In a major announcement, Commerce Secretary Howard Lutnick has detailed a new trade deal between the U.S. and the European Union, calling it an “amazing” and “massive” win for America.
Following negotiations led by President Trump in Scotland, the deal aims to rebalance trade with the $20 trillion EU economy. Here is what you need to know about the framework.
🇪🇺 How Does the New Deal Impact the European Union?
According to Secretary Lutnick, the EU has agreed to new terms on its exports to the United States.
- The EU will now pay a 15% tariff on the majority of goods it sells to America. This applies to their $600 billion worth of annual exports.
- This new tariff is expected to generate $90 billion in revenue for the United States.
- The EU has also promised to purchase $750 billion in energy from the U.S., shifting away from its reliance on adversaries.
🇺🇸 What Are the Major Wins for America in This Deal?
The Secretary emphasized that the deal finally “righted the wrong of trade” for American workers and businesses.
In a landmark concession, the EU has agreed to cut all of its tariffs and trade barriers for American goods. This means that U.S. farmers, ranchers, fishermen, and businesses will have zero-tariff access to the massive European market of 450 million people. The goal is to shrink the U.S. trade deficit and grow American exports.
💰 What About the $600 Billion Investment Commitment?
A huge part of the deal is a commitment from European companies to invest an additional $600 billion in the United States during President Trump’s term.
Secretary Lutnick explained that the EU gathered commitments from its top pharmaceutical, auto, and other companies to build new factories and invest directly in America. This is on top of the hundreds of billions they already invest annually.
🌏 What Does This Mean for Other Trade Deals?
With this major deal secured, the U.S. is in the “driver’s seat” for other negotiations.
- South Korea is reportedly very eager to get a deal done, with officials flying to Scotland to meet with the U.S. delegation.
- Regarding China, talks are currently underway in Geneva. The Secretary suggested a 90-day extension for negotiations is a likely outcome, but the final decision rests with President Trump.
- The President is expected to set a final tariff policy for all nations by the end of this week.
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