US, EU seal trade deal with 15 pc tariffs

The deal seems to have staved off, at least for now, far higher imports on both sides that might have sent shockwaves through economies around the globe.

It was reached after a brief meeting between European Commission chief Ursula von der Leyen and US President Donald Trump at the latter’s Turnberry golf course in Scotland

Their private sit-down culminated months of bargaining, with the White House deadline on Friday nearing for imposing punishing tariffs on the EU's 27-member countries.

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Interesting negotiation: Trump

“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.”

Ahead of the session, Trump had remarked that he would change “a very one-sided transaction, very unfair to the United States.”

What the deal entails

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 USD 750 billion worth of U.S. energy and invest USD 600 billion more than it already is in America — as well as make a major military equipment purchase.

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He said tariffs “for automobiles and everything else will be a straight across tariff of 15 per cent” and meant that US 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 that the USD 750 billion in additional US 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.

15 pc a clear ceiling: EU chief

“When the European Union and the United States work together as partners, the benefits are tangible,” Von der Leyen said, noting that the agreement “stabilised 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.

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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.

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“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” 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 should now present the deal to member states and EU lawmakers — who will ultimately decide whether or not to approve it.