EU Proposes Tariff Cuts to Strengthen Trade Relations with the US
The European Commission has initiated two key proposals aimed at advancing the implementation of the EU-US Joint Statement. These measures, as noted by the EU, are intended to enhance stability and predictability in EU-US trade and investment relations, “to the benefit of business, workers and citizens on both sides of the Atlantic,” reports 24brussels.
The first proposal seeks to eliminate tariffs on US industrial goods while granting preferential market access for various US seafood and non-sensitive agricultural products.
Additionally, the second proposal aims to extend the duty-free treatment of lobster, now including processed varieties. The Commission confirmed on Thursday its commitment to continue negotiations with the US to reduce tariffs further, particularly within the framework of a future EU-US Agreement on Reciprocal, Fair, and Balanced Trade.
These legislative proposals are crucial steps toward executing the EU’s tariff reductions outlined in the recent EU-US Joint Statement. The European Parliament and Council must approve these proposals under the ordinary legislative process before the tariff cuts can take effect.
The Commission anticipates that the US will implement the previously agreed 15% US tariff ceiling on EU cars and car parts. This reduction from 27.5% to 15% is projected to become effective from 1 August 2025, coinciding with the introduction of the EU’s legislative proposals. This adjustment is expected to save car manufacturers over €500 million in duties for exports within just one month.
Furthermore, the US has committed to maintaining zero or near-zero tariffs on specific product categories, with the most-favored nation (MFN) tariff applying. This arrangement will commence on 1 September and includes categories such as unavailable natural resources, aircraft and aircraft parts, generic pharmaceuticals, and their ingredients. Both parties have expressed a willingness to expand this list of products.
On 21 August, the EU and the US released a statement concerning transatlantic trade and investment. This Joint Statement reinforces the political agreement established between President Ursula von der Leyen and President Donald Trump on 27 July.
The EU’s legislative proposal encompasses all commitments made under Section 1 of the EU-US Joint Statement, underscoring a mutual determination to restore stability and predictability in trade and investment relations.
The transatlantic partnership serves as a vital component of global commerce, representing the most significant bilateral trade and investment relationship worldwide. EU-US trade in goods and services has doubled over the past decade, surpassing €1.6 trillion in 2024, with €867 billion in goods and €817 billion in services. This amounts to over €4.2 billion of goods and services being exchanged across the Atlantic daily.
This “deep and comprehensive” partnership is further supported by mutual investment. In 2022, EU and US companies invested €5.3 trillion in each other’s markets.