EU Agrees to Implement US Trade Deal Struck Last Summer
The European Union has finally agreed to implement its trade deal with the United States after five hours of intensive negotiations between members of the European Parliament and member states. The move aims to avert additional tariffs threatened by former US President Donald Trump.
Under the agreement, which was originally reached last July at Trump's Scottish golf course, import duties on most US goods entering the EU will be removed. The deal can now enter into force, bringing much-needed stability to transatlantic trade relations.
European Commission President Ursula von der Leyen welcomed the pact, stating: 'Together, we can ensure stable, predictable, balanced and mutually beneficial transatlantic trade.' She emphasized that the EU is delivering on its part of the bargain.
The agreement puts the bloc on track to meet Trump's 4 July deadline for ratification, a deadline that has already been met by the United States. Trade Commissioner Maroš Šefčovič described the late-night talks, which concluded around 2am in Brussels, as a 'collective effort' yielding a 'strong result' and 'meaningful work'. He added: 'After more than five hours of intensive negotiations … the EU has shown that we are a reliable trading partner, while standing firm in defending the interests of European stakeholders.'
The ratification process had been frozen twice by MEPs in protest at Trump's threats of higher tariffs in January and his subsequent threat to take control of Greenland. In a significant victory for the European Parliament, MEPs forced the insertion of a clause warning that the EU could reinstall tariffs on American products such as motorbikes if the US does not drop tariffs on steel derivatives—products involving an element of steel—by the end of the year.
Bernd Lange, chair of the parliamentary trade committee, described this as a 'tricky' part of the negotiations that extended talks with the commission from midnight to 2am. He noted that the commission was 'a little bit nervous about this issue,' an apparent reference to the fear of retaliation by Trump.
Barring any further hiccups, the European Parliament will vote on the deal on 16 or 17 June, according to Lange. Although the US Supreme Court has already ruled that Trump's imposition of 15% tariffs on most EU exports was illegal, EU leaders decided to honor the deal to stabilize the trading environment for businesses, including the car industry, which had been hit with 27.5% tariffs.
MEPs had demanded a sunset clause allowing the EU to end the deal on 31 March 2028, and a suspension clause if Trump broke his word and increased the 15% tariff rate. The transatlantic relationship is the EU's most significant, worth more than €1.8 trillion in 2025.
The final text empowers the commission to trigger the suspension mechanism if the US fails to meet its commitments or disrupts trade and investment with the EU, including by 'discriminating against or targeting EU economic operators.' Lange said the final sunset clause was a year later than hoped for, but the end of the deal in May 2029 would coincide with a new presidential administration. He stated that the parliament would not hesitate to trigger the suspension clause if Trump breaches his side of the deal before that date.
The sunset clause is an important addition that will help small and medium-sized businesses, as there had been no impact assessment before the deal was struck in Scotland. It gives the EU means to address spikes in US imports 'that cause or threaten to cause serious injury to domestic producers,' with suspension again a possible outcome.
The parliament agreed to scale back some demands, and the final text notably gives the US until the end of the year to reduce its 50% tariff on steel to 15%, rather than insisting on it as a precondition. Lange played down the concessions extracted from lawmakers, declaring: 'Parliament has prevailed with its demands for a comprehensive safety net.'
Anna Cavazzini, of the EU's Greens, said the deal 'puts the EU at a disadvantage' while conceding 'it can secure a certain degree of economic stability.' She added: 'One can only hope that the agreement on the tariff deal will now calm the situation, so that other major issues in the EU-US relationship can be addressed.'
