U.S. and EU Strike Framework Trade Deal

On 27th July 2025, U.S. President Donald Trump and European Commission President Ursula von der Leyen finalized a trade agreement imposing a 15% import tariff on most EU goods—avoiding a larger trade conflict and marking a major milestone in transatlantic trade relations.

Key Points

15% Tariff Deal: Most EU goods will face a 15% U.S. import tariff, down from the earlier threatened 30%.
Announced in Scotland: The deal was unveiled after a high-level meeting at Trump’s golf course in Scotland.
EU Investment Package: EU to invest $600 billion in the U.S., including $750 billion in energy and major arms purchases.
Tariff Exceptions: No tariffs on aircraft, certain chemicals, semiconductor equipment, generic drugs, and raw materials.
Steel & Aluminum: A 50% tariff remains on EU steel and aluminum; quota-based alternatives are under discussion.
Auto Sector Relief: German carmakers avoid a 27.5% tariff hike, safeguarding a vital sector for the EU economy.
EU Concerns: Lawmakers fear 15% is still too steep and that U.S.-bound investments could strain EU’s internal economy.
Unresolved Points: Final decisions pending on spirits tariffs, agriculture, and non-tariff barriers.
Currency Movement: The euro rose 0.2% against major currencies following the announcement.
Japan Deal Parallels: Structure resembles the U.S.–Japan trade pact, but lacks clear implementation guidelines.