Automotive News Europe — 2025-07-27
Automotive Industry
The U.S. and the European Union agreed on a hard-fought deal that will see the bloc face 15 percent tariffs on most of its exports, including automobiles, staving off a trade war that could have delivered a hammer blow to the global economy.
The pact was concluded less than a week before an Aug. 1 deadline for President Donald Trump’s higher tariffs to take effect and was quickly praised by several European leaders.
German Chancellor Friedrich Merz said the deal averted a trade conflict that would have hit Germany’s export-driven economy and its large auto sector hard. The German carmakers Volkswagen, Mercedes-Benz and BMW were some of the hardest hit by the 27.5 percent U.S. tariff on car and parts imports now in place.
Trump and European Commission President Ursula von der Leyen announced the deal July 27 at Trump’s golf club in Turnberry, Scotland, although they didn’t disclose the full details of the pact or release any written materials. The 15 percent rates will take effect Aug. 1, according to a U.S. official.
“It’s the biggest of all the deals,” Trump said, while von der Leyen added it would bring “stability” and “predictability.”
Von der Leyen and Trump differed on some of the key terms of the deal they announced. Trump said the tariff level would apply to “automobiles and everything else,” but not to pharmaceuticals and metals.
Von der Leyen said later at a news conference that the 15 percent rate would be all inclusive, wouldn’t stack on top of industry-specific tariffs and would cover drugs, computer chips and cars. Metals duties “will be cut and a quota system will be put in place,” she said.