European officials expressed palpable relief following the announcement of a trade agreement finalized on July 27 between President Donald Trump and European Commission President Ursula von der Leyen.
Fears of a looming 30% tariff on goods exported to the United States were alleviated as Europe managed to negotiate a lower rate of 15%.
The agreement took place at Turnberry, Scotland, a luxury golf resort owned by President Trump, with key details still undisclosed, particularly concerning the specific exemptions negotiated for sensitive sectors.
President Trump emphasized the EU’s commitment to purchasing $750 billion worth of energy and investing an additional $600 billion in the United States.
Despite the relief, the outcome of the talks has a bitter aftertaste.
Given the size of the EU market, with 450 million consumers, and its position as the United States’ second-largest supplier of goods, Europe appeared to have greater leverage compared to Japan in striving for a lower tariff rate.
However, the negotiations revealed significant setbacks, with the EU initially aiming for a rate under 10% at the end of June.
By mid-July, hopes were that a 10% rate could be achieved—already secured by the United Kingdom, the US’s third-largest trading partner.
The compromise reached by the European Commission highlights the struggles of the 27 member states to assert themselves against President Trump’s determination to impose his rules globally, as well as his political strategy to weaken the EU.
Amid calls from France for a firmer stance, the EU was prepared with a package of retaliatory measures valued at €93 billion, set to take effect on August 7 had the negotiations failed.
However, the president of the European Commission prioritized maintaining unity among European nations, which faced temptation to pursue their own interests.
Countries like Germany and Italy, deeply engaged in transatlantic trade, were not keen on confrontation, particularly given the critical need for US support in Ukraine and America’s role in European defense.
Ultimately, the 15% tariff is seen as a lesser evil compared to previous increases instituted by President Trump, which included 50% tariffs on steel and aluminum and 25% on automobiles and auto parts.
These measures are expected to negatively impact the competitiveness of involved companies and elevate consumer prices.
In return for the negotiated terms, von der Leyen and the European business community cling to hopes of stabilizing the economic landscape, yet guarantees remain elusive in the unpredictable environment shaped by President Trump.
Three days following a troubled summit between China and the EU—revealing Brussels’ challenges in achieving any significant trade rebalancing—the handshake between Trump and von der Leyen starkly illustrates the current power dynamics.
As a new world order emerges, Europe finds itself adhering to a defensive posture that offers little protection against potential future power plays.
The recent developments illustrate the delicate balance of power and the ongoing challenges facing Europe in its efforts to navigate complex international trade relations.
image source from：lemonde
