Trump's Tariff Agreement Offers European Automakers an Unexpected Advantage, While Another Sector Suffers | Carscoops

      A comprehensive trade agreement reduces car tariffs while leaving other European sectors behind as the EU pledges billions for US imports.

      The EU must initiate the process of increasing imports from the US.

      The Union has committed to buying $750 billion in energy supplies by 2028.

      European car manufacturers are breathing easier, despite the fact that Trump's measures have affected their profits.

      European automakers have received a much-appreciated break, as the tariffs imposed by the US will be lowered to 15 percent, retroactively effective from August 1. This development follows a new trade agreement reached between the United States and the European Union in late July, just three weeks prior.

      Before President Donald Trump's return to the Oval Office, EU tariffs had been set at a mere 2.5 percent. However, car manufacturers recently faced tariffs of 27.5 percent, and before last month's agreement, Trump had threatened to impose sweeping 30 percent tariffs on most major industries.

      Read: US And EU Reach Mega Trade Deal That Could Shake Up The Auto Industry

      Automobiles were initially excluded from the new 15 percent base tariff following Trump’s conversation with European Commission President Ursula von der Leyen, but they have now been confirmed as eligible for this reduced tariff.

      In return for the US agreeing to apply these lower tariffs retroactively from August 1, the European Union will eliminate tariffs on all US industrial goods and must offer preferential market access for US seafood and agricultural products. This includes tree nuts, dairy items, fresh and processed fruits and vegetables, processed foods, planting seeds, soybean oil, and pork and bison meat.

      Additionally, the EU plans to purchase liquefied natural gas, oil, and nuclear energy from the United States, amounting to $750 billion by 2028. Moreover, it intends to acquire at least $40 billion in AI chips from American companies for its computing centers and has pledged to “substantially increase” its procurement of military and defense equipment from the United States.

      On its end, the US will only implement the lower 15 percent tariffs on European automobiles once the EU begins the legislative process to import selected goods. According to European Union trade commissioner Maros Sefcovic, the bloc is “working very hard” to finalize this process.

      However, the outlook is less favorable for Europe’s wine and spirits sector, which exports $9 billion worth of products to the US annually. The EU had sought an exemption for this industry to reduce tariffs to zero but was unable to achieve that goal.