Topline<\/p>\n
The U.S. has agreed to a trade deal with the European Union, President Donald Trump and European Commission President Ursula von der Leyen announced Sunday afternoon, agreeing to a 15% tariff rate on most EU goods\u2014just days before Trump\u2019s self-imposed August 1 deadline\u2014in an announcement that buoyed U.S. futures and European stock markets on Monday.<\/p>\n
US President Donald Trump meets with European Commission President Ursula von der Leyen in Scotland … More on Sunday.<\/p>\n
AFP via Getty ImagesKey Facts<\/p>\n
Both Trump and von der Leyen said the tariffs would be applied \u201cacross the board,\u201d but Trump later said they would not apply to several major sectors the administration is planning specific tariffs for.<\/p>\n
Trump said the EU agreed to purchase $750 billion in energy, purchase an undetermined amount of military equipment, invest a further $600 billion in the United States and open the European economy to American goods at 0% tariffs.<\/p>\n
Von der Leyen said the U.S. agreed to \u201czero for zero tariffs\u201d on some strategic goods, including \u201call aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources and critical raw materials,\u201d adding the two sides would work to expand that list.<\/p>\n
The 15% rate matches the rate secured in a deal with Japan<\/a>, another major U.S. trade partner and auto exporter, announced last week, and the administration has suggested<\/a> 15% would be the baseline. <\/p>\n The European Union was previously facing a steep 30% tariff rate scheduled to go into effect on Aug. 1, and the deal alleviates immediate fears of an impending trade war between the two economies.<\/p>\n How Have The Stock Markets Reacted To The Trade Deal?<\/p>\n The benchmark S&P Futures index rose to nearly 0.3% in early trading on Monday, to 6,442 points, while the tech-centric Nasdaq Futures was up around 0.5% at 23,530 points. Dow futures were also up, rising nearly 0.2% to 45,162 points. Key European indices saw a big jump as well, with the pan-European STOXX 50 index rising 0.9%, while France\u2019s CAC 40 rose 0.67% and Germany\u2019s DAX was up 0.33%.<\/p>\n Crucial Quote<\/p>\n \u201cIt will bring stability. It will bring predictability. That\u2019s very important for businesses on both sides of the Atlantic,\u201d von der Leyen said. \u201cBasically, the European market is open. It\u2019s 450 million people.\u201d <\/p>\n Which European Leaders Have Critcized The Trade Deal?<\/p>\n Some leaders from Germany and France criticized the deal, saying it appeared as if the EU had capitulated to Trump\u2019s demands. In a post on X, former French Prime Minister Fran\u00e7ois Bayrou criticized European leaders for accepting the deal, saying<\/a>: \u201cit is a dark day when an alliance of free peoples, united to assert their values and defend their interests, resolves to submission.\u201d Alice Weidel, the leader of Germany\u2019s far-right AfD Party, tweeted<\/a>: \u201cThe EU has been brutally taken advantage of! 15% tariffs and the obligation to purchase weapons and energy from the US are not an agreement, but a slap in the face for European consumers and producers!\u201d The leader of Germany\u2019s Greens party, Michael Bloss, also called out the deal, criticizing the EU\u2019s decision to import $750 billion worth of fossil fuels from the U.S. Bloss tweeted<\/a>: \u201cThis trade deal is devastating for European climate policy. It’s a deal that plunges us back into fossil fuel dependency and destroys our climate goals…We’re trading our dependence on Putin for a new dependence on U.S. fracking companies.\u201d<\/p>\n Big Number<\/p>\n $235.6 billion. That was the United States\u2019 trade deficit with the EU in 2024, according to the U.S. Trade Representative<\/a>. Trump made reducing trade deficits between major trading partners like the EU a key plank in his economic policy, and on Sunday von der Leyen seemed on the same page. \u201cWe wanted to rebalance the trade relation and we wanted to do it in a way that trade goes on between the two of us across the Atlantic because the two biggest economies should have a good trade flow between us, and I think we hit exactly the point we wanted to find,\u201d the European Commission president said. \u201cRebalance, but enable trade on both sides, which means good jobs on both sides of the Atlantic, means prosperity on both sides of the Atlantic, and that was important for us.\u201d<\/p>\n What Goods Were Not Covered In The Deal?<\/p>\n Trump said pharmaceutical imports were \u201cunrelated\u201d to the deal reached Sunday. \u201cSteel is staying the way it is,\u201d Trump also added. \u201cSteel and aluminum. That\u2019s a worldwide thing that stays the way it is.\u201d Trump previously raised tariffs on steel and aluminum imports<\/a> to 50% in June. Commerce Secretary Howard Lutnick also said the administration would soon announce a new plan for chip manufacturing, likely in the next two weeks. However, von der Leyen later contradicted this statement, insisting that the 15% would apply to pharmaceuticals and semiconductors. Forbes has reached out to the White House for clarification.<\/p>\n What To Watch For<\/p>\n Trump predicted the new deal would allow more American cars and American agriculture to enter the European market. \u201cIt’s open for our companies to go in and do a good job with it. I think you’ll like them,\u201d Trump said, addressing von der Leyen. \u201cI think you’ll like it.\u201d Trump later said European citizens would enjoy \u201cdiversification\u201d from increased access to American cars and again predicted the deal would be popular. \u201cWe\u2019ll do it in very strict conjunction with the president [von der Leyen] and the European Union. And likewise, they\u2019re coming into our country with great vigor. I think they\u2019re going to make a lot of money with this.\u201d<\/p>\n Further Reading<\/p>\n