The European Parliament has approved a long-delayed trade agreement with the United States, averting a threatened increase in U.S. tariffs on automobiles. Members of the European Parliament (MEPs) voted 440 to 151 to eliminate tariffs on certain American industrial goods and agricultural products, a key aspect of the deal negotiated last year between U.S. President Donald Trump and European Commission President Ursula von der Leyen.

The agreement, initially reached at Trump’s Scottish golf resort in Turnberry, sets a 15 percent tariff cap on European exports to the U.S. However, a subsequent Supreme Court ruling declared these tariffs illegal, resulting in Trump relying on temporary emergency powers to impose a 10 percent levy on top of existing duties. This combination has driven tariffs on some products, including cheese, above the agreed 15 percent threshold.

The parliamentary vote had been postponed multiple times amid geopolitical concerns, including Trump's threat to annex Greenland and uncertainty following the Supreme Court decision. The deal also provides for U.S. lobster to enter the European Union duty-free for an additional five years, a concession aimed at securing political support in Maine, a crucial swing state and major lobster producer in the U.S., ahead of upcoming midterm elections.

The agreement still requires ratification by individual EU member states and leaves unresolved disputes, particularly regarding U.S. tariffs on steel, aluminum, and certain other goods such as washing machines, which currently face duties as high as 50 percent. Should these tariffs remain in place by the end of the year, the European Commission reserves the right to rescind some concessions granted under the deal.

EU tariff reductions under the pact are set to expire on December 31, 2029, unless renewed. Bernd Lange, chair of the European Parliament’s trade committee, noted that U.S. Trade Representative Jamieson Greer has pledged to phase out those tariffs deemed inconsistent with the agreement. However, Lange cautioned that ultimate decisions rest with the White House and President Biden’s administration, leaving future developments uncertain.

Beyond tariffs, Lange highlighted ongoing tensions between the U.S. and EU, including disputes over digital regulations and allegations related to forced labor laws. The U.S. has imposed a 10 percent tariff on the EU concerning insufficient forced labor enforcement, expected to replace the temporary emergency tariffs when they lapse on July 24. An additional investigation into industrial overcapacity could trigger further U.S. duties.

Given the range of outstanding issues, EU officials emphasized the importance of maintaining mechanisms within the trade deal that allow for responsive measures, describing the agreement as a crucial “safety net” amid persistent trade frictions.