The European Commission proposed on Thursday removing tariffs on imported US industrial goods, part of a trade agreement with the United States that should result in retroactive cuts to US tariffs on European cars.
The proposals are the first European Union (EU) step in enacting the framework agreement between US President Donald Trump and commission president Ursula von der Leyen on July 27th, which saw the EU accept a broad 15 per cent tariff to avoid a damaging trade war.
The United States has agreed to reduce its tariffs on cars built in the European Union to 15 per cent from 27.5 per cent from the first day of the month in which the EU’s legislative proposal was presented – meaning from August 1.
The preliminary agreement ended conflict between the world’s two largest trading and investment partners, although it is an asymmetric deal, with Brussels required to cut its duties and buy more U.S. energy products while Washington retains tariffs on 70 per cent of EU exports to the United States.
Trump has periodically railed against the European Union, saying in February that it was “formed to screw the United States” and wanting to reduce the U.S. merchandise trade deficit with the EU, which in 2024 amounted to $235 billion.
EU governments have broadly said they accept the deal as the lesser of evils, mindful that Trump was otherwise set to impose 30 per cent tariffs on almost all imported EU goods.
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The EU’s legislative proposal will need to be approved by a majority of the EU’s 27 members and by the European Parliament, which could take weeks, but the reduction of US tariffs on EU cars will take place before then.
The proposal consists of two acts – one to eliminate tariffs on industrial goods and provide preferential access to US seafood and certain farm products, the other to prolong tariff-free treatment of lobsters, now including processed lobsters. – Reuters
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