The trade deal struck between Commission President Ursula von der Leyen and US President Donald Trump on Sunday, 27 July, means that EU goods exported to the United States will be subject to a 15 per cent tariff, with some exemptions. The agreement also stipulates that EU will increase its investments in the US and spend some $750bn on energy.
“It’s a good deal for everybody. It’s going to bring us closer together,” said Mr Trump, using his typical rhetorics, immediately after the breakthrough had been announced. Ms von der Leyen was also positive. “It is a huge deal (…) creating certainty in uncertain times,” commented the Commission President.
It is a huge deal creating certainty in uncertain times. – Ursula von der Leyen, European Commission President
Originally, President Trump had threatened that all EU exports to the US would be subject to a 30 per cent tax, effective 1 August. Such measure would probably see many EU companies ceasing deliveries of goods to the American market. The agreement was announced after private talks between the US President and Ms von der Leyen at the Trump Turnberry Golf course in South Ayrshire, Scotland.
Aircrafts, some chemicals and more are exempt
Though the deal has been announced as a definite one, at the moment it is a sort a “framework agreement”, with further technical details to be negotiated over the next weeks. European Commission has the mandate to negotiate trade deals for the entire European Union, but agreements like this still require approval by EU member states.
The 15 per cent rate will apply across most sectors, including cars and pharmaceuticals. However, there are important exemptions on so-called strategic products like aircrafts and component parts, certain chemicals, semiconductors, certain agricultural products, some natural resources, and critical raw materials.
According to Ms von der Leyen, the deal “…will also increase our energy cooperation. Purchases of US energy products will diversify EU’s sources of supply and contribute to Europe’s energy security…. US AI chips will help power European AI gigafactories and help the US to maintain their technological edge,” said the Commission President.
Mr Trump said the EU would boost its investment in the US by $600bn, including military equipment, and spend $750bn on energy. Purchases of American liquified natural gas (LNG), oil and nuclear fuels would help reduce European reliance on Russian power sources.
