European Commission president Ursula von der Leyen and US president Donald Trump at Turnberry in Scotland on Sunday. Photograph: Andrew Harnik/Getty Images

The European Union and US have agreed a deal that will lock in tariffs of 15 per cent on most EU imports to the US, but prevent the prospect of an economically devastating trade war.

The final terms of the deal were worked out during a meeting between European Commission president Ursula von der Leyen and US president Donald Trump at his Turnberry golf resort in Scotland on Sunday.

The EU hopes the deal will draw a line under months of uncertainty, shifting deadlines and threats of sweeping tariffs from Mr Trump that had cast a shadow over the European economy.

The commission, the EU’s executive body, which is responsible for trade policy, had been scrambling to secure an agreement before an August 1st deadline. Mr Trump had threatened to triple import levies on nearly all trade coming from the EU if a deal was not done by then.

The accord effectively sees the EU accepting import taxes of 15 per cent on most of its huge volume of trade with the US.

Speaking after the negotiations ended, Ms von der Leyen said the US had agreed to cap any future tariffs on pharmaceutical products at that rate.

EU negotiators had pushed for limits to tariffs on pharma products to shield the sector from huge trade levies Mr Trump had threatened to put on the industry.

The rate would also apply to cars, representing a cut on the current 25 per cent tariffs the European automobile sector has faced for months when selling cars to the US.

The two sides agreed that no tariffs would be charged on imports of aircraft, certain chemicals and some agri-food goods, though the finer details of what agricultural products will benefit from these exemptions is still to be worked out.

[ EU pushing to cap future tariffs on pharma in US dealOpens in new window ]

Blanket tariffs of 15 per cent represent a serious economic blow to Ireland given its large volume of trade with the US. Finance officials will begin studying the likely impact on the State’s economic projections and plans for October’s budget.

The Government is expected to seek firm assurances that the EU-US agreement will spare the pharma sector from tariffs of more than than 15 per cent.

Mr Trump’s plans to use tariffs to pressure pharmaceutical firms to move manufacturing capacity to the US has been a point of concern given that the industry accounts for much of the Republic’s exports to the US.

He previously said he was planning tariffs of “up to 200 per cent” on the sector under a separate process.

Taoiseach Micheál Martin said the agreement would bring “clarity and predictability” to the transatlantic relationship.

“We will now study the detail of what has been agreed, including its implications for businesses exporting from Ireland to the US, and for different sectors operating here,” he said.

Tánaiste and Minister for Foreign Affairs and Trade Simon Harris said that “while Ireland regrets that the baseline tariff of 15 per cent is included in the agreement, it is important that we now have more certainty on the foundations of the EU-US trade relationship”.

Negotiations between the US and EU camps had intensified in recent weeks. European Commission officials were confident they were on the cusp of a deal pending Mr Trump’s approval.

However, several sources in Dublin and Brussels said much had still hung on Sunday’s face-to-face talks between Mr Trump and Ms von der Leyen.

The deal includes EU commitments to purchase set amounts of US oil, nuclear power and liquefied natural gas annually.

Nearly all EU trade to the US has been charged tariffs of 10 per cent since early April, with imports of cars and steel facing higher levies.

The United States and the European Union have reached a wide-ranging trade agreement, averting a full-blown transatlantic trade war days ahead of an August 1 deadline for the introduction of steep tariffs.

The deal, which imposes a 15 percent tariff on most European goods, came after a private meeting on Sunday between US President Donald Trump and European Commission President Ursula von der Leyen in Scotland.

“It was a very interesting negotiation. I think it’s going to be great for both parties,” Trump told reporters at his Turnberry golf resort, hailing the agreement as the “biggest deal ever made”.

Von der Leyen said the agreement would “bring stability” and “bring predictability that’s very important for our businesses on both sides of the Atlantic”.

The deal, sealed days before Washington was due to impose a 30 percent tariff on EU imports, is the most significant of Trump’s trade deals announced so far, following preliminary pacts with Japan, the United Kingdom, Indonesia, Vietnam and the Philippines, and a 90-day trade truce with China.

The EU is the US’s largest trading partner, with two-way trade in goods and services last year reaching nearly $2 trillion.

Under the deal, the 15 percent tariff will be applied broadly to European exports, including automobiles.

The 15 percent baseline rate marks a reprieve for Europe’s auto industry, which had since April been subject to a 25 percent duty on top of a pre-existing 2.5 percent levy.

Under the agreement, a limited range of goods, including plane parts, semiconductor equipment, certain chemicals and some agricultural products, will be fully exempt from tariffs.

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Trump said the EU also committed to buying about $750bn worth of US energy, in addition to boosting overall investment in the US by $600bn and placing a large order for military equipment.

“We have the opening up of all of the European countries,” Trump said.

Still, few details were included in the announcement.

“The big caveat to today’s deal is that there is nothing on paper, yet,” Carsten Brzeski, Global Head of Macro for ING Research, said in a note.

“The next hours and days will hopefully bring more clarity, Therefore, any assessment has to be taken with more than only one pinch of salt.”

The breakthrough follows months of tense back-and-forth exchanges between European officials and Trump, who has long accused the EU of unfair trade practices.

Just before negotiations began, Trump called the existing arrangements “a very one-sided transaction; very unfair to the United States”.

On Sunday, Von der Leyen pointed to the combined economic might of the US and Europe, saying that their trade encompassed “hundreds of millions of people and trillions of dollars”.

Von der Leyen also acknowledged Trump’s “tough” reputation as a negotiator, to which he replied: “But fair.”

Trade conflict averted

Earlier this month, negotiations appeared close to collapse when Trump threatened to proceed with the 30 percent tariff unless the EU matched the 15 percent rate he recently agreed to with Japan.

Asked if he would accept anything lower, Trump flatly said, “No”.

In anticipation of the possibility that the sides could fail to reach a deal, Brussels had prepared a long list of retaliatory tariffs targeting everything from beef and beer to Boeing aircraft and car parts.

German Chancellor Friedrich Merz welcomed the agreement.

“This agreement has succeeded in averting a trade conflict that would have hit the export-orientated German economy hard,” Merz said in a statement.

“This applies in particular to the automotive industry, where the current tariffs of 27.5 percent will be almost halved to 15 percent.”

Italian Prime Minister Giorgia Meloni said it was “positive” that a trade deal had been reached, but she would need to see the details to properly judge the agreement.

Other European lawmakers were more critical.

Danish MP Rasmus Jarlov said the announcement was “nothing to celebrate”.

“Almost everything will become more expensive in both Europe and the USA, and we will all be worse off,” Jarlov, a member of the Conservative People’s Party, said on X.

“The economic illiteracy in the White House is doing serious damage to the West.”

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Trump, who is in Europe until Tuesday, is scheduled to meet UK Prime Minister Keir Starmer on Monday for talks that are also expected to focus heavily on trade.

While a separate US–UK trade framework was unveiled in May, many elements of the agreement have not been clarified.

On Tuesday, Trump will travel to Aberdeen to open a third golf course under the family name before departing for Washington later in the day.

SINGAPORE: Oil prices rose on Monday after the United States clinched a trade deal with the European Union and may extend a tariff pause with China, relieving concerns that higher levies could have hurt economic activity and limited fuel demand.

Brent crude futures inched up 20 cents, or 0.29%, to $68.64 a barrel by 0336 GMT, while U.S. West Texas Intermediate crude stood at $65.31 a barrel, up 15 cents, or 0.23%.

The US-European Union trade deal and a possible extension in the US-China tariff pause are supporting global financial markets and oil prices, IG markets analyst Tony Sycamore said.

“With the risk of a prolonged trade war and the importance of the August tariff deadlines being steadily defused, markets have responded positively,” he added in a note.

Sunday’s US-EU framework trade pact sets an import tariff of 15% on most EU goods, half the threatened rate. The deal averted a bigger trade war between two allies that account for almost one-third of global trade and could crimp fuel demand.

Also set for Monday is a meeting in Stockholm of senior US and Chinese negotiators aiming to extend before an August 12 deadline a truce holding off sharply higher tariffs.

Oil prices settled on Friday at their lowest in three weeks weighed down by global trade concerns and expectations of more oil supply from Venezuela.

State-run oil company PDVSA is readying to resume work at its joint ventures under terms similar to Biden-era licenses, once U.S. President Donald Trump reinstates authorisations for its partners to operate and export oil under swaps, company sources said.

Though prices were up slightly on Monday, gains were limited by the prospect of OPEC+ further easing supply curbs.

A market monitoring panel of the Organization of the Petroleum Exporting Countries and their allies is set to meet at 1200 GMT on Monday.

It is unlikely to recommend altering existing plans by eight members to raise oil output by 548,000 barrels per day in August, four OPEC+ delegates said last week, though another source said it was too early to say.

ING expects OPEC+ will at least complete the full return of 2.2 million barrels per day of the additional voluntary supply cuts by the end of September.

That would work out to a supply hike in September of at least 280,000 barrels per day. However, there is clearly room for a more aggressive hike.

The producer group is keen to recover market share while summer demand is helping to absorb the extra barrels.

JP Morgan analysts said global oil demand rose by 600,000 bpd in July on year, while global oil stocks rose 1.6 million bpd.

In the Middle East, Yemen’s Houthis said on Sunday they would target ships of companies that do business with Israeli ports, regardless of nationality, in what they called a fourth phase of military operations against Israel over the Gaza conflict. – Reuters

(July 28): South Korea is pitching the US on a shipbuilding partnership as a key proposal to seal a last-minute agreement to avoid a 25% tariff rate.

While details remain unclear, Yonhap News reported that South Korea has proposed a multi-billion dollar project dubbed “Make American Shipbuilding Great Again”. South Korea’s Industry Ministry declined to comment.

“We confirmed the US side’s strong interest in the shipbuilding sector and the two countries agreed to work together to develop mutually acceptable terms that include shipbuilding cooperation,” South Korea’s presidential office said in a statement on Saturday.

As countries across Asia clinched deals last week, Seoul’s negotiators have been racing to stay engaged with their US counterparts as Washington shifted its focus to the European Union and China. The US and EU announced a pact on Sunday that will see the bloc face 15% tariffs on most of its exports to the US, including automobiles. The latest agreement, which follows a Japan deal last week, adds to the pressure on Asia’s fourth-largest economy to clinch a deal.

South Korea, where negotiations have been slowed by internal political turmoil, is one of the biggest Asian economies to still be without a deal. Aside from China, other major exporters in the region that are in the thick of negotiations include India and Taiwan.

South Korea’s finance and foreign ministers are set to meet with their US counterparts this week in a last-minute bid to close the negotiations and the government in Seoul has said the two countries are committed to making a deal before US President Donald Trump’s Aug 1 deadline.

Also on table is increased access to South Korea’s agricultural market, as well as a fund to invest in American projects similar to an agreement Japan struck. Under the deal, the two sides touted a US$550 billion (RM2.32 trillion) fund as part of the agreement on the tariff rate dropping to 15%. The South Korean talks are similarly focused on reaching a 15% tariff rate, including for autos, and the recent proposals suggest a comparable structure.

Putting agricultural imports on the table raises the stakes for South Korea’s new government. Past efforts to open the country’s beef market sparked nationwide protests and any shift on rice imports could face even stiffer resistance.

Barring a deal, Bloomberg Economics estimates a 1.7% hit to South Korea’s gross domestic product, with market volatility and uncertainty threatening to push the GDP losses beyond that. Overseas shipments were equivalent to more than 40% of South Korea’s GDP last year.

“Japan’s trade deal paints a positive backdrop but also sets a high bar for others,” Morgan Stanley economist Kathleen Oh said in a note last week. “[South] Korea and Taiwan may need to ramp up new investment schemes to increase agricultural and energy imports and expand market access, as seen in Japan’s case.”

[LONDON/WASHINGTON] The US and European Union agreed on a hard-fought deal that will see the bloc face 15 per cent 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 (Aug 1) deadline for US 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 on Sunday at his golf club in Turnberry, Scotland, although they did not disclose the full details of the pact or release any written materials.

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

The euro advanced over all Group of 10 peers in early Sydney trading, with the spot up 0.3 per cent to 1.1773 after closing up 1 per cent last week.

The deal would leave EU exports facing much higher tariffs than the bloc would charge for imports from the US, with von der Leyen saying the aim is to rebalance a trade surplus with the US. But those kinds of tradeoffs in the agreement angered some European industry groups, with Germany’s main lobby saying it “sends a fatal signal to the closely intertwined economies on both sides of the Atlantic”.

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Von der Leyen and Trump also differed on some of the key terms of the deal they announced. The US president said the tariff level would apply to “automobiles and everything else”, but not pharmaceuticals and metals. Steel and aluminium “stays the way it is”, the US president added, and drugs are “unrelated to this deal”.

The chief of the EU’s executive arm said later at a news conference that the 15 per cent rate would be all inclusive, would not stack on top of industry-specific tariffs and would cover drugs, chips and cars. Metals duties “will be cut and a quota system will be put in place”, she said.

“We have 15 per cent for pharmaceuticals. Whatever the decisions later on is, of the president of the US, how to deal with pharmaceuticals in general globally, that’s on a different sheet of paper,” von der Leyen said, adding that the overall rate “is not to be underestimated but it was the best we could get.”

The EU agreed to purchase US$750 billion in American energy products, invest US$600 billion in the US on top of existing expenditures, open up countries’ markets to trade with the US at zero tariffs and purchase “vast amounts” of military equipment, Trump said. Von der Leyen said no decisions have been made on European wine and spirits, but the matter would be sorted out soon.

Key to getting the 15 per cent rate to apply to pharmaceuticals and semiconductors was the bloc’s promise to make US investments, according to sources familiar with the matter.

Ahead of the meeting, the EU was expecting a 15 per cent charge on its imports to also apply to most pharmaceuticals. The products had been one of the negotiation’s main sticking points.

Without a deal, Bloomberg Economics estimated that the total US average effective tariff rate would rise to nearly 18 per cent on Aug 1 from 13.5 per cent under current policies. The new deal brings that number down to 16 per cent.

For months, Trump has threatened most of the world with high tariffs with the goal of shrinking the US trade deficits. But the prospect of those duties, and Trump’s unpredictable nature, put world capitals on edge. In May, he threatened to impose a 50 per cent duty on nearly all EU goods, adding pressure that accelerated negotiations, before lowering that to 30 per cent.

The transatlantic pact removes a major risk for markets and the global economy, a trade war involving US$1.7 trillion worth of cross-border commerce, even though it means European shipments to the US are getting hit with a higher tax at the border.

The goals, Trump said, were more production in the US and wider access for American exporters to the European market. Von der Leyen acknowledged part of the drive behind the talks was a reordering of trade, but cast it as beneficial for both sides.

“The starting point was an imbalance,” von der Leyen said. “We wanted to rebalance the trade we made, and we wanted to do it in a way that trade goes on between the two of us across the Atlantic, because the two biggest economies should have a good trade flow.”

The announcement capped off months of often tense shuttle diplomacy between Brussels and Washington. The two sides appeared close to a deal earlier this month when Trump made his 30 per cent threat.

The EU had prepared to put levies on about 100 billion euros (S$151 billion), about a third of American exports to the bloc, if a deal was not reached and Trump followed through on his warning.

US and European negotiators had been zeroing in on an agreement this past week, and the decision for von der Leyen to meet Trump at his signature golf property brought the standoff to a dramatic conclusion.

Officials had discussed terms for a quota system for steel and aluminium imports, which would face a lower import tax below a certain threshold and would be charged the regular 50 per cent rate above it. The EU had also been seeking quotas and a cap on future industry-specific tariffs.

The EU for weeks, indicated a willingness to accept an unbalanced pact involving a reduced rate of around 15 per cent, while seeking relief from levies on industries critical to the European economy. The US president has also imposed 25 per cent duties on cars and double that rate on steel and aluminium, as well as copper.

Several exporters in Asia, including Indonesia, the Philippines and Japan, have negotiated reciprocal rates between 15 to 20 per cent, and the EU saw Japan’s deal for 15 per cent on autos as a breakthrough worth seeking as well. Washington’s talks also continue with Switzerland, South Korea and Taiwan.

Trump said he is “looking at deals with three or four other countries”, but “for the most part”, others with smaller economies or less significant trading relationships with the US would receive letters simply setting tariff rates.

Trump announced a range of tariffs on almost all US trading partners in April, declaring his intent to revive domestic manufacturing, help pay for a massive tax cut and address economic imbalances he has said are detrimental to US workers. He put them on pause a week later when investors panicked.

Trump’s decades-old complaints about the global trading system heap particularly sharp scorn on the EU, which he has accused of being formed to “screw” the US. The bloc was established in the years following World War II in order to establish economic stability on the continent.

The president has lashed out at non-tariff barriers for American companies to do business across the 27-nation bloc. Those include the EU’s value-added tax, levies on digital services, and safety and environmental regulations.

Weeks of negotiations tested the EU’s willingness to digest what is seen as an asymmetrical outcome, a senior EU diplomat said, but one that offers an opportunity to continue the talks without escalating further. BLOOMBERG