US, EU reach agreement on tariffs

The United States struck a framework trade deal with the European Union on Sunday, imposing a 15% US import tariff on most EU goods, but averting a spiralling battle between two allies which account for almost a third of global trade.

The announcement came after European Commission President Ursula von der Leyen travelled for talks with US President Donald Trump at his golf course in western Scotland to push a hard-fought deal over the line.

“I think this is the biggest deal ever made,” Trump told reporters after an hour-long meeting with von der Leyen, who said the 15% tariff applied “across the board”.

“We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability,” she said.

The deal, that also includes $600 billion of EU investments in the United States and significant EU purchases of US energy and military equipment, will indeed bring clarity for EU companies.

However, the baseline tariff of 15% will be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30% rate.

The deal mirrors parts of the framework agreement the United States clinched with Japan last week.

“We are agreeing that the tariff... for automobiles and everything else will be a straight across tariff of 15%,” Trump said. However, the 15% baseline rate would not apply to steel and aluminium, for which a 50% tariff would remain in place.

Trump, who is seeking to reorder the global economy and reduce decades-old US trade deficits, has so far reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of “90 deals in 90 days.”

He has periodically railed against the European Union saying it was “formed to screw the United States” on trade.

Arriving in Scotland, Trump said that the EU wanted “to make a deal very badly” and said, as he met von der Leyen, that Europe had been “very unfair to the United States”.