Why the EU-US Framework Trade Deal Is Already Showing Cracks

The EU-US trade deal was supposed to stabilise transatlantic commerce. Six months in, structural problems are appearing. Here is what is going wrong and who can fix it.

The EU-US Framework Agreement on Reciprocal, Fair, and Balanced Trade has not produced the commercial stability that both sides advertised when they announced it. Six months into its operation, the specific structural problems that trade lawyers identified in its architecture at announcement are producing the practical complications that were predicted.

The first crack: the IEEPA ruling's impact on deal architecture. The framework was negotiated using IEEPA tariffs as the background pressure — both parties structured their commitments around tariff rates that were legally enabled by IEEPA authority. With IEEPA struck down, the deal's structure requires formal renegotiation or congressional codification to survive in its current form. The Trump administration has not formally indicated which path it prefers, creating legal uncertainty for European exporters planning shipments.

The second crack: European retaliation toolkit. As part of the framework, the EU committed to suspending its countermeasure toolkit — the list of targeted US goods that the EU had prepared to tariff in retaliation for US tariffs. The toolkit suspension was contingent on the US maintaining the agreed tariff ceiling. With the legal basis of that ceiling now unclear, the EU's suspension of its countermeasures is under internal institutional review — European member states whose export sectors are most exposed are pressing for clarification.

The third crack: the pharmaceutical tariff signals. When Trump signaled that pharmaceutical tariffs of up to 200 percent might be coming in a separate review process, European pharmaceutical exporters — who ship approximately €70 billion annually to the US — faced the specific anxiety that the framework agreement's protections might not cover this specific sector. The EU has formally raised pharmaceutical tariff concerns in the trade dialogue mechanisms the framework established.

Despite these cracks, the framework remains the operative structure for transatlantic trade. Neither side has walked away from it formally. The US needs the revenue stability and the political credibility of a trade deal. The EU needs the certainty of a ceiling even if that ceiling is contested at the margins.