In a significant development for international trade, former President Donald Trump and European Commission President Ursula von der Leyen announced a groundbreaking trade deal during their meeting on Sunday. This is a critical moment in time to change the US-EU economic partnership for the better. Indeed, the EU is the U.S.’s largest trading partner jointly with China.
The agreement, which Trump described as “a very powerful deal, it’s a very big deal, it’s the biggest of all the deals,” seeks to address various trade disparities between the two entities. The European Union has expressed interest in negotiating exemptions or lower tariffs for key industries that could potentially benefit from improved terms.
Yet, perhaps for the first time in the meeting, Trump admitted how complicated these negotiations are. He told reporters that he still viewed a “50-50” chance of establishing a framework for the agreement. Those talks played out under the shadow of potential EU retaliatory tariffs aimed at a broad range of U.S. products including agricultural goods. This compounded the stakes for both sides to come to a deal.
Finally, the bilateral trade relationship between the U.S. and the EU is truly remarkable. In 2024, it is expected to reach some 1.68 trillion euros, roughly 1.97 trillion U.S. dollars. The EU continued to benefit from a substantial trade surplus in goods with the U.S. It was met with a services shortfall. These complexities present opportunities for advocates and funders to build their relationship.
Under that agreement, Trump slapped a 15% tariff on more than $7.5 billion worth of European goods. This is a major change from his earlier proposal for a 30% rate. This concession might improve the competitive landscape for EU exports to the U.S. It will reinforce their economic relationship, too.
Beyond tariff lowering, the European Union pledged to buy an additional $750 billion of American energy. In addition, it promised to inject $600 billion into the U.S. economy, giving American industries—and the workers who power them—a much-needed shot in the arm.
While still holding some skepticism, Trump himself admitted he had “three or four sticking points” going into the meeting. He was hopeful that they could still come to an understanding that served the interests of both sides.
“This is the biggest deal, people don’t realize.” – Donald Trump
As discussions continue, both leaders remain focused on solidifying this landmark agreement, which could have far-reaching implications for trade and economic stability between the U.S. and Europe.