Europe strikes 'unbalanced trade deal': U.S. avoids import duties while Europe pays

©picture alliance/dpa | Michael Kappeler

It has taken a long time, but after 10 months of negotiations, the European Union has finally found a compromise on the implementation of the trade agreement already reached last summer with the United States.

From the European point of view, the deal is already being greeted with skepticism. After all, most American products will enter the European market without any import duty, while the European products will be subject to a 15% import tariff.

Last night, the European Parliament and the governments of EU countries reached an agreement on the precise details of the deal that European Commission President Ursula von der Leyen struck with U.S. President Donald Trump in July 2025. It was decided then that the US will impose a general import tariff of 15 percent on most European products. In return, Europe itself would not do so. Most American products would be allowed to enter the European market without an import tariff. The EU would also invest billions in the US as well as purchase US military equipment and energy. That deal was struck at lightning speed. President Trump stepped up the pressure to ratify the agreement quickly, before July 4, the 250th anniversary of the US.

The European Parliament and EU governments agreed to build in some security mechanisms and filed the sharp edges of the agreement. Consequently, the European Commission will be able to intervene effectively should Trump upset trade relations once again. If things change, Europe could raise import tariffs on U.S. imports. Similarly, if the U.S. does not reduce high tariffs on steel and aluminum to 15 percent or if U.S. imports increase so much that European producers run into trouble, Europe can intervene.

An important detail: the deal can be cancelled at the end of 2029. The timing more or less parallels the end of Trump's second term in the White House.

©picture alliance/dpa | Michael Kappeler