The US and EU reach a Framework Agreement on Trade

The Framework Agreement affirms the political agreement between the EU and the UK reached on 27 July 2025: Most EU products will face a 15% tariff when entering the United States, while many US products will enter the European Union tariff-free. Moreover, the Framework Agreement outlines key terms for further negotiations between the parties. 

Key takeaways from the Framework Agreement

The EU intends to eliminate tariffs on US industrial goods

With regards to US exports to the EU, the Framework Agreement stipulates an intention for the EU to eliminate tariffs on all US industrial goods. Additionally, the EU intends to offer preferential market access to various US seafood and agricultural products, including fruit and vegetables, processed foods, dairy, and meats. The EU will also extend and expand a Tariff Agreement from 2020 on lobster. In essence, these measures make it easier for many US exporters to do business with entities within the EU - in some cases, even compared to the period before the reciprocal tariffs introduced by Trump in April 2025. 

US commits to tariff ceiling

The US, for its part, will apply either the US Most Favored Nation (MFN) tariff rate or a 15% tariff rate, whichever is higher, on most EU goods. Furthermore, starting 1 September 2025, certain products, such as natural resources, aircraft, generic pharmaceuticals and chemicals, will face only MFN tariffs, which are essentially zero or nearly zero. The US and EU may include other products for MFN-only tariffs in future negotiations. 

These ceilings represent a substantial improvement from current tariffs and provide certainty and predictability on market conditions for EU exporters. EU goods exported to the US will be subject to a maximum 15%, including the MFN tariff. If the current MFN rate is above 15%, only the MFN tariff applies. This favoured treatment is reserved for the EU, as well as Canada and Mexico. For other trading partners of the US, additional tariffs are applied on top of existing MFN tariffs. 

Adjustments to Section 232 tariffs

For pharmaceuticals, semiconductors, and lumber, EU exports to the US will be subject to a maximum tariff of 15%, even if future Section 232 investigations, as discussed in one of our previous Tariff and Trade Alerts, would otherwise lead to higher tariffs in these sectors. Upon the EU’s legislative proposal to reduce tariffs, the US will drop Section 232 tariffs on EU automobiles and parts subject to an MFN tariff of 15% or higher. Otherwise, the tariff on these goods will be capped at 15%. This represents a significant improvement for EU exporters compared to the current tariff rate of 27.5%.

Enhanced EU-US cooperation

The Framework Agreement also provides for enhanced cooperation between the EU and the US across multiple sectors:

• Steel and aluminium: The US and EU plan to work together to protect their domestic steel and aluminium markets from overcapacity, maintain secure supply chains, and may use tariff-rate quotas to manage trade in these sectors.
• Energy and technology: The US and EU will collaborate to secure and diversify energy suppliers, remove non-tariff barriers, and streamline bilateral energy trade. The EU plans to import US LNG, oil, nuclear products worth $750 billion by 2028 and at least $40 billion worth of US AI chips. Both sides will align technology security standards to prevent technology leakage.
• Investment and economic: With mutual investment stocks topping $5 trillion, both sides aim to encourage more investment. The statement indicates that EU companies are expected to invest $600 billion in strategic US sectors by 2028.

The EU-US Framework covers a wide range of issues beyond tariffs. Key points include increased EU purchases of US defence equipment, enhanced cooperation to reduce non-tariff barriers and align standards, cooperation on investment reviews, export controls and duty evasion, and a joint action to address obstacles in food and agricultural trade. The EU will also consider US concerns on environmental regulations.

Implications for Norwegian entities

As Norway is not part of the EU's Customs Union, the Framework Agreement does not directly benefit Norwegian entities. As a consequence, EU exports will benefit from more favourable terms than Norwegian exports. Main differences include:

• Norway will face the 15% tariffs in addition to the ordinary US tariffs on most goods, including those already subject to tariffs above 15%. This contrasts with the EU, which will face a maximum tariff of 15% on most goods, except for those already subject to higher tariffs, where the existing rate remains.
• Norway does not benefit from the cap to current and future sector-specific tariffs under Section 232, such as on cars, car parts, pharmaceuticals, semiconductors, and timber. Therefore, Norwegian companies will face both ordinary and additional reciprocal tariffs within these sectors.
• The EU will only pay existing duties for critical goods, including aircraft, select pharmaceuticals, specific chemicals. Norway, however, will initially be subject to the additional 15% reciprocal tariff on these goods.

The EU's deal with the US may also have implications for Norwegian exports to the EU. For example, according to the EU-US joint statement, the parties intend to negotiate rules of origin to ensure that the agreement predominantly benefits the US and the EU. This may lead to restrictions on the amount of Norwegian and other non-EU inputs that can count towards preferential trade terms, which may in turn impact Norwegian suppliers in transatlantic value chains. For Norway, this showcases that trade agreements between third parties may significant impact Norwegian exporters. This underscores the need for ongoing political and diplomatic dialogue, even regarding trade negotiations in which Norway is not an official party. 

The EU-US Framework Agreement comes in addition to the ongoing concerns for Norwegian entities exporting to the EU regarding potential safeguards measures from the EU. Recently, the European Commission informed the EEA EFTA states that safeguards are being considered for imports of, among other things, ferroalloy. As discussed in one of our previous Tariff and Trade Alerts, such measures leave the EU in a challenging position between WTO rules and the EEA Agreement, and may potentially be incompatible with one or the other, depending on how the safeguard measures are designed. For Norwegian entities that may be affected, it is essential that Norwegian authorities advocate forcefully for exemptions. 

Next steps

The Framework Agreement does not solve all trade issues between the US and the EU, and important details, such as the implementation deadline and enforcement mechanisms, are yet to be decided. The elements of the Framework Agreement must also be translated into legislative proposals, as stated by EU Commissioner Šefčovič. From a Norwegian perspective, it also remains to be seen whether the ongoing trade talks between Norway and the US will culminate in a trade agreement between the two countries.