European Parliament committee approves legislation to lower tariffs on industrial goods agreed upon in the US EU Framework Agreement: On 19 March, the International Trade Committee approved two legislative proposals that would remove most tariffs on US industrial goods, including the 1.7% duty on food processing and packaging machinery. The regulation will only take effect once the following conditions are agreed upon:
Suspension Clause: Any tariff that is imposed on the EU or any of its Member States (EU-27) would result in immediate suspension of the legislative work on implementing tariff preferences on US products.
Sunrise Clause: The tariff preferences for US products would only become effective when the commitments agreed under the US-EU Framework on an Agreement on Reciprocal, Fair, and Balanced Trade (Turnberry Deal) are effectively respected by the United States.
Conditions on EU products containing steel: US tariffs on EU products that contain less than 50% steel and aluminum content will be lowered from 50% to 15%. Currently the United States imposes a 50% Section 232 tariff on the value of non-US origin steel and aluminum content on imports into the United States.
Conditions on the current Section 122 tariff: If Section 122 tariffs are increased from 10% to 15% across the board, this would result in immediate suspension of the legislative work on implementing tariff preferences on US products.
Section 338 tariffs will be an option for some countries: On 18 March, U.S. Trade Representative Jamieson Greer said that the Trump Administration is considering using Section 338 of the Tariff Act of 1930 to apply tariffs on countries that “discriminate” against US exports. Section 338 has never been used and would impose a 50% tariff on select countries with no time limit. Currently, the Administration is using Section 122, Section 232, and Section 301 tariffs on US trading partners. Those of relevance to PMMI members include:
Status of U.S. bilaterial negotiations and discussions: During the period when IEEPA tariffs were in effect, the Trump Administration negotiated or announced trade agreements with nineteen countries. Countries with announced US reciprocal framework trade deals of relevance to PMMI members include the EU, Switzerland, Japan, UK, Taiwan, South Korea, and India. Given the Supreme Court decision that IEEPA tariffs are deemed illegal, the IEEPA-related provisions of agreements are nullified. As of 24 February, all US trading partners are subject to the Section 122 10% tariff (increase to 15% expected given earlier comments by President Trump and Secretary Bessent) regardless of whether a deal was negotiated. The Administration has noted that they intend to stand by the trade deals and expect counterparts to as well. Country reactions during the week of 17-23 March include:
European Union: The European Parliament’s International Trade Committee approved legislation that implements tariff reductions on industrial goods agreed upon under the US-EU Framework Agreement. Please see more details above.
India: India’s Commerce Secretary said that India will sign its trade deal with the United States only after the United States establishes a new tariff framework.
Trade Policy Actions by Other Countries
The UK Government announces new Steel Strategy to help protect domestic industry: On 19 March, the United Kingdom (UK) announced a new Steel Strategy that introduces new trade measures to protect the domestic industry from overcapacity. Starting 1 July 2026, overall quota volume for steel imports will be reduced by 60% compared to current agreements and steel imported into the UK. Above-quota imports will be subject to a 50% tariff, an increase from the current 25% above-quota tariff rate. The UK government is also raising the UK’s maximum most-favored-nation (MFN) on steel tariffs at the WTO to 50%. It is unclear which steel products will be affected as no list was published with the UK’s announcement. PMMI members based in the UK importing steel inputs for food processing and packaging machinery may be affected by these new measures.
Paraguay becomes final Mercosur member countries to approve Mercosur-EU Trade Deal: On 17 March, Paraguay became the final Mercosur member to approve the EU-Mercosur interim Trade Agreement (iTA), joining Brazil, Uruguay, and Peru. The iTA will enter into force once the European Parliament ratifies. Conditional implementation is expected in early May 2026. Upon entry into force, the 1.7% standard/MFN tariff rate for food processing and packaging machinery of 8422 and 8438 manufactured in Mercosur member countries and imported into the EU will be eliminated. For most EU-origin machinery of 8422 and 8438 imported into Mercosur member countries, the standard/MFN tariff of 2-20% will be eliminated over a period of 11-16 equal annual reductions. Some machinery imports into Mercosur are already MFN duty-free or excluded from preferential market access. Specific preferential tariffs are based on product code and the Mercosur member country in which the machinery is imported.
