The European Parliament has given its final approval to implement the tariff agreement with Donald Trump, which was proposed last July. The deal was approved just days before a US deadline to raise tariffs if not sanctioned by 4 July.
Key Conditions of the Deal
MEPs approved the deal with two main provisos. The first is a 'sunset clause' that will cause the deal to expire on 31 December 2029 unless renewed. The second sets out 'clear conditions' for tariff reductions on products containing some steel and aluminium—tariffs imposed by Trump under national security laws, not the tariff regime instituted on 'liberation day' last April.
Details of the Agreement
Under the deal, the US applies a 15% tariff on most EU exports, while the EU has reduced import duties on some US goods, including agricultural products and a wide range of seafood, to 0%. The deal is expected to be formally adopted by EU leaders at their meeting in Brussels on Thursday.
The European Parliament's approval came nearly a year after the original deal was agreed at Donald Trump's Turnberry golf course in Scotland last July. The lengthy democratic process baffled the US administration, which implemented the deal immediately last summer.
Relations with the EU soured when the US, under national security considerations, imposed tariffs on products with steel or aluminium content, a move Brussels has frequently protested.
Future Provisions
Under the agreement voted on in the European Parliament on Tuesday, the European Commission will be able to suspend tariff preferences for US goods by 31 December 2026 if the US continues to apply tariffs on steel derivatives. The Commission will report to the Parliament on the matter by 1 December.
By 30 June 2029—six months after Trump's presidency is due to end—the Commission is required to conduct an assessment of the impact of the 0% tariffs on US agricultural goods and small- to medium-sized businesses on EU industry.
Ratification Process
MEPs suspended the ratification process twice this year through the international trade committee: first in protest against Trump's threat to impose higher tariffs in January, and then over his threat to take over Greenland.
Although the US Supreme Court has already ruled that the 15% tariff at the heart of the deal is illegal, the EU agreed to maintain the agreement to achieve stability for businesses and industry.
