The European Union has finally agreed to implement its trade deal with the United States after five hours of intense negotiations between members of the European Parliament and member states. The move is aimed at averting further tariffs threatened by former President Donald Trump.
Deal Details and Implementation
The agreement, struck last July at Trump's Scottish golf course, can now enter into force. It removes import duties on most US goods entering the EU. European Commission President Ursula von der Leyen welcomed the pact, stating, "Together, we can ensure stable, predictable, balanced and mutually beneficial transatlantic trade."
The deal puts the bloc on track to meet Trump's 4 July deadline for ratification, which has already been implemented in the US. Trade Commissioner Maroš Šefčovič described the outcome as a "collective effort" and a "strong result" after more than five hours of intensive negotiations.
Parliament's Demands and Concessions
MEPs had twice frozen the ratification process in protest at Trump's threats of higher tariffs in January and his threat to take control of Greenland. In a significant victory, they forced the insertion of a clause warning that the EU could reinstall tariffs on American products such as motorbikes if the US does not drop tariffs on steel derivatives by the end of the year.
Bernd Lange, chair of the parliamentary trade committee, described this as a "tricky" part of the negotiations that extended talks with the commission from midnight to 2am. He noted that the commission was "a little bit nervous about this issue," apparently referring to fears of retaliation by Trump.
Sunset and Suspension Clauses
MEPs had demanded a sunset clause allowing the EU to end the deal on 31 March 2028 and a suspension clause if Trump broke his word and increased the 15% tariff rate. The final text empowers the commission to trigger the suspension mechanism if the US fails to meet its commitments or disrupts trade and investment with the EU, including by "discriminating against or targeting EU economic operators."
Lange said the final sunset clause was a year later than hoped for, but the end of the deal in May 2029 would coincide with a new presidential administration. He warned that the parliament would not hesitate to trigger the suspension clause if Trump breached his side of the deal before this date.
Impact on Businesses
Although the US Supreme Court has already ruled that Trump's imposition of 15% tariffs on most EU exports was illegal, EU chiefs took the decision to honour the deal in an effort to stabilise the trading environment for businesses, including the car industry, which had been hit with 27.5% tariffs. The transatlantic relationship is the EU's most significant, worth more than €1.8 trillion in 2025.
The parliament agreed to scale back some demands, notably giving the US until the end of the year to reduce its 50% tariff on steel to 15% rather than insisting on it as a precondition. Lange played down the concessions, declaring that "Parliament has prevailed with its demands for a comprehensive safety net."
Reactions and Next Steps
Anna Cavazzini of the EU's Greens said the deal "puts the EU at a disadvantage" while conceding "it can secure a certain degree of economic stability." She added, "One can only hope that the agreement on the tariff deal will now calm the situation, so that other major issues in the EU-US relationship can be addressed."
Bar any further hiccups, the European Parliament will vote on the deal on 16 or 17 June, Lange said.
