U.S.-EU deal sets a 15% tariff on most goods and averts the threat of a trade war with a global shock

Trade policy researcher Stuart Trew joins CTV to discuss the importance of the deal between the U.S. and the EU, and what it could mean for Canada.

EDINBURGH, Scotland — The United States and the European Union agreed on Sunday to a trade framework setting a 15 per cent tariff on most goods, staving off -- at least for now -- far higher imports on both sides that might have sent shock waves through economies around the globe.

The sweeping announcement came after U.S. President Donald Trump and European Commission chief Ursula von der Leyen met briefly at Trump’s Turnberry golf course in Scotland. Their private sit-down culminated months of bargaining, with the White House deadline Friday nearing for imposing punishing tariffs on the EU’s 27 member countries.

“It was a very interesting negotiation. I think it’s going to be great for both parties,” Trump said. The agreement, he said, was “a good deal for everybody” and “a giant deal with lots of countries.”

Von der Leyen said the deal “will bring stability, it will bring predictability, that’s very important for our businesses on both sides of the Atlantic.”

Many facets will require more work

As with other, recent tariff agreements that Trump announced with countries including Japan and the United Kingdom, some major details remain pending in this one.

Trump said the EU had agreed to buy some $750 billion worth of U.S. energy and invest $600 billion more than it already is in America -- as well as make a major military equipment purchase. He said tariffs “for automobiles and everything else will be a straight across tariff of 15 per cent” and meant that U.S. exporters “have the opening up of all of the European countries.”

Von der Leyen said the 15 per cent tariffs were “across the board, all inclusive” and that “indeed, basically the European market is open.”

At a later news conference away from Turnberry, she said the $750 billion in additional U.S. energy purchases was actually over the next three years -- and would help ease the dependence on natural gas from Russia among the bloc’s countries.

“When the European Union and the United States work together as partners, the benefits are tangible,” Von der Leyen said, noting that the agreement “stabilized on a single, 15 per cent tariff rate for the vast majority of EU exports” including cars, semiconductors and pharmaceuticals.

“15 per cent is a clear ceiling,” she said.

But von der Leyen also clarified that such a rate wouldn’t apply to everything, saying that both sides agreed on “zero for zero tariffs on a number of strategic products,” like all aircraft and component parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials.

It is unclear if alcohol will be included in that list.

“And we will keep working to add more products to this list,” she said, while also stressing that the “framework means the figures we have just explained to the public, but, of course, details have to be sorted out. And that will happen over the next weeks.”

Further EU approval needed

In the meantime, there will be work to do on other fronts. Von der Leyen had a mandate to negotiate because the European Commission handles trade for member countries. But the Commission must now present the deal to member states and EU lawmakers, who will ultimately decide whether or not to approve it.

Before their meeting began, Trump pledged to change what he characterized as “a very one-sided transaction, very unfair to the United States.”

“I think both sides want to see fairness,” the Republican president told reporters.

Von der Leyen said the U.S. and EU combined have the world’s largest trade volume, encompassing hundreds of millions of people and trillions of dollars and added that Trump was “known as a tough negotiator and dealmaker.”

“But fair,” Trump said.

Trump has spent months threatening most of the world with large tariffs in hopes of shrinking major U.S. trade deficits with many key trading partners. More recently, he had hinted that any deal with the EU would have to “buy down” a tariff rate of 30 per cent that had been set to take effect.

But during his comments before the agreement was announced, the president was asked if he’d be willing to accept tariff rates lower than 15 per cent, and he said “no.”

First golf, then trade talk

Their meeting came after Trump played golf for the second straight day at Turnberry, this time with a group that included sons Eric and Donald Jr. In addition to negotiating deals, Trump’s five-day visit to Scotland is built around golf and promoting properties bearing his name.

A small group of demonstrators at the course waved American flags and raised a sign criticizing British Prime Minister Keir Starmer, who plans his own Turnberry meeting with Trump on Monday.

Other voices could be heard cheering and chanting “Trump! Trump!” as he played nearby.

On Tuesday, Trump will be in Aberdeen, in northeastern Scotland, where his family has another golf course and is opening a third next month. The president and his sons plan to help cut the ribbon on the new course.

The U.S. and EU seemed close to a deal earlier this month, but Trump instead threatened the 30 per cent tariff rate. The deadline for the Trump administration to begin imposing tariffs has shifted in recent weeks but is now firm and coming Friday, the administration insists.

“No extensions, no more grace periods. Aug. 1, the tariffs are set, they’ll go into place, Customs will start collecting the money and off we go,” U.S. Commerce Secretary Howard Lutnick told “Fox News Sunday” before the EU deal was announced. He added, however, that even after that “people can still talk to President Trump. I mean, he’s always willing to listen.”

Without an agreement, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes.

If Trump eventually followed through on his threat of tariffs against Europe, meanwhile, it could have made everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the United States.

“I think it’s great that we made a deal today, instead of playing games and maybe not making a deal at all,” Trump said. “I think it’s the biggest deal ever made.”

Will Weissert, The Associated Press

Associated Press writers Seung Min Kim in Cincinnati and Samuel Petrequin in London contributed to this report.