According to a 3.5-page joint statement on the framework agreement signed on 21/8, most goods imported from the EU to the US, including cars, pharmaceuticals, semiconductors, and wood, will be subject to a 15% tariff. This rate is significantly lower than what former President Trump had threatened, as well as the 100% tariff on semiconductors.
The US agreed to apply the most favored nation (MFN) tariff rate from 1/9 to EU aircraft and components, original pharmaceuticals and materials, chemical precursors, and scarce natural resources such as cork.
In return, the EU will eliminate tariffs on all US industrial goods and provide preferential market access for several US seafood and agricultural products. Brussels will enact the necessary legislation to implement the tariff reductions as committed. Meanwhile, Washington is taking steps to reduce the current 27.5% tariff on cars.
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European Commission President Ursula von der Leyen sits with US President Donald Trump after announcing the trade framework agreement in Turnberry, Scotland, UK, on 27/7. Photo: Reuters |
European Commission President Ursula von der Leyen sits with US President Donald Trump after announcing the trade framework agreement in Turnberry, Scotland, UK, on 27/7. Photo: Reuters
The agreement also mentions the EU's plan to purchase 750 billion USD worth of liquefied natural gas (LNG), oil, and nuclear energy products from the US, along with 40 billion USD worth of US-manufactured artificial intelligence chips. The EU also plans to invest an additional 600 billion USD in strategic sectors in the US by 2028.
Additionally, both sides committed to addressing "unreasonable digital trade barriers," considering cooperation to protect the steel and aluminum markets from overcapacity, and ensuring secure supply chains through tariff quotas.
EU Trade Commissioner Maros Sefcovic stated this is "the most favorable trade agreement the US has ever granted to any partner." "This framework is a first step that can be developed over time to encompass more areas, improve market access, and further strengthen our economic relationship," he said.
Former US President Donald Trump and European Commission President Ursula von der Leyen initially announced the trade framework agreement on 27/7 in Turnberry, Scotland, after a one-hour meeting, concluding months of negotiations.
The two leaders met again this week in Washington for talks on the Ukraine conflict and praised the trade framework agreement as a historic achievement. A senior Trump administration official expects European car manufacturers could see tariff reductions "in just a few weeks," as soon as Europe introduces the bill to eliminate tariffs on US industrial goods, even before it is passed.
Phien An (Reuters, CNBC)
