EU AND US REACH DEAL ON TARIFFS AND TRADE
On 27 July European Commission President Ursula von der Leyen announced an agreement between the European Union and the United States on tariffs and trade. In a statement published by the European Commission, President von der Leyen highlighted that the deal brings “certainty in uncertain times”, offering much-needed stability and predictability for businesses and citizens on both sides of the Atlantic.
The agreement is built around three main pillars: tariff stabilisation, expanded zero-for-zero product coverage, and strengthened cooperation in key strategic sectors. For most of EU exports to the US, a uniform 15% tariff rate will apply, covering sectors such as automotive, semiconductors, and pharmaceuticals. President von der Leyen underscored that this is a “clear ceiling”, with no stacking or additional levies, thus ensuring transparency and planning certainty for exporters and importers alike.
For goods originating in the EU, a conditional 15% tariff applies when the Most Favoured Nation (MFN) duty rate is below 15%. For example, if a product’s standard duty rate is 5%, an additional 10% reciprocal tariff will be imposed to reach the 15% threshold. However, for products with an MFN duty rate above 15%, only the MFN rate will apply, with no additional reciprocal tariff.
In addition to the capped tariff rate, the EU and US agreed to eliminate tariffs altogether on a wide range of strategic products. This includes all aircraft and component parts, selected chemicals, generics, semiconductor manufacturing equipment, specific agricultural goods, natural resources, and critical raw materials. Both sides have committed to expanding this zero-tariff list in the future.
The agreement also addresses the long-standing issue of global overcapacity in steel and aluminium production. In a move towards fairer global competition, the EU and US will reduce bilateral tariffs in this sector and implement a quota-based system, enabling smoother trade while jointly tackling external distortions.
Energy security has emerged as another central focus of the transatlantic partnership. The EU will significantly ramp up purchases of US liquefied natural gas (LNG), oil and nuclear fuels, as part of its ongoing strategy to diversify supply sources and reduce dependency on Russian energy. The Commission also confirmed that US AI chips will be essential for powering upcoming European AI gigafactories, further reinforcing technological ties.
The Commission notes that looking ahead, the agreement lays the groundwork for further reductions in tariffs, greater alignment on non-tariff measures, and deeper cooperation in areas of economic security. It also signals a broader ambition to turn EU external trade into a more assertive foreign economic policy, rooted in a strong Single Market and expanding global partnerships.
CLECAT notes that although the agreement between the EU and the US has been politically endorsed, it remains legally incomplete. The formal legal text is still under development by the European Commission services in coordination with their US counterparts, with completion expected later this month.
The full statement by European Commission President Ursula von der Leyen is available on the website of the European Commission.