What have the EU and US agreed to in their trade agreement?

Washington and Brussels have reached a trade pact with a clear headline: the EU gives in and accepts a 15% tariff on its exports to the US, the highest rate applied in decades. The European Commission thus gives in after months of negotiations to avoid a punishment that seemed much heavier, given the repeated pressure and ultimatums from the White House in recent months. The level of the tariff was surely the most anticipated announcement and constitutes the central core of the pact. However, there are other significant clauses. On the one hand, an exemption has been established for certain goods; on the other, the EU commits to purchasing energy products, such as oil and gas, from the North American giant for $750 billion. Furthermore, and although it is not expected to be written into the agreement, the EU agrees to increase its arms purchases from the US to meet the new objectives set by NATO and to boost its companies' investments in the United States.

Below are some questions and answers about the agreement.

Does the 15% affect all exports?

No, although the volume of affected products will be very large: the 15% tariff will affect around 70% of EU exports to the United States. US imports, for their part, will not be affected by higher tariffs. On the contrary, it has been agreed that the EU will lower tariffs on some goods. Pending a detailed list, this category would include certain agricultural and fishery products, such as nuts and raw and processed fish, automobiles, machinery, some chemical products and fertilizers, cheeses and other dairy products, and pet food.

Will some products be subject to a higher tariff?

The 15% tariff will generally apply to all European exports to the US. However, some products will be hit harder. This is the case for steel and aluminum and their derivatives. These items were already subject to a 50% tariff before negotiations between the two blocs began in mid-April, just days after US President Donald Trump kicked off his trade war with the announcement of a universal tariff. In principle, this rate will remain in place, although EU sources clarify that talks are still ongoing.

Cars, on the other hand, have managed to avoid the additional surcharge they had been subject to. The automobile and components industry, a strategic sector for the major European economy, Germany, was previously burdened with a tariff of 27.5%. Under the new agreement, the general tax of 15% will apply.

Are there any exempt assets?

The 30% of European exports not subject to tariffs include some products the US needs to import to meet its demand and others considered strategic, to which zero tariffs will technically apply. The EU has not yet published an exhaustive list, and community sources assure that negotiations on certain items are still ongoing. European Commission President Ursula von der Leyen announced on Sunday that this package will include "all aircraft and their components, certain chemical products, semiconductors, some agricultural products, natural resources, and critical raw materials."

Pharmaceutical products represent a separate area of concern, one that remains uncertain. Initially, they will not be included in the initial list of goods subject to the 15% tariff, although the US, which is conducting an investigation into these items, does not rule out the possibility of them being subject to the tariff in the future.

What has the EU committed to buying from the US?

A key part of the agreement is Brussels' commitment to import billions of dollars' worth of energy products from the US. Under the pact, the EU will purchase liquefied natural gas, oil, and nuclear technology (such as reactors) worth $750 billion (about €640 billion) during the remainder of Trump's term, equivalent to about €250 billion a year.

There is also an understanding on arms purchases. Strictly speaking, the trade agreement does not oblige the EU to purchase weapons from the United States, but Brussels recognizes that, following the NATO summit held at the end of June, which raised the bar for defense spending to 5% of GDP, member states' allocations will have to be accelerated, and this move will inevitably benefit Washington, whose arms companies are giants in the sector.

Washington and Brussels have also agreed that European companies will invest 600 billion euros in the US economy. This latest figure is the result of contacts and discussions the European Executive has held with member state companies regarding their investment intentions, according to EU sources, who point out that the EU does not have the legal capacity to guarantee these amounts.

When will the rates come into effect?

Next Friday, August 1, the EU and the US will issue a joint statement outlining the main elements of the agreement. Brussels expects Washington to give the green light that same Friday to an executive order implementing the 15% tariff.

Is Brussels considering retaliation?

No. Once the joint declaration is issued, Brussels will have to seek the support of the member states to give the pact legally binding force. The agreement is not expected to be rejected. If this were to happen, the outlook would change, and the EU would be free to retaliate. The US could also increase its tariff penalties.