Washington: After weeks of tense negotiations between their top trade officials, the European Union and US have finally struck a framework deal – and it comes on the eve of America’s latest round of tariff talks with China. Ultimately it took leaders from Washington and Brussels to sit down face to face to reach Sunday’s agreement.

According to BBC, President Donald Trump’s personal involvement was crucial in pushing the deal over the line, even when the prospects of a breakthrough seemed dim. The agreement means the EU will now face a 15% US tariff, rather than the 30% that had been threatened. Though a significant concession for the EU, this rate is still higher than before Trump’s so-called Liberation Day in April and less favorable than the UK’s 10% rate.

Brussels can claim some success as the lower rate applies to many major European exports. EU carmakers will face a 15% US import tax, rather than the 25% global tariff introduced in April. In return, the EU is opening its markets at zero tariff to American exports, according to Trump. However, EU steel and aluminum will continue to face a 50% tariff when sold into the US.

For Trump, this deal follows last week’s tariff agreement with Japan and marks another major victory. The EU agreement is expected to generate roughly $90 billion in tariff revenue for the US government, based on last year’s trade figures. Additionally, the EU will buy US energy products and arms worth hundreds of billions of dollars, boosting American military equipment investment by $600 billion and spending $750 billion on energy.

Despite the hardball negotiations, both sides wanted to avoid extending talks beyond the August 1 deadline. The EU had positioned itself as a tough negotiator, preparing retaliatory tariffs and warning of potential follow-through. Trump has long criticized Europe’s trade practices, focusing on the trade deficit, where the US purchased $236 billion more goods from the EU than it sold last year.

European Commission President Ursula von der Leyen acknowledged the need to tackle the deficit, emphasizing the importance of making trade relations more sustainable. The EU’s bargaining position faced challenges, as risking a trade war with the world’s biggest economy was ill-timed amid Europe’s sluggish economic growth.

John Clarke, a former EU trade negotiator, noted the EU’s weak position, stating, “Trump was not going to back down and it settled for 15%, so it’s a bad day for international trade, frankly. But it could have been worse.” The deal underscores Trump’s commitment to renegotiating US trade relationships.

The US-EU deal follows agreements with Japan, the UK, Vietnam, and Indonesia. The next significant negotiations involve Mexico, Canada, and China. As the US and China engage in trade talks, there is hope for suspending higher tariffs for another 90 days. However, China’s tougher stance poses potential disruptions to global trade if talks falter.