EU-US thaw starts with industry, but steel remains the exception

The European Union has now formally eliminated tariffs on imports of US industrial goods, marking the first concrete implementation of the EU-US trade agreement reached between Commission President Ursula von der Leyen and US President Donald Trump in Scotland last year. 

The measures entered into force on 1 July, following approval by the European Parliament and the Council. 

Commission President Ursula von der Leyen hailed the move as “good news for transatlantic trade,” arguing it will give businesses greater predictability, consumers more choice and both sides of the Atlantic fewer reasons to reach for the tariff playbook. 

The package removes all remaining EU duties on US industrial products and grants improved market access for a range of non-sensitive American agricultural and seafood products.

It also marks the end of a turbulent period in EU-US trade relations, which had been dominated by tariff disputes and repeated threats of escalation before both sides agreed to a new framework. 

A win for manufacturers, and for certainty

The most immediate beneficiaries are likely to be US manufacturers.

Machinery, chemicals, medical devices, industrial components and other intermediate goods can now enter the European market under more favourable conditions. 

For Washington, the deal opens easier access to a market of more than 450 million consumers while extending preferential treatment to selected agricultural exports, including dairy products, processed foods, fruit and vegetables, soybean oil, pork, bison meat and seafood. 

Duty-free access for US lobster—first agreed during Donald Trump’s previous administration—has also been preserved. 

For Europe, however, the agreement is about more than exports.

European manufacturers that rely on American technologies, components and industrial inputs stand to benefit from lower transaction costs and greater predictability. 

Across sectors ranging from automotive and aerospace to chemicals and pharmaceuticals, fewer customs barriers should translate into smoother supply chains and greater confidence when planning long-term investments.

Consumers may also benefit, although any impact on prices is likely to be gradual rather than immediate.

The politics matter as much as the tariffs

The agreement is as much a diplomatic signal as a trade measure.

For Brussels, it demonstrates that the European Union can honour commitments to Washington without compromising its regulatory autonomy. For the United States, it provides tangible evidence that negotiation, not escalation, can still produce results.

The legislation remains in force until the end of 2029 and includes safeguard mechanisms allowing either side to suspend concessions if commitments are no longer respected. 

Then there is steel

If industrial goods symbolise the thaw, steel reminds everyone that the relationship still has limits.

While opening its market to most American industrial exports, the EU has simultaneously tightened protection for one of its most politically sensitive industries. Since 1 July, a new steel import regime has reduced duty-free quotas and increased the tariff on imports exceeding those quotas from 25% to 50%. 

The measure replaces the EU’s previous safeguard regime and is designed to address persistent global overcapacity rather than target the United States specifically. 

Steel, in other words, remains the exception.

The new rules of free trade

That exception says more about today’s transatlantic relationship than the tariff cuts themselves.

Trade is becoming more open where it strengthens integrated supply chains and lowers costs. But where industrial capacity, economic security and strategic autonomy are concerned, Brussels is drawing firmer lines than before.

The result is a new model of transatlantic trade. One that is more stable, but also more selective.

The tariff war may be over. Strategic trade has only just begun.