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“The United States and European Union have agreed [to] a trade deal, ending a months-long standoff between two of the world's biggest economic partners. 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…
“Trump said the EU would boost its investment in the US by $600bn, including American military equipment, and spend $750bn on energy… 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.” BBC
Both sides agree that the deal favors the US:
“The optics could hardly have been more humiliating for the representative of 450 million Europeans. Von der Leyen had to fly to Scotland and wait until the president and his son had finished their round of golf… She sat in silence as Trump claimed that only the US was providing emergency food assistance to starving Palestinians in Gaza, although the EU is the one of the biggest providers of humanitarian aid…
“She felt obliged to parrot Trump’s narrative that EU-US trade was unbalanced and that the objective of the negotiation was to ‘rebalance’ the relationship, without referencing the large US surplus in services trade with Europe… The result was a deal that will undoubtedly hurt the European economy – the Axa Group chief economist Gilles Moec calculates that it could knock 0.5% off the bloc’s GDP – but averted potential tit-for-tat trade measures that could have exacted a higher price.”
Paul Taylor, The Guardian
“Past presidents have compartmentalized American negotiations, keeping security relations and trade negotiations on different tracks. Mr. Trump thought this was stupid. The combination of access to the American market and American security guarantees was so valuable, he believed, that foreigners would pay a much higher price than his predecessors ever got. The recent deals with the EU and Japan support his view…
“For decades, American presidents sought to cajole American allies to do more burden-sharing and open their markets more to American goods—and got nowhere. Then Mr. Trump came charging in, breaking rules and shattering norms… Donald Trump may not get a Nobel Prize in economics anytime soon. But he’s teaching a master class in the real motivations and priorities of American allies that his successors will forget at their peril.”
Walter Russell Mead, Wall Street Journal
Other opinions below.
“[Trump] can effectively threaten Ukraine with a tragic defeat and the EU with the consequences of such an outcome… ‘What a nice country Ukraine is,’ he says ominously to Europeans, ‘it would be terrible if something happened to it.’ There are no economic discussions taking place at the moment; rather, it’s the logic of military force supplanting every economic discussion. The gangsterism has been effective.”
Bruno Maçães, New Statesman
“Whether the White House ‘won’ its trade negotiations with the European Union is debatable: Americans will now pay more for French wine and German cars, while Europeans get a tax cut on US goods. Nonetheless, the talks clearly exposed Europe’s lack of leverage. To gain more, the bloc must rapidly improve its competitiveness, starting by mobilizing the trillions of euros in investment needed to fund innovation, strengthen its militaries and decarbonize.”
Editorial Board, Bloomberg
“Taxes on American IT and platform-capitalist monopolies were scrapped even before the negotiations started. EU leaders played nice, hoping for mercy. In the long term, EU elites could have resisted the United States’ redivision of the world…
“EU elites could have accepted the new multipolarism as a fact — and taken the initiative to help create the new multilateral world order… [But] entering into a ‘systemic rivalry’ with Beijing in 2019, and pursuing this line ever since, meant siding with the American big brother. It also meant standing and falling with the United States’ attempt to block the rise of China and the Global South. Isolated in the world, European leaders were at Washington’s mercy.”
Ingar Solty, Jacobin Magazine
“The size and wealth of the American consumer base is unmatchable, and countries that get cut off from it can’t easily make up the difference by selling more goods and services somewhere else. Whole industries in Europe and Asia would collapse without access to the American consumer. Trump is willing to give them access — for a price…
“The modest protection a 15% tariff affords gives more investors at home a reason to put their capital into American companies — which is good for our workforce and consumers alike. It means more jobs and more goods; more money in Americans’ pockets and more stock on the shelves, which keeps prices down… American businesses should recognize their opportunity as well — they’re native to a market the entire world is desperate to be in, and they should use that advantage to the fullest.”
Daniel McCarthy, New York Post
Some argue, “This deal is better seen as an armistice rather than a peace treaty, but a cease-fire comes with obvious geopolitical advantages at a time when Xi, Putin, and others are on the prowl. Its terms are also a useful demonstration of U.S. power, something to be celebrated but not too noisily…
“Economically, the introduction of a modicum of certainty ought, if the armistice holds, to reap some economic rewards on both sides of the Atlantic. It will take some time to learn whether those rewards will outweigh the costs of this deal…
“Trump has won this round in his trade wars, but this is no reason to think — if American prosperity is the ultimate objective — that these wars are being fought wisely.”
The Editors, National Review
