EU pushes for reduced US autos tariff from August 1 as joint text limits exemptions

By Andrea Shalal and David Lawder

WASHINGTON/BRUSSELS (Reuters) -The European Union will work to ensure lower U.S. tariffs on its car exports are applied retroactively to August 1, the bloc's trade chief said on Thursday, as the transatlantic partners set out details of a framework trade deal struck in July.

In a 3-1/2-page joint statement, the two sides spelled out that 15% U.S. tariffs would apply to most EU imports and listed the commitments made, including the EU's pledge to eliminate tariffs on U.S. industrial goods and to give preferential market access for a wide range of U.S. seafood and agricultural goods.

Washington will take steps to reduce the current 27.5% U.S. tariffs on cars and car parts, a huge burden for European carmakers, once Brussels introduces the legislation needed to enact promised tariff cuts on U.S. goods, it said.

The statement said U.S. tariff relief on autos and auto parts would kick in on the first day of the month in which the EU introduced the legislation.    

EU trade commissioner Maros Sefcovic said it was the European Commission's "firm intention" to make proposals by the end of this month, meaning the U.S. car tariff reduction would apply from August 1.

A senior Trump administration official, speaking on condition of anonymity, said European carmakers could see relief from the current U.S. tariffs within "hopefully weeks."

"As soon as they're able to introduce that legislation - and I don't mean pass it and fully implement it, but really introduce it - then we will be in a position to provide that relief. And I will say that both sides are very interested in moving quickly," they said.

U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the deal on July 27 at Trump's luxury golf course in Turnberry, Scotland after months of negotiations.

The two leaders met again this week as part of negotiations aimed at ending Russia's war in Ukraine, with both lauding their trade framework deal as an historic accomplishment.

The joint statement said the deal could be expanded over time to cover additional areas and further improve market access.

POSSIBLE TEMPLATE

The joint statement was "a play to hold each other accountable" and ensure that both sides carried out the pledges announced last month, the U.S. official said.

Ryan Majerus, a former U.S. Commerce Department official now with the King and Spalding law firm, said the statement "could serve as a conceptual model for what we will eventually see with Japan and South Korea."

The two major U.S. trading partners negotiated similar reductions in Trump's automotive tariffs but are also waiting for them to be implemented.

The EU and U.S. said they intended to accept and provide mutual recognition to each others' automotive safety and other standards, but industry officials said this language was more vague than initially announced.

LIMITED EXEMPTIONS

The joint statement noted that the U.S. agreed to apply only pre-existing Most Favored Nation tariffs of below 15% from September 1 on EU aircraft and parts, generic pharmaceuticals and ingredients, chemical precursors and unavailable natural resources, including cork.

This exemption did not apply to wine or spirits, a key EU demand, but the two sides agreed to consider other sectors and products for inclusions. 

"So these doors are not closed forever," Sefcovic said, while acknowledging that securing an exemption for alcoholic drinks would not be easy.

SpiritsEUROPE trade group Director General Herve Dumesny urged "both sides to remain at the negotiating table and deliver a swift, full return to zero-for-zero" tariffs on spirits.

PURCHASE, INVESTMENT PLANS

The U.S.-EU statement reiterated the EU's intention to procure $750 billion in American liquefied natural gas, oil and nuclear energy products, plus an additional $40 billion worth of U.S.-made artificial intelligence chips.

It also repeated the intention for EU companies to invest an additional $600 billion across U.S. strategic sectors through 2028. 

Both sides committed to address "unjustified digital trade barriers," the statement said, and the EU agreed not to adopt network usage fees.

They also agreed to negotiate rules of origin to ensure that the agreement's benefits accrued to both trading partners.

The statement also left unchanged the 50% U.S. national security tariff on EU-produced steel, aluminum and goods made with the metals, which were expanded this week to hundreds of additional products.

"There will be no exemptions, no exclusions for steel and aluminum tariffs," Trump trade adviser Peter Navarro told reporters at the White House, due to what he said were past exclusion abuses.

But the joint statement left the door open to a future tariff rate quota for the EU as the two sides discuss "ring-fencing" their domestic markets from overcapacity, a reference to Chinese production.

Navarro called the Trump administration's agreement with the EU a "magnificent achievement" for both sides of the Atlantic that U.S. courts should not criticize.

A federal appeals court is expected to rule any day on a legal challenge that could strike down a significant portion of Trump's tariffs, those invoked under the International Emergency Economic Powers Act.

(Reporting by Andrea Shalal, David Lawder and Philip Blenkinsop; Additional reporting by Ryan Patrick Jones; Editing by Kate Mayberry and Joe Bavier)