U.S. imposes 15% tariff limit for the sake of economic stability acknowledged by EU.
The European Union (EU) and the United States have reached a significant political agreement on July 27, 2025, aimed at easing trade tensions that began in March. However, the agreement is not yet legally binding and requires further detailed negotiations to finalize the legal text.
Under this political framework, the EU will make massive investments in the U.S., totaling $600 billion over President Trump’s term, in addition to already existing investments. The EU also commits to purchasing $750 billion in U.S. energy exports through 2028, aiming to reduce European reliance on adversarial energy sources and narrow the U.S. trade deficit with the EU.
The EU will work to eliminate tariffs in various sectors and provide meaningful quotas for other products to create market access for U.S. exports, supporting American jobs. Non-tariff barriers for both U.S. industrial and agricultural exports to the EU are targeted for reduction, notably easing red tape for U.S. exporters, especially small and medium-sized businesses.
However, the U.S. has implemented a 15% tariff on most EU goods exports, significantly higher than the roughly 2% pre-Trump levels. This tariff is expected to have a minimal negative impact on EU GDP, estimated as a one-off hit of 0.3% to 0.5%, with sector-specific effects particularly on automotive, chemicals, metals, and parts of the pharmaceutical sectors.
In response, the EU is preparing potential countermeasures to the U.S. tariffs, including additional import duties on U.S. products like aircraft, automobiles, medical devices, IT equipment, and industrial machinery, covering €95 billion of U.S. imports. It is also considering restrictions on EU exports such as scrap metals and chemicals worth €4.5 billion, pending the outcome of ongoing consultations and negotiations.
European Commissioner for Trade, Maroš Šefčovič, has reacted to the new U.S. tariffs on social media, stating that EU exporters now benefit from a more competitive position due to the new U.S. tariffs. He also believes that the new tariffs reinforce stability for businesses and confidence in the transatlantic economy.
It is expected that the EU will not suspend the countermeasures it had prepared in case no agreement was reached with the United States, pending the official publication. The trade agreement sets U.S. tariffs on European products at 15%, and the EU has a maximum limit of 15% for all tariffs, according to the agreement.
The agreement also includes an increase in military material purchases by the EU. Maroš Šefčovič believes that the new tariffs will contribute to the stability of businesses and confidence in the transatlantic economy. The work on finalizing the official text of the trade agreement for U.S. tariffs of 15% on European products is still ongoing.
Last week, the European Commission adopted a total retaliation package worth 93 billion euros against the U.S., which has not yet been suspended. The agreement between the EU and the United States is considered as a possible, not the best, agreement, as the European ambition was greater, with zero tariffs for European industrial goods. The agreement is still preliminary and not fully official, with details pending. The U.S. publication of the agreement is pending.
As of August 1, 2025, the current state of the EU-U.S. trade agreement is that a major political agreement was reached, but it is not yet legally binding and requires further detailed negotiations to finalize the legal text.
- The significant political agreement between the EU and the United States in July 2025 includes the EU's commitment to investing $600 billion in U.S. finance, which will support business growth.
- As part of the agreement, the EU plans to purchase $750 billion in U.S. energy exports, an action aimed at reducing European reliance on adversarial energy sources and addressing the trade deficit with the U.S. in the realm of general-news.
