Europe agrees to a sweeping trade deal that includes over $1 trillion in U.S. investments and purchases. 

Just one week after President Trump announced a trade deal with Japan the White House said was worth $550 billion, he rolled out a new deal with the European Union – a trade deal he described as “the biggest of them all.”  

The EU deal follows the same basic Trump administration playbook as recent agreements: threaten sky-high tariffs, then settle for a lower rate paired with hundreds of billions in new investment promises.  

President Trump announced the agreement after an eighth round of talks – led by U.S. Commerce Secretary Howard Lutnick and EU Trade Commissioner Valdis Dombrovskis – wrapped up in Scotland, just days before his August 1 tariff deadline. Here are the details:  

• Tariffs: The White House had warned of 30% duties on most EU imports. Under the new deal, the EU will instead face a 15% baseline tariff, matching the rate Japan agreed to last week. 

• Autos: Both sides made concessions. The EU will lower its 10% tariff on U.S. cars to 2.5%. In return, the U.S. will drop its auto tariff on European vehicles from 25% to 15%. 

• Energy and defense: The EU committed to buying $750 billion worth of U.S. liquefied natural gas, oil, and military equipment over the next three years.  

• Direct investment: Europe pledged $600 billion in new U.S.-based investments, largely in semiconductors, green energy, and pharmaceuticals. But these are investments from the private sector, and the EU has no legal authority to force private companies to follow through. 

• Zeroed-out sectors: A narrow set of goods (commercial aircraft, certain chemicals, generic drugs, chipmaking tools) will now trade tariff-free in both directions. 

• Metals: No change on steel and aluminum, which still face a 50% U.S. tariff. European leaders pushed for a reduction but got only a vague promise to revisit the issue later. 

Is it actually the biggest trade deal ever? 

When President Trump announced the trade deal with Japan last week, he called it “the largest trade deal in history.” Now, he’s saying the same thing about the EU deal.  

The EU deal is certainly bigger than the Japan deal, both in terms of total trade volume (Americans trade about $1.45 trillion worth of goods and services with the EU each year, compared to just $280 billion with Japan) and in terms of announced investments in the U.S. ($1.35 trillion pledged from the EU, $550 billion from Japan). 

But does that make the EU trade deal the biggest in history?

It depends on what metric you’re looking at. But when it comes to the $1.35 trillion the EU has pledged to spend on investing in the U.S. or buying American energy, no other deal comes close. And combined with the massive trade volume between America and Europe, it’s not a stretch to call this the biggest deal ever inked. Here’s how it compares to other major trade agreements: 

It’s important to note that the three biggest deals on this list are not legally binding. Congress has not voted on them, and the details still need to be ironed out – these are just “agreements in principle” and are subject to change.  

But this is still a major victory for the Trump administration as the August 1st tariff deadline approaches. Two major economies – Japan and the EU – have made deals with the U.S., other countries must be feeling the clock ticking.