EU proposes tariff cuts to implement EU-US deal, securing auto relief, lowering duties, and reinforcing stability in the world’s largest trade partnership.
On 28 August 2025, the European Commission introduced two key proposals aimed at implementing the commitments outlined in the EU-US Joint Statement of 21 August 2025. These initiatives represent the first formal steps toward delivering the tariff reductions agreed between the two partners, ensuring that the United States provides retroactive tariff relief for the European Union’s automotive industry starting from 1 August 2025.
This development is significant for the broader transatlantic economy. By addressing tariff issues, the proposals contribute to greater stability and predictability in trade and investment relations between the EU and the US. Businesses, workers, and consumers on both sides of the Atlantic are expected to benefit from lower costs and improved market access.
The first proposal involves eliminating tariffs on a range of US industrial goods while also granting preferential access for selected categories of US seafood and certain agricultural products considered non-sensitive. The second proposal extends the current tariff-free treatment of lobsters to include processed lobster products, thereby broadening opportunities for US exporters in the European market.
Looking ahead, the Commission has confirmed its intention to maintain engagement with Washington to achieve further tariff reductions. This includes discussions related to a future EU-US Agreement on Reciprocal, Fair, and Balanced Trade, which could extend tariff relief and expand mutual market access.
The next step requires approval by both the European Parliament and the Council of the European Union through the ordinary legislative procedure. Only after these legislative bodies endorse the proposals will the EU’s tariff reductions formally take effect.
Meanwhile, under Section 3 of the Joint Statement, the US has committed to lowering tariffs on EU cars and car parts from the current rate of 27.5% down to 15%. This reduction will apply retroactively from 1 August 2025, coinciding with the EU’s own proposals. Analysts estimate that this move alone will save European carmakers more than €500 million in duties for exports shipped in just one month.
Additionally, starting from 1 September 2025, the United States will either eliminate tariffs entirely or reduce them to near zero on several product categories. These include cork, aircraft and aircraft parts, generic pharmaceuticals, their ingredients, and certain chemical precursors. Both partners have also pledged to continue expanding this product list in future negotiations.
The Joint Statement of 21 August builds upon earlier political commitments made by European Commission President Ursula von der Leyen and US President Donald Trump in July. The legislative proposals now put forward by the EU cover all its obligations under Section 1 of the Joint Statement, reflecting a joint effort to re-establish reliability in transatlantic trade.
The EU-US relationship is the world’s largest bilateral trade and investment partnership. In 2024, their combined trade in goods and services exceeded €1.6 trillion, with over €4.2 billion worth exchanged daily. Beyond trade flows, mutual investments between EU and US companies reached €5.3 trillion in 2022, underscoring the depth and importance of this partnership to global economic stability.
