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A trade agreement has been formalized between the United States and Europe, announced by President Donald Trump on Sunday. This deal helps prevent a potential escalating conflict between two key allies responsible for nearly one-third of worldwide trade. The framework includes a 15% tariff on European goods entering the U.S., along with substantial European commitments to purchase American energy and military supplies. This provides much-needed clarity for businesses across the EU.
While the 15% baseline tariff is an improvement over the initially desired zero-tariff goal by Europe, many in Europe view it as a less favorable outcome than hoped. The deal also avoids the harsher threat of a 30% tariff rate. The announcement followed discussions in Scotland, where European Commission President Ursula von der Leyen traveled to meet with President Trump to push the compact through.
Trump, aiming to reshape the global economy and reduce persistent U.S. trade deficits, has reached agreements with Britain, Japan, Indonesia, and Vietnam. However, his administration has not yet fulfilled its promise of securing “90 deals in 90 days.” Trump has frequently criticized the European Union, claiming it was “designed to harm” U.S. trade interests.
The U.S. trade deficit with the EU hit $235 billion in 2024, according to U.S. Census Bureau data. The EU counters that it has a surplus in services, which helps balance overall trade.
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