The United States will continue imposing a 27.5% tariff on European automobiles until the European Union enacts legislation to lower duties on American exports. A framework agreement released Thursday outlines the path for reducing tariffs to 15%.
Trade Agreement Overview
The agreement was announced July 27 following a meeting between President Donald Trump and European Commission President Ursula von der Leyen in Turnberry, Scotland. Under the deal, the EU has pledged to remove tariffs on U.S. industrial goods and expand access for American seafood and agricultural products. In return, the U.S. will cut tariffs to 15% on a wide range of European imports, including cars, semiconductors, and pharmaceuticals.
Tariff Reductions Linked to EU Legislation
U.S. officials emphasized that the lower rates will only take effect once the EU submits the required legislation. “The reduction is contingent upon the EU proposal,” said one official. According to the framework, the 27.5% tariff will drop “on the first day of the month in which the EU introduces the legislative measure,” provided it complies with the agreement.
European Political Response
European leaders expressed caution. French Prime Minister François Bayrou called the agreement concerning, while Spanish Prime Minister Pedro Sánchez said the impact on Spain would be limited due to the country’s smaller trade exposure to the U.S.
Industry Reactions
Reactions from industry groups were mixed. Spain’s Food and Beverage Federation welcomed the avoidance of a trade dispute but criticized continued export duties. The U.S. Distilled Spirits Council warned that tariffs on European spirits could cost $1 billion in sales and 12,000 jobs, calling for a permanent, tariff-free solution.
