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Europe’s parliament has agreed to cut duties on many American goods to avoid a fresh round of retaliatory tariffs from the Trump administration.
The trade deal, which took effect July 1, sets 15% tariffs on most exports to the U.S. and zero tariffs on industrial goods coming from the U.S. into the 27-nation European Union.
The agreement was originally reached a year ago. However, the U.S. Supreme Court’s February decision declaring many of the Trump administration’s wide-ranging, open-ended tariffs illegal, combined with the president’s threats to take Greenland by force, slowed Europe’s approval. President Donald Trump had threatened to slap additional tariffs on E.U. goods if the agreement wasn’t approved by July 4.
EU officials lauded the deal for giving the bloc the predictability it needed. The agreement expires at the end of 2029. In a statement, the E.U.’s international trade committee chair, Bernd Lange, said the agreement was good for the bloc.
“Despite the pressure, Parliament stood its ground throughout these negotiations,” Lange said. “Our determination has paid off, delivering a stronger agreement for European businesses and citizens and far more robust guardrails than originally envisaged. By translating the EU’s commitments in the joint statement into law, this regulation becomes part of the E.U.’s defensive toolbox: it not only strengthens and stabilizes E.U.-U.S. trade relations, but it also gives the E.U. the ability to respond if the United States fails to uphold its side of the bargain.”
Despite tensions between the U.S. and E.U., bilateral trade between the two reached a record in 2025, according to the German Economic Institute. The institute said U.S.-E.U. trade hit $1 trillion last year.