European Parliament is set to approve the E.U.-U.S. trade deal

The European Parliament is expected to approve legislation on Tuesday to put into effect the European Union’s side of last year’s trade agreement with the United States, a step that would lower some import duties and, at least for now, reduce the risk of a new tariff clash between the two economies.

The vote comes nearly 11 months after the deal was struck with President Donald Trump at Turnberry in Scotland. Reuters reported that lawmakers are widely expected to back the measure, which would remove EU duties on some U.S. imports while leaving in place broad U.S. tariffs of 15%. Trump had warned that tariffs could go “much higher” if the bloc did not move quickly.

For European industry, the parliamentary vote is being treated as a needed sign of stability after months of uncertainty. Fifteen business associations representing carmakers as well as textiles, cosmetics and food and drink producers said support for the agreement would help companies that depend on roughly $2 trillion in annual transatlantic trade. At the same time, those groups said the accord does not settle all disputes and that major questions remain over how Washington will apply future tariffs.

That uncertainty matters for beverage producers because wine and spirits remain exposed to sudden policy shifts even if the broader deal moves ahead. European drinks companies have been looking for a more predictable trading environment in the U.S., one of their most important export markets, but the current framework still leaves room for new pressure on pricing, margins and market access.

The immediate concern is timing. A new set of U.S. tariffs is due to take effect on July 24, and businesses want confirmation that those measures will match the Turnberry agreement exactly. Another deadline falls even sooner. A five-year suspension of retaliatory tariffs tied to the long-running Airbus-Boeing dispute is due to expire on July 11, and both sides still need to agree not to restore mutual duties on $11.5 billion in goods.

U.S. Trade Representative Jamieson Greer has said Washington will stick to the deal. But Bernd Lange, who chairs the European Parliament’s trade committee, told Reuters he was less certain because final decisions rest with Trump. “Nobody knows what will really happen,” Lange said.

His concern was sharpened by Trump’s warning on Monday that he could impose 100% tariffs on French wine. Such a move would directly hit one of Europe’s most visible beverage exports and could also undermine confidence in the wider agreement. Lange said the EU should be prepared, if necessary, to suspend parts of the deal. The bloc could also activate countermeasures on EUR93 billion, or about $108 billion, in U.S. goods; those measures are currently suspended until August 6.

The trade tensions go beyond headline tariff rates. Washington wants Brussels to address what it sees as non-tariff barriers, including EU rules on carbon border taxes, deforestation-linked imports and supply-chain checks related to human rights and environmental harm. The EU has already softened some regulations and extended compliance deadlines, but pressure from U.S. companies continues. Exxon Mobil, for example, wants the EU’s corporate sustainability law scrapped and has taken its complaints to Trump.

Brussels has its own list of grievances. EU officials object to U.S. tariffs above 15% on products that contain metal, including washing machines, wind turbines and motorcycles. Reuters reported that Trump expanded the list of so-called metal derivatives a month after the Turnberry deal, though some items were later removed. Under EU legislation, the European Commission must suspend tariff reductions on U.S. steel or aluminum goods unless all those tariffs return to 15% by year’s end.

Manufacturers in Europe say those higher duties are already affecting business decisions. Automakers have been among the hardest hit by tariffs and are adjusting production plans accordingly. Volvo Cars, which builds most of its U.S.-bound vehicles in Europe, plans to begin making some XC60 sport utility vehicles at its South Carolina plant later this year and to add a new hybrid model there before the end of the decade.

In food and drink, producers are watching whether sector-specific relief can still be negotiated. The EU wants the United States to replace 50% tariffs on steel and aluminum with tariff-free quotas and to widen the list of products that can move without duties. European wine and spirits makers want to be included early in any such exemptions.

They have support from parts of the U.S. industry. American spirits producers favor a return to zero tariffs on both sides for distilled beverages, arguing that bilateral trade grew 450% from 1997 to 2018 under a zero-for-zero system. That arrangement ended during tariff disputes in Trump’s first term. Chris Swonger, president of the Distilled Spirits Council of the United States, said another round of conflict still hangs over the sector.

For wineries, distillers and importers, this means that even a parliamentary approval in Brussels may offer only temporary relief. If French wine becomes a direct target or if broader tariff threats return through other channels, exporters across Europe could face higher costs or weaker demand in the American market. Importers and distributors in the United States could also see renewed volatility in supply chains and shelf prices.

Another source of concern is the continued use of Section 232 investigations, which allow Trump to impose tariffs if imports are judged to threaten national security. Reuters noted that these investigations could still be used in ways that break with the spirit or terms of the Turnberry accord.

One risk appears lower than before: sudden across-the-board tariff announcements without formal process. After a U.S. Supreme Court ruling struck down Trump’s global tariffs, his administration now needs to conduct a formal investigation before imposing new levies. Ignacio Garcia Bercero, a senior fellow at Bruegel, told Reuters that Washington may still find other ways to make political threats, but he does not expect tariffs to remain as readily available an instrument as before.

Even so, for European exporters and especially for wine and spirits producers, much depends on what happens over the next several weeks rather than on Tuesday’s vote alone. The parliamentary approval would mark progress toward calmer trade relations, but it would not remove the risk that political threats, regulatory disputes or sector-specific measures could reopen tensions across one of the world’s largest commercial relationships.