The US and the European Union cut their tariffs for the 1st time in two decades

The United States and the European Union (EU) announced a bilateral reduction in tariffs for the first time in more than two decades.

Under the agreement, the EU will remove tariffs on imports of US live and frozen lobster products.

US exports of these products to the EU exceeded $ 111 million in 2017.

Furthermore, the EU will eliminate these tariffs on a most-favored-nation (MFN) basis, retroactive from 1 August 2020.

EU tariffs will be eliminated for a period of five years and the European Commission will quickly initiate procedures aimed at making the tariff changes permanent.

The United States will reduce its tariff rates by 50% on certain products exported by the EU with an average annual trade value of $ 160 million, including certain prepared foods, certain glassware, surface preparations, propellants, cigarette lighters and parts. lighter.

The United States tariff reductions will also be made on an MFN basis and will be retroactive as of August 1, 2020.

The United States Trade Representative, Robert Lighthizer, and the European Union Trade Commissioner, Phil Hogan, announced the agreement this Friday to lower tariffs that will increase market access by hundreds of millions of dollars in United States exports and the European Union.

Tariffs and history

“As part of improving relations between the EU and the United States, this mutually beneficial agreement will bring positive results to the economies of the United States and the European Union. We intend this package of tariff reductions to mark only the beginning of a process that will lead to additional agreements that create freer, fair and reciprocal transatlantic trade, ”said Ambassador Lighthizer and Commissioner Hogan.

In 2019, the United States completed the formal procedures necessary to begin negotiations on a trade agreement, as did the European Commission.

In September 2018, as required by the Congressional Bipartisan Trade Priorities and Accountability Act of 2015, Ambassador Lighthizer consulted with members of Congress about the Trump Administration’s interest in initiating trade negotiations with the EU.

On October 16, 2018, the Office of the United States Trade Representative officially notified Congress that President Trump intended to initiate trade negotiations with the EU.

On January 11, 2019, following consultations with Congress and a public comment period from U.S. stakeholders,

The Trump Administration issued formal US negotiating targets for the EU.

The agreement announced today stems from an ongoing engagement with the EU on these issues.