EU-U.S. Trade Deal Boosts Some Exporters While Machinery Faces Steeper Tariffs
A recent customs agreement between the EU and the U.S. has reshaped trade flows, giving European exporters an advantage over Asian competitors. While some sectors have gained from lower tariffs, others—particularly machinery manufacturers—now face significantly higher costs. From April 2025 to February 2026, the U.S. imposed an average tariff of 7.8 percent on EU imports, far below the nearly 37 percent rate applied to Chinese goods. This disparity has strengthened the EU’s position in the U.S. market, especially for industries like automotive manufacturing. German exporters, in particular, benefited more than most, with their average tariff rate falling to 10.6 percent.
However, machinery producers encountered unexpected hurdles. The U.S. government reclassified certain machinery containing large amounts of steel as steel products, subjecting them to a 50 percent tariff. As a result, the effective EU tariff rate for machinery climbed to 12.6 percent. This increase has offset some of the agreement’s benefits, prompting concerns from industry experts.
IW economist Samina Sultan highlighted the issue, warning that the high duties on machinery undermine the broader EU-U.S. deal. She urged both sides to renegotiate terms to prevent further harm to manufacturers. The EU-U.S. customs deal has delivered mixed outcomes. While sectors like automotive have seen lower tariffs, machinery exporters now face steeper costs. The agreement’s long-term impact will depend on whether both parties address the remaining trade barriers.
