The agreement was negotiated in a harbor at a meeting in Scotland between Trump and the European Commission President Ursula von der Leyen.
The Commission President 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 to the value of 750 billion dollars and make new investments in the USA for 600 billion dollars, according to Trump.
– We will replace Russian gas and oil through significant purchases of American liquid 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 at the same time agreed on duty-free trade of 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 duty pause. The message comes with less than a week left before the pause expires on August 1.
This puts an end to months of tense negotiations and speculations 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 EU's exporters have paid 10 percent duty on goods sent to the USA, 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 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.
