EU assessment: Trump's new tariffs violate US-EU trade agreement; some product tariffs will exceed the 15% cap

According to a recent assessment by the European Union, U.S. President Trump’s new tariff policy will increase tariffs on certain EU export goods, including cheese and some agricultural products, exceeding the limits allowed by the trade agreement between the two sides.

Last Friday, the U.S. Supreme Court rejected the legality of Trump’s global “reciprocal tariffs” imposed under emergency powers. Trump then announced a new 10% global tariff and threatened to raise it to 15%. However, as of Tuesday, the 15% rate has not yet been implemented.

On Monday, the European Commission told lawmakers that this new global tariff would be added on top of existing tariffs.

European Parliament International Trade Committee Chair Bernd Lange said that the combined tariff rate would cause tariffs on some goods to exceed the 15% cap agreed upon in the EU-U.S. trade agreement.

In July last year, Trump reached a trade agreement with European Commission President von der Leyen. Under the agreement, most EU exports to the U.S. would be subject to a 15% tariff, while the EU would remove tariffs on various American goods. The U.S. would also continue to impose a 50% tariff on European steel and aluminum products.

The EU accepted this clearly unequal agreement to avoid a full-scale trade war with Washington and to maintain U.S. support on security issues, especially regarding Ukraine.

According to informed sources, based on the EU Commission’s assessment, under Trump’s new tariff plan, tariffs on goods such as butter, plastics, textiles, and chemicals will exceed 15%. The new global tariff measures will be in effect for five months.

On Monday, the European Parliament paused legislative work to approve the EU-U.S. agreement, demanding clearer clarification of Trump’s new trade policies.

EU Trade Commissioner Shefchovich held calls over the weekend with U.S. Trade Representative Griller and Commerce Minister Lutnik, and submitted a report to European lawmakers and the EU delegation on Monday.

Sources said Shefchovich indicated that a transition period of up to four months might be needed to finalize the details of the new trade policy.

Several attending ambassadors said that despite the uncertainty caused by the Supreme Court’s ruling, they still hope to maintain the current trade agreement.

Both sides expressed a desire to preserve the agreement, but some insiders noted that how to do so and how long it would take remain unclear.

(Article source: Caixin)