Diplomacy
US, EU reach landmark 15% tariff deal, averting trade war
The US and the EU have reached an agreement to apply a 15% tariff on most of their exports, including automobiles, for now averting a trade war that could have dealt a severe blow to the global economy.
The deal was signed less than a week before the Friday deadline set by US President Donald Trump for higher tariffs to take effect.
Several European leaders, including German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni, praised the agreement, describing it as “sustainable.”
Trump and European Commission President Ursula von der Leyen announced the deal on Sunday at the Turnberry golf club in Scotland but did not disclose all its details or release any written documents.
According to a US official who spoke to Bloomberg, the 15% tariffs will take effect on August 1.
“This is the greatest of all deals,” Trump said, while von der Leyen added that the agreement would bring “stability” and “predictability.”
The agreement will result in the EU facing much higher tariffs than those it will apply to products imported from the US. Von der Leyen stated that the purpose of this is to balance the trade surplus with the US.
However, such concessions in the deal have angered some European industry groups. Germany’s main lobby group said it “sends a fatal signal to the closely intertwined economies on both sides of the Atlantic.”
Von der Leyen and Trump also have differing views on some key terms of the agreement they announced. The US president said the tariff level would apply to “automobiles and everything else,” but not to pharmaceuticals and metals.
The head of the EU executive body, in a later press conference, stated that the 15% rate would cover everything, would not be added on top of sector-specific tariffs, and would include pharmaceuticals, chips, and automobiles.
Von der Leyen noted that metal tariffs would be reduced and a quota system would be introduced.
“We have secured an agreement for a 15% rate on pharmaceuticals. Whatever decision the US president makes later on how to deal with pharmaceuticals in general is a separate issue,” von der Leyen said, adding that the overall rate “should not be underestimated, but it is the best we could get.”
Senior US officials later clarified that the two sides had agreed to apply a 15% tariff on the EU’s pharmaceutical exports.
The officials added that a separate Section 232 investigation concerning pharmaceuticals would proceed within the next three weeks, but the EU’s tariff rate would remain at 15%.
Trump said the EU has agreed to purchase $750 billion worth of American energy products, make an additional $600 billion in investments on top of current spending, open their markets to trade with the US at zero tariffs, and purchase a “large amount” of military equipment.
Von der Leyen added that Europe would replace Russian gas with an annual purchase of $250 billion in energy from the US for the remainder of Trump’s term.
The president also noted that a decision on European wines and spirits has not yet been made but that the issue would be resolved soon.
According to sources close to the matter, the key to applying the 15% rate to pharmaceuticals and semiconductors was the bloc’s promise to invest in the US.
Before the meeting, the EU expected the 15% tariff applied to its imports would also apply to most pharmaceuticals. These products were one of the main sticking points in the negotiations.
If an agreement had not been reached, the total average effective US tariff rate would have risen from 13.5% under current policies to 18% on August 1, according to Bloomberg estimates. With the new deal, this rate has been reduced to 16%.
The agreement does not cover the EU’s steel and aluminum exports, which will continue to be subject to a 50% tariff, according to senior US officials.
The officials added that tariffs on the aerospace sector would remain at 0% pending the outcome of the Section 232 investigation.
The officials had discussed terms for a quota system for steel and aluminum imports. Under this system, imports below a certain threshold would be subject to a lower import tax, while imports above this threshold would be subject to the normal 50% rate. The EU had also requested a cap on quotas and future sector-specific tariffs.
US Commerce Secretary Howard Lutnick told reporters that the outcome of the investigation into the semiconductor industry, which could lead to the imposition of new sectoral tariffs, is expected to be announced in about two weeks.
The transatlantic deal removes a major risk to the markets and the global economy: a trade war involving approximately $1.7 trillion in cross-border trade. But the final agreement also means that shipments from the EU to the US will be subject to a higher tax at the border.
Trump said the goals are to increase production in the US and to secure broader access for American exporters to the European market. Von der Leyen acknowledged that part of the driving force behind the negotiations was the rebalancing of trade, but she stated that it was beneficial for both sides.
“The starting point was an imbalance. We wanted to rebalance our trade, and we wanted to do it in a way that trade between two large economies would continue, because there should be a good flow of trade between two large economies,” said von der Leyen.
If the deal had failed and Trump had carried out his threat, the EU was prepared to impose tariffs on €100 billion ($117 billion) of US exports to the EU, which constitutes about one-third of the total.
For weeks, the EU had been demanding relief from tariffs on sectors critical to the European economy, indicating it was prepared to accept an unbalanced agreement that included a reduction of about 15%. The US president had also imposed a 25% tariff on automobiles and double that on steel, aluminum, and copper.
Not all EU members were pleased with the agreement reached on Sunday. France’s Deputy Minister for European Affairs, Benjamin Haddad, described the deal as “unbalanced” on social media and said the bloc should activate enforcement measures that would allow it to retaliate against US tech companies.
Dutch Minister for Foreign Trade Hanneke Boerma called the agreement “not ideal” and urged the commission to continue negotiations with the US.
Diplomacy
FIFA abandons $4.2 billion commercial stake sale following widespread revolt
FIFA and Gianni Infantino have backed down from plans to sell a stake in the organization’s commercial and event operations following widespread backlash.
In a statement issued late Friday night, the embattled FIFA president said:
“After carefully listening to all views, it has become clear that this project, regardless of the level of support, causes divisions that are now contrary to the interests of the objective originally established. Our goal has always been, and will always be, to unite and improve. As a result, this proposal will not be implemented.”
Infantino’s proposal met with fierce resistance from UEFA, CONCACAF, and the Asian Football Confederation (AFC).
UEFA indicated that all 55 of its members would boycott FIFA competitions, including the World Cup, if the plans remained on the table.
In its statement, FIFA noted that “nobody is selling football,” and while asserting that it “acknowledges and respects the feedback and concerns expressed publicly,” emphasized that it would continue to implement suggestions.
It added that it “reaffirms its commitment to an open and democratic process of consultation.”
Shortly after FIFA issued its statement, the AFC released its own declaration of solidarity with UEFA and the Confederation of North, Central America and Caribbean Association Football (CONCACAF).
Infantino subsequently suffered two major internal blows.
First, his adviser Carlos Cordeiro resigned from his position, sharply criticizing the plan in a statement as “a bad deal for FIFA member associations, a bad deal for football, and a bad deal for the long-term future of the game.”
Then, FIFA Chief Operating Officer Kevin Lamour told the Associated Press that staff felt “deceived” by Infantino and that after raising the issue, he would “sleep better, even at the cost of losing his job.”
Lamour said:
“This is the project of a single person. Leaving aside that this project should not proceed… it is now time for the political leaders of world football to ask themselves the right questions and make the right decisions.”
These developments left Infantino cornered, and by Friday afternoon, numerous figures within the organization—speaking to The Athletic on condition of anonymity to protect their jobs—believed it was no longer a question of “if” the cord would be cut, but “when.”
Joshua Kushner’s venture capital firm Thrive had not withdrawn from the deal as of Friday night, but that became moot when FIFA management ultimately decided to kill the project via a public statement.
Joshua Kushner is the brother of Jared Kushner, the son-in-law of Donald Trump.
On Tuesday, world football’s governing body had announced its intention to establish FIFA Forward Enterprises (FFE), a new private entity to manage its flagship events, including the World Cup and the Club World Cup, with plans to sell a 21% minority stake in FFE to external investors.
The sale was targeted to generate $4.2 billion (£3.2 billion) in revenue. FIFA stated that this amount could be immediately distributed to its 211 member associations under a new funding stream named the “FIFA Fast-Forward Program” (FFFP).
Under the plan, FIFA’s total development funding would have exceeded $10 billion over the next four years.
Despite mounting criticism in recent days, FIFA confirmed that if member associations opposed the FFE plan but the proposal was accepted, the dissenting federations would each receive $20 million (£14.9 million) for the 2027–30 cycle, regardless of whether shares in FFE were sold to private investors (to be followed by $22 million for 2031–34 and $24 million for 2035–38).
However, had a given member association accepted the FFE proposal, it would have received $40 million for the 2027–30 period, with subsequent payouts remaining the same.
The three confederations that explicitly took a stand against FIFA’s plan represent 137 of the 211 FIFA member associations.
FIFA had stated that for the proposal to move forward, it required the approval of a majority of the 211 member associations as well as the 37-member FIFA Council, which consists of Infantino and eight FIFA vice presidents.
Strategic reactions and leadership crisis
South American football confederation CONMEBOL did not reject the plans in a statement on Friday, but noted that financial and commercial decisions “must always serve the interests of football and never take precedence over the essence of the game.”
According to a report by The Athletic, Infantino’s future leadership of FIFA was called into question during UEFA and CONCACAF meetings held on Thursday.
Infantino assumed the FIFA presidency in February 2016, succeeding Sepp Blatter, and was expected to run unopposed in the next election scheduled for March 2027.
There is also talk among European officials of putting forward Nasser Al-Khelaifi, the Qatari CEO of beIN Media, to run against Infantino.
Lise Klaveness, President of the Norwegian Football Federation, told VG: “My clear impression right now is that he has suffered a major loss of trust. We did not vote for him last time and were skeptical about this. There are many good aspects to FIFA, but if you take a lax approach to governance principles and rules, you lose trust quickly.”
Diplomacy
Defense Priorities director warns US air strategy in Middle East faces tactical limits
The collapse of a tentative memorandum of understanding between Washington and Tehran, coupled with the diminishing strategic returns of American air power, has left the United States locked in an unsustainable, low-intensity conflict with Iran, according to Benjamin Friedman, Policy Director at the Washington-based think tank Defense Priorities.
Speaking in an interview on the YouTube channel Harici with host Sarp Sinan Hacır, Friedman attributed the failure of the short-lived US-Iran memorandum primarily to the Trump administration’s diplomatic missteps, vague draft language, and unrealistic expectations regarding a comprehensive settlement.
“Both sides really deserve some blame, but the Trump administration deserves the bulk of the blame for drafting an agreement that was so vague on key terms,” Friedman said, citing ambiguities surrounding the timeline for unfreezing Iranian assets and the scope of American commitments to restrain Israeli military operations in Lebanon.
Friedman emphasized that deep-seated mistrust in Tehran, exacerbated by repeated instances where diplomatic engagement was followed by Israeli or American military strikes, led Iranian negotiators to adopt an unyielding posture. At the same time, he noted that Iran likely miscalculated by using disruptions in the Strait of Hormuz to aggressively force leverage.
“The Trump administration remained intent on this sort of grand bargain that would restrain Iran seeking weapons development… and I think they continue to misread the Iranian willingness to sign that kind of deal,” Friedman noted, adding that Tehran viewed its leverage over the Strait of Hormuz as essential despite the risk of provoking further strikes.
Expressing deep skepticism over the prospects for a lasting diplomatic breakthrough, Friedman criticized the administration’s reliance on informal envoys such as Steve Bannon and Jared Kushner over professional diplomatic channels, predicting that the baseline outcome will remain an unpredictable, episodic conflict.
“What’s more likely is a kind of on-off-again kind of war—sort of what we’re in now, where we have occasional strikes, with the United States perhaps by accident adopting the Israeli model of ‘mowing the lawn’ periodically,” Friedman said.
Addressing the efficacy of US air power, Friedman argued that military operations against Iranian targets have reached a point of diminishing returns. While early strikes successfully eliminated critical high-value assets—such as over-the-horizon radar systems that targeted anti-ship missiles—Iran’s ballistic missile and long-range drone capabilities remain largely intact and operational.
He pointed to a recent strike on a base hosting US personnel in Jordan, launched from western Iran over a distance exceeding 1,000 kilometers, as evidence of Tehran’s sustained strike precision and the tactical limits of American interdiction efforts.
“The war is a failure for air power even in a tactical sense,” Friedman stated. “Initially, we looked at it and said we had a lot of success in destroying targets, but as more information came out, it turned out they had maybe more than half of their missiles and launchers survive the initial phase of the war.”
Friedman observed that the global proliferation of low-cost, high-precision guidance technology has permanently altered the strategic landscape, neutralizing the traditional invulnerability of forward-deployed US installations. “The precise effects of air power that used to be almost a monopoly of the United States… is actually making our posture in the region less sustainable,” he said, warning that similar vulnerabilities would be vastly amplified in any potential high-intensity conflict with China.
As an alternative to open-ended military engagement, Friedman suggested that Washington consider a complete military withdrawal from the region, even if it entails accepting Iranian transit fees on commercial shipping through the Strait of Hormuz. “The cost of preventing that through perpetual outbursts of warfare is much higher than just accepting it,” he noted.
Turning to regional dynamics, Friedman addressed Israel’s current absence from active strike operations against Iran, characterizing it as a calculated move to preserve its own air defense interceptors while relying on Washington to bear the operational and political burdens of containment.
On European security and the broader alliance structure, Friedman offered a critical assessment of the NATO summit in Ankara and the administration’s “NATO 3.0” concept. He described the white paper led by Defense Secretary Pete Hegseth as an effort to coerce European states into escalating defense expenditures and purchasing American hardware under the threat of reduced security guarantees, rather than executing a structured, strategic US posture adjustment.
“This is not a real US withdrawal; it’s a kind of pressure to up your loyalty in a particular way,” Friedman said, noting that major European powers such as Germany, France, and the UK lack a compelling existential incentive to construct independent, large-scale conventional war-fighting capabilities.
Regarding bilateral relations with Ankara, Friedman noted that US-Turkish tensions have eased considerably following the shift in American posture in Syria and progress toward resolving long-standing friction points, including the F-35 program and S-400 procurement. He added that while Israeli leadership under Prime Minister Benjamin Netanyahu has expressed frustration over Washington’s constructive engagement with President Recep Tayyip Erdoğan, the White House has maintained its strategic course despite pressure from domestic pro-Israel lobbying groups.
Addressing internal Republican Party dynamics, Friedman highlighted the evolving public stance of Vice President J.D. Vance, whose cautious criticism of Israeli influence and emphasis on divergent national interests reflects broader ideological shifts within the conservative base.
“Vance is more representative of the shift in the Republican Party,” Friedman said. “He’s criticizing them in a limited way and saying, ‘Our interests are different.’ From the perspective of those of us who would like the United States to have a more distant relationship from Israel, it’s progress.”
Looking ahead to the upcoming US midterm elections, Friedman anticipated that a loss of congressional control by the Republican Party would severely curtail the administration’s domestic executive overreach, though its structural impact on foreign policy execution and Middle Eastern operations would remain comparatively limited.
Diplomacy
UK Prime Minister Andy Burnham pledges full support to Ukraine in meeting with Zelenskyy
UK Prime Minister Andy Burnham has met with Ukrainian President Volodymyr Zelenskyy in Portsmouth, England.
Zelenskyy is the first world leader Burnham has met in person since taking office, with the prime minister committing to building a “firm partnership” between the United Kingdom and Ukraine.
Demonstrating their support, the two leaders toured a military base in Portsmouth where 200 Ukrainian troops are currently undergoing naval training exercises.
Burnham described his meeting with the Ukrainian president as “warm” and said he plans to visit Ukraine soon.
“We will build this together and address the various issues President Zelenskyy is facing, many of which we discussed today,” Burnham said.
The meeting follows an announcement by London that it will share intellectual property rights to assist Kyiv’s war effort.
The new prime minister announced that the UK will share the “Stone Cloak” electronic warfare system—which is fitted to drones to prevent detection—and will assist Ukraine in mass-producing the technology.
Burnham has focused primarily on domestic matters since replacing Keir Starmer, who faced criticism from elements within his own party for spending too much time abroad and focusing heavily on foreign affairs.
However, Burnham sought to signal continuity in Britain’s policy toward Ukraine. In one of his first phone calls after becoming prime minister last week, Burnham invited Zelenskyy to visit the UK “as soon as possible.”
Starmer spent his final full day as prime minister in Kyiv, where he announced £255 million in funding for Ukraine.
Speaking to Sky on Monday, Zelenskyy said his telephone conversation with Burnham had been “very good.”
The Ukrainian leader noted that Starmer had previously assured him that “the new government would maintain the policy of supporting Ukraine during the war.”
The new prime minister told the Ukrainian leader it was “no coincidence” that he was his first international visitor since moving into Downing Street.
“The purpose of this is to send a very clear message. We stand 100% with Ukraine, I personally stand 100% with you, and I will fully deliver on every commitment this country has made to Ukraine,” Burnham said.
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