The United States and the European Union have announced a Framework Agreement that introduces tariff adjustments across a wide range of products, including agricultural goods. While not legally binding, some of the measures came into effect on August 7.
One of the central provisions is the EU's commitment to remove tariffs on all U.S. industrial goods, such as machinery, chemicals, and electronics. The EU will also provide preferential access for U.S. seafood and agricultural products. For U.S. exporters, this is intended to improve competitiveness in European markets.
The U.S. has adjusted its tariff structure for EU goods with a hybrid model in place since August 7. Most EU products are now subject either to the standard Most Favored Nation (MFN) rate or to a combined tariff of 15%, which includes both MFN and a reciprocal tariff.
Exceptions apply from September 1, 2025. Certain goods, including unavailable natural resources such as cork, aircraft and aircraft parts, and generic pharmaceuticals with their chemical precursors, will only be subject to the MFN rate.
For EU semiconductors, pharmaceuticals, and lumber currently covered by Section 232 tariffs under the Trade Expansion Act of 1962, the U.S. has capped rates at 15%, comprised of the MFN tariff and the Section 232 tariff.
If the EU introduces its own legislative proposals, U.S. tariffs on automobiles and parts will also change. Goods with an MFN rate of 15% or higher will not be subject to additional Section 232 tariffs. For goods with a lower MFN rate, a combined tariff of 15% will apply. These measures would take effect at the start of the month in which the EU proposal is introduced.
Steel and aluminum products are not yet included in the agreement. Both sides indicated they will consider tariff-rate quota arrangements to protect domestic markets from overcapacity while maintaining supply chain access.
Negotiations will also establish rules of origin to ensure tariff preferences apply primarily to U.S. and EU goods. This may involve new documentation requirements, increased supply chain transparency, and revised audit and verification processes.
Further negotiations are expected in the coming months to finalize timelines, exemptions, and enforcement procedures. The changes are expected to affect supply chains, landed costs, and trade flows between the U.S. and the EU.
Source: C.H. Robinson