Donald Trump and the European Union recently reached a trade agreement, concluding months of tense negotiations. The deal includes a 15% tariff on most goods, including cars, and significant European investments in American energy and military equipment. Here are the key points ¹:

- *Tariff Rate*: The agreed-upon 15% tariff rate is lower than Trump's initial proposal of 30%.

- *European Investments*: The EU has committed to investing around $600 billion in the United States, focusing on energy and military equipment.

- *US-EU Trade Deficit*: Trump aims to reduce the US trade deficit with the EU, which reached $235 billion in 2024.

- *Trade Agreement*: This deal is part of Trump's broader effort to reshape global trade dynamics and reduce long-standing US trade deficits.

It's worth noting that Trump has been using tariffs as a negotiating tool to address trade imbalances. He sent letters to several countries, including some in Europe, outlining new reciprocal tariff rates set to take effect on August 1, 2025. These rates vary by country, ranging from 25% to 40% ².

The recent agreement with the EU marks a step towards rebalancing trade relations between the two entities. However, the specifics of the agreement and its implications for future trade relations remain to be seen.