Tariffs:
1. US to impose 15% tariffs on most EU imports
2. US to lower auto tariffs once the EU passes matching tariff-cut legislation
3. From Sept 1, US will apply only MFN tariffs on EU aircraft/parts, generics, chemical precursors, and scarce natural resources
4. EU to eliminate tariffs on all US industrial goods and grant preferential access for US seafood/agriculture
Energy & Tech Purchases:
1. EU to buy $750B in US LNG, oil, and nuclear products
2. EU to purchase at least $40B in US AI chips
Investment & Cooperation:
1. EU firms to invest $600B in US strategic sectors by 2028
2. Both sides to negotiate rules of origin to ensure benefits remain bilateral
3. Exploring cooperation on steel and aluminum market protections
4. Joint commitment to tackle digital trade barriers; EU pledges not to adopt network usage fees
5. Considering measures for secure supply chains, including tariff-rate quota solutions
This trade deal, announced on August 21, 2025, marks a historic shift from decades of stalled U.S.-EU negotiations, driven by a 15% U.S. tariff on EU imports and a $750 billion EU commitment to U.S. energy, reflecting a strategic pivot amid Europe’s reduced reliance on Russian gas (down to 19% of imports in 2024 per Consilium data).
The inclusion of a $40 billion EU purchase of U.S. AI chips highlights a geopolitical race for technological dominance, with xAI’s planned 1 million Nvidia GB200 chips (Carnegie Endowment) underscoring the stakes, though rushed deals risk offshoring critical industries to misaligned partners.
The agreement’s focus on MFN tariffs and reciprocal tariff cuts, backed by the WTO’s definition of non-discriminatory trade, challenges prior protectionist policies, potentially reshaping global supply chains but raising concerns about enforcement given past U.S.-EU trade disputes.
