Ursula von der Leyen, the President of the European Commission, with former President Donald Trump, announced a new trade deal. This deal between the EU and US follows months of hard-fought negotiations. In retaliation, the agreement includes a 15% deep uniform tariff on the EU’s exports to the US on average. This is an enormous decrease from the 30% tariff initially proposed. This new rate is still a significant jump. The average tariff previously stood at 4.8%.
The announcement included a stage-managed handshake and beaming smiles between von der Leyen and Trump. It’s triggered the ire of other EU leaders, as well as some EU trade associations. Yes, many people behind the Iron Curtain are very concerned with the possible economic ramifications these sanctions have on European nations. Italy, Germany, and Ireland stand to take the brunt of the new tariffs.
Italian trade associations are mobilizing. In return, they are demanding billions in compensation from the EU to mitigate anticipated financial losses from the updated tariff structure. Cristiano Fini, a representative from the Italian Confederation of Farmers, expressed his disgust with the deal. He thinks it looks more like “a capitulation” than a good faith give and take.
French President Emmanuel Macron welcomed the agreement as offering “predictability in the short term.” He called for Europe to be tougher on the US in future negotiations. Macron remarked, “In order to be free you have to be feared. We weren’t feared enough.” He indicated that this agreement is only a preliminary step in an ongoing negotiation process, asserting, “This isn’t the end of the story and we won’t leave it at that.”
Neale Richmond, a minister of state in Ireland’s foreign affairs department, provided his delightfully Irish pragmatic take on where things stand. He just shrugged and said, “You know, it is what it is and we go on.” His sentiment is broadly representative of the measured welcome of the deal, beneath which lies a fear about what it may mean for different parts of Europe.
The US government wants the agreement to bring in $600 billion worth of EU investments by the end of Trump’s second term. At the same time, EU officials say that companies are setting targets to achieve this goal by 2029. Steel and aluminum tariffs will stay at 50%, making already-testing US-Chinese trade relations that much worse.
Implementation of the agreement will have different effects among European countries. Hildegard Müller, president of the German Association of the Automotive Industry, described the new tariffs as a costly burden for manufacturers in Germany. She highlighted the point that the automotive industry would be the most severely impacted by these changes.