US Reaches Trade Agreement With EU

After weeks of strained negotiations, the U.S. and the European Union have agreed on trade terms.

President Donald Trump and European Commission President Ursula von der Leyen announced Sunday that the 27-nation bloc will purchase $750 billion worth of energy from the U.S. and invest $600 billion more in the country than current levels. The E.U. will not charge tariffs on U.S. goods and agreed to buy an unspecified amount of military equipment from the country.

In return, the U.S. will charge 15% tariffs on automobiles and “everything else” from the E.U. Trump later clarified that the 15% tariff did not include pharmaceuticals and that the 50% tariff on steel and aluminum will still apply to E.U. countries.

“[The deal] will bring stability, it will bring predictability. That’s very important for our businesses on both sides of the Atlantic,” von der Leyen said.

The 15% tariff is half of what Trump threatened would go into effect on Aug. 1 in a letter posted on social media earlier in the month. The E.U. had prepared retaliatory tariffs that would have gone into effect if the two governing bodies could not reach a deal.

The E.U. is one of America’s largest trading partners. According to the Census Bureau, the U.S. exported $369.8 billion of goods to the E.U. Imports from the E.U. amounted to $605.7 billion, bringing the trade deficit to $235.9 billion.

This is the sixth trade agreement Trump’s administration has made. Earlier this month, Vietnam, Indonesia, Japan, and the Philippines agreed to trade deals. Before that, the U.K. had settled on trade policies with the U.S., despite being exempt from higher “reciprocal” tariffs.

Trump said his administration anticipates making three or four more deals before higher tariffs on roughly two dozen countries take effect. The remaining countries will receive confirmation letters outlining U.S. tariffs on their goods before the Aug. 1 deadline, he said.

Commerce Secretary Howard Lutnick also said the administration’s approach to semiconductor tariffs will be revealed in two weeks.