Following a meeting with Ursula von der Leyen, President, European Commission on July 27, 2025, US President Donald Trump announced the signing of a trade deal introducing a 15 per cent tariff on most goods from the European Union entering the US, including cars.
Notably, certain products like aircrafts, their components, chemicals, and pharmaceuticals will be exempted from these tariffs. This new rate will not be added to existing tariffs. Earlier this month, President Trump had threatened a 30 per cent tariff on the EU, to which the bloc had prepared retaliatory measures.
Beyond tariffs, the agreement includes substantial economic commitments. The EU will purchase US energy worth $750 billion and invest an additional $600 billion in the US over time. As announced by President Trump, ‘hundreds of billions of dollars worth military equipment would also be purchased,’ He lauded the agreement as ‘a very powerful and big deal, it's the biggest of all the deals,’ he asserted.
The deal received a mixed but generally positive reception. Ireland acknowledged trade would become ‘more challenging and expensive’ but welcomed the clarity. Praising the deal, German Chancellor Friedrich Merz highlighted its benefits for Germany's auto industry as it reduced tariffs from 27.5 per cent to 15 per cent. Dick Schoof, Prime Minister, The Netherlands, commended the EU for securing the ‘best deal possible.’ The US-EU trade relationship is valued at nearly $2 trillion.
