Filenews 22 August 2025
The European Union and the United States announced on Thursday the framework of a new Agreement on Reciprocal, Fair and Balanced Trade, aimed at strengthening their trade and investment ties. The agreement includes tariff reductions, preferential access to markets and cooperation in critical strategic areas such as energy, defence and the digital economy.
According to the joint statement, the two sides have "one of the largest economic relations in the world," with mutual investment stocks worth more than $5 trillion. In this context, European companies are expected to invest an additional $600 billion in the US by 2028.
Highlights of the agreement
- Apply a 15% cap to all EU products subject to reciprocal tariffs, with exceptions for strategic goods such as aircraft, generic medicines and natural resources (e.g. cork).
- The U.S. pledged to include pharmaceuticals, semiconductors and timber in the ceiling after the completion of the Article 232 investigations.
- The tariff on cars and spare parts is reduced from 27.5% to 15%.
- Work together to address steel and aluminium overproduction and safeguard supply chains through the use of tariff rate quotas (TRQs).
- Reducing non-tariff barriers through cooperation on standards, conformity assessments and SPS certificates.
- Strengthen cooperation in the field of financial security, investment and digital trade.
Benefits for the EU
The agreement offers stability to European businesses, protecting jobs and ensuring predictability in terms of access to the US market. The EU maintains its competitiveness vis-à-vis other US trading partners, while paving the way for further tariff lifts and the reduction of non-tariff barriers.
EU offers to the US
The EU will remove tariffs on industrial products and expand the U.S. side's access to agri-food goods such as nuts, fish, seeds and processed foods. In contrast, sensitive products such as beef, poultry, rice and ethanol are not included.
Investment and energy
European companies are planning $600 billion of new investment in the U.S. by 2029, while the EU plans $750 billion worth of U.S. energy supplies over the next three years to replace Russian gas and oil. In addition, the EU is committed to buying €40 billion worth of artificial intelligence chips to support its digital transition.
Regulatory and institutional issues
The EU agreed to exchange views with the US on the Due Diligence Directive (CSDDD) and the Deforestation Regulation (EUDR), but without changing its regulatory framework or granting preferential treatment to US companies. There has been no commitment to changes to the European Digital Regulations (DMA, DSA).
Defensive dimension
The EU recognises plans to increase defence equipment purchases from the US, as part of the strategic to deepen transatlantic cooperation and strengthen interoperability in NATO.
Next steps
The Joint Declaration is political and non-binding, but both parties commit to proceed swiftly with the implementation of what has been agreed. The implementation will follow the foreseen EU procedures, with the participation of member states and the European Parliament.
