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2h ago

U.S., EU Publish Trade Framework Capping Most Tariffs at 15%, With Car Relief Tied to EU Action

The brief political text sets purchase and investment targets, leaving wine, spirits, steel unresolved.

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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

  • U.S. duties on EU passenger cars would fall from 27.5% to 15% only after Brussels introduces its own tariff‑cutting legislation, with possible reimbursement retroactive to Aug. 1 and parts folded into the 15% rate.
  • Pharmaceuticals from Europe are explicitly capped at a 15% U.S. tariff, as officials confirm a 15% baseline covering most EU shipments, described in a 3½‑page nonbinding document.
  • EU commitments include up to $750 billion in U.S. energy purchases by 2028, at least $600 billion in U.S. investment, and reported plans to buy about $40 billion in American AI chips.
  • The framework outlines zero tariffs for U.S. industrial goods entering the EU and preferential access for categories such as dairy, pork, tree nuts, seafood, and other agricultural products.
  • Tariff treatment for wine, spirits, and steel remains unsettled as negotiators move to draft legal text; markets showed relief for pharma stocks while auto shares lagged on the deal’s conditionality.