REMEMBER the European Union’s triumphalism about avoiding the worst of Donald Trump’s threatened tariffs? Well, the EU came off worse, and still has not reached a settlement, even while it claims a resolution.
On July 27, the EU agreed a US tariff rate of 15 per cent on a range of goods. Just think about that for a minute. Imagine yourself in 2024, considering the possibility that the EU – the self-described agent of European economic growth – would accept a whopping tariff on its exports to America, its largest national market. In 2024, the average tariff on EU exports was around 2.4 per cent!
The 15 per cent tariff applies to many goods that the EU considers competitive with American goods, including automobiles, auto parts, pharmaceuticals and semi-conductors. These sectors had been scheduled with American tariffs from 25 per cent (automobiles and parts) to 30 per cent (pharmaceuticals).
Did the EU accept 15 per cent in those sectors as a bitter pill so that it would be better off overall? No. The average tariff on US imports from the EU will surge to 17.5 per cent in 2026.
Some of the EU’s strongest sectors face even steeper tariffs. For steel, aluminium and copper, US tariffs remain at 50 per cent.
US tariffs will reduce the EU’s annual gross domestic product by 0.2 per cent, and industrial output by 0.3 per cent.
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