Discussion at the Farnesina's task force's initial technical gathering
The European Union (EU) and the United States (US) have announced a significant agreement, effective from 2025, that aims to de-escalate tariff tensions and boost transatlantic trade cooperation. The deal, which sets a 15% tariff ceiling on most EU exports to the US, including cars and car parts, as well as potential future tariffs on pharmaceuticals and semiconductors, also includes a reduction of US tariffs on EU goods.
Starting August 1, 2025, the US will lower tariffs on EU aircraft and aircraft parts, certain chemicals, drug generics, and natural resources back to pre-January 2025 levels. In response, the EU has agreed to suspend its retaliatory tariffs, aligning with this timeline.
The agreement also establishes tariff rate quotas for EU exports at historic levels to cut existing 50% tariffs on steel, aluminum, and copper. This move ensures fair global competition. The EU has further committed to purchasing an additional $750 billion in US energy products over three years and investing $600 billion by 2029 in various sectors in the US. In return, no higher tariffs will be imposed on US exports to the EU.
The deal extends beyond tariff reductions. Both parties have agreed to cooperate on reducing non-tariff barriers, addressing digital trade barriers, strengthening economic security and supply chain resilience, and collaboration on investments, export controls, and customs enforcement. The EU has also agreed to significant purchases of US military equipment.
A tariff task force has been established at the Farnesina, Italy, to address issues related to the new trade relations between the EU and the US. The task force, which remains active for specific requests, has a dedicated phone number and email. The first meeting of the task force was held today, attended by around 70 business associations.
The agreement is pending a more stable framework, and negotiations are expected to continue. For goods in naval transit or stored for commercialization before August 8, the basic tariff of 10% will continue to apply until October 5, 2025. The EU countries have 14 days (until August 12) to validate the suspended countermeasures.
This landmark agreement signals a significant step towards a more harmonious trade relationship between the EU and the US, with potential benefits for businesses and consumers on both sides of the Atlantic.
The EU has pledged to invest $600 billion by 2029 in various US sectors, a move that is linked to the reduction of tariffs on EU exports and the suspension of retaliatory tariffs. Furthermore, the EU has agreed to purchase an additional $750 billion in US energy products over three years, which is part of the general-news headlines regarding the improvement in energy finance and business ties between the EU and the US.
