EU-US Trade Deal: Section 1

Arne Mielken
Sep 1, 2025
4 min read

🔒 The EU proposes duty reduction in line with Section 1 of the EU-US deal.

New US-EU trade agreement introduces a 15% tariff, impacting customs, compliance, and import/export strategies.

On 21 August 2025 the EU and the US issued a Joint Statement on transatlantic trade and investment.

These EU's tariff reductions are outlined in Section 1 of the EU-US Joint Statement.

Two Act Proposals

The European Commission has introduced two proposals to facilitate the implementation of the EU-US Joint Statement from August 21, 2025.

Act One Proposal

The Text of the proposal (1) concerns a proposal to eliminate tariffs on US industrial goods and provide preferential market access for a range of US seafood and non-sensitive agricultural goods.

Act Two Proposal

The Text of the proposal (2) proposes to prolong the tariff-free treatment of lobster, now including processed lobster.

Section 1 of the EU-US Trade Agreement

"The European Union intends to eliminate tariffs on all US industrial goods and to provide preferential market access for a wide range of US seafood and agricultural goods, including tree nuts, dairy products, fresh and processed fruits and vegetables, processed foods, planting seeds, soybean oil, and pork and bison meat. The European Union will immediately take the necessary steps to extend the Joint Statement of the United States and the European Union on a Tariff Agreement announced on 21 August 2020, with respect to lobster (that expired 31 July 2025), coupled with an expanded product scope to include processed lobster."

U.S. Commitment on cars & automative parts

According to Section 3 of the EU-US Joint Statement, the US is set to enforce the agreed 15% tariff cap on EU cars and car parts. The reduction in tariffs from 27.5% to 15% is anticipated to take effect on the first day of the month when the European Union's legislative proposals are introduced, specifically 1 August 2025.

Here’s Section 3 simplified into clear bullet points:

The US will cap tariffs on EU pharma, semiconductors, and lumber at a maximum of 15% (MFN + Section 232 combined).
Once the EU introduces its own tariff-cutting legislation:
- No extra 232 tariffs on EU cars and car parts if the MFN tariff is already 15% or higher.
- If the MFN tariff is below 15%, the US will apply a combined 15% rate (MFN + Section 232).
These tariff cuts will start the same month the EU’s legislation is introduced.
The US expects the EU’s law to fully match the framework deal.
Any US tariff changes will be done in a way that protects US national security.
On steel and aluminium, both sides may work together to block global overcapacity while keeping supply chains secure, possibly using tariff-rate quotas (TRQs).

Zero or near-zero tariffs to certain EU product categories

The US has also pledged to apply zero or near-zero tariffs on specific product categories, with only the most-favoured nation (MFN) tariff applicable, starting 1 September. This includes unavailable natural resources such as cork, all aircraft and aircraft parts, generic pharmaceuticals and their ingredients, and chemical precursors. Both parties have agreed to work on further expanding this list.

The 19 Sections of the EU-US Trade Deal

EU removes tariffs on US industrial goods, expands agri-food access, and renews the lobster deal with wider scope.
US applies MFN or 15% tariffs on EU goods, with MFN-only for cork, aircraft, pharma, and precursors from Sept 2025.
US caps Section 232 tariffs at 15% and ties auto tariff cuts to EU legislative action, while considering steel/aluminium TRQs.
US and EU to negotiate rules of origin to keep trade benefits within both markets.
EU to buy $750bn in US energy and $40bn in AI chips through 2028 while aligning tech security rules.
EU firms to invest $600bn in US strategic sectors by 2028 to reinforce transatlantic partnership.
EU to increase procurement of US defence equipment to strengthen NATO cooperation and interoperability.
US and EU to mutually recognise auto standards, expand conformity assessments, and deepen technical standards cooperation.
US and EU to reduce agri-food barriers by streamlining pork and dairy sanitary certification.
EU to address US concerns on its deforestation law to avoid negative impacts on transatlantic trade.
EU commits to ease CBAM burden on US SMEs with added flexibilities beyond the de minimis exception.
EU to reduce burdens from CSDDD and CSRD, reconsider liability and climate obligations, and limit extraterritorial impacts.
EU reaffirms US conformity bodies as Notified Bodies and both sides commit to a cybersecurity MRA.
US and EU to cooperate against third-country export restrictions on critical minerals and similar resources.
US and EU to negotiate high-standard IP rights protection and enforcement commitments.
US and EU to ensure strong labour rights protection, including eliminating forced labour from supply chains.
EU confirms no network usage fees, both commit to WTO e-commerce moratorium and no digital duties.
EU to consult US on digitalisation of trade procedures and implementation of EU Customs Reform.
US and EU to align on supply chain resilience, investment reviews, export controls, duty evasion, and fair procurement.

Next Steps

The Parliament and Council will now have to approve the two proposals under the ordinary legislative procedure before the EU's tariff reductions can enter into force.