{"id":11582031,"date":"2025-07-28T10:03:47","date_gmt":"2025-07-28T14:03:47","guid":{"rendered":"https:\/\/www.baltimoresun.com\/?p=11582031&preview=true&preview_id=11582031"},"modified":"2025-07-28T11:05:45","modified_gmt":"2025-07-28T15:05:45","slug":"us-europe-trade-deal-impact","status":"publish","type":"post","link":"https:\/\/www.baltimoresun.com\/2025\/07\/28\/us-europe-trade-deal-impact\/","title":{"rendered":"How the US-EU trade deal wards off more escalation but will raise prices and slow growth"},"content":{"rendered":"

By DAVID McHUGH, SAM McNEIL and SAMUEL PETREQUIN, Associated Press<\/strong><\/p>\n

FRANKFURT, Germany (AP) \u2014 U.S. President\u00a0Donald Trump<\/a>\u00a0and European Commission President Ursula von der Leyen have\u00a0announced a sweeping trade deal<\/a>\u00a0that imposes 15% tariffs on most European goods, warding off Trump’s threat of a 30% rate if no deal had been reached by Aug. 1.<\/p>\n

The tariffs, or import taxes, paid when Americans buy European products could raise prices for U.S. consumers and dent profits for European companies and their partners who bring goods into the country.<\/p>\n

Here are some things to know about the deal:<\/p>\n

Unresolved details<\/h4>\n

Trump and von der Leyen’s announcement, made during Trump’s visit to one of his golf courses in Scotland, leaves many crucial details to be filled in.<\/p>\n

The headline figure is a 15% tariff rate on about 70% of European goods brought into the U.S., including cars, computer chips and pharmaceuticals. It’s lower than the 20% that Trump initially proposed, and lower than his threats of 50% and then 30%.<\/p>\n

The remaining 30% is still open to further decisions and negotiations.<\/p>\n

Von der Leyen said that the two sides agreed on zero tariffs on both sides for a range of \u201cstrategic\u201d goods: Aircraft and aircraft parts, certain chemicals, semiconductor equipment, certain agricultural products and some natural resources and critical raw materials. Specifics were lacking.<\/p>\n

She said that the two sides \u201cwould keep working\u201d to add more products to the list.<\/p>\n

Additionally, EU companies would purchase what Trump said was $750 billion (638 billion euros) worth of natural gas, oil and nuclear fuel over three years to replace Russian energy supplies that Europe is seeking to exit in any case.<\/p>\n

Meanwhile, European companies would invest an additional $600 billion (511 billion euros) in the U.S. under a political commitment that isn’t legally binding, officials said.<\/p>\n

Not yet in writing<\/h4>\n

Brussels and Washington will shortly issue a joint statement that frames the deal but isn’t yet legally binding, according to senior officials who weren’t authorized to be publicly named according to European Commission policy.<\/p>\n

The joint statement will have “some very precise commitments and others which will need to be spelled out in different ways,\u201d a senior European Commission official said.<\/p>\n

EU officials said that the zero tariff list would include nuts, pet food, dairy products and seafood.<\/p>\n

Steel tariff remains<\/h4>\n

Trump said that the 50% U.S. tariff on imported steel would remain. Von der Leyen said that the two sides agreed to further negotiations to fight a global steel glut, reduce tariffs and establish import quotas \u2014 that is, set amounts that can be imported, often at a lower rate or tariff-free.<\/p>\n

Trump said that pharmaceuticals, a major import from the EU to the US, weren’t included in the deal. Von der Leyen said that the pharmaceuticals issue was \u201con a separate sheet of paper\u201d from Sunday’s deal.<\/p>\n

And von der Leyen said that when it came to farm products, the EU side made clear that \u201cthere were tariffs that could not be lowered,\u201d without specifying which products.<\/p>\n

\u2018Best we could do\u2019<\/h4>\n

The 15% rate removes Trump’s threat of a 30% tariff. But it effectively raises the tariff on EU goods from 1.2% last year to 17% and would reduce the 27-nation’s gross domestic product by 0.5%, said Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics.<\/p>\n

Higher tariffs, or import taxes, on European goods mean sellers in the U.S. would have to either increase prices for consumers \u2014 risking loss of market share \u2014 or swallow the added cost in terms of lower profits. The higher tariffs are expected to hurt export earnings for European firms and slow the economy.<\/p>\n

Von der Leyen said that the 15% rate was \u201cthe best we could do\u201d and credited the deal with maintaining access to the U.S. market, and providing \u201cstability and predictability for companies on both sides.\u201d<\/p>\n

Mixed reaction<\/h4>\n

German Chancellor Friedrich Merz welcomed the deal which avoided \u201can unnecessary escalation in trans-Atlantic trade relations” and said that \u201cwe were able to preserve our core interests,\u201d while adding that \u201cI would have very much wished for further relief in trans-Atlantic trade.\u201d<\/p>\n

Senior French officials on Monday criticized the accord. Strategy Commissioner Cl\u00e9ment Beaune said that the deal failed to reflect the bloc\u2019s economic strength.<\/p>\n