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2h ago

U.S. and EU Publish Trade Framework Capping Most Tariffs at 15%

The published Joint Statement is non‑binding, with tariff cuts—especially for autos—dependent on subsequent EU and U.S. legislative steps.

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European Commissioner for Trade Maros Sefcovic addresses the media on the EU-US trade deal, in Brussels, Belgium, August 21, 2025. REUTERS/Yves Herman

Overview

  • Brussels pledged up to $750 billion in U.S. energy purchases through 2028 alongside about $600 billion in new investment, plus at least $40 billion in AI chip procurement and increased defense buys.
  • Duties on European cars and parts would drop to 15% once the EU starts required legislation, with the lower rate eligible to apply retroactively to Aug. 1 if those steps are taken.
  • The statement is a short, non‑binding framework that now heads into legal drafting in Washington and Brussels, leaving rules of origin, enforcement and customs procedures to be defined.
  • Wine and spirits and the steel and aluminum quota arrangements were left for further talks, and the EU has paused retaliatory tariffs until Feb. 5, 2026.
  • Industry reaction was cautious as pharmaceuticals gained clarity with a 15% cap and autos faced conditionality, and analysts pointed to concurrent Section 232 moves as a lingering risk.