European Parliament backs EU-U.S. trade deal to avert auto tariff threat

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EU-U.S. trade deal approval

Highlights

European Parliament approves EU-U.S. trade agreement by 440 to 151 votes, cutting EU tariffs on U.S. industrial and some agricultural goods to zero, while U.S. tariffs remain higher.
White House imposes a temporary 10% levy on top of existing duties, leaving certain European products like cheese facing tariffs above 15%, with U.S. lobster duty-free access extended for five years.
Outstanding disputes remain as steel, aluminium derivatives, and washing machines face up to 50% duties, with concessions set to expire December 31, 2029 unless renewed and further U.S. tariffs possible over EU digital and labour policies.

Ratification vote and tariff terms

As reported by Financial Times, the European Parliament on Tuesday approves the agreement by 440 votes to 151 after repeated delays tied first to Donald Trump’s threats over Greenland and later to uncertainty following a U.S. Supreme Court ruling on the tariff regime.

Under the deal, the EU cuts its tariffs on U.S. industrial goods and some agricultural products to zero, while U.S. tariffs on European goods remain higher. The original Turnberry agreement reached last year between Trump and European Commission President Ursula von der Leyen sets a 15% tariff rate on EU goods, but the Supreme Court later rules those tariffs illegal.

That forces the White House to rely on temporary emergency legislation to impose a 10% levy on top of existing duties, leaving cheese and some other products facing tariffs above 15%. The agreement also extends duty-free access for U.S. lobster to the EU for another five years, a demand with political importance for Republicans in Maine ahead of midterm elections.

Outstanding disputes and business risks

The approval still requires final endorsement from EU member states and does not settle the dispute over U.S. tariffs on steel and aluminium derivatives. Some products, including washing machines, still face duties of up to 50%, despite the deal’s intended role in capping tariffs on EU goods at 15%.

If those higher duties are still in place at the end of the year, the European Commission can reverse some of the concessions offered to Washington. The EU concessions are due to expire on December 31, 2029 unless they are renewed.

Bernd Lange, chair of Parliament’s trade committee, says last week that U.S. Trade Representative Jamieson Greer commits to phasing out some of the disputed tariffs and acknowledges a breach of the agreement. Lange also warns that the final decision rests with the White House and the president, while separate disputes over EU digital regulation, forced labour rules and industrial overcapacity could trigger fresh U.S. levies.

The U.S. also imposes 10% tariffs on the EU over what Washington describes as inadequate forced labour laws, and Lange says these are due to replace the emergency tariffs when those expire on July 24. He says the bloc needs a safety net to respond because multiple trade conflicts remain unresolved.

In our earlier article, we examined how Whirlpool’s long-standing support for U.S. tariffs on foreign appliance makers is now backfiring, creating unexpected financial and operational strains. We noted that protectionist measures intended to shield domestic producers can also raise costs and disrupt supply chains, turning into a burden even for the companies that advocate import restrictions.

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