How long can the tariff "peace" last? The EU has ratified the Turnbury Agreement, but structural differences between the US and the EU remain unresolved.
2026-06-16 17:04:24
The European Parliament will vote on legislation on Tuesday (June 16) to implement the commitments made by the EU in the trade agreement reached nearly 11 months ago at Trump Templeley Golf Course in Scotland.
It is expected that the vast majority of lawmakers will support the agreement, which includes eliminating EU tariffs on US imports and the arrangement for the US to generally impose a 15% tariff.
Trump had threatened to raise tariffs on the EU to "higher levels" if the EU did not act quickly.
Industry leaders are urging lawmakers to support the agreement, and European automakers, already hard hit by tariffs, have begun to adjust their strategies accordingly.
The Turnberry Agreement will eliminate the EU's 10% import tariff on US cars, a significant development for transatlantic trade. Volvo Cars, which currently produces most of its vehicles exported to the US in Europe, plans to begin production of some of its best-selling XC60 SUVs at its South Carolina plant later this year, and also plans to launch a new hybrid model there by the end of the decade to better adapt to the market changes brought about by the agreement.
Fifteen business associations representing the EU's automotive, textile, cosmetics, and food and beverage industries issued a joint statement supporting the agreement, stating it would provide valuable stability for businesses reliant on $2 trillion in annual transatlantic trade. However, they also made it clear that this is not the end of the dialogue. The crucial next step is whether the new round of tariffs Washington will implement on July 24th will be fully compliant with the Turnbury Agreement.
The two sides also need to reach an agreement to avoid reimposing tariffs on $11.5 billion worth of goods involved in the long-standing aircraft subsidy dispute, the current five-year suspension period for which the tariffs will expire on July 11.
U.S. Trade Representative Greer stated that the U.S. would abide by the agreement, but European Parliament Trade Committee Chairman Lange expressed skepticism, believing the final decision rests with the White House and Trump. Trump's threat on Monday to impose a 100% tariff on French wine could potentially undermine the agreement's implementation.
Langer emphasized that the EU should be prepared to suspend parts of the agreement if necessary and could reinstate retaliatory tariffs on €93 billion (approximately $108 billion) worth of US goods, measures currently suspended until August 6.
Beyond tariffs, Washington and Brussels also need to cooperate on other aspects of the agreement, but their priorities differ significantly. The United States insists that the EU address non-tariff barriers and regulatory issues, including the EU's carbon border adjustment mechanism, "no deforestation" certification requirements for imported goods, and audits of companies' supply chains on human rights and environmental issues.
The EU has relaxed some rules and extended compliance deadlines, but US companies such as ExxonMobil still hope that the EU will completely abolish laws related to corporate sustainability and have expressed their dissatisfaction to the Trump administration.
The EU complained that the US imposed tariffs exceeding 15% on metal-containing products such as washing machines, wind turbines, and motorcycles. Even after the Turnberry Agreement was reached, Trump expanded the scope of tariffs on so-called "metal-derived products."
Although some products have been removed, EU legislation stipulates that the European Commission will suspend tariff reductions on US steel and aluminum products unless all relevant tariffs are reduced to 15% by the end of the year.
EU tableware and catering equipment manufacturers say higher tariffs could squeeze them out of the US market or further compress their already thin profit margins. These disagreements demonstrate that while the US-EU trade negotiations have achieved some progress, structural contradictions remain regarding regulatory coordination and industry protection.
The EU hopes the US will replace the current 50% tariff on steel and aluminum with tariff-free quotas and expand the range of duty-free products. EU wine and spirits producers hope to be among the first beneficiaries, and they also have the support of the US spirits industry.
The industry advocates for the elimination of tariffs by both sides, pointing out that bilateral trade grew by 450% during the period of “zero-to-zero” tariffs from 1997 to 2018. This historical data provides strong evidence for both sides to further reduce trade barriers.
The steel and spirits industries are important sectors in US-EU trade, and expanding the agreement on these areas would create more opportunities for companies on both sides. However, while Trump's tariff threats have been limited by the US Supreme Court ruling, market uncertainty remains.
Garcia Bercero, a senior fellow at the think tank Bruegel, points out that while the United States cannot arbitrarily impose new tariffs, it may still issue threats through other political tools.
The European Parliament is set to vote on Tuesday to implement Trump's Turnbury trade agreement, which includes eliminating the EU's 10% tariff on US cars and providing stability to the $2 trillion annual transatlantic trade. However, Trump's threat to impose a 100% tariff on French wine, disagreements over steel and aluminum tariffs, and non-tariff barriers still pose risks to implementation. With significant differences in priorities between the US and the EU, and while the agreement has industry support, its long-term stability depends on subsequent coordination and compliance from both sides.
Q1: What are the core contents of the Turnbury Accords?
The Turnberry Agreement primarily commits to eliminating the EU's 10% tariff on US automobile imports and addresses the US's 15% tariff arrangement on EU goods. The agreement aims to provide stability for the $2 trillion annual transatlantic trade while suspending some retaliatory tariffs. Automakers such as Volvo have already adjusted their production layout accordingly, increasing local production in South Carolina. The agreement also needs to address the suspension of tariffs on $11.5 billion worth of goods related to the aircraft subsidy dispute.
Q2: What is the significance of the European Parliament vote for US-EU trade?
If the vote passes on Tuesday, the Turnberry Agreement will be formally implemented, providing policy certainty for businesses and easing tariff pressure. European industries, including the automotive and food and beverage sectors, strongly support it, believing it will help stabilize supply chains. However, Trump's latest tariff threats could affect implementation, and the EU is prepared to retaliate, including reinstating tariffs on $108 billion worth of US goods.
Q3: What are the main differences between the US and the EU in implementing the agreement?
The US is demanding that the EU address non-tariff barriers such as carbon border taxes, deforestation-free certification, and supply chain audits, while the EU is concerned about the high US tariffs on metal products. Trump's threat to impose a 100% tariff on French wine has further escalated tensions. Further negotiations are also needed on steel and aluminum tariff quotas, zero tariffs on spirits, and aircraft subsidies.
Q4: What impact will Trump's tariff threats have on the prospects of the agreement?
Trump has threatened to raise tariffs if the EU is slow to act and has already warned about French wine, which could undermine the agreement's atmosphere. Although the US Supreme Court has limited its ability to impose arbitrary tariffs, uncertainty remains. EU Trade Commissioner Lange indicated that parts of the agreement might be suspended or retaliatory tariffs might be reinstated, showing that the bargaining between the two sides continues.
Q5: What are the actual impacts of the agreement on related industries?
European automakers like Volvo will accelerate local production in the US; the spirits and wine industry looks forward to zero tariffs to revive growth (historical data shows trade increased by 450% during periods of zero tariffs); and steel companies hope to expand duty-free quotas. However, if tariff disputes remain unresolved, manufacturers of tableware, catering equipment, and other products may face the risk of a shrinking US market. Overall, the agreement will reduce costs and boost confidence in transatlantic trade, but the details of its implementation will determine its ultimate effectiveness.
It is expected that the vast majority of lawmakers will support the agreement, which includes eliminating EU tariffs on US imports and the arrangement for the US to generally impose a 15% tariff.
Trump had threatened to raise tariffs on the EU to "higher levels" if the EU did not act quickly.
Industry leaders are urging lawmakers to support the agreement, and European automakers, already hard hit by tariffs, have begun to adjust their strategies accordingly.
Key elements of the Turnberry Agreement: elimination of auto tariffs, and stable expectations for transatlantic trade.
The Turnberry Agreement will eliminate the EU's 10% import tariff on US cars, a significant development for transatlantic trade. Volvo Cars, which currently produces most of its vehicles exported to the US in Europe, plans to begin production of some of its best-selling XC60 SUVs at its South Carolina plant later this year, and also plans to launch a new hybrid model there by the end of the decade to better adapt to the market changes brought about by the agreement.
Fifteen business associations representing the EU's automotive, textile, cosmetics, and food and beverage industries issued a joint statement supporting the agreement, stating it would provide valuable stability for businesses reliant on $2 trillion in annual transatlantic trade. However, they also made it clear that this is not the end of the dialogue. The crucial next step is whether the new round of tariffs Washington will implement on July 24th will be fully compliant with the Turnbury Agreement.
The two sides also need to reach an agreement to avoid reimposing tariffs on $11.5 billion worth of goods involved in the long-standing aircraft subsidy dispute, the current five-year suspension period for which the tariffs will expire on July 11.
U.S. Trade Representative Greer stated that the U.S. would abide by the agreement, but European Parliament Trade Committee Chairman Lange expressed skepticism, believing the final decision rests with the White House and Trump. Trump's threat on Monday to impose a 100% tariff on French wine could potentially undermine the agreement's implementation.
Langer emphasized that the EU should be prepared to suspend parts of the agreement if necessary and could reinstate retaliatory tariffs on €93 billion (approximately $108 billion) worth of US goods, measures currently suspended until August 6.
Significant differences in priorities between the US and Europe
Beyond tariffs, Washington and Brussels also need to cooperate on other aspects of the agreement, but their priorities differ significantly. The United States insists that the EU address non-tariff barriers and regulatory issues, including the EU's carbon border adjustment mechanism, "no deforestation" certification requirements for imported goods, and audits of companies' supply chains on human rights and environmental issues.
The EU has relaxed some rules and extended compliance deadlines, but US companies such as ExxonMobil still hope that the EU will completely abolish laws related to corporate sustainability and have expressed their dissatisfaction to the Trump administration.
The EU complained that the US imposed tariffs exceeding 15% on metal-containing products such as washing machines, wind turbines, and motorcycles. Even after the Turnberry Agreement was reached, Trump expanded the scope of tariffs on so-called "metal-derived products."
Although some products have been removed, EU legislation stipulates that the European Commission will suspend tariff reductions on US steel and aluminum products unless all relevant tariffs are reduced to 15% by the end of the year.
EU tableware and catering equipment manufacturers say higher tariffs could squeeze them out of the US market or further compress their already thin profit margins. These disagreements demonstrate that while the US-EU trade negotiations have achieved some progress, structural contradictions remain regarding regulatory coordination and industry protection.
Steel Agreement and Spirits Industry Expectations: EU Seeks Further Breakthrough
The EU hopes the US will replace the current 50% tariff on steel and aluminum with tariff-free quotas and expand the range of duty-free products. EU wine and spirits producers hope to be among the first beneficiaries, and they also have the support of the US spirits industry.
The industry advocates for the elimination of tariffs by both sides, pointing out that bilateral trade grew by 450% during the period of “zero-to-zero” tariffs from 1997 to 2018. This historical data provides strong evidence for both sides to further reduce trade barriers.
The steel and spirits industries are important sectors in US-EU trade, and expanding the agreement on these areas would create more opportunities for companies on both sides. However, while Trump's tariff threats have been limited by the US Supreme Court ruling, market uncertainty remains.
Garcia Bercero, a senior fellow at the think tank Bruegel, points out that while the United States cannot arbitrarily impose new tariffs, it may still issue threats through other political tools.
Editor's Summary
The European Parliament is set to vote on Tuesday to implement Trump's Turnbury trade agreement, which includes eliminating the EU's 10% tariff on US cars and providing stability to the $2 trillion annual transatlantic trade. However, Trump's threat to impose a 100% tariff on French wine, disagreements over steel and aluminum tariffs, and non-tariff barriers still pose risks to implementation. With significant differences in priorities between the US and the EU, and while the agreement has industry support, its long-term stability depends on subsequent coordination and compliance from both sides.
Frequently Asked Questions
Q1: What are the core contents of the Turnbury Accords?
The Turnberry Agreement primarily commits to eliminating the EU's 10% tariff on US automobile imports and addresses the US's 15% tariff arrangement on EU goods. The agreement aims to provide stability for the $2 trillion annual transatlantic trade while suspending some retaliatory tariffs. Automakers such as Volvo have already adjusted their production layout accordingly, increasing local production in South Carolina. The agreement also needs to address the suspension of tariffs on $11.5 billion worth of goods related to the aircraft subsidy dispute.
Q2: What is the significance of the European Parliament vote for US-EU trade?
If the vote passes on Tuesday, the Turnberry Agreement will be formally implemented, providing policy certainty for businesses and easing tariff pressure. European industries, including the automotive and food and beverage sectors, strongly support it, believing it will help stabilize supply chains. However, Trump's latest tariff threats could affect implementation, and the EU is prepared to retaliate, including reinstating tariffs on $108 billion worth of US goods.
Q3: What are the main differences between the US and the EU in implementing the agreement?
The US is demanding that the EU address non-tariff barriers such as carbon border taxes, deforestation-free certification, and supply chain audits, while the EU is concerned about the high US tariffs on metal products. Trump's threat to impose a 100% tariff on French wine has further escalated tensions. Further negotiations are also needed on steel and aluminum tariff quotas, zero tariffs on spirits, and aircraft subsidies.
Q4: What impact will Trump's tariff threats have on the prospects of the agreement?
Trump has threatened to raise tariffs if the EU is slow to act and has already warned about French wine, which could undermine the agreement's atmosphere. Although the US Supreme Court has limited its ability to impose arbitrary tariffs, uncertainty remains. EU Trade Commissioner Lange indicated that parts of the agreement might be suspended or retaliatory tariffs might be reinstated, showing that the bargaining between the two sides continues.
Q5: What are the actual impacts of the agreement on related industries?
European automakers like Volvo will accelerate local production in the US; the spirits and wine industry looks forward to zero tariffs to revive growth (historical data shows trade increased by 450% during periods of zero tariffs); and steel companies hope to expand duty-free quotas. However, if tariff disputes remain unresolved, manufacturers of tableware, catering equipment, and other products may face the risk of a shrinking US market. Overall, the agreement will reduce costs and boost confidence in transatlantic trade, but the details of its implementation will determine its ultimate effectiveness.
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