After months of deliberation, the United States and the European Union finalized a new treaty and agreement in principle on July 27, 2025, according to the Oeconomus Economic Research Foundation.
Under the deal, the US imposes a 15% import tariff on nearly all EU-origin goods, including passenger vehicles, while existing 50% tariffs remain for aluminum and steel. Pharmaceutical products are excluded from the agreement.
Due to deep interdependence in the pharmaceutical sector—70% of US drug imports come from Europe and nearly half of EU pharmaceutical exports head to the US—the application of high tariffs could trigger inflationary pressure in the US and shrink market access in the EU, especially impacting countries like Ireland, where 50–60% of total exports (and 90% of US-bound shipments) consist of pharmaceutical and chemical products.
As part of the deal, the EU committed to purchasing $750 billion worth of US energy resources, including LNG, oil, and nuclear fuels—marking a major step forward in energy cooperation. In 2024, the US exported around $70 billion in energy to Europe, becoming the continent’s leading energy supplier. For instance, 45.6% of EU LNG imports in 2024 came from the US, while Norway remains dominant in pipeline gas supply. This represents a dramatic shift from previous years: in 2022, Russia led EU imports across multiple energy categories, but by 2023 its share had dropped sharply.
The agreement also includes a pledge to increase EU purchases of US-made weapons, though no specific figures have been released. Between 2020 and 2024, EU NATO members more than doubled their arms imports, with 64% sourced from the US. Additionally, a $600 billion investment package is outlined to help reduce the EU’s trade surplus, which totaled €50 billion in 2024 across goods and services. That year, the US remained the EU’s top export partner, absorbing 20.6% of all goods exported and ranking as the second-largest import source with 13.7% of incoming goods.
Despite the agreement’s broad scope, its legal framework and implementation mechanisms remain unclear, prompting debate on institutional competencies, member state sovereignty, and enforceability. A key issue is how direct EU investments into the US would be realized, and whether individual member states could be compelled to participate, given the European Commission’s limited authority in this domain.
Further doubts are raised by the application of a 15% US import tariff, which may affect both compliance with WTO rules and the amendment of EU customs regulations. During the implementation of the investment and procurement commitments, it will be especially important to clarify the legal framework regarding the forms and mechanisms through which member states may become parties to the agreement, as well as which dispute resolution forums—such as ISDS-type mechanisms—will provide legal remedies in case of conflicts. The technological and data-sharing dimensions of the agreement—particularly in light of GDPR compliance—add another layer of complexity. Politically, contention is rising among member states like France, which advocate using the EU’s "anti-coercion instrument" despite the bloc’s formal endorsement of the agreement.
Overall, although the deal represents a breakthrough in transatlantic relations, its legal execution and practical impacts are expected to spark ongoing expert and policy-level debates.