EU commences initiative to eradicate tariffs on American industrial products
The European Union and the United States of America have announced a provisional shop deals on July 27, 2025, marking a significant step towards easing tensions between the two economic powerhouses. Despite the deals being uneven, with the EU cutting more tariffs and boosting U.S. energy purchases, while the USA kept most EU goods under duties, both parties view it as a major win.
The new agreement, which came into effect on August 1, saw the EU eliminate duties on U.S. industrial products and grant "preferential market access" to certain U.S. seafood and agricultural products. In return, the U.S. removed retroactive tariffs on EU cars and unlocked the door for increased imports from the EU.
The vote was hailed by both U.S. President Donald Trump and European Commission President Ursula von der Leyen as a significant boost for their respective economies. Von der Leyen described Trump as a tough negotiator, while Trump claimed the pact to be the biggest advertisement ever made, surpassing the $550 billion agreement with Japan.
The EU has agreed to invest about $600 billion in the United States and to sharply increase purchases of U.S. energy and military equipment. Brussels also included two legal measures in the deal. One scrapped EU tariffs on industrial goods and extended preferential access for U.S. seafood and selected agricultural items. The second continued duty-free treatment for lobsters, expanding it to include processed products.
However, the deal remains provisional, with no formal agreement signed as of yet. The European Commission eliminated duties on U.S. industrial products, but the USA continues to apply duties to roughly 70% of EU shipments. Von der Leyen stated that the 15% tariff applied "across the board" and it was "the best we could get."
The politics between the two largest economies in the world, which together make up close to a third of world trade, is expected to bring stability and predictability, according to von der Leyen. The announcement was made at Trump's golf course in western Scotland.
Despite the imbalance in the deal, member governments of the EU accepted it as the less harmful option, as without a deal, the White House had been prepared to slap 30% tariffs on almost all EU imports. The deal, while not perfect, is a step forward in strengthening the economic relationship between the EU and the USA.
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