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The United States and the European Union reached an agreement on a trade framework this Sunday, concluding months of market uncertainty for industries and consumers on both sides of the Atlantic.
Key points of the agreement include:
– Nearly all European Union goods imported into the U.S. will face a standard tariff of 15%. This applies to products such as automobiles — which currently face a tariff of 27.5% — as well as semiconductors and pharmaceuticals. The 15% rate is the maximum and will not be added on top of existing tariffs.
– The U.S. will reveal the outcomes of its Section 232 trade investigations within two weeks and will decide the tariffs for semiconductors and drugs separately. Any future decisions on these sectors will be handled independently, according to European Commission President Ursula von der Leyen.
– Both the U.S. and EU will implement zero tariffs on all aircraft and their components, select chemicals, certain generic medications, semiconductor manufacturing equipment, some agricultural exports, natural resources, and critical raw materials. Additional products may be included in the future. The rules for spirits are still under discussion.
– Tariffs on European steel and aluminum will remain at 50%, though von der Leyen indicated these tariffs will eventually be reduced and replaced with a quota system.
– The EU committed to purchasing $250 billion worth of U.S. liquefied natural gas annually over the next three years, totaling $750 billion, as a replacement for Russian gas. The EU will also buy U.S. nuclear fuel.
– Under the terms of the deal, the EU has pledged to buy U.S. military equipment, and European companies are set to invest $600 billion in the U.S. during President Trump’s second term.
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