US-EU trade accord fosters stability and presents opportunities for both economic powerhouses

On July 27, 2025, European Commission President Ursula von der Leyen and U.S. President Donald J. Trump reached a significant political agreement on tariffs and trade in Scotland. This framework agreement, focusing on reciprocal tariffs, aims to provide stability, predictability, and economic prospects for citizens and businesses on both sides of the Atlantic.

The core element of the agreement is the introduction of a uniform tariff rate of 15% for a large majority of EU exports to the United States. This move is expected to reduce non-tariff barriers to trade, including closer cooperation on technical standards in the automotive industry and health and plant protection measures (SPS). Strategically important sectors such as the semiconductor industry are also set to benefit from this limitation.

Moreover, the EU and the US have agreed on a mutual zero-tariff rate for a range of strategic products. This includes the EU's planned purchases of approximately 700 billion euros worth of liquefied natural gas, oil, and nuclear energy products from the US over the next three years, as well as AI chips worth 40 billion euros.

For consumers and importers in the EU, the agreement means annual savings of around 5 billion euros in tariffs. The EU, which is the US's largest export market, stands to benefit from this deal, with the main exported goods including pharmaceutical products, road vehicles, and industrial machinery and components.

In the services sector, the main exported services from the EU include freelance, scientific, and technical services, telecommunications and IT services, and information services. European companies have expressed their intention to invest at least 550 billion euros in the US by 2029, particularly in strategic growth areas. These investments could further bolster existing investments of over 2.4 trillion euros and provide new impetus for the transatlantic economy.

The agreement also deepens economic security cooperation between the EU and the US, aiming to make supply chains more resilient and combat unfair trade practices. In 2022, around 5.3 trillion euros in bilateral direct investments further strengthened the economic ties between the EU and the US.

The EU had a total trade surplus of about 50 billion euros in 2024, with the surplus in goods trade outweighing the deficit in services. The agreement, however, is not legally binding, and the EU and the US will continue to negotiate to fully implement it.

The framework agreement for mutual, fair, and balanced transatlantic trade and investment is a significant step towards strengthening the economic relationship between the EU and the US. It is hoped that this agreement will foster greater economic cooperation and prosperity for both parties in the years to come.

US-EU trade accord fosters stability and presents opportunities for both economic powerhouses