Reaction to the European Unions trade agreement with the Trump administration

Mint

4 days ago

FRANKFURT, Germany — The European Union's trade agreement with the Trump administration is getting mixed reviews. EU officials say they warded off a total economic disaster. But French officials in particular say the EU punched below its weight while economists say the deal is dangerously vague.
The deal leaves Europe with a 15% tariff on most goods imported into the U.S., with some goods categories tariff-free, but no agreement on rates for key areas such as pharmaceuticals and steel.
Here is what they're saying:
Failing to reach a deal by the Aug. 1 deadline would have meant a 30% tariff threatened by U.S. President Donald Trump, EU chief trade negotiator Maroš Šefčovič said.
The main aim of European officials was a negotiated agreement, rather than a tit-for-tat escalation that could have included retaliatory EU tariffs on 93 billion euros worth of goods, including U.S. agricultural products, steel and chemicals.
'A trade war may seem appealing to some, but it comes with serious consequences, with at least a 30% tariff," Šefčovič said. 'Our trans-Atlantic trade would effectively come to a halt, putting close to 5 million jobs, including those in SMEs in Europe, at grave risk.
'Our businesses have sent us a unanimous message: avoid escalation and work towards a solution that delivers immediate relief,' he said.
Major exports to the U.S.: Aircraft, pharmaceuticals, luxury perfumes and leather goods, wine and spirits.
Senior French officials on Monday criticized the accord, with Foreign Trade Minister Laurent Saint-Martin urging a European response in the services sector, and Strategy Commissioner Clément Beaune warning it underplayed the 27-nation bloc's economic strength.
'The good news is that there is an agreement — our companies now have visibility and stability in the trans-Atlantic trade relationship,' Saint-Martin said on France Inter radio. 'But this agreement is not balanced, and we will need to keep working."
He pointed to digital services as a key front in the trade imbalance. 'Donald Trump spent months saying he wanted to rebalance a trade relationship that disadvantages the United States, but he was only talking about goods. If we look at services, it's the opposite. So it's up to us now to carry out the work of force and rebalancing,' he said.
'The United States decided to use force to impose a new law of the jungle that no longer respects the rules of international trade that we had for decades,' Saint-Martin said.
Beaune, France's high commissioner for strategy and planning, said on franceinfo radio that 'this is an unequal and unbalanced agreement.' He warned that 'Europe did not wield its strength. We are the world's leading trading power.'
'When you look at it, the glass is a quarter full and three-quarters empty,' Beaune said.
Prime Minister François Bayrou was even more scathing, posting on X: 'It is a dark day when an alliance of free peoples, united to uphold their values and defend their interests, resigns itself to submission.'
Major exports to the U.S.: Motor vehicles, pharmaceuticals and industrial machinery.
German Chancellor Friedrich Merz said that the deal would give companies a more predictable environment to plan and invest — a key EU goal after weeks of back-and-forth threats in tense talks with Trump administration officials.
'It is good that Europe and the USA have agreed and thus avoided an unnecessary escalation in trans-Atlantic trade relations," he said. "We have been able to preserve our core interests, even if I would have very much wished for further relief in trans-Atlantic trade.'
Asked about negative reactions to the deal from German business, Merz countered that it was met with relief by some companies and sectors.
However, 'it is completely clear to me that the tariffs that now remain — in particular the 15% against 0% for imports to the European Union — constitute a significant burden for the export-oriented economy of the Federal Republic of Germany,' Merz said, noting that he had said repeatedly before the agreement that 'there will be an asymmetric deal, if there is one at all.'
Major exports to the U.S.: Industrial machinery, cars and agricultural products.
Italian Premier Giorgia Meloni, who has positioned herself as a 'bridge' between the Trump administration and Europe, welcomed news of the tariff agreement as a 'positive' outcome that avoided an 'unpredictable and potentially devastating' trade war.
But in comments to reporters on the sidelines of a U.N. food security conference in Addis Ababa, Ethiopia, she said that details still needed to be worked out and that she's still unclear what exemptions are carved out for particular industries.
'I always thought, I continue to think that a trade escalation between Europe and the United States would have unpredictable, potentially devastating consequences,' she said.
Meloni said that she needed to understand what the exemptions might be, including on agricultural products, which are of concern to Italy, given its wine exports in particular.
'So there are a number of elements that are missing as well, as I don't know exactly what we are referring to when we talk about investments, gas purchases."
She noted that the deal in its current form is legally nonbinding in principle, 'so there is still, let's say, room to fight.'
Major exports to the U.S.: Packaged medicines and batteries.
Hungarian Prime Minister Viktor Orbán, an ally of Trump who has gained a following within the MAGA movement, blasted the agreement on Monday as a failure on the part of Europe's leadership.
'Even at first glance, it is obvious to me that this is not an agreement,' Orbán said in a video discussion with his party's spokesman. 'Donald Trump ate Ursula von der Leyen for breakfast, that's what happened.'
Orbán, a frequent EU critic, has been careful not to criticize Trump's administration for its trade policy, instead faulting the bloc for being unable to conclude a comprehensive tariff agreement with Washington.
Orbán said that a U.S.-U.K. trade deal, which imposed a blanket 10% tariff on British exports, was more favorable than the one concluded with the EU.
'The American president is a heavyweight negotiator, and is a featherweight,' Orbán said. 'The European agreement is worse than the British one, so portraying it as a success will be difficult.'
Jon Harrison at TS Lombard: 'It is no surprise to find that trade deals agreed under duress in weeks rather than the usual years of careful negotiation leave a mass of detail incomplete and open to interpretation.'
Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics: 'We think this will reduce EU GDP by about 0.5%, which is worse than we had previously assumed.'
'While the deal has avoided a much worse outcome for now, it remains to be seen whether it will last.'
Julian Hinz, trade expert at the Kiel Institute for the World Economy: 'The deal agreed yesterday is not a good deal — it is appeasement.
'While the EU may avert a trade war in the short term, it is paying a high price in the long term by abandoning the principles of the multilateral, rules-based world trade system of the World Trade Organization.'
Justin Spike reported from Budapest, Hungary, Thomas Adamson from Paris, and Nicole Winfield from Rome. Sam McNeil contributed to this report from Brussels.
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