Trump Takes Victory Lap on EU Trade Deal as Tariff Deadline Looms

Michelle Shulz, founder and managing partner of Schulz Trade Law, breaks down how the back and forth on tariffs is impacting the decisions businesses are making and why a trade agreement with the EU may not be a fully done deal quite yet.

The US and European Union agreed on a hard-fought deal that will see the bloc face 15% tariffs on most of its exports, including automobiles, staving off a trade war that could have delivered a hammer blow to the global economy.

The pact was concluded less than a week before a Friday deadline for President Donald Trump’s higher tariffs to take effect and was quickly praised by several European leaders, including German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni, who called it “sustainable.”

Trump and European Commission President Ursula von der Leyen announced the deal Sunday at his golf club in Turnberry, Scotland, although they didn’t disclose the full details of the pact or release any written materials. The 15% rates will take effect Aug. 1, according to a US official.

“It’s the biggest of all the deals,” Trump said, while von der Leyen added it would bring “stability” and “predictability.”

“The EU played a bad hand about as well as it could have,” said Stephen Olson, a former US trade negotiator now with the ISEAS-Yusof Ishak Institute. “The EU sees value in healthy, robust and open North Atlantic trade relations; President Trump does not. That simple dynamic put the EU behind the eight ball throughout the negotiations.”

President Donald Trump is getting his way with the world economy.

Trading partners from the European Union to Japan to Vietnam appear to be acceding to the president’s demands to accept higher costs — in the form of high tariffs — for the privilege of selling their wares to the United States. For Trump, the agreements driven by a mix of threats and cajoling, are a fulfillment of a decades-long belief in protectionism and a massive gamble that it will pay off politically and economically with American consumers.

On Sunday, the United States and the 27-member state European Union announced that they had reached a trade framework agreement: The EU agreed to accept 15% U.S. tariffs on most its goods, easing fears of a catastrophic trans-Atlantic trade war. There were also commitments by the EU to buy $750 billion in U.S. energy products and make $600 billion in new investments through 2028, according to the White House.

“We just signed a very big trade deal, the biggest of them all,” Trump said Monday.

But there’s no guarantee that Trump’s radical overhaul of U.S. trade policy will deliver the happy ending he’s promised. The framework agreement was exceedingly spare on details. Most trade deals require months and even years of painstaking negotiation that rise and fall on granular details.

High-stakes negotiations break Trump's way

Financial markets, at first panicked by the president’s protectionist agenda, seem to have acquiesced to a world in which U.S. import taxes — tariffs — are at the highest rates they’ve been in roughly 90 years. Several billion in new revenues from his levies on foreign goods are pouring into the U.S. Treasury and could somewhat offset the massive tax cuts he signed into law on July 4.

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