U.S. and EU Agree on Major Trade Deal (Tariff Implementation Guidance)

Trade Update • July 31, 2025 / Updated Sept. 25

Key Points

• EU will eliminate tariffs on U.S. industrial goods and expand farm/seafood access (pork, dairy, nuts, seafood, more) effective Sept. 1, 2025.

• U.S. will impose a 15% or MFN tariff on EU imports, with exemptions for cork, aircraft/parts, and generic drugs, starting Sept. 1, 2025.
• Tariffs on steel and aluminum will be capped at 15%, with quota and supply chain talks continuing from Sept. 1, 2025.
• Auto tariffs will be capped at 15% once EU legislation is passed — retroactive to Sept. 1 if adopted by Sept. 15, 2025, or effective Oct. 1, 2025 if delayed.
• EU will purchase $750B in U.S. energy, $40B in AI chips, and invest $600B in U.S. industries (energy, defense, clean tech) by 2028.
• Latest: CBP issued detailed implementation guidance on September 24, 2025, following the formalization of the tariff modifications in the Federal Register notice published on September 25, 2025.

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resident Trump and the European Union have advanced their economic partnership with a new Framework on an Agreement on Reciprocal, Fair, and Balanced Trade. This updated framework builds on the recent trade deal announced last July 28 and reflects shared commitments to reduce trade imbalances, expand market access, and strengthen supply chains between the two economies.

Latest Update: U.S. Customs and Border Protection (CBP) issued detailed guidance on implementing the framework on September 24, 2025, shortly before the tariff modifications were officially published in the Federal Register notice on September 25, 2025.

For more details, see the latest updates further below, under Tariff Implementation Guidance & Procedure.

Updated Framework Key Terms of the Agreement

Tariffs

• The United States will apply the higher of either the MFN rate or a combined 15% tariff (MFN + reciprocal tariff) on EU imports.
• Effective September 1, 2025, the U.S. will apply only the MFN tariff to cork, aircraft and parts, generic pharmaceuticals (including precursors), and other sectors mutually agreed.
• The EU will eliminate tariffs on all U.S. industrial goods and extend preferential access for a wide range of U.S. agricultural and seafood products, including dairy, pork, bison, processed foods, planting seeds, soybean oil, fruits, vegetables, and seafood.
• The August 21, 2020 U.S.–EU lobster tariff agreement (which expired July 31, 2025) will be immediately extended with an expanded product scope to cover processed lobster.
• For automobiles and parts: once the EU introduces the necessary legislation*, U.S. Section 232 auto tariffs will be reduced: capped at a combined 15% (MFN + Section 232) for covered goods with lower MFN rates, and removed altogether where MFN rates are already ≥15%. *If legislation is introduced in the EU on Sept.15, the auto tariffs would be reduced to 15% retroactive to Sept. 1. If the legislation is not introduced until October, the relief would start Oct. 1.
• On steel, aluminum, and related products, both sides will explore tariff-rate quota solutions and “ring-fencing” measures to prevent global overcapacity while maintaining secure bilateral supply chains.

Tariff Implementation Guidance & Procedure

The CBP guidance issued on September 24, 2025, outlines the operational application of the tariff changes:

• Section 232 tariffs on autos and parts from EU capped at 15%; zero additional duty where MFN ≥ 15%. New HTSUS codes introduced (9903.94.50-53) for declarations.
• Exemptions apply to civil aircraft products (HTSUS 9903.02.76), natural resources including cork (9903.02.74), essential oils for religious use (9903.02.75), and non-patented pharmaceuticals (9903.02.77).
• Entry filing procedures require duties to be properly allocated across HTSUS classifications.
• Correction options are provided via post summary corrections (PSC) or protests for overpaid duties on entries before implementation.
• Reciprocal tariff exemptions continue for steel, aluminum, and copper under extant Section 232 measures.
• Effective dates: tariff changes apply for goods entered or withdrawn from warehouse on or after September 1, 2025, except autos and parts effective August 1, 2025.

Meanwhile, the Federal Register notice issued on September 25, 2025 legally amends the HTSUS to incorporate the Framework Agreement tariffs:

• Confirms the tariff caps and exemptions across EU imports including autos, aircraft, cork, and pharmaceuticals.
• Codifies tariff adjustments under Executive Order 14346, modifying previous proclamations related to Section 232 and reciprocal tariffs.
• Defines tariff application as the higher of MFN or a 15% reciprocal rate, with specified product exemptions.
• Details the use of new HTSUS classifications for reporting duties on relevant EU goods.
• Provides legal instructions for importers to correct prior entries and recover overpaid amounts via PSC or protest.

Key Provisions

Investment and Energy

• EU companies will invest an additional $600 billion in the U.S. by 2028, on top of more than $100 billion annually already invested, reflecting a strong commitment to the U.S. as a secure and innovative investment destination.
• The EU will purchase $750 billion worth of U.S. energy (LNG, oil, nuclear) through 2028, reinforcing U.S. energy leadership.
• The EU will also procure at least $40 billion of U.S. AI chips for European computing centers.
• Both sides will align technology security requirements to prevent leakage to destinations of concern.

Market Access and Non-Tariff Barriers

• Preferential access for U.S. agricultural goods will expand across seafood, pork, dairy, tree nuts, fruits, vegetables, and processed foods.
• Both sides commit to reduce regulatory barriers, including mutual recognition of automotive standards and expanded conformity assessments in additional sectors.
• Work continues to streamline EU sanitary requirements for U.S. food exports.
• The EU commits to address U.S. concerns with the EU Deforestation Regulation, the Carbon Border Adjustment Mechanism (CBAM), and corporate sustainability directives (CSDDD, CSRD) to avoid undue trade impacts and reduce burdens on SMEs.
• The EU reaffirms U.S. conformity assessment bodies can be designated as Notified Bodies for telecom equipment under the 1998 MRA, and both sides will negotiate a mutual recognition agreement on cybersecurity.

Economic Security and Supply Chains

• Both parties will coordinate on supply chain resilience, inbound/outbound investment reviews, export controls, and action against duty evasion.
• Cooperation will extend to critical minerals, defense procurement, and addressing non-market policies of third countries.
• The EU plans to substantially increase defense procurement from the U.S., strengthening NATO interoperability and transatlantic security.
• Rules of origin will be negotiated to ensure agreement benefits accrue primarily to the U.S. and EU.

Digital Trade and Standards

• The EU confirms it will not impose network usage fees and both parties will maintain zero customs duties on electronic transmissions.
• Both reaffirm support for the WTO moratorium on digital trade duties and will push for a permanent multilateral commitment.
• Cooperation will expand on technical standards, especially in automotive, telecommunications, and cybersecurity.
• The EU will consult with the U.S. and traders on digitalization of trade procedures under its Customs Reform initiative

Impact of the Trade Deal

American Manufacturers

• More chances to sell goods in Europe, creating jobs and boosting factory production
• Lower tariffs in Europe help U.S. manufacturers compete better
• Increased investment and energy sales support growing the economy

Farmers and Agriculture

• Easier rules and fewer trade barriers for U.S. farm products like pork and dairy
• Supports farming communities with new export markets

Energy Sector

• The U.S. strengthens its role as a global energy supplier.
• Europe gains more diverse and dependable energy sources.

How GHY Can Help?

GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.

By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.

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