EU reaches trade deal with US ahead of August 1 deadline
The EU has reached a trade deal with the US just days out from the August 1 deadline.
US President Donald Trump met with European Commission President Ursula von der Leyen for crunch talks on Sunday during Trump's visit to Scotland.
The announcement of a trade agreement comes after months of negotiations between the two sides and Trump's threat of higher tariff rates to apply to EU goods from August 1 if a deal was not struck.
Speaking before the meeting, von der Leyen said that Trump was known as a "tough negotiator and deal maker" and if there was to be success in a trade deal being agreed, "it would be the biggest trade deal either of us has ever struck".
This agreement announced today will avoid tariffs of 30% being imposed by the US on EU goods from August 1.
Instead, a baseline tariff of 15% on EU goods to the US is included in the agreement.
Trump said following the meeting with von der Leyen on Sunday that the EU is going to agree to purchase $750 billion dollars worth of energy from the US, and to invest into the US "$600 billion dollars more than they are investing already".
He said the EU would also be agreeing to open up all countries to trade at zero tariff.
"We were able to make a deal that is very satisfactory to both sides. It's a very powerful deal, it's a very big deal, it will be the biggest of all the deals. We're very honoured to have done so," Trump said.
President von der Leyen speaking after the agreement was made said that the deal "creates certainty in uncertain times", along with "stability and predictability, for citizens and businesses on both sides of the Atlantic".
"We have stabilised 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," von der Leyen said.
Zero-for-zero tariffs have been agreed on a number of strategic products, including certain agricultural products.
On steel and aluminium, von der Leyen said that the EU and the US "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."
In the event that trade talks had failed ahead of August 1, EU member states had recently agreed a €93 billion package of countermeasures.
Taoiseach Micheál Martin has said that the agreement achieved in Scotland between Presidents von der Leyen and Trump is very welcome.
"It brings clarity and predictability to the trading relationship between the EU and the US – the biggest in the world," the Taoiseach said.
"That is good for businesses, investors and consumers. It will help protect many jobs in Ireland.
"The negotiations to get us to this point have been long and complex, and I would like to thank both teams for their patient work."
He said that the details of what has been agreed will now be studied, "including its implications for businesses exporting from Ireland to the US, and for different sectors operating here".
"The agreement is a framework and there will be more detail to be fleshed out in the weeks and months ahead," the Taoiseach continued.
"It does mean that there will now be higher tariffs than there have been and this will have an impact on trade between the EU and the US, making it more expensive and more challenging.
"However, it also creates a new era of stability that can hopefully contribute to a growing and deepening relationship between the EU and the US, which is important not just for the EU and the US, but for the global economy.
"Given the very real risk that existed for escalation and for the imposition of punitively high tariffs, this news will be welcomed by many."
Tánaiste and Minister for Foreign Affairs and Trade Simon Harris agreed that this deal provides "much needed certainty" for Irish, European and American businesses "who together represent the most integrated trading relationship in the world".
"Ireland makes a key contribution to this with the Ireland-US economic relationship valued at more than €1 trillion," the Tánaiste said.
“The US had made clear, and this has been replicated in other recent agreements, which the US has reached with other countries, that a baseline tariff was always going to be part of the outcome.
"I have always stressed that tariffs are damaging and will have a negative impact on companies exporting to the US.
“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."
President von der Leyen described this as 15% tariffs across the board, all-inclusive.
“There is still a lot of detail on the agreement which will need to be brought forward including in relation to pharma, aviation and other sectors," the Tánaiste continued.
"Over the coming days, we will be examining what has been agreed and the full implications for Irish business and the economy, including any implications for the all-island economy.”
Minister Harris added that in many respects, this stage "represented the end of the beginning phase" of the negotiations, with the EU and the US now working to implement the agreement.
“The EU is committed to having an outcome that is mutually beneficial," he said.
