EDINBURGH, Scotland (AP) — The United States and the European Union agreed on Sunday to a trade framework setting a 15% tariff on most goods, staving off — at least for now — far higher import duties on both sides that might have sent shock waves through economies around the globe.

Tariffs are rising sharply in 2025, with the US rates jumping to 13.3%—the highest since 1939—fueling global uncertainty and triggering a projected $2 trillion hit to global GDP by 2027.

The European Union dominates critical pharmaceutical imports into the United States, making the 30% tariffs Trump threatened to go into effect Aug. 1 particularly risky.

The tools of China’s trade war have been industrial policy and a weak currency, not tariffs. They are working.