Europe Gets a Written Trump Trade Deal, With a Caveat for Automakers

The United States and the European Union on Thursday published much-anticipated details of the trade agreement they struck verbally last month, which will see Washington maintain high tariffs on vehicles imported from the 27-nation bloc until it takes steps to lower its levies on many American industrial and agricultural products.

The terms, outlined in a joint statement released by two of the world’s largest and most intertwined economies, formalized a truce announced in July that averted a damaging tit-for-tat escalation in President Trump’s punishing global trade war.

But that deal was a handshake arrangement, and negotiators have been scrambling ever since to put it into writing. European officials have been eager for a formal document, hoping that it would solidify promises that the administration had made to spare the bloc from worse outcomes. The newly published version is not a legally enforceable pact, but it is a step toward one.

Its backbone remains unchanged: The United States will maintain a 15 percent tariff on most goods arriving from E.U. member countries, a rate that Mr. Trump officially imposed in an executive order that took effect earlier this month.

In a win for Europe, that rate applies to some of its biggest exports, including pharmaceuticals, many of which will remain taxed at 15 percent even after the United States finalizes an expected set of tariffs for foreign-made medicines that could be as high as 200 percent.

Mr. Trump has looked to impose the duties on pharmaceuticals separately, and globally, on national security grounds, with additional tariffs planned for other critical sectors such as computer chips and lumber. But Europe will be spared from those higher rates as well, the two sides committed on Thursday.

Cars are more complicated. The United States will not immediately relax for Europe tariffs it has imposed worldwide on foreign-made vehicles. Rather, the two sides agreed that the United States would lower those tariffs to 15 percent only after Europe takes steps to follow through on its commitments to lower tariffs on imported American goods.

Specifically, the bloc must “formally” introduce legislation that would relax duties on industrial goods and agricultural products, including bison, tree nuts, dairy and many types of seafood, before lower car levies will kick in.

The delay could upset European automakers, who have faced steep financial losses for months as a result of America’s high car tariffs, which are currently set to 27.5 percent.

But a White House official, who briefed reporters in advance on condition of anonymity, said that Washington hoped this could be addressed in a matter of weeks, with tariffs lowered retroactively to the beginning of the month that the E.U. is able to take action.

The release of the joint statement on Thursday is a critical step in what has been a weekslong back and forth between negotiators on both sides of the Atlantic, as European officials made a last-ditch effort to secure additional tariff relief, particularly on wine and spirits. In the end, they did not succeed, and taxes on those imports remain at 15 percent. Before this year, alcohol tariffs had generally been held at zero.

The written agreement acknowledges that the bare-bones deal is “a first step in a process that can be further expanded over time to cover additional areas.”

In many ways, the documents that the two governments produced also evinced the even tougher haggling still on the horizon if they hope to strike a more formal trade deal, an undertaking usually years in the making. U.S. and European officials agreed to continue discussions on a vast array of thorny trade issues, including adjustments to auto and emissions standards and a reduction in regulations on U.S. technology companies, all of which have long rankled policymakers in Washington.

Europeans have insisted that they will not water down their key digital regulations, painting the issue as a matter of sovereignty. But the White House continues to push for them to weaken rules that govern online speech on big platforms in particular, criticizing the regulations for going too far to censor content and for causing undue burden to American technology companies.

Before clinching their trade truce, the two sides appeared primed for a devastating standoff, with Mr. Trump threatening tariffs on Europe of 30 percent, and the regional bloc considering a set of retaliatory measures, which the White House had promised to combat in kind.

They reached their deal partly because European emissaries appealed to Mr. Trump with promises of significant new U.S. investments, adopting a tactic that other countries have also used to lessen the blow of U.S. tariffs. Under the deal, Europe agreed to purchase $750 billion in American energy, while increasing its investment in the United States by more than $600 billion.

It quickly became clear that officials in Brussels saw the commitments more as aspirations than hard targets, given the fact that they would come from private sources that were not controlled by the E.U.’s executive branch, the European Commission. On Thursday, U.S. and E.U. officials appeared to acknowledge as much in their joint statement, which did not include further details on the investments or the way in which Washington might enforce the terms.

Still, the E.U. and its top executive official, Ursula von der Leyen, were forced to make other important concessions to the United States to secure the deal. The agreement has been widely criticized in Europe for its potential costs.

And rhetorically, E.U. officials have been forced to echo Mr. Trump’s assertion that the agreement will make the global trading system more fair. They had long held that it was not unfair to begin with.