TEMPO.CO, Jakarta - President of the European Commission Ursula von der Leyen and President of the United States Donald Trump reached a tentative trade deal on Sunday, July 27, 2025. The agreement averted a potential tariff war between the two economic powers, ahead of the August 1 deadline set by Trump. The meeting took place at Trump's golf course on the coast of Scotland.
According to the report by Euronews, the majority of European exports to the American market will be subjected to a fixed tariff of 15 percent. Von der Leyen said the tariff is "across-the-board" and "all-inclusive."
"This will bring stability and predictability that's very important for our businesses on both sides of the Atlantic," she said.
Trump welcomed the agreement enthusiastically. "I think it's great we made a deal today instead of playing games. I think it's the biggest deal ever made," he said. Von der Leyen added, "It was tough negotiations (but) we came to a good conclusion."
Lower Than Earlier Tariff Threats
The deal came after Trump threatened a 30 percent tariff if an agreement was not reached before August 1. Previously, he had imposed a 20 percent tariff in April, which was eventually suspended.
The agreed 15 percent tariff is lower than the tariffs imposed on Indonesia and the Philippines (19 percent), and equal to the tariff for Japan, a fellow G7 member.
European products were previously subject to an average tariff of 4.8 percent when entering America. Under this new agreement, including European-made cars, the tariff will be adjusted to 15 percent, down from 27.5 percent.
Strategic Sectors and Energy
Several strategic sectors will be exempt from tariffs based on the "zero-for-zero" scheme. The list includes aircraft and its components, semiconductor equipment, critical raw materials, as well as some chemical and agricultural products. "We will keep working to add more products to this list," said von der Leyen.
The agreement also includes the European Union's commitment to purchase energy from America, including liquefied natural gas (LNG), oil, and nuclear fuel, with a total of more than US$250 billion per year. The value is estimated to reach US$700 billion by the end of Trump's term. According to Trump, all European Union countries will be open to American goods, and the bloc will also invest US$600 billion in the US.
The Pressure of Trade Imbalance
In a press conference, von der Leyen highlighted the imbalance in trade balances. "The starting point was an imbalance, a surplus (of goods) on our side and a deficit on the U.S. side. 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," she said.
Pharmaceuticals, especially, have become a sensitive issue. European pharmaceutical products will be subject to a 15 percent tariff, although Trump opened the possibility of further action. "15% is certainly a challenge for some, but we should not forget that it keeps us access to the American market," von der Leyen stated. She added that the European Union will continue to seek other trading partners to expand export and investment opportunities.
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