EU pushes for lower US car tariff in trade deal outline

Andrea Shalal and David Lawder | August 21, 2025

The European Union will strive to ensure lower US tariffs apply to its car exports retroactively, EU trade chief Maros Sefcovic says, as the trans-Atlantic partners set out details of their framework trade deal struck in July.

In a joint statement, the two sides spelled out that 15 per cent US tariffs would apply to most EU imports and listed the commitments made, including the EU’s pledge to eliminate tariffs on US industrial goods and to give preferential market access for a wide range of US seafood and agricultural goods.

Washington would take steps to reduce the 27.5 per cent US tariffs on cars and car parts, a huge burden for European car makers, once Brussels introduced the legislation needed to enact promised tariff cuts on US goods, it said.

The statement on Thursday said US tariff relief on autos and auto parts would kick in on the first day of the month in which the EU introduced the legislation.

Sefcovic said it was the European Commission’s “firm intention” to make proposals by the end of the month, meaning the US car tariff reduction would apply from August 1.

A senior administration official, speaking on condition of anonymity because they were not authorised to speak publicly, said European car makers could see relief from the current US tariffs within “hopefully weeks”.

“As soon as they’re able to introduce that legislation – and I don’t mean pass it and fully implement it, but really introduce it – then we will be in a position to provide that relief. And I will say that both sides are very interested in moving quickly,” they said.

US President Donald Trump and European Commission President Ursula von der Leyen announced the deal on July 27 at Trump’s luxury golf course in Scotland after months of negotiations.

The two leaders met again this week as part of negotiations aimed at ending Russia’s war in Ukraine, with both lauding their trade framework deal as an historic accomplishment.

The joint statement said the deal could be expanded over time to cover additional areas and further improve market access.

The joint statement was “a play to hold each other accountable” and ensure that both sides carried out the pledges announced in July, the official said.

It noted that the US agreed to apply only pre-existing Most Favoured Nation tariffs of below 15 per cent from September 1 on EU aircraft and parts, generic pharmaceuticals and ingredients, chemical precursors and unavailable natural resources, including cork.

This exemption did apply to include wine or spirits, a key EU demand, but the two sides agreed to consider other sectors and products for inclusions.

“So these doors are not closed forever,” Sefcovic said, while acknowledging that securing an exemption for alcoholic drinks would not be easy.

The statement reiterated the EU’s intention to procure $US750 billion in US liquefied natural gas, oil and nuclear energy products, plus an additional $US40 billion of US-made artificial intelligence chips.

It also repeated the intention for EU companies to invest an additional $US600 billion across US strategic sectors through 2028.

Both sides committed to address “unjustified digital trade barriers”, the statement said, and the EU agreed not to adopt network usage fees.