Scotland’s Edinburgh (AP) In order to prevent, at least for the time being, much higher imports on both sides that could have sent shockwaves through economies all over the world, the United States and the European Union agreed on Sunday to a trade framework that would impose a 15% tariff on the majority of goods.
Following a brief meeting between President Donald Trump and European Commission chief Ursula von der Leyen at Trump’s Turnberry golf course in Scotland, the broad statement was made. Months of negotiations culminated in their private meeting as the White House approaches the deadline of Friday to impose punitive tariffs on the 27 EU members.
The negotiation was fascinating. Trump stated, “I think it’s going to be great for both parties.” He claimed that everyone benefited from the accord, which was a huge issue with many nations.
According to von der Leyen, the agreement will provide predictability and stability, which is crucial for our companies on both sides of the Atlantic.
Many facets will require more work
Some important aspects are still unknown in this tariff deal, as they were in previous recent ones that Trump announced with nations like Japan and the United Kingdom.
According to Trump, the EU has pledged to invest $600 billion more than it now does in America, purchase a significant amount of military hardware, and purchase about $750 billion worth of U.S. energy. He stated that all European nations will open their borders to U.S. exporters and that the 15% straight-forward tax would apply to cars and everything else.
According to von der Leyen, the European market is essentially open and the 15% tariffs were applied uniformly and inclusively.
She stated at a subsequent press conference held outside of Turnberry that the $750 billion in increased U.S. energy purchases would actually be spread out over the next three years and would help reduce the bloc’s reliance on Russian natural gas.
Von der Leyen stated that the benefits of cooperation between the US and the EU are palpable, pointing out that the deal settled on a single 15% tariff rate for the great majority of EU exports, such as automobiles, semiconductors, and medications.
According to her, 15% is the absolute maximum.
The two sides agreed on zero-for-zero tariffs on a number of strategic products, including all aircraft and component parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources, and critical raw materials, von der Leyen added, but he also made it clear that such a rate wouldn’t apply to everything.
Whether alcohol will be on that list is uncertain.
She also emphasized that the framework means the figures we just revealed to the public, but of course, nuances need to be worked out. “And we will continue working to add more products to this list,” she stated. And within the upcoming weeks, that will take place.
Further EU approval needed
There will be other fronts to work on in the meanwhile. Since the European Commission manages trade for member nations, von der Leyen was mandated to negotiate. However, the deal should now be presented by the Commission to EU parliamentarians and member states, who will finally decide whether or not to adopt it.
Prior to their meeting, Trump promised to make changes to what he saw as an extremely unfair and one-sided deal for the United States.
The Republican president told reporters, “I think both sides want to see fairness.”
Von der Leyen noted that Trump was seen as a tough negotiator and dealmaker, and that the U.S. and EU together have the greatest trade volume in the world, involving hundreds of millions of people and trillions of dollars.
Fair, though, Trump said.
In an effort to reduce significant trade imbalances with numerous important trading partners, Trump has spent months threatening to impose high tariffs on most of the world. More recently, he had made hints that any agreement with the EU would need to lower a 30% tariff rate that was about to go into force.
However, when asked if he would be open to accepting tariff rates below 15% during his remarks prior to the agreement’s announcement, the president responded negatively.
First golf, then trade talk
Following Trump’s second consecutive day of golf at Turnberry, where he played with his sons Eric and Donald Jr., they met. Trump’s five-day trip to Scotland is centered on golf and marketing properties with his brand, in addition to deal-making.
A tiny number of protesters at the course held a placard denouncing British Prime Minister Keir Starmer, who is scheduled to meet with Trump at Turnberry on Monday, and waved American flags.
Trump! Trump! was being chanted and cheered by other voices as he performed close by.
Trump will visit Aberdeen, in northeastern Scotland, on Tuesday. There, his family owns another golf club, and next month they plan to add a third. The president intends to assist in launching the new course with his sons.
Earlier this month, a deal between the U.S. and the EU was imminent, but Trump threatened to impose a 30% tariff instead. Although it has changed in recent weeks, the Trump administration claims that the deadline for enacting tariffs is now set for this Friday.
No further grace periods or extensions. Prior to the announcement of the EU agreement, U.S. Commerce Secretary Howard Lutnick told Fox News Sunday that the tariffs are established, will be implemented, and that Customs will begin collecting the money on August 1. But even after that, he said, people can still speak with President Trump. He’s always willing to listen, after all.
In the absence of an agreement, the EU stated that it was ready to respond with duties on hundreds of American goods, including beer, Boeing aircraft, meat, and auto parts.
Meanwhile, the United States might have seen higher prices for everything from German technology and Spanish medications to French cheese and Italian leather goods if Trump had finally implemented his threat of tariffs against Europe.
Instead of playing games and possibly not reaching an agreement at all, I think it’s fantastic that we reached one today, Trump stated. It’s the biggest transaction ever struck, in my opinion.
By The Associated Press’s Will Weissert. Samuel Petrequin and Seung Min Kim made contributions.
