On 27 July 2025, President Trump and European Commission President Ursula von der Leyen announced a new deal on tariffs and trade between the United States and the European Union. The agreement aims to stabilize EU – U.S. trade relations and prevent a broader tariff escalation. Early reporting on and statements about the new agreement indicates that a single tariff rate of 15% will apply to most imports into the United States as well as zero rates for certain products imported into the EU, thereby eliminating the risk of cumulative duties and offering greater predictability for businesses engaged in transatlantic trade. However, many details on the deal still remain to be confirmed.
According to a fact sheet released by the White House on 28 July, a 15% tariff will apply to the vast majority of EU-originating goods imported into the U.S., covering key sectors such as automobiles (which are currently subject to a 27.5% duty rate), pharmaceuticals, and semiconductors, superseding the national security tariffs that have been or which may be imposed on these imports under Section 232 of the Trade Expansion Act of 1962. The announced 15% tariff replaces a previously threatened 30% duty under the U.S. reciprocal tariff package. In addition to this 15% reciprocal tariff, the agreement includes a zero-for-zero arrangement on several strategic goods, including all aircraft and component parts, certain chemicals, generic pharmaceuticals, and semiconductor manufacturing equipment. The 50% U.S. tariffs imposed under Section 232 on EU steel and aluminum will remain in place.
Additionally, the EU has committed to significant economic engagement with the U.S. As part of the deal, it committed to (i) spend an additional $750 billion on U.S. energy products, including LNG, oil, and nuclear fuels, (ii) invest $600 billion in the U.S. economy, and (iii) purchase substantial volumes of American military equipment. Moreover, the agreement should include provisions for further technological cooperation. According to the fact sheet on the agreement, the EU will also work toward addressing U.S. concerns on non-tariff barriers to U.S. imports in the industrial and agricultural sectors.
Notably, just days before the agreement was reached, the EU adopted Implementing Regulation (EU) 2025/1564, consolidating and expanding its countermeasures in response to U.S. tariffs. The Implementing Regulation introduced new retaliatory tariffs on US-originating products and export restrictions on certain EU-origin goods, scheduled to take effect in phases starting August 7. However, with the new agreement in place, these measures are now expected to be further suspended.
At this very moment, no official documents on the deal have been published apart from statements and the fact sheet. We expect the details of the agreement to be published in due course. Many specifics are yet to be confirmed, including the timeline for the implementation of the agreement, the exact scope of the tariffs, as well as non-tariff barriers to market access such as import quotas and intellectual property protections. We will continue to monitor and report on any developments.
