Trump Announces 'Biggest-Ever' Trade Deal With European Union, Here's Why It Tilts In US's Favour

In a high-stakes meeting that ran just under an hour, the United States (US) and the European Union (EU) on Sunday (27 July) reached a sweeping trade accord to end their escalating tariff dispute — one that US President Donald Trump hailed as the “biggest-ever deal” in trade history.

The breakthrough came ahead of a looming 1 August deadline, after which the US had threatened to impose a blanket 30 per cent tariff on all European goods, NDTV reported.

Instead, under the new agreement, a 15 per cent across-the-board tariff will now apply on EU exports to the US — including key sectors like automobiles, pharmaceuticals, and semiconductors.

"This is probably the biggest deal ever reached in any capacity," Trump declared after talks with European Commission President Ursula von der Leyen at his golf resort in Scotland.

Why Trump calls it ‘biggest-ever’

• $750 billion worth of EU energy purchases from the US over three years, covering liquefied natural gas (LNG), oil, and nuclear fuels.

• An additional $600 billion in EU investments in the US economy.

• EU’s commitment to buying “hundreds of billions of dollars worth of military equipment” from the US, adding a strong defence-industrial component to the pact.

Collectively, these figures far exceed the scope of most bilateral trade agreements and represent a strategic rebalancing of EU economic ties — particularly its energy dependence on Russia.

Von der Leyen called the deal “significant,” adding, “It will bring stability. It will bring predictability. That’s very important for our businesses on both sides of the Atlantic.”

More features of the deal

While the headline tariff will be set at 15 per cent — three times the previous average of 4.8 per cent — the EU managed to secure targeted exemptions and strategic carve-outs:

• Tariff relief on key exports including aircraft, certain chemicals, critical raw materials, and select agricultural products.

• Continued negotiations for a “zero-for-zero” deal on alcohol, with von der Leyen hopeful of finalizing that in the coming days.

• A quota system for steel, despite Trump’s initial insistence that existing 50 per cent steel tariffs would remain unchanged.

Political and industry reactions

German Chancellor Friedrich Merz swiftly welcomed the accord, calling it a move that avoided "needless escalation in transatlantic trade relations."

However, business leaders in Germany and across the EU were more cautious. The BDI — Germany’s main industry federation — warned of “considerable negative repercussions,” and the country’s chemical industry group VCI noted the agreed tariff levels remained “too high” to be fully competitive.

Still, von der Leyen defended the outcome: “15 per cent is not to be underestimated, but it is the best we could get.”

The deal, while finalised at the executive level, will still require approval from EU member states. Their ambassadors, who were on a scheduled visit to Greenland, were briefed Sunday morning and were expected to reconvene for formal review.

Strategic implications

The agreement ends months of economic brinkmanship between Washington and Brussels, during which the EU had already been hit with:

• 25 per cent tariffs on cars

• 50 per cent on steel and aluminium

• 10 per cent general tariffs across industries — all of which were set to jump to 30 per cent if no deal was reached

The EU had also prepared a retaliatory list worth $109 billion, which included levies on American aircraft and vehicles — a trade war that now seems to have been narrowly avoided.

Asked whether more such deals were in the pipeline, Trump simply said: "This was the big one. This is the biggest of them all."