Trump, EU strike trade deal in Scotland, easing tensions

The United States and the European Union reached a preliminary trade agreement on July 27, setting a 15 per cent tariff on most goods, including cars. The deal, announced by President Donald Trump and European Commission President Ursula von der Leyen at Trump’s Turnberry resort in Scotland, marks a temporary end to months of tense negotiations between Washington and its largest trading partner.

Under the agreement, the EU has committed to making significant investments in American energy and purchasing US military equipment, Caliber.Az reports, citing The New York Times. 

President Trump said the deal will “rebalance, but enable trade on both sides.” Von der Leyen, sitting beside him, added: “We made it.”

The announcement comes as a relief after a period of growing uncertainty over the transatlantic trade relationship. Last year, the EU accounted for nearly $610 billion of the $3.3 trillion in goods imported by the United States. The newly agreed 15 percent tariff is higher than the 10 percent previously applied to British goods but is more moderate than the 30 percent rate Trump had threatened in a letter to EU leaders on July 11, unless a deal was struck by August 1.

That threat came after weeks of fluctuating talks, during which European negotiators believed they were nearing an agreement—only to be met with last-minute demands. In preparation for a potential breakdown, the EU had finalized a package of retaliatory tariffs last week, a move aimed at giving the bloc leverage in the event of failed negotiations.

Trump framed the July 27 deal as a major victory.

“This is the biggest deal. People don’t realise. This is bigger than other deal,” he said. “We have great countries, great countries, I’m familiar with many of them, so are you, and this is really the biggest deal.”

A key issue in negotiations was the high tariff on European auto exports, particularly for Germany. European automakers, who sent $45 billion worth of cars to the US last year, have been struggling under the 27.5 per cent tariff imposed by the Trump administration in April. The new deal will lower that rate to 15 per cent, offering some relief to the EU’s car industry.

Pharmaceuticals, the EU’s largest export to the US, were another contentious point. The Trump administration had threatened to impose a staggering 200 percent tariff on pharmaceutical imports, a move that would have hit the European sector hard. Although the new deal did not explicitly address the future of pharmaceutical tariffs, Trump commented on Sunday that such products “are very special” and should ideally be made in the United States—though he admitted that the U.S. would “probably still import a lot” of medicines from Europe.

The agreement also includes EU commitments to boost American energy imports, helping to align both sides’ economic priorities. Despite the showery weather earlier in the day, Trump played 18 holes of golf with family and guests at the resort before sitting down with von der Leyen for final negotiations.

“I’m not in a good mood,” Trump admitted at the announcement, though he expressed confidence in the outcome: “There’s a 50-50 chance that a trade deal would be struck in about an hour between the US and the EU.”

Asked earlier by journalists whether Israel should be doing more to allow food into Gaza, where more than 100 people have died from malnutrition since the conflict began, Trump avoided a direct response. Instead, he noted that the US had recently sent $60 million in food aid.

“And nobody even acknowledged [it]. You should at least say thank you,” he added.

Though many details remain to be clarified, the deal represents a de-escalation in one of the world’s most significant economic relationships, potentially averting a trade war—for now.

By Sabina Mammadli