The US and EU are racing to lock in the final details of their major new trade deal before Friday's deadline.

But critics say its a rushed fix, with German Chancellor Friedrich Merz calling the outcome unsatisfying, while France’s Bayrou dubbed the EU’s ‘submission’ a ‘dark day’.

President Trump and European Commission President Ursula von der Leyen announced Sunday that the US and EU had agreed to the framework of a trade deal that included a baseline tariff rate of 15% on EU goods imported into the US.

Trump, called the deal “the biggest of them all,” while von der Leyen said that "15% is not to be underestimated, but it is the best we could get." EU reaction to the agreement was decidedly mixed, with Germany and France offering perhaps the strongest criticism.

Trump also confirmed on Monday that 15% represents the new standard for tariff negotiations.

“For the world, I would say it’ll be somewhere in the 15% to 20% range,” Trump said in Scotland as he met with UK Prime Minister Keir Starmer.

Meanwhile, another round of US-China talks kicked off this week, with markets hoping for another extension of the countries' trade truce. The South China Morning Post, a Hong Kong-based English-language newspaper, reported that is seen as the likely outcome. This was confirmed by Commerce Secretary Howard Lutnick who said a 90-day China trade truce extension is likely.

Last week, Trump said that letters dictating tariff rates for over 200 countries would go out soon while his administration works to clinch deals with larger trade partners. Trump said the US hasn't had a "lot of luck" with Canada and suggested he may impose threatened 35% levies on goods not covered by the US-Canada-Mexico trade agreement.

Trump also touted a deal with Japan that included a $550 billion investment in the US and a 15% tariff on goods imported into the US from Japan. Japan said Tuesday its trade deal with the US eased policy uncertainty but warned US trade actions could still weigh on its economy.

Meanwhile, US Trade Representative Jamison Greer said "more negotiations" would be needed with India, just days before the Aug. 1 deadline.

Read more: What Trump's tariffs mean for the economy and your wallet

Here are the latest updates as the policy reverberates around the world.

Germany's Chancellor released a statement saying he's not \\"satisfied\\" with the new EU-US trade deal and expressed concerns about how it'll affect his country's economy.

Reuters reports:

German Chancellor Friedrich Merz said on Monday he was not satisfied with the result of trade talks with the United States, but \\"more simply wasn't achievable\\" and added the German economy would suffer \\"significant\\" damage due to the agreed tariffs.

The trade deal announced on Sunday imposes a 15% import tariff on most EU goods - lower than the 30% once threatened by U.S. President Donald Trump but well above initial hopes of a zero-for-zero agreement.

The rate almost halves the existing tariff rate on Europe's auto sector, a cornerstone of the German economy, from 27.5%, Merz pointed out.

\\"But I am fully aware that the tariffs that remain — particularly the 15% versus 0% for imports into the EU — pose a serious burden for Germany’s export-oriented economy,\\" he told a press conference in Berlin.

\\"I am not satisfied with this result in the sense of: 'This is good.' But I do say that, given the starting point we had with the United States, more simply wasn’t achievable,\\" he said.

Read more here.

On Sunday, President Trump and European Commission President Ursula von der Leyen announced a preliminary trade agreement, avoiding an all-out trade war. Here's what we know about the terms the two sides agreed to, per Reuters:

Most European imports will face 15% tariffs (avoiding the 30% tariffs previously threatened).

The 15% tariff will cover about 70% of EU goods bound for the US, about 780 billion euros (over $900 billion).

The baseline tariff covers pharmaceuticals and semiconductors, which were not subject to tariffs previously, and cars, which were subject to duties of 27.5%.

US imports into the EU will not face higher tariffs in return.

Zero tariffs will apply to about 70 billion euros of trade.

Von der Leyen said tariff-exempt products include: \\"all aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources, and critical raw materials.\\"

The EU pledged to buy $750 billion worth of US energy products, including gas, oil, and nuclear fuel.

It also pledged $600 billion in investments into the US economy and an undefined amount of weapons purchases.

Several questions still remain unresolved, however. Here's what remains to be seen when the US and EU reveal a joint statement on Aug. 1:

Steel and aluminum: Trump said on Sunday that the US would maintain its 50% tariff on steel and aluminium imports. EU officials said the two sides agreed on a quota, above which the tariffs would apply, but US officials said nothing had been agreed upon.

The exact parameters of zero-for-zero tariffs, including potential carveouts for wine and spirits.

Deal completion with binding terms, which will require the backing of a majority of EU countries.

Read more here.

The Canadian Press reports:

Prime Minister Mark Carney said Monday that Canada's negotiations with the United States are in an \\"intense phase\\" after President Donald Trump announced a trade agreement with the European Union.

\\"There are many aspects to these negotiations,\\" said Carney in Prince County, P.E.I. \\"We are engaged in them but the assurance for Canadian business, for Canadians, is we will only sign a deal that's the right deal, that's a good deal for Canada.\\"

The prime minister's comments come after Trump last week told reporters that Canada wasn't a priority for his administration ahead of his Aug. 1 deadline to make trade deals. [...]

The Canadian economy is significantly impacted by Trump's sectoral tariffs on steel, aluminum and automobiles and will be hit by copper tariffs the president has said will also go in place by the week's end.

Carney said that while there are similarities between the Canada-U.S. negotiations and those involving Europe, there are also many differences.

Read more here.

The recent trade deal announced between the United States and the European Union is raising concerns in different industries about potential costs. The pharmaceutical industry, specifically, is estimated to take on an extra billion dollars based on new data.

Reuters reports:

The European Union's trade deal with the United States could cost the pharmaceutical industry between $13 billion and $19 billion as branded medicines become subject to a tariff of 15%, analysts said on Monday.

The added costs could raise prices for consumers unless pharmaceutical companies take action to mitigate the impact of the tariffs, one of the analysts said.

Pharmaceuticals had historically been exempt from duties. Medicines are the largest European exports to the United States by value and the EU accounts for about 60% of all pharmaceutical imports to the U.S.

Read more here.

Luxury goods companies have been spared the worst case scenario in Sunday's EU-US trade deal. But the worst is not over yet, they still face a balancing act as already weak consumer demand prevents them from raising prices further.

Reuters reports:

Big labels like Chanel and LVMH's (MC.PA, LVMUY) Louis Vuitton and Dior have relied on dramatic price increases in recent years to drive a chunk of their profit growth.

Jacques Roizen, managing director, China, at Digital Luxury Group, said the deal struck by U.S. President Donald Trump and European Commission President Ursula von der Leyen on Sunday, imposing a 15% tariff on EU goods, brings much needed certainty to luxury's key U.S. market.

Yet, \\"brands are treading carefully with further price hikes to avoid alienating younger and occasional shoppers,\\" he said.

Although baseline duties are below a hefty 30% levy that Trump had threatened just a couple of weeks ago, they are a far cry from the zero-for-zero tariff deal Brussels was hoping to clinch.

Read more here.

US and Chinese trade negotiators are meeting this week for at least two days of trade talks as markets continue to focus on relations between the two superpowers and whether stiff tariff rates will be delayed again.

Yahoo Finance's Ben Werschkul reports on what to expect:

Trump officials also hope this third gathering of the trade teams in recent months will provide an opportunity to pivot to longer-term issues even as a short-term deadline of Aug. 12 remains front of mind.

The talks are being closely watched for whether they move the countries toward a face-to-face later this year between Presidents Trump and Xi Jinping as well as whether negotiators can solidify recent gains, such as a lessening of tensions around semiconductors and rare earth minerals.

\\"We have a good relationship with China,\\" President Trump said Monday just after his team stepped into the talks.

He signaled his focus could be on market access, saying, \\"I'd love to see China open up their country.\\"

Read more here.

Reuters reports:

In the end, Europe found it lacked the leverage to pull Donald Trump's America into a trade pact on its terms and so has signed up to a deal it can just about stomach - albeit one that is clearly skewed in the US favour.

As such, Sunday's agreement on a blanket 15% tariff after a months-long stand-off is a reality check on the aspirations of the 27-country European Union to become an economic power able to stand up to the likes of the United States or China.

The cold shower is all the more bracing given that the EU has long portrayed itself as an export superpower and champion of rules-based commerce for the benefit both of its own soft power and the global economy as a whole.

For sure, the new tariff that will now be applied is a lot more digestible than the 30% \\"reciprocal\\" tariff which Trump threatened to invoke in a few days.

Read more here.

CNN reports:

The United States and China are poised to start a fresh round of talks in Sweden, aiming to extend a temporary trade truce that held back triple-digit tariffs while the world’s two biggest economies try to broker a lasting deal.

Delegations led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will convene in Stockholm on Monday before the current deadline expires on August 12. Ahead of the talks, Bessent said an extension is “likely” and that “trade is in a very good place with China.”

It will be the rivals’ third European get-together in as many months, during which they have alternately feuded and negotiated, after slapping each other with sky-high tariffs that threatened to cut off all trade. Washington and Beijing reached a 90-day truce at a May meeting in Geneva, then pulled it back from the brink of collapse with further talks in London in June.

Read more here.

Europe's reaction to its trade deal with the US is decidedly mixed so far. As we detailed earlier, the deal represents the \\"least-worst\\" option for Europe, which was facing 30% duties on its imports to the US.

So EU leaders have put on a brave face, saying that they hope this breakthrough is but the first step toward a more favorable, longer-term agreement.

Bloomberg rounded up some initial reaction. One that stood out: Hungarian Prime Minister Viktor Orban, a Trump ally:

“What’s clear is that this isn’t a deal Donald Trump struck with Ursula von der Leyen,” Orban said in an online interview with a pro-government influencer on Monday. “Donald Trump ate Ursula von der Leyen for breakfast. The American president is a heavyweight negotiator, Madam President is featherweight.”

From the German chancellor:

“The agreement has succeeded in averting a trade conflict that would have hit the export-oriented German economy hard,” German Chancellor Friedrich Merz said in a statement late Sunday. “This has enabled us to safeguard our core interests, even if I would have liked to have seen further easing in transatlantic trade.”

Italian Prime Minister Giorgia Meloni called the agreement \\"sustainable\\":

“I welcome the fact that an agreement has been reached,” Meloni told reporters Monday in Addis Ababa, Ethiopia. “I have always thought, and continue to think, that a trade escalation between Europe and the US would have unpredictable and potentially devastating consequences.”

France took a more hawkish approach:

“Let’s be clear: the current situation is not satisfactory and cannot be sustainable,” French Minister for European Affairs Benjamin Haddad said in a social media post. “The free trade that has brought shared prosperity to both sides of the Atlantic since the end of the Second World War is now rejected by the United States, which is choosing economic coercion and complete disregard for WTO rules.”

Finally, from Slovakia:

Slovak Prime Minister Robert Fico, who typically joins Orban in criticizing the EU, said that 15% is “a good negotiation result,” though he warned that the devil is “hidden in the details.”

Read more here.

European Union wine and spirits producers could emerge as one of the few winners in the US-EU trade deal which was agreed on Sunday.

Reuters reports:

Shares in Pernod, Diageo and Campari initially rose in early trade. But they stood 1.3%, 0.4% and 0.3% lower by 0707 GMT. Shares in Remy fell 2.2%.

Alcohol is among the EU's top exports to the United States, worth about $10.5 billion in 2024, according to Eurostat data, with certain products like Remy Martin cognac and champagne required to be produced in specific European regions.

The United States accounts for about 18% of exports for another exclusively French product, champagne.

For cognac makers, the U.S. tariffs represent a fresh challenge after producers of the drink managed this month to avert the threat of duties of up to around 35% from China.

For Spanish and Italian wines, around 14% and 24% of total exports, respectively, are sold in the United States.

Semiconductor play ASML (ASML) getting a lot of mentions on the Street this morning as a winner from the US/EU trade deal.

Shares are up nearly 5% in pre-market trading. I would note ASML just a week ago issued weak guidance that hammered the stock, so be mindful of that.

Here's what JP Morgan had to say this morning:

\\"ASML had indicated in its Q2 results that it saw hesitation (and thus lack of orders) from customers to order tools for their new US fabs due to the risk of tariffs on semiconductor equipment. If this information from the US on zero tariffs on semiconductor equipment is correct then this would be very positive for ASML in particular, but also for VAT. Other semiconductor equipment companies in Europe, such as ASM International (ASM.AS) manufacture their tools outside the EU and thus deals with countries such as Singapore, Malaysia and the US will be important for those companies.\\"

The FT reported on Monday that President Donald Trump has frozen restrictions on technology exports to China in order to avoid hurting trade talks with Beijing and to help secure a meeting between Trump and President Xi Jinping this year, according to people familiar with the matter.

The US Commerce Department's Bureau of Industry and Security, which is in charge of export controls, has been advised to avoid tough moves on China, according to eight people, including current and former US officials.

The US and China are due to meet in Stockholm on Monday for a third round of trade talks following previous meetings in Geneva and London.

The FT reports:

While Trump wants to avoid actions that could hurt efforts to meet Xi, some officials have argued that the US is hamstrung on export controls because of the risk that China retaliates by restricting the export to the US of critical rare earths and magnets, as it did in May for the first time.

Earlier this year, Trump was poised to restrict technology exports to China. In April, his team told Nvidia (NVDA) it would block the export of its H20 chip, which was designed for the Chinese market after the Biden administration restricted more advanced chips. But Trump reversed course following direct lobbying from Nvidia chief executive Jensen Huang.

The H20 has become the focus of a battle between security officials, who say the chip will help the Chinese military, and Nvidia, which says blocking US technology exports forces Chinese groups to accelerate innovation.

Read more here (subscription required).

Dutch brewer Heineken (HKHHY, HEIO.AS) said on Monday that it welcomed the trade deal between the European Union and the US and that it was weighing all options to deal with growing tariff challenges in the long term, including shifting manufacturing.

Reuters reports:

CEO Dolf van den Brink welcomed the certainty brought by the trade deal clinched on Sunday, which reduced a threatened 30% US tariff on EU goods to 15% - a rate that would still hit Heineken's US profits.

All options are being considered to mitigate tariffs long-term, including shifting manufacturing, he said, but added that such moves were capital intensive and would first need more consistency in policy.

\\"We look at all options from ... continuing with our current setup, a more hybrid version, or otherwise,\\" he told journalists on a call. \\"If and when we deem them financially to be more attractive in the mid- to long-term, we would for sure explore them.\\"

Read more here.

Japan confirmed that only a small part, just 1% to 2%, of the $550 billion deal with the US will be actual investment. Most of the money will be in the form of loans, according to Japan's trade negotiator Ryosei Akazawa.

Akazawa said that Tokyo will save roughly $68 billion through lower tariff rates in its deal with the US.

The details revealed by Akazawa on Saturday via an interview with public broadcaster NHK, suggest the Japanese may end up giving up much less than at first glance.

The $550 billion investment framework combines loans, investments and loan guarantees provided by financial institutions backed by the Japanese government.

Bloomberg News reports:

Of the total, investment will comprise 1% or 2% and the US and Japan will split the profits of that investment at a ratio of 90-10, he said. Japan had originally proposed a 50-50 ratio, he added.

The fund is a centerpiece of the deal announced by the two sides that will impose 15% tariffs on Japanese cars and other goods. Officials from Japan and other countries that struck deals with the US are now sifting through the terms to explain them to the public.

“It’s not that $550 billion in cash will be sent to the US,” Akazawa said. “By letting the US have 90% of the profits rather than 50%, I think Japan’s loss will be at most a couple of tens of billions of yen. People are saying various things, such as ‘You sold out Japan,’ but they’re wrong.”

Read more here.

Following Volkswagen's (VOW3.DE, VWAGY) guidance cut last week, the German carmakers premium brand Audi has also cut its full-year guidance, citing the impact of higher US import tariffs and restructuring expenses.

Reuters reports:

The company now expects revenue between 65 billion euros ($76 billion) and 70 billion euros, down from a previous range of 67.5 billion to 72.5 billion, and an operating margin between 5 and 7%, down from a previous range of 7 to 9%.

Read more here.

The US-EU trade deal has the potential to roll back months of EU posturing as a leading global economic force. This is based on the argument that the bloc has been pushed into accepting a \\"least-worst\\" deal after failing to bring suitable leverage to the trade table.

Reuters reports:

Sunday's agreement on a blanket 15% tariff after a months-long stand-off is a reality check on the aspirations of the 27-country European Union to become an economic power able to stand up to the likes of the United States or China.

The cold shower is all the more bracing given that the EU has long portrayed itself as an export superpower and champion of rules-based commerce for the benefit both of its own soft power and the global economy as a whole.

For sure, the new tariff that will now be applied is a lot more digestible than the 30% \\"reciprocal\\" tariff which Trump threatened to invoke in a few days.

While it should ensure Europe avoids recession, it will likely keep its economy in the doldrums: it sits somewhere between two tariff scenarios the European Central Bank last month forecast would mean 0.5-0.9% economic growth this year compared to just over 1% in a trade tension-free environment.

\\"We were dealt a bad hand. This deal is the best possible play under the circumstances,\\" said one EU diplomat. \\"Recent months have clearly shown how damaging uncertainty in global trade is for European businesses.\\"

Read more here.

As many of the specifics of the trade deal between the EU and US remained unclear Sunday, at least one European Union leader said she was awaiting more information before passing judgment on it. Italy's Prime Minister Giorgia Meloni called it \\"positive' that he agreement had been reached, but wanted to see the details, Reuters reports:

Italy is one of the biggest European exporters to the U.S., with a trade surplus of more than 40 billion euros.

The Italian government, led by a nationalist coalition, had urged its European partners to avoid a direct clash between the two sides of the Atlantic.

In a statement, Meloni said that the agreement \\"ensures stability\\", adding that the 15% \\"is sustainable, especially if this percentage is not added to previous duties, as was originally planned.\\"

\\"We are ready to activate support measures at the national level, but we ask that they also be activated at the European level for sectors that will be particularly affected by US tariff measures,\\" she added.

Read more here.

European Commission President Ursula von der Leyen noted that there isn't yet a specific US-EU agreement on tariffs regarding wine and spirits between the two trading partners, among other unsettled details, and the Distilled Spirits Council of the United States is lobbying for an amicable resolution.

\\"We are optimistic that in the days ahead this positive meeting and agreement will lead to a return to zero-for-zero tariffs for U.S. and EU spirits products, which will benefit not only our nation’s distillers, but also the American workers and farmers who support them from grain to glass,\\" the trade association's president and CEO Chris Swonger said in a statement provided to Yahoo Finance. \\"For more than 20 years, large and small distilleries across the U.S. have flourished under a tariff-free relationship with the EU, our largest export market. It’s time to get back to toasts not tariffs.”

The trade deal ironed out between the EU and the US on Sunday has more than few wrinkles remaining, chief among them: What the levy on pharmaceuticals will be. Bloomberg reports:

After he met with European Commission President Ursula von der Leyen Sunday, Trump said that the deal would not include pharmaceuticals, a contentious point in the negotiations, seeming to imply they would be subject to a higher tariff.

In a separate news conference, von der Leyen said, “The EU agreed we have 15% for pharmaceuticals.” But she added, “Whatever decisions later – by the president of the US – that’s on a different sheet of paper.”

The US has initiated investigations into whether the import of certain products, such as pharmaceuticals and semiconductors, poses a national security threat to the country. This could lead to separate tariffs on those sectors.

Read more here.

From YF's Ben Werschkul:

In any case, the 15% baseline is a shift — even from recent weeks.

Trump earlier this month said that many countries would see a rate of “probably 10% or 15%, we haven’t decided yet.” Even last Sunday, Commerce Secretary Howard Lutnick told CBS: \\"You should assume that the small countries... will have a baseline tariff of 10%.\\"

This new standard is also notable fulfillment of an oft-made campaign trail promise that saw the then-candidate pledge to create a \\"ring around the collar\\" of the US economy with a blanket rate of between 10% and 20%.

Fulfilling that pledge — which was often dismissed as unrealistic at the time — has now become not only accepted but even a plus for markets after six months of Trump's second term have seen threats of higher duties that have reordered world trade actions.

Read more here.