The White House published a fact sheet on the US-EU trade deal today.
For US imports from the EU: The new U.S. reciprocal tariff will be 15% on most imports, which is lower than the 30% announced earlier this month and the original 20% as noted in April. Section 232 tariffs of 50% on aluminum, steel, and copper will remain in place.
For US exports to the EU: EU tariffs on US-manufactured food processing and packaging machinery under HS codes 8422 and 8438 are currently 1.7%. The EU has free trade agreements in place with Canada, Japan, Korea, Mexico, and the UK which provide duty-free access into the EU.
According to the fact sheet, the EU “will work … to eliminate tariffs in various sectors and will provide meaningful quotas for other products…” as well as “work to address a range of U.S. concerns related to various EU requirements that are burdensome to U.S. exporters, particularly small and medium-sized businesses, including through efforts to eliminate the red tape that U.S. exporters face when doing business in the European Union.”
Press reports indicate tariffs on industrial goods will be eliminated. Ideally, this will mean that PMMI members’ US exports will also be duty-free into the EU in the near future. The EU has yet to publish a list of tariff codes to clarify scope of tariffs to be reduced, nor identify which EU requirements may be simplified.
While the EU’s retaliation list published on 24 July has not been rescinded, we anticipate no retaliatory duties by the EU will be applied given the announcement of the deal.
Timing and Implementation: The trade deal has not been finalized, and timeline and implementation date have not been announced. We hope to learn more from the Administration as to whether the 15% new US reciprocal tariff rate will be implemented starting 1 August. It is not clear what tariff rate will be applied on products already in transit (i.e., the 10% baseline tariff or the 15% new reciprocal tariff).
Tariff cost estimates: Under the announced deal we estimate US imports of food processing and packaging machinery may face an additional $296.1 M in reciprocal tariff costs through the end of this year. That is $98.7 M higher than under the current 10% baseline tariff. Please see table below for costs by tariff line.
Estimated Tariff Costs on EU-Manufactured Food Packaging/Processing Machinery thru End of the Year
