Over the last few weeks, President Trump has announced trade deals with a number of major trading partners, but details of the handshake agreements have been hard to come by. On Thursday, the White House spelled out some of the elements of its recent agreement with the European Union via a joint statement that serves as a “first step” toward formally defining new terms of trade between the massive economies.
The statement, which is not legally enforceable, affirms that the U.S. intends to impose a 15% tariff on most imports from the 27 EU nations. The goods covered by that basic rate include pharmaceuticals — a relief for EU producers who had been threatened with tariffs as high as 200%. Semiconductors, wine and lumber will also be tariffed at 15%.
The basic 15% rate will not apply to vehicles and auto parts, which face a 27.5% tariff, at least initially. According to the statement, the U.S. will reduce that tariff once the EU “formally introduces the necessary legislative proposal” to reduce tariffs on a variety of U.S.-made industrial and agricultural goods.
The industrial inputs of steel and aluminum will also face a higher tariff, with the 50% rate Trump imposed earlier this year remaining in place. The statement says the two sides “intend to consider the possibility to cooperate” on a system that allows that tariff to be reduced at some point in the future.
There was little detail on one of the key elements highlighted by Trump when he first announced the agreement in July. The EU has pledged to invest $600 billion in the U.S. economy, but nothing was said about how that investment would take place or be managed. Thursday’s statement does nothing to clarify the issue, simply saying, “European companies are expected to invest an additional $600 billion across strategic sectors in the United States through 2028.”
What the experts are saying: Ursula von der Leyen, the president of the EU, said the statement helps provide “predictability” and “stability” for people on both sides of the Atlantic. “This EU-US trade deal delivers for our citizens & companies, and strengthens transatlantic relations,” she said on social media.
EU Trade Commissioner Maros Sefcovic said that “this is the most favorable trade deal the U.S. has extended to any partner.” But he also noted that the process is not over. “This is the beginning,” he added. “This framework is the first step, one that can grow over time to cover more sectors, improve market access and strengthen our economic ties even further.”
Some critics in Europe, though, have rejected the terms of the framework, which they see as heavily tilted toward the United States. French Prime Minister Francois Bayrou said it was a “dark day when an alliance of free peoples, united to assert their values and defend their interests, resolves to submissions.”
There are also concerns that Trump’s tariffs could be struck down by the U.S. Supreme Court, throwing international trade into chaos. Ryan Young of the libertarian Competitive Enterprise Institute told The New York Times that there’s a good chance that at least some of Trump’s trade moves could be halted. “While everyone is hoping for some tariff stability, this deal probably won’t deliver it,” he said.