The European Parliament has given its final approval to implement last July’s tariff agreement with Donald Trump, clearing the way for the deal to take full effect and averting the threat of higher US duties that would have been triggered if ratification had not been completed by 4 July.
Under the agreement, the United States will apply a 15% tariff on most EU exports, while the European Union has cut import duties on a range of American goods — including some agricultural products and a wide selection of seafood — to 0%. The deal is intended to restore stability to transatlantic trade, which exceeded €1.6 trillion in 2024, and is expected to save EU importers and consumers roughly €5 billion in duties annually.
MEPs approved the main regulation with 440 votes in favour, 151 against and 50 abstentions, but attached two significant provisos designed to protect European industry and give Brussels leverage in ongoing disputes over US tariffs on steel and aluminium.
Sunset clause and steel conditions
The first proviso is a “sunset clause” that will cause the agreement to expire on 31 December 2029 unless it is renewed by both sides. The date was deliberately set to fall after the end of Donald Trump’s current presidential term, giving the next administration — or a re-elected one — time to negotiate a successor deal.
The second proviso sets out clear conditions for tariff reductions on products that contain steel and aluminium. These tariffs were imposed by the Trump administration under Section 232 of the Trade Expansion Act, which allows import restrictions on national security grounds, rather than under the separate “Liberation Day” tariff regime launched last April. The steel and aluminium disputes have been among the most contentious elements of the broader trade relationship. European steel exports to the US fell by 34% year-on-year after American tariffs of up to 25% were imposed in March 2025, and some US duties on steel derivatives have remained as high as 50% despite the 15% ceiling agreed in last July’s framework.
Under the text voted on by MEPs, the European Commission will have the power to suspend tariff preferences for US goods if the United States continues to apply tariffs on steel derivatives above the 15% level beyond 31 December 2026. The Commission is required to report to the Parliament on this matter by 1 December 2026. A safeguard mechanism has also been established allowing Brussels to investigate and counter any import surges that threaten serious injury to EU industry or agriculture.
Background and ratification process
The framework of the deal was agreed nearly a year ago at Donald Trump’s Turnberry golf course in Scotland. The United States implemented its side of the agreement immediately last summer, a swiftness that contrasted sharply with the EU’s democratic ratification process, which has been described as having “baffled” the US administration. The European Parliament’s vote came after MEPs had suspended ratification twice through the international trade committee: first in protest against Trump’s threat to impose higher tariffs in January, and then over his public threat to take over Greenland.
EU leaders are expected to formally adopt the deal when they meet in Brussels on Thursday, with member states due to give their final approval on 26 June.
The European Commission is also required by the Parliament to conduct an assessment of the impact of the 0% tariffs on US agricultural goods and on small- to medium-sized businesses by 30 June 2029 — six months after the end of Trump’s current term. The Commission will report its findings to the Parliament.
Wider trade context
The US Supreme Court has already ruled that the 15% tariff at the heart of the deal is illegal, but the EU agreed to maintain the agreement in an attempt to provide stability for businesses and industry. The US goods trade deficit with the EU stood at $235.6 billion in 2024.
Other trade tensions persist. Trump has threatened fresh tariffs on French wine in response to France’s digital services tax, and US complaints over EU digital regulation and digital services taxation in individual member states remain unresolved. The EU has previously retaliated against US steel tariffs by reinstating suspended duties, including measures targeting €6.4 billion of US goods in 2018 and an additional €40 million of derivative products in January 2020.
Alongside the tariff agreement, the EU has committed to procuring US liquefied natural gas, oil and nuclear energy products valued at $750 billion over the next three years, aiming to replace Russian supplies, and European companies are expected to invest an additional $600 billion in the United States through 2028. The deal also prolongs tariff-free treatment for US lobster imports, including processed lobster products.
European Commission President Ursula von der Leyen said: “A deal is a deal – and the EU is delivering its part.”
