Key points in the statement include the U.S. committing to “apply the higher of either the U.S. Most Favored Nation (MFN) tariff rate or a tariff rate of 15 percent, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the European Union.”
As of Sept. 1, the U.S. will apply only MFN duties on several goods from the EU, including “unavailable natural resources (including cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors.”
Several so-called Section 232 tariffs have been capped at the wider 15% tariff rate
, including those on lumber, semiconductors and pharmaceuticals, according to a senior U.S. administration official. This is sharply below the rates Trump has sometimes threatened, as well as a 100%
levy on semiconductors.
Europe’s pharmaceutical sector — the U.S.′ top source for pharma imports — will also see tariffs capped at up to 15%. Critically, the rate will not stack on top of other EU-wide tariffs.
From Sept. 1, the Trump administration has also agreed to only apply its MFN drug pricing policy to generic pharmaceuticals. The directive aims to reduce U.S. drug prices by tying them to the typically lower prices paid by other developed nations.
