The European Commission proposed new legislation on Thursday (August 28) to eliminate all tariffs on American industrial products and provide preferential market access for a range of American agricultural and seafood products. In exchange, the United States has agreed to reduce tariffs on European cars and automotive parts.
This move is a key step in implementing the framework of the US-EU trade agreement. Currently, the EU faces a 27.5% tariff on its automobile and automotive parts exports to the US. While the trade agreement reached by the US and EU at the end of July would lower tariffs on nearly all European products to 15%, Trump stated that the US would not reduce the EU’s car tariffs to 15% until legislation is proposed to eliminate American industrial and other tariffs.
The European Commission proposed legislation on Thursday to eliminate tariffs on American industrial products and provide “preferential market access” for a range of American seafood and non-sensitive agricultural products. The EU will also extend duty-free treatment for American lobsters, including processed lobsters.
According to the consensus reached between the EU and the US, as of the first day of the month following the submission of legislative proposals by the EU, the US will reduce tariffs on EU cars from 27.5% to 15%. Given that the European Commission proposed legislation on August 28, the 15% tariff on EU cars by the US should take effect from August 1, 2025. The European Commission declared that within a month, this would save European car manufacturers over 500 million euros in export tariffs.
For the legislation proposed by the European Commission to take effect, it needs approval from the European Parliament, the European Council, and at least 15 of the 27 EU member states.
Cars are one of the most important export products from the EU to the US, with Germany alone exporting new cars and parts worth $34.9 billion to the US in 2024.
EU Trade Commissioner Maros Sefcovic stated on Thursday that the US-EU agreement is not only a step towards stability but also lays the foundation for closer cooperation on common challenges.
“Both sides are fulfilling commitments and ensuring the comprehensive implementation of the agreement, which serves our mutual interests. I particularly welcome the reduction of tariffs to 15% on cars and automotive parts from August 1, 2025, as it will help our automotive industry remain competitive in the global market,” Sefcovic said.
Based on the trade agreement reached between the EU and Trump at the end of July, the EU agreed to purchase $750 billion worth of American energy products and pledged an additional $600 billion investment in the US.
European Commission President Ursula von der Leyen previously stated that both parties had agreed to implement zero tariffs on certain strategic products, including all aircraft and aircraft components, certain chemicals, some generic drugs, semiconductor equipment, certain agricultural products, natural resources, and key raw materials.