European Commission President Ursula von der Leyen and US President Donald Trump met on Sunday afternoon at Turnberry golf resort in Scotland where they reached a last-minute deal on tariffs and trade which will cancel the mutual threats of retaliatory 30 % tariffs and counter measures planned for August.
Before the talks started, Trump described the chances of success at 50 – 50 after months of negotiations during which the EU side continued to express cautious optimism while preparing itself for a breakdown. Asked about her feelings, von der Leyen described the talks, that only lasted about one hour, as tough and seemed very relieved.
“Today's deal creates certainty in uncertain times,” she said in a statement to the press after the talks, sitting next to Trump. "It delivers stability and predictability for citizens and businesses on both sides of the Atlantic. This is a deal between the two largest economies in the world. We trade USD 1.7 trillion per year. Together we are a market of 800 million people.”
She was satisfied with the outcome when going into the details although some of them appear as imbalanced to the advantage of the US.
“We have stabilised on a single 15% tariff rate for the vast majority of EU exports. This rate applies across most sectors, including cars, semiconductors and pharmaceuticals. This 15% is a clear ceiling. No stacking. All-inclusive.” The EU had hoped to bring down the tariffs to 10 % but compared to what the tariffs would have been absent a deal (27,5 % for cars) the EU can cope with the tariff rate.
However, the deal has not yet been confirmed in writing and Trump seemed to question her description of a single 15 % rate which will include pharmaceuticals, steel and aluminum. “On steel and aluminium, the EU and the US face the common external challenge of global overcapacity,” von der Leyen said. “And to reduce barriers between us, tariffs will be cut. And a quota system will be put in place.”
The EU will also increase investments and energy cooperation with the US as the Trump administration had demanded in no uncertain terms because of what it described as imbalance and unfair competition in its trade relationship with the EU. The EU agreed to purchase $750 billion of energy (LNG and other fuels) over three years and invest $600 billion more than planned in the US.
She justified the purchases of US energy products as a replacement of Russian fossil fuels and a diversification of EU’s sources of supply which will contribute to Europe’s energy security.
Von der Leyen underlined that the EU does not put all eggs in one basket. “We are also creating new trade partnerships around the world – expanding from the 76 we have. We have concluded negotiations in the last months with Mercosur, Mexico and Indonesia. In an unsettled world, Europe is a reliable partner.” Negotiations are also going on with India.
She finished by thanking her negotiating team and President Trump personally for the breakthrough in the trade talks. “He is a tough negotiator, but he is also a dealmaker.” This was perhaps true in the talks with the EU but he has still to prove it in foreign affairs and use American leverage to put an end to on-going wars in Europe and the Middle East.
