EU Council President António Costa meets with Anke Rehlinger - Steadfast proponent for an EU capable of prioritizing interests of border territories
EU-US Trade Negotiations: A Step Towards Balanced Trade
In a recent meeting in Brussels, Anke Rehlinger, the Minister President of Saarland and President of the Bundesrat, discussed the ongoing trade tensions between the European Union (EU) and the United States with EU Council President Antonio Costa. The conversation focused on the impacts of US tariffs on the European automotive and steel industries and the progress made in the negotiations between the two parties.
The US tariffs, initially set at 20% for all EU imports, have put a significant strain on the EU automotive sector, which contributes 60% of the EU’s trade surplus. The tariffs have resulted in estimated export losses between €1.5 billion and €7.5 billion for passenger vehicles and vehicle parts, the most exposed segments. US automakers have reported billions in tariff-related costs, with European automakers facing similar pressures.
The steel and aluminum tariffs have also disrupted supply chains and raised costs for both the EU and US, given the foundational role these industries play in manufacturing for both economies.
However, recent negotiations have led to tentative agreements to ease tensions and reduce tariffs. A key joint statement from August 20, 2025, affirms a new framework agreement aimed at reciprocal, fair, and balanced trade. The United States has committed to applying the Most Favored Nation (MFN) tariff, combined with Section 232 tariffs, to capped rates not exceeding 15% on EU goods including automobiles and parts once the EU passes corresponding legislation.
This agreement includes a commitment for the EU to reduce or legislate tariff cuts symmetrically to avoid higher US tariffs and aims to "ring-fence" domestic markets from overcapacity via tariff-rate quota solutions for steel and aluminum, promoting secure supply chains while addressing overcapacity concerns.
Furthermore, a broader trade deal was announced on July 28, 2025, aiming to generate tens of billions in revenue, reduce trade imbalances, and stimulate investment. Tariffs in various sectors are targeted for elimination or reduction in line with this deal, with meaningful market access for US goods into the European market.
While the tariff environment remains somewhat fluid pending European legislative action and full implementation of the framework agreement, the new 15% combined tariff on vehicles still significantly affects profitability and trade strategies. Both sides emphasize addressing non-tariff barriers and improving trade facilitation for industrial and agricultural exports, indicating that future negotiations will likely expand beyond tariffs to regulatory and market access issues.
Cooperation on steel and aluminum supply chain security with mechanisms like tariff-rate quotas suggests future trade may balance industrial competitiveness with the need to protect sensitive domestic sectors on both sides. The automotive industry's margins remain under pressure, with tariffs causing delayed price adjustments and uncertainty that could influence investment and production decisions into 2026 and beyond.
In addition to trade discussions, Costa and Rehlinger also addressed the need to better protect the EU's external borders. As the head of a border region, Rehlinger expressed a critical view towards the spiral of increasing border controls in Europe. The future cohesion policy of the EU was also part of the discussion between Costa and Rehlinger.
References: 1. EU-US Trade: A New Framework Agreement 2. EU-US Trade: Impacts on the Automotive Industry 3. EU-US Trade: Joint Statement and Framework Agreement 4. EU-US Trade: Broader Trade Deal Announced
- The ongoing discussions between the European Union (EU) and the United States, initiated by Anke Rehlinger and EU Council President Antonio Costa, also encompassed the need to address war-and-conflicts-induced migration and its implications on the EU's policy-and-legislation.
- The recent tariff agreements between the two parties have not only affected the automotive and steel industries but also extended their influence to other areas, such as crime-and-justice, as US automakers reported billions in tariff-related costs, similar to those faced by European automakers.
- The 15% combined tariff on EU cars still significantly affects profitability and trade strategies, causing delayed price adjustments and uncertainty that could influence general-news topics like politics and investment decisions into 2026 and beyond.
- As the head of a border region, Rehlinger emphasized the importance of addressing political issues related to crime-and-justice, particularly the need to enhance border controls in the EU.
- The ongoing EU-US Trade negotiations also addressed the need for cooperation in areas beyond trade, such as fires and emergency response, as both sides agreed that secure supply chains are crucial for ensuring the stability of their economies.
