On 20 May 2026, the Council presidency and the European Parliament reached an agreement on two regulations aimed at implementing the tariff-related aspects of the framework on a agreement on Reciprocal, Fair, and Balanced Trade between the EU and the U.S. (the “Trade Agreement Framework”), announced on 21 August 2025, following the EU–U.S. Joint Statement of 27 July 2025 in Turnberry (see our prior blog post on this topic here).
In essence, the Trade Agreement Framework has introduced a 15% tariff ceiling on EU goods imported into the U.S, while the EU commits to eliminating tariffs on U.S. goods imported into the EU. The U.S. has implemented most of its commitments, including the 15% tariff ceiling with retroactive effect as of 1 August 2025. However, the EU’s commitments have not yet been reflected in binding legislation.
To implement these commitments, the European Commission had already proposed two regulations on 28 August 2025
- The first regulation provides for preferential market access by:
- eliminating customs duties on U.S. industrial goods and
- providing reduced tariffs for certain non-sensitive agricultural products and seafood via tariff rate quotas.
- The second regulation extends the existing duty suspension for lobster products.
Progress on the implementation of the EU’s commitments was temporarily delayed twice, due to (i) tariff-related tensions concerning Greenland and (ii) the U.S. Supreme Court ruling finding that certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful.
The compromise reached during the interinstitutional negotiations clears the way for implementation of the Trade Agreement Framework, while introducing targeted safeguards to the first regulation. Some of these elements are also mirrored in the second regulation concerning lobster products. The key safeguard clauses are outlined below.
- Safeguard for surge of imports
Under this safeguard mechanism, the EU may take action if increased imports of U.S. goods cause, or threaten to cause, serious injury to EU producers or result in significant market disruption. This safeguard mechanism may be triggered on the basis of a substantiated request by at least three EU Member States, the EU industry, trade unions or on the European Commission’s own initiative.
In such cases, the Commission would initiate an examination to determine whether the import increase has caused, or threatens to cause, such injury or disruption. Where these conditions are met, the Commission may suspend the application of the regulation, in whole or in part, and reimpose customs duties at a level necessary to prevent or remedy the injury. This safeguard broadly reflects existing EU trade defense instruments and preserves the Commission’s flexibility to address adverse effects of tariff liberalisation.
- Suspension clauses
In addition to the general safeguard above, the EU is empowered to suspend the tariff eliminations in specific situations via an implementing act. The mechanism may be triggered in situations such as where the U.S. fails to comply with its obligations or undermines the objectives pursued under the Trade Agreement Framework, or where the trade and investment relations with the EU are disrupted, including by discriminating against or targeting EU economic operators. Notably, the suspension mechanism may also be triggered where there are sufficient indications that such actions may occur in the future.
Furthermore, the EU is empowered to suspend the deal if the U.S. continues to apply a tariff rate higher than 15% on steel and aluminum derivative products after 31 December 2026. Current U.S. Section 232 tariffs on these products remain significantly above this threshold.
- The ‘sunset’ clause
The Council and Parliament have also included a so-called sunset clause, under which the regulation will only apply for a limited period unless explicitly extended. Under the agreed text, the regulation will cease to apply at the end of 2029 unless further legislative action is taken.
- Monitoring obligations
Monitoring of the economic impact of the measures will take place six months after the entry into application of the regulations and every three months thereafter. The Commission will use this monitoring to regularly inform the Council and the Parliament. The monitoring serves primarily as a data-gathering and reporting mechanism. The Commission will use the collected data to prepare a comprehensive assessment of the impact of the regulations, to be presented six months prior to their expiry. This assessment will inform the decision on whether the measures should be extended.
Next steps
The agreed texts of the legislative act are now finalized and will have to be formally adopted by Council and Parliament before being published into the EU Official Journal. The adoption vote will likely take place mid-June. At this stage, the final texts are not yet publicly available. The regulation will enter into force on the day following publication. The regulation concerning lobster products will apply retroactively from 1 August 2025.
The Baker McKenzie global customs and trade team will continue monitoring developments with respect to the EU-U.S. Trade Deal and will report on significant updates.
