The United States and the European Union have agreed to cut tariffs on most European imports to 15 percent, easing trade tensions and reinforcing economic ties between the two blocs amid fragile global market conditions.

The deal, signed during a meeting between President Donald Trump and European Commission President Ursula von der Leyen in Scotland, reduces the threat of a broader transatlantic trade war. The agreement follows prolonged negotiations and is set to take effect on August 1.

Under the terms of the deal, the EU will increase its purchases of US energy products by $750 billion and commit to $600 billion in new investment across sectors including infrastructure, advanced manufacturing and defense. In return, the US will scale back planned tariffs that were initially set at 30 percent.

The revised duties will apply broadly to industrial and consumer goods, though pharmaceuticals, metals and semiconductors remain exempt pending further negotiations. Officials close to the talks said the concessions on sensitive sectors were tied to the EU’s long-term investment pledges.

Von der Leyen described the agreement as a “necessary step” toward stability and regulatory certainty. Trump hailed the EU’s commitment to increase spending on American military equipment.