Brussels: The European Union reached a preliminary agreement on Wednesday on legislation to eliminate tariffs on imports of US goods. This is a key element of the trade agreement reached with Washington in July and is likely to help avert higher US tariffs on EU products.
According to Yemen News Agency, under the terms of the agreement reached in Scotland in July, the EU agreed to eliminate import duties on US industrial goods and grant preferential access to US agricultural and marine products for EU markets, while the US imposes a 15% tariff on most of its goods. Nearly 10 months after the conclusion of this framework agreement, the European Parliament and the Council of the European Union, the body representing the governments of the EU member states, agreed to draft legislation to allow the tariff reductions to take effect.
After nearly five hours of negotiations, an agreement was also reached on provisions to suspend the implementation of these concessions if Trump reneges on the deal, and on a clause to terminate the agreement by the end of 2029 unless new legislation is passed to extend it. This internal EU agreement is expected to bring some calm to the world's largest trading relationship, which involves nearly $2 trillion in trade in goods and services annually.
This comes a week after Trump's visit to China, which was marked by friendly rhetoric but failed to produce any substantive progress. The bloc relies on Washington for about 20 percent of its goods exports, but Trump is determined to reduce the trade deficit in goods with the EU, which exceeds $200 billion, through tariffs. The American Chamber of Commerce in the European Union expressed its satisfaction with the agreement, stating that it represents a crucial step for companies that depend on stable transatlantic trade and investment relationships.
Trump said he intends to impose significantly higher tariffs on EU goods, including cars, unless the bloc fulfills its commitments under the trade agreement by July 4. He had previously threatened to raise tariffs on car imports from the EU to 25 percent from the current 15 percent. The EU is expected to implement the measure before Trump's July 4 deadline, with a final vote in the European Parliament anticipated in mid-June.