EU Reaches Agreement to Move Forward on U.S. Trade Deal — Update

By Ed Frankl and Edith Hancock

European lawmakers on Wednesday said they reached a provisional deal to remove some import tariffs on U.S. goods, as part of the trade deal signed last summer, ahead of a deadline set by President Trump that would ramp up tariffs on cars.

Lawmakers in Brussels had paused ratification of the deal after the Supreme Court ruled that some of Trump's so-called reciprocal global tariffs implemented last year were illegal. In response, Trump imposed a new, temporary 10% global levy in February. A federal trade court ruled earlier this month that Trump didn't have the authority to impose that duty.

Lawmakers also delayed the process when Trump threatened to raise tariffs on nations that opposed his desire to annex Greenland, part of Denmark.

Trump later said he would impose new 25% tariffs on EU car imports if Europeans did not implement the agreement by July 4.

The trade deal "is expected to serve as a platform to continue engaging with the U.S. to lower tariffs and cooperate closely on shared challenges," the European Council said Wednesday. The agreement reached Wednesday paves the way for a final vote in the European Parliament ahead of Trump's deadline.

The EU's agreement eliminates remaining import duties on U.S. industrial goods and reduces duties for certain seafood and agricultural products. The broader trade deal also caps tariffs on most EU goods imports into the U.S. at 15%, with the EU pledging around $600 billion in investment in the U.S.

EU officials also agreed on a slew of safeguards designed to protect European exporters. Under the text negotiated by the EU, the European Commission--the bloc's executive arm--has the power to assess whether a surge in imports from the U.S. is harming or threatens to hamper local businesses, and suspend its side of the deal if it decides that is the case.

The commission could also suspend its side of the deal if the U.S. fails to meet commitments set out in the agreement signed by both sides in 2025, or if the Trump administration discriminates against or targets EU businesses.

Lawmakers had pushed for adding stronger safeguards to the legislation, including adding a "sunset clause" that would see the deal expire by the end of March 2028 unless new legislation is introduced to extend it. The EU's negotiators ultimately agreed to keep the deal in place until the end of 2029, with the possibility to extend further.

Officials sought to protect the bloc's metals sector by giving the commission power to reinstate tariffs on U.S. steel and aluminum if the White House continues to apply a tariff rate higher than 15% on products made with those metals imported from the EU after December 2026. The U.S. set out a tariff regime for steel, aluminum and copper in April that sets duties of up to 50% for commodity-grade metals and a 25% rate for some products made with them.

"A deal is a deal, and the EU honors its commitments," said commission President Ursula von der Leyen on X. "Together, we can ensure stable, predictable, balanced, and mutually beneficial trans-Atlantic trade."

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

May 20, 2026 05:25 ET (09:25 GMT)