US Car Tariffs Remain at 27.5% as EU-US Trade Deal Stalls Over Digital Rules

Brussels – A recently agreed-upon trade deal between the European Union and the United States has stalled in its formalization, primarily due to a disagreement over the EU’s landmark Digital Services Act (DSA). The July agreement, intended to de-escalate trade tensions and reduce tariffs, is now in limbo as both sides clash over the future of digital regulation, impacting a promised cut to US car tariffs.

The core of the dispute centers on the European Union's insistence on upholding its new online speech rules, which Washington views as a threat to free expression and a burden on American technology companies. As stated in a recent social media post by Mario Nawfal, "> EU-U.S TRADE DEAL STUCK IN DRAFT MODE - THANKS TO A TECH FIGHT." The EU maintains that the DSA is crucial for ensuring a safer and fairer online environment by compelling tech giants to address illegal content and harmful online material.

US officials, however, argue that the DSA imposes significant compliance costs and restricts free speech, particularly affecting large American tech firms. According to reports from the Financial Times, cited by Reuters, Washington has sought language in the trade statement that would allow for concessions on the DSA, a move the European Commission has firmly rejected as a "red line." This ideological divide represents a fundamental clash between the EU's emphasis on digital sovereignty and the US's defense of free-speech norms.

A direct consequence of this impasse is the delay in reducing US tariffs on European car exports. While the July deal had already slashed tariffs on most EU goods to 15%, a significant reduction from initially threatened rates, the anticipated cut for cars from 27.5% to 15% has not materialized. A US official indicated that President Donald Trump would postpone signing the executive order for this tariff reduction until the joint trade statement is finalized, leaving automakers in uncertainty.

This ongoing standoff highlights a broader regulatory divergence reshaping the global technology sector, creating a fragmented digital landscape where tech companies must navigate conflicting obligations. Despite the current deadlock, EU officials reportedly remain optimistic that an agreement can still be reached, allowing for the progression of both the trade declaration and associated US executive measures.