The European Union struck a provisional agreement on Wednesday on legislation to remove import duties on US goods, a key part of a trade deal reached with Washington in July and a move likely to avert higher US tariffs on EU products.

Under the deal struck at US President Donald Trump's Turnberry golf resort in Scotland last July, the EU agreed to remove import duties on US industrial goods and grant preferential access to US farm and seafood products, while the US imposes tariffs of 15% on most EU goods.

Nearly 10 months since that framework accord, the European Parliament and the Council, the body representing EU governments, agreed on a legislative text to allow the EU duty reductions to come into force.

After five hours of negotiations, they also agreed reinforced provisions to suspend the concessions in case Trump reneges on the agreement and a sunset clause to terminate the deal at the end of 2029 unless there is new legislation to renew it.

The internal EU deal should bring some calm to the world's largest trading relationship, with an annual exchange of $2 trillion in goods and services, coming a week after Trump's visit to China. The EU has relied on the US to take in some 20% of its goods exports, but Trump is determined through tariffs to reduce the goods trade deficit with the bloc of more than $200 billion.

"I am proud to announce that Europe has avoided a damaging escalation of transatlantic trade tensions and protected European companies, investments and millions of jobs on both sides of the Atlantic," Zeljana Zovko, the lead trade negotiator in the European People's Party on the US deal, said in an X post.

"The EU walks the talk, while defending our interests. Once approved, it'll boost transatlantic stability and cooperation," European Trade Commissioner Maros Sefcovic wrote on X.

The American Chamber of Commerce in the EU said it was relieved to see the agreement, saying it was a critical step for businesses that rely on stable transatlantic trading and investment relations. SpiritsEurope was also positive, saying it would ensure greater stability and predictability. German Economy Minister Katherina Reiche said it provided planning certainty for businesses.

July 4 deadline 

Trump has said he would impose much higher tariffs on EU goods including cars if the EU did not implement its trade deal commitments by July 4, having earlier threatened to raise tariffs on EU car imports to 25% from the current 15%.

EU lawmakers had twice paused the required legislation after Trump's threats to impose new tariffs on European allies who did not back his proposed acquisition of Greenland and after the US Supreme Court struck down his global tariffs.

The bloc should now meet Trump's July 4 deadline, with a final vote of approval in the European Parliament expected in mid-June. Bernd Lange, the chair of parliament's trade committee, expressed confidence that lawmakers would vote in favor, saying the agreement ensured a safety net for dealing with an unpredictable US administration.

EU lawmakers had wanted tougher guarantees, but the two sides did not accept their proposed "sunrise clause" under which the EU would only cut duties when the US fulfilled its side of the deal, and the "sunset clause" was pushed from the end of March 2028 to the end of 2029.

The European Commission can also suspend tariff preferences by the end of this year if the US keeps in place tariffs higher than 15% on steel and aluminum "derivative" products like wind turbines and refrigerators.

EU governments had had less appetite for inserting such items, concerned they could antagonize the Trump administration and create uncertainty for EU businesses.