Trade Explainer: A Comparison of US Agreements With the EU, the United Kingdom, and Japan
August 29, 2025
Shutterstock / Marian Weyo
The Trump administration’s sweeping changes in early 2025 have reshaped the global trading landscape with unprecedented speed. Following the president’s 90-day suspension of “retaliatory” tariffs in April, governments raced to secure bilateral agreements with Washington before the clock ran out. Although the White House fell short of its goal of striking 90 deals in 90 days, it succeeded in concluding a series of framework agreements with partners including the EU, Indonesia, Pakistan, the Philippines, South Korea, the United Kingdom, and Vietnam. Each deal set a revised baseline tariff rate, lowering the steeper duties initially proposed in return for targeted concessions and new investment and purchase commitments.
As the specifics of these framework agreements are fleshed out and detailed negotiations begin, this analysis compares three deals: the US-UK Economic Prosperity Deal (EPD), the first agreement to be announced; the US-Japan Strategic Trade and Investment Agreement; and the US-EU Framework on an Agreement for Reciprocal, Fair, and Balanced Trade, unveiled just ahead of the August 1 deadline. How do these deals compare, and what do they reveal about the future direction of allied trade relations?
| US-EU Framework on an Agreement for Reciprocal, Fair, and Balanced Trade | US-UK Economic Prosperity Deal (EPD) | US-Japan Strategic Trade and Investment Agreement | |
| New baseline US tariff level | 15% | 10% | 15% |
| New baseline tariff rate | EU will lower to 0% for industrial products. | Not mentioned. | Not mentioned. |
| US tariff reduction | The United States will apply only the Most Favored Nation (MFN) tariffs for aircraft and aircraft parts, generic medicines, and natural resources unavailable in the United States (including cork). The EU will lower tariffs to 0% for US industrial goods. | The United Kingdom requests that the United States continue efforts to lower tariffs on UK goods imposed by US executive authorities, as well as those tariffs subject to Congressional approval. | The United States will lower reciprocal tariffs to 0% for natural resources unavailable (or unavailable at sufficient scale to satisfy domestic demand) and generic medicines. Aircraft and aircraft parts are referenced separately with “reciprocal”, steel, aluminum, and copper tariffs no longer applying. |
| Do tariffs stack? That is, do multiple tariffs apply to the same imported product or is the baseline rate all-inclusive? | Tariffs do not stack. If the MFN tariff is higher than the baseline tariff, then the MFN tariff applies, unless specified otherwise. | Tariffs are calculated at the baseline rate of 10% + original MFN rates. Exceptions apply for autos, auto parts, aluminum/iron/steel, and aircraft parts. | Tariffs do not stack. If the MFN tariff is higher than the baseline tariff, then the MFN tariff applies, unless specified otherwise. |
Section 232s
| US-EU Framework on an Agreement for Reciprocal, Fair, and Balanced Trade | US-UK Economic Prosperity Deal (EPD) | US-Japan Strategic Trade and Investment Agreement | |
| Autos | 15%, on condition that the EU passes legislation to reduce tariffs and/or improve market access for US industrial goods. | UK autos enter the United States at a 10% rate up to a quota of 100,000 per year, then 27.5% for autos over the quota. | 15% (as of date of publication of the Federal Register order). |
| Aluminum, copper, iron, and steel | 50%, with the United States and EU to work on ringfencing their economies from overcapacity, leading to a tariff rate quota solution for EU exports and their derivative products. | Currently, 25% on aluminum, steel, and derivative products. This rate could be reduced to the MFN level for a mutually agreed volume of metric tons, contingent on the US’s and the UK’s confirming the security of the UK supply chain. | Not mentioned. Section 232 tariff of 50% applies. |
| Semiconductors | 15% | The United States promises to provide a significantly preferential rate once the Section 232 investigation is complete and rates are announced. | Not mentioned. |
| Pharmaceuticals | 15% | The United States promises to provide a significantly preferential rate once the Section 232 investigation is complete and rates are announced. The negotiations are contingent on supply-chain security requirements being met. | Not mentioned. |
| Aircraft and aircraft parts | Only MFN tariff will apply. (MFN rate is 0% for most aircraft and aircraft parts.) | MFN rate. | “Reciprocal” tariffs and other tariffs on aluminum, copper, and steel will no longer apply. |
Other Issues
| US-EU Framework on an Agreement for Reciprocal, Fair, and Balanced Trade | US-UK Economic Prosperity Deal (EPD) | US-Japan Strategic Trade and Investment Agreement | |
| Agriculture | The EU will provide preferential market access for a wide range of US seafood and agricultural goods, including tree nuts, dairy, soybean oil, pork and bison meat, fresh and processed fruit and vegetables, processed foods, and planting seeds. The EU will extend the agreement on lobster and expand the scope to include processed lobster. The EU will address nontariff barriers including streamlining requirements for sanitary certificates for pork and dairy. Talks regarding tariffs on wine and spirits are ongoing. | The United Kingdom will permit beef imports at a 20% tariff rate for up to 1,000 metric tons annually, with a preferential rate applied to an additional 13,000 metric tons. A preferential tariff-rate quota will also be established for ethanol. The United States and the United Kingdom reaffirm that food and agricultural goods must meet the importing country’s sanitary and phytosanitary (SPS) standards, and other mutual standards. Both parties commit to working together to improve market access, highlight concerns, and increase cooperation in areas that will facilitate greater trade. | Nothing on tariffs, but Japan is working towards expedited implementation of a 75% of rice procurement. Japan pledges to make $8 billion in purchases of US agricultural goods including corn, soybeans, fertilizer, bioethanol (including sustainable aviation fuel), as well as other products. |
| General non-tariff barriers | Both sides commit to addressing non-tariff barriers to energy trade; accepting and providing mutual recognition of each other’s auto standards; and enhancing technical cooperation on standards in key sectors of mutual interest. The EU will consider the implications of its Deforestation Regulation (EUDR), Carbon Border Adjustment Mechanism (CBAM), Corporate Sustainability Due Diligence Directive (CSDDD), and Corporate Sustainability Reporting Directive (CSRD) on US companies. | Both sides commit to treating the other’s conformity assessment bodies no less favorably than their own, including in accreditation, approval, licensing, and related procedures. Both sides commit to negotiating additional mutual recognition agreements for certain industrial goods and to advancing an agreement on services domestic regulation. Both parties will discuss principles for recognizing international standards and agree on which standards bodies meet those principles in selected sectors. | Japan is working to accept US-manufactured and safety-certified vehicles without additional testing. |
| Digital | Both sides commit to future talks on “unjustified digital trade barriers” and negotiating a mutual recognition agreement on cybersecurity. The EU will impose no network usage fees, and neither the United States nor the EU will charge customs duties on electronic transmissions. The EU will consult with the United States and US traders on digitalization of trade procedures and implementation of proposed EU Customs Reform legislation. | Both sides commit to negotiating digital trade provisions, including on (financial) services. They commit to negotiating provisions on digitalization of trade procedures. | Not mentioned. |
| Economic security | Both sides agree to act on non-market policies of third parties; to cooperate on investment screening, export controls, and duty evasion; and to jointly address unfair competition and procurement practices by third countries. The United States could review rules surrounding EU exports of sensitive technologies in exchange for greater alignment. | Both sides agree to coordinate to address non-market policies of third countries and to cooperate on investment screening, export controls, and information and communications technology (ICT) vendor security. They reaffirm procurement commitments under the World Trade Organization's Agreement on Government Procurement. They confirm negotiations on duty evasion customs cooperation to combat evasion schemes and transshipment. | Not mentioned. |
| Intellectual property | Both sides commit to discussing high-standard commitments related to intellectual property rights protection and enforcement. | The two sides will discuss commitments to rights protection. | Not mentioned. |
| Labor | Both sides commit to working to ensure strong protection of internationally recognized labor rights (including the elimination of forced labor in supply chains). | The two sides will discuss commitments to labor practices (including addressing forced labor in supply chains). | Not mentioned. |
| Environment | The EU will review the impact of the EUDR on US businesses. | The two sides will discuss commitments to environmental policies and practices. | Not mentioned. |
| Investment and purchase commitments | The EU intends to procure US liquefied natural gas, oil, and nuclear energy with an expected offtake valued at $750 billion through 2028; to purchase $40 billion in US AI chips; and to purchase US military and defense equipment. EU companies are expected to invest $600 billion across US strategic sectors through 2028. | IAG, which own British Airways, announced the purchase of 32 Boeing aircraft for $13 billion. | The Japanese government agrees to invest $550 billion, and the US government will select where these investments will be made. (A previous statement—“The United States retains 90% of the profits from this investment.”—is not included. Separately, Japan agrees to purchase 100 Boeing commercial aircraft and US-made defense equipment. |