The agreement was negotiated in a harbor at a meeting in Scotland between Trump and the President of the European Commission Ursula von der Leyen.
The President of the Commission describes the agreement as ”all inclusive”.
It creates certainty in an uncertain time. It delivers stability and predictability for citizens and companies on both sides of the Atlantic, says von der Leyen at a press conference after the meeting.
The agreement means 15 percent American import duties on the majority of all EU goods, including cars. Steel and aluminum are exceptions.
Additionally, the EU agrees to buy American energy worth $750 billion and make new investments in the US for $600 billion, according to Trump.
– We will replace Russian gas and oil through significant purchases of American liquefied natural gas, oil and nuclear fuel, says Ursula von der Leyen at a press conference.
Opens up to the USA
Furthermore, the union will open up the member countries' markets for duty-free trade with the USA and buy ”enormous amounts” of American military equipment, reports Bloomberg.
The EU and the USA have also agreed on duty-free trade in a number of so-called strategic products. This includes, among other things, aircraft and aircraft parts, chemicals, semiconductors and certain agricultural products and natural resources.
The duties are significantly lower than the 50 percent Trump threatened with in May, as well as the 30 percent he established before the parties agreed on a tariff pause. The message comes with less than a week left before the pause expires on August 1.
It puts an end to months of tense negotiations and speculation about a trade war with the potential to seriously damage the global economy.
Status quo
Intensive negotiations have been ongoing between the EU and the USA since April. During that time, the USA has imposed a 10 percent duty on goods from the EU, in addition to existing duties averaging 4.8 percent. The new agreement thus means a kind of status quo.
The duties on European cars are currently 25 percent, but will thus be reduced to 15 percent if the information is correct.
Prior to the meeting, which was held at Trump's golf resort outside Glasgow, Ursula von der Leyen said that a new trade agreement was about ”rebalancing” trade between the parties, regarding the EU's export surplus and the USA's deficit.
The agreement on a new trade agreement must now be approved by the EU's member countries.
