Description: After months of trade tensions, the European Union and the US have concluded their bilateral trade agreement, where the US would impose a 15% fixed tariff rate on most imports from the EU. The deal was announced by President Trump and EU Commission President Ursula von der Leyen who had a private meeting during Trump’s visit to Scotland. Details around the deal are yet to emerge, however, the 50% fixed US tariff rate on steel and aluminum imports from EU would remain, while industries such as aerospace, chemicals, some pharmaceuticals, semiconductors and rare earths would reportedly be exempted from tariffs. According to Trump, the EU also vowed to invest more than $750 billion in the US energy industry, importing products such as oil and gas and invest additional $600 billion in the US defense industry. The deal was positively and enthusiastically accepted by the Trump administration and hailed as a major win for the US President, while EU leaders have exercised cautious optimism in expressing their opinion regarding the deal.
Impact: Europe effectively surrendered its autonomism to the US and admitted defeat in practically trading its market advantages for effective stabilization of transatlantic relations. The agreement, as it currently stands, would largely benefit and bolster the US economy while further degrading the EU’s and positions the Union in a state of constant economic dependence on the US. The agreement defused trade and bilateral tensions between the US and the EU and to some extent restored previously determined positions in their strategic alliance where the US continues to dominate the partnership. EU avoided much larger economic repercussions of 30% tariffs while some countries, such as Germany, lowered the tariffs on its automotive industries from 27.5% to a fixed 15%, which precipitated EU leaders to express cautious optimism when grading the effects of the trade deal. The agreement reinstates the importance of the transatlantic partnership for the EU, and the positive effects of the conditioned foreign policy for the US.