SUMMARY :

• The EU and U.S. have reached a political (non-binding) trade agreement introducing a 15% tariff ceiling for EU exports to the U.S., while the EU commits to significant purchases and future tariff reductions. Although the deal brings short-term stability, it raises concerns over balance, enforceability, and long-term competitiveness for EU industry.

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As previously mentioned, the European Union and the United States reached a political agreement on 27 July 2025 covering tariffs and broader trade relations. Below is a summary of what has been agreed, the potential impact on the sporting goods industry, and the next steps.

1. status of the agreement

The agreement is political and not legally binding at this stage. While both sides have agreed on the main principles, further negotiations are ongoing to finalise the details.

• No official legal text is available yet. All information below is based on public statements from EU and U.S. authorities.
• Key elements will require formal ratification, likely under a Free Trade Agreement framework involving (also most likely) the European Parliament and the Council.
• The agreement has already sparked political controversy in Brussels and several EU capitals, where concerns have been raised about a perceived imbalance in the deal.

2. what has been agreed so far

from the U.S. side:

• A 15% tariff ceiling on EU goods impacted by the reciprocal duties:

• If the MFN (Most Favoured Nation) duty is below 15%, the rate is raised to 15%.
• If the MFN duty is above 15%, that rate applies, with no additional tariff.
• This approach differs from the cumulative tariff structure applied to other countries.

• Introduction of tariff rate quotas for EU steel and aluminium, replacing the current flat 50% tariff.

from the EU side:

• Full elimination of tariffs on industrial goods and some agricultural exports from the U.S.
• Tariff reductions on many U.S. products
• Commitments to:

• Purchase $750 billion worth of U.S. energy
• Purchase €40 billion in AI chips
• Invest at least $600 billion in U.S. sectors by 2029

• Suspension of planned countermeasures targeting €93 billion worth of U.S. goods.
• General commitment to reduce non tariff barriers

3. implementation timeline

already in place:

• As of 8 July, the U.S. implemented the new 15% reciprocal tariff on EU goods.
• Today, the EU postponed retaliatory tariffs for a minimum of six months.

pending formal agreement:

• Elimination/reduction of EU tariffs on U.S. goods
• Implementation of steel and aluminium quotas
• Clarification of Rules of Origin, which will determine which goods qualify for preferential treatment

The legal pathway for these measures is still uncertain and will likely require co-legislator approval.

4. what it means for the sporting goods industry

EU exports to the U.S.:

• Will be subject to a minimum 15% duty
• May face a higher duty if MFN exceeds 15%
• Steel and aluminium products remain subject to the 50% sectoral tariff

• It is unclear whether derivative products will be included in future quotas

U.S. exports to the EU:

• No immediate changes until a formal agreement is ratified
• Apart from industrial & some agricultural goods, the EU has only stated that it will remove “significant tariffs” - further detail is pending

5. FESI’s initial assessment

While the agreement offers short-term benefits, it raises important questions. Key observations from an EU industry perspective:

• The EU gains short-term stability, avoiding the risk of a 30% tariff on all its exports.
• It secures a competitive advantage over other trade partners, as reciprocal tariffs replace, rather than add to, existing duties.
• The deal may support geopolitical alignment, especially on issues like Russia and Ukraine.
• However, the agreement appears asymmetrical:

• The U.S. obtains significant financial commitments, while access for EU goods remains limited.

• EU products may face increased competition from U.S. goods in both markets.
• The EU’s announcement to purchase U.S. goods may be difficult to enforce, as such decisions ultimately lie (in most cases) with private companies, not EU institutions.
• With many concessions already made, the EU may have limited leverage in future negotiations.
• Most importantly, this remains a non-binding agreement, and its approval is not guaranteed.

6. next steps

We will share a detailed update as soon as the legal text is published and the negotiations are formally concluded.

Until then, we recommend caution. We would advise that FESI refrains from taking a public position on the deal until there is greater legal and political clarity.

For more information see:

• Commission’s Q&A
• U.S. Fact Sheet

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