The agreement between the United States and the European Union has prevented the outbreak of a full-blown trade war between the world’s two largest economies. While the outcome brought temporary relief, few are in a celebratory mood. The new framework, which imposes a base tariff of 15% on most European products entering the US, is significantly higher than the 10% tariff introduced in April, and a far cry from the 1.2% average prior to the Trump presidency.

As CNN reports, tensions peaked in late May when Trump, frustrated with the course of negotiations with the EU, unilaterally declared that “talks are over” and imposed 50% tariffs directly from the Oval Office. “I’m not looking for a deal,” he said at the time, shocking Brussels.

However, European Commission President Ursula von der Leyen, with whom Trump maintains a warm relationship, contacted him and pledged that the EU would act “immediately and decisively.” Her response convinced Trump to back down and resume talks.

Despite weeks of negotiations and a July 9th deadline, no resolution was reached, prompting the US to postpone the implementation of the so-called “retaliatory” tariffs until August 1st. The final agreement was struck just days before the deadline, during Trump’s visit to Scotland and his meeting with von der Leyen.

“We did it,” Trump declared. “It’ll work out well.” Von der Leyen, for her part, stated: “I think we achieved exactly what we aimed for – a balance that will allow trade on both sides of the Atlantic.”

Markets responded with cautious optimism: Dow Jones futures rose by 150 points, while the S&P 500 and Nasdaq also moved higher.