Europe is set to welcome a wave of American cars and energy after Brussels clinched a last-minute trade deal with Donald Trump, narrowly avoiding a transatlantic trade war.
The agreement, unveiled on Sunday, means the European Union will now face a flat 15 per cent tariff on exports to the United States—halving the 30 per cent rate previously threatened by the former president.
In exchange, Mr Trump said the EU had agreed to drop tariffs entirely on US goods entering the bloc.
However, in contrast to the EU’s dealings with the UK over Brexit, where thorny issues such as placing trade barriers across the Irish Sea , this time the interests of Ireland appear to have been left to the very back of the list of priorities for the block.
How important is Trump’s deal with Europe and what is on offer?
Speaking from his Turnberry golf resort in Scotland, Mr Trump described the pact as “the biggest of them all”, adding it follows successful trade agreements with Britain and Japan. He made the announcement after meeting European Commission president Ursula von der Leyen.
As part of the deal, the EU will import $750bn (£558bn) of energy from the United States and commit a further $600bn in investments into the world’s largest economy.
“We are agreeing that the tariff straight across for automobiles and everything else will be a tariff of 15pc,” said Mr Trump, who has repeatedly pushed for Europe to buy more American oil and gas.
“We have the opening up of all the European countries, which were essentially closed. You were not exactly taking our autos, you weren’t exactly taking our agriculture. Now it is open.
“It is open for our companies to go in and do a good job.”
Mr Trump said the deal would give Europeans better access to US pickup trucks and SUVs, with trade between the two economies now set to expand.
“They [Europe] are going to make a lot of money with this,” he said. “I think everybody is. And it is going to bring a lot of unity and friendship.”
Financial markets have been shaken in recent months by Mr Trump’s shifting trade policies, with the tariff stand-off creating uncertainty for global investors and governments.
What does Trump hope to achieve with his Europe trade deal?
His broader aim has been to encourage global firms to move manufacturing into the US to boost tax revenues and domestic jobs.
Ms von der Leyen said the goal of the deal was to “rebalance” trade flows between the two sides.
“The starting point was an imbalance, a surplus on our side and a deficit on the US side, and we wanted to rebalance that,” she said.
“We wanted to do it in a way that trade goes on between the two of us, across the Atlantic.
“The two biggest economies should have good trade flowing: rebalance, but enable trade on both sides, which means good jobs on both sides of the Atlantic, which means prosperity on both sides of the Atlantic. That was important to us.”
The deal excludes steel and aluminium, which will still face higher tariffs of 50 per cent when exported to the US. British exports of the same materials face a reduced tariff of 25 per cent.
Bad for Ireland: drugs firms left out of deal
Mr Trump also confirmed that pharmaceuticals would not be included in the new agreement, with separate talks planned for that sector.
This omission could prove a major blow to Ireland, which relies heavily on its pharmaceutical exports.
“We have to have them made in the US,” said Mr Trump. “We want them made in the US. Pharmaceuticals are very special.
“We can’t be in a position where we are relying on other countries. Europe is going to make pharmaceuticals, drugs and everything else for us too, a lot, but we are going to make our own.”
Claus Vistesen, of Pantheon Macroeconomics, said the agreed 15 per cent tariff was less severe than many feared, and unlikely to alarm financial markets—but he warned it would still dent both the EU and US economies.
“Trump is finding a middle ground,” Mr Vistesen said. “He is still shooting himself in the foot. US consumers will pay higher prices, and growth in trading partners will be lower than it would have otherwise been.”