The United States and European Union have struck a framework deal on trade, including on drugs, chips, agriculture and automobiles.
Washington has agreed to cap tariffs on pharmaceuticals, semiconductors and lumber at 15%, while Brussels will eliminate tariffs on industrial goods and widen preferential access for US agricultural and seafood products.
US President Trump had previously threatened levies as high as 250% on drugs and 100% on microchips.
The EU’s blanket 'reciprocal' tariff will remain at 15%, as it has been since 7 August, while US automobile tariffs are set to ease once the EU presents legislation on its own industrial tariff cuts.
The EU has pledged to procure $750 billion worth of US liquefied natural gas, oil and nuclear products through 2028, alongside $40 billion of US artificial intelligence chips, as indicated by Trump and European Commission President Ursula von der Leyen last month when an outline deal was first agreed.
European companies are expected to invest a further $600 billion in "strategic sectors" in the US over the same period.
“This framework agreement represents a concrete demonstration of our commitment to fair, balanced, and mutually beneficial trade and investment,” the White House said in a joint statement.
EU trade chief Maros Sefcovic described the deal as a “first step” that could be expanded to other sectors.
He said there is a firm intention to present this legislative proposal this month, adding that the US's 15% tariff on EU autos will apply retroactively the digital sector was kept out of the current trade talks.
The two sides said the framework will support reindustrialisation, deepen defence cooperation, and strengthen supply chains while reducing long-standing trade frictions.