The United States and the European Union have reached a framework trade agreement that confirms the oral deal they announced in July. The pact sets a 15% cap on tariffs for most EU exports to the US, including cars, pharmaceuticals, semiconductors and timber, reducing the current aggregate auto duty from 27.5% to 15%. The agreement also prevents the imposition on EU chip imports of the 100% tariffs US President Donald Trump had publicly raised as a possibility.

Under the deal, the EU will eliminate tariffs on all industrial goods from the US and provide preferential market access for a broad range of US agricultural products. The US will take steps to lower the current 27.5% tariffs on cars and auto parts once the EU enacts legislation required to implement reciprocal tariff reductions.

The agreement includes large commercial and investment commitments: the EU plans to buy $750 billion of US LNG, oil and nuclear energy products by 2028, and European companies committed to invest $600 billion in strategic US sectors by 2028. The EU also pledged to significantly increase purchases of US military equipment "with the support and assistance of the US government," citing a shared strategic priority to deepen transatlantic defense industrial cooperation and strengthen NATO interoperability.

The deal covers cooperation on artificial intelligence, cybersecurity and technology protection, and calls for reducing non-tariff barriers and mutual recognition of standards. EU trade commissioner Maroš Šefčovič warned that the alternative would have been "a trade war with extremely high tariffs and political escalation," saying, 'That would threaten jobs, growth and businesses on both sides of the Atlantic.' The agreement was first announced by President Trump and European Commission President Ursula von der Leyen on July 27 at Turnberry in Scotland after an hour of talks. #EU #US #trade #tariffs #AI #FiatNews