Overview

• The latest USTR draft would pause enforcement of the EU’s Digital Markets Act and delay the bloc’s new deforestation rule for 12 months
• US exports would receive a one-year exemption from the EU’s Carbon Border Adjustment Mechanism and waivers on upcoming methane regulations for energy shipments
• Negotiators have outlined cooperation on shipbuilding standards, maritime shipping and joint measures targeting non-market economies such as China
• The draft focuses solely on regulatory frictions and omits Trump-era tariffs on EU steel, aluminum and automobiles
• Tariff tensions could flare after July 14 when the EU’s retaliatory duties take effect and on July 17 when President Trump threatens to impose a 20% levy on EU goods if no separate agreement is reached