The European Union reached a provisional agreement on Wednesday regarding the implementation of the trade pact with the United States, paving the way to avoid new tariffs threatened by American President Donald Trump.
According to CNBC and Reuters, the compromise was reached after over five hours of negotiations between representatives of European institutions.
President Ursula von der Leyen welcomed the agreement and called for a swift completion of the legislative process, insisting that "an agreement is an agreement, and the European Union respects its commitments."
The compromise comes after months of trade tensions between Brussels and Washington and reduces the risk of a new tariff escalation between the two economies.
Mechanism for protecting the European industry
The agreement includes a safety mechanism that will allow the European Commission to suspend tariff reductions if American imports affect the European industry.
Additionally, Brussels will be able to suspend the trade facilitations granted to the US if the American administration maintains tariffs exceeding 15% on processed European steel and aluminum until the end of 2026.
The provisionally approved legislation implements one of the key components of the trade agreement agreed last year between the EU and the US, at Trump's golf resort in Turnberry, Scotland.
Under that agreement, the European Union agreed to eliminate tariffs on American industrial goods, while Washington committed to capping tariffs at 15% for the majority of European products.
Trump threatened with "much higher" tariffs
Negotiations were delayed several times in the European Parliament. The first suspension of talks came after Trump threatened, in January, to take control of Greenland, a Danish autonomous territory.
Subsequently, discussions were postponed again after the US Supreme Court invalidated a significant portion of the Trump administration's extensive tariff policy.
In early May, the White House leader warned that the European Union had until July 4 to ratify the trade agreement, threatening otherwise with "much higher" tariffs.
Trump even promised to raise tariffs to 25% for cars and trucks imported from the EU, accusing Brussels of not adhering to the provisions of the "Turnberry Agreement."
Washington also demands the removal of regulatory barriers
Following the announcement of the European compromise, the US Trade Representative's Office (USTR) welcomed the progress made by Brussels but warned that merely reducing tariffs is not enough.
The American administration insists that the European Union also eliminate non-tariff barriers and regulatory obstacles considered restrictive for American companies.
The USTR stated that it will review the amendments introduced in European legislation to verify if they comply with the joint declaration agreed upon between Washington and Brussels.
European officials: A trade escalation has been avoided
The main negotiator of the European People's Party group, Željana Zovko, stated that the agreement allowed avoiding a dangerous trade escalation between the two sides of the Atlantic and protected European companies and jobs.
Similarly, the chief trade negotiator of the European Parliament, Bernd Lange, described the negotiations as "a challenging path," but necessary for stabilizing the economic relations between the EU and the US.
The final vote on the approval of the agreement is expected in mid-June.