EU Accepts 15% Trump Tariffs in Last-Minute Trade Deal

TLDR

Table of Contents

Trump and EU reach trade deal with 15% tariff rate on EU goods, half the threatened 30% but higher than hoped
China-US tariff truce expected to extend another three months at Stockholm talks starting Monday
Japan deal precedent set baseline at 15% with $550 billion investment commitment to US
European markets rise on relief despite concerns about unbalanced nature of agreement
EU pledges $750 billion in strategic US purchases over three years including energy imports

President Trump and European Commission President Ursula von der Leyen announced a trade deal framework on Sunday that establishes a 15% baseline tariff on EU goods imported into the United States. The agreement comes after negotiations in Scotland and represents a compromise between the EU’s hopes for zero tariffs and Trump’s initial threat of 30% levies.

Today, President Trump secured a HUGE, POWERFUL TRADE DEAL between the U.S. and EU 🇺🇸
The EU will:
💰 Invest $600 Billion in U.S.
⚡️ Purchase $750 Billion in American Energy
💸 Open Markets to U.S. pic.twitter.com/PWNtlhpH5b
— The White House (@WhiteHouse) July 28, 2025

Trump described the deal as “the biggest of them all” while von der Leyen acknowledged that “15% is not to be underestimated, but it is the best we could get.” The framework agreement still requires additional details to be confirmed before implementation.

The tariff rate follows a pattern established by Trump’s recent Japan deal, which also set a 15% baseline with a $550 billion investment commitment. Japanese trade negotiator Ryosei Akazawa suggested the investment funds could support Taiwanese chipmakers building US plants using Japanese components.

Taiwan’s TSMC previously announced a $100 billion US investment plan, including three Arizona facilities with one already operational. This investment structure appears to be the template for future trade agreements under the new administration.

European Markets Show Relief Despite Concerns

European stocks opened higher on Monday, with the STOXX 600 reaching a four-month high as markets responded positively to the trade clarity. Technology and healthcare sectors led the gains, while automotive stocks including Stellantis rose 3.5% and Valeo jumped 4.7%.

Belgian Prime Minister Bart De Wever expressed mixed feelings about the agreement, calling it “a moment of relief but not of celebration” due to unresolved questions and increased tariffs in several areas. German Chancellor Friedrich Merz welcomed the deal as preventing a trade conflict that would have severely impacted Germany’s export economy.

French ministers highlighted concerns about the agreement’s balance while noting potential exemptions for key sectors like spirits. Industry minister Marc Ferracci emphasized that months of additional negotiations would be needed to finalize the deal.

The 15% rate represents a compromise compared to the average US import tariff of around 2.5% before Trump’s return to office. European chemical industry representatives described the sentiment as being “grateful for a storm” when expecting “a hurricane.”

China Truce and Broader Trade Strategy

Separate from the EU agreement, reports indicate Beijing and Washington plan to extend their tariff truce by three months at trade talks beginning Monday in Stockholm. This extension would provide additional time for negotiations between the world’s two largest economies.

Trump indicated on Friday that tariff letters for over 200 countries would be distributed soon as his administration works on deals with major partners including India and Canada. He expressed frustration with Canada negotiations and suggested 35% tariffs on goods outside existing trade agreements.

The new baseline tariff structure ranges from 15% to 50% depending on the trading partner, replacing Trump’s previous “Liberation Day” tariffs that started at 10%. This represents a shift toward higher baseline rates for most US trading relationships.

The EU has committed to $750 billion in strategic US purchases over three years, including oil, liquefied natural gas, and nuclear fuel. However, questions remain about US production capacity to meet this demand, particularly for LNG where capacity increases will take several years.

Currency markets responded positively to the trade clarity, with the euro rising 0.73% and oil prices increasing on Monday. The agreement between economies representing nearly one-third of global trade provides stability for international businesses planning investments and expansions.

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