On Sunday, 27 July, European Commission President Ursula von der Leyen met with US President Donald Trump in Scotland to advance discussions on EU-US trade relations ahead of the 1 August tariff implementation deadline set by the US administration. During the meeting, Trump indicated that, should an agreement be reached, this would be “the end of it for a number of years.”
A preliminary 15% tariff framework agreement was reached, under which the EU commits to purchasing $750 billion of energy and investing an additional $600 billion in military equipment. However, in the European Commission’s technical briefing on Monday, 28 July, it was noted that the $600 billion investment pledge is simply an “intention,” not a “guarantee.” An official stated, “It’s not something the EU, as a public authority, can guarantee – it’s something based on the intention of private companies.”
On Thursday, 31 July, US President Donald Trump signed an executive order, formalising tariffs of 15% on EU goods shipped to the US. The new duties will not go into effect on the originally stated date of 1 August. Instead, they will be implemented on 7 August, giving countries another window to negotiate.
Key details concerning the pharmaceutical sector, as well as semiconductors and other areas, are still under discussion. EU Trade Commissioner Maroš Šefčovič confirmed the EU had secured a verbal understanding that any future tariffs on pharmaceuticals would not exceed 15% – a cap that Mr. Šefčovič has expressed confidence in being respected by the US administration. However, this should be viewed with caution as it is not a legally binding commitment and would only become official through a US executive order after the section 232 on pharma and semiconductors investigation ends.
To advance the agreement, a three-page joint political statement is being prepared for endorsement by EU Member States. This document is expected by the Commission to be finalised by Friday, 1 August. However, recent reports suggest the joint statement will not be published on this date.
An EU negotiator described the current agreement as “not your standard trade agreement,” noting, “We are talking very much about a relatively light joint statement which has some very precise commitments and others which need to be spelt out in different ways.”
In the meantime, the EU’s retaliatory tariff list is still on standby to come into effect on 7 August. The Commission has until 6 August to suspend or annul these measures. However, after President Trump’s executive order on Thursday confirming the 15% tariffs, the Commission will certainly suspend EU countermeasures for another 6 months.
