US, EU Release Details of Trade Deal

The European Union will strive to ensure lower U.S. tariffs apply to its car exports retroactively, EU trade chief Maros Sefcovic said on Thursday, as the transatlantic partners set out details of their framework trade deal struck in July.

In a 3-1/2-page joint statement, the two sides spelled out that 15% U.S. tariffs would apply to most EU imports and listed the commitments made, including the EU's pledge to eliminate tariffs on U.S. industrial goods and to give preferential market access for a wide range of U.S. seafood and agricultural goods.

Washington will take steps to reduce the current 27.5% U.S. tariffs on cars and car parts, a huge burden for European carmakers, once Brussels introduces the legislation needed to enact promised tariff cuts on U.S. goods, it said.

The statement said U.S. tariff relief on autos and auto parts would kick in on the first day of the month in which the EU introduced the legislation.
Sefcovic said it was the European Commission's "firm intention" to make proposals by the end of the month, meaning the U.S. car tariff reduction would apply from August 1.

A senior administration official, speaking on condition of anonymity because they were not authorized to speak publicly, said European carmakers could see relief from the current U.S. tariffs within "hopefully weeks."

"As soon as they're able to introduce that legislation -- and I don't mean pass it and fully implement it, but really introduce it -- then we will be in a position to provide that relief. And I will say that both sides are very interested in moving quickly," they said.

U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the deal on July 27 at Trump's luxury golf course in Turnberry, Scotland after months of negotiations.

The two leaders met again this week as part of negotiations aimed at ending Russia's war in Ukraine, with both lauding their trade framework deal as an historic accomplishment. The joint statement said the deal could be expanded over time to cover additional areas and further improve market access.

The joint statement was "a play to hold each other accountable" and ensure that both sides carried out the pledges announced last month, the official said.

The joint statement noted that the U.S. agreed to apply only pre-existing Most Favored Nation (MFN) tariffs of below 15% from September 1 on EU aircraft and parts, generic pharmaceuticals and ingredients, chemical precursors and unavailable natural resources, including cork.

This exemption did apply to include wine or spirits, a key EU demand, but the two sides agreed to consider other sectors and products for inclusions.
"So these doors are not closed forever," Sefcovic said, while acknowledging that securing an exemption for alcoholic drinks would not be easy.

The statement reiterated the EU's intention to procure $750 billion in U.S. liquefied natural gas (LNG), oil and nuclear energy products, plus an additional $40 billion of U.S.-made artificial intelligence chips.

It also repeated the intention for EU companies to invest an additional $600 billion across U.S. strategic sectors through 2028.

Both sides committed to address "unjustified digital trade barriers," the statement said, and the EU agreed not to adopt network usage fees.
They also agreed to negotiate rules of origin to ensure that the agreement's benefits accrued predominantly to both trading partners.

In addition, they said they would consider cooperation to ring-fence their respective steel and aluminum markets from overcapacity, while ensuring secure supply chains between each other, including through tariff quotas.