The United States and European Union (EU) released a comprehensive Framework Agreement that limits U.S. tariffs on imports from the EU at 15%. The agreement “reflects acknowledgement by the European Union of the concerns of the United States and our joint determination to resolve our trade imbalances and unleash the full potential of our combined economic power.”
The Framework Agreement is intended as a first step in a process that could expand to cover additional areas and “continue to improve market access and increase their trade and investment relationship.”
The United States and the EU reached the agreement in July 2025, avoiding President Donald Trump’s threatened 30% tariffs. The agreement raised concerns in Europe about economic damage, political fallout, and the durability of the deal. (see U.S. and EU Reach Trade Agreement)
Key Details
Tariff Reductions:
The EU “intends” to eliminate tariffs on all U.S. industrial goods and expand preferential access for US agriculture and seafood.
The U.S. will commit to limit tariffs on EU industrial goods at 15%, with MFN-only tariffs applied to key sectors such as aircraft, pharmaceuticals, and natural resources.
The U.S. commits to conditional reduction of Section 232 tariffs on EU automobiles and parts upon EU legislative implementation.
Energy & Technology:
The EU commits to purchase $750 billion of U.S. liquified natural gas, oil, and nuclear energy products by 2028.
The EU “intends” to purchase $40 billion in U.S. artificial intelligence (AI) chips for computing infrastructure.
Investment:
EU firms are expected to invest $600 billion in strategic U.S. sectors through 2028.
Defense:
The EU plans to substantially increase procurement of U.S. defense equipment, reinforcing NATO interoperability.
Regulatory Cooperation:
The is mutual recognition of automotive standards and expanded conformity assessments across sectors.
The EU notes U.S. concerns related to the Carbon Border Adjustment Mechanism (CBAM), Corporate Sustainability Due Diligence Directive (CSDDD), and Corporate Sustainability Reporting Directive (CSRD).
The EU will ease compliance burdens for U.S. exporters, especially for small and medium-sized businesses.
Digital Trade:
The EU confirms it will not impose network usage fees.
Both sides reaffirm the WTO moratorium on customs duties for electronic transmissions.