Breaking News: Von der Leyen and Trump strike EU-US trade deal to avert all-out tariff war

The European Union and the United States have struck a tentative trade deal to avert a potentially devastating tariff war between two of the world’s largest economies, capping a race against time before a self-imposed deadline of 1 August.

Under the agreed terms, finalised on Sunday by European Commission President Ursula von der Leyen and US President Donald Trump during a meeting in Scotland, the majority of EU exports bound for the American market will be slapped with a 15% tariff.

The tariff for US exports bound for the EU market was not immediately clear.

“I think it’s great we made a deal today instead of playing games,” Trump said at the end of the meeting. “I think it’s the biggest deal ever made.”

Von der Leyen noted the 15% tariff would be “across-the-board” and “all-inclusive”.

“It was tough negotiations (but) we came to a good conclusion,” she said, highlighting the “openness” of the EU market, which Trump had challenged.

Both leaders shook hands to applause in the room.

“We were able to make a deal that’s satisfactory to both sides, so it’s a very powerful deal. It’s the biggest of all the deals,” Trump said.

The 15% rate is lower than the 20% rate that Trump imposed, and later paused, in April as part of his contentious, self-styled “reciprocal tariffs”, as well as the 30% rate that he threatened to slap in a letter sent to von der Leyen earlier this month.

The 15% rate is also inferior to the rates that other countries have negotiated with the White House in recent days, including Indonesia (19%) and the Philippines (19%), and matches the number granted to Japan (15%), a G7 ally.