The United States and European Union have announced a new framework agreement setting the stage for closer cooperation on tariffs, market access, and supply chain security. Both sides describe it as a starting point that could expand over time to cover additional areas of trade and investment.
As part of the agreement, the EU intends to remove tariffs on US industrial goods and expand market access for a range of American seafood and agricultural products. This includes reviving the now expired tariff deal from 2020 regarding lobster.
The US continues with a tariff system where EU goods face a combined rate of at least 15%, made up of the standard Most Favored Nation (MFN) tariff plus a reciprocal duty. Effective September 1, 2025, the US will apply only the MFN tariff to EU products such as, unavailable natural resources (including cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors. The US also plans to limit Section 232 tariffs on EU pharmaceuticals, semiconductors, and lumber to no more than 15%.
Automotive tariffs will shift once the EU takes its legislative steps to reduce tariffs. Vehicles and parts with an MFN tariff of 15% or more will no longer face Section 232 duties, while those with a lower MFN tariff will be capped at a combined 15%. The two sides also signaled interest in working together on steel, aluminum, and related products to address overcapacity while maintaining secure supply chains, potentially through tariff-rate quota arrangements.
The implementation and specifications of the duty reductions provided in this framework, will require official notice through the Federal Register and US Customs CSMS messaging.
Mohawk Global Trade Advisors is actively tracking these developments and can help importers manage risk, adapt sourcing strategies, and ensure compliance. Reach out to connect with an expert.