EU agrees to implement last year’s US trade deal after Trump threats

After nearly a year of fluctuating trade tensions, the European Union reached an agreement Wednesday to implement its side of a trade pact with the U.S., seen as a crucial step in de-escalating the tariff disputes sparked by President Donald Trump.

Hailing the “good news,” German Chancellor Friedrich Merz said it showed the bloc was “delivering on its commitments” and bringing “security and stability” for European businesses – which faced a new Trump tariff threat unless the deal kicks in by July 4.

The 27-nation bloc struck an accord with Washington last July, setting levies on most European goods at 15%, but to Trump’s frustration, it had yet to make good on its pledge to scrap levies on most U.S. imports in return.

Negotiators from the EU’s parliament and capitals wrangled late into the night in Strasbourg, finally emerging long after midnight with news of an agreement to move forward.

“This means we will soon deliver on our part,” EU chief Ursula von der Leyen said on social media, calling for the implementation process to be quickly finalized as Trump’s deadline looms.

“Together, we can ensure stable, predictable, balanced, and mutually beneficial transatlantic trade.”

The EU agreement puts the bloc well on track for ratification by July 4 – short of which the U.S. leader threatened “much higher” tariffs and already vowed to raise duties on European cars and trucks from 15% to 25%.

Trump’s tariff blitz targeting steel, aluminium, car parts and other sectors hit the bloc hard before the deal struck with von der Leyen in Turnberry, Scotland last year – and has jolted it to cultivate trade ties around the world.

But the EU cannot afford to neglect the 1.6-trillion-euro ($1.9-trillion) relationship with the U.S., its largest trade partner.

‘Get what you need’

The EU parliament gave the deal a conditional green light in March, after months of delay caused by Trump’s designs on Greenland and a U.S. Supreme Court ruling striking down many of the president’s tariffs.

Parliament was under pressure to drop several amendments the Americans considered unacceptable, but trade committee head Bernd Lange – whose job was to hammer out a stance between haggling factions – played down the concessions extracted from lawmakers.

“One of my favorite songs from the Rolling Stones is, ‘You can’t always get what you want’. But if you try, you will get what you need – and indeed, we got what we need,” he told reporters at a press conference on Wednesday.

“We need a safety net in the relation with the United States,” Lange said, calling U.S. trade policy under Trump “totally unsecure and unpredictable.”

Among the safeguards built into the final text, the European Commission can move to suspend the accord if the U.S. fails to meet its commitments or disrupts trade and investment, including by “discriminating against or targeting EU economic operators.”

It also gives the EU means to address spikes in U.S. imports “that cause or threaten to cause serious injury to domestic producers,” with suspension once again a possible outcome.

There were clear compromises too, with the text notably giving the United States until the end of the year to drop surtaxes above 15% on steel components, rather than making it a precondition as parliament wanted.

Another concession was over so-called “sunrise” and “sunset” clauses under which the EU side of the accord would kick in once the U.S. makes good on its pledges, and would expire unless renewed in 2028.

The sunrise clause was removed altogether, while the sunset was pushed back to the end of 2029.

The pan-European agri-business group Copa-Cogeca welcomed the overall deal as a “step towards greater certainty for farmers” but vowed to remain vigilant over potential ill-effects.

Similarly, Germany’s auto industry association VDA broadly welcomed the agreement but also warned the safeguards risked upsetting the apple cart with the U.S. side – calling for matters to now be finalized “as quickly as possible.”

DAILYSABAH