The United States and European Union have reached a trade deal imposing a 15% tariff on European imports, a significantly lower rate than the 30% threatened earlier this month, but still among the highest duties in decades between the transatlantic partners.
The agreement, announced Sunday, ends months of uncertainty that had threatened to escalate into a major trade conflict. The European Union will not impose new tariffs on U.S. goods as part of the deal, while both sides agreed to exempt several industries from the duty, including aircraft, certain chemicals, generic pharmaceuticals, semiconductor equipment, and selected agricultural products.
The tariff rate is still a steep increase compared with the 1.2% average duty on European imports last year. However, it eases pressure on industries that had braced for far higher costs, particularly Germany’s auto sector, where tariffs on cars drop from 27.5% to 15%.
The agreement also includes EU commitments to purchase $750 billion in U.S. energy products and invest \$600 billion in the American economy, although details on the timeline and structure of those investments remain unclear. EU leaders also signaled plans to expand purchases of U.S. military equipment.
Even with this deal, uncertainty remains. Existing 50% tariffs on steel remain in place, and the U.S. is considering additional duties on pharmaceuticals and semiconductors. Trump has separately floated a 200% tariff on imported drugs, though that would not take effect for at least 18 months.
The EU had prepared $100 billion in retaliatory tariffs targeting politically sensitive U.S. products but shelved them after the agreement was reached. Without a deal, analysts warned of higher consumer prices for cars, wines, cheeses, and other goods on both sides of the Atlantic.
Source: NBC