The European Union is preparing to implement import duty cuts agreed with U.S. President Donald Trump last year, a move that would help avert, at least temporarily, a renewed escalation of tariff tensions between the world’s two largest trading partners.
The European Parliament is due to vote Tuesday on legislation designed to fulfill the EU’s commitments under the trade agreement reached nearly 11 months ago at Trump’s Turnberry golf course in Scotland. A strong majority is expected to support the deal, which includes the removal of EU tariffs on U.S. imports alongside broader U.S. tariff adjustments set at 15%.
Trump had previously warned of “much higher” tariffs if the EU failed to act, increasing pressure on lawmakers to approve the package. Industry groups across Europe have also urged approval, arguing the agreement provides stability for transatlantic trade worth an estimated $2 trillion annually.
Automakers are among the sectors already adjusting to the expected changes. The deal eliminates a 10% EU import duty on U.S.-made cars, prompting companies such as Volvo Cars to shift production plans, including moving some XC60 SUV manufacturing to South Carolina later this year and preparing a hybrid model at a new U.S. facility by the end of the decade.
Fifteen European industry associations representing sectors including automotive, textiles, cosmetics and food and beverage said backing the agreement would secure predictability for businesses dependent on transatlantic trade. However, they cautioned the deal is “not the end of the conversation.”
Attention now turns to whether upcoming U.S. tariff measures scheduled for July 24 will align fully with the Turnberry framework. Both sides must also resolve disputes over a long-running aircraft subsidies conflict involving $11.5 billion in goods, with a temporary tariff suspension set to expire July 11.
U.S. Trade Representative Jamieson Greer said Washington intends to honor the agreement, but European Parliament trade committee chair Bernd Lange expressed skepticism about enforcement. “The decision is in the White House by the president and therefore nobody knows what will really happen,” he said.
Further uncertainty stems from Trump’s warning of 100% tariffs on French wine and ongoing U.S. investigations under Section 232, which allow tariffs on national security grounds. Analysts say such measures could still disrupt the agreement.
The EU retains the option to suspend parts of the deal or reactivate countermeasures on about €93 billion ($108 billion) of U.S. goods currently on hold until Aug. 6.
Beyond tariffs, both sides are negotiating broader regulatory issues. The United States has pressed the EU to ease rules on supply chain transparency, environmental compliance and its carbon border tax, while European officials have raised concerns about U.S. tariffs exceeding 15% on metal-containing products such as washing machines, wind turbines and motorcycles.
Some EU lawmakers are also considering legislation that would reinstate tariff suspensions on U.S. steel and aluminum products unless rates return to agreed levels by year-end. European manufacturers of cutlery and catering equipment have warned that higher tariffs could price them out of the U.S. market.
Meanwhile, EU wine and spirits producers are pushing for broader tariff reductions, aligning with U.S. spirits makers who argue for a return to zero-tariff trade, citing rapid growth during a previous tariff-free period.
Despite lingering uncertainty, analysts say the immediate risk of a full breakdown has eased following recent legal and procedural changes in the United States that require formal investigations before new tariffs can be imposed.
“There might be other tools the United States finds to make threats for political reasons, but I don’t think tariffs are going to be that instrument,” said Ignacio Garcia Bercero, a senior fellow at think tank Bruegel, cited by Reuters.
