UPDATE: The European Union is urgently seeking to implement lower US tariffs on car exports retroactively, as confirmed by EU trade chief Maros Sefcovic. This announcement comes as part of the framework trade deal established in July, which aims to reshape trans-Atlantic trade relations.
In a statement released earlier today, both sides clarified that a 15 percent tariff would apply to most EU imports. However, significant changes are on the horizon for European car manufacturers, who currently face a burdensome 27.5 percent tariff on vehicles and parts. The reduction in these tariffs is contingent upon the EU introducing necessary legislation, which Sefcovic aims to propose by the end of the month. If successful, the new tariffs could take effect as soon as August 1.
A senior US administration official, who requested anonymity, indicated that European car makers could see relief from these tariffs in a matter of weeks. “As soon as they’re able to introduce that legislation, we will be in a position to provide that relief. Both sides are very interested in moving quickly,” the official stated.
This trade deal, initially announced by US President Donald Trump and European Commission President Ursula von der Leyen on July 27, has been hailed as a historic accomplishment following lengthy negotiations. The latest developments come amidst ongoing discussions regarding the conflict in Ukraine, highlighting the interplay between trade and geopolitical stability.
The joint statement underscores that the agreement is structured to hold both sides accountable for their commitments, enhancing market access for US seafood and agricultural goods in return for the EU’s pledge to eliminate tariffs on US industrial products. Notably, the deal could expand to cover additional sectors, with both parties committed to addressing “unjustified digital trade barriers.”
Additionally, the EU has reiterated its intent to procure $750 billion in US liquefied natural gas, oil, and nuclear energy products, alongside an extra $40 billion in US-made artificial intelligence chips. Furthermore, EU companies are expected to invest $600 billion across US strategic sectors by 2028.
Sefcovic acknowledged that while the EU’s demand for exemptions on alcoholic beverages, such as wine and spirits, remains challenging, “these doors are not closed forever.” The joint declaration stated that US tariffs would revert to pre-existing Most Favoured Nation rates below 15 percent for certain EU goods, effective September 1.
As these negotiations unfold, the focus remains sharply on the timeliness of tariff reductions, which could significantly impact the automotive industry and broader economic relations between the EU and the US. Stakeholders are urged to monitor developments closely, as the potential for change is rapidly approaching.
Stay tuned for further updates on this evolving story, as the EU and US work to finalize the details of this high-stakes trade agreement.
