US President Donald Trump on Sunday, July 27, announced that that a trade deal has been reached with the European Union, after a meeting with European Commission President Ursula von der Leyen. The deal comes just days before the August 1 tariff deadline.

The deal will see a 15% tariff on ‘most’ goods from the European Union that come into the US, including cars.

Some of the products, including aircrafts, their components, chemicals and pharmaceuticals, will not be subject to tariffs. The new 15% tariff rate will not be added to any tariffs already in effect.
Donald Trump, during his letter-sending spree to nations earlier this month, had threatened a 30% tariff on the European Union, in response to which, the bloc had already readied a slew of counter measures, in case talks failed.

The European Union will also purchase US energy worth $750 billion and invest another $600 billion into the country over a period of time. “Hundreds of billions of dollars worth military equipment would also be purchased,” Trump said, without specifying a number.

“It’s a very powerful deal, it’s a very big deal, it’s the biggest of all the deals,” the US President said, having made similar remarks after striking a deal with Japan last week.

Ireland welcomed the move, although they said that trade will now get “more challenging and expensive,” but added that this does lend some clarity and stability to the process.

The deal was also welcomed by German Chancellor Friedrich Merz, who said that it will benefit the country’s auto industry as tariffs come down from 27.5% currently, to 15%.

Netherlands PM Dick Schoof also wrote on “X” that “no tariffs would be better”, but praised the European Union for getting the “best deal possible.”

The US-European Union trade relationship is valued at close to $2 trillion, according to the European Council data for 2024, after accounting for both services and goods. The 27-country bloc has a trade surplus with the US when it comes to goods, but runs a deficit on the services front.

US futures have reacted positively to the news with the Dow futures gaining close to 200 points in response.

(With Inputs From Agencies.)