Trade Update: U.S. and EU Set Tariff Rates for Key Sectors Including Autos and Pharma

After weeks of intense talks, Brussels and Washington reached an agreement on trade war US EU this month, establishing the 15% flat rate of EU exports that go to U.S. In the course of the agreement it was also agreed that EU members pledged to European Union also pledged to buy $750 billion worth of U.S. energy, and make at least $600 billion of investments within and within the United States.

Lumber, Tech, and Regulatory Measures

The key points of the agreement comprise its U.S. commitment to “apply the greater of the U.S. most Favored Nation (MFN) tariff rate or the tarif rate 15 percent which consists of the MFN tariff, plus the reciprocal tariff on products that originate from the European Union.”

On September 1st on, 1st, the U.S. will implement only MFN-related duties on a variety of EU products, which include “scarce natural resources (such as cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients, and chemical precursors.”

Pharmaceutical Sector

The pharmaceutical industry in Europe which is the biggest producer for U.S. pharma imports, will be subject to pharmaceutical tariffs of 15 15%. This is significant because it is not added to already existing US EU tariffs.

As of September 1st, the administration has accepted to apply its MFN drug pricing policy exclusively for generic pharmaceuticals. This policy change is designed to lower U.S. drug prices by making them more comparable to the less expensive costs of other developed nations.

Autos

It is worth noting that the U.S. and EU also declared an additional 15% tariff in the case of European automobiles and parts coming into the U.S. However, this will be in effect only if Brussels adopts legislation to cut the tariff policy 2025 of its citizens as per an official of the senior administration. The official said that the mere enactment of EU legislation to lower the auto industry tariffs is enough to initiate this arrangement.

As part of the framework for trade in July the EU has pledged to eliminate all “already low” duties on industrial products from the U.S.