Editor’s Note
This article outlines the formalization of a key agreement between the United States and the European Union, established in the summer of 2025. The joint declaration marks a significant step in transatlantic cooperation.
On July 27, 2025, the President of the European Commission and the President of the United States reached a principled agreement, which was formalized by a joint declaration on August 21, 2025.
The joint declaration stipulates that most European products exported to the United States will be subject to a minimum duty of 15%, which includes the rate of the so-called “Most-Favored-Nation” tariffs that were already in effect before January 2025 (see below). This rate applies to automobiles and their parts, which were previously subject to a total duty of 27.5%.
Furthermore, the United States lifts its additional tariffs on three categories of products originating from the European Union (returning to only the so-called “Most-Favored-Nation” tariffs): (i) “unavailable” natural resources (including cork), (ii) aeronautical equipment, (iii) generic pharmaceutical products, as well as their chemical precursors.
These exemptions are detailed in the list provided in Annex I of the notice published in the federal register by the U.S. administration on September 25, 2025.
The European Union has emphasized its intention to:
- Eliminate tariffs on all U.S. industrial products (currently, 66% of industrial goods originating from the United States already enter the European Union duty-free).
- Grant preferential market access to certain U.S. food and agricultural products (nuts, dairy products, fresh and processed fruits and vegetables, processed foods, seeds, soybean oil, pork and bison meat, etc.).
Other elements of the agreement outside the tariff scope are detailed in the joint declaration of August 21, 2025.
These tariff concessions from the European Union take the form of two regulatory proposals published by the European Commission on August 28, 2025, which must be approved by a qualified majority of the Council and a simple majority of the Parliament:
- A first legislative proposal to implement the industrial and agricultural tariff concessions outlined in the principled agreement.
- A second legislative proposal aiming to extend and expand the preferential regime granted to lobsters and Norway lobsters originating from the United States (extension of a 2020 regulation).
Following the principled agreement concluded on July 27, 2025, between the President of the European Commission and the U.S. President, the United States adopted an executive order on July 31, which entered into force on August 7. It sets the rate of the so-called reciprocal tariff for goods originating from the European Union at 15%.
This rate is a floor that includes the rate of the so-called “Most-Favored-Nation” tariffs that were already in effect before January 2025. Thus, products that were subject to a tariff lower than 15% before January 2025 are subject to a total duty of 15%. Products that were subject to a duty equal to or higher than 15% remain subject to the same duty. The list of exempted goods provided for by the executive order of April 2, 2025 continues to apply. It is available here.
The additional 10% duty implemented by the executive order of April 9, 2025 (see below) ended on August 7.
Through an executive order on April 2, 2025, the United States subjected all its imports originating from certain of its trading partners to an additional so-called reciprocal tariff. This duty was then set at 20% for imports originating from the European Union. The list of U.S. trading partners targeted by these so-called reciprocal duties is available here. Certain goods are exempt from these additional duties, particularly when they are already subject to a sector-specific additional duty. The list of exempted goods is available here.
Through an executive order on April 9, 2025, the so-called reciprocal duties were suspended for a period of 90 days, until July 9, 2025. It was an additional duty of 10% that applied in the United States to imports from the European Union during this period. This suspension decision was extended by an executive order on July 7, 2025 until August 1, 2025.