A raw deal but the best they could get with Trump: Europe dismayed and relieved at the same time

Yahoo

4 days ago

FRANKFURT, Germany (AP) — 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:
The European Commission
Failing to reach a deal by the Aug. 1 deadline would have meant a 30% tariff threatened by Trump, said Maroš Šefčovič, the EU's chief trade negotiator. The chief aim of European officials was a negotiated deal, rather than a tit-for-tat escalation that could have included retaliatory EU tariffs on 93 billion euros ($108 billion) worth of goods including US agricultural goods, steel and chemicals.
'A trade war may seem appealing to some, but it comes with serious consequences, with at least a 30% tariff," said Šefčovič. 'Our transatlantic trade would effectively come to a halt, putting close to 5 million of jobs, including those in SMEs (small and medium sized enterprises) in Europe, at grave risk.
"Our businesses have sent us a unanimous message: avoid escalation and work towards a solution that delivers immediate relief.'
France: 'A dark day'
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 bloc's economic strength.
'The good news is that there is an agreement — our companies now have visibility and stability in the transatlantic trade relationship,' said Saint-Martin 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 added.
Beaune, France's High Commissioner for Strategy and Planning, said on franceinfo radio: 'This is an unequal and unbalanced agreement.' He warned: '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.'
Germany: 'Avoided unnecessary escalation'
German Chancellor Friedrich Merz said 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 U.S.A. have agreed and thus avoided an unnecessary escalation in transatlantic 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 transatlantic trade.'
Italy: 'Positive outcome'
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 details still needed to be worked out and that she still is 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.
She said 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 non-binding in principle, 'so there is still, let's say, room to fight.'
Hungary: Trump 'ate EU for breakfast'
Hungarian Prime Minister Viktor Orbán, an ally of President Donald 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 (European Commission President) Ursula von der Leyen for breakfast, that's what happened.'
Orbán, a frequent critic of the European Union, has been careful not to criticize Trump's administration for its trade policy, instead faulting the EU for being unable to conclude a comprehensive tariff agreement with Washington.
Orbán said a trade deal between the US and the UK which imposed a blanket 10% tariff on U.K. exports, was more favorable than that concluded with the EU.
'The American president is a heavyweight negotiator, and (von der Leyen) is a featherweight,' Orbán said. 'The European agreement is worse than the British one, so portraying it as a success will be difficult.'
Economists: Less growth, many blank spots
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."
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McNeil contributed from Brussels, Adamson from Paris, and Winfield from Rome. Justin Spike in Budapest, Hungary, also contributed.
David Mchugh, Sam Mcneil, Thomas Adamson And Nicole Winfield, The Associated Press