EU defends Trump trade deal facing backlash
European Commission President Ursula von der Leyen clinched the framework accord with Trump Sunday after dashing to Scotland as the August 1 deadline loomed for steep levies that threatened to cripple Europe's economy.
EU exports are now set to face across-the-board tariffs of 15 percent -- higher than customs duties before Trump returned to the White House, but much lower than his threatened 30 percent.
The 27-nation bloc also promised its companies would purchase energy worth $750 billion from the United States and make $600 billion in additional investments -- although it was not clear how binding those pledges would be.
"This is clearly the best deal we could get under very difficult circumstances," Sefcovic said.
Full details of the agreement -- and crucially which sectors could escape the 15-percent levy -- will be known in coming days, although the EU says it has avoided steeper tariffs on key exports including cars and medicines.
But the reaction from European capitals -- which gave von der Leyen the mandate to negotiate -- ranged from muted to outright hostile.
French Prime Minister Francois Bayrou said it was a "dark day" for Europe and said the accord was tantamount to "submission".
Speaking for Europe's biggest economy, German Chancellor Friedrich Merz gave a warmer welcome to a deal he said had avoided "needless escalation".
Industry groups in both countries made plain their disappointment however, with Germany's main auto sector body saying the 15-percent levy "burdens" carmakers while its VCI chemical trade association said the rates were "too high".
Hungary's Prime Minister Viktor Orban attacked the deal in blunt terms, saying "Trump ate Ursula von der Leyen for breakfast".
'Not only about trade'
"It looks a bit like a capitulation," said Alberto Rizzi of the European Council on Foreign Relations (ECFR).
"The EU accepted a fairly unbalanced deal," he added, saying it delivered a "political victory for Trump".
Von der Leyen had faced intense pressure from EU states to strike a deal quickly with the bloc's biggest partner and protect a $1.9-trillion trading relationship.
Defending Brussels' approach, Sefcovic warned that a no-deal scenario -- meaning a 30-percent tariff and the prospect of further escalation -- would have risked up to five million jobs in Europe.
Throughout the months-long talks, Brussels prioritised stability and maintaining good relations with Washington, over escalation.
That line of thinking has support: Italian Prime Minister Giorgia Meloni, a Trump ally, said the deal had avoided "potentially devastating" consequences.
Markets in Asia and Europe welcomed the certainty and rose following the announcement -- reflecting the 4.4 billion euros ($5.1 billion) worth of daily transatlantic goods and services trade that were at stake.
Hanging over the negotiations was the risk to other areas of cooperation -- like Ukraine -- if the EU descended into a trade war with its closest security partner.
"It's not only about the trade -- it's about security, it's about Ukraine," Sefcovic told reporters Monday.
Jacob Funk Kirkegaard of the Peterson Institute for International Economics acknowledged it was "clearly an imbalanced deal" if judged purely on trade terms.
"But if you're trying to avoid worse national security outcomes, well then maybe the deal is not so bad," he said.
Cautious approach
The EU had sought to ramp up the pressure in the final stretch of talks, fearing a bad deal and higher levies, with countries approving a $109-billion package of counter-tariffs at the last minute.
And states led by France were pushing for a more robust response including the option to deploy the trade "bazooka" known as the anti-coercion instrument.
But the threat of retaliation was consistently framed by Brussels as a last resort should talks fail, and experts suggested the hardening stance may have come too late to make a real difference.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
France 24
39 minutes ago
- France 24
Markets rise as Trump chip exemptions boost tech giants
The advances built on a strong lead from Wall Street and extended the previous day's rally fuelled by hopes the Federal Reserve will cut interest rates next month. A day before sweeping tariffs were due to come into effect on dozens of countries, the president said: "we're going to be putting a very large tariff on chips and semiconductors". He added that the level would be "100 percent" but did not offer a timetable. However, he said "the good news for companies like Apple is, if you're building in the United States, or have committed to build... in the United States, there will be no charge". Stock gains were led by Taiwan's giant TSMC, which surged almost five percent in early trade, with the island's National Development Council chief Liu Chin-ching saying the firm was in the clear. "Because Taiwan's main exporter is TSMC, which has factories in the United States, TSMC is exempt," he told a briefing in parliament. TSMC, which is ramping up manufacturing in Arizona, has pledged to invest as much as $165 billion in the United States, which the firm said in March was the "largest single foreign direct investment in US history". Seoul-listed Samsung, which is also pumping billions into the world's number one economy, rose more than two percent while South Korean rival SK hynix was also up. Apple-linked firms were also helped after the US giant said it will invest an additional $100 billion in the United States, taking its total pledge to $600 billion over the next four years. Foxconn and Pegatron both rose in Taipei. However, Tokyo Electron and Renesas both retreated in Japanese trade. Tariff talks "To some degree this outcome would be something of a relief," said Morgan Stanley analysts. "Yes, 100 percent tariffs are unpalatable but if companies are given time to restore them, the real tax is just the higher cost of building chips in the United States." Trump's remarks came hours before his wide-ranging "reciprocal" tariffs are set to kick in against trading partners, and after he doubled his levy on India to 50 percent over its purchase of Russian oil. Fifty percent tolls on Brazilian goods came into place Wednesday, with significant exemptions, after Trump targeted Latin America's biggest economy over its prosecution of former president Jair Bolsonaro. Investors are keeping tabs on talks between the White House and New Delhi, as well as other countries including Switzerland, which was this week hammered with a 39 percent toll. Asian markets extended their recent run-up and have regained much of last week's losses sparked by the president's tariff announcements and weak US jobs data. Tokyo, Hong Kong, Shanghai, Singapore, Seoul and Wellington were all in the green, with Taipei leading the way thanks to the surge in TSMC. The gains followed a strong day on Wall Street, where Apple jumped more than five percent and Amazon piled on four percent. Traders had already been on a buying streak as they grew optimistic that the Fed will cut rates after data last week showing US jobs creation cratered in May, June and July, signalling the economy was weakening. US futures rose Thursday. Oil prices rose after Trump threatened penalties on other countries that "directly or indirectly" import Russian oil, after imposing his extra toll on India. Still, traders are keeping tabs on developments regarding Moscow and its war in Ukraine after the US president said he could meet with Vladimir Putin "very soon" following what he called highly productive talks between his special envoy and the Russian leader. Key figures at around 0230 GMT Tokyo - Nikkei 225: UP 0.8 percent at 41,114.68 (break) Hong Kong - Hang Seng Index: UP 0.3 percent at 24,985.53 Shanghai - Composite: UP 0.1 percent at 3,636.23 Euro/dollar: DOWN at $1.1657 from $1.1659 on Wednesday Pound/dollar: DOWN at $1.3355 from $1.3358 Dollar/yen: UP at 147.50 yen from 147.38 yen Euro/pound: UP at 87.29 pence from 87.23 pence West Texas Intermediate: UP 0.9 percent at $64.93 per barrel
France 24
39 minutes ago
- France 24
Trump increases India tariffs to 50% for buying Russian oil
01:57 07/08/2025 Trump praises progress with Russia following Witkoff meeting with Putin 06/08/2025 Failing to tackle climate change will mean more wildfires ahead Environment 06/08/2025 Italy approves $15.5B plan for longest suspension bridge to Sicily Europe 06/08/2025 Nuclear weapons states no longer respect 'legal commitment to non-proliferation treaty' Asia / Pacific 06/08/2025 France: In Aude, the largest wildfire of the summer France 06/08/2025 'The memories of the horrors of nuclear war and radiation seem to be lost on today's leaders' Asia / Pacific 06/08/2025 Man lights cigarette from French war memorial 06/08/2025 US Health Secretary to cancel $500 million in vaccine development projects
France 24
2 hours ago
- France 24
Trump's 'dividend' promise for Americans leaves open questions
But the eyebrow-raising suggestion from a leader with a flair for creating headlines is largely opaque -- with key questions left open about how the giveaway would be funded. Trump himself has acknowledged the difficulty in splashing cash at a time when the United States faces crushing debt. "We have so much money coming in, we are thinking about a little rebate," Trump said last month, "but the big thing we want to do is pay down debt." He has since referred to the so-called rebate as a "dividend," and said it could be for "people that would be middle income people and lower income people." His idea has, naturally, roused interest. Republican Senator Josh Hawley introduced a bill in July that would see $600 checks sent to each adult and dependent child in American families. Trump has a track record in dishing out money -- or at least taking the credit for it. During the Covid pandemic, he insisted that his name be put on government checks distributed to tens of millions of Americans as financial support. Looming questions Trump's latest plan raises a key question: How will it be financed? The United States faces a national deficit that worsened from October to June compared to the same period a year earlier. That was despite a rise in revenue generated by tariffs that Trump has slapped on dozens of US trading partners. Handing out cash to Americans would add to the deficit and increase the country's debt, which was at more than $36.8 trillion by early August. Trump, when explaining his dividend idea, has claimed the United States is raking in trillions of dollars from other countries thanks to his protectionist agenda. The Republican has also cited large investments promised by Japan and the European Union -- deals that coincided with agreements on US tariffs. But foreign leaders paint a different picture. Japan, for example, has stated that its $550 billion pledge will largely be in the form of loans and guarantees -- certainly not just hard cash. And Trump's claims about the revenue generated by tariffs can also be misleading. The president claims -- wrongly -- that tariffs are paid by foreign countries to the US government. Yet, in reality, it is importers in the United States that are on the hook.
