Washington (TIP)- The United States and European Union say they’ve agreed on the details of a trade deal that would keep tariffs high for now on European vehicles and lower them on computer chips, but it will take weeks — or months — of additional negotiations to iron out remaining issues.
White House officials hailed a joint statement released on August 21 in Washington and Brussels 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, which traditionally have faced levies of little more than 2 percent.
The increased import tax is expected to mean higher prices for Americans on European medicines, French perfumes, Italian wines and other items.
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, such as bison.
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. European officials have pushed to get those promises in writing during weeks of back-and-forth talks.
Since the deal was announced, the 27-nation E.U. has sought to poke holes in Trump’s blanket tariffs by negotiating carve-outs for its top industries. The bloc has secured some exemptions, such as for aircraft and parts.
But wine and spirits — a flash point in trade talks and key exports for countries like France and Italy — have not been spared, E.U. officials said Thursday, much to the dismay of the industry on both sides of the Atlantic. Americans previously were able to import alcohol products from Europe without paying any U.S. tax.
The E.U.’s trade commissioner, Maros Sefcovic, said negotiators would keep trying to bring down levies on booze and other sectors, including steel and aluminum.
The agreement is “truly impactful at a time when the trade landscape has completely changed. … But this is not the end, it is the beginning,” Sefcovic said.
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, which Trump blames for hollowing out American factory towns.
“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, who spoke on the condition of anonymity under ground rules set by the White House.
Still, the joint statement, which is not a legally binding document, was replete with provisions that will require additional bargaining. E.U. officials described it as “a blueprint.”
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 ” barriers to trade involving electronic transmissions 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.