On August 21, the European Commission and the US government published a joint statement in nineteen points for “fair, balanced, and mutually beneficial trade and investment.”

What’s in the deal

This joint statement formalizes the informal agreement between Commission President Ursula von der Leyen and US President Donald Trump on July 27 in Turnberry, Scotland. US tariffs came into effect on August 7.

By securing an overall tariff rate of 15% (rather than 30%), the Commission congratulated itself on having avoided a trade war with the US.

However, this rate is more than triple the average tariffs applicable before Donald Trump arrived at the White House (4.8%).

Trade in goods between the EU and the United States is worth €867 billion in 2024 (and €817 billion for services).

Certain sectors are exempt, such as aeronautics (aircraft and spare parts), which will not be subject to any customs tariffs. Conversely, the pharmaceutical sector will see customs tariffs rise from 0% (exemption) to 15% (standard tariff, with exemptions, however). The wine and spirits sector did not obtain the hoped-for exemption, despite French lobbying.

The 15% rate also applies retroactively to cars and auto parts from the first day of the month in which the EU initiates procedures to reduce customs tariffs on vehicles from the United States.

Vehicles and auto parts had been taxed at 27.5% upon entry into the US market since March. The rate was retroactively set at 15% at the very end of August.

A separate clause in the joint statement specifies that the EU and the US will begin to collaborate in other areas related to the automotive industry, in particular by “ensuring mutual recognition of their respective standards”.

This mutual recognition remains vague at this stage, but is already raising many concerns about US safety and pollution standards.

Steel and aluminum imports are not covered by the general tariff cap. They remain subject to a 50% duty until the EU and the US begin discussions on cooperation to fight overproduction, particularly from China, and possibly introduce tariff quotas.

In a sign of the immense administrative complexity of the new US customs regime, Italian cheese producers — Parmigiano Reggiano and Grana Padano — have complained to the Commission that certain products continue to be taxed at 30% despite the entry into force of the 15% customs tariff.

Vague promises

The joint statement of August 21 sets out a series of commitments that are still very vague and go far beyond trade discipline — or even simply the EU's powers. These include:

  • The EU's commitment to purchase approximately $40 billion worth of US AI chips and $750 billion worth of liquefied natural gas by 2028.
  • The $600 billion in investments expected from European companies in the US by 2028.
  • The EU's planned increase in purchases of US military and defense equipment.

It is these strategic concessions — more than the trade provisions of the framework agreement itself — that are fueling criticism of Ursula von der Leyen's “capitulation” to Donald Trump.

In a speech delivered in Rimini on August 22, Mario Draghi said: “For years the European Union believed that its economic dimension, with 450 million consumers, would itself bring geopolitical power and leverage in international trade relations. This year will be remembered as the year in which that illusion evaporated.”

In addition, the Commission is committing to review several pieces of legislation — the CSRD, CS3D, the deforestation regulation, and the carbon border adjustment mechanism. The Commission already intends to thoroughly reform these directives and regulations as part of omnibus packages aimed at simplifying the European regulatory environment.

European digital regulation in the spotlight

The EU intends to continue applying its flagship digital regulations, in particular the Digital Services Act (DSA) and the Digital Markets Act (DMA).

The Commission explained: "The Joint Statement does not include any commitment on EU digital regulations. We have made it very clear to the US that changes to our digital regulations – the Digital Markets Act and the Digital Services Act – were not on the table."

A few days after the joint statement, Donald Trump threatened retaliatory measures against countries that apply “discriminatory” rules to US tech companies.

It is therefore highly likely that the issue will be back on the table. For Competition Commissioner Teresa Ribera, the EU must be prepared to walk away from the negotiating table when concluding a formal trade agreement if the US carries out these threats.

But division is already growing within the college of commissioners itself. Yesterday, Google was supposed to receive an antitrust fine in the adtech case but the decision was put on hold. It is rumoured trade commissioner Maroš Šefčovič’s opposed the fine being released yesterday — this triggered significant criticism that the EU is caving under US pressure.

What now?

The new US tariffs are already in effect, and on August 7, the EU suspended its retaliatory (or “rebalancing”) measures adopted on July 24. But at this stage, the agreement is only a political one.

Its implementation on the European side will be carried out in accordance with EU legal procedures, in consultation with Member States and the European Parliament. The Commission wants to move as quickly as possible to improve market access and reduce tariffs in order to obtain reciprocal tariff relief for its strategic sectors.

The timetable and modalities for implementation will be specified shortly. Although the declaration has received the support of the Member States, it is not legally binding and serves as a reference for future negotiations.