The European Union is preparing to fast-track legislation this week to remove all tariffs on US industrial goods, a key demand from President Donald Trump. In return, Washington has pledged to reduce its duties on European automobile exports, a sector critical to the bloc’s economy.
According to people familiar with the matter, the European Commission will also extend preferential tariff rates to select US seafood and agricultural goods. The EU has admitted that the deal tilts in America’s favor but argues it is necessary to provide businesses with stability and certainty in transatlantic trade.
Commission President Ursula von der Leyen described the deal as “a strong, if not perfect” arrangement, reflecting the bloc’s pragmatic approach. By pushing forward without its usual impact assessment process, Brussels signals urgency in meeting Trump’s conditions.
European car exports to the US currently face a 27.5% tariff, a heavy burden for an industry that generated $34.9 billion (€30.1 billion) in German vehicle and parts exports to the US in 2024. Trump has made clear that American tariffs on nearly all European products would only fall to 15% if EU legislation to remove industrial tariffs is introduced.
If the EU passes the proposal by the end of August, the reduced 15% tariff on European cars will be applied retroactively to August 1. This move could offer significant relief to Europe’s powerful automobile sector, which has been caught in the crosshairs of Trump’s aggressive trade strategy.
Despite progress, uncertainty remains as Trump has threatened new tariffs on nations taxing online services, a veiled reference to EU digital regulations affecting US tech giants like Google and Apple. This raises questions about whether the latest tariff concession will ease tensions or simply open another front in the transatlantic trade battle.