The United States and European Union have reached a landmark trade agreement imposing a 15% tariff on EU goods entering the U.S., announced by President Donald Trump during his visit to Scotland. This breakthrough comes just ahead of the looming August 1 deadline that threatened to unleash a transatlantic trade war. As part of the deal, the EU committed to purchasing $750 billion worth of U.S. energy and investing $600 billion into the American economy. President Trump also highlighted the EU’s promise to eliminate tariffs on other sectors and significantly ramp up its procurement of U.S. military equipment. European Commission President Ursula von der Leyen confirmed the uniform 15% tariff and emphasized that the move will help balance trade across the Atlantic. Given that over $600 billion of U.S. imports last year came from the EU, this agreement represents a major reset in global trade policy. Analysts say the pact has shifted the global mood, calming fears of escalating trade conflict and providing a bullish signal for both equities and commodities. Michael Brown from Pepperstone commented that this deal removes a critical layer of market uncertainty, noting that the euro may benefit and that European automakers stand to gain, just as Japanese car manufacturers did under a similar arrangement earlier. U.S. defense and energy sectors are poised to profit from the EU’s commitments, although not all sectors emerged unscathed. Pharmaceuticals were not spared, as von der Leyen stated the 15% tariff will apply there as well. Meanwhile, Trump has not ruled out imposing a 200% tariff on EU drug imports, which could destabilize Europe’s pharmaceutical exports. The timing of the deal is pivotal. This week marks a crucial stretch for U.S. markets, with trade agreements potentially stacking up before August 1, while major corporate earnings from Meta, Microsoft, Apple, and Amazon are set to shape sentiment further. At the same time, the Federal Reserve is expected to announce its interest rate decision. While most forecasts suggest a hold, Trump has continued his campaign for deep rate cuts, turning up the pressure on Fed Chair Jerome Powell. Fed officials, however, are in wait-and-see mode as they evaluate the inflationary effects of newly imposed tariffs. On another front, analysts from Capital Economics expressed skepticism about China’s intentions regarding rare earth exports. Despite a June uptick, shipments remain 40% lower year-on-year, and Beijing is showing little willingness to ease controls. This casts doubt on Trump’s claims that China has agreed to boost supplies. Oil markets responded positively to the U.S.-EU trade agreement, with Brent rising 0.29% to $68.64 a barrel and WTI up 0.23% to $65.31, reversing the losses seen last Friday. That drop was driven by expectations of increased Venezuelan supply, with PDVSA preparing to resume joint ventures, contingent on U.S. export authorizations. Meanwhile, senior U.S. and Chinese officials are set to meet in Stockholm to discuss extending the existing tariff truce ahead of the August 12 deadline. As global diplomacy, corporate earnings, and central bank policy converge, the next few days could determine the direction of markets and trade for the rest of the year. Learn the skills to trade like a pro with MJFXM Trading Courses – your gateway to smart and successful trading.