Trump Announces Major US-EU Trade Agreement With 15% Tariffs and Massive Energy, Defense Deals
The United States and the European Union have finalized a significant trade agreement, President Donald Trump announced Sunday during a visit to Scotland. The deal includes a 15% tariff on EU goods entering the U.S. and covers wide-ranging economic commitments.
Under the agreement, the EU will purchase $750 billion worth of U.S. energy and invest another $600 billion in the American economy. Trump also stated that the EU will significantly increase purchases of U.S. military equipment.
“They are opening up their markets to zero tariffs,” Trump said, adding that the European bloc would buy “a vast amount of military gear” from the U.S.
European Commission President Ursula von der Leyen confirmed the tariff plan, saying the 15% duty would apply broadly and help rebalance trade between the two economies. Last year, the U.S. imported over $600 billion in goods from the EU, out of a total of $3.3 trillion in imports.
The announcement comes just days before Trump’s “reciprocal tariffs” were scheduled to take effect on August 1. Markets had been uneasy about the risk of no deal. The EU had faced possible levies as high as 30% and had been pushing for a zero-tariff framework.
Analysts welcomed the news. Michael Brown, Senior Research Strategist at Pepperstone, said the deal “removes a major risk” that had been weighing on markets. He added that it also signals a shift toward deal-making and away from aggressive trade rhetoric.
Brown noted that European carmakers would benefit significantly. The 15% tariff includes car imports to the U.S., mirroring a recent exemption Japan secured. U.S. defense and energy companies are also expected to gain from the EU’s purchase commitments.
Pharmaceuticals will also fall under the 15% tariff, according to von der Leyen. However, she warned that the U.S. may introduce further measures. Trump has previously threatened to impose tariffs as high as 200% on EU drug imports, putting pressure on Europe’s key pharmaceutical sector.
The trade deal arrives during what ING analysts call a “massive” week for the U.S. economy. Several major tech companies—including Meta Platforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), and Amazon (NASDAQ: AMZN)—are set to report earnings.
Additionally, a critical inflation report tracked by the Federal Reserve will be released, and the Fed will announce its latest interest rate decision on Wednesday. While the Fed is expected to hold rates steady, Trump has ramped up calls for rate cuts, targeting Fed Chair Jerome Powell.
Officials at the central bank have adopted a “wait-and-see” stance, partly due to uncertainty surrounding Trump’s tariffs and their broader impact on the U.S. economy.
