In a significant breakthrough, the US and EU reached a framework trade agreement on Sunday, averting the imposition of 30% tariffs on European imports. Instead, a reduced 15% rate will apply to most goods. The two sides also agreed to exempt key strategic sectors—such as aircraft, chemicals, and some pharmaceuticals—from any tariffs entirely.
The deal also includes sweeping commitments from the EU, including USD 750B in US energy purchases and USD 600 billion in fresh US-bound investment over current levels.
EU Commission President Ursula von der Leyen called the agreement a win for “stability and predictability,” while acknowledging that the 15% tariff still presents challenges for European automakers. Meanwhile, the EU’s pivot toward US nuclear fuel and LNG also marks a decisive shift away from Russian energy dependency.
US President Donald Trump declared the deal as larger than last week’s USD 550B Japan agreement and reiterated that it would significantly deepen US-EU ties across energy, defense, and trade. He claimed “hundreds of billions” in arms sales could follow.
Euro advanced broadly on the announcement, but momentum is restrained. EUR/CHF is still capped below 0.9365 resistance despite today’s bounce. Firm break of this level is needed to be the first sign that consolidation pattern from 0.9445 has completed, and the rally from 0.9218 is ready to resume. Otherwise, more sideway trading would likely follow first.
