EU Parliament Votes This Week on US Trade Deal — Higher Tariffs Threatened If It Fails

The European Parliament is voting this week on whether to ratify a landmark trade agreement with the United States — and Washington is making clear the stakes are high. US Ambassador Andrew Puzder warned European lawmakers on Monday that rejecting the deal would be "economic malpractice," while separately telling Bloomberg that the EU can expect higher tariffs if negotiations collapse.

What Is the EU-US Trade Deal?

The agreement — sometimes called the "Turnberry deal" after early framework talks — was designed to give EU exporters preferential access to the US market while avoiding the worst of the tariff escalation that followed the Supreme Court's February 2026 ruling striking down IEEPA-based tariffs. The deal is widely seen as a cap on effective EU tariff rates, potentially holding them to around 15% versus the higher rates the administration could impose through other legal mechanisms.

The European Parliament's trade committee advanced the agreement last week, clearing the way for a full chamber vote. But final ratification remains uncertain. Some MEPs have raised objections over US agricultural access demands and digital trade provisions, while others are uncomfortable with the 150-day countdown clock on the current Section 122 global tariff.

The US Warning

Puzder was unambiguous in his message to European lawmakers. "If the trade deal goes away, you guys get hit with the increased tariffs, and for us, nothing changes," he told Bloomberg on March 23. A day later, speaking directly to the European Parliament, he called rejection "economic malpractice" given the economic integration between the two blocs.

The implicit threat: if the deal dies, the US administration could invoke Section 301 — the same legal authority currently under investigation for 16 economies including the EU — to impose country-specific tariffs with no statutory cap and no expiration date.

Current Tariff Landscape for EU Importers

Right now, EU-origin goods entering the US face the 10% global tariff under Section 122 of the Trade Act of 1974, which took effect February 24, 2026 as a replacement for the IEEPA tariffs struck down by the Supreme Court. That 10% stacks on top of existing MFN (Most Favored Nation) base duties. Section 232 steel and aluminum tariffs at 50% apply on top of that for relevant products.

For context: Section 122 tariffs are capped at 15% by statute and expire after 150 days unless Congress grants an extension — making the late-July 2026 deadline a potential inflection point. The White House has been explicit that Section 301 investigations, launched March 11–12 and targeting 16 countries for manufacturing overcapacity, are the intended long-term replacement if bilateral deals are not reached.

What Importers Should Watch

If the EU ratifies the deal, importers sourcing from Germany, France, Italy, and other EU member states could see rates stabilize — or potentially fall below the current 10% Section 122 level for certain product categories. If the deal fails, EU goods are likely to face:

• Continued Section 122 at 10% through approx. July 2026
• Potential new Section 301 tariffs following the USTR investigation (findings expected summer 2026)
• Ongoing Section 232 at 50% for steel and aluminum regardless of any deal

Supply chain teams that source from EU manufacturers — particularly in automotive parts, machinery, chemicals, and industrial equipment — should model both scenarios in their landed cost calculations now rather than waiting for the vote outcome.

The Broader Context: Plan B Is Already in Motion

The EU deal vote is happening against the backdrop of a rapidly evolving US trade strategy. After the Supreme Court eliminated IEEPA tariffs in February, the administration moved on three parallel tracks: Section 122 as a bridge, bilateral deals for key allies, and Section 301 investigations as the long-term enforcement tool.

On March 11–12, USTR launched sweeping Section 301 investigations targeting 16 economies for manufacturing overcapacity and 60 economies for forced labor enforcement failures. The EU is named in both. The investigations can take 12 months but have no cap on eventual tariff rates — making a bilateral deal the faster, more predictable path for EU exporters.

Use our tariff search tool to look up the current rate for any EU-origin product by HTS code, and our landed cost calculator to model the cost impact under different tariff scenarios.

Sources: Bloomberg (March 23, 2026), Euronews (March 24, 2026), Tax Foundation Tariff Tracker, USTR.gov press releases.