U.S. and European Union provide fresh details of giant trade pact
White House officials hailed the statement as an important step toward fleshing out the commitments reached by President Donald Trump and European Commission President Ursula von der Leyen at their impromptu July summit.
The three-and-a-half page statement confirms that the U.S. will impose a 15 percent tariff on most European products. The U.S. now has agreed to lower its 25 percent tariff on imported cars to 15 percent for European vehicles once the E.U. introduces legislation to eliminate its already-low tariffs on American industrial products and to provide greater market access for some American farm goods.
European semiconductors, pharmaceuticals and lumber also will face import taxes of 15 percent, far lower than levels the president is eyeing for those goods produced in other markets.
The White House said the E.U. deal signals the president's determination to replace the 30-year old global trading system helmed by the World Trade Organization with a series of government-to-government arrangements designed to shrink the chronic U.S. trade deficit.
'We feel like this is a really positive step forward for the U.S.-E.U. relationship, where both parties have agreed that there are certain problems, such as trade imbalances, that need to be addressed, that are no longer sustainable, and that we can address in a bilateral way outside the WTO,' said a senior administration official speaking on the condition of anonymity under ground rules set by the White House.
Still, the joint statement was replete with provisions that will require additional bargaining. The two sides, for example, agreed to negotiate 'rules of origin' that will determine which specific products qualify for lower tariffs. In other trade negotiations, hammering out such terms proved complex and time-consuming.
Elsewhere, the joint statement said the two sides 'commit to work together' on issues such as reducing nontariff trade barriers, addressing 'unjustified digital trade barriers' and cooperating on addressing other nations' export controls on critical minerals, a likely reference to China.
'These are ambitious things and we expect in the coming weeks — hopefully weeks and not too many months — to fully paper over the agreement,' said the senior administration official.
Last month, the White House hailed the Trump-von der Leyen handshake agreement as 'historic' and 'colossal' and said it would fundamentally reshape the transatlantic trading relationship. Though the partial deal left several issues for subsequent talks, Trump celebrated it as 'the biggest deal ever made.'
The agreement reached at Trump Turnberry, one of the president's Scottish golf courses, established a 15 percent tariff on most European goods. That figure is lower than the 50 percent tax that Trump had threatened. But it is far higher than the roughly 2 percent levy that European products traditionally faced.
The E.U. also agreed to purchase $750 billion worth of American energy products over the next three years and to invest an additional $600 billion in the U.S. Analysts reacted skeptically to those plans, noting that European leaders do not dictate private sector spending or investment decisions.
The White House expects private companies to follow through with the spending and investment plans with a focus on strategic sectors such as pharmaceuticals, semiconductors, automobiles and advanced manufacturing, according to the senior administration official.
U.S. and European diplomats in recent weeks traded proposed language for the statement. Commerce Secretary Howard Lutnick pressed the Europeans — without clear success — for changes in taxes and regulations that affect U.S. digital giants, such as Google, Apple, Amazon and Facebook.
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