The new US-EU trade agreement creates a two-tiered tariff reality for European automakers: a punishing 27.5% duty now, with the prospect of a lower 15% rate later—if and when the EU meets specific conditions. This “now vs. later” structure maintains maximum leverage for the United States while leaving the European car industry in an uncertain waiting game.
Currently, every vehicle exported from the EU to the US is subject to the steep 27.5% tariff. This will remain the daily reality until the European Commission formally introduces a legislative proposal to lower its own barriers to American goods. The deal offers a clear exit ramp, but the keys to that exit are held in Brussels, not Washington.
The promise of a 15% tariff is a powerful incentive, but it is not yet a reality. The framework agreement, while detailed, is contingent on future actions that are subject to the political process of the 27-member bloc. Any internal disagreement or delay within the EU directly translates into an extension of the higher tariff period.
This conditional framework means that for European car manufacturers, planning for the future remains challenging. They must operate under the assumption of a 27.5% cost base while hoping for a reduction that is dependent on political maneuvering. The deal has replaced one form of uncertainty with another, shifting the focus from the whims of Washington to the workings of Brussels.