A New Chapter in Transatlantic Trade: The US–EU Framework Agreement

To make sure the perspectives of Portuguese companies are fully reflected in future discussions and revisions of the agreement, AmCham has launched a short survey to assess the impact of the new tariffs, the challenges they create, and the priorities ahead. The insights gathered will guide AmCham’s action, strengthen its advocacy on behalf of members, and help design initiatives that respond to the real needs of the Portuguese business community.

The US–EU Framework Agreement

At the end of August, the European Union and the United States published a joint declaration establishing the framework for transatlantic trade and investment, building on the political agreement reached by President Ursula von der Leyen and President Trump on July 27.

The agreement seeks to strengthen trade and investment relations, support economic reindustrialisation, and address trade imbalances. It represents an initial step in a process that may gradually expand to cover additional areas and provide greater market access.

Particular attention is given to sectors of strategic importance for Portuguese companies, such as cork and pharmaceuticals, helping to secure stronger trade relations and supply chain stability in these industries.

The Framework Agreement dominated headlines over the summer. While businesses would have preferred a more ambitious reduction of tariffs, the deal successfully prevented tensions from escalating into a full-scale trade war that could have caused severe disruption to transatlantic commerce. It brings greater predictability to trade flows across the Atlantic.

The agreement also provides much-needed relief for businesses facing potential disruption to global supply chains. It delivers de-escalation in the ongoing dispute and offers companies a higher degree of certainty. Nonetheless, the 15% tariff still represents a significant increase in the cost of trading across the Atlantic for many sectors.

The EU and the US should broaden the scope of sectors included in the deal’s zero-for-zero tariff list, with the long-term objective of creating a zero-tariff zone across the Atlantic.

Ultimately, both sides should advance regulatory cooperation and develop a shared approach to common geopolitical challenges. The commitment to work more closely on issues such as energy, defence, technology, and global overcapacity is a constructive first step toward reinforcing the transatlantic economic partnership.

Key Elements of this Agreement:

1. Tariffs and Market Access

The United States will apply either the Most Favored Nation (MFN) tariff or a combined 15% tariff on EU goods.

The U.S. will apply only the MFN tariff on certain products of particular importance, such as cork and pharmaceuticals and their chemical precursors, ensuring smoother trade flows for these key sectors.

The EU will eliminate tariffs on all U.S. industrial goods and provide preferential access for various U.S. seafood and agricultural products.

2. Sector-Specific Measures

Tariffs on EU pharmaceuticals, semiconductors, lumber, automobiles, and automobile parts will be reduced according to the Framework. For steel, aluminium, and derivative products, the parties will explore measures to manage overcapacity while ensuring secure supply chains.

3. Energy and Technology Cooperation

The EU intends to procure U.S. liquefied natural gas, oil, nuclear energy products, and AI chips. Both parties will coordinate on technology security requirements and support secure, diversified energy supplies.

4. Investment

Mutual investment stocks exceed $5 trillion, with European companies expected to invest an additional $600 billion in the U.S. by 2028.

5. Defense

The European Union will increase procurement of U.S. military and defence equipment, strengthening transatlantic defence cooperation and NATO interoperability.

6. Regulation

The EU will address U.S. concerns regarding the Deforestation Regulation, CBAM, CSDDD, and CSRD.

US – EU Tariffs (latest agreement)