US and EU strike an 'across-the-board' agreement on tariffs

US President Donald Trump meeting European Commission President Ursula von der Leyen at Trump Turnberry golf course in South Ayrshire, Scotland. AFP

US President Donald Trump and European Commission President Ursula von der Leyen have agreed a deal to end a transatlantic tariff dispute, averting the risk of a full-scale trade war.

Mr Trump and Ms Von der Leyen held private talks at the US leader's Trump Turnberry golf course in South Ayrshire in Scotland on Sunday, and later announced what the US President called an “across-the-board” agreement.

The breakthrough comes just days before an August 1 deadline for the EU to strike a deal with Washington or face a sweeping 30 per cent US tariff on the bloc's goods.

Trump announces new trade deal with Indonesia and cuts tariff

Read More

“We have reached a deal. It's a good deal for everybody,” Mr Trump told reporters.

Mr Trump said the deal involved a baseline levy of 15 per cent on EU exports to the US, the same level secured by Japan, including for the bloc's crucial auto sector, which is currently being taxed at 25 per cent.

“We are agreeing that the tariff straight across, for cars and everything else, will be a straight across tariff of 15 per cent,” he added.

Mr Trump also said the bloc had agreed to purchase "$750 billion worth of energy” from the US, as well as $600 billion more in additional investments in the country.

Negotiating on behalf of the EU's 27 countries, Ms Von der Leyen's European Commission had been pushing hard to salvage a trading relationship worth an annual $1.9 trillion in goods and services.

“It's a good deal,” the EU chief told reporters, sitting alongside Mr Trump following their hour-long talks.

“It will bring stability. It will bring predictability. That's very important for our businesses on both sides of the Atlantic,” she said.

The EU has been hit by multiple waves of tariffs since Mr Trump reclaimed the White House.

It is currently subject to a 25 per cent levy on cars, 50 per cent on steel and aluminium, and an across-the-board tariff of 10 per cent, which Washington threatens to hike to 30 per cent in a no-deal scenario.

Brussels has been focused on getting a deal to avoid sweeping tariffs that would further harm its sluggish economy with retaliation held out as a last resort.