EU Leaders Express Concern Over New Trade Agreement with the US

Following a newly established trade agreement between the EU and the US, leaders from Germany and France have voiced significant concerns regarding its implications for their economies. Despite acknowledging the deal's necessity to avoid a trade conflict, many European leaders see it as unfavorable.

Leaders from Europe's two largest economies, Germany and France, are expressing considerable unease over the trade deal recently negotiated between EU chief Ursula von der Leyen and US President Donald Trump. German Chancellor Friedrich Merz suggested that the agreement could "substantially damage" Germany's financial situation. Additionally, French Prime Minister Francois Bayrou described the deal as akin to "submission."

Reaction across the European Union has been predominantly negative, with many leaders resigning themselves to signing an unequal agreement in a bid to avoid a full-scale trade war. The deal entails imposing a 15% tariff on a majority of EU exports to the US—a reduction from the rate Trump originally threatened—to encourage Europe to increase its purchase of American energy while also reducing taxes on certain imports.

Following private discussions at Trump's golf course in Scotland, von der Leyen characterized the agreement as a "huge deal," which Trump argued would create closer ties between the US and the EU. However, this deal still requires approval from all 27 EU member states that each have differing dependencies on exports to the US. Although no nation has signaled intent to block the agreement, there remains a lack of celebration among European leaders.

Merz cautioned that both the US and European economies would suffer as a result of this deal but acknowledged that the Brussels negotiating team "couldn't expect to achieve any more" against a US president determined to shift the balance with major trading partners. Conversely, Bayrou's remarks on social media captured a somber tone, emphasizing that it was a "dark day" for an alliance of nations that aim to uphold shared values and interests.

Hungarian Prime Minister Viktor Orban—a known ally of Trump—insinuated that the US president had easily outmaneuvered von der Leyen, while Spanish Prime Minister Pedro Sanchez expressed a willing, albeit unenthusiastic, support for the deal.

In the lead-up to the final negotiations, some European leaders had discussed employing anti-coercion measures to leverage against Trump; however, faced with the prospect of 30% tariffs, the EU ultimately opted for this deal—one that still signifies an economic hit but is less severe than originally anticipated.

While von der Leyen initially framed the agreement as a success, the sentiment quickly shifted. By the following day, even Manfred Weber, leader of her European People's Party, referred to the arrangement as "damage control." As the general structure of the deal has been outlined, its finer points are set to be finalized in ensuing technical discussions. Despite lingering skepticism, some officials have welcomed the agreement as a source of "much-needed predictability," crucial for job retention and investment—especially in light of ongoing geopolitical tensions stemming from the Ukraine conflict. EU Trade Commissioner Maros Sefcovic defended the terms at a press conference, emphasizing the necessity of maintaining strong trade relations with the US amid current global challenges, indicating that this could come at a cost.