What remains after one year of the EU-US tariff deal

EU-US Trade: One Year After the Tariff Deal – and Many Open Questions

Tariffs, counter-tariffs and ever-new threats: The agreement between the EU and the US was meant to draw a line and provide certainty. Yet there is still no solution for all products. And Trump is already threatening again.

What did the EU and the US agree on?

EU Commission President Ursula von der Leyen and US President Donald Trump reached an agreement on 27 July 2025 at Turnberry in Scotland. However, negotiations over details continued for several weeks before a joint declaration on the bilateral trade agreement was finally issued on 21 August 2025.

Most European imports were subsequently subject to a maximum surcharge of 15 percent of the goods' value. Since the end of July, the flat-rate tariff on EU imports to the US has stood at ten percent, an EU Commission spokeswoman told the German Press Agency.

Brussels also made concessions under the bilateral agreement, abolishing EU tariffs on US industrial goods, for example, to avoid an escalation. Given the impulsive nature of policy under Trump, the EU later added an additional safety net: should the US fail to fully implement its commitments or suspend agreed arrangements, the EU's own concessions can likewise be suspended.

What is the current situation?

Citing allegedly insufficient measures against forced labour, President Trump imposed new tariffs on imports from 60 countries at the end of July. The EU was also affected – which is why the flat-rate tariff on EU imports currently stands at ten percent. Overall, the EU Commission does not see this as a deterioration of the situation – quite the contrary: all EU exports benefit from the new tariff rules either through a more favourable or an equivalent arrangement, the Brussels authority stated following the announcement.

In addition, tariff exemptions on imports from the EU – such as those for cork and diamonds – would be reinstated. These would be added to existing exemptions, such as those for aircraft and aircraft parts, generic medicines and active pharmaceutical ingredients. The announcement also provides positive impetus for working towards further tariff exemptions.

However, this does not apply to all products: there is still no solution for the tariffs of up to 50 percent on steel and aluminium, nor for the 25 percent rates on certain truck imports. And the automotive industry also faces a higher tariff rate: 15 percent applies there.

How does German business view the deal?

The Federation of German Industries (BDI) takes a divided view of the deal between von der Leyen and Trump. "The Turnberry deal has so far brought only limited stability for industry. The agreement was always a painful compromise," says Wolfgang Niedermark, a member of the BDI's executive management. "On tariffs for steel and aluminium products, there is renewed risk of an expansion of US measures after some temporary improvements," he cautioned.

There is also discontent from the automotive industry. "The current US tariffs of 15 percent on passenger cars and their parts continue to pose a noticeable challenge for the German automotive industry," said a spokesperson for the German Association of the Automotive Industry (VDA). He also criticized the fact that the "very high additional US tariffs on European commercial vehicles and their parts represent a significant burden for the companies affected." Before Trump took office, the tariff rate for passenger cars had stood at 2.5 percent.

Are there alternatives to US trade?

Since the beginning of Trump's second term, the EU has concluded bilateral trade agreements with Indonesia, India and Mexico, and the Mercosur agreement was also finalized.

However, these cannot replace the preeminent position of the United States: last year, the US and the EU exchanged goods and services worth around 1.8 trillion euros. That is more than in 2024 and corresponds to roughly 30 percent of world trade. Among the product categories that the EU exports most to the US are, alongside medical devices and pharmaceutical products, industrial machinery and road vehicles.

How great is the uncertainty?

Trump recently demonstrated how volatile he is in the case of Canada: after imposing a 25 percent tariff on nearly all goods last year — allegedly because the neighboring country was doing too little to combat drug smuggling across the border — Trump temporarily threatened a rate of 100 percent.

Most recently, he threatened an additional import duty of 50 percent on a range of products, only to scrap it just hours before the intended start date. These sudden reversals have long characterized Trump's erratic negotiating style and his policies, and are known by the acronym "TACO" — which stands for "Trump Always Chickens Out."

Nevertheless, there are recurring concerns about a new escalation: for example, Trump threatened "substantial tariffs" on imports from the European Union following a multibillion-euro EU fine against Google.

With material from dpa