What's in Trump's trade deal with Europe?
- By Reuters -
- Jul 28, 2025
BRUSSELS, July 28- The United States and the European Union agreed on a framework trade deal, which leaders on both sides of the Atlantic said would end months of uncertainty for industries and consumers.
Here are the main elements of the deal that will enter into force on August 1 through an executive order by President Donald Trump, according to EU officials:
BASELINE TARIFF RATE: Almost all EU goods entering the U.S. will be subject to a 15% baseline tariff. The 15% tariff is not added to any existing rates.
CARS: Cars and car parts will be subject to the 15% tariff, compared to the 27.5% they face now.
PHARMACEUTICALS AND SEMICONDUCTORS: Pharmaceuticals and microchips will face a 0% tariff until the U.S. concludes Section 232 trade investigations in a few weeks and imposes new global tariff rates on the two industries.
The levy on pharmaceuticals and microchips imported from Europe will not exceed 15%, irrespective of the tariffs applied more widely.
TIMBER AND COPPER: Tariffs will be applied after the conclusion of 232 investigations into those sectors. The duties on European lumber and copper will not exceed 15%.
STEEL AND ALUMINIUM: Tariffs on European steel and aluminium will stay at 50%, for now, but the EU and the U.S. agreed that they will be replaced by a quota system that will be negotiated later.
European steel exports within the agreed quota would face the most-favoured nation tariff rate agreed under WTO rules, which are low and in some cases zero depending on the steel grade. Steel exports outside of the quota would be at 50%.
ZERO-FOR-ZERO tariffs: The U.S. and EU will have zero-for-zero tariffs on:
– all aircraft and their components,
– certain chemicals,
– certain generic drugs,
– semiconductor-making equipment,
– some agricultural products but with the exclusion of all sensitive products like beef, rice, ethanol, sugar or poultry.
– Natural resources and critical raw materials.
More products are to be added.
STRATEGIC PURCHASES: The EU pledged to make $750 billion in strategic purchases, covering oil, liquefied natural gas (LNG) and nuclear technology during U.S. President Donald Trump’s term in office.
This will come as a mix of spot purchases for oil, long-term contracts for LNG and government procurement for nuclear technology. The amount has been estimated on the basis of Europe’s planned phase out of energy purchases from Russia.
EU purchases of U.S. microchips would be on top of the $750 billion. The U.S. will be the preferred vendor.
European companies are to invest $600 billion in the U.S. over the course of Trump’s second term. Japan’s package will consist of equity, loans and guarantees from state-run agencies of up to $550 billion to be invested at Trump’s discretion, Tokyo says. EU officials, in contrast, said Europe’s $600 billion investment pledge is based on the combined investment intentions expressed by European companies.
DEFENCE PROCUREMENT: EU member states will purchase U.S. military equipment. The deal does not specify an amount.