Released July 29, 2025 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The European Union (EU) and the U.S. have reached an agreement on a baseline 15% tariff on a range of EU goods just days before a 30% tariff was to be activated.
The high-level deal was announced by European Commission (EC) President Ursula von der Leyen and U.S. President Donald Trump in Scotland. Although the agreed tariff is half of what was threatened, it is higher than the 10% tariff the EU was already paying on most exports to the U.S. Over the next three years, Europe has agreed to buy US$750 billion worth of oil, gas, nuclear fuel and semi-conductors, including liquefied natural gas (LNG). It will also invest US$600 billion in the U.S., including buying military equipment. In 2024, goods traded between the EU and US were worth roughly US$976 billion, with the U.S. importing about US$606 billion worth of goods from the EU and exporting around US$370 billion worth. Trump's tariff threats are designed to address that imbalance and speaking recently he said that countries that have yet to strike individual trade agreements with the U.S. could face a tariff rate of 15%-20% on their exports.
Von der Leyen said: "We have stabilized on a single 15% tariff rate for the vast majority of EU exports. This rate applies across most sectors, including cars, semiconductors and pharmaceuticals. This 15% is a clear ceiling. No stacking. All-inclusive. So it gives much-needed clarity for our citizens and businesses. This is absolutely crucial. Today we have also agreed on zero-for-zero tariffs on a number of strategic products. This includes all aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources and critical raw materials. And we will keep working to add more products to this list."
However, punitive 50% tariffs on EU exports of steel and aluminium will remain in place for now with the possibility of a quota system that could replace them. Von der Leyen said: "On steel and aluminium, the EU and the U.S. face the common external challenge of global overcapacity. We will work together to ensure fair global competition. And to reduce barriers between us, tariffs will be cut. And a quota system will be put in place." The deal will see an existing tariff of 27.5% on European cars and car parts reduced to the 15% baseline but there remains uncertainty over what tariffs European wine and spirits producers will face in the U.S..
The accuracy of the sums of money the EU is expected to spend on U.S. LNG, for instance, have been grossly overstated according to market watchers at TS Lombard and Reuters. Davide Oneglia, an economist at TS Lombard speaking to Yahoo Finance : "The huge figure for energy imports is meaningless, as it's unachievable not only because EU demand cannot grow that much, but also because US exporters cannot supply that much either!" Total energy imports from the U.S. accounted for less than US$80 billion last year, far short of the US$250 billion per year promise made in the deal.
Reactions to the deal from European leaders have been cautiously positive about it securing some market certainty but less so at the hike of the baseline tariff to 15% and the lack of detail. German Chancellor Freidrich Merz said: "This agreement has succeeded in averting a trade conflict that would have hit the export-orientated German economy hard. This applies in particular to the automotive industry, where the current tariffs of 27.5% will be almost halved to 15%." France's Prime Minister Francois Bayrou was less pleased: "It is a somber day when an alliance of free peoples, brought together to affirm their common values and to defend their common interests, resigns itself to submission." In Ireland, Trade Minister Simon Harris said: "A deal provides a measure of much needed certainty for Irish, European and American businesses who together represent the most integrated trading relationship in the world. While Ireland regrets that the baseline tariff of 15% is included in the agreement, it is important that we now have more certainty on the foundations for the EU-US trade relationship, which is essential for jobs, growth and investment."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The high-level deal was announced by European Commission (EC) President Ursula von der Leyen and U.S. President Donald Trump in Scotland. Although the agreed tariff is half of what was threatened, it is higher than the 10% tariff the EU was already paying on most exports to the U.S. Over the next three years, Europe has agreed to buy US$750 billion worth of oil, gas, nuclear fuel and semi-conductors, including liquefied natural gas (LNG). It will also invest US$600 billion in the U.S., including buying military equipment. In 2024, goods traded between the EU and US were worth roughly US$976 billion, with the U.S. importing about US$606 billion worth of goods from the EU and exporting around US$370 billion worth. Trump's tariff threats are designed to address that imbalance and speaking recently he said that countries that have yet to strike individual trade agreements with the U.S. could face a tariff rate of 15%-20% on their exports.
Von der Leyen said: "We have stabilized on a single 15% tariff rate for the vast majority of EU exports. This rate applies across most sectors, including cars, semiconductors and pharmaceuticals. This 15% is a clear ceiling. No stacking. All-inclusive. So it gives much-needed clarity for our citizens and businesses. This is absolutely crucial. Today we have also agreed on zero-for-zero tariffs on a number of strategic products. This includes all aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources and critical raw materials. And we will keep working to add more products to this list."
However, punitive 50% tariffs on EU exports of steel and aluminium will remain in place for now with the possibility of a quota system that could replace them. Von der Leyen said: "On steel and aluminium, the EU and the U.S. face the common external challenge of global overcapacity. We will work together to ensure fair global competition. And to reduce barriers between us, tariffs will be cut. And a quota system will be put in place." The deal will see an existing tariff of 27.5% on European cars and car parts reduced to the 15% baseline but there remains uncertainty over what tariffs European wine and spirits producers will face in the U.S..
The accuracy of the sums of money the EU is expected to spend on U.S. LNG, for instance, have been grossly overstated according to market watchers at TS Lombard and Reuters. Davide Oneglia, an economist at TS Lombard speaking to Yahoo Finance : "The huge figure for energy imports is meaningless, as it's unachievable not only because EU demand cannot grow that much, but also because US exporters cannot supply that much either!" Total energy imports from the U.S. accounted for less than US$80 billion last year, far short of the US$250 billion per year promise made in the deal.
Reactions to the deal from European leaders have been cautiously positive about it securing some market certainty but less so at the hike of the baseline tariff to 15% and the lack of detail. German Chancellor Freidrich Merz said: "This agreement has succeeded in averting a trade conflict that would have hit the export-orientated German economy hard. This applies in particular to the automotive industry, where the current tariffs of 27.5% will be almost halved to 15%." France's Prime Minister Francois Bayrou was less pleased: "It is a somber day when an alliance of free peoples, brought together to affirm their common values and to defend their common interests, resigns itself to submission." In Ireland, Trade Minister Simon Harris said: "A deal provides a measure of much needed certainty for Irish, European and American businesses who together represent the most integrated trading relationship in the world. While Ireland regrets that the baseline tariff of 15% is included in the agreement, it is important that we now have more certainty on the foundations for the EU-US trade relationship, which is essential for jobs, growth and investment."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
