Background on the Trade Agreement
After months of intense negotiations, Brussels and Washington sealed a trade agreement in late July based on 15% tariffs for European products entering the United States. The agreement, announced in a joint statement by the European Union and the Trump administration, does not include reductions for wines and spirits.
Key Tariff Details
According to the joint statement, European cars and pharmaceutical products will be subject to a 15% tariff upon entry into the United States. Commissioner Maros Sefcovic of the European Union confirmed these details during a press conference, presenting the agreement’s highlights.
Sefcovic mentioned that negotiations will continue and “these doors are not closed forever.” The reduction of tariffs to 15% for wines and spirits was strongly requested by France and Italy.
Tariff Comparison
The new 15% tariff rate is significantly higher than the previous rate around 4.8% before Trump’s return to power. However, it is lower than the threatened tariff by the Republican billionaire if no agreement was reached.
Implementation Timeline
Regarding the application of these 15% tariffs on cars, compared to the current 27.5%, Sefcovic expressed confidence that they would be applied retroactively to August 1st, having received assurances from the U.S. in this regard.
The joint text specifies that the 15% tariff will take effect when the EU introduces legislative text to reduce its own tariffs.
EU Investments in the US
In addition to the tariffs imposed on European products, the EU committed to invest $750 billion in energy and $600 billion in further investments in the United States.
Key Questions and Answers
- What products are affected by the new tariffs? European cars and pharmaceuticals will be subject to a 15% tariff upon entry into the United States.
- What was the previous tariff rate? The previous tariff rate was around 4.8%.
- When will these new tariffs take effect? The 15% tariffs are expected to be applied retroactively to August 1st.
- What investments has the EU committed to in the US? The EU has pledged $750 billion for energy investments and an additional $600 billion for other investments in the United States.
