The United States and the European Union have reached a Framework Agreement aimed at establishing reciprocal, fair, and balanced trade between the two economies. The agreement is intended to reinforce one of the world's largest trade and investment relationships and address longstanding concerns about trade imbalances.
According to a joint statement, "This Framework Agreement represents a concrete demonstration of our commitment to fair, balanced, and mutually beneficial trade and investment. This Framework Agreement will put our trade and investment relationship – one of the largest in the world – on a solid footing and will reinvigorate our economies’ reindustrialization. It reflects acknowledgement by the European Union of the concerns of the United States and our joint determination to resolve our trade imbalances and unleash the full potential of our combined economic power. The United States and the European Union intend this Framework Agreement to be a first step in a process that can be further expanded over time to cover additional areas and continue to improve market access and increase their trade and investment relationship."
Key provisions include an EU commitment to eliminate tariffs on all U.S. industrial goods, as well as preferential market access for various U.S. seafood and agricultural products such as tree nuts, dairy products, fruits, vegetables, processed foods, planting seeds, soybean oil, pork, and bison meat. The EU also plans to extend tariff agreements related to lobster products.
On its part, the United States will apply either its Most Favored Nation (MFN) tariff rate or a 15 percent tariff—whichever is higher—on goods from the EU. However, certain products including natural resources like cork, aircraft parts, generic pharmaceuticals, their ingredients, chemical precursors, will only face MFN tariffs starting September 1, 2025.
The agreement outlines adjustments for tariffs imposed under Section 232 of the Trade Expansion Act of 1962 on EU-originating pharmaceuticals, semiconductors, lumber—as well as automobiles—ensuring rates do not exceed 15 percent under specified conditions once legislative changes are enacted by both parties.
Both sides have agreed to negotiate rules ensuring that benefits accrue mainly within their respective territories. They also plan cooperation on secure energy supplies; notably, the EU intends to purchase significant quantities of U.S.-sourced liquified natural gas (LNG), oil, nuclear energy products valued at $750 billion through 2028. Additionally, there is an expected procurement by the EU of at least $40 billion worth of U.S.-made AI chips for computing centers.
Investment is another focus area: mutual investment stocks exceed $5 trillion across both economies. European companies are projected to invest an additional $600 billion in strategic sectors in the United States through 2028.
Defense procurement forms part of deepening transatlantic ties with increased purchases planned by Europe from U.S. military suppliers—an effort supported by both governments aiming at stronger NATO interoperability.
The agreement also covers mutual recognition of standards for automobiles; efforts toward harmonizing technical standards; reducing non-tariff barriers affecting food/agricultural trade; addressing concerns over deforestation regulations; reviewing requirements related to carbon border adjustments; facilitating digital commerce without customs duties on electronic transmissions; strengthening alignment on supply chain resilience; enhancing labor rights protections; improving cybersecurity cooperation; managing export restrictions imposed by third countries; protecting intellectual property rights; consulting on digitalization procedures for customs reform; reviewing inbound/outbound investments controls against unfair competition from third countries.
Finally,"The United States and the European Union intend this Framework Agreement to be a first step in a process that can be further expanded over time," according to their joint statement.
