Everything we know (so far) about the trade agreement between the European Union and the United States

BarcelonaThe earthquake began on Sunday night, and the exact cause is still unknown. After months of threats, US President Donald Trump met with European Commission President Ursula von der Leyen at her golf resort in Scotland. to seal "the biggest deal of all", in the words of the Republican president, and avoid a trade war. Once they shook hands, the exact details of the agreement depended on who answered the question, with Trump very forceful on aspects such as the impact on products like steel and aluminum, and Von der Leyen qualifying what many European states have seen. like a defeat.

Two days later, the fine print of an agreement affecting the €4.2 billion worth of goods and services that cross the Atlantic daily is still unclear, but more details are starting to emerge after both the European Commission and the White House released more information separately, contradicting each other. To add to the confusion, the European Commission defended this Tuesday that "the political agreement is not legally binding" and the EU and the US "will continue negotiating to fully implement it."

Maximum tariff of 15%

The main point of the trade agreement reached between the US and the EU is the imposition of a general 15% tariff on European exports, starting August 1. "It's the best we could get," acknowledged von der Leyen, who abandoned Washington's threat of a general 30% tariff and distanced herself from the original desire to avoid new trade barriers. All this without forgetting that, since last April, Washington has already applied a general 10% tariff, a rate that was added to the 4.8% that the US administration had previously established. The Commission now speaks of a "tariff ceiling" of 15% on the vast majority of exports, with exceptions such as when the most-favored-nation tariff—a basic tax on imports between member states of the World Trade Organization to avoid discrimination—exceeds 15%, when the latter will be applied.

Most affected sectors

Trump had his sights set on specific products such as pharmaceuticals—he even threatened tariffs of 200%—semiconductors, and automobiles. The latter already paid a 27.5% tariff, a rate that will be reduced to a general 15%. "This provides immediate relief," the Commission emphasizes. Regarding pharmaceuticals and semiconductors, the EU executive notes that the additional tariffs that Washington may impose will be a maximum of 15% and that, until this happens, they will continue as they are now, with a very low or zero tax burden, although the White House assures that it will apply 15% starting Wednesday 1.

Steel and aluminum have not been so fortunate, remaining as they were, with a 50% tariff, but the Commission has managed to extract a promise of a quota system for European exports that would reduce the current rate, without specifying any timeline. The new agreement also adds a 50% tariff on copper. According to the White House, this tariff will generate "tens of thousands of dollars in revenue."

The EU will also facilitate the entry of products such as Alaskan hake, Pacific salmon, shrimp, soybean oil, cereals, and nuts, all of which are subject to quotas, into sectors such as fishing and agriculture. This will also be done on processed foods such as ketchup and cookies.

Strategic Products

Von der Leyen spoke of eliminating tariffs on strategic products, including aircraft and their components, certain chemical products, and natural resources. According to the Commission, they will be given special treatment with "zero-to-zero tariffs" and will return to the levels prior to Trump's assumption of power, with the intention of adding more products to this list. It is not yet known what will happen to wines and spirits.

Million-dollar investments

The agreement with the US came with the EU's commitment to make multi-million-dollar investments in the world's richest economy, in line with the disbursements that Japan, one of the other countries with which it has reached an agreement, will also make. The agreement included purchasing $750 billion in energy (€700 billion at the current exchange rate), with the aim of reducing energy dependence on Russia, as well as investing $600 billion (€550 billion). While it can be assumed that these investments will be with public money, European sources assure that "much of the money" will be private, and that these figures are estimates of what decoupling from Russia will cost and the investments that European companies will be able to make in the United States.

Here, too, lies one of the main disagreements: the Commission says they will be implemented by 2029, while the White House says it will be completed a year earlier. And, in fact, at Tuesday's midday press conference, one of the European Commission's (EC) Trade spokespersons, when asked about this difference, referred to the Brussels statement and said that the measures will be implemented within three years. Europe also doesn't mention the purchase of military equipment, while Trump says they will buy "significant quantities."

Now the Commission details that an additional purchase of €40 billion in artificial intelligence chips is also planned to maintain "the EU's technological advantage." According to European sources, these figures also reflect the estimated outlays that European companies are expected to make in the coming years. In this sense, the Commission speaks of "promoting and facilitating mutual investment," although the White House has not mentioned any investment on its part.