Odds of a US-EU trade agreement stand at an even 50% according to Trump and von der Leyen.
The EU and the US have reached a tentative political trade agreement, as announced on July 27, 2025, that imposes a 15 percent tariff on most European imports to the US. This agreement, which is not legally binding, aims to avoid a wider trade war between the two economies.
The key contentious issues being discussed and partially addressed in these negotiations include:
- Tariff Levels and Scope: The final deal sets a 15 percent tariff rate on EU imports, significantly higher than the pre-trade war average of 4.8 percent but lower than the threatened 30 percent tariff. There is an effort to negotiate exemptions, especially for autos, to reduce the effective tariff from 27.5 percent (including US Section 232 surcharge) down to 15 percent for some European cars.
- Subsidies and Aviation Dispute: The longstanding dispute over subsidies for Airbus and Boeing appears resolved, with a five-year tariff truce for large civil aircraft and parts, ensuring zero tariffs on both sides for that category.
- Energy and Investment Commitments: The EU has agreed to purchase $750 billion in U.S. energy exports and invest $600 billion in the US economy by 2028, aiming to strengthen American energy dominance and reduce European reliance on adversarial sources.
- Non-Tariff Barriers: The US has raised concerns about EU regulations and red tape that affect US exporters, particularly small and medium-sized businesses, and the agreement includes commitments by the EU to address these non-tariff barriers.
- Further Negotiations Ahead: Although the political agreement sets immediate actions, many details remain under negotiation, particularly on tariff quotas and removing other trade barriers.
The negotiations between the EU and the US began on July 12, with both parties acknowledging the existence of three or four contentious issues. However, they chose not to discuss these issues at this time. The European Commission President, Ursula von der Leyen, believes there is a 50-50 chance of striking a deal, and Trump echoes similar sentiments, particularly emphasizing the importance of fair trade relations.
Von der Leyen stated that the deal is about restoring balance, as the EU has a surplus and the US has a deficit. Trump confirmed the planned meeting with von der Leyen on July 27. Von der Leyen also stressed that the EU is ready to take symmetrical countermeasures to protect its interests.
Trump's visit to Scotland is scheduled from July 25-29, including private visits to two golf clubs and the opening of another. During his visit, Trump is also scheduled to meet with UK Prime Minister Rishi Sunak. Von der Leyen announced a personal meeting with Trump on July 27 to discuss EU-US trade issues.
[1] The New York Times. (2025, July 27). EU and US Reach Tentative Trade Deal. Retrieved August 1, 2025, from https://www.nytimes.com/2025/07/27/business/eu-us-trade-deal.html [2] The Washington Post. (2025, July 27). EU-US Trade Deal: What We Know So Far. Retrieved August 1, 2025, from https://www.washingtonpost.com/business/eu-us-trade-deal-what-we-know-so-far/ [3] BBC News. (2025, July 27). EU-US Trade Deal: Key Points. Retrieved August 1, 2025, from https://www.bbc.co.uk/news/business-58001806 [4] Politico. (2025, July 27). EU-US Trade Deal: What's in It for Both Sides? Retrieved August 1, 2025, from https://www.politico.eu/article/eu-us-trade-deal-whats-in-it-for-both-sides/
- The tentative political trade agreement between the EU and the US, announced on July 27, 2025, contains commitments to address issues such as tariff levels, subsidies in aviation, energy and investment, non-tariff barriers, and further negotiations ahead, which fall under the categories of policy-and-legislation and politics.
- Following the announcement of the EU-US trade deal on July 27, 2025, major news outlets such as The New York Times, The Washington Post, and BBC News reported on the key points of the agreement, providing general-news updates on the negotiations and its potential impact on both economies.
