EU-US Trade Deal Greenlit: Parliament and Council Agree on 15% Tariff Cap Through 2029

The Council Presidency and the European Parliament reached a provisional agreement on Tuesday 20 May 2026 on two regulations implementing the tariff-related aspects of the EU-US Joint Statement, agreed in Turnberry on 21 August 2025 between Commission President Ursula von der Leyen and US President Donald Trump. The deal, finalised after weeks of trilogue negotiations under pressure from threats of 25% US tariffs on European goods, marks a critical step in delivering on transatlantic trade commitments — even as it remains politically fragile in advance of the final plenary vote in June.

Key elements of the agreement

The compromise text establishes a 15% tariff ceiling on EU goods imported into the US, in exchange for the Union eliminating tariffs on most US industrial goods. It opens preferential market access through tariff rate quotas for certain US seafood and non-sensitive agricultural products. A sunset clause provides that the regulation will cease to apply on 31 December 2029 unless extended through subsequent legislative action, after a Commission assessment of its trade effects on European industry, agriculture and SMEs.

Steel and aluminium safeguard

Particularly contested by Parliament, the safeguard mechanism on steel and aluminium gives the Commission the power to suspend tariff concessions if Washington continues to apply duties above 15% on EU steel and aluminium derivative products beyond 31 December 2026. Current US Section 232 tariffs on these products remain significantly above the threshold, making the suspension trigger a near-certain political flashpoint by year-end. Last August, the United States added 407 product categories to the list subject to steel and aluminium tariffs, prompting Parliament to insist the issue be addressed directly within the main regulation.

Automotive sector relief

The legislation is expected to deliver immediate relief to the European automotive sector. Washington committed to retroactively lower its 27.5% tariffs on European-made cars to 15% from 1 August 2025, contingent on the Commission tabling the legislation — a condition now considered fulfilled. Among the broader concessions, the EU also reduces to 0% the vast majority of tariffs on US industrial products, ranging from machinery to pharmaceuticals, some chemicals, plastics, and fertilisers — sectors where Brussels seeks to break dependencies on Russia.

Parliament’s reservations

MEPs across political groups agreed to approve the deal even though many view the attached safeguards as substantially weakened compared to earlier drafts. Parliamentarians had pushed for an earlier sunset clause — March 2028 rather than December 2029 — and for stricter conditionality making EU tariff cuts dependent on US implementation. The final compromise has prompted reservations across the chamber, and it remains uncertain whether the text will survive the June plenary vote in its current form.

Monitoring mechanism

The agreement creates an unusually dense monitoring regime, reflecting Parliament’s concern about the political volatility of US trade policy under President Trump. Six months after the regulation enters into force, and every three months thereafter, the Commission will be required to inform the co-legislators of changes in trade volumes and the value of US exports to the EU under the covered goods. This continuous oversight mechanism is designed to allow rapid reaction if the transatlantic balance shifts unexpectedly.

The economic asymmetry debate

The Turnberry agreement continues to face criticism for being imbalanced — the United States gaining access to the EU market with low or zero tariffs while European exports face a 15% wall on the American side. Yet the broader picture is more nuanced: European industry also benefits from cheaper imports of inputs and components, and the agreement is best assessed as part of integrated value chains rather than purely from an export-oriented standpoint. The Commission has consistently argued that the alternative — a full-blown transatlantic tariff war — would be substantially more damaging to European competitiveness.

A platform for further engagement

The EU and the United States share the world’s largest and most integrated economic relationship. Maintaining a stable, predictable and balanced transatlantic partnership remains in the strategic interest of both sides. The Joint Statement is intended as a platform for continued engagement with Washington to lower tariffs further and cooperate on shared challenges — from technology standards to critical raw materials supply chains. For Brussels, the political question now is whether the safeguards extracted by Parliament will prove sufficient to maintain Union credibility in the eyes of European industry and citizens.