Trump Cuts Trade Deal With EU, Sets 15% Tariff

President Donald Trump announced that the European Union (EU) will invest $600 billion in the U.S., purchase $750 billion worth of American energy products, and buy “vast amounts” of weapons under a trade deal that establishes a 15% tariff rate.

Without a durable agreement between the U.S. and China, tariffs could rise sharply once again. I Photo: ©European Union, 2025

The announcement came one week after a similar agreement with Japan, which pledged $550 billion in investment in key U.S. industrial sectors, Jason Ma reported for Fortune.

With deals now finalized with both the EU and Japan, the U.S. is turning its attention to China, as the world’s two largest economies prepare for high-stakes trade talks.

Negotiations between Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to begin Monday in Stockholm. A trade truce between the U.S. and China is scheduled to expire on August 12, but both sides are reportedly planning a 90-day extension.

The EU and Japan will both face a 15% tariff on most of their exports to the U.S. Bessent cited Japan’s $550 billion investment pledge as a key factor in securing the lower tariff rate, down from the 25% Trump had previously threatened.

“They got the 15% rate because they were willing to provide this innovative financing mechanism,” Bessent told Bloomberg TV on Wednesday.

Trump had warned the EU would need to “buy down” the initially proposed 30% tariff, referencing the terms of the Japan deal. Jamie Cox, managing partner at Harris Financial Group, noted that “when Japan broke down and made a deal, the EU had little choice.”

But the most challenging negotiations may still lie ahead. “The biggest piece in the trade deal puzzle remains,” Cox added, “and the Chinese are unlikely to be as willing to fold.”

Without a durable agreement between the U.S. and China, tariffs could rise sharply once again—potentially to prohibitive levels that would effectively cut off trade between the two powers.