Topline
The U.S. has agreed to a trade deal with the European Union, President Donald Trump and European Commission President Ursula von der Leyen announced Sunday afternoon, agreeing to a 15% tariff rate on most EU goods—just days before Trump’s self-imposed August 1 deadline—in an announcement that buoyed U.S. futures and European stock markets on Monday.
US President Donald Trump meets with European Commission President Ursula von der Leyen in Scotland … More on Sunday.
Key Facts
Both Trump and von der Leyen said the tariffs would be applied “across the board,” but Trump later said they would not apply to several major sectors the administration is planning specific tariffs for.
Trump said the EU agreed to purchase $750 billion in energy, purchase an undetermined amount of military equipment, invest a further $600 billion in the United States and open the European economy to American goods at 0% tariffs.
Von der Leyen said the U.S. agreed to “zero for zero tariffs” on some strategic goods, including “all aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources and critical raw materials,” adding the two sides would work to expand that list.
The 15% rate matches the rate secured in a deal with Japan, another major U.S. trade partner and auto exporter, announced last week, and the administration has suggested 15% would be the baseline.
The European Union was previously facing a steep 30% tariff rate scheduled to go into effect on Aug. 1, and the deal alleviates immediate fears of an impending trade war between the two economies.
How Have The Stock Markets Reacted To The Trade Deal?
The benchmark S&P Futures index rose to nearly 0.3% in early trading on Monday, to 6,442 points, while the tech-centric Nasdaq Futures was up around 0.5% at 23,530 points. Dow futures were also up, rising nearly 0.2% to 45,162 points. Key European indices saw a big jump as well, with the pan-European STOXX 50 index rising 0.9%, while France’s CAC 40 rose 0.67% and Germany’s DAX was up 0.33%.
Crucial Quote
“It will bring stability. It will bring predictability. That’s very important for businesses on both sides of the Atlantic,” von der Leyen said. “Basically, the European market is open. It’s 450 million people.”
Which European Leaders Have Critcized The Trade Deal?
Some leaders from Germany and France criticized the deal, saying it appeared as if the EU had capitulated to Trump’s demands. In a post on X, former French Prime Minister François Bayrou criticized European leaders for accepting the deal, saying: “it is a dark day when an alliance of free peoples, united to assert their values and defend their interests, resolves to submission.” Alice Weidel, the leader of Germany’s far-right AfD Party, tweeted: “The EU has been brutally taken advantage of! 15% tariffs and the obligation to purchase weapons and energy from the US are not an agreement, but a slap in the face for European consumers and producers!” The leader of Germany’s Greens party, Michael Bloss, also called out the deal, criticizing the EU’s decision to import $750 billion worth of fossil fuels from the U.S. Bloss tweeted: “This trade deal is devastating for European climate policy. It’s a deal that plunges us back into fossil fuel dependency and destroys our climate goals…We’re trading our dependence on Putin for a new dependence on U.S. fracking companies.”
Big Number
$235.6 billion. That was the United States’ trade deficit with the EU in 2024, according to the U.S. Trade Representative. Trump made reducing trade deficits between major trading partners like the EU a key plank in his economic policy, and on Sunday von der Leyen seemed on the same page. “We wanted to rebalance the trade relation and we wanted to do it in a way that trade goes on between the two of us across the Atlantic because the two biggest economies should have a good trade