US drops tariffs on EU cars to 15%

The European automotive industry breathed a sigh of relief on Thursday as the US formally reduced its tariffs from 27.5% to 15%, in accordance with the trade agreement reached in July between the EU and the US.

A notice was published on the US federal register confirming that the measure will apply retroactively from 1 August, in accordance with US promises.

“I appreciate that implementation of our joint commitments is on track: car and parts tariffs down to 15% retroactively Aug 1, key exemptions from the cap Sept 1,” EU Trade Commissioner Maroš Šefčovič wrote on X, after a video call with his US counterpart Jamieson Greer.

The notice also implements tariff exemptions agreed for aircraft, certain pharma products and chemicals, and some natural resources.

Last July, the EU and US reached a trade deal after weeks of dispute which allows Washington to impose 15% tariffs on EU goods.

Talks on steel and aluminium to begin

However, negotiations between Washington and Brussels are far from over.

EU steel and aluminium remain subject to 50% tariffs, to the dismay of the sector, which is already struggling with an influx of overcapacity from Asia.

The tariffs were extended in August to 407 new product categories containing steel and aluminium.

In a joint statement published in August, the EU and the US committed to negotiating tariff rate quotas for the industry and to cooperate on the issue of overcapacities.

“With respect to steel, aluminium, and their derivative products, the European Union and the United States intend to consider the possibility to cooperate on ring-fencing their respective domestic markets from overcapacity, while ensuring secure supply chains between each other, including through tariff-rate quota solutions,” the joint statement said.

However, the talks on steel and aluminium seem just to be starting.

“My next focus: jumpstarting our strategic collaboration on steel,” Šefčovič said on X.