Quote from Alex bobby on July 31, 2025, 8:51 AM

The EU and US Have Shaken Hands on a Trade Deal—But What Comes Next?

After months of tension and looming tariff threats, the European Union and United States have reached a long-awaited trade framework agreement. Sealed with a handshake between US President Donald Trump and EU Commission President Ursula von der Leyen on Sunday in Scotland, the deal was hailed as a breakthrough in transatlantic relations.

But even as headlines proclaimed victory, uncertainty continues to cloud the path ahead. With the White House and EU Commission making conflicting claims about the deal’s specifics, industry leaders, investors, and policymakers on both sides of the Atlantic are holding their breath—waiting for a promised joint statement to clarify what, exactly, has been agreed upon.

A Framework, Not a Final Deal

At the heart of the confusion is the nature of the deal itself. The forthcoming joint statement—expected before August 1, when Trump had threatened to impose a 30% blanket tariff on EU imports—is not legally binding. Instead, it’s described by the EU as a “roadmap” of political commitments.

“This joint statement is not a legally binding document but rather a series of political commitments,” EU Commission spokesperson Olof Gill confirmed on Tuesday. That distinction matters. While it gives both sides room to maneuver, it also leaves the door open for future disagreements and reinterpretations of the deal’s content.

Critically, the deal includes major commitments from the EU in areas such as energy and defence: €750 billion in purchases of US energy and €600 billion in investments and weapons procurement. However, these are not state-level commitments. Due to legal constraints, they will depend heavily on the private sector's willingness to follow through.

Tariffs: Still on the Table

One of the key aspects expected in the joint statement is a clear tariff structure. The EU and US had agreed on July 27 to apply a 15% tariff on most EU imports, down from the 30% Trump had previously threatened. However, it remains unclear which sectors might win exemptions.

France, in particular, is lobbying for zero tariffs on wine and spirits—an area of major export interest. An EU official noted that “exemptions are still being negotiated,” and the final joint statement is likely to include an updated list of products that will be excluded from the 15% rate.

On the other side, the EU is expected to offer 0% tariffs for a range of US exports. That list is expected to include:

• Non-sensitive agricultural goods (such as nuts, processed fish, select dairy items, and pet food)
• Certain industrial products
• Fertiliser-related chemicals, where the EU sees US supply as a strategic alternative to Russian imports

The goal, according to EU sources, is to balance mutual access while maintaining protections for sectors considered vulnerable or “sensitive” within the EU.

The Battle Over Non-Tariff Barriers

While tariffs are a big part of the conversation, non-tariff barriers (NTBs) may prove even more contentious. These include regulations, standards, and testing requirements that affect trade, particularly in digital services, food safety, and environmental protections.

The US has long criticised the EU’s digital and phytosanitary regulations as unfairly restrictive. However, the EU has stood firm in defending its standards—particularly around data privacy (e.g., GDPR) and food safety.

An EU official insisted there will be no concessions on revisiting these regulations. “We are not reopening our regulatory framework to accommodate demands that undermine European values or consumer safety,” the official said.

Still, observers expect some language in the joint statement aimed at reducing bureaucratic friction—perhaps referencing cooperation or regulatory alignment in specific sectors without making hard commitments.

A Lesson from the Indonesia-US Deal

To get a sense of what the joint statement might look like, officials are pointing to last week’s US-Indonesia trade agreement. That deal outlines tariff rates, purchasing commitments, and includes a section addressing NTBs like licensing and customs procedures.

Likewise, the EU-US statement may contain figures and targets, but with enough ambiguity to avoid legal liability if targets are missed. The goal is to maintain flexibility while signalling serious intent to move toward more balanced trade.

Executive Orders on the Horizon

The US administration is also expected to issue a series of executive orders confirming the new tariff levels for various trading partners. One such order is anticipated for the EU—formally reducing the threat of 30% tariffs, provided the joint statement is finalised on time.

Whether that happens before the August 1 deadline remains uncertain. A delay could rattle markets and reintroduce fears of a renewed transatlantic trade war.

Looking Forward

As the EU and US prepare to release the joint statement, all eyes will be on the fine print—or lack thereof. The coming weeks will be critical for defining how political commitments translate into practical action. Industry stakeholders will need clarity on tariff structures, timelines, and regulatory expectations, while governments must work to maintain diplomatic balance without compromising strategic interests.

If successfully implemented, the deal could mark a reset in transatlantic economic cooperation, especially amid global supply chain shifts and geopolitical uncertainty. But with so many moving parts—and lingering mistrust—the path forward will require patience, transparency, and continued negotiation. The handshake may have signalled a new chapter, but the story of EU-US trade is far from over.

Conclusion

The handshake between Trump and von der Leyen marks an important political moment—but the real test lies ahead. With no legally binding terms and much still to be negotiated, the EU-US trade deal remains a work in progress. The coming joint statement will provide more clarity, but businesses and governments alike will need to read between the lines. For now, the only certainty is that the future of transatlantic trade remains anything but settled.

Meta Description:
With the EU and US agreeing on a trade framework, questions remain about tariff exemptions, non-tariff barriers, and a joint statement that’s more political than legal. What lies ahead for transatlantic trade?