US keeps car tariffs in place as EU trade deal takes shape

The United States and the European Union released long-awaited details of a tentative trade agreement initially reached last month, which sees Washington maintaining steep tariffs on European vehicles until the bloc lowers duties on American industrial and agricultural goods.

The joint statement formalizes a truce announced in July that helped avert a dangerous escalation in President Trump’s ongoing trade war. While the agreement remains non-binding, it is a step toward a more comprehensive deal, Caliber.Az reports, citing foreign media.

Negotiators had scrambled to move beyond what was initially a handshake deal. European officials pushed for a written document, hoping to secure US commitments.

At the heart of the agreement, the US will maintain a 15% tariff on most goods from the EU under an executive order already in effect. In a partial victory for Europe, key exports like pharmaceuticals will remain taxed at 15%, avoiding the looming 200% rate planned globally on certain medicines.

Mr. Trump continues to pursue national security-based tariffs on critical sectors like pharmaceuticals, computer chips, and lumber. But, as statement confirmed, Europe will be spared the harshest of these measures.

However, high car tariffs remain a sticking point. The US will not immediately reduce its 27.5% duty on foreign-made vehicles. That reduction will come only after the EU introduces legislation to lower tariffs on a range of US goods, including bison, tree nuts, dairy, and seafood.

A White House official, speaking on condition of anonymity, said the delay could be brief: “Washington hoped this could be addressed in a matter of weeks, with tariffs lowered retroactively to the beginning of the month that the EU is able to take action.”

Despite European efforts, wine and spirits remain taxed at 15%, a reversal from zero-duty rates in previous years. The document acknowledges the agreement as “a first step in a process that can be further expanded over time to cover additional areas.”

Underlying the deal are $750 billion in European energy purchases and over $600 billion in promised investments in the US. Still, the EU noted these are aspirations, not firm targets, with much left to negotiate.

By Vafa Guliyeva