The European Union has officially approved the implementation of key terms of the framework trade agreement it reached with the U.S. last summer, capping a turbulent monthslong saga.
With the European Parliament voting in favor of implementation Tuesday, the bloc will eliminate tariffs on all industrial goods and provide preferential market access to a range of U.S. agricultural and seafood products. The EU will also prolong tariff-free treatment for lobster imports, including processed lobster. For its part, the U.S. agreed to cap tariffs on EU imports at 15% as part of the agreement struck in Turnberry, Scotland, last July.
The EU is expected to implement the provisions sometime before the end of the month, potentially as early as next week, EU officials told Supply Chain Dive.
The latest development finalizes the pact after the European Parliament and individual member governments gave their approval in recent months. Along the way, the bloc twice paused efforts to implement the deal in response to new tariffs and Trump’s threats to annex Greenland.
Along with lowering tariffs and expanding market access, the EU also approved several safeguard measures as part of the legislation to implement the pact. These provisions, which include a so-called “sunset clause,” spell out timelines and procedures under which the EU can adjust elements of the deal in response to changing trade relations or market conditions.
“By translating the EU’s commitments in the joint statement into law, this regulation becomes part of the EU’s defensive toolbox: it not only strengthens and stabilises EU-US trade relations, but it also gives the EU the ability to respond if the United States fails to uphold its side of the bargain,” Bernd Lange, chair of the European Parliament’s International Trade Committee, said in a statement Tuesday.
Per the sunset clause, preferential treatment for industrial goods and agricultural imports will expire on Dec. 31, 2029, pending a European Commission review and legislative proposal to prolong the regulation.
“The deal is unbalanced, unfair, and it makes no sense to have a legislation which is really based on an unfair deal forever,” Lange said during a press conference Tuesday, noting the discrepancy in tariff rates being implemented by the two sides.
In the near term, the EU also set rules related to U.S. tariffs implemented since the two trading partners first reached an agreement last August. Namely, the EU will be able to suspend preferential tariff treatment if the U.S. continues to apply a tariff rate above 15% to steel and aluminum derivative imports from the bloc by Dec. 31, 2026. In addition, the EU can suspend its side of the pact if U.S. tariffs exceed the 15% cap.
Earlier this month, the U.S. Trade Representative Jamieson Greer proposed a 10% or 12.5% tariff for 60 trading partners due to alleged failure to impose and enforce forced labor bans. Under the proposal, which stemmed from a Section 301 investigation launched in March, the EU would face a 10% tariff. The U.S. is also in the midst of another Section 301 investigation evaluating potential excess manufacturing production and capacity of 16 trading partners, including the EU.
Greer has intimated that levies resulting from the probes would not alter the agreement between the U.S. and EU.
“We understand that a deal is a deal,” Greer said earlier this month, Bloomberg reported. “We want to make sure that we are able to resolve the trading practices that are identified as problematic in our investigations and we’re going to take into account the Turnberry deal, of course.”
