How the EU-US trade deal extends beyond economics – DW – 07/30/2025

DW

3 days ago

Europe's reaction to the EU-US trade deal was rather muted, with France and Hungary heavily criticizing the agreement. Experts say the deal may have geopolitical ramifications and continue Europe's reliance on the US.
Though the details and effects of the trade deal between the European Union and the United States are just starting to take shape, many European business associations and politicians are already criticizing the agreement as unfair and expressing concerns over the economic consequences.
Meanwhile, Brussels emphasizes that the deal goes beyond the economy. "It's not just about trade. It's about security. It's about Ukraine. It's about current geopolitical volatility," EU Trade Commissioner Maros Sefcovic in Brussels said on Monday.
He told reporters that while he couldn't go into all the details of the talks between European Commission President Ursula von der Leyen and US President Donald Trump, he could say for sure that they were about more than just trade. For him, it is a big plus that the two biggest economies and closest allies are on the same page when it comes to the geopolitical issues of today.
On Sunday, von der Leyen and Trump agreed on the terms of a deal on future tariffs. The agreement provides for a basic tariff rate of 15% on most EU imports and exemptions for certain strategically essential products, among other measures.
The agreement also contains provisions of geostrategic consequence. The EU is said to have promised the US that it will purchase strategic commodities such as gas, oil, nuclear fuel and AI chips worth $750 billion (€649 billion). The EU also plans to invest a further $600 billion in the US. EU countries are also expected to purchase military equipment from the US, though whether EU members need to guarantee these purchases remains unclear.
The deal has received rather muted praise from EU member states, while France and Hungary have been very critical of the European Commission.
Penny Naas, a policy analyst at the US-based think tank German Marshall Fund, said that the EU has not consistently leveraged its position as the world's largest single market.
"They didn't always exert their strength," she told DW. "Geopolitically, Europe looked quite weak in how it conducted the negotiations and how it ultimately was given the rate coming out of this."
Elvire Fabry, Senior Research Fellow at the Jacques Delors Institute, finds it difficult to even describe the recent talks as negotiations. She argues that the EU's hands were tied due to its dependence on security guarantees from the US. According to Fabry, the framework conditions would have been entirely different if the EU had not needed US support to help defend Ukraine in its war with Russia.
Trump's previous statements threatening to withdraw support from Ukraine have sent shockwaves in the EU. The bloc would unlikely be able to replace US aid financially or militarily.
Both experts agree that the different interests of the member states and their lack of unity were problems during the negotiations. Fabry sees the so-called anti-coercion instrument as the only way for Europeans to apply pressure on and build credibility with the US. However, there was no agreement among the member states on its possible application.
The anti-coercion instrument is designed to deter countries from exerting economic pressure on the EU. As a last resort, the EU can impose far-reaching countermeasures.
The agreement also has geopolitical implications for the EU. Naas observes that the commitment to buy energy, AI chips and weapons "shows Europe's continued reliance on the US in other ways." Buying from the US is the "best of bad options" for the EU, she says, and makes it clear that Europe has not achieved strategic autonomy.
French President Emmanuel Macron has coined the term "strategic autonomy" as a buzzword during the US-EU trade deal negotiations. This term essentially means that Europe should be as independent as possible from other powers. This independence should comprise the arms industry, energy and procuring critical raw materials.
The deal also contains important geopolitical components with regard to China, Fabry told DW. This is because it appears to include commitments to coordinate on issues such as Chinese overcapacity, that is, production that exceeds Chinese market needs.
The details are still unclear, according to Fabry. However, China is now worried the EU is aligning itself more closely with the US's anti-China approach.
When asked about China on Monday, EU Trade Commissioner Seferovic emphasized that despite all efforts, the list of problems with the China was becoming longer. Even last week's EU-China summit did not produce the desired results.
He said the US has the same issues with China in many areas. "So it goes without saying that we should work together with our allies."
To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video