The United States and the European Union reached a trade agreement on Sunday, ending the trade standoff between the world's most important economic partners over the past months.
The agreement came after decisive negotiations between US President Donald Trump and European Commission President Ursula von der Leyen in Scotland, and includes the imposition of a 15 percent US tariff on all goods imported from the European Union.
The agreement represents a reduction in the 30 percent import taxes that Trump threatened to impose starting Friday.
Trump emphasized that the 27-nation European Union will open its markets to American exporters, with full tariff exemptions for certain products.
For her part, Ursula von der Leyen praised the agreement, stressing that it would "bring stability to both allies," which together represent nearly a third of global trade.
Trump has threatened to impose tariffs on major US trading partners in an attempt to reorganize the global economy and reduce the US trade deficit.
In addition to the European Union, Trump also reached tariff agreements with the United Kingdom, Japan, Indonesia, and Vietnam, though he fell short of his stated goal of "90 deals in 90 days."
The negotiations for the agreement between Trump and Ursula took place at the Turnberry golf course in South Ayrshire, Scotland, where Trump is visiting for five days.
"We have reached an agreement," the US president said after a brief meeting with the European Commission president. "It's a good agreement for everyone. It will bring us closer together."
Von der Leyen hailed the agreement, describing it as a "huge deal" after "arduous negotiations."
Under the agreement, Trump said the EU would boost its investments in the United States by $600 billion, purchase hundreds of billions of dollars in American military equipment, and spend $750 billion on the U.S. energy sector.
While Ursula explained that energy investment will focus on American liquefied natural gas, oil, and nuclear fuel, to help reduce Europe's dependence on Russian energy sources.
“I would like to personally thank President Trump for his personal commitment and leadership in achieving this milestone,” she said.
"He's a tough negotiator, but he's also a great deal maker," she added.
Trump also indicated that the 50 percent tariffs he imposed on global steel and aluminum would remain in place.
Both parties can consider this agreement a victory for each of them.
The European Union could have faced even worse tariffs from the United States, but it achieved the same 15 percent agreement that Japan reached with Trump. Of course, the agreement was not as good as the one Britain obtained, as US tariffs on its products did not exceed 10 percent.
For the United States, the agreement means $90 billion in tariff revenue will flow into government coffers, according to trade figures with the European Union last year, in addition to hundreds of billions of dollars in investment that will flow into the American economy.
Total trade in goods between the European Union and the United States amounted to approximately $975.9 billion last year. The trade balance was favored by the Europeans, with the United States importing approximately $606 billion worth of goods from the EU, while US exports to the EU totaled $370 billion.
This imbalance, or trade deficit, is a point of contention for Trump, who says such trade relationships mean the United States is "losing."
Had Trump carried out his previous threats to impose heavy tariffs on Europe, many products would have been subject to import taxes, from Spanish medicines to Italian leather, German electronics, and French cheese.
The European Union threatened at the time that it was ready to respond by imposing tariffs on American goods, including auto parts, Boeing aircraft, and beef.
British Prime Minister Keir Starmer plans to meet Trump at Turnberry on Monday.
Trump is scheduled to visit Aberdeen on Tuesday, where his family owns another golf course, and will open a third next month.
The President and his sons intend to participate in cutting the ribbon at the opening of the new stadium.
Source: BBC
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Trump reaches a trade agreement with EU and reduces tariffs on its goods.