The European Union on Thursday followed through on a central plank of its trade deal with President Trump after months of internal wrangling. Another economic battle with Washington looms even larger.
The EU’s member countries on Thursday approved sweeping tariff cuts for many U.S. imports, marking the last formal vote in a multistep process whose pace had frustrated American officials. The tariff cuts were among several commitments the EU made last year in exchange for a U.S. pledge to cap most levies on the bloc at 15%.
Now the EU must tackle an even thornier challenge: addressing U.S. complaints that its regulations are hurting American companies’ access to its 27-country market.
European rules on deforestation, methane emissions and digital regulations are among the U.S.’s top concerns, U.S. Ambassador to the EU Andrew Puzder said. He said the bloc’s tariff cuts were relatively easy to deal with by comparison. “The tough part is the non-tariff trade barriers,” he said.
It won’t be easy for the bloc to satisfy the U.S. In some cases, the Trump administration is seeking legislative changes or exemptions for U.S. companies. EU officials say they are committed to tackling non-tariff barriers but don’t plan to change their laws to appease the U.S.
The EU “has been firm and consistent in explaining that our legislative framework and our regulatory autonomy are not up for negotiation,” said a spokesman from the European Commission, the bloc’s executive body.
These are some of the European regulations on the Trump administration’s hit list:
Digital Markets Act
The EU’s rulebook for big tech companies is a frequent punching bag for the Trump administration, which says the bloc discriminates against American companies by imposing hefty fines and pushing them to change their business practices. The Digital Markets Act aims to make it easier for smaller companies to compete with global tech giants—many of which are based in the U.S. The commission last year fined Apple and Meta Platforms for breaching the law.
In a move that could add to tensions with the U.S., the EU said Thursday that Amazon.com’s and Microsoft’s cloud services should be added to a list of digital platforms that are subject to tougher DMA scrutiny.
Digital Services Act
This law requires big social-media and search platforms to address certain risks, such as the spread of illegal content and the use of disinformation to manipulate election results. U.S. officials have previously accused the bloc of using the law to censor speech, an allegation the EU denies.
The DSA was used last year to fine Elon Musk’s X about $140 million over transparency concerns and an allegation that its blue-check-mark system was deceptive. Musk, a critic of the bloc, said after the fine was announced that the EU should be abolished.
A separate investigation into X’s handling of illegal content and information manipulation is ongoing.
Deforestation regulation
This law aims to ensure that rubber, wood and cocoa products the bloc imports aren’t contributing to global deforestation. It is due to take effect at the end of this year after its enforcement was delayed twice and some of its requirements were eased. The U.S. says the regulation still imposes a big burden on producers who are managing natural resources responsibly.
Methane regulation
Energy companies and importers in the bloc will have to report their emissions of methane, a powerful contributor to climate change. Eventually, the law will require importers to meet new emissions intensity standards or risk fines.
The rules could disrupt Europe’s oil-and-gas supply, energy ministers from the U.S., Qatar, Algeria and Nigeria said in a joint letter to EU leaders this week. “As of now, there is no viable path to compliance,” they said.
Carbon border tax
The bloc’s carbon border adjustment mechanism adds a charge for certain imports based on the greenhouse gases that were emitted in their production. The trade deal the U.S. and EU reached last summer said the bloc would work to provide “additional flexibilities” in the law’s implementation.
Recognizing standards
The U.S. and EU agreed in last year’s trade deal to make it easier for companies to prove their compliance with trans-Atlantic standards. Businesses on both sides of the Atlantic have long advocated such harmonization, but progress has been slow.
Ignacio García Bercero, a former EU trade official, said the two sides should focus their efforts on issues that were identified in the text of last year’s agreement, including the push to recognize each other’s standards.
“None of these issues are easy,” he said. “If they were, they would’ve been solved a long time ago.”