EU-US Trade Agreement: A Progress Update

Breaking News: EU and US Forge Landmark Deal, Avoiding Full-Blown Trade war

Washington D.C. – In a significant advancement that averts a perhaps damaging trade escalation, the European Union and the United States have reached a “framework” agreement, effectively de-escalating tariff tensions.While a 15-percent levy will remain for German automakers, experts deem it “manageable,” according to trade geopolitics expert Elvire Fabry of the jacques Delors Institute. This new rate, though higher than previous EU tariffs on US goods (averaging 4.8 percent), largely mirrors the existing situation, with companies already facing a 10 percent flat rate imposed by the Trump governance.

The agreement includes substantial commitments from the EU to bolster US energy and investment.The bloc has pledged to purchase $750 billion in liquefied natural gas, oil, and nuclear fuels from the US over three years, aiming to diversify away from Russian energy sources.Moreover,the EU will inject an additional $600 billion into American investments. President Trump also highlighted that EU nations, in line with their recent NATO defense spending pledges, will procure “hundreds of billions of dollars’ worth of military equipment” from the US.Key Tariff Exemptions Secured

While the 15-percent rate generally applies across most sectors, including critical industries like semiconductors and pharmaceuticals – a vital export for Ireland – significant exemptions have been secured.The EU and US have agreed on bilateral tariff exemptions for a range of key goods, encompassing aircraft, specific chemicals, semiconductor equipment, certain agricultural products, and crucial raw materials.

A major point of contention, the 50-percent tariffs on European steel exports to the United States, has also seen a compromise. European Commission President von der Leyen announced that a quota system will replace the steep tariffs once a certain volume of metal enters the US, though specific details on this mechanism are still forthcoming.

The Road Ahead: Finalizing the Details

This landmark deal now requires the approval of EU member states. Ambassadors are scheduled to meet on Monday for a debriefing from the European Commission. Technical consultations will continue over the coming weeks to flesh out the agreement, described by von der Leyen as a “framework.”

crucially, final decisions are still pending on specific sectors, most notably alcohol. France and The Netherlands have been advocating for carve-outs for their wine and beer industries, respectively, with a resolution expected in the immediate days ahead.

Evergreen Insights:

This agreement underscores the delicate balance of global trade relations and the importance of diplomacy in resolving potentially disruptive disputes.The commitment to increased energy imports highlights the strategic imperative for diversification and the growing role of the US as an energy supplier. Furthermore, the emphasis on military equipment purchases signals a broader trend of strengthened transatlantic defense cooperation. The successful navigation of these complex negotiations serves as a crucial reminder that even in the face of significant economic pressures, dialogue and compromise can pave the way for mutually beneficial outcomes and continued global stability.

How does the current EU-US approach to trade differ from the pursuit of a comprehensive agreement like TTIP?

Current Status of Transatlantic Trade Negotiations

As of July 28, 2025, formal, comprehensive negotiations for a new EU-US trade agreement – often referred to as a successor to the stalled Transatlantic Trade and Investment Partnership (TTIP) – are not actively underway. However, notable dialogue and focused initiatives are shaping the transatlantic economic relationship. The current approach leans towards sector-specific agreements and addressing shared concerns rather than a broad, overarching treaty. Key developments include the Trade and Technology Council (TTC),established in 2021,and ongoing discussions regarding steel and aluminum tariffs.

The Trade and Technology Council (TTC): A New Framework

The TTC represents a pivotal shift in EU-US economic cooperation. It’s not a conventional free trade agreement, but a forum for coordinating approaches on critical trade, technology, and security issues.

Key Focus Areas:

Supply Chain Resilience: Addressing vulnerabilities in critical supply chains, particularly semiconductors and battery components.

Digital Regulation: Aligning approaches to data privacy, artificial intelligence (AI), and digital platform governance. this includes discussions around the EU’s Digital Services Act (DSA) and Digital Markets Act (DMA).

Export Controls: Coordinating export controls on sensitive technologies to address national security concerns.

Investment Screening: Enhancing cooperation on investment screening to protect critical infrastructure and technologies.

Trade and Labor: Discussions on promoting fair labor practices and worker rights in global trade.

The TTC has yielded some early successes, including agreements on details sharing and joint research projects. However, challenges remain in translating these commitments into concrete actions.

Resolving Trade disputes: Steel & Aluminum Tariffs

A major sticking point in EU-US trade relations has been the tariffs imposed by the US on steel and aluminum imports under Section 232 of the Trade Expansion Act of 1962. These tariffs,initially implemented in 2018,sparked retaliatory measures from the EU.

Recent Developments (July 2025): A phased reduction of these tariffs was agreed upon in late 2023, with a goal of complete removal by the end of 2025. While progress has been made, lingering concerns about overcapacity in the global steel market and potential circumvention of the agreement continue to be debated.

Impact on Industries: The tariffs significantly impacted industries reliant on steel and aluminum,including automotive,construction,and manufacturing. The resolution is expected to alleviate some of these pressures, but the long-term effects are still being assessed.

Global Arrangement: The US is actively pursuing a broader global arrangement on steel and aluminum trade, aiming to address overcapacity and promote fair competition. The EU’s participation is considered crucial for the success of this initiative.

Sector-Specific initiatives & Emerging Areas of Cooperation

Beyond the TTC and steel/aluminum disputes,several sector-specific initiatives are gaining momentum:

Critical Minerals: recognizing the strategic importance of critical minerals for the green transition,the EU and US are exploring cooperation on sourcing,processing,and recycling these materials. This includes potential joint investments in mining projects and the development of sustainable supply chains.

Green Technologies: Collaboration on promoting the development and deployment of green technologies, such as renewable energy, energy storage, and carbon capture, is a key priority. This aligns with both the EU’s Green Deal and the US’s Inflation reduction Act.

Data Privacy & Cross-Border Data Flows: The EU-US Data Privacy Framework, replacing the invalidated Privacy Shield, aims to facilitate the secure transfer of personal data across the Atlantic.This is vital for businesses operating in both regions. Ongoing legal challenges and scrutiny remain, however.

pharmaceuticals: Discussions are underway to streamline regulatory cooperation in the pharmaceutical sector, perhaps accelerating the approval of new medicines and reducing costs.

The Future of EU-US Trade: Potential Scenarios

While a comprehensive free trade agreement remains unlikely in the near term, several scenarios could shape the future of EU-US trade relations:

1. Continued Sectoral Approach: The TTC and sector-specific initiatives continue to be the primary drivers of cooperation, with incremental progress on key issues.
2. Limited Trade Package: A smaller-scale trade package focusing on specific areas of mutual interest, such as digital trade or environmental goods, could be negotiated.
3. Resumption of Comprehensive Negotiations: A shift in political priorities or a change in geopolitical circumstances could lead to a renewed push for a broader trade agreement, though this is considered less probable.
4. Increased Trade Tensions: Escalating trade disputes or diverging regulatory approaches could lead to increased tensions and protectionist measures.

Benefits of Strong EU-US Economic Ties

A robust transatlantic economic relationship offers significant benefits for both sides:

Economic Growth: Increased trade and investment can boost economic growth and create jobs.

Innovation: Collaboration on research and development can foster innovation and technological advancements.

Supply Chain Resilience: Diversifying supply chains and reducing reliance on single sources can enhance resilience.

Geopolitical Stability: Strong economic ties can strengthen the transatlantic alliance and promote geopolitical stability.

Setting Global Standards: The EU and US, as major economic powers, can collaborate to set global standards in areas such as digital regulation and environmental protection.

Practical Tips for Businesses Navigating Transatlantic Trade

* Stay Informed: Monitor developments in EU-US trade policy through official sources,