A new transatlantic start: the new trade framework agreement between the EU and the USA

The European Union and the United States have published a declaration that creates a new framework for transatlantic trade and puts economic relations between the EU and the US on a new footing. The aim is mutual, fair and balanced trade, supported by tariff reductions, the elimination of technical barriers to trade and common standards for sustainability and investment. The framework agreement is a strategic step towards strengthening the transatlantic partnership in times of global uncertainty.

Customs

A central component of the agreement is the realignment of customs policy.

The USA is introducing a standardised tariff rate of 15% for most EU exports. For certain strategic products such as aircraft parts, generic medicines and critical raw materials, the regular MFN (Most Favoured Nation) tariff will remain in place. The MFN tariff is a principle of international law that applies within the framework of the World Trade Organisation (WTO). According to this principle, a WTO member must grant all other WTO members the same tariff concessions that it grants to an individual member - in other words, it may not apply discriminatory tariff rates.

In return, the EU will abolish all tariffs on US industrial goods and facilitate market access for selected agricultural and fishery products. These include processed foods, vegetable oils and meat products. Once the EU has abolished these tariffs, the US will ensure that tariffs under Section 232 of the Trade Expansion Act of 1962, which applies to goods originating in the EU, do not exceed 15%. Graduated regulations apply to vehicles and vehicle parts, depending on the respective MFN rate. In the area of steel and aluminium, tariff quota solutions are to be introduced in future in order to limit overcapacity and strengthen security of supply.

The EU and the US also want to develop common rules of origin to ensure that the trade benefits agreed upon primarily benefit the contracting parties. The EU will also exchange views with the US and US traders on the digitalisation of trade procedures and the implementation of the EU customs reform currently being discussed in the trilogue procedure.

Non-tariff barriers to trade

The parties are also aiming for closer regulatory cooperation. In the industrial sector, particularly for vehicles, the mutual recognition of technical standards is to be expanded. Conformity assessment is also to be simplified in order to avoid duplicate testing. In the agricultural sector, the aim is to simplify health certificates for certain meat and dairy products in order to facilitate trade and reduce administrative hurdles.

Green Trade Regulation

Sustainability and environmental standards also play a central role in the agreement. The EU is examining the impact of its regulation on deforestation-free products (EUDR) on US exports and wants to mitigate negative effects. Additional exemptions for small and medium-sized US companies are to be created as part of the Carbon Border Adjustment Mechanism (CBAM). The EU also wants to reduce the burdens of the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) for third-country companies with equivalent standards, thereby strengthening transatlantic trade in particular. Both sides also want to work together for strong protection of internationally recognised labour rights, including the elimination of forced labour in supply chains.

Export control and FDI

Both parties also want to work together more closely on inbound and outbound investment screenings and export controls. The aim is to prevent circumvention strategies and better protect sensitive sectors.

Miscellaneous

Other points in the framework agreement include the energy, defence and digitalisation sectors. For example, the EU has committed to purchasing large quantities of US energy products worth USD 750 billion, including LNG and nuclear energy, in order to reduce its dependence on third countries. European companies are also to make extensive investments in the USA totalling USD 600 billion, particularly in strategic sectors such as semiconductors, AI and infrastructure. The EU will expand its military procurement from the US in order to strengthen interoperability within NATO. An agreement on mutual recognition in the area of cyber security is also planned. In digital trade, both sides want to waive network charges and maintain the duty-free transfer of electronic data.

Next steps

The EU will soon present legislative proposals to implement the agreed customs measures. It remains to be seen whether the EU Parliament will approve these proposals unchanged. However, as soon as these have been adopted as agreed, the US customs facilitations will come into force. The first reductions for certain product groups are set to take effect from 1 September 2025. Further negotiations on rules of origin, investment protection and sustainability standards are planned. However, it is still completely open as to whether and how the regulations could look here.