The European Union and the United States have reached an agreement to settle a trade dispute over tariff hikes, European Commission President Ursula von der Leyen and US President Donald Trump announced on Sunday.

The US and EU have finalised a major trade pact reducing tariffs to 15%, averting a trade war. Energy, defence, and investment dominate the deal, but key sectors like pharma and semiconductors remain at risk.

The European Union is exploring a broader set of possible counter-measures against the United States as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats.

EDINBURGH, Scotland (AP) — The United States and the European Union reached a tariff deal Sunday after a brief meeting between President Donald Trump and European Commission chief Ursula von der Leyen. A White House deadline was days away for imposing punishing import taxes on the 27-member EU, which is America’s leading global trading partner.