Trump’s tariff deal with European Union will save its automakers up to $700 million a month

European automakers will save around 500-600 million euros ($585-700 million) a month dating back to Aug. 1 after the Trump administration implemented the U.S. end of its trade deal with the European Union, the EU’s top trade negotiator said Thursday.

Trade Commissioner Maros Sefcovic said that the deal establishing a 15% tariff on most EU goods took effect with publication in the U.S. Federal Register instructing customs officials what to charge. That would reduce the tariff from a painfully high 27.5% rate set earlier by Trump.

The reduction eases a major burden on EU automakers and is a chief selling point for the deal as presented by European Commission President Ursula von der Leyen.

The deal is retroactive to Aug. 1 so “what we expect now is that the tariffs will be returned to the automakers as of the first of August, which is something like 500, 600 million euros per month,” Sefcovic said ahead of a meeting with Southeast Asian trade ministers in Kuala Lumpur, Malaysia.

The 15% tariff is still much higher than tariffs from before Trump took office, which averaged in the single digits, and the trade deal has been criticized by business associations and some members of the European Parliament.

Sefcovic said most member states supported the deal and that after detailed exchanges and presentations on the details he expected lawmakers would support it as well.

He said it was “the best deal available” after difficult talks with Trump administration officials. “Any other alternative would be much worse,” he said. Trump threatened even higher rates during the talks.

—Associated Press