Leaders from Europe’s two largest economies, Germany and France, have raised significant alarm over the newly inked trade deal between the European Union (EU) and the United States. German Chancellor Friedrich Merz characterized the agreement as one that would “substantially damage” Germany’s finances, while French Prime Minister Francois Bayrou condemned the deal as equivalent to “submission” to US demands.
Despite the grim responses, there was a consensus among various EU capitals that the agreement, although unequal, was preferable to the looming threat of an all-out trade war. The deal stipulates a 15% tariff on most EU exports to the US—half of what US President Donald Trump had initially proposed. In return, Europe has committed to purchasing more American energy and reducing taxes on certain imports.
The agreement emerged following discussions at Trump’s Turnberry golf course in Scotland, where EU chief Ursula von der Leyen hailed the deal as a “huge deal,” indicating it would foster closer ties between the US and the EU. However, its viability hinges on the approval of all 27 EU member states, each holding diverse interests and reliance on trade with the US.
While no member country signaled intentions to thwart the deal, the mood remained somber among leaders. Merz cautioned that the deal would have ramifications for both the US and European economies. He acknowledged the tough negotiating environment against a US president intent on altering trade dynamics with allies. Bayrou's comments on social media expressed disappointment: “It is a dark day... when an alliance of free peoples resigns itself to submission.”
Hungarian Prime Minister Viktor Orban, a known ally of Trump, remarked that the US president "ate von der Leyen for breakfast." Meanwhile, Spain's Prime Minister Pedro Sanchez expressed reluctant support for the agreement, lacking enthusiasm.
In the lead-up to the negotiations, several European leaders aimed to exert pressure on Trump through anti-coercion measures that would limit US firms' access to European markets. However, facing the potential of a 30% tariff, the EU opted for a compromise that was less damaging than initially feared.
Though von der Leyen touted the agreement as an achievement, European People's Party leader Manfred Weber referred to it merely as “damage control.” The fine details of the deal will be finalized following additional technical discussions, yet this agreement has brought a sense of relief to many in Europe. Finland’s Prime Minister stated it would provide "much-needed predictability," and Ireland’s Trade Minister emphasized it would create the stability essential for jobs and investment.
Defending the agreement in a press conference, EU's trade commissioner Maros Sefcovic maintained it was the “best deal we could get under very difficult circumstances.” He highlighted the importance of maintaining productive relations with the US, especially in light of ongoing geopolitical tensions, emphasizing that alignment on current global issues could necessitate accepting a higher price in trade agreements.
