EU strikes deal on Trump trade pact

STRASBOURG — The European Union agreed early Wednesday morning to implement a trade deal with the United States, likely averting a threat by President Donald Trump to punish further delay with oppressive tariffs.

Negotiators from the European Parliament, the Council of the EU and the European Commission reached a compromise after more than five hours of talks on legislation to enact the accord struck last summer at Trump’s golf resort in Turnberry, Scotland. 

Under that pact, the EU agreed to scrap tariffs on U.S. industrial and some farm goods, while Washington was to cap tariffs on most European exports at 15 percent. But the bloc slow-walked its deliberations after Trump in January threatened to seize Greenland, a Danish territory, and then again after the U.S. Supreme Court struck down much of his tariff agenda. 

“The EU has demonstrated once again that we are a rather reliable trading partner that honors its commitments,” said EU trade chief Maroš Šefčovič after leaving the negotiating room. 

Following months of internal EU wrangling, the compromise arrived after Trump — frustrated by the wait — threatened to impose a 25 percent tariff on European cars from July 4. 

That escalation risked tipping the €1.7 trillion annual transatlantic trade relationship back into crisis, just as the energy supply shock caused by the Middle East conflict weighs on European economic growth.

According to the final text of the compromise seen by POLITICO, the Commission could, at the request of the Parliament or a member country, suspend the trade deal if Washington doesn’t reduce its duties on European steel and aluminum products by the end of 2026.

The U.S. steel and aluminum tariffs go as high as 50 percent under a proclamation signed by Trump in April, and many EU lawmakers have complained the move violates the cap agreed at Turnberry. According to the deal agreed early Wednesday, the European Commission will report to the Parliament and the Council on the state of U.S. steel tariffs at the end of this year, and if the U.S. is judged not to be in compliance, the Commission will assess whether to suspend the deal. 

Negotiators added a so-called sunset clause that would see the agreement expire in December 2029 — nearly a year after Trump is due to leave the White House. 

The deal also includes safeguards requiring that the Commission launch an investigation, either on its own initiative or at the request of three EU countries, to determine whether imports seriously threaten certain domestic industries — which could then lead to a partial or total suspension of the deal.

However, language to void the deal if the U.S. once again threatens the EU’s territorial sovereignty — which the European Parliament had demanded after Trump threatened to annex Greenland — wasn’t included after EU capitals opposed it. 

An EU official familiar with the discussions, who was granted anonymity to speak about the closed-door talks, said member countries had wanted to exclude non-trade elements from the agreement. 

European Union Trade Commissioner Maroš Šefčovič, who said the EU had demonstrated “we are a rather reliable trading partner that honors its commitments.” | Annabelle Gordon/AFP via Getty Images

The text now heads to a closely watched vote expected during the June 15–18 plenary session in Strasbourg.

Parliamentary arithmetic

Some liberal and left-wing lawmakers in the European Parliament are still hostile to the deal and have warned they may vote against the Turnberry compromise.

Crucially, the deal empowers the European Commission to rule whether the U.S. is in breach of the Turnberry accord — and leaves it to the EU executive to decide whether to suspend it. The version of the proposal favored by the Parliament would have forced the Commission to automatically suspend the deal in case of a breach.

The European People’s Party — the largest group in the chamber — is keen to get the deal on the books, and negotiators hope a majority will back it.

Zeljana Zovko, the EPP lawmaker representing the center-right group in the negotiations, told POLITICO that the deal “will save our businesses and give them breathing space to continue trade with our most important trading partner.” 

Failure by the Parliamentary plenary to ratify the compromise would humiliate Bernd Lange, the chair of the chamber’s trade committee and the Parliament’s chief negotiator.

Lange declared himself satisfied with the result despite the concessions. “We are ensuring stability and security for European manufacturers, fully aware that we cannot, of course, always guarantee that the U.S. will abide by the agreement,” he said.

The German Social Democrat had assembled a broad coalition of lawmakers to demand that extra conditions be attached to the accord to shield the EU from Trump’s periodic attempts to coerce America’s longtime allies. But it remains to be seen whether the text can command a majority in the Parliament in light of its significant concessions.

Sabine Weyand, the outgoing chief of the Commission’s trade department, told members of her entourage at the talks that she expected to get the deal through a meeting of ambassadors from EU member countries later on Wednesday, calling the task “a walk in the park.”

Tom Schmidtgen in Berlin and Julius Brinkmann in Washington contributed reporting.