🎧 Listen to This Article
The European Commission on Thursday proposed removing tariffs on U.S. industrial goods as part of a broader trade agreement with the United States. The move is expected to trigger retroactive reductions in U.S. tariffs on European cars.
The proposal represents the first step by the EU to implement the framework agreed on July 27 by U.S. President Donald Trump and European Commission President Ursula von der Leyen. Under that agreement, the EU accepted a 15 percent tariff on certain goods to prevent a damaging trade conflict.
Under the preliminary arrangement, the United States will reduce its tariffs on cars produced in the European Union to 15 percent from 27.5 percent, effective from August 1, the month when the EU presented its legislative proposal.
While the agreement ends part of the trade dispute between the world’s two largest trading partners, it remains asymmetric. Brussels is required to cut certain duties and increase purchases of U.S. energy products, whereas Washington will maintain tariffs on approximately 70 percent of EU exports to the United States.
President Trump has frequently criticized the EU, claiming in February that it was formed to disadvantage the United States. He has also cited the U.S. merchandise trade deficit with the EU, which totaled $235 billion in 2024, as a key concern.
EU governments have largely accepted the agreement as a pragmatic solution, recognizing that the alternative could have involved U.S. tariffs of up to 30 percent on most imported EU goods.
The EU’s legislative proposal now requires approval from a majority of the bloc’s 27 member states and the European Parliament, a process that could take several weeks. Nonetheless, the reduction in U.S. tariffs on European cars will take effect prior to formal EU approval.
The proposal is divided into two legislative acts. The first eliminates tariffs on industrial goods and grants preferential access for U.S. seafood and select farm products. The second act extends tariff-free treatment for lobsters, now including processed lobster products.
For any questions, clarifications, feedback, or contributions regarding this article, please contact us at editorial@tax.news. We welcome your input and are dedicated to delivering accurate, timely, and insightful tax news. All inquiries will be handled confidentially in accordance with our privacy policy.
