US and EU Reach 'Framework' Agreement to Lower Most Tariffs to 15%

The United States and the European Union have reached an agreement on a trade "framework" deal that would set a uniform tariff of 15% on most EU goods exported to the U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the development at a joint press conference on Sunday.

Under the agreement, the EU will purchase $750 billion worth of U.S. energy exports over the next three years and invest $600 billion in the U.S. Trump said at the press conference that this arrangement is part of broader economic and trade cooperation between the two sides.

Von der Leyen explained at another Sunday briefing that the 15% tariff would apply to most goods exported by the EU, including cars, semiconductors, and pharmaceuticals, and that this rate is an "all-in" tariff that does not stack with other duties. However, Trump later indicated that pharmaceuticals may not be covered by this agreement. The U.S. is currently conducting investigations under Section 232 of the Trade Expansion Act of 1962 into multiple imports, including pharmaceuticals, which have previously paved the way for tariffs on goods such as steel and aluminum.

Von der Leyen emphasized: "We have agreed to apply a 15% tariff to pharmaceuticals. As for how the U.S. President will handle pharmaceuticals globally in the future, that is a matter for another document." She added that the two sides also reached zero-for-zero tariff arrangements on a "range of strategic products," covering aircraft and parts, certain chemicals, semiconductor equipment, some agricultural products, natural resources, and critical raw materials.

"We will continue working to add more products to this list," von der Leyen said. She also revealed that the two sides will begin consultations on a quota system for steel and aluminum. Currently, the U.S. imposes a 50% tariff on global steel and aluminum imports.

Von der Leyen stated: "The agreement provides a framework on which we will further reduce tariffs on more products, address non-tariff barriers, and cooperate in the area of economic security. Because when the EU and the U.S. work together as partners, both sides gain tangible benefits." She also acknowledged that "details still need to be finalized in the coming weeks."

Neither the U.S. nor the EU immediately provided a specific timeline for the finalization and implementation of the agreement. This framework deal comes just before the U.S. deadline originally set for August 1 to reinstate "reciprocal tariffs" on specific countries. Since April 9, these country-specific tariffs have been suspended, replaced by a baseline rate of 10%.

Trump said on Sunday that his administration will send letters to countries this week confirming or clarifying the tariff rates their goods will face when exported to the U.S. starting August 1. According to letters Trump shared on social media earlier this month, EU goods were originally scheduled to face a 30% tariff after the suspension period ends.

The EU is the largest trading partner of the U.S. According to data from the U.S. International Trade Commission, in 2024 the U.S. imported $606 billion worth of goods from the EU while exporting $370 billion to the EU, resulting in a trade deficit of $236 billion, second only to China among sources of the U.S. trade deficit.

The Trump administration said it has reached agreements with several trading partners ahead of the August 1 deadline, including Japan, Indonesia, and the United Kingdom, while negotiations with other economies are still ongoing.