Europe, U.S. Confirm 15% Tariff for Pharma, Cars & Chips

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The European Union (EU) and the U.S. have agreed a maximum 15% tariff that will be applied to the vast majority of EU exports, including strategic sectors such as cars, pharmaceuticals, semiconductors and lumber.

A Joint Statement issued by the EU and the U.S. confirmed the new trade deal and put to rest previous threats by U.S. President Donald Trump to levy tariffs of up to 250% on the pharmaceutical sector. The statement provides more details and assurance to key sectors following the general agreement of a "last minute" tariff deal announced by the EU and U.S. in July. For additional information, see July 29, 2025, article - Europe Seals 'Last-Minute' Tariff Deal with U.S.. At the time, President Trump said that the handshake tariff deal did not cover pharmaceuticals and semiconductors meaning both sectors could have faced tariffs of 250% and 100%, respectively.

Regarding the latest trade deal, Ursula von der Leyen, president of the European Commission (EC), said: "Faced with a challenging situation, we have delivered for our Member States and industry, and restored clarity and coherence to transatlantic trade. This is not the end of the process, we continue to engage with the US to agree more tariff reductions, to identify more areas of cooperation, and to create more economic growth potential. At the same time, we continue to diversify our international trade partnerships, creating EU jobs and prosperity."

For cars and car parts, the 15% U.S. tariff ceiling will apply in tandem with the EU initiating tariff reductions in relation to U.S. products. In addition, from September 1, a number of product groups will benefit from a special regime, with only Most Favoured Nation (MFN) tariffs of 15% tariffs applying. These include unavailable natural resources (such as cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors. Both sides will continue to work to "extend this regime to other product categories." There was no indication that the current 50% tariff on EU exports of steel and aluminium will be reduced and no update on progress with a proposed quota system that could replace them. The EU will now work to pass legislation to eliminate tariffs on all U.S. industrial goods and to provide preferential market access for a wide range of U.S. seafood and agricultural goods, including tree nuts, dairy products, fresh and processed fruits and vegetables, processed foods, planting seeds, soybean oil, and pork and bison meat.

Maroš Šefčovič, Commissioner for Trade and Economic Security, commented: "The Joint Statement is the result of intensive but constructive engagement, and it carries real weight at a time when the global trade landscape is undergoing profound change. This is a serious, strategic deal -- and we are fully behind it. A wide range of sectors, including strategic industries such as cars, pharmaceuticals, semiconductors, and lumber, stand to benefit from the deal. The alternative -- a trade war with sky-high tariffs and political escalation -- would harm jobs, growth, and businesses on both sides of the Atlantic."

The European Federation of Pharmaceutical Industries and Associations (EFPIA), which represents the biopharmaceutical industry operating in Europe, said that despite the deal it remained concerned for the sector's future in Europe. "We understand the environment that European policy makers are operating in, and recognise the efforts to secure a trade deal for the region that works for all. With a potential 15% U.S. tariff on pharmaceuticals, no clear path for exemptions for innovative medicines and no visibility on future trade and pricing policies, we remain concerned for the future of patients and our sector in Europe," warned Nathalie Moll, director general of EFPIA. The group said the estimated cost of 15% tariffs on pharmaceutical exports to the U.S. equates to approximately 18 billion euros (US$21 billion) and "will directly impact R&D investments and industry's ability to innovate".

Reaction from the car industry was more positive. The European Automobile Manufacturers' Association (ACEA) welcomed the deal, in particular the confirmation that the U.S. would reduce its tariffs on imports of EU automobiles from 27.5% to 15%. "This confirmation is a positive step that provides greater certainty for our industry," stated Sigrid de Vries, ACEA's Director General. "It is now crucial that the Commission proceeds to implement the EU's commitments without delay, mitigating the tariff impact which already has cost automakers millions of euros in duties every day."

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