(May 20): The European Union (EU) finalised the text of its long-delayed US trade deal after months of negotiations, clearing a major hurdle to ratifying the pact before President Donald Trump’s threatened deadline to impose higher tariffs.
EU lawmakers and member states reached the agreement early on Wednesday, according to the EU’s rotating presidency held by Cyprus, overcoming lingering disputes that have helped stall implementation.
The deal, which was initially struck last July, would see the EU erase levies on US industrial goods in exchange for a 15% tariff ceiling on the bloc’s exports.
The European Parliament and EU countries will now vote to ratify the finished text. Trump has said that if the deal isn’t in place by July 4, he will hike tariffs on European automobiles to 25% from 15%.
Wednesday’s agreement should help calm transatlantic trade tensions, which have ratcheted up in recent weeks as Trump rails against European allies over both economic issues and the war in Iran.
“Maintaining a stable, predictable and balanced transatlantic partnership is in the interest of both sides,” said Michael Damianos, the Cypriot commerce minister, in a statement. “Today, the European Union delivers on its commitments.”
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Earlier this month, Trump accused the EU of dragging its feet on ratifying the US trade pact and threatened to hit the bloc’s cars and trucks with higher tariffs. He then set a July deadline for the EU after speaking with European Commission President Ursula von der Leyen, the bloc’s top executive.
The successful negotiations overnight should allow the EU to meet that target. The European Parliament is expected to ratify the deal at a session on June 16, with EU capitals following shortly thereafter.
“The EU walks the talk, while defending our interests,” EU trade chief Maros Sefcovic wrote on X. “Once approved, it will boost transatlantic stability and cooperation.”
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Still, the commission, which handles trade matters for the EU, has said it maintains options to protect the bloc’s interests if Trump were to follow through on his threat to boost levies.
While the US has partially implemented the trade agreement, EU lawmakers have repeatedly blocked ratification, first over Trump’s threats to annex Greenland and then after the US Supreme Court struck down Trump’s global tariff regime.
The European Parliament finally approved the deal in March but added multiple amendments to the legislation. Those included a stipulation that the agreement wouldn’t be implemented until the US honors its commitments and a March 2028 expiration date, unless both sides agreed to an extension.
Negotiators on Wednesday agreed to an expiration date at the end of 2029, instead of in 2028, and also adopted more measures meant to shield EU industries from a sudden spike in US imports. But they left out the provision that would delay implementation until the US honoured its commitments.
Lawmakers were mostly pleased.
“One of the famous songs of the Rolling Stones is ‘You Can’t Always Get What You Want.’ Content-wise, we got it,” said Bernd Lange, the European Parliament’s trade committee chief, in a statement to Bloomberg News.
Notably, the completed text includes fresh language meant to address long-running EU concerns over US metals tariffs.
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The US last August decided to widen a 50% metals tariff to hundreds of products that include steel and aluminium, like motorcycles and tableware. The move didn’t explicitly violate US commitments made under the trade pact, but many Europeans argued it nonetheless hollowed out the 15% tariff ceiling.
Early on Wednesday, EU negotiators inserted a clause allowing the commission to suspend the trade deal if tariffs on the products using steel and aluminium surpass 15% after 2026.
In addition, the final text empowers the commission to pause the pact if the US runs afoul of its commitments.
Attention will now turn to the US to see how it reacts to the EU’s tweaks. Trump officials have previously warned the bloc against altering the initial deal reached last July.
“We didn’t agree to” the changes EU lawmakers were seeking, US Trade Representative Jamieson Greer told Bloomberg Television earlier this month.
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