The newly announced US-EU trade deal is being interpreted quite differently depending on which side of the Atlantic you’re listening to, but its impact on global trade is undeniable. At the core of the agreement is a new 15% tariff ceiling on most EU exports to the United States, a notable reduction from the much higher tariffs threatened during earlier negotiations. This compromise aims to avoid an all-out tariff war while still providing protection for domestic industries on both sides.

For the EU, this means reduced uncertainty and fewer barriers for sectors like cars, car parts, pharmaceuticals, and semiconductors. However, higher tariffs—up to 50%—will persist for EU steel, aluminum, and copper exports. To offset these measures, the EU has committed to purchase an additional $750 billion in US energy over the next three years and invest $600 billion in various US sectors by 2029. These measures are designed not only to rebalance trade flows but also to deepen economic ties.

Both sides have also agreed on several other key points. There will be a focus on addressing non-tariff barriers in food and agriculture, and the deal sets out to eliminate unfair digital trade practices by maintaining zero customs duties on electronic transmissions. Another major feature is the tightening of rules of origin, which ensures that only products genuinely made in the US or EU benefit from the agreement, aiming to cut out third-country “free riders.”

Despite its broad scope, reaction to the deal is mixed. US politicians frame it as a decisive win for American workers and industries, while some European critics argue that the agreement puts disproportionate pressure on the EU and increases its reliance on American exports, especially in the energy sector.

Ultimately, the deal stops short of full free trade but establishes a framework that may stabilize transatlantic economic relations and encourage further negotiations in the years ahead.