The United States and European Union released a joint statement introducing a Framework on an Agreement on Reciprocal, Fair, and Balanced Trade (“Framework Agreement”) on August 21, 2025. Although the Framework Agreement is non-binding, the framework outlines shared negotiating objectives, with the potential to expand into new areas over time. 

Key Provisions of the Framework:

1. EU Market Access 
   1. The EU intends to eliminate tariffs on all U.S. industrial goods and grant preferential access to a broad range of U.S. agricultural and seafood products including tree nuts, dairy products, fresh and processed fruits and vegetables, processed foods, planting seeds, soybean oil, pork, bison, and lobster.
2. U.S. Tariff Policy 
   1. For EU-origin goods, the U.S. plans to apply the higher of: (1) the standard Most-Favored-Nation (MFN) rate, or (2) a combined 15% tariff (comprising the MFN rate and a reciprocal tariff).
   2. Effective September 1, 2025, certain products, including aircraft and aircraft parts, generic pharmaceuticals and related inputs, will face only the MFN rate. The parties may expand this list of products subject only to MFN rates to other key sectors.
   3. Both parties agreed to negotiate rules of origin that would ensure the benefits of the trade agreement would accrue primarily to the U.S. and the EU.
3. Section 232 Automobiles and Auto Parts Tariffs –
   1. Following the introduction of the necessary legislative proposal by the EU, automobiles and auto parts of EU origin subject to Section 232 will be subject to a tariff equal to the greater of the MFN rate or 15%.
   2. These adjustments would take effect the first day of the month EU legislation is introduced enacting tariff reductions.
4. Other Section 232 Tariffs
   1. The U.S. aims to cap tariffs at 15% on EU-origin pharmaceuticals, semiconductors, and lumber products subject to Section 232 actions. 
   2. For steel, aluminum and their derivative products, both sides plan to explore cooperative solutions, such as tariff-rate quotas, to address overcapacity and maintain secure supply chains. 
5. Military and Defense Procurement  
   1. The EU plans to increase procurement of military and defense equipment from the U.S. 
6. Non-Tariff Barriers 
   1. The U.S. and EU declare that they will work together to reduce non-tariff barriers in key sectors, including mutual recognition of automotive regulatory standards, streamlined sanitary certification for pork and dairy products, and ongoing technical cooperation on cross-border standards.
7. EU Deforestation
   1. The EU commits to recognizing that the production of the relevant commodities within the U.S. poses a negligible risk to global deforestation. 
8. Strategic Investment and Procurement Intentions
   1. Under this framework agreement, the EU declared that EU companies “intend to” invest $600 billion in strategic U.S. sectors, procure $750 billion in U.S. energy products by 2028, and $40 billion in U.S. AI chips. 

Note: This Framework Agreement is not a finalized trade agreement, but rather an agreement to continue to negotiate further, outlining the parties' intentions for a future comprehensive trade deal.