U.S. Strikes Wave of Trade Deals Ahead of Tariff Deadline

The U.S. and EU reached a trade deal, alongside pacts with Japan, the UK, Vietnam, and others before the August 1 deadline.

The United States and the European Union reached a high-stakes trade agreement on Sunday, averting a major transatlantic tariff conflict just days before the August 1st tariff deadline. The deal imposes a 15% tariff on most EU goods, including branded pharmaceuticals, semiconductors, autos and auto parts, while leaving in place the existing 50% sectoral tariffs on steel, aluminum, and copper. The EU has also committed to investing $600 billion in the U.S. economy and purchasing $750 billion worth of American energy exports.

Trump went on to describe the deal as “the biggest ever made,” citing its scale and long-term potential to address the U.S. trade deficit with the EU, which reached $235 billion in 2024 according to US Census Bureau data.

While the 15% baseline tariff applies broadly—including branded pharmaceutical products—European Commission President Ursula von der Leyen stated certain generic drugs may be exempt. However, neither the White House nor EU officials have specified which generics qualify. The lack of clarity around generics has raised concerns about potential shortages, given that these drugs operate on thinner margins and are more sensitive to trade-related costs.

The deal does, however, provide clarity in other areas, explicitly exempting several high-value sectors, including aircraft and aircraft parts, semiconductor equipment, specific chemicals, critical raw materials, and certain agricultural goods.

The U.S.–EU agreement is part of a broader string of deals announced ahead of the administration’s August 1 deadline. Similar pacts were reached with Japan (15%), the United Kingdom (10%), Indonesia (19%), the Philippines (19% – not yet finalized), and Vietnam (20% – not yet finalized). Vietnam’s deal includes a clause imposing a 40% tariff on goods that are shipped from China through Vietnam without undergoing substantial changes. This aims to prevent companies from sidestepping existing U.S. tariffs on Chinese products by routing them through Vietnam without meaningful processing or manufacturing.

Trade officials say negotiations with countries that have not reached deals remain ongoing, with non-signatory nations facing tariffs of up to 50% beginning August 1 unless bilateral agreements are secured. The administration has framed these deals as necessary to reduce America’s long-standing trade deficits and to realign the global supply chain away from Chinese dependency.

For more information, see:

Reuters, EU-US trade deal could add up to $19 billion in pharma industry costs, analysts say , July 28

The White House, Fact Sheet: The United States and European Union Reach Massive Trade Deal, July 28

CNBC, Trump announces EU trade deal with 15% tariffs, July 27

Brownstein, President Trump Announces Trade Deals as the Aug. 1 Deadline Approaches, July 25

Brownstein, Reciprocal Tariff Rates Effective Aug. 1

The Business Standard, US and EU clinch trade deal to avert prohibitive US tariffs, Trump says, July 29

Supply Risk Solutions, Trump Expands Tariff Agenda with Japan Deal, EU Negotiations, and Import Duties Across Asia, July 23

Supply Risk Solutions, U.S. Gives Notice of Sweeping Tariff Hikes on August 1 Amid Stalled Trade Talks, July 14

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