There's a lot happening with Trump's tariffs this week as countries scramble to make deals ahead of the August 1 deadline. One of the latest trade agreements reached was with the European Union.
While the agreement isn't finalized, the US and EU announced a framework deal that laid out the basics of what the trading partners had agreed to.
The biggest takeaways for US consumers include a baseline 15% tariff rate across all European products imported into the United States, with a handful of exceptions.
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Some of those exceptions have already been agreed to. Most notably for consumers: certain generic drugs will be exempt from the tariffs. But many others, including wine and spirits, are still up in the air.
Europe is a major source of pharmaceuticals, cars and other consumer goods for the United States. About 60% of prescription drugs in the United States are imported from Europe, according to Reuters. Some of the most popular luxury vehicles, including Audi and Porsche, are also European.
The US also imports a smattering of other products from Europe, ranging from Ikea furniture to luxury apparel and accessories. Here are some of the most noticeable ways tariffs will impact your wallet after the US-EU trade deal.
What products will face tariffs under Trump's trade deal with the EU?
Right now, the framework US-EU trade deal includes a 15% baseline tariff, which is lower than the 30% rate threatened earlier but, in certain cases, higher than the rates that had been in place for some imports.
Here's how tariff policy will change under the deal for some of the most popular European imports.
Prescription medications
The EU is a key source of major drugs like Wegovy, Ozempic, Keytruda, Gardasil 9 and countless others. As a consumer, however, you may not notice the price hike if your insurance covers the medications you take.
It's also easier for drug manufacturers (as compared to, say, car manufacturers) to shift production to the United States quickly. So, even if you're paying out of pocket, the price hike could be temporary if the manufacturer behind your medications have plans to establish or expand stateside production.
While some generic drugs will be exempt, it's not known yet which ones.
European cars and car parts
Audi, BMW, Mercedes-Benz, Volkswagen and other European carmakers will see the 27.5% tariff they currently face drop to the 15% baseline rate.
However, since prices today still don't fully reflect the new tariffs, you're still likely to see a price jump at the dealership going forward. Just how much car prices go up with tariffs will vary by manufacturer. You should also brace for higher repair costs, too. That, in turn, could also trigger a spike in car insurance premiums as insurers compensate for those rising costs.
European furniture
The most widely recognizable European furniture brand is probably Ikea, but there are also a number of high-end luxury furniture makers in Europe that will also be subject to the 15% baseline tariff. That means consumers at all price points are likely to see costs go up to furnish their homes.
Luxury items
Europe is home to popular luxury brands like Prada, Burberry, Louis Vuitton, Chanel and many others. While the apparel, accessories and other items you buy from these brands will be subject to tariffs, you might not see that in the price tag.
Luxury brands already have profit margins as high as 80% so they might be more willing to eat the tariffs than brands with thinner margins.
Shoppers will also be indirectly impacted by other tariffs, such as the 50% tariff on steel and aluminum that's staying in place and the baseline tariff impacting machinery and certain raw materials.
While you're probably not buying factory machinery or raw materials yourself, the higher cost of those materials could result in a higher price tag on the products that are made with them.
What you should do after the EU trade agreement
For the most part, you probably won't see too much of a difference in your budget unless you had plans to buy a European car or shop at Ikea. With that said, it's the goods that still hang in the balance that you want to watch.
Plan ahead for your medications
If you pay out of pocket for any prescription medications, you have two options. One is to ask your doctor to write you a prescription for a few months in advance so you can stock up before prices go up.
The other is to switch any name brand drugs to their generic counterparts. Generic drugs are already cheaper than name brand drugs, and some are exempt from the tariffs, which would make the price difference even more noticeable.
However, it isn't yet clear which specific generics will be exempt. So, you may want to wait to discuss any changes with your doctor after the details of the trade deal are finalized.
Stock up on European products whose future is still uncertain
Check the source of your favorite foods and other products to see which ones hail from Europe. You may want to stock up on these before tariffs raise prices where possible.
If you're a wine connoisseur, for example, pick up a couple of extra bottles of your favorite European wines this weekend. While wine and spirits may end up on the exemption list, the first half of 2025 has shown us that policy can shift quickly and dramatically.
If wines don't make the cut, they'll face the same 15% tariffs that other non-exempt European goods do. Profit margins in the wine industry are already razor thin, so any bump in cost is likely to be passed directly onto consumers.
Grabbing a few extra of your favorites at their current price lets you delay the pain of any potential price hike. And if wines do end up making the exemption list, you've already got bottles on hand to celebrate the good news.
The same goes for any other European products you love like perfume and makeup. These are unlikely to be given an exemption. So grabbing an extra bottle of your favorite perfume or your favorite European cosmetics now might be a good idea.
Get a tune up on your European car
You may have already bought a new car earlier this year when President Trump first started levying tariffs — or you might just not be in the market for one right now. But keep in mind that the tariffs apply to car parts, not just cars.
If there's a repair you've been putting off or your car is due for a general tune-up soon, get that done sooner rather than later. And don't skimp on any recommended repairs your mechanic suggests. Getting worn parts replaced now, even if they could have maybe lasted a few extra months can help you avoid higher repair costs later.
Add shopping to your European travel plans
The tariffs agreed to in the new trade deal aren't high enough to warrant booking a flight to Europe to do your Ikea shopping or fill your prescriptions.
But, if you're planning a trip anyway, it does mean packing an extra bag to stock up on your favorite European brands while you're there could be worth your while.
Currently, a U.S. traveler can bring up to $800 worth of goods purchased in Europe home in their luggage duty-free. When traveling with your spouse or family, you can combine the $800 personal exemption of each person into one joint declaration.
Key takeaways from the US-EU trade deal
There are still a lot of details to be worked out in the trade deal between the United States and the European Union. But so far, the framework deal is enough to avert the worst case scenario of 30% tariffs that President Trump had threatened earlier. While prices across many European goods are still likely to increase, even with the lower 15% rate, they won't spike as much as they could have.
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