As of August 2025, the US imposed a reciprocal tariff regime on the EU, establishing a 15% ceiling for most EU exports. This all-inclusive rate applies across sectors such as cars, semiconductors, pharmaceuticals, and lumber. If a product’s Most Favored Nation (MFN) tariff is already 15% or higher, no additional US tariff is applied. For products with an MFN rate below 15%, the US tariff is set at 15% minus the MFN rate.
Several product groups benefit from zero or near-zero tariffs, including aircraft and aircraft parts, generic pharmaceuticals and their ingredients, chemical precursors, and natural resources unavailable in the US. Both sides have committed to expanding this special regime to additional categories over time.
Section 232 tariffs on steel and aluminum remain in place, with the US rate for EU-origin steel and aluminum set at 50%. However, the US-EU deal includes an aerospace exemption: civil aircraft and parts that meet the requirements of the WTO Agreement on Trade in Civil Aircraft are not subject to these tariffs.
For automobiles and parts, the US applies a modified Section 232 tariff: 0% for products with an MFN rate of 15% or higher, and 15% minus the MFN rate for products below 15%. This avoids stacking tariffs and provides clarity for EU automotive exports.
The agreement emphasizes reducing non-tariff barriers. Both parties have agreed to work together on car standards, recognize each other’s product checks in more industries, and reduce red tape in trade and investment. There is also a commitment to cooperate on the development of international standards and to accept each other’s standards for cars.
The deal includes provisions for strengthening supply chain resilience, tackling non-market practices, and deepening cooperation on investment screening and export controls. The EU has committed to procuring US liquefied natural gas, oil, and nuclear energy products to help replace Russian energy sources. Both sides are working to protect their steel and aluminum sectors from unfair competition and global overcapacity.
The US-EU trade deal is designed to restore stability and predictability for businesses and consumers on both sides of the Atlantic. It avoids harmful escalation and provides a platform for ongoing dialogue, with the aim of further reducing tariffs and addressing additional barriers in the future.
While the reciprocal tariffs are in effect, their legal basis is under review by the US Supreme Court, which is considering the President’s authority to impose such tariffs under the International Emergency Economic Powers Act. Regardless of the outcome, Section 232 and Section 301 tariffs remain available tools for US trade policy.
The current US-EU trade framework marks a shift toward more structured and predictable transatlantic trade, with clear tariff ceilings, targeted exemptions, and a focus on regulatory cooperation. Ongoing negotiations and legal reviews may further shape the landscape, but the agreement provides a foundation for continued engagement and gradual liberalization.