US and EU avert trade war with 15% tariff agreement

EU to invest $77b in US and dramatically step up purchases of American energy, arms

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TURNBERRY, Scotland - The US has struck a framework trade deal with the European Union, imposing a 15 per cent US import tariff on most EU goods, which is half the rate President Donald Trump had threatened.

The move averted a spiralling battle between two allies that account for almost a third of global trade.

Mr Trump and European Commission president Ursula von der Leyen on July 27 announced the deal at Mr Trump's luxury golf course in western Scotland after an hour-long meeting that pushed the hard-fought deal over the line, following months of negotiations.

"I think this is the biggest deal ever made," Mr Trump told reporters, lauding EU plans to invest some US$600 billion (S$771 billion) in the US and dramatically increase its purchases of US energy and military equipment.

Mr Trump said the deal, which tops a US$550 billion deal signed with Japan last week, would expand ties between the transatlantic powers after years of what he called unfair treatment of US exporters.

Dr von der Leyen, describing Mr Trump as a tough negotiator, said the 15 per cent tariff applied "across the board", later telling reporters it was "the best we could get".

"We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability," she said.

The deal, which Mr Trump said calls for US$750 billion of EU purchases of US energy in the coming years and "hundreds of billions of dollars" of arms purchases, likely spells good news for a host of EU companies, including Airbus, Mercedes-Benz and Novo Nordisk, if all the details hold.