European Union adds safeguard to US trade pact over aluminium and steel tariffs

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The European Union has reached a provisional agreement to implement a trade pact with the United States, a move aimed at avoiding tariff increases from the US and easing uncertainty around transatlantic trade, including aluminium and steel.

The agreement includes safeguards that would allow the European Commission to suspend tariffs if US imports harm European industry. It also allows Brussels to suspend tariff preferences if Washington continues applying duties above 15 per cent on EU steel and aluminium derivatives beyond the end of 2026.

Steel and aluminium derivatives remained among the most contentious issues during negotiations, with some US duties still reaching 50 per cent despite the 15 per cent ceiling agreed under the Turnberry trade deal signed last year.

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The compromise includes a sunset clause under which the regulation would expire on December 31, 2029, unless renewed. The safeguards were introduced after some EU lawmakers delayed approval of tariff reductions over concerns about continued US duties on European metals and industrial products.

Maroš Šefčovič, EU’s trade commissioner, said FT, “Despite turbulence, the deal holds. We have demonstrated once again that the EU is a reliable trading partner.” He added that steel discussions had been “probably the most difficult”.

Šefčovič said he had discussed the outcome with US Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, whose initial reaction was to “welcome” the outcome.

“What matters to the US is that the EU respects the Turnberry deal and its commitment to lower tariffs for lobsters and certain industrial products. That is what the EU is delivering,” Šefčovič said.

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Under the agreement, the EU will continue allowing tariff-free imports of US lobster for another five years, extending a concession first introduced in 2020.

Željana Zovko, lead negotiator of the centre-right European People’s Party, said,  “This is not a deal about the Trump administration. It is a deal to protect European businesses from further uncertainty.”

The trade pact, approved in Scotland last year, set tariffs at 15 per cent on most EU exports to the US, while the EU agreed to remove tariffs on many American industrial goods and selected agricultural products.

Implementation was delayed after Donald Trump threatened higher tariffs on EU goods, including raising duties on European cars and trucks to 25 per cent if Brussels failed to implement its side of the agreement before July 4.

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Bernd Lange said parliament had “substantially improved” the Commission proposal by adding a sunset clause and strengthening the suspension mechanism.

The European Parliament and EU member states will now vote on ratifying the final text.