The European Union and United States have agreed a deal that will lock in tariffs of 15 per cent on most EU imports to the US, but prevent the prospect of an economically devastating trade war.

The final terms were worked out during a meeting between European Commission president Ursula von der Leyen and US president Donald Trump at his Turnberry golf resort in Scotland.

The EU hopes the deal will draw a line under months of uncertainty, shifting deadlines and threats from Mr Trump, which have defined the fractious trade negotiations.

The deal includes EU commitments to purchase set amounts of energy from the US each year, as well as commit to make annual investments in the US economy.

Speaking on Sunday, Ms von der Leyen said the 15 per cent tariffs would apply to cars, representing a cut on the currently 25 per cent levies the European automobile sector faces.

The cap would also cover two sectors Mr Trump has promised to introduce tariffs on at a later date, pharmaceuticals and semiconductors.

Speaking before the meeting, Mr Trump indicated pharmaceuticals might not be covered by the terms of any agreement, signalling coming tariffs on the sector.

“We have to have them made in the United States, we want them made in the United States... We can’t be in a position where we’re relying on other countries,” he said.

EU negotiators had pushed for tariffs to be capped at 15 per cent, including for cars and pharmaceutical products.

In a statement on Sunday evening, Tánaiste and Minister for Foreign Affairs and Trade Simon Harris said he understood the 15 per cent rate was “all-inclusive”.

“While Ireland regrets that the baseline tariff of 15 per cent is included in the agreement, it is important that we now have more certainty on the foundations of the EU-US trade relationship,” he said.

Together, the EU and the US are a market of 800 million people.

 

And nearly 44 percent of global GDP.

It’s the biggest trade deal ever ↓ https://t.co/rG3cHebXEk

— Ursula von der Leyen (@vonderleyen) July 27, 2025

Taoiseach Micheál Martin said the agreement would bring “clarity and predictability” to the transatlantic trading relationship.

“We will now study the detail of what has been agreed, including its implications for businesses exporting from Ireland to the US, and for different sectors operating here,” he said.

Mr Trump is in Scotland for a five-day visit that he began on Friday night.

Ms von der Leyen, head of the EU executive that has been negotiating with the Trump administration, travelled from Brussels to Scotland, in a bid to push a preliminary deal over the finish line after months of talks.

The commission briefed ambassadors from the EU’s 27 states on Sunday, giving diplomats an update on where talks stood before Ms von der Leyen and Mr Trump sat down together.

US commerce secretary Howard Lutnick travelled from Washington to Scotland on Saturday, with EU trade commissioner Maros Sefcovic flying in from Brussels.

Senior commission figures were in contact with officials from the Japanese government over the weekend in order to gauge how the very final stages of their negotiations played out behind the scenes as a US tariff deal was agreed last week.

That agreement saw Japan accept 15 per cent tariffs on its products sold to the US.

Cars produced in the EU and sold in the US have faced 25 per cent import duties, while steel and aluminium products have been charged twice that amount.

A 10 per cent tariff has applied to nearly all trade since the start of April, with two sectors, pharmaceuticals and computer chips, exempt from those measures. Mr Trump has promised to introduce steeper tariffs targeting pharma and semiconductors later.

Mr Trump has said the US will impose tariffs of 30 per cent on practically all imports from the EU from August 1st in the event no agreement is reached.

In such a scenario the EU said it would hit back with its own 30 per cent tariffs on €93 billion of US trade.

France, Germany and many other EU states were prepared to back the EU opening an investigation to determine if it is facing economic coercion, allowing the bloc to turn to emergency powers in an escalating trade war. The EU’s anti-coercion instrument, known as the “big bazooka”, would allow the union to restrict the European operations of US multinationals and tech giants, and introduce export controls on transatlantic trade.

Meanwhile, EU commissioner Michael McGrath has said that the European Union is “aggressively extending” its network of international trade agreements, having recently concluded deals with Mexico, Switzerland, Indonesia and the Mercosur South American trade bloc.

He said that the meeting between Mr Trump and the president of the European Commission is a “significant and decisive moment”, with hopes for a tariff deal.

The EU is also in trade negotiations with India, Thailand, the Philippines and the UAE as the escalating trade war between Washington and the European bloc continues, Mr McGrath, the EU commissioner for justice and consumer protection, said.

The EU’s objective is to reach a “comprehensive final settlement” on all outstanding trade issues, including pharmaceuticals, Mr McGrath told RTÉ’s This Week radio programme on Sunday. The “ideal scenario” would be agreement on a “zero-for-zero deal” on a range of goods, he added.

However, if the US pushes ahead with its threatened 30 per cent tariffs on EU goods, the EU is ready with counter-tariffs on €93 billion worth of US exports, he said.

“The terms of trade that we had up to just six months ago are no longer available. The world has changed, and we have had major disruption to the system of global trade. We have to recognise the reality.”