“The U.S. will keep the current 27.5% tariffs on automobiles from the European Union until the 27-nation bloc introduces legislation to reduce levies on a variety of U.S. goods, according to a joint statement released on Thursday.
The Trump administration will reduce automotive levies to 15% once the EU "introduces the necessary legislative proposal" to reduce tariffs on a range of U.S. seafood and agricultural goods, including "tree nuts, dairy products, fresh and processed fruits and vegetables," according to the statement.
It said the lower auto tariffs would take effect from the first day of the month the EU's legislation is introduced.
EU trade chief Maros Sefkovic said Thursday that the bloc intends to introduce its legislative proposal this month. He said Commerce Secretary Howard Lutnick assured him that if the EU does that, lower U.S. auto tariffs would apply retroactively beginning Aug. 1.
The plan to tie the U.S. auto tariff reduction to EU action on its levies was detailed in a four-page framework that is a further elaboration of the political agreement the two sides first announced last month. It is one of a handful of U.S. trade pacts that have been detailed in joint statements and perhaps the most consequential deal President Trump has so far announced.
EU officials have said the deal represents their best available option given the Trump administration's determination to apply high tariffs on trading partners. Because the 15% baseline tariff doesn't stack on top of other U.S. tariffs, EU officials note it isn't much higher than the 10% tariff Trump imposed earlier this year.
"This is a serious strategic deal," Sefcovic said during a press conference on Thursday in Brussels. "The alternative -- a trade war with sky high tariffs and political escalation -- helps no one."
The U.S. pledge to lower auto tariffs was a crucial element of the deal for European leaders and especially for Germany, a key auto exporter.
The U.S. will apply a 15% tariff to nearly all European goods destined for the U.S., the statement says. Products exempted from the 15% tariff include "unavailable natural resources" in the U.S., like cork, as well as aircraft and aircraft parts and generic pharmaceuticals and chemicals used to make them. Those products will be tariffed at rates that predate Trump's recent tariff moves, known as "most favored nation" tariffs that are typically lower than the 15% baseline tariff. The two trading partners also agreed to consider other industries that could be subject to rates lower than 15%, according to the statement.
U.S. tariffs on other pharmaceuticals, semiconductors and lumber from the EU will also be capped at 15%, the statement said. The EU had sought such a pledge because of concerns that the Trump administration could impose much higher tariffs for those sectors based on national-security investigations.
European alcoholic products will be subject to the 15% tariff, marking a blow to the continent's distillers and winemakers despite EU efforts to secure an exemption. European officials said Thursday that they would continue to work on getting an exemption for those products.
U.S. tariffs on steel and aluminum remain at 50%, though the two sides will "consider the possibility to cooperate" on measures that could see the tariffs reduced, or allow a certain amount of product to enter the U.S. tariff-free.” [1]
1. U.S. News: High Auto Tariffs On EU Stay Until Bloc Takes Action. Bade, Gavin; Kim Mackrael. Wall Street Journal, Eastern edition; New York, N.Y.. 22 Aug 2025: A2.
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