The European Union and U.S. agreed on a trade deal which cements the vassalization of the EU:
After make-or-break negotiations between President Donald Trump and European Commission President Ursula von der Leyen in Scotland, the pair agreed a US tariff on all EU goods of 15%.
That is half the 30% import tax rate Trump had threatened to implement starting on Friday. He said the 27-member bloc would open its markets to US exporters with zero per cent tariffs on certain products.
Von der Leyen also hailed the deal, saying it would bring stability for both allies, who together account for almost a third of global trade.
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Trump said the EU would boost its investment in the US by $600bn (£446bn), including American military equipment, and spend $750bn on energy.
That investment over the next three years in American liquified natural gas, oil and nuclear fuels would, von der Leyen said, help reduce European reliance on Russian power sources.
Some goods will not attract any tariffs, including aircraft and plane parts, certain chemicals and some agricultural products. A separate deal on semiconductors may be announced soon.
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[A] 50% US tariff Trump has implemented on steel and aluminium globally would stay in place, he said.
The is a very, very bad deal for Europe. It again demonstrates the incompetence of EU Commission President Ursula von der Leyen.
As I have pointed out previously there was and is no imbalance in trade between the U.S. and Europe. There was no need for tariffs or for agreeing to a deal. As the Washington Post concedes (archived):
For the E.U., a 15 percent blanket tariff is far worse than what European officials had previously hoped for. They’d offered “zero-for-zero” tariffs with the U.S. on industrial goods at the start of Trump’s trade blitz. But the bloc has sought to avoid an all-out trade war with its traditionally closest commercial and military ally.
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Trump frequently complains about the yawning gap in U.S.-E.U. merchandise trade. Last year, the U.S. imported almost $606 billion worth of European products while selling goods totaling about $370 billion to European buyers. The resulting $236 billion trade deficit is evidence of European unfairness, Trump insists.
But the U.S. runs a sizable surplus of its own in trade in services like financial advice, tourism and education, bringing the total trade relationship much closer to balance. Considering the total $1.8 trillion in goods and services that flow between the U.S. and E.U., the U.S. trade deficit is less than $100 billion, which most economists say is inconsequential.
The EU commission was given the tools to prevent the current outcome. That is why yesterday Martin Sandbu of the FT argued (archived) that there was no need to concede:
There will be no final agreement.
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So it is a mistake to treat this as a negotiation with an ultimate resolution. There will be no resolution. There will continue to be instrumentalised chaos, promised policy steps will suddenly be thrown out, and linkages with all kinds of demands unrelated to trade will keep being made, mafia-style (just ask Brazil). The EU’s task is not, therefore, to negotiate a trade deal, but to find ways to insure its economies, companies and workers as much as possible from the cost of being exposed to a completely unreliable US.
The US is more vulnerable than it thinks.
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[T]he EU’s net imports of US services and its net royalty payments for intellectual property balance out its net exports of goods to America. [..]
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The EU is more powerful than it looks. So far, the EU does not seem too willing to go beyond tariffs as a retaliatory weapon. But it, obviously, has others. The most relevant rule here is the “anti-coercion instrument” (ACI) that gives the European Commission vast powers to choose economic measures it sees fit — well beyond the realm of tariffs or even trade more generally — in order to respond to an attempt by a foreign power to coerce its policy decision.
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To sum up: there is no settlement that will end Trump’s unreasonable demands and stabilise trade policy; the balance of bargaining power favours Europe more than conventional wisdom believes; and the EU may not need, in terms of its long-term economic interests, to divert Trump from his protectionist course. So why should the EU offer the US anything? To be blunt, it doesn’t need to negotiate. That is what von der Leyen should tell Trump today. Pulling out of talks is, if anything, more likely to get Trump to back down.
There was no reason for the EU to accept any deal.
That it did so is a result of the miserable negotiation tactics (archived) van der Leyen has pursued. She has become a cause and symbol of Europe’s decay.
The only positive feature of the deal is that it is not clear yet (archived) what it entails:
Like many preliminary agreements Mr. Trump has announced, this one had few details. For some of the “deals” that Mr. Trump reached, other governments have seemed to lack clarity on what exactly they agreed to, and it remains unclear which tariff rates will apply to which products as of Aug. 1.
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“There’s a lot of issues that I think are still very unclear,” said Mujtaba Rahman, managing director for Europe at the Eurasia Group. “If there aren’t further exemptions to be negotiated to that 15 percent, I think it’s a far more suboptimal deal than the member states were hoping to achieve.”
On hopes that the EU member states will finally be furious enough to kick van der Leyen out of her office. The Prime Minister of France seems to be ready to do that.
François Bayrou @bayrou – 8:29 UTC · Jul 28, 2025
(Translated by Grok)
Von der Leyen-Trump Agreement: it is a dark day when an alliance of free peoples, united to affirm their values and defend their interests, resolves to submission.
Indeed this is a capitulation to the U.S. of A.
As a German I wince when I read Chancellor Merz’ commenting (archived) against the interests of his own country:
German Chancellor Friedrich Merz saluted the agreement as “avoiding an unnecessary escalation in transatlantic trade relations”.
He said a trade war “would have hit Germany’s export-oriented economy hard”, highlighting how the German automotive industry would now see US tariffs cut from 27.5 per cent to 15 per cent.
However, Wolfgang Niedermark, board member of the Federation of German Industries trade body, called the agreement “an inadequate compromise”, with the EU “accepting painful tariffs”.
A 15 per cent US tariff rate “will have a huge negative impact on Germany’s export-oriented industry”, he said.
Warwick Powell, in stark contrast to other opinions, sees the deal as an attempt by the EU to further entangle the U.S. in Europe:
[L]ook beneath the bombast, and a different picture emerges. The picture is paradoxically not of European weakness per se (or vassalage as self-loathing Europeans would be tempted to say), but of European entrapment strategy from a position of relative weakness. If anything, this “deal” locks the United States deeper into Europe’s security and economic architecture, not the other way around. And it does so by using the one thing Trump cannot resist: the illusion of winning.
Warwick argues that most parts of the deal will never be done anyway. The U.S. can not export, and the EU not import, the amount of gas that would be needed to spend $750bn on energy. The investment side of the deal would have happened anyway and the tariffs will hurt the U.S. more than the EU.
But how is the EU winning with that? It sounds like 4-dimensional chess to me when von der Leyen is clearly incapable of winning a round of checkers.
The best summary of the situation comes, as so often these days, from the Russian side:
Medvedev: Trump “steamrolled” Europe with a one-sided deal that serves only American interests.
Commenting on the newly struck trade agreement between the U.S. and the European Union, former Russian President and current Deputy Chairman of the Security Council Dmitry Medvedev argues that the agreement:
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- Strips Europe of its economic defenses, removing tariffs for U.S. goods while leaving EU markets vulnerable;
- Imposes heavy costs on European industry and agriculture, forcing them to rely on overpriced American energy;
- Diverts investment from Europe into the United States.
For Trump, it’s just business, Medvedev notes. For Europe, however, it’s blind ideological zealotry — with Ursula von der Leyen and the Eurocratic elite sacrificing the welfare of their own citizens.
Th EU commission could have easily prevented this.
A 100% tariff on Hollywood movies and a digital service tax to be payed by Microsoft, Google and others would have hit Trump and the U.S. where it hurts. The means were all there for the EU commission but it did not even give them a try. The result is a terrible outcome.
Reprinted with permission from Moon of Alabama,
