It took nearly a year for the European Union to ratify a lopsided trade deal with the United States that was meant to quell a tariff-wielding Donald Trump — but analysts say the delay ultimately worked in Europe’s favor.
In the early hours of Wednesday, European lawmakers and EU governments reached a final compromise they hope will spare the bloc from additional tariffs threatened by an increasingly impatient U.S. president and help reset long-strained ties with its largest commercial partner.
The agreement also brings an end to months of uncertainty within Brussels itself. The European Parliament repeatedly resisted the European Commission’s push to fast-track its adoption, first amid growing concerns over Trump’s threats to acquire Greenland and later over a Supreme Court ruling that struck down the administration’s ability to impose tariffs under the International Emergency Economic Powers Act.
Under the deal struck by Brussels and Washington last July at Trump’s golf club in Turnberry, Scotland, the EU agreed to scrap tariffs on American industrial goods and some food products, while the U.S. committed to cap duties on European imports at 15%. At the time, many experts criticized the agreement as profoundly unequal. In the lead-up to the Turnberry deal, Trump had threatened tariffs as high as 30%, which would have dramatically reduced trade flows between the EU and the U.S.
The final text now seems to provide Brussels with ammunition to respond if the White House walks away from the terms of the agreement.
“The most important elements of Bernd Lange’s proposal are already in place,” said Ignacio García Bercero, a non-resident fellow at the Bruegel think tank and former director in the Commission’s trade department. He was referring to a slew of safeguard measures presented by Lange, the chair of the Parliament’s international trade committee and lead negotiator on the file. Those measures included conditionalities, such as a sunrise and a sunset clause, aimed at ensuring that Washington would abide by the deal.
The much-awaited compromise comes at a precarious moment for the EU. Trump renewed his tariff threats at the start of the month, warning he would impose duties of up to 25% on European cars should Brussels fail to implement the deal by July 4, U.S. Independence Day.
Safeguards against Trump’s trade volatility
One of the biggest changes to the text approved on Wednesday was the introduction of a suspension clause that would empower the Commission to rescind the deal if the U.S. doesn’t lower duties to 15% by the end of 2026, including on steel and aluminum. The clause would have to be triggered by either the Parliament or a member state.
Last April, the U.S. imposed duties of up to 50% on European steel, aluminum and copper, as well as a 25% rate on goods that are manufactured with those materials.
Emilie Kerstens, an associate director at Flint Global, a consultancy, noted that such a clause would be essential in helping the EU hedge against Trump’s erratic policies.
“Essentially there is a built-in flexibility to allow the EU to respond if new tariffs that contradict the Turnberry deal come out of 301 or 323 investigations,” she said, referencing two of the sections of the U.S. Trade Act under which the administration launched two new investigations against the bloc earlier this year in a bid to keep its levies in place following the Supreme Court ruling.
The final text also contains a sunset clause stipulating that the deal would automatically expire at the end of 2029 — a deadline strategically designed to coincide with the end of Trump’s term. Then it will be up to the Commission to decide whether the deal should be extended.
An additional safeguard mechanism also requires the EU executive to assess whether the agreement will have led to a surge in imports that “threaten to cause serious injury to EU industry, including the agricultural sector.” The Commission could either start an investigation on its own or do so after a request from one or more member states or the Parliament.
Nonetheless, a sunrise clause that would have tied the deal’s final ratification to the U.S. lowering tariffs on EU steel and aluminum to 15% is nowhere to be found in the text. To most analysts, though, its absence was hardly a surprise.
“The sunrise clause was obviously the most controversial,” Kerstens said, given that it would further delay the implementation of a deal that Trump made it clear he wants implemented as soon as possible.
Also missing from the text is a suspension clause requested by the Parliament that would have allowed the EU to freeze the deal in the event of Greenland-like threats to EU sovereignty.
Uncertainty amid shaky EU-U.S. relations
Doubts remain over whether the amended agreement will be accepted by the U.S. administration.
On the EU side, the European executive has been trying to sell Wednesday's ratification as proof of its trustworthiness.
“The EU has demonstrated once again that we are a reliable trading partner that honors its commitments,” EU Trade Commissioner Maroš Šefčovič said in a statement. “This outcome fully respects the EU-US Joint Statement.”
But when asked whether he thinks that Trump will swallow the strengthened provisions, Lange, who made a name for himself over the past months for pushing back on Trump’s agenda, candidly admitted he had “no clue.”
“That’s a big question mark,” the German socialist told reporters on Wednesday, acknowledging he feared safeguards over the steel and aluminum derivatives could be an irritant.
“I’m not sure they [the Americans] will accept it,” he continued.
In a similar vein, experts like Kerstens are under no illusion that this will mark the end of the long-running tariff saga, as long as Trump remains in office.
“My message to our clients has been consistent: It is never a done deal,” Kerstens said.
“You know there is always the chance of further volatility.”
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