EU Resumes Implementation Of Trade Deal With The United States

The European Union’s (EU) parliament voted in late March to resume ratification of the trade agreement framework that the EU and the U.S. government had worked out last year.

In addition to resumption of implementation, the parliament also approved the inclusion of several new safeguard provisions to protect EU interests against shifts in U.S. trade policy. These provisions stipulate that:

• Before the agreement goes into effect, the U.S. government must reduce Section 232 tariffs to 15 percent for steel and aluminum derivatives that contain less than 50 percent of these metals;
• The deal would automatically expire in March 2028; and
• The agreement can be suspended if the U.S. government imposes tariff hikes or new tariffs that exceed the 15 percent ceiling, engages in what the EU deems to be economic coercion, or levies threats to EU territorial sovereignty.

The agreement now moves into “trilogue” discussions in which the European Commission, its Parliament, and EU member state governments will discuss the text of the deal. These discussions, which are expected to begin as early as April 13, would be the final step before the deal goes into effect on the EU side.

As Connecting the Dots readers may recall, the EU had paused implementation of the deal earlier this year after the U.S. Supreme Court invalidated President Donald Trump’s International Emergency Economic Powers Act (IEEPA) tariffs and President Trump threatened to take over Greenland. After the IEEPA tariffs were invalidated, the president also imposed 10 percent tariffs on trading partners, including the EU, for 150 days, which he threatened could eventually rise to 15 percent.

Under the trade agreement that is now moving forward, the EU would remove tariffs on many U.S. products, including aircraft, chemicals, and agricultural products while the U.S. government would impose a 15 percent rate on many European imports and maintain 50 percent duties on steel and aluminum. The deal also requires the EU to purchase $750 billion on U.S. energy products by 2028.