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EU and US Finalize Trade Agreement, Avoiding 30% Tariff Threat

Updated: 2025-09-23 06:46 BST

Top Lines

EU and US sign trade agreement, averting 30% tariff escalation.
Agreement imposes 15% tariffs on most EU goods entering the US.
France criticizes deal as unbalanced; Germany and Italy express cautious support.

What Happened

On 27 July 2025, European Commission President Ursula von der Leyen and US President Donald J. Trump agreed on a framework for reciprocal, fair, and balanced trade between the EU and the US. This agreement was finalized on 21 August 2025, establishing a 15% tariff on most EU goods entering the US, thereby avoiding the previously threatened 30% tariff. However, critical sectors such as pharmaceuticals and steel remain unresolved. (policy.trade.ec.europa.eu)

Why It Matters

Economic Impact: The 15% tariff is expected to affect major EU exports to the US, including motor vehicles, pharmaceuticals, and industrial machinery. (apnews.com)
Political Reactions: France has strongly condemned the agreement, labeling it unequal and unbalanced. Germany and Italy have expressed cautious support, acknowledging the avoidance of further escalation but highlighting the deal's imperfections. (apnews.com)
Future Negotiations: The unresolved issues in sectors like pharmaceuticals and steel suggest that further negotiations may be necessary to address these critical areas.

Key Numbers / Facts

15% Tariff: New tariff rate on most EU goods entering the US.
30% Tariff: Previously threatened tariff rate that was avoided through the agreement.

Timeline (Today, 2025-09-23)

06:46 BST: Finalization of the EU-US trade agreement, imposing a 15% tariff on most EU goods entering the US. (policy.trade.ec.europa.eu)

Sources

European Commission – EU trade relations with United States — published 2025-09-23 06:46 BST
AP News – Reaction to the European Union's trade agreement with the Trump administration — published 2025-09-23 06:46 BST