Sawt Falasteen - Trump vs. EU: A good deal?

At the end of July 2025, US President Donald Trump and EU Commission President Ursula von der Leyen presented a transatlantic trade agreement at the Turnberry golf resort in Scotland, signalling a surprise agreement after months of escalating threats of punitive tariffs. At its heart is a 15% cap on almost all EU goods exported to the United States, while Brussels will in return scrap all tariffs on US industrial goods – a paradigm shift from the previous ‘zero tariff symmetry’.

In addition, the European Union has committed to purchasing US energy worth 750 billion dollars by 2028 and investing 600 billion dollars in American sites. These commitments are intended not only to improve the US trade balance, but also to reduce European dependence on third countries. Steel, aluminium and copper are exempt from the 15 per cent cap – here, surcharges of 50 per cent remain in place, which will hit traditional EU export industries particularly hard.

The legal framework for implementation is a presidential order signed on 31 July, which comes into force seven days later and adjusts the US Harmonised Tariff Schedule accordingly. Washington is selling the result as a ‘historic recalibration’ of trade relations; Brussels emphasises that it has averted an escalation of the announced 30% punitive tariffs and gained planning security.

But criticism in Europe is loud: German Chancellor Friedrich Merz warns of ‘considerable damage’ to competitiveness, while French Prime Minister François Bayrou speaks of a ‘dark day’ for industry. Economists expect many EU companies to have to choose between sacrificing margins and adjusting prices in the US – with potential inflationary and demand effects on both sides of the Atlantic.

In the medium term, the agreement is likely to cause massive shifts in supply chains: the US energy and defence sectors will benefit immediately, while European car and machine manufacturers will increasingly build up production capacities in North America – a trend that is already evident in current investment plans and reveals the complete incompetence of European politicians! However, before the package becomes legally binding, the 27 EU member states and the European Parliament must ‘still’ give their approval; several MEPs have announced a detailed review of the ‘asymmetrical agreement’.

Whether the agreement represents a stable new trade order or merely a respite depends on whether Brussels forces renegotiations – and whether Washington honours its commitments on market opening, investment and tariff reductions in the long term.