US and EU Forge Groundbreaking Trade Deal with 15% Tariffs Averting Economic Tensions and Boosting Transatlantic Investment

Welcome to European Union Tariff News and Tracker. Listeners, in a major breakthrough, the United States and European Union have struck a framework trade agreement imposing a 15 percent tariff on most EU goods entering the US—half the 30 percent rate President Donald Trump had threatened back in July. According to Reuters, Trump and European Commission President Ursula von der Leyen sealed the deal at Trump's golf course in Scotland, calling it the biggest trade pact ever and praising the EU's commitments to invest $600 billion in the US while ramping up purchases of American energy and military equipment to $750 billion.

This mirrors Trump's recent framework with Japan, averting a full trade war between the world's two largest economies, which together drive nearly a third of global trade. DD News reports the baseline 15 percent tariff applies across the board but spares aircraft, certain chemicals, generic drugs, semiconductors, and some agricultural products, with steel and aluminum held at 50 percent—though talks continue on quotas. Von der Leyen hailed it as the best possible outcome, bringing stability after months of tense negotiations.

Germany's export-heavy economy dodged a bullet, as Chancellor Friedrich Merz noted, protecting giants like VW, Mercedes, and BMW from steeper auto tariffs already at 27.5 percent. Yet critics like European Parliament trade chief Bernd Lange argue it's imbalanced, with hefty EU investments potentially straining the bloc. Finance & Commerce adds that European exporters have adapted via exemptions and new markets, with the tariff impact pegged at just 0.37 percent of EU GDP by Societe Generale—far milder than feared inflation doomsday scenarios.

Trump retains power to hike rates if commitments falter, amid his broader 2025 tariff blitz lifting US import taxes to 17 percent overall and generating $30 billion monthly for the Treasury, per Yale Budget Lab. The euro ticked up post-deal, signaling market relief. As 2026 looms with Supreme Court challenges and USMCA reviews, this EU pact stands as Trump's transatlantic win, reordering trade deficits that hit $235 billion last year.

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