The United States will maintain its 27.5% tariff on European cars and auto parts until the European Union introduces legislation to reduce tariffs on U.S. industrial and agricultural goods, according to details of a new framework trade deal released Thursday.
Under the agreement, the U.S. has pledged to lower its tariff on European vehicles to 15% once the E.U. takes formal legislative steps to cut tariffs on U.S. exports. A U.S. official said the relief would be applied from the first day of the month in which the E.U.’s proposal is introduced.
The framework deal also includes the U.S. capping tariffs at 15% on most European imports, including pharmaceuticals, semiconductors, and lumber. In exchange, the E.U. has agreed to eliminate tariffs on U.S. industrial goods and widen market access for American seafood and agricultural products such as fresh produce, pork, bison meat, and tree nuts.
Industry reactions have been mixed. European automakers remain subject to the higher U.S. tariff until legislation is introduced, while winemakers and spirits producers expressed disappointment that no exemptions were granted for their sector. France’s wine exporters federation (FEVS) said the outcome could “create major difficulties” for the industry, and U.S. distillers warned that 15% tariffs on European spirits could cost more than $1 billion in retail sales and 12,000 jobs.
Some European businesses have already responded by shifting operations. Swiss brands Lindt and Victorinox announced plans to move part of their production to the U.S. to avoid export tariffs.
Germany, Ireland, Italy, France, and the Netherlands remain the largest European exporters to the U.S., according to Eurostat. Italian industry representatives cautioned that the combined effect of tariffs and currency fluctuations could sharply reduce the country’s exports.
Both U.S. and E.U. officials emphasized that the deal is a “first step” toward broader tariff alignment, with scope for further exemptions under future negotiations.
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