The European Union and the United States took a decisive step towards preventing a trade war with the signing of a Joint Statement on transatlantic trade and investment, announced on August 21 in Brussels. The agreement sets, for the first time, a 15% cap on U.S. tariffs on the vast majority of European exports, ranging from automobiles and semiconductors to pharmaceuticals.
A political agreement with economic impact
This pact is the result of intense negotiations between European Commissioner for Trade, Maroš Šefčovič, and his American counterparts, following the understanding reached on July 27 by Commission President Ursula von der Leyen and President Donald Trump.
Von der Leyen described the outcome as a tangible advance: “We have brought clarity and coherence back to transatlantic trade. This is not the end of the process; we will continue working to reduce tariffs further and expand cooperation.”
Tariffs with limits and exceptions
The key measure is the 15% limit on tariffs applied to most European exports to the U.S. Strategic industries such as automotive, timber, and pharmaceuticals are included.
At the same time, some products will benefit from a special regime with only Most Favored Nation (MFN) tariffs, such as cork, aircraft and parts, and generic pharmaceuticals. These changes will come into effect on September 1.
Additionally, the EU will initiate procedures to reduce tariffs on certain American products, especially cars and components.
Steel, aluminum, and secure supply chains
The agreement also includes joint measures addressing excess capacity in the steel and aluminum sectors. Brussels and Washington will develop a tariff quota system to maintain the competitiveness of European industries and secure critical supply chains.
Šefčovič emphasized the strategic importance of this understanding: “We have avoided a damaging escalation. This is a serious and weighty deal that protects jobs and businesses on both sides of the Atlantic.”
The world’s most valuable economic relationship
With exchanges exceeding €1.6 trillion annually and mutual investment flows reaching €5.3 trillion in 2022, the EU-U.S. relationship is the most significant in the world. Every day, over €4.2 billion in goods and services cross the Atlantic.
The agreement aims to strengthen this interdependence and provide companies and citizens with a framework of predictability. For the EU, it also represents an opportunity to demonstrate commitment to multilateralism while maintaining the diversification of trading partners.
Next steps
The European Commission will work with Member States and the Parliament to implement the pact and open negotiations for a broader, fair, and balanced trade agreement. As a gesture of easing tensions, the EU has already suspended retaliatory measures adopted in late July.
Frequently Asked Questions (FAQs)
1. What is the maximum tariff agreed upon?
The United States will impose a ceiling of 15% on most European exports, including cars, semiconductors, pharmaceuticals, and wood.
2. Which products are exempt from this limit?
Cork, aircraft and parts, and generic medicines will only be subject to standard MFN tariffs starting September 1.
3. What does the agreement mean for steel and aluminum?
Tariff quotas will be implemented to curb global overcapacity and ensure secure supply chains.
4. How valuable is the transatlantic trade relationship?
It exceeds €1.6 trillion annually, making it the most significant bilateral economic relationship in the world.
Source: Portal Financiero