European Parliament approves lower tariffs for US-imports

In 2025 Bavaria imported about 11,177 billion euros worth of goods from the US. Most were motor vehicles or parts thereof, data processing equipment, electronic and optical products or pharmaceuticals. About five percent of all Bavarian imports originated in the US. In previous years that figure had been higher.

Soon, most US-imports are likely to benefit from significantly lower tariffs when entering the European Union and therefore Bavaria. Following a lengthy policy-debate the European Parliament has voted for a regulation lowering tariffs and creating tariff quotas as agreed in the “Joint Statement on a United States-European Union framework on an agreement on reciprocal, fair and balanced trade” published in 2025. The regulation can enter into force once it has been approved by the EU member states and has been published in the Official Journal of the European Union. Tariffs will be lowered on the day after publication.

The text approved by parliament can be accessed online . It is the basis for this article. Please note, that it is not legally binding.

Key provisions of the regulation

Tariffs are lowered to zero percent for all goods listed in Annex I of the regulation. This affects most imports, including motor vehicles, electronics, machinery, chemicals as well as steel and aluminum. Tariff quotas were established for meat and dairy products, and for other foodstuffs and agricultural goods listed in Annex III of the regulation.

Tariff reductions won’t apply retroactively. Meaning, there will be no reimbursement of tariffs paid between August 2025, when the Joint Statement was published, and now. Moreover, tariffs are only lowered until 31 December 2029. Thus, transatlantic trade may be back on the agenda after the US presidential election and the European parliament election in 2029.

Some parts of the regulation go beyond the tariff deal struck in 2025. The regulation includes a clause empowering the European Commission to take safeguard measures for industries suffering due to increased competition from US-imports. The Commission must monitor the effects of the tariff reductions. Industry representatives, EU member states and members of the European parliament may call on the Commission to take safeguard measures if they fear that European industry is adversely affected by increased US imports.

Furthermore, the regulation aims to strengthen the European Union's negotiating position vis-à-vis the United States. The regulation empowers the Commission to suspend tariff reductions if the US violates the terms of the Joint Statement or if the US threatens the trade relationship by other means. A clause on steel and aluminum tariffs states that the Commission may increase the European tariffs on steel and aluminum unless the US has lowered its tariffs on European steel and aluminum to no more than 15 percent by 31 December 2026.

Continuing implementation of the Joint Statement

Companies importing goods into the European Union from the United States should revisit the classification of their goods and check if they may benefit from reduced tariff rates.

The transatlantic partners will continue to negotiate the conditions of the trade relationship as the Joint Agreement of 2025 is not yet fully implemented. Steel and aluminum tariffs are still on the agenda, and it remains unclear how the European commitment to buy energy resources, AI chips and defence equipment from the United States will be implemented. The same is true for European investment commitments in strategic sectors of the US economy. Furthermore, the US and the EU agreed to work on lowering non-tariff barriers such as technical standards for industrial goods. Whether the US comply with the tariff agreement and the US’s section 301 investigations concerning forced labor and industrial overcapacity are likely to be points of contention in the coming months.