Shippingtelegraph: U.S., EU reveal trade details under new framework deal. Here’s what is in the pact.

by Shipping Telegraph

The U.S. will impose a 15% tariff for the vast majority of EU exports, including strategic sectors such as cars, pharmaceuticals, semiconductors and lumber, according to a joint statement issued Thursday by the Trump administration and European Union.

Sectors which are already subject to Most Favoured Nation (MFN) tariffs of 15% or above, will not be subject to additional tariffs.

With regard to cars and car parts, the 15% US tariff ceiling will apply in tandem with the EU initiating the procedures for tariff reductions vis-à-vis US products.

In addition, effective as of 1 September, a number of product groups will benefit from a special regime, with only MFN tariffs applying. These include unavailable natural resources (such as cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors.

Moreover, in line with European Commission president Ursula von der Leyen’s 27 July statement, both sides agree to continue to “ambitiously work” to extend this regime to other product categories.

The terms, outlined in a joint statement released by two of the world’s largest economies, set a clearer framework for a truce announced in July that averted a damaging trade war escalation.

The new framework comes after President Trump and European Commission president Ursula von der Leyen met in July, ending a months-long standoff between two of the world’s key economic partners.

At the time, they announced that the EU will invest $600 billion in the U.S., buy $750 billion of U.S. energy, and increase its purchases of US military equipment.

Some of the additional provisions of the framework pact include:

• The European Union will provide “preferential market access” for a wide range of U.S. seafood and agricultural goods, including tree nuts, dairy products, fresh and processed fruits and vegetables, processed foods, planting seeds, soybean oil, and pork and bison meat.
• ​The European Union plans to “substantially increase procurement of military and defense equipment from the United States, with the support and facilitation of the U.S. government.”
• The European Union intends to procure U.S. liquified natural gas, oil, and nuclear energy products with an expected offtake valued at $750 billion through 2028.

European Commission president Ursula von der Leyen said in a statement the deal restores “clarity” and “coherence to transatlantic trade,” adding that, “this is not the end of the process” as the “EU will continue to engage with the US to agree more tariff reductions, to identify more areas of cooperation, and to create more economic growth potential.”