European governments and firms breathed a collective sigh of relief after the US-EU trade deal was sealed on Sunday, following nearly four months of tariff uncertainty.

Markets reacted positively: shares in European automakers jumped as much as 3% at Monday’s opening, while broader EU stock indices reached four-month highs. European bond yields fell, signaling investor optimism that transatlantic trade tensions may be easing.

Under the agreement, a 15% US tariff will be levied on most exports from the European Union, and the bloc will commit €514 billion ($600 billion) in investment to the US — its largest trading partner. Tariffs on some sectors have yet to be finalized.

While the new 15% rate is less severe than the 25% tariff imposed on European automakers in April and the 30% levy previously scheduled for August 1, it still represents a sharp increase from the 2.5% duty in place before US President Donald Trump's second term began.

European Commission President Ursula von der Leyen told reporters that the new tariff rate was "a good deal," adding it would return "stability" and "predictability" to transatlantic trade. She cautioned that "15% is not to be underestimated, but it is the best we could get."

German Chancellor Friedrich Merz echoed that sentiment, calling the agreement a means to "preserve our core interests" and avert "an unnecessary escalation in transatlantic trade relations." Yet he admitted disappointment over the outcome, stating, "I would have very much wished for further relief."

EU criticized over 'scandalous' deal

While EU policymakers maintain they succeeded in negotiating Trump down from harsher tariffs, many European political and business leaders have condemned the new deal as damaging to the 27-member bloc. The EU had originally sought a 10% tariff.

 

Hungarian Prime Minister Viktor Orban offered a biting critique during a Facebook livestream, saying: "Trump ate Ursula von der Leyen for breakfast," adding that the deal is "worse" than the one the United Kingdom clinched in May.

Under that deal, most British exports still face a blanket 10% US tariff, while economists have warned the US-UK agreement lacks depth and leaves key sectors — like pharmaceuticals and agriculture — exposed.

French Prime Minister Francois Bayrou called the deal a "dark day," lamenting how the EU, "an alliance of free peoples, brought together to affirm their common values and to defend their common interests, resigns itself to submission."

Former high-profile European lawmaker Guy Verhofstadt, meanwhile, labeled the deal "scandalous" and a "disaster." In comments on X, he decried the lack of "a single concession from the American side" and criticized the EU’s "poorly negotiated" approach.

German MEP Bernd Lange, who chairs the European Parliament's trade committee, wrote on X that the deal was "lopsided" and that Brussels had made concessions that were "difficult to accept."

French entrepreneur Arnaud Bertrand went further, calling the deal "a one-way transfer of wealth," adding that "it rather looks like the type of unequal treaties that colonial powers used to impose in the 19th century — except this time, Europe is on the receiving end."

Ruben Staffa, foreign trade expert at the German Institute for Economic Research (DIW Berlin), said the deal marks "almost a tenfold increase in the average tariffs that applied before Trump's second term."

What are the positives for the EU?

The deal helps the EU sidestep a full-scale trade war that could have severely disrupted business confidence and consumer spending on both sides of the Atlantic.

In anticipation of steeper US tariffs, Brussels had prepared €72 billion in retaliatory measures on American imports, including levies targeting aircraft and automobiles.

Additional options reportedly included export restrictions on certain steel and chemical products, as well as possible moves against US services — particularly in Big Tech and finance — where the US holds a €109 billion trade surplus with the EU.

While far from ideal, the agreement’s economic impact is expected to be relatively mild. Citing data from the Kiel Institute for the World Economy (IfW), German business daily Handelsblatt reported Monday that the tariffs would mean a 0.1% hit to the EU's gross domestic product (GDP).

This is much lower than last year's Goldman Sachs estimate of a GDP cut of up to 1% in the event of a much lower 10% US tariff.

Some sectors stand to benefit. Bloomberg Intelligence forecasts a €4 billion boost in earnings for the European auto sector, thanks to the reduction in vehicle tariffs from 27.5%.

However, German firms are bracing for a substantial cost: Handelsblatt estimates the new levies will burden them with €6.5 billion in additional expenses.

"The trade deal comes at a price — the German economy," Melanie Vogelbach, managing director for international economic policy at the German Chamber of Commerce and Industry, told DW. 

Vogelbach added that the 15% baseline tariff "makes our exports to the US much more expensive and a lot less competitive than local (US) production."

What could Brussels have done better?

Despite averting a trade war, Brussels has faced criticism for failing to extract more substantial concessions from Washington.

Analysts argue the EU missed key opportunities to secure reciprocal tariff cuts on high-value European exports — including wine, spirits, and luxury goods.

Some suggest that placing restrictions on US tech giants and financial institutions might have pressured Trump to lower tariffs on autos and pharmaceuticals.

The EU’s planned €647 billion in energy purchases from the US, paired with a further €514 billion in investments, both over three years, has left some economists skeptical about the feasibility of such commitments.

"That's a very large amount of money," Allan Auerbach, an economics professor at the University of California - Berkeley, told DW. "I'm not sure how that will be accomplished ... as [European[ businesses make their own decisions about where they invest, so we'll have to wait to see the fine print."

Critics also point to Brussels’ early retreat from its retaliatory tariffs, which they say weakened the bloc’s negotiating leverage.

Others note that EU leaders failed to capitalize on US domestic politics — such as targeting exports from Republican strongholds or encouraging US companies to lobby the Trump administration from within.

Internal divisions among EU member states, notably Hungary, further fractured Brussels’ position.

Meanwhile, Trump's unpredictable tactics and aggressive tariff threats kept EU negotiators on the back foot throughout the talks.

What happens next?

The deal is a preliminary framework rather than a comprehensive agreement. Over the coming months, negotiators from Brussels and Washington will draft a detailed text and set a date for the 15% tariff to take effect.

Given Trump's track record of last-minute demands, as seen in US-Japan trade talks, the EU must brace for potential revisions.

The deal requires approval from EU member states and scrutiny from the European Parliament, a process likely to span several weeks.

Meanwhile, the Trump administration faces nearly a dozen lawsuits challenging the legality of his tariff policy, arguing that Trump lacks congressional authority to impose them unilaterally. Should any of these succeed, the tariffs could be voided, triggering fresh negotiations.

Key sector-specific levies also remain unresolved. Brussels is still pushing for exemptions on wine and spirits — especially vital for France and Italy. Lower rates on pharmaceuticals and semiconductors are also under discussion.

Finally, the EU’s pledge to ease nontariff barriers — such as regulatory complexities and VAT hurdles — will require careful negotiation to ensure alignment with existing EU standards.

https://www.dw.com/en/eu-us-trade-deal-brussels-settles-but-at-what-price/a-73433982

 

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YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

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         POLITICAL CARTOONIST SINCE 1951.

 

THE CARTOON AT TOP IS TOO MILD.....

 

Trump ‘wiped the floor’ with EU – Medvedev

 

The new trade agreement between the US and the EU is “completely humiliating for the Europeans,” former Russian President Dmitry Medvedev has said.

The deal, announced on Sunday by US President Donald Trump and European Commission President Ursula von der Leyen, includes a requirement for EU member states to increase imports of American energy and defense products. It also imposes a blanket 15% tariff on EU exports to the US – terms accepted by Brussels to avoid even steeper trade penalties.

In a social media post on Monday, Medvedev, who serves as deputy chair of the Russian Security Council, claimed that the terms of the deal meant Trump had “wiped the floor with Europe.”

“One can only feel sorry for ordinary Europeans,” Medvedev wrote. He asserted that where Trump is seeking economic benefits for American businesses, EU leaders are motivated by an ideological anti-Russian sentiment, as the deal further cements Brussels’ intention to terminate all purchases of Russian oil and gas.

The Trump administration has used tariffs as a tool to confront what it considers unfair trade practices and chronic deficits in trade with key partners. In the absence of a deal, EU products could have faced tariffs as high as 50%. Last week, Brussels prepared a list of US goods it was ready to hit with retaliatory duties if negotiations collapsed.

Medvedev and other senior Russian officials have repeatedly portrayed EU leaders as politically weak and overly compliant with Washington’s agenda, often at the expense of their own economic interests.

Russia has been especially critical of the EU’s break from Russian energy supplies, a move initiated as part of sanctions over the Ukraine conflict. Moscow contends that the resulting shift to more expensive US liquefied natural gas has contributed to the deindustrialization of major European economies.

https://www.rt.com/russia/622085-medvedev-trump-eu-deal/

 

READ FROM TOP.

 

YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.

 

THE CARTOON AT TOP IS TOO MILD.....

 

AND THE YANKS ARE DOING THE SAME TO THE AUSSIES.....