EU agrees to implement US trade deal struck last summer

The EU has finally agreed to implement its trade deal with the US after five hours of talks between members of the European Parliament and member states in the hope of averting more tariffs threatened by Donald Trump.It means the agreement struck last July at the US president’s Scottish golf course can now enter into force, removing import duties on most US goods entering the EU.“This means we will soon deliver on our part,” said the European Commission president, Ursula von der Leyen, welcoming the pact. “Together, we can ensure stable, predictable, balanced and mutually beneficial transatlantic trade.”The agreement puts the bloc on track to meet Trump’s 4 July deadline for ratification of the deal, which has already been implemented in the US.The trade commissioner, Maroš Šefčovič, said of the talks that ended at about 2am in Brussels: “Collective effort. Strong result. Meaningful work. After more than five hours of intensive negotiations … the EU has shown that we are a reliable trading partner, while standing firm in defending the interests of European stakeholders.”MEPs had twice frozen the process to ratify the deal in protest at Trump’s threat of higher tariffs in January and then his threat to take control of Greenland.In a significant victory, MEPs forced the insertion of a clause warning that the EU could reinstall tariffs on American products such as motorbikes if the US did not drop tariffs on steel derivatives – products involving an element of steel – by the end of the year.Bernd Lange, the chair of the parliamentary trade committee, said this had been a “tricky” part of the negotiations that extended talks with the commission from midnight to 2am. He said the commission was “a little bit nervous about this issue”, an apparent reference to the fear of retaliation by Trump.Bar any further hiccups, the European Parliament will vote on the deal on 16 or 17 June, Lange said.Although the US supreme court has already ruled that Trump’s imposition of 15% tariffs on most EU exports was illegal, EU chiefs took the decision to honour the deal in an effort to stabilise the trading environment for businesses, including in the car industry, which had been hit with 27.5% tariffs.MEPs had demanded a sunset clause allowing the EU to end the deal on 31 March 2028 and a suspension clause if Trump broke his word and increased the 15% tariff rate.The transatlantic relationship is the EU’s most significant, worth more than €1.8tn in 2025.The final text empowers the commission to trigger the suspension mechanism if the US fails to meet its commitments or disrupts trade and investment with the EU, including by “discriminating against or targeting EU economic operators”.Lange said the final sunset clause was a year later than hoped for, but the end of the deal in May 2029 would coincide with a new presidential administration. He said the parliament would not hesitate to trigger the suspension clause if Trump breached his side of the deal before this date.He said the sunset clause was important addition to the deal that would help small and medium-sized businesses as there had been no impact assessment before the deal in Scotland.It gives the EU means to address spikes in US imports “that cause or threaten to cause serious injury to domestic producers”, with suspension again a possible outcome.The parliament agreed to scale back some demands, and the final text notably gives the US until the end of the year to reduce its 50% tariff on steel to 15% rather than insisting on it as a precondition.Lange played down the concessions extracted from lawmakers, declaring: “Parliament has prevailed with its demands for a comprehensive safety net.”Anna Cavazzini, of the EU’s Greens, said the deal “puts the EU at a disadvantage” while conceding “it can secure a certain degree of economic stability”. She said: “One can only hope that the agreement on the tariff deal will now calm the situation, so that other major issues in the EU-US relationship can be addressed.”