The European Parliament has granted final approval to implement the tariff agreement reached with Donald Trump last July, nearly a year after it was proposed and just days before a US deadline to increase tariffs.
Key Conditions of the Deal
MEPs agreed to the deal with two main provisos. The first is a "sunset clause" that will cause the agreement to expire on 31 December 2029 unless renewed. The second sets out "clear conditions" for tariff reductions on products containing steel and aluminium, which Trump imposed under national security laws rather than his "liberation day" tariff regime from last April.
Under the deal, the US applies a 15% tariff on most EU exports, while the EU has reduced import duties on certain US goods, including some agricultural products and a wide range of seafood, to 0%.
Formal Adoption Expected
The deal is expected to be formally adopted by EU leaders when they meet in Brussels on Thursday. The European Parliament's approval came almost 12 months after the original deal was agreed at Trump's Turnberry golf course in Scotland last July. The democratic process has baffled the US administration, which implemented the deal stateside immediately last summer.
Relations with the EU soured when the US, citing national security, imposed tariffs on products containing steel or aluminium, a move Brussels has frequently protested.
Future Safeguards and Reviews
Under the agreement voted on in the European Parliament on Tuesday, the European Commission can 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 Parliament on the matter by 1 December.
By 30 June 2029, six months after Trump's presidency is due to end, the Commission must conduct an assessment of the impact of 0% tariffs on US agricultural goods and small- to medium-sized businesses on EU industry.
Delays and Legal Context
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 ruled the 15% tariff at the heart of the deal illegal, the EU agreed to maintain the agreement to provide stability for businesses and industry.
