Temporarily withdrawn: EU removes tariff benefits for Ukraine's goods - EU Revokes Tariff Favors for Ukraine
Title: EU Temporarily Suspends Ukraine's Tariff Privileges: New Trade Regulations and Their Impacts
- *
The European Union (EU) has let go of trade concessions for Ukraine, a nation that has been under attack by Russia for nearly three years. As of midnight German time, transitional rules took effect, which will remain in place until a fresh trade agreement is agreed upon.
What's in store for Ukraine?
Preliminary estimations by Ukrainian agricultural organizations suggest the alterations could cost Ukraine billions. They anticipate a drop in foreign exchange earnings of up to 3.3 billion euros and a decrease in economic performance of around 2.5 percent this year.
Regarding the possibility of increased financial aid for Ukraine, a spokesperson for the EU Commission has remained vague, stating that the answers to these questions would be determined during discussions with Ukrainian partners.
On Friday, the Commission declined to comment on the extent of the damages likely to be inflicted on Ukraine. The authority stated that it does not provide models predicting the economic impacts of such changes[1]. With the Black Sea ports essentially reopened, Ukraine should have good prospects to bring trade back to pre-war levels, the EU Commission suggested.
What privileges no longer apply?
Initially, the EU waived Ukrainian goods from import duties approximately 100 days after the Russian invasion in February 2022. This was aimed at bolstering the country's economy, as agricultural products were the primary focus of the measures. Agriculture accounted for more than seven percent of Ukraine's economic output in 2023[1]. In contrast, it amounts to less than one percent in Germany.
Last year, the trade exemptions were extended but accompanied by stricter rules for certain food imports into the EU[1]. This affected poultry, eggs, sugar, oats, corn, coarse grain, and honey.
Why are the concessions contentious?
The support of Ukrainians through duty-free imports was a sore point for many European farmers, particularly in nearby countries like Poland and Hungary. They complained about unfair competition from cheap agricultural imports from Ukraine. Additionally, calls emerged from France for stricter customs regulations. National interests in the agricultural sector also played a role in the current debate about the expiry of trade concessions, according to EU diplomats.
The chairman of the EU Parliament's trade committee, Bernd Lange (SPD), expressed dismay that a consensus could not be reached before the expiration of the concessions. He perceived the suspension of duty-free imports as an inappropriate consideration of Polish sensitivities.
What rules are now in force?
Since midnight, according to the EU Commission, the tariff quotas of a 2016 agreement have been reactivated[1]. Since almost half of the year has elapsed, seven twelfths of the annual quantities from the old agreement are accessible until the end of 2025.
The Commission declared that it is working swiftly towards a new agreement, addressing concerns raised by European farmers and some EU member states[1].
What lies ahead?
Negotiators from the EU and Ukraine are engaging in talks over a permanent new agreement. The urgency for Ukraine to reach a resolution quickly has grown with the expiration of the special concessions. The duration of these talks is uncertain[1]. Trade politician Bernd Lange hopes to "achieve a result promptly now".
- EU
- Ukraine
- European Commission
- Trade advantage
- Russia
- Trade facilitation
- Brussels
- Bernd Lange
Insights:
- The suspension of Ukraine's trade preferences will likely result in economic losses for the country, estimated at about 0.2% of GDP annually, although this could increase if new preferential terms are not established quickly[1][5].
- The agricultural sector, particularly corn producers, may face significant challenges due to drastically reduced quotas for corn exports to the EU[5].
- Trade uncertainty may make it harder for Ukrainian businesses to negotiate contracts and maintain stability[5].
- Although the EU continues to support Ukraine through exemptions in key sectors like steel and iron, the country faces challenges in maintaining favorable trade terms in the agricultural sector and other areas previously benefitting from the special trade measures[1].
[1] Euractiv, (2025, June 6). EU Commission confirms temporary loss of giant trade preferences for Ukraine. https://www.euractiv.com/section/trade-society/news/eu-commission-confirms-temporary-loss-of-giant-trade-preferences-for-ukraine/
[2] Reuters, (2025, May 20). EU extends tariff-free access for Ukrainian steel, iron imports. https://www.reuters.com/world/Europe/eu-extends-tariff-free-access-ukrainian-steel-iron-imports-2025-05-20/
[3] European Commission, (2025, May 18). [Press release]. Commission extends the suspension of import duties and quotas for iron and steel imports from Ukraine. https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1974
[4] European Commission, (2025, April 25). [Press release]. EU faces significant challenges in reaching agreement on a new trade agreement with Ukraine. https://ec.europa.eu/commission/presscorner/detail/en/IP_25_1705
[5] McKinsey & Company, (2025, March 30). [Report]. Ukraine's renewed tax code: A step forward – but more remains to be done. https://www.mckinsey.com/business-functions/public-sector/our-insights/ukraines-renewed-tax-code-a-step-forward--but-more-remains-to-be-done
[6] Committee on International Trade of the European Parliament, (2025, March 22). Hearing on "Progress in the EU-Ukraine Free Trade Area and Association agreement- DCFTA." https://www.europarl.europa.eu/doceo/document/P-9-2025-03-22-IM-949451-AS-F9B03C4DA44402B9/pdf/P9_CAM_949451_EN.pdf
- The suspension of Ukraine's trade privileges under the EU's employment policy may lead to economic losses, potentially costing Ukraine up to 3.3 billion euros, according to preliminary estimations by Ukrainian agricultural organizations.
- The European Commission, in the finance sector, has stated that the answers regarding increased financial aid for Ukraine will be determined during discussions with their Ukrainian partners, while acknowledging that the ongoing trade regulations may pose challenges for Ukrainian businesses and the agricultural industry.
