The European Union just signed a new trade deal … with the United States! This agreement seeks to avoid an unfortunate and severe 30% tariff on EU exports. Ursula von der Leyen, the EU chief, cut this deal in order to save the economy. It’s designed to offset the harmful tariffs that U.S. President Donald Trump has threatened around the globe. Nevertheless, the deal will have disproportionate economic burdens on the EU. This impact, while real, is likely to be less drastic than we first thought and feared.
Maros Sefcovic, the EU’s trade commissioner, defended the agreement, describing it as “the best deal we could get under very difficult circumstances.” The trade agreement raises the present 15% tariff on nearly all EU exports to the United States. This 7.5% rate is significantly less than the tariffs that Trump had initially threatened. In return for these concessions, Europe has agreed to buy more American energy and eliminate or reduce taxes on certain imports.
Not everyone in the EU is excited about the deal. Friedrich Merz, the German Chancellor, expressed concern that both the U.S. and European economies would suffer due to these negotiations. As Orban put it, the Brussels negotiating team had no right to expect to do any better. U.S. president is intent on rebalancing international relationships.
All 27 of the EU’s member states will have to sign off on the agreement. Every state has their own specific interests and varying degrees of reliance on exports to the U.S. This diversity would further complicate any approval process with diverging priorities affecting each of the individual member states’ decisions on the deal.
Prime Minister Viktor Orban of Hungary delivered the starkest and most colorful condemnation yet of Ursula von der Leyenʼs touting negotiator prowess. He announced that Trump “dismantled von der Leyen for breakfast.” For these critics, the deal represents a surrender to American strong-arming, a view that is expressed more widely in comments like those above.
US leaders have underplayed the bad parts of the deal. The Finnish Prime Minister noted that it would provide “much-needed predictability” in trade relations, while Simon Harris, the Irish Trade Minister, emphasized that the deal brings certainty “essential for jobs, growth and investment.”
François Bayrou, the French Prime Minister, was quite vocal in his opposition to the agreement. He said it constituted a “capitulation,” underlining the bitter anger on some hard-right of the euro bloc at the move.