The ratification of a trade pact between the United States and the European Union may be imminent after President Donald Trump this week revised U.S. duties on key import categories.
On Thursday, the one-year anniversary of “Liberation Day” and Trump’s Rose Garden announcement of double-digit duties for dozens of U.S. trading partners, the White House announced changes to tariffs on metals and pharmaceuticals. The president said he would impose duties on certain name-brand drugs at rates up to 100 percent, while revising the way tariffs are assessed on steel an aluminum from producers across the globe.
This spells good news for the EU and other countries that have, or are on their way to finalizing, trade deals with the U.S., as they will be subject to lower tariff rates on pharma products. The EU—along with Switzerland, Japan and South Korea—will see a rate of 15 percent on such exports to the U.S. market, while certain drugs from the United Kingdom will see 10 percent duties.
The move has alleviated some of the agita felt by EU lawmakers, who pressed pause on ratifying the handshake pact made between Trump and European Commission President Ursula von der Leyen at the U.S. president’s golf course in Turnberry, Scotland last July following the Supreme Court ruling that invalidated much of Trump’s tariff platform in February. They, along with trade officials from India and the U.K., felt that the dissolution of the International Emergency Economic Powers Act (IEEPA) tariffs thrust their established trade frameworks into question.
The EU deal, which saw mixed reactions from the 27-member bloc when it was announced, imposes 15 percent tariffs on a plethora of European products, supplanting Trump’s earlier threat to tax EU imports at 30 percent. Europe agreed to draw down its tariffs on American products to zero, and to purchase $750 billion in energy from American sources and to invest $600 billion into the U.S. economy.
Bernd Lange, chair of the European Parliament’s International Trade Committee, who has been a key player in the negotiations, told Politico that this week’s developments make the completion of the deal a likelier outcome. He told the outlet, however, that the U.S. had done away with previous 50 percent tariffs on many steel products like motorcycles, which face the agreed-upon 15 percent duty. However, certain categories still face a 25 percent special rate.
The steel and aluminum tariffs remain a sticking point, but “The U.S. is increasingly adopting a stance of not further breaching the Scotland Deal,” he said. The trade bloc “wanted a little bit more, so let’s see,” he added.
