In 2024, the United States brought in $606 billion worth of products from the European Union and sent about $370 billion (equivalent to 318.7 billion euros). In an effort to address this trade imbalance, the U.S. has decided to impose a 15% tax on roughly 70% of items received from the EU, as part of an agreement reached on July 27 following discussions between the European Commission—responsible for representing the bloc—and the American government.
Nevertheless, the rate agreed upon for the EU exceeds that secured by another significant trade ally of both the U.S. and the EU: the United Kingdom.
Amandine Hess, who has been reporting on the issue for Euronews, stated: ‘The European Commission argues that 15% represents a favorable agreement since the UK’s 10% tariff is not a comprehensive rate, implying it does not include the current U.S. import duties imposed on the UK.’
Both sides reached an agreement that duties will be waived for specific industries considered vital for each block, including aerospace and related parts, some medicines, natural resources, and essential minerals, along with other areas.
One of the few industries within the EU benefiting from the agreement is the automotive sector, as it will now face a 15% tariff rather than the initial 27.5% set during Trump’s presidency. In comparison, tariffs on steel and aluminum remain at 50%.
The European Union will keep engaging in talks with the United States to secure additional tariff waivers for specific goods and set limits on imports for others.
Nevertheless, various EU governments viewed the agreement as underwhelming – and even “surrender,” according to the statement from the French prime minister.
How does the EU fare in terms of trade within the service sector?
The group might still implement corrective measures for adjustment or utilize its strong anti-compulsion tool, which has the potential to prohibit American firms from participating in EU’s public tenders.
While the EU holds an advantage over the US in terms of merchandise trade, it encounters a shortfall in service sectors, particularly within the digital industry and key advancements in artificial intelligence.
“Every digital service we utilize within the EU comes from America. There was an intention to focus on these services specifically using the anti-coercion mechanism,” stated Niclas Poitiers, a researcher at the Bruegel policy institute located in Brussels.
“The key issue is how you can create a digital single market that enables European businesses to grow as significantly as Google and Apple have done previously, allowing them to rival these corporations globally instead of merely relying on fast-expanding American services,” Poitiers added.
U.S. President Donald Trump has also requested assurances from the European Union that could prove challenging to meet.
The European Commission has committed to investing at least $600 billion (516.9 billion euros) from European firms into the United States by 2029, along with purchasing $750 billion (646.1 billion euros) worth of U.S. liquefied natural gas, oil, and nuclear energy supplies. According to Amandine Hess, Donald Trump asserts that the EU will also acquire American arms; however, all such choices will be determined by individual EU member states and private enterprises rather than the institutions in Brussels.
The EU-US trade agreement still needs confirmation from the 27 EU countries, which could also be challenging.
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Reporter: Isabel Marques da Silva
Creation of content: Pilar Montero López
Video production: Zacharia Vigneron
Graphism: Loredana Dumitru
Editing supervision: Ana Lázaro Bosch and Jeremy Fleming-Jones
