Trump and EU Seal New Trade Deal Today, Setting 15% Tariffs to Avert Trade War

President Trump flew to his Turnberry golf resort in Scotland today to finalise a deal with European Commission President Ursula von der Leyen, setting a 15 per cent tariff on most EU imports—well below the 30 to 50 per cent that had been threatened from 1 August. The move echoes a recent pact with Japan and appears to pull back from the brink of a full-blown trade war. Steel and aluminium, however, will still face a separate 50 per cent levy, though a new quota system will soften the impact in some sectors. In return, the EU has agreed to purchase more US liquefied natural gas and to funnel hundreds of billions of dollars into investments across the United States.

This deal establishes a cap on most tariffs at 15 per cent, and EU exports to the US—such as vehicles, medicines and semiconductors—will also face that rate. Von der Leyen called the outcome “the best we could get,” suggesting the EU settled to avoid more damaging tariffs. Maroš Šefčovič, one of the bloc’s top negotiators, warned earlier this month that Trump’s original tariff threat “would eliminate transatlantic trade” and urged both sides to “use every minute until 1 August” to reach a solution.

British exporters, who already face a 10 per cent tariff on cars under the UK’s own trade deal with Washington, now risk added costs when selling to the EU, which may reconfigure its own tariff regime in response. Business groups in Britain have warned that the new arrangements could harm competitiveness and increase consumer prices. Some MPs expressed frustration that the UK was left out of the talks, despite the so-called “special relationship” with the US.

Markets reacted quickly. One analyst described the 15 per cent figure as “punchy but half the 30 per cent they were threatened with,” calling it more of a climbdown than a victory. Trump, in contrast, branded it “the biggest of all deals,” claiming it would protect American jobs. What the populist US right presents as strength, critics call yet another example of bluster followed by retreat—a pattern seen throughout Trump’s trade approach. From reduced China tariffs to last-minute renegotiations of earlier threats, Trump’s strategy often unfolds as a spectacle of brinkmanship that achieves little structural change.

Observers also noted similarities with previous US–China trade battles, where bold rhetoric collapsed into modest compromises. Experts say upcoming negotiations on digital trade and cross-border data handling could follow a similar pattern. Meanwhile, EU officials appear focused on stabilising relations and minimising fallout.

As Trump continues to set global trade policy from personal venues like his Scottish golf course, some worry about the long-term reliability of such deals. Critics have increasingly questioned the coherence of his strategy—and his mental stability—given his erratic public outbursts and reversals. What began as a show of dominance has again ended in moderation, reinforcing concerns that global economic decisions remain to some degree vulnerable to the whims of a single, orange and volatile leader.

References

Gray, A. & Shalal, A., “US and EU clinch deal with 15% US tariff on most EU exports to avert trade war”, Reuters, 27 July 2025, https://www.reuters.com/business/us-eu-clinch-deal-with-15-us-tariff-most-eu-exports-avert-trade-war-2025-07-27/“Reaction to US and EU trade deal”, Reuters, 27 July 2025, https://www.reuters.com/business/view-reaction-us-eu-trade-deal-2025-07-27/Rankin, J., “Trump’s 30% tariffs would eliminate EU-US trade, says chief negotiator Šefčovič”, The Guardian, 14 July 2025, https://www.theguardian.com/us-news/2025/jul/14/trump-tariffs-eu-us-trade-says-sefcovicPalmer, D., “Trump: 50-50 chance of reaching trade deal with EU”, Politico, 25 July 2025, https://www.politico.com/news/2025/07/25/trump-eu-trade-deal-00476850US News, “U.S.-EU agreement could mirror pact with Japan, experts say”, CBS News, 25 July 2025, https://www.cbsnews.com/news/trump-tariffs-trade-deal-eu-scotland/