Global trade agreements don’t just shape policy—they reshape supply chains, costs, and competitive advantage. For companies moving goods across the Atlantic, the recently unveiled United States and European Union (EU) Framework Agreement brings this reality into focus as it aims to create more reciprocal, fair, and balanced trade.
While the Framework Agreement is not legally binding, both parties have committed to significant tariff adjustments—some of which were already implemented on August 7. The changes span a wide range of goods—from industrial products and pharmaceuticals to automobiles and seafood—making it critical to understand the rules now, before they reshape your landed costs.
Here’s a closer look at some of the key aspects of the Framework Agreement and how it may affect your business.
EU to eliminate and reduce tariffs on certain U.S. products
One of the key changes outlined in the Framework Agreement is the EU’s commitment to eliminate tariffs on all U.S. industrial goods, such as machinery, chemicals, electronics, and other manufactured products, and to provide preferential market access for a wide range of U.S. seafood and agricultural goods.
For U.S. exporters, this move is designed to level the playing field and make U.S. exports more competitive in European markets.
U.S. tariff adjustments: MFN + reciprocal tariff model
The U.S. is adjusting its own tariff structure for EU goods and has already begun implementing a new hybrid model as of August 7. Most products from the EU are now subject to the higher of:
- The standard Most Favored Nation (MFN) rate, or
- 15%, which is inclusive of MFN and a reciprocal tariff to reach the 15%.
However, there are exceptions. Starting September 1, 2025, unavailable natural resources (including cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors will only be subject to the MFN rate.
Tariffs to be capped at 15% for certain goods subject to Section 232
EU semiconductors, pharmaceuticals, and lumber subject to the Section 232 (of the Trade Expansion Act of 1962) tariffs would be comprised of the MFN tariff and the Section 232 tariff and capped at 15%.
If the EU introduces its own legislative proposals, the U.S. will reduce tariffs on EU automobiles and parts as follows:
- No Section 232 automobile or automobile parts tariffs will apply to applicable goods with an MFN tariff of 15% or higher, and
- For goods with an MFN rate lower than 15%, a combined rate of 15% (comprised of the MFN tariff plus Section 232 automobile tariffs) will be applied
The auto/auto parts tariff reductions are expected to be effective from the first day of the same month in which the European Union’s legislative proposal is introduced.
The Framework Agreement remains undefined regarding steel and aluminum products; however, the parties intend to cooperate by considering tariff-rate quota solutions to protect their domestic markets from overcapacity, while ensuring secure supply chains between each other.
Rules of origin to be negotiated
To ensure that the tariffs benefit predominately EU and U.S. goods, both sides will negotiate rules of origin. While no additional details were provided, this may involve a revaluation of documentation requirements, greater emphasis on supply chain transparency, or a closer look at audit and verification procedures, among other factors.
What to expect next
Expect further negotiations to take place to finalize key details surrounding the commitments outlined in the Framework Agreement, such as a timeline, exemptions, and enforcement mechanisms. That means the coming months are pivotal for shippers. Proactive planning and strong partnerships with logistics and customs experts will be essential—not just to manage risk, but to uncover new opportunities in the evolving transatlantic trade environment.
For updates on all of the new tariffs announced by the Trump Administration this year, follow the U.S. Tariff Timeline.
Stay informed
Developments in customs and trade continue to evolve—stay informed to be prepared:
