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The flags of the United States and the European Union are displayed alongside the word "Tariff." / Photo courtesy of Reuters, Yonhap News Agency

The European Parliament on June 16 (local time) ratified a proposal to lower tariffs on U.S. imports in accordance with the trade agreement signed with the United States last year.

Reuters reported that the measure approved on this day will remain valid until the end of 2029 and includes a safeguard allowing for the immediate suspension of the tariff cuts should the U.S. violate the terms of the agreement.

In July last year in Turnberry, Scotland, U.S. President Donald Trump signed a trade pact under which the European Union (EU) would eliminate import tariffs on U.S. manufactured goods and certain agricultural products, while the U.S. would impose a 15% tariff on most EU goods.

However, as implementation on the EU side stalled, President Trump had been ramping up pressure, threatening to slap even higher tariffs if the pact was not ratified by July 4. With the European Parliament concluding its legislative procedures on this day, the EU has managed to meet the looming deadline.

Ursula von der Leyen, President of the EU Commission, confirmed the fulfillment of the EU's obligations via social media.

Karin Karlsbro, a Member of the European Parliament, assessed that while transatlantic trade tensions have not been entirely defused, the move is significant in that it establishes an institutional foundation to maintain future market stability.

The business community has welcomed the measure. Erik Severinsson, Chief Commercial Officer (CCO) of Volvo Cars, which operates production bases in both Europe and the U.S., projected, "The enhanced market predictability will improve production planning, supply chain management, and investment efficiency."

German industry, the largest exporter to the U.S., welcomed the implementation of the agreement but urged the U.S. side to also fully honor the Turnberry pact.

Although the European Parliament averted an immediate tariff clash by approving the trade agreement with the U.S., lingering uncertainties still remain. In fact, President Trump recently mentioned that he would hit French wine with a 100% retaliatory tariff if France fails to scrap its digital services tax.

Furthermore, following a ruling by the U.S. Supreme Court that declared President Trump's tariff policies unconstitutional, the U.S. government must restructure its existing tariffs based on the Turnberry agreement by July 24.

                                                                                                           Lee Jung-eun