Settlement units 15% ceiling on US tariffs for EU exports
1 August 2025
3 minute learn
The European Union and United States have agreed to a brand new political deal on tariffs and commerce, geared toward restoring stability and predictability of their financial relationship and strengthening transatlantic provide chains, in response to a current press launch from the European Fee.Â
The settlement was reached throughout a gathering in Algiers on July 27 between European Fee President Ursula von der Leyen and US President Donald Trump. It marks the start of a broader course of to deepen financial cooperation and enhance market entry.
Below the deal, the US will apply a single, all-inclusive tariff ceiling of 15% on almost all EU items beginning Aug. 1. This consists of sectors beforehand topic to considerably greater tariffs, resembling automobiles and automobile elements, which at present face mixed tariffs of as much as 27.5%. If the US most favoured nation (MFN) tariff exceeds 15%, solely the MFN fee will apply, with no further duties.
Strategic EU exports — together with plane and elements, choose chemical compounds, and sure generics — will see US tariffs rolled again to pre-2025 ranges. The 2 sides additionally agreed to proceed negotiations to increase the listing of merchandise receiving particular remedy.
To handle world overcapacity, the EU and US will coordinate on tariff fee quotas for metals resembling metal, aluminium and copper, changing present 50% tariffs with diminished and extra secure charges.
The EU will liberalize restricted volumes of commerce in areas of mutual curiosity, reducing roughly €5 billion in duties yearly on US imports whereas sustaining safety for delicate EU sectors. The EU will remove remaining low-level tariffs on industrial items and enhance market entry for numerous US merchandise, together with Alaska pollock, salmon and shrimp, underneath tariff fee quotas.
Moreover, the EU will open entry for as much as €7.5 billion value of US agricultural exports, resembling soya bean oil, seeds, grains, and processed items like ketchup and biscuits. These concessions are designed to ease enter prices for EU producers with out undermining agricultural protections.
The settlement additionally covers regulatory cooperation. The EU and US will work collectively on automotive requirements and sanitary measures, whereas increasing mutual recognition of conformity assessments in sure sectors. Additionally they dedicated to nearer coordination on funding screening, export controls, and lowering non-market commerce distortions.
On power, the EU plans to acquire as much as $750 billion (about €700 billion) in US-sourced power — together with liquified pure fuel, oil, and nuclear merchandise — over the subsequent three years to switch Russian provides. The EU may even buy €40 billion value of US-manufactured AI chips to bolster its digital infrastructure.
In return, EU companies plan to speculate a minimum of $600 billion (about €550 billion) in US sectors by 2029, complementing the €2.4 trillion already invested within the US market.
The July 27 settlement is political in nature and never legally binding. Implementation of the deal would require additional negotiations in step with inside procedures on each side.
The European Fee stated the settlement protects EU regulatory sovereignty and preserves delicate areas of agriculture, together with beef and poultry.
