The United States officially announced: Implementing the US-EU trade agreement, imposing a 15% tariff on EU automobiles

On Wednesday, the United States officially lowered tariffs on EU automobiles, effective August 1, 2025. This move by the U.S. solidifies the terms of a framework trade agreement reached between both parties nearly two months ago:

According to CCTV News, on September 24 local time, the Trump administration in the U.S. issued a formal announcement implementing the trade agreement reached with the EU, confirming a 15% tariff on EU-imported automobiles and automotive products starting August 1.

Additionally, the document also listed tariff exemptions for certain pharmaceutical compounds, aircraft parts, and other imported goods.

The U.S. Department of Commerce and the Office of the Trade Representative released a document online on Wednesday detailing the tariff adjustments, which lowered import taxes on a range of goods.

The adjustments listed in the document also include exemption lists for multiple industries, covering aircraft and parts, generic drugs and raw materials, as well as "scarce natural resources" such as cork, certain metals, and ores, which will continue to enjoy lower Most-Favored-Nation (MFN) tariff rates starting September 1.

The U.S. stated in the announcement that the product list may be adjusted in the future. This move stems from an executive order signed by Trump earlier this month, allowing the U.S. government to more easily adjust import tariff rates on agreements signed with trade partners.

Most of the new tariff rates apply to goods shipped from the EU to the U.S. after September 1, but the reduction in tariffs on automobiles and parts is contingent upon the EU's introduction of legislation to lower tariffs on U.S. industrial products and certain non-sensitive agricultural products. The EU took relevant action on August 28, implementing its concession commitments, paving the way for the Trump administration to retroactively apply the new automobile tariff rates.

Previously, these automobiles were subject to an additional 25% U.S. tariff on top of a 2.5% base tariff.

Under the trade agreement arrangement, the tariff ceiling for most EU export products is set at 15%. This rate will not be stacked on top of any existing industry-specific tariffs, and the EU expects it will also cover potential future sectoral tariffs on pharmaceuticals, chips, and more.

However, both sides have yet to make substantial progress on reducing tariffs on steel and aluminum products, with EU-related exports still facing a high tariff of 50%. Other goods that originally had tariffs exceeding 15% under the MFN arrangement will continue to be taxed at the original higher rates.

Automobile Tariffs Are Crucial for the EU

In response to the latest news on automobile tariffs, the European STOXX 600 automobile and parts index erased an earlier 1.7% decline and turned to rise. Shares of German automakers such as Volkswagen, Porsche, and Mercedes-Benz Group increased. Among them, Porsche, which is most severely impacted by U.S. tariffs and relies entirely on imports in the U.S. market, saw its Frankfurt stock price rise by as much as 3.8%. The euro fell 0.63% against the dollar, trading at 1.1740 Analysis indicates that this move by the United States will help further ease tensions between the U.S. and the European Union, as both sides are currently working on the specific implementation details of a trade agreement. This initiative, officially filed in the Federal Register, is particularly reassuring for the European automotive industry. European car manufacturers have been waiting for weeks for the U.S. to formally adopt lower tariffs.

Reducing automotive tariffs is of significant importance to the EU. Cars are one of the most important export products from the EU to the U.S., with Germany, the EU's largest economy, exporting new cars and parts worth $34.9 billion to the U.S. in 2024 alone.

Financial data from the first half of the year shows that the revenues and profits of Germany's three automotive giants—Mercedes-Benz, BMW, and Volkswagen—have seen a significant decline. Previous reports indicated that U.S. tariffs and other factors could lead to a reduction of €10 billion in cash flow for the three major German automakers this year.

Background of U.S.-EU Trade Dialogue

According to CCTV News, on July 27 local time, U.S. President Trump stated that the U.S. has reached a new trade agreement with the EU, imposing a 15% tariff on goods exported from the EU to the U.S. European Commission President Ursula von der Leyen stated that the 15% rate is the best result the Commission could achieve.

According to CCTV News, on August 28 local time, the European Commission proposed two legislative proposals, taking a key step towards implementing the joint statement on tariffs between the EU and the U.S. These measures aim to ensure the tariff reductions that the U.S. will implement on the EU automotive industry starting August 1, and further promote the stability and predictability of transatlantic trade and investment relations:

According to the proposals, the EU will eliminate some tariffs on U.S. industrial products, grant preferential market access for certain seafood and non-sensitive agricultural products, and extend the duty-free treatment for shrimp.

At the same time, the U.S. has committed to reducing tariffs on EU cars and parts from 27.5% to 15%, and will implement zero or near-zero tariffs on several products such as cork, aircraft and parts, generic drugs, and chemical precursors starting September 1