The EU holds its breath as 1 August US tariff deadline looms

A few days after the political agreement struck between the EU and the US, the European Commission is still awaiting executive orders from Washington setting in concrete the deal agreed by handshake by Commission President Ursula von der Leyen and President Donald Trump — which would spare Europeans from higher tariffs.

“It is the clear understanding of the EU that the US will implement the agreed across-the-board tariff ceiling of 15%. It is also our clear understanding that the US will implement the exemptions to the 15% ceiling as outlined by President von der Leyen last Sunday,” Commission spokesperson Olof Gill said on Thursday.

“The US has made these commitments. Now it's up to the US to implement them. The ball is in their court,” he added. 

The Commission expects the White House to issue executive orders before 1 August replacing the current tariffs — 25% on EU cars and 10% on all EU imports — with the 15% rate agreed on 27 July. This would provide relief to a strategic sector like the automotive industry and avoid the 20% so-called “reciprocal” tariffs Trump had threatened to apply at the beginning of April.

However, the US tariffs of 50% on steel and aluminium are expected to remain in place, as this strategic sector is still under negotiation, with the EU hoping to obtain a quota system with lower tariffs.

“I don't expect this new quota system to be in place by tomorrow,” Gill said, “we're working on it and our intention is to have something ready and workable as soon as possible.”

Joint statement

Among the exemptions, the EU has secured 0% rate for aircraft. Von der Leyen on Sunday also announced that zero-for-zero tariffs will apply to certain chemicals, generic drugs, semiconductor-making equipment, some agricultural products, some natural resources and critical raw materials.

It remains to be seen whether all the products will be covered by the executive orders. The Commission said however on Thursday that wine and spirits will not be among the exemptions, negotiation on this strategic sector being still ongoing.

A joint statement is also being negotiated. However, differing interpretations of the deal struck on Sunday between the EU and the US could delay its publication.

Views diverge sharply across the Atlantic on what the US calls “non-tariff barriers” to its exports, namely EU digital regulation and phytosanitary rules. While the US is pushing for these to be eased, the EU continues to firmly assert its sovereignty over its legislative powers.

The wording of the  EU’s commitments to purchase US energy, weapons as well as its investment commitments is also expected to be the subject of tough negotiations.