Global Daily Tax News, EU, US Flesh Out Tariff Deal Outlined In July, (Aug 22, 2025)

The EU and US have issued a Joint Statement establishing a framework for "fair, balanced, and mutually beneficial" transatlantic trade and investment.

The Joint Statement confirms and builds on the political agreement reached between the bloc and the United States on July 27.

The Joint Statement lays out in detail the new US tariff regime towards the EU, with a clear maximum, all-inclusive, tariff rate of 15 percent for the vast majority of EU exports, including strategic sectors such as cars, pharmaceuticals, semiconductors, and lumber.

Sectors that are already subject to Most Favoured Nation (MFN) tariffs of 15 percent or above will not be subject to additional tariffs.

Further, the agreement confirms the 15-percent tariff rate for EU cars and car parts, while the EU would implement its commitment to lower tax on US-made vehicles, having earlier pledged a 2.5 percent rate.

The EU said certain product groups will benefit from a special regime, with only MFN tariffs applying, with effect from September 1, 2025. These include unavailable natural resources (such as cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors.

Both sides have agreed to continue to "ambitiously work to extend this regime to other product categories", the EU said.

Meanwhile, the European Union intends to eliminate tariffs on all US industrial goods and to provide preferential market access for a wide range of US seafood and agricultural goods, including tree nuts, dairy products, fresh and processed fruits and vegetables, processed foods, planting seeds, soybean oil, and pork and bison meat.

In relation to the Carbon Border Adjustment Mechanism, the Statement adds: "Taking note of the US concerns related to treatment of US small and medium-sized businesses under the CBAM, the European Commission, in addition to the recently agreed increase of the de minimis exception, commits to work to provide additional flexibilities in the CBAM implementation."

CBAM – a climate measure – will put a carbon price on imports that corresponds to what would have been paid had the goods been produced in the EU. With the EU set to ramp up taxes on harmful emissions, the measure is intended to reduce the risk of carbon leakage by encouraging producers in non-EU countries to green their production processes, as well as encouraging other states to implement similarly ambitious environmental tax policies.

CBAM is intended to prevent the emissions reduction efforts of the Union being undermined by the relocation of production to non-EU countries or the increased importation of carbon-intensive products.