EU moves to finalise US trade pact as bloc seeks to avoid fresh Trump tariffs – Firstpost

The European Union on Wednesday moved a step closer to ratifying its long-delayed trade pact with the United States after negotiators agreed on the final text of the agreement and endorsed tariff reductions aimed at defusing a potential trade clash with US President Donald Trump.

The provisional accord, reached between EU lawmakers and member states overnight, implements the tariff provisions of the EU-US Joint Statement signed in August 2025 and clears one of the final political hurdles before formal ratification.

The agreement comes at a crucial moment for Brussels, with Trump warning that the United States could raise tariffs on European automobiles to 25 per cent from 15 per cent if the pact is not fully in place before July 4.

At the heart of the deal is the EU’s decision to scrap remaining duties on US industrial goods while securing a 15 per cent cap on tariffs applied to European exports entering the American market. European officials see the arrangement as essential to preventing a wider escalation in transatlantic trade tensions.

The agreement still requires formal approval from the European Parliament and EU member states, but officials expect the ratification process to be completed within weeks.

“Maintaining a stable, predictable and balanced transatlantic partnership is in the interest of both sides,” said Michael Damianos, the Cypriot commerce minister, as Cyprus currently holds the EU’s rotating presidency.

“Today, the European Union delivers on its commitments. We are and will remain a trusted and reliable partner in global trade,” he added.

Apart from removing customs duties on industrial products, the agreement also widens preferential access for certain US seafood and non-sensitive agricultural products through tariff-rate quotas and lower import duties. A separate regulation extends the suspension of tariffs on American lobster imports.

The negotiations were politically sensitive inside Europe, where lawmakers pushed for stronger safeguards to ensure the EU could respond quickly if the United States failed to honour the agreement or if European industries faced injury from a sudden spike in imports.

Under the revised framework, the European Commission would have powers to investigate market disruptions and suspend parts of the agreement if necessary. The mechanism can be triggered by member states, trade unions, industry groups or the Commission itself.

Brussels would also retain the right to withdraw concessions on steel and aluminium if US tariffs above 15 per cent continue beyond December 2026.

Negotiators further agreed to include a sunset clause that would keep the agreement in force until the end of 2029 unless both sides decide to extend it. Earlier drafts backed by the European Parliament had proposed a shorter timeline ending in 2028.

The pact had faced repeated delays over the past year. Opposition within Europe intensified after Trump threatened to annex Greenland, while fresh legal uncertainty emerged after the US Supreme Court struck down parts of Trump’s broader global tariff regime.

Although the European Parliament approved the overall framework in March, lawmakers insisted on tighter conditions to protect EU businesses and ensure Washington upheld its commitments under the deal.

The EU and the United States remain each other’s largest economic partners, accounting for nearly 30 per cent of global trade in goods and services. Bilateral trade between the two sides reached an estimated €1.7 trillion in 2024, underlining the high stakes involved in avoiding another tariff war.