EU to Buy AI Chips, LNG Under Trade Deal With US
The U.S. and the EU reached a trade deal this week that will include a 15% U.S. tariff on most EU exports and will eliminate duties on both sides for other items, including aircraft parts and certain semiconductor equipment, agricultural products and more. The EU also will buy advanced American AI chips along with more American energy as part of the bloc’s effort to phase out purchases from Russia, European Commission President Ursula von der Leyen said.
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Von der Leyen said the deal creates “more predictability for our businesses.” Although the 15% U.S. tariff on the “vast majority” of EU exports, including cars, is higher than the duties the EU faced under the Biden administration, she noted that it’s less than the 30% rate that President Donald Trump threatened under his reciprocal tariff regime (see 2507250025).
“We are ensuring immediate tariff relief. This will have a clear impact on the bottom lines of our companies,” von der Leyen said. “And with this deal, we are securing access to our largest export market. At the same time, we will give better access for American products in our market.”
She added that the deal features “zero-for-zero tariffs on a number of strategic products,” including “all aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources and critical raw materials.” The EU plans to “keep working to add more products to this list.”
Trump, speaking to reporters after announcing the deal July 27, said he thinks American car exporters will especially benefit. He said U.S. cars “basically were not invited” into the EU, but now they will be. “We do really well with the pickup trucks, with the SUVs, we have some great things,” he said. “And I think the people of Europe will have some diversification. I think that'll make them happy.”
EU Trade Commissioner Maros Sefcovic said U.S. tariffs on European cars are being reduced from 27.5% to 15% percent “while enabling EU carmakers to expand their exports from the U.S.” This will “enhance their global standing and strengthen our value chain, as numerous European [small and mid-sized enterprises] support production activities in the U.S.,” he said.
Von der Leyen, speaking to reporters July 27, also said the deal will include provisions to boost exports of advanced American AI chips to Europe, which “power our AI gigafactories” and “help the U.S. to maintain their technology edge." Although she didn’t provide more details, she added that the two sides agreed to "cooperate on economic security, because when the European Union and the United States work together as partners, the benefits are tangible on both sides."
Speaking during a July 28 news conference, Sefcovic said the EU now has "clarity" that European firms will be able to buy advanced chips from the U.S. The Biden administration’s AI diffusion rule, which was scheduled to set limits on U.S. exports of advanced chips to certain European countries, had frustrated European lawmakers and officials for what they said were unfair buying restrictions across member states (see 2502110074 and 2502200051).
"You know how much emphasis we put on developing AI centers, AI gigafactories in Europe," Sefcovic said. "And therefore, for me, this is one of the very important strategic achievements that we have now the clarity that the top quality chips will be available for us Europeans, that we will collaborate in this field very, very closely with our American partners. Because this is clearly opening a new chapter of strategy cooperation in such a future-oriented sector like AI."
Sefcovic added that the U.S. and the EU have "complementary" semiconductor capabilities, noting that the U.S. produces advanced chips and the EU houses ASML, a leading maker of chip manufacturing equipment. "If the U.S. has the best chip designers, we have the best machine on this planet to print this chip," he said. "So clearly, we are complementary here, and we want to consolidate this further by building very solid and strong AI capacities in Europe."
The White House didn’t respond to a request for more details about this agreement.
The EU also agreed to buy $750 billion in U.S. energy by 2028, a White House fact sheet said. Von der Leyen said the bloc will buy $250 million worth of U.S. liquefied natural gas and other energy per year over the next three years to help substitute for Russian oil.
“We still have too much Russian LNG that is coming through the back door again to our European Union, and some Russian gas and oil still in the European Union, which we do not want anymore,” she told reporters. “We want to absolutely get rid of Russian fossil fuels, and therefore it is much welcome to purchase the more affordable and better LNG from the United States.”
The White House fact sheet also said the EU will work with the U.S. to “eliminate tariffs in various sectors and will provide meaningful quotas for other products,” which will “create commercially meaningful market access opportunities for a significant amount of U.S. goods exports” to the EU. The two sides also will address non-tariff barriers that are “burdensome” to both U.S. industrial exports and agricultural exports. This will include potentially “streamlining requirements for sanitary certificates for U.S. pork and dairy products.”