Well, the US President walked the walk, having talked the ‘art of the deal’ talk over the course of a lifetime, and what a deal it resulted in.
The long-anticipated US/EU tariff deal is in, and the US appears to have won bigly: a 15 percent import tariff on most EU goods, with none being placed in return, and hundreds of billions of dollars worth of EU investment in the US secured at the same time.
Before returning to those specifics, it must be confessed, as many with an interest in doing damage control have been claiming throughout the morning and afternoon, that it could have been worse. Staring down the barrel of 30 percent tariff rate come August 1 if an agreement hadn’t been reached, it can truthfully be said that that eventuality was avoided.
But that’s about all that can be said in favour of Europe’s negotiators. They managed to avoid the 30 percent tariff by apparently caving on near-everything else, giving the US almost everything it was looking for in the meantime. Mr Trump, one imagines, must be quite pleased with the European “capitulation”, as it’s already being widely described.
It’s genuinely worth watching the footage of the meeting at Trump’s Scottish golf course between the US President and European Commission President, Ursula von der Leyen, because the transcript could hardly be believed if you didn’t see the exchange take place with your own eyes.
Take this excerpt as proof. Having already heard the preliminary details of the “deal,” which I’m loath to call it because generally both sides receive something as part of a deal, a reporter asks Ms von der Leyen somewhat disbelievingly, “What are the US concessions? What is the US giving up in the deal, if anything?”
The EC president provides not a single example of a US concession, because while the agreement averted greater catastrophe, it did not, in any meaningful sense, serve European interests beyond the absolute bare minimum: restoring “stability” and bringing an end to “uncertainty”.
Here’s von der Leyen’s response to the question in full:
“The starting point was an imbalance, a surplus on our side and a deficit on the US Side. And we wanted to rebalance the trade relations. And we wanted to do it in a way that trade goes on between the two of us across the Atlantic, because the two biggest economies should have a good trade flow between us. And I think we hit exactly the point we wanted to find.”
Aside from the fact that, when services are taken into account as well as physical goods, there is no substantial trade deficit between the EU and the US, why did we want to rebalance the trade relations in a way entirely unfavourable to us, as Ms von der Leyen claims?
Whatever the US President and his supporters believe about the balance of trade between the economic giants, should it not have been the role of the EC President and her crack team of negotiators to tirelessly advocate for the interests of Europe and its many member states, just as Trump and his team did for theirs? By Ms von der Leyen’s account, their starting point was taking Trump’s line and working to reshape matters in a manner pleasing to him.
To return to some of those specifics, what can be said so far is that a 15 percent tariff is being applied by the US to a great number of EU goods, while the EU is agreeing not to apply one in return. The EU is also set to make over $1 trillion worth of purchases and investments across a variety of American sectors, energy and military equipment foremost among them.
Reuters eye-wateringly reports a senior US administration official as divulging that “Trump retains the ability to increase the tariffs in the future if European countries do not live up to their investment commitments”.
There are many specifics to be figured out in the coming weeks and months, but while it can already be acknowledged that the situation could have been worse (very few situations couldn’t), the deal itself couldn’t have been much worse. It very much appears that nothing, beyond the status quo in a few non-negotiable areas, was secured by Europe.
As one irate commentor put it, the US secured a deal, Europe agreed to a bill.
In the wake of the announcement, everyone has lined up to utter what one might expect them to: the MAGA audience is understandably delighted, Eurocrats are doing damage control by variously claiming that the renewed stability and predictability is to be welcomed and that, as mentioned, “things could have been worse”.
More sceptical European voices, which appear very much to this writer to be in the majority, predictably include Hungarian PM Viktor Orban, who said that Trump “ate von der Leyen for breakfast” and less predictably French PM Francois Bayrou, who said it is a “dark day, when an alliance of free peoples, united to affirm their values and defend their interests, resolves to submission”.
Lest they be too quick to criticise for you, one of the age’s greatest lovers of Europe, Guy Verhofstadt, was none too optimistic in his assessment of the result, either:
“The EU – US deal is scandalous… a disaster…with not one concession from the American side…badly negotiated…,” the European Movement leader wrote on X.
Our leaders took the safe and, as ever, eminently sensible position of simply welcoming the outcome of the negotiations, despite the fact that the country in their charge is likely to be smacked by their ramifications. Taoiseach Micheál Martin described the “clarity and predictability” the agreement heralds as “good for businesses, investors and consumers”. “It will help protect many jobs in Ireland,” he added.
That may well be the case – for now. But a great many businesses, investors, and yes, via those losses, consumers, will suffer as the 15 percent tariff makes itself felt, even as greater threats loom on the horizon.
The fate of the critically-important pharma industry hangs in the balance, President Trump reiterating on his Scotland trip his intention to see those desirable multinationals currently working away in Ireland reshored on American soil. Given Trump’s apparent ability to “manifest victories into existence”, which isn’t an overly impressive magic trick when the quality of the opposition is considered, that he will move in the direction of getting what he wants is to be expected. But for now, we watch and welcome.
As the taoiseach mentioned yesterday evening, the European rollover was required to avoid a “damaging trade war”. A disappointed European may well respond that it’s a shame Trump and his team didn’t feel the same way.