EU-U.S. Trade Agreement Finalized with Tariffs on Key Sectors

The United States and the European Union have formally documented the terms of a landmark framework trade agreement, adding detail to the accord first announced by U.S. President Donald Trump and European Commission President Ursula von der Leyen in late July.

In a joint statement released Thursday, the two trading partners confirmed that the U.S. will implement a 15% tariff on a wide range of EU imports, including automobiles, auto parts, pharmaceuticals, semiconductors, and raw materials such as lumber, steel, and copper. The tariffs will either be set at 15% or at the most favored nation (MFN) rate, whichever is higher.

The inclusion of lumber, steel, and copper is particularly significant for U.S. construction and manufacturing industries, as those materials face ongoing price volatility and global supply chain pressure. According to the agreement, these commodities—alongside pharmaceuticals and semiconductors—fall under ongoing Section 232 investigations, which in the past have resulted in tariffs as high as 50%. By capping rates at 15%, the agreement is intended to bring stability and predictability to U.S. importers.

The U.S. also confirmed it will restrict tariffs to the MFN rate for aircraft and aircraft parts, generic pharmaceuticals, chemical precursors, and “unavailable natural resources.” These measures will take effect on September 1.

In exchange, the European Union committed to eliminating tariffs on U.S. industrial products and expanding market access for American agricultural goods. U.S. exports of tree nuts, pork, dairy, and fresh and processed fruits and vegetables are expected to benefit from the new framework.

“These tariff reductions are expected to be effective from the first day of the same month in which the European Union’s legislative proposal is introduced,” the joint statement noted.

The two partners also pledged to cooperate on auto standards and said they would “consider the possibility” of aligning steel and aluminum policies to prevent market overcapacity from undermining domestic producers.

Beyond tariffs, the agreement outlines large-scale commitments:

• The EU will procure $750 billion in U.S. energy products through 2028.
• The EU will also purchase $40 billion worth of U.S. artificial intelligence chips.
• European companies are expected to invest $600 billion in the U.S. over the next three years.
• The EU committed to reducing regulatory barriers for U.S. firms to smooth transatlantic trade.

European Commission President Ursula von der Leyen praised the deal’s long-term implications, writing on X: “Predictability for our companies & consumers. Stability in the largest trading partnership in the world. And security for European jobs & economic growth in the long-term. This EU-US trade deal delivers for our citizens & companies, and strengthens transatlantic relations.”

The agreement marks one of the most consequential trade frameworks between Washington and Brussels in recent years, with sweeping effects on global supply chains, industrial competitiveness, and agricultural markets.

Originally reported by Philip Neufer in Construction Dive.