A newly forged trade agreement between the United States and the European Union is set to provide temporary stability; however, it has been described as “unbalanced” by French Minister Benjamin Haddad. He remarked on X, “While this deal brings short-term relief, it does not adequately address key disparities.”
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The deal, announced following a meeting between US President Donald Trump and European Commission President Ursula von der Leyen at a golf resort in Scotland, imposes a 15% tax on EU exports. This move comes as part of efforts to resolve a tension-filled tariff standoff that risked escalating into a major trade war. Mr. Trump heralded the agreement as the “biggest ever,” showcasing a moment of optimism in transatlantic relations.
During the brisk negotiation, which lasted about an hour, the leaders managed to avert a looming deadline on August 1 that threatened to trigger a sweeping 30% tariff on European goods. “We’ve reached a deal that’s beneficial to all parties involved. This could well be the largest trade deal ever negotiated,” stated President Trump with enthusiasm.
As part of the agreement, a base tariff of 15% will apply broadly, including critical sectors such as automobiles, pharmaceuticals, and semiconductors. Mr. Trump further noted that the agreement involves the 27-nation EU bloc committing to purchase “$750 billion worth of energy” from the United States along with committing $600 billion in additional investments to strengthen the economic partnership.
Reflecting on this significant progress, Ms. von der Leyen mentioned that the substantial purchase of US liquefied natural gas, oil, and nuclear fuels over three years is part of the EU’s strategy to reduce reliance on Russian energy sources. “This agreement certainly stabilizes the trading environment, offering much-needed predictability for businesses on both sides of the Atlantic,” she explained.
Importantly, the agreement outlines tariff exemptions for several strategic products, such as aircraft and certain agricultural goods, which Ms. von der Leyen hopes to expand in the coming days, including efforts for “zero-for-zero” agreements concerning alcohol.
Moreover, in response to increasing defense spending commitments within NATO, President Trump indicated that EU nations would also be investing “hundreds of billions of dollars” in military equipment. This agreement marks a new chapter in trade relations that have faced challenges since Mr. Trump took office, with the EU facing an array of tariffs, including a hefty 25% on automobiles and 50% on steel and aluminum.
“While the imposed 15% tariff is significant, it’s admittedly the best we could negotiate under current circumstances,” Ms. von der Leyen recognized. Her sentiments were echoed by German Chancellor Friedrich Merz, who described the deal as a means to avoid “needless escalation in transatlantic trade relations.”
However, sentiments among German exporters were mixed. The German BDI federation voiced concerns over potential adverse effects, while the VCI chemical trade association expressed disappointment with the high tariff rates. While the EU was keen to negotiate a quota system for steel imports, Mr. Trump appeared to dismiss this idea, stating, “Steel will remain unchanged,” although Ms. von der Leyen remained hopeful for future discussions on reducing tariffs and establishing quotas.
The 15% tariff is significantly higher than the previous average of 4.8% on European goods and reflects an additional flat rate of 10%. Should negotiations have faltered, the EU was prepared to retaliate with counter-tariffs on $109 billion (€93 billion) worth of US goods.
Looking ahead, Mr. Trump expressed optimism, stating, “This was the big one. This is the biggest of them all,” as he continues to reshape US trade policies globally.
Edited By Ali Musa
Axadle Times International – Monitoring.
