US-EU trade deal ‘best possible settlement’: European Commission

The European Commission has unveiled details of the new trade agreement between the European Union and the United States, describing it as the “best possible settlement” under highly complex circumstances.

The deal follows months of negotiations and is expected to be announced in a joint statement by both sides before 1st August.

A key feature of the agreement is the imposition of a unified 15 percent tariff on most European exports to the US market, up from the previous average of 4.8 percent.

The automotive sector is among the most affected, particularly in Germany, Europe’s largest industrial engine, where manufacturers had been paying tariffs as high as 27.5 percent since April—up from 2.5 percent before Donald Trump’s return to the White House. In this context, the new deal is considered a welcome relief.

In return, Europe will import US energy resources—including natural gas, oil and nuclear fuel—worth US$750 billion over three years. The move aims to reduce dependence on Russian gas and support Ukraine’s defence efforts.

Brussels also announced that European companies plan to invest up to $600 billion in the US market.

The agreement includes a duty-free list of goods deemed “essential” by both parties, with specific items to be announced later. These are likely to include US products such as nuts, cheese, certain dairy derivatives and pet food, in exchange for potential European exemptions on industrial goods such as machinery, equipment and select chemical products used in fertiliser production. The agreement may also lower tariffs on US vehicles in return for reciprocal benefits for Europe’s aviation and medical device sectors.

Some sectors remain unclear in the agreement’s outcomes, particularly pharmaceuticals and semiconductors, which are currently under US investigation and may be subjected to higher duties. Brussels insists that pharmaceutical tariffs must not exceed 15 percent, a position opposed by the White House.

European steel will continue to face tariffs of up to 50 percent, although a quota system is being considered to ease the customs burden on agreed volumes. The agreement still requires ratification by EU member states, with uncertainty surrounding the legal mechanism Brussels will employ.

Meanwhile, Europe has prepared a list of US goods worth €93 billion targeted for retaliatory tariffs starting 7th August should Washington fail to comply with the negotiated terms.