“The EU is the only one with an all-inclusive tariff cap like this. Fifteen per cent and nothing extra”, defended the President of the European Commission, Ursula von der Leyen, in an op-ed published on Sunday 24 August in the Belgian newspaper L'Écho and other European newspapers. She defends the agreement reached with the United States on 28 July (see EUROPE 13689/1), which was subsequently translated into a non-binding joint declaration on 21 August. In her opinion, the agreement is “imperfect”, but “solid”.
The President of the European Commission is thereby responding to the many criticisms levelled at the terms of the new transatlantic relationship. And with good reason: until the beginning of 2025, most economic sectors benefited from tariffs of less than 5%.
When the UK reached an agreement with Washington in May, the 10% rate agreed between the two partners was described as “unacceptable” by the majority of European countries. Since then, the Commission has convinced them that the 15% horizontal tariff is the best available option.
Best possible treatment. The President of the European Commission is now even boasting about a more favourable treatment than other countries thanks to the 15% cap granted to the EU. Her reasoning is based in particular on the British example: although the agreement concluded between London and Washington sets a rate of 10% – which also includes the most-favoured nation (‘MFN’) tariff – this would not be the case if this basic ‘MFN’ rate is higher than 10%. In other words, certain British exports will be subject to customs duties of more than 10%, or even 15% for the most heavily taxed products. For example, America’s MFN rate for some fabrics is up to 25%.
In addition, the EU has negotiated a treatment capped at 15% irrespective of the future tariffs that the US administration will impose on the rest of the world following investigations into the pharmaceuticals, semi-conductors and timber sectors. It is a kind of “insurance policy” that the EU has negotiated, in the words of a senior European official. Washington is expected to impose new customs duties on pharmaceutical products in the near future.
Ongoing concerns. However, these guarantees are not enough to reassure European exporters, whose fate remains unclear. On 28 July, Mrs von der Leyen announced a future reciprocal exemption from tariffs on certain agricultural products. Representatives of the sector are regretful that this promise has still not been fulfilled.
Especially since American agri-food products benefit from increased market access thanks to the agreement “while EU producers are left facing higher tariffs, now rising to 15%, on key export products”, denounced the European agricultural organisations Copa-Cogeca.
Brewers of Europe, the representative of brewers in Europe, also fears the consequences for its sector, which will be doubly affected, since beer cans are also subject to tariffs on aluminium-derived products.
Steel and aluminium, as well as products that contain them, are still subject to a 50% duty until further notice. The list of derivatives has even been extended by the US administration in recent days.
European and American negotiators have been tasked with setting tariff quotas for European steel and aluminium, below which the MFN rate will apply, instead of the current 50%.
Axel Eggert, Director of Eurofer, which represents the sector in the EU, is nonetheless concerned about the lack of a timetable for implementing the new quotas: “No deadline is set and we already see the huge delay, for instance, in the implementation of the US-UK deal”.
See the joint EU-US declaration: https://aeur.eu/f/i4j (Original version in French by Léa Marchal)