The United States and the European Union announced they have reached a Framework on an Agreement on Reciprocal, Fair, and Balanced Trade.
Under the terms, the European Union plans to eliminate tariffs on all US industrial goods and provide preferential market access for a range of US seafood and agricultural products.
The EU also intends to extend the joint US-EU lobster tariff agreement, previously expired on 31 July 2025, with an expanded scope to cover processed lobster.
The United States will apply the higher of either its Most Favored Nation tariff rate or a 15% combined tariff on EU goods, with specific exemptions starting 1 September 2025 for cork, aircraft and aircraft parts, generic pharmaceuticals, and chemical precursors.
The US also commits to capping tariffs at 15% on EU pharmaceuticals, semiconductors, and lumber subject to Section 232 actions.
Tariff reductions on EU automobiles and parts will take effect once the EU introduces corresponding legislation.
Both sides intend to address steel and aluminium market overcapacity and consider tariff-rate quota mechanisms.
The EU announced plans to procure US liquefied natural gas, oil, and nuclear products valued at $750 billion through 2028, alongside $40 billion in purchases of US AI chips.
European companies are expected to invest $600 billion in strategic US sectors during the same period.
The EU also plans to increase procurement of US defence equipment with support from the US government.
The agreement outlines commitments on mutual recognition of automobile standards, cooperation in standards development, conformity assessments in additional sectors, and addressing non-tariff barriers in agriculture.
The EU will work to mitigate US concerns over the EU Deforestation Regulation, the Carbon Border Adjustment Mechanism, and the Corporate Sustainability Due Diligence Directive.
Further commitments include cooperation on cybersecurity mutual recognition, export restrictions on critical minerals, intellectual property protection, labour rights enforcement, and digital trade rules.
Both sides confirmed they will not impose customs duties on electronic transmissions and intend to maintain the WTO moratorium in this area.
The United States and the European Union stated their intention to document the Framework Agreement in line with internal procedures.