The United States and the European Union have reached a preliminary trade deal to avoid a 30% U.S. tariff on imported goods from the EU that President Donald Trump threatened would go into effect on Aug.

The European Union and its 27 member nation bloc became the latest of the United States' top trading partners to come to an agreement with Trump over the weekend, joining the Philippines, Japan and Indonesia in announcing deals during July.

The rate will apply in addition to individual “reciprocal” tariffs targeting countries with which the US runs a trade deficit.

Trump’s trade deal with the E.U. may lead to higher prices for brand-name drugs in the U.S., including the blockbuster medications Ozempic and Wegovy, experts say.

The EU, a group of countries with shared economic interests, exports about $2 trillion worth of goods to the U.S. The 27 countries had hoped for a lower tariff of 10%, similar to the deal Trump negotiated with the U.K. and well below the original threat of 30% tariffs, but most analysts expected something closer to 15%.

With the U.S. and the European Union agreeing to a trade framework that includes a 15% tariff on goods imported from the EU, American consumers now face an overall effective tariff rate of 18.2%, the highest level since 1934,

The 15 percent tariff rate agreed under the new deal could significantly impact pharma firms reliant on European imports.

Fareed Zakaria asks Bill Gates how damaging he thinks Trump’s tariffs are. Hear his response . 01:43 . Now playing

"We're in much better shape because it's now clear that if there's gonna be a real trade war with anyone, it would just be with China," Secretary Ross tells Fortune.