Tariffs On Auto, Pharma Capped At 15% — US, EU Lock In Trade Deal
The US and EU agreed to a trade deal ahead of Aug. 1, the deadline imposed by Donald Trump to slap the so-called reciprocal tariffs on countries with no bilateral trade pacts.
Automobile and pharmaceutical products supplied to the United States from Europe will face a tariff not exceeding 15%, according to a key agreement reached between the US and EU on Thursday, as part of their trade deal.
The US and EU agreed to a trade deal ahead of Aug. 1 — the deadline imposed by Donald Trump to slap the so-called reciprocal tariffs on countries with no bilateral trade pacts.
Trump already imposed a flat 15% rate on most European goods — half the 30% he’d previously threatened.
Additionally, effective Sept. 1, the US will apply only the MFN tariff on unavailable natural resources (including cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors.
Both the countries have also agreed to consider other sectors and products that are important to economies and value chains for inclusion in the list.
According to the agreement between both the countries, No Section 232 automobile or automobile parts will be applicable to the European Union goods covered with an MFN tariff of 15% or higher. These tariff reductions are expected to be effective from the first day of the same month in which the European Union’s legislative proposal is introduced.
With respect to steel, aluminium, and their derivative products, the countries intend to consider the possibility to cooperate on ring-fencing their respective domestic markets from overcapacity, while ensuring secure supply chains between each other, including through tariff-rate quota solutions.
European companies are expected to invest an additional $600 billion across strategic sectors in the United States through 2028, US said in its statement.
