Two of the world's largest economies have finally secured a trade deal, which will see the vast majority of European exports to the United States hit with a clear maximum tariff rate of 15 per cent.
In a joint statement released on Thursday, local time, both blocs agreed to lower the tariffs applying to European cars, pharmaceuticals, semiconductors and lumber.
But other key exporters, including Europe's key wine and spirits sector, failed to score a zero-tariff carve-out and now face passing the increased costs onto American consumers.
The deal will affect what both parties say is the "most valuable economic relationship in the world", worth 1.6 trillion euros ($2.8 trillion) each year.
The agreement builds on an agreement struck last month between European Commission President Ursula von der Leyen and US President Donald Trump.
"Faced with a challenging situation, we have delivered for our member states and industry, and restored clarity and coherence to transatlantic trade," Ms von der Leyen said.
Meanwhile, EU Trade Commissioner Maros Sefcovic said the agreement was the "most favourable" extended by the US to any trading partner.
Wine exporters 'hugely disappointed'
Mr Sefcovic said the agreement would lower the rate of tariffs on European car exports to the US from 27.5 per cent to 15 per cent.
But he added that a push to score a zero per cent tariff on wine and spirits failed, despite a push from major producers in France and Italy.
"These doors are not closed forever," he said.
The tariffs will affect up to $US10 billion of imports a year and raise the cost of French champagne, Irish whiskey and Italian prosecco for American consumers.
The head of France's wine and spirits federation (FEVS), Gabriel Picard, said the 15 per cent tariff left the sector "hugely disappointed".
"We are certain that this will create major difficulties for the wines and spirits sector," he said.
French Trade Minister Laurent Saint-Martin said his government would seek "additional exemptions" in the trade deal.
'Not the end of the process'
Under the agreement, the EU committed to significantly improving market access to a range of US seafood and agricultural goods, including tree nuts, dairy products, fruits, vegetables, pork and bison meat.
On the other hand, a special, more favourable regime will apply as of September 1 to a number of EU exports to the US, including "unavailable natural resources" such as cork, all aircraft and aircraft parts and generic pharmaceuticals.
These would effectively face a "zero or close to zero" rate, the commission said.
The EU and US would also work to fight "unfair and distortive competition" in the steel, aluminium and copper sectors.
But amid outcry from certain sectors, Ms von der Leyen said the European Commission would continue to push for further exemptions.
"This is not the end of the process; we continue to engage with the US to agree more tariff reductions, to identify more areas of cooperation, and to create more economic growth potential," she said.
The French government also indicated it would seek "additional exemptions" from the US.
ABC/wires
