The United States and the European Union have reached a major trade agreement, easing tensions between the two economic powers. Following negotiations in Scotland on July 27 between President Donald Trump and European Commission President Ursula von der Leyen, the two sides agreed to set a 15% tariff on all European goods, significantly lower than the 30% Trump had threatened to impose starting August 1.
As part of the deal, the EU will purchase US$750 billion worth of American energy and increase its investment in US goods by an additional $600 billion.
Trump and von der Leyen described the agreement as historic, with the US president calling it “the biggest deal ever made.”
Von der Leyen said the deal would bring greater economic stability, emphasizing the importance of cooperation between two allies that together account for nearly a third of global trade.
Trump has a long history of embracing aggressive trade tactics and protectionist policies. But how do tariffs really work—and what are the wider impacts? Click through the following gallery to find out how trade wars can affect you.