The agreement was announced on Sunday by US President Donald Trump and European Commission President Ursula von der Leyen, just ahead of the August 1 deadline that threatened a 30% blanket tariff on EU exports to the US. Under the new deal, a baseline levy of 15% will apply to EU exports — including automobiles — aligning with the rate previously negotiated with Japan. This replaces the existing 25% tariff on EU car exports.
The development is significant for Tata Motors, particularly for its UK-based subsidiary Jaguar Land Rover (JLR), which relies heavily on the US market. While the UK is no longer part of the EU and had already signed a separate trade agreement with the US, JLR also manufactures vehicles in Slovakia — a member of the EU — and exports a large volume from that plant to the US.
In April, JLR had paused shipments from Slovakia to the US due to reciprocal tariffs but resumed them in May. While the company did not disclose specific shipment numbers, global wholesale volumes, including those from the UK and Slovakia, rose 22% in 2024.
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US-Europe Trade Deal
The US President also said the bloc had agreed to purchase “$750 billion worth of energy” from the United States, as well as $600 billion more in additional investments in the country. Negotiating on behalf of the EU’s 27 countries, von der Leyen’s European Commission had been pushing hard to salvage a trading relationship worth an annual $1.9 trillion in goods and services.
The EU has been hit by multiple waves of tariffs since Trump reclaimed the White House. It is currently subject to a 25% levy on cars, 50% on steel and aluminium, and an across-the-board tariff of 10%, which Washington threatens to hike to 30% in a no-deal scenario.
US-EU Tariffs
While 15% would be much higher than pre-existing US tariffs on European goods, which average around 4.8%, it would mirror the status quo, with companies currently facing an additional flat rate of 10 percent.
Had the talks failed, EU states had greenlit counter tariffs on $109 billion (93 billion euros) of US goods including aircraft and cars to take effect in stages from August 7. Brussels was also drawing up a list of US services to potentially target.
Trump has embarked on a campaign to reshape US trade with the world, and has vowed to hit dozens of countries with punitive tariffs if they do not reach a pact with Washington by August 1. US Commerce Secretary Howard Lutnick had said Sunday the August 1 deadline was firm and there will be “no extensions, no more grace periods”.
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