National Times Bureau, July 28, 2025: The United States and the European Union on Sunday reached a sweeping framework trade deal, calming tensions between two of the world’s largest economies and averting a high-stakes tariff escalation that threatened nearly a third of global trade.
The agreement imposes a uniform 15% US import tariff on most European goods, replacing the possibility of steeper duties that had alarmed businesses on both sides of the Atlantic. It also includes major EU investments in American infrastructure and commitments to purchase US energy and military equipment.
Both sides hailed the deal as a stabilizing force in a fragile global economy. While the European bloc had originally sought a zero-tariff outcome, negotiators ultimately accepted the compromise to avoid a looming 30% levy. The agreement also aligns closely with recent US trade terms negotiated with Japan.
The flat 15% tariff applies broadly, though key sectors such as steel and aluminium remain exceptions, facing a separate 50% tariff under current US policy. Nonetheless, the deal offers clarity for companies navigating an increasingly unpredictable trade landscape.
Beyond tariffs, the EU committed to investing $600 billion in the US, signaling deeper strategic ties and economic interdependence. US officials noted that the deal builds momentum toward rebalancing trade relationships worldwide, part of a broader strategy that includes recent agreements with Britain, Vietnam, Indonesia, and Japan.
However, critics in Europe may view the compromise as a step back from long-standing ambitions of completely free transatlantic trade. Despite that, both governments appeared eager to showcase unity amid broader geopolitical uncertainty.
Meanwhile, in a separate but closely watched development, US and Chinese officials are set to resume trade talks in Stockholm on Monday. The negotiations aim to solidify a fragile truce and avoid a new wave of tariffs, some of which could exceed 100% if no agreement is reached before the August 12 deadline.
With global supply chains still recovering from past trade disruptions, the twin tracks of US-EU and US-China negotiations are being closely watched by investors and industry leaders around the world.
