BRUSSELS — The European Commission on Thursday proposed new legislation to eliminate tariffs on U.S. industrial goods, a move that should unlock a reduction in Washington’s own tariffs on European autos.
Putting forward the legislation is a precondition for President Donald Trump’s administration to drop tariffs on European cars to 15 percent from the current 27.5 percent. Under the terms of the transatlantic trade deal unveiled a week ago, the U.S. would in turn backdate the reduction in its auto tariffs to Aug. 1.
“The first act concerns a proposal to eliminate tariffs on U.S. industrial goods and provide preferential market access for a range of US seafood and non-sensitive agricultural goods,” the European Commission said in a press release.
“The second one proposes to prolong the tariff-free treatment of lobster, now including processed lobster.”
The agreement, EU trade chief Maroš Šefčovič said last week, was good news for the bloc’s auto industry, which has been “bleeding a lot of cash” in recent months.
“This will save car makers more than €500 million in duties that would have otherwise been paid for exports in one month only,” Brussels added in its statement.
The handshake trade deal reached between Trump and European Commission President Ursula von der Leyen in Scotland at the end of July would set a baseline U.S. tariff on European exports of 15 percent. The EU would meanwhile scrap industrial tariffs — including the 10 percent it currently levies on autos made in the United States. Brussels has also committed to open its market wider for a basket of U.S. farm exports.
The next key question is whether the United States will indeed make good on its side of the bargain. Trump cast the fragile transatlantic trade truce into doubt earlier this week when he threatened new tariffs on countries who apply digital policies that he deems discriminatory.
A senior Commission official was confident this would go through.
“There should not be any doubt: their tariffs on cars and car parts should go down. That is the U.S. part of the bargain,” the official, speaking on condition of anonymity, told a briefing.
Lobster in, beef out
Commission officials underlined that no “sensitive” farm goods were included, stressing that U.S. beef and poultry remain explicitly excluded from the concessions. These products are politically explosive in Europe, where stricter hormone and hygiene rules have long limited American imports.
Instead, Brussels offered tariff-rate quotas on a limited list of U.S. agrifood exports such as dairy, pork, nuts, seafood and even bison meat. It also kept all U.S. lobster imports tariff-free, a politically potent win in Washington, landing as Maine’s lobster season is in full swing. One official described the concessions as “meaningful, but not very costly” for the EU.
That offers little relief for European farm lobbies which were already critical of the outline of the deal last week.
Groups like Copa-Cogeca and Farm Europe argue that European agriculture “footed the bill” for the handshake deal. It won no reciprocal gains, they said, while still facing a 15 percent tariff ceiling on most exports to the U.S., including products that previously traded tariff-free, like wine and spirits. Farm groups say rural interests were effectively sidelined while Europe’s carmakers walked away with the prize.
EU hurdles
Proposing the tariff legislation is only a first step, as the Commission will still need the assent of at least 15 of the EU’s 27 member countries and a simple majority in the European Parliament for it to take effect.
Since the Commission negotiated the trade deal with the political blessing of member countries, the Council of the EU that represents them shouldn’t present a major hurdle.
The European Parliament could be a different proposition, however, with Bernd Lange, the chair of its international trade committee, telling POLITICO on Wednesday “there are disagreements about what the exact reduction in numbers should look like, particularly in the agricultural sector.” Another issue, he added, was how the deal would be implemented and for how long.
European lawmakers will reconvene next week in Strasbourg for the first time after the summer recess. Sabine Weyand, the top official at the Commission’s trade department, will testify before the trade committee on Wednesday.
“We have a parliament with a very divided configuration, and ‘reason’ may not always be the first characteristic,” said Marie-Pierre Vedrenne, a French lawmaker from the Renew group.
That said, Manfred Weber, leader of the European People’s Party that has the largest caucus, has said his conservatives would stand by the deal struck by von der Leyen, describing it as “painful but right.”
This story has been updated.
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