In a significant move to prevent a looming transatlantic trade war, the United States and the European Union announced a new trade framework on Sunday that imposes a uniform 15% tariff on most goods exchanged between the two economic giants. The deal, which came after months of tense negotiations, was finalized following a meeting between U.S. President Donald Trump and European Commission President Ursula von der Leyen at Trump’s Turnberry golf resort in Scotland.

“This is a giant deal with lots of countries. I think it’s going to be great for both parties,” Trump declared, calling the agreement “a good deal for everybody.” Von der Leyen emphasized the agreement’s significance, saying it will bring “stability” and “predictability” for businesses on both sides of the Atlantic.

The newly established 15% tariff applies to the majority of goods traded between the U.S. and the EU, including cars, semiconductors, and pharmaceuticals. However, both leaders clarified that certain strategic items—such as aircraft and component parts, specific chemicals, generic medicines, semiconductor equipment, some agricultural products, and critical raw materials—will enjoy a “zero-for-zero” tariff policy.

Although the broad terms of the deal were made public, key details remain unresolved. The European Commission must now present the agreement to EU member states and lawmakers for ratification. This step is crucial before the agreement can take full legal effect.

President Trump also announced that the EU has committed to purchasing an additional $750 billion in U.S. energy over the next three years, aimed in part at reducing European dependence on Russian gas. Furthermore, the EU will invest an additional $600 billion in the U.S. and proceed with a significant military equipment purchase from American manufacturers.

The agreement averts the imposition of a previously threatened 30% tariff on EU goods, which was due to take effect on August 1. Commerce Secretary Howard Lutnick had stated earlier that there would be “no extensions, no more grace periods,” emphasizing the urgency to finalize a deal.

Without the agreement, the EU had prepared a retaliatory package that included tariffs on American beef, auto parts, beer, and even Boeing aircraft, which could have significantly escalated tensions.

The trade breakthrough comes amidst Trump’s five-day visit to Scotland, where he’s combining diplomacy with promoting his family’s golf properties. After a round of golf with sons Eric and Donald Jr., the president turned to high-stakes diplomacy, culminating in what he described as “the biggest deal ever made.”

Von der Leyen reiterated the importance of the agreement for global economic stability. “When the European Union and the United States work together as partners, the benefits are tangible,” she said, promising continued negotiations to expand the zero-tariff list in the coming weeks.

The deal is seen as a diplomatic win that temporarily diffuses escalating trade tensions, though some critics in Europe argue the 15% tariff still represents a compromise that favors U.S. interests. The coming weeks will be critical as both sides iron out the specifics and secure domestic approvals.