The European Union and the United States finally released a statement on the agreed-upon new trade deal between the two, almost a month after it was announced. The statement confirms that the EU will have tariffs for several of its products in the US, even though an exemption list of items has been agreed upon and can be revised in the future.
Overall, products will have a 15% tariff to enter the US. Some sectors will still face high tariffs, most notably steel and aluminium. US President Donald Trump slapped a 50% tariff on them months ago, and negotiations to remove or lower them didn’t go through. Car and car parts export still have a 27.5% tariff, but talks are ongoing to lower it. Wine and other spirits were not exempted from the hike.
Unavailable natural resources, aircraft, and aircraft parts, as well as generic pharmaceuticals, their ingredients, and chemical precursors, will be exempt from the 15% hike and will be subject to normal, non-discriminatory tariffs (MFN). Other types of pharmaceuticals and semiconductors are also currently covered, but the US may raise tariffs to 15% if it finds violations after a series of investigations on EU exports.
The deal also includes provisions for European investments in the US. According to the joint statement, the EU will seek to invest around €644 billion through 2028 in US energy, $40 billion worth in AI chips produced in the US, plus additional investments of $600 billion across strategic sectors. The EU will also increase its investments in US military and defence equipment, a move that may hinder its own plan to boost European defence production by the decade’s end.
Despite the optimism professed by EU officials, the deal was criticised across the board and seen at best as an inevitable bad deal. Critics pointed out the lack of reciprocity in the agreement, with the US not receiving any tariffs for its products. Also, the deal is not legally binding, meaning that Trump may decide to push for more if he has one of his frequent changes of mind.
However, the EU Commissioner for Trade Maroš Šefčovič, who oversaw negotiations between the bloc and the US, commented on what could have happened without a deal: “the alternative – a trade war with sky-high tariffs and political escalation – would harm jobs, growth, and businesses on both sides of the Atlantic.”
European Commission President Ursula von der Leyen also defended the deal in the joint statement, saying that “faced with a challenging situation, we have delivered for our Member States and industry, and restored clarity and coherence to transatlantic trade.” She also pledged to keep up negotiations for more exemptions for other sectors: “This is not the end of the process, we continue to engage with the US to agree more tariff reductions, to identify more areas of cooperation, and to create more economic growth potential.”
