US-EU Joint Statement and Other Recent Tariff Developments

What was agreed?

• The U.S. will ensure tariffs on pharmaceuticals and semiconductors (which are subject to Section 232 investigations) are capped at 15%. It is noteworthy that President Trump had threatened tariffs of 250% on imports of pharmaceuticals at one point.
• Certain EU origin goods (i.e. aircraft and aircraft parts, generic pharmaceuticals and their chemical precursors) will only face the Most Favoured Nation rates – (MFN) (i.e. rates applicable prior to President Trump’s tariff regime).
• In addition to 0% tariffs on U.S. industrial goods imports, the EU will provide preferential market access to certain U.S. origin seafood and agricultural goods– including some dairy products.
• Undertaking by both parties to reduce or eliminate non-tariff barriers. For cars there is a commitment to recognise each other’s standards and to facilitate conformity assessments to cover additional industrial sectors.
• Commitment to work towards the introduction of tariff rate quotas for trade of steel and aluminium between the 2 blocs.
• The EU will address the concerns of U.S. business accessing the EU markets in the context of various ESG legislation (i.e. CBAM, EUDR, CSRD and CSDDD).
• The EU and U.S. will work together to address non-market policies of third parties (i.e. coordination on export controls, unfair trading practices, inward and outward investment reviews and duty evasion). 

Is this a good deal for European Business?

Despite the initial disappointment with the framework agreement, the joint announcement issued on the 21st of August 2025 has provided the much-needed clarity around many of the key points that were agreed.

In contrast with other large exporting countries, tariffs to be applied on EU imports will not be stacked. This is good news. Tariff stacking means goods are levied with the MFN duty rate in addition to their country’s specific reciprocal tariff rate.

It is noteworthy that the UK and countries not mentioned in annex 1 of the Executive Order issued on the 31st of July will be faced with a 10% reciprocal tariff but imports from these countries will face tariff stacking.

Some countries have been hit with very penal tariff rates. Imports to the U.S. from Switzerland will now face reciprocal tariffs of 39% in addition to the MFN rate (unless an alternative agreement is reached in the future).

In this context, the deal struck by the EU could be viewed as a reasonable outcome as can be seen from the data presented in Table 1.

This joint statement addressed some sensitive issues for the EU. In particular, aircraft and aircraft parts and generic medicines will continue to enjoy the same U.S. market access as they have previously enjoyed. There is a commitment by both sides to add more strategically important products to this list.

Given the relatively favourable outcome to negotiations, EU exporters can be confident of retaining market share relative to their non-U.S. competitors.

It will be interesting to see how indigenous U.S. companies fare in this new environment. Though U.S. manufacturers will be protected from competition in their home market, the U.S. tariff regime will significantly increase the cost of inputs and consequently, the U.S. consumer is likely to bear much of the cost of these tariffs.

The enhanced access to the EU market is a win for U.S. manufacturers – however as the effective EU import duty rate is already quite low, this is likely to be a marginal effect and is not expected to impact severely on EU manufacturers.

However, due to increased costs on inputs due to tariffs, U.S. exporters may lose some competitiveness in their export markets, and this will perhaps create some opportunities for EU manufactures.

Section 232 Investigations

Section 232 of the 1962 Trade expansion act assesses whether imported goods threaten U.S. national security. Currently, the U.S. Department of Commerce is undertaking several Section 232 investigations.

Of particular interest to Irish companies is the outcome of section 232 investigations on semiconductors and pharmaceuticals. It has been agreed that any additional tariff arising from these investigations will not impact upon in-scope goods of EU origin. Instead, they will be levied only with the EU reciprocal rate of 15%. Thus far, this arrangement will only apply to goods of EU origin – which should give EU goods a competitive advantage relative to goods of other countries upon import to the U.S.

However, this concession does not apply to imports of steel and aluminium. The U.S. Bureau of Industry and Security (BIS) expanded the scope of the section 232 tariffs on imports to the U.S. of steel and aluminium to include machinery and various other industrial and consumer goods.

In-scope products of EU origin will now face the universal15% tariff levied on the value of the imported in-scope goods in addition to a 50% tariff on the value of the non-U.S. origin steel and aluminium content. Where the value of the steel and/or aluminium is not known, the 50% tariff is applied to the entire value of the goods.

The U.S. authorities require the location of the ‘melt and pour’ of the iron content and/or ‘smelt and cast’ location of the aluminium content. The 50% tariff does not apply if the steel/aluminium is of U.S. origin.

This measure will be highly detrimental to EU exporters of in-scope goods. However, there is a commitment in the joint statement from the EU and U.S. to introduce tariff rate quotas (TRQs). TRQs allow a limited amount of a specific product to enter market at a preferential duty rate, once this volume has been exceeded the applied duty rate reverts to the higher amount.

The introduction of TRQs should ease this situation, but the timelines for their implementation have not yet been defined.

What does this framework agreement mean for Ireland?

The effective exemption of EU origin pharmaceuticals and semiconductors from section 232 tariffs will come as a major relief. Exports of pharmaceuticals to the U.S. accounts for half of Irish exports by value.

Unfortunately, there does not currently appear to be any carve outs for exports from the Irish food and beverage sector and this will come as a major disappointment. Furthermore, the opening of EU access to some U.S. agricultural products will surprise many and will most likely draw a cold response from Irish agricultural interest groups.

Commission President Ursula von der Leyen indicated that she was hopeful of more products being added to the ‘MFN-for-zero’ list and it can be expected that several EU Member States including Ireland will be keen for goods from the agricultural sector to be added to this list.

Due to different reciprocal tariff rates being applied to different countries, it is likely that there will be a significant increase of complexity of doing business with the U.S.

This is further compounded in Ireland by the fact that goods of UK origin from Northern Ireland will be subject to different tariff treatment relative to goods of Irish origin, i.e. MFN+10% in Northern Ireland versus 15% in the Republic. This could cause a reorientation of some supply chains to optimize how the all-island economy trades with the U.S.

Compliance with customs regulations should now be a key area of focus for Irish exporters. The U.S. administration have been very transparent about the requirement for good compliance with customs regulations and anecdotally, their post clearance checks have become much more stringent. The Trump administration has identified import tariffs as an important source of federal revenue. Consequently, importers can expect a greater focus on compliance with the U.S. customs regulations in the weeks and months ahead.

Though this agreement represents a deterioration in how EU companies trade with the U.S., the agreement serves to provide EU exporters with some certainty going forward.

At the very least, it brings this period of turbulence to an end, and it should provide a platform from where improved terms can be negotiated to benefit more industrial sectors within the EU.

Government Supports

On Monday 25th of August, the Irish Government launched its Action Plan on Market Diversification which covers plans for diversification of investment in and out of Ireland. This plan which contains more than 100 actions is built around four core objectives:

1. Supporting Exporting Businesses and Market Access – ensuring that Irish enterprises, particularly SMEs, have the tools, insights and supports they need to succeed in new and existing markets.
2. Deepening and Broadening Ireland’s International Engagement – scaling up our diplomatic and agency presence in key regions and leveraging our diaspora and global networks to open doors for Irish business.
3. Delivering Trade and Tourism Missions for Strategic Impact – enhancing the visibility of Ireland as a trusted partner and destination for trade, investment, and tourism.
4. Enhancing Domestic Readiness for Economic Engagement and Partnership – ensuring that our domestic policies, infrastructure, and regulatory environment support international competitiveness and innovation.

As part of the plan, Enterprise Ireland has launched two new grants;

• New Markets Validation Grant offers funding of up to €150,000 for companies to develop market entry strategies for new markets or new products. 
• Market Research Grant will assist “Irish companies impacted by the effects of tariff disruption in markets and for companies looking to scope new market opportunities and/or address knowledge gaps on existing or new markets”. This grant worth a maximum of €35,000 can support a wide range of expenditure including consultancy, overseas travel and subsistence, trade fair participation (excl exhibitor fees) and market research reports.

How can Deloitte help your business adapt and thrive in this new trade environment?

Deloitte has been successfully advising clients to navigate this trade disruption. Our experience is that those who take an end-to-end approach, make data driven decisions, and execute consistently will outperform more passive peers. A tailored approach across response functions will be needed, but the journey starts with strategy for resilience building.

Businesses should immediately respond through:

1. Leading with commercial readiness
2. Mobilise strategic planning - this is not a business-as-usual moment
3. Execute to protect value

We have explored these further below:

1. Leading with commercial readiness

The trade deal ‘certainty’ has prompted aggressive negotiations between customers and suppliers. Commercial planning plays a crucial role in defending margins. Tariffs have turned pricing into a delicate balance between protecting margins in the short term and retaining customers in the long term. Deloitte’s Commercial Risk Classification Matrix and Practical Guide outlines three key commercial dimensions (product leverage, customer evaluation and deal economics and feasibility) and appropriate tactics that can support this shift.

Fig 1 Deloitte Commercial Risk Classification Matrix

Where pricing risks eroding customer trust or competitive positioning, combined with pre-existing decline in volume, it will take other commercial levers, holistic cost transformation, M&A and portfolio optimisation to navigate the market and unlock new growth.

This is a fundamental starting point to building resilience – by protecting profitability and commencing strategic planning.

2. Building Resilience: Mobilise Strategic Planning

The introduction of tariffs will disrupt all players across the value chain – manufacturers, suppliers, competitors, customers and end consumers. Our experience points to a “end to end” response, aligning strategic focus of the business – beyond business-as-usual. These five capabilities operate with an enhanced performance mandate and at higher intensity, delivering critical insights and enabling fast, data-driven decisions.

a. Commercial Excellence and Customer Relations: Protect margins without eroding market position. Once you have assessed commercial risks (per matrix above), focus on empowering your teams with the right data and tools to protect existing value from tariffs and unlock new growth. 

b. Supplier Partnerships and Supply Chain: Map your supplier network strengthen strategic partnerships and align supply chain decisions with commercial priorities to improve cost resilience and delivery certainty. 

c. Operations and Manufacturing: Explore the feasibility of re-aligning production to mitigate tariffs. Where relocation is viable, it is critical to clearly understand cost-benefit (your leadership capability to affect this change) and the long-term commercial potential for associated product lines.  

d. Regulatory, Tax and Legal: Proactively manage compliance to minimise cross-border trade exposure to avoidable tariffs. Classify products accurately, determine the originating status of your goods, revisit value for customs purposes (bearing in mind any impact on transfer pricing), evaluate opportunities to identify and separate non-dutiable charges from the custom value through bundling and unbundling strategies and leverage available reliefs (e.g. First Sale for Export) or incentives while shaping policy discussions that influence industry outcomes. 

e. Financial Planning: Use current momentum to plan cost transformation and cashflow optimisation. Invest in cross-functional initiatives for tariffs mitigation in both the immediate and long term.

3. Execute to Protect Value

In moments of structural disruption, fast execution is the true differentiator. O Our approach is to increase collaboration between teams to address conflicting priorities and ensure everyone supports the decisions made. This must be informed by on the ground insight representing stakeholders across the value chain, e.g. customer and supplier feedback, emerging regulatory implications. Set commitment to take data-driven decisions in real time.

Map, Decide, Act  

The 15% tariff realignment signals a lasting shift in the rules of engagement, where speed agility and clarity of action will separate the market leaders from the rest. Resilience and agility are now the new advantages. As we’ve learned through COVID, inflation cycles, and tariff journey to date, companies with embedded commercial and supply chain agility - those that can map, decide, and act quickly - will consistently outperform slower peers.

For many businesses, this trade deal marks the start of a new commercial reality. At Deloitte, we partner with organisations to navigate complexity and capture opportunity. Whether you are adjusting your cost base, pulling the right commercial levers to defend margins, evaluating custom valuation approaches and reliefs or optimising your global production and supply models, Deloitte is ready to lead with actionable solutions.