The European Commission is preparing to table legislation this week to eliminate all EU tariffs on US industrial goods, in a bid to satisfy preconditions set by the White House for lowering American duties on European cars and parts.
The move follows a joint EU–US framework announced on 21 August and is intended to trigger a reduction in current US auto levies on EU exports.
Under the framework, the EU “intends to eliminate tariffs on all US industrial goods” and to grant preferential market access to selected US seafood and agricultural products, including tree nuts, dairy, fruit and vegetables, processed foods, seeds, soybean oil, pork and bison meat. In return, the US commits to apply a general 15% tariff ceiling on most EU exports, with specified carve-outs where only the most-favoured-nation (MFN) rate would apply, such as aircraft and aircraft parts, cork and generic pharmaceuticals.
Crucially for European manufacturers, US tariffs on EU automobiles and parts—currently a combined 27.5% made up of a 25% Section 232 duty plus the 2.5% MFN rate—would decline to 15% once the EU formally introduces the necessary legislative proposal. The framework states that auto relief becomes effective from the first day of the month in which the EU proposal is introduced, creating a retroactive element if the proposal is filed late in a calendar month.
Brussels’ accelerated timetable aims to capture that retroactive window. Bloomberg reported on Wednesday that the Commission intends to bring forward the proposal before the end of this week, aligning with the framework’s timing provisions and the US commitment to adjust rates accordingly. Reuters previously noted that Washington would move to reduce the 27.5% car tariff on the same basis, with the change tied directly to the EU tabling its legislation.
The 21 August framework does not resolve all outstanding issues. Tariffs on steel and aluminium remain at elevated levels, with both sides agreeing only to consider cooperation on “ring-fencing” their markets against overcapacity, including potential tariff-rate quotas. In parallel, the EU will extend and expand an earlier tariff arrangement on US lobster, adding processed products to the scope. Rules of origin are to be negotiated to ensure benefits accrue predominantly to EU and US producers.
Digital policy remains a separate point of contention. President Donald Trump has warned of additional tariffs and possible export restrictions targeting countries that tax or regulate US technology companies, a stance that has kept digital services taxes and the EU’s platform rules outside the current trade package. Brussels has maintained that its digital safeguards are neutral in application and form part of the bloc’s internal market regime.
The Commission has characterised the transatlantic arrangement as a stabilising measure for business, while acknowledging that the terms reflect US concerns. Commission President Ursula von der Leyen has described the agreement as “strong, if not perfect”, arguing that it provides certainty while negotiations continue on sectoral exemptions and non-tariff issues.
For the automotive sector, the difference between a 27.5% and a 15% US tariff is material. Germany, which exported roughly $35bn in vehicles to the US last year, is among the most exposed to the higher rate. A reduction to 15% would align autos with the general ceiling laid out in the framework and ease pressure on EU carmakers’ margins and pricing in their largest non-EU market. Industry analyses and US briefings this summer have treated 27.5% as the operative rate for passenger cars since the Section 232 action in late March.
The EU’s legislative step would also activate limited MFN-only treatment in a handful of areas, including aircraft and certain pharmaceuticals, from 1 September. Separately, Brussels and Washington committed to work on mutual recognition of standards in automotive and other industrial sectors, and to address non-tariff barriers in agri-food trade, including streamlining sanitary certificates for pork and dairy.
Energy and investment pledges feature prominently in the package. The EU signalled an intention to procure US liquefied natural gas, oil and nuclear products with an expected offtake valued at $750bn through 2028. European companies are “expected to invest” an additional $600bn in US strategic sectors over the same period, while the EU plans to purchase at least $40bn of US AI chips for computing centres. These statements are framed as intentions and expectations rather than binding treaty obligations.
Next steps hinge on procedure. The Commission must table its proposal, after which the Council and European Parliament will consider the measures under EU law. In the US, tariff adjustments referenced in the framework—particularly those imposed under Section 232—would be implemented through executive action. Both sides have committed to “promptly document” the agreement and to continue talks on standards, export controls and economic-security alignment.
If the Commission meets its self-imposed deadline this week, US tariffs on EU car exports would be cut to 15%, applied retroactively from 1 August, provided Washington implements the corresponding measures. Further carve-outs and sectoral arrangements may follow as negotiators work through annexes and implementing texts in the weeks ahead.
