Source: Supply Chain Dive
Date: 21st August 2025

New Deal Introduces 15% Tariffs on Key Imports While Expanding Market Access for U.S. Goods.

The United States and the European Union have formalized the terms of a framework trade agreement initially announced in late July. The pact outlines a 15% tariff on many EU imports, including cars, auto parts, pharmaceuticals, and semiconductors.

The U.S. will apply either a 15% tariff or the most-favored-nation (MFN) duty rate, whichever is higher, while capping tariffs on sectors such as semiconductors and pharmaceuticals that are under review under Section 232. In return, the EU committed to eliminating tariffs on U.S. industrial products and expanding market access for American food exports, including pork, dairy, fruits, and nuts.

The agreement specifies that U.S. tariffs of 15% on EU cars and auto parts will take effect once the EU introduces legislation enacting its commitments.

Aircraft, generic pharmaceuticals, and certain natural resources will be subject only to MFN rates as set by the World Trade Organization. Both sides also agreed to cooperate on automobile standards and consider additional sectors for tariff adjustments.

Discussions are ongoing regarding joint approaches to steel and aluminum markets to prevent overcapacity.

Beyond tariff measures, the EU has pledged significant procurement and investment commitments, including $750 billion in energy products and $40 billion in artificial intelligence chips from the U.S. through 2028, along with $600 billion in EU company investments into the U.S. over the next three years.

The agreement also seeks to reduce regulatory barriers for U.S. firms operating in Europe, reinforcing predictability and stability in one of the world’s largest trading partnerships.