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Bloomberg
a day ago
- Automotive
- Bloomberg
EU Defends Trade Deal Amid Mounting Criticism
By European leaders on Monday sought to defend their trade deal with President Donald Trump, an accord that will see the European Union accepting a 15% tariff on most of its exports to the US while reducing levies on some American products to zero. Industry officials in Germany have warned that the deal leaves the auto industry exposed and will make companies in Europe less competitive. 'The agreement is an inadequate compromise and sends a disastrous signal to the closely intertwined economies on both sides of the Atlantic,' said Wolfgang Niedermark, a member of the executive board of Germany's BDI industry federation.
Irish Examiner
2 days ago
- Business
- Irish Examiner
EU-US trade deal criticised by German business leaders and French minister
The EU-US trade deal, clinched in a ballroom at Donald Trump's golf resort in Scotland on Sunday, has been criticised by France's prime minister and business leaders across Germany. The deal, which will impose 15% tariffs on almost all European exports to the US including cars, ends the threat of a punitive 30% import duties being imposed on Mr Trump's August 1 deadline for a deal, but it is a world apart from the zero-zero import and export tariff the EU offered initially. It also means European exporters to the US will face more then triple the average 4.8% tariff now in force, with negotiations to continue on steel, which is still facing a 50% tariff, aviation, and a question mark over future barriers to pharmaceutical exports. The deal has been cautiously welcomed on the Irish side, with Government sources saying it provides certainty to businesses. One senior source said 'nobody was jumping with joy' over the deal due to baseline tariffs, but that it did provide certainty to businesses. Reacting to the deal, Taoiseach Micheál Martin said it brought 'clarity and predictability to the trading relationship between the EU and the US'. 'That is good for businesses, investors and consumers. It will help protect many jobs in Ireland,' Mr Martin said. 'We will now study the detail of what has been agreed, including its implications for businesses exporting from Ireland to the US, and for different sectors operating here. However, Mr Martin said the baseline tariff would make trade between the EU and US 'more expensive and more challenging'. France's prime minister, François Bayrou, said Europe had submitted to the US, on a 'dark day' for the union. 'It is a dark day when an alliance of free peoples, gathered to affirm their values and defend their interests, resolves to submission,' Bayrou posted on X. The German chancellor, Friedrich Merz, rapidly hailed the deal, saying it avoided 'needless escalation in transatlantic trade relations' and averted a potentially damaging trade war. German exporters were less enthusiastic. The powerful BDI federation of industrial groups said the accord would have 'considerable negative repercussions', while the country's VCI chemical trade association said the accord left rates 'too high'. It is also clear that the US tariff of 15% on automotive products will place a burden on German automotive companies in the midst of their transformation, hitting sales and profits. The president of the car industry federation VDA, Hildegard Müller, said it was 'fundamentally positive' that a framework deal was agreed but warned of huge costs to come. European stock markets hit a four-month high at the start of trading on Monday, amid relief that a deal had been reached. Germany's Dax jumped by 0.86%, and France's Cac 40 index rose by 1.1%. France's minister for Europe, Benjamin Haddad, said on Monday that the agreement would provide 'temporary stability … but it is unbalanced'. Victory for Trump The German bank Berenberg said the deal brought to an end the 'crippling uncertainty' but said it was a victory for Mr Trump. 'It is great to have a deal. In two major respects, however, the outcome remains much worse than the situation before Trump started his new round of trade wars early this year,' said Holger Schmieding, Berenberg's chief economist. 'The extra US tariffs will hurt both the US and the EU. For Europe, the damage is mostly frontloaded,' Mr Schmieding said in a note to clients on Monday morning. 'The deal is asymmetric. The US gets away with a substantial increase in its tariffs on imports from the EU and has secured further EU concessions to boot. In his apparent zero-sum mentality, Trump can claim that as a 'win' for him,' he added. The Italian bank UniCredit also said Mr Trump had got the better out of the EU. 'Is this a good deal for the EU? Probably not. The outcome is heavily asymmetrical, and it leaves US tariffs on imported EU goods at much higher levels than EU tariffs on imports from the US,' UniCredit said in a note to clients. '15% is not to be underestimated, but it is the best we could get,' the European Commision president Ursula von der Leyen acknowledged. Initially the EU had tried to hardball the US by threatening but pausing €21bn worth of retaliatory measures in April, and adding another list of €73bn-worth of US imports that would be taxed earlier this month. But it pivoted to a quick UK-style deal after the Nato summit in June, swapping a comprehensive trade deal for security and defence promises from Mr Trump. By contrast, China, which threatened the US with a cascade of punitive tariffs, is still negotiating with Mr Trump, who over the weekend froze technology transfer restrictions to create space for a deal with Beijing. Berenberg said the deal would affect the German economy, but the decline in growth would be offset by the Bundestag's recent growth stimulus package, it added. The EU had pushed for a compromise on steel that could allow a certain quota into the US before tariffs would apply. Mr Trump appeared to rule that out, saying steel was 'staying the way it is', but Ms von der Leyen insisted later that 'tariffs will be cut and a quota system will be put in place' for steel. He also ruled out a carve-out for pharmaceuticals but later Ms von der Leyen said the 15% tariff would apply to EU medicine exports and that any other tariffs were up to the US president. The EU is now subject to a 25% levy on cars, 50% on steel and aluminium, and an across-the-board tariff of 10%, which Washington had threatened to increase to 30% in a no-deal scenario. The bloc had been pushing hard for tariff carve-outs for critical industries from aircraft to spirits, and its car industry, crucial for France and Germany, is already reeling from the levies imposed so far. The Guardian
DW
2 days ago
- Business
- DW
EU-US trade deal: European leaders back plan amid criticism – DW – 07/28/2025
Germany's Friedrich Merz welcomes US-EU trade pact, saying it avoids "needless escalation in transatlantic trade relations." While specifics are yet to be disclosed, the deal marks a pivotal moment following tensions. The US and EU have announced a trade deal that would set tariffs at 15% for European goods, including automobiles, averting the worst-case scenario. "This is the biggest deal ever made," Trump said, lauding EU plans to dramatically increase its purchases of US energy and military equipment as part of the deal. Trump said the tariff rate would apply to "automobiles and everything else" and added that the 50% tariff on steel and aluminum "stays the way it is." The baseline 15% tariff is still seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff trade agreement framework between the United States and the European Union is worse than the deal the United Kingdom has with Washington, Hungarian Prime Minister Viktor Orban said Monday. "Donald Trump did not reach an agreement with Ursula von der Leyen, but rather Donald Trump ate Ursula von der Leyen for breakfast," Orban said during a Facebook livestream. The European Union and the United States reached a trade agreement Sunday that imposes a 15% tariff on most EU goods, higher than the United Kingdom's 10% tariff rate. Orban, widely regarded as Trump's strongest ally in Europe, has previously said US tariffs were the result of Brussels' incompetence, according to his government. France's European affairs minister, Benjamin Haddad, criticized what he described as an "unbalanced" trade deal between the EU and the US. "The trade deal negotiated by the European Commission with the United States will provide temporary stability for economic actors threatened by American tariff escalation," Haddad said. "But it is unbalanced," he stressed. "Let's be clear: the current state of affairs is not satisfactory and cannot be sustainable." France has long called for a tough line on the US tariff policy, as well as for the European Union to develop its strategic autonomy. The Federation of German Industries (BDI) criticized the trade deal between the EU and the US, calling it an "inadequate compromise" that sends a "disastrous signal." The powerful industry lobby group said that the EU was accepting painful tariffs and that a 15% tariff rate is expected to have significant negative consequences. "The only positive aspect of this agreement is that a further escalation spiral has, for now, been avoided," BDI said. It added that the lack of a deal on steel and aluminum exports was an "additional blow." To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video DW Correspondent Birgit Maass said that many in the EU and critics of Donald Trump would say that US President Donald Trump has strong-armed the EU to get concessions, using the leverage of his country's resources when it comes to security policy. "NATO and the US have been a big guarantor of European security. This obviously comes all in a mix. Europe needs the US not just for trade but also for the general security situation with a war in the continent of Europe, in Ukraine, and the threat that's being posed by Russia." she said. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Italy's Prime Minister Giorgia Meloni called the trade deal between the EU and the US "positive," but added that she would need to see the details. Italy is one of Europe's biggest exporters to the US, with a trade surplus of over €40 billion. "I consider it positive that there is an agreement, but if I don't see the details I am not able to judge it in the best way," Meloni said. The country's national coalition-led government had pressed its European partners to refrain from a trade clash with the US. Meloni said in a statement that the deal "ensures stability". She added that the 15% tariff "is sustainable, especially if this percentage is not added to previous duties, as was originally planned." The statement was also signed by coalition partners, Antonio Tajani of Forza Italia and Matteo Salvini of the League. "We are ready to activate support measures at the national level, but we ask that they also be activated at the European level for sectors that will be particularly affected by US tariff measures," Meloni added. Irish Prime Minister Micheal Martin hailed the agreement between the European Union and the United States, saying that it will help "protect many jobs" in his country. "The negotiations to get us to this point have been long and complex, and I would like to thank both teams for their patient work," he said. "We will now study the detail of what has been agreed, including its implications for businesses exporting from Ireland to the US, and for different sectors operating here," he added. Martin also noted that higher tariffs will make trade between the EU and US more expensive and challenging. But he said the deal creates a "new era of stability" that could promote a deeper relationship between the EU and the US, which the Irish prime minister said was important for the global economy. "Given the very real risk that existed for escalation and for the imposition of punitively high tariffs, this news will be welcomed by many," Martin said. The trade pact means the bloc would avoid the 30% tariffs that Trump had threatened on all goods from the EU on July 12. But it marks a significant compromise, especially given that European Commission President Ursula von der Leyen offered a "zero-for-zero tariffs for industrial goods" when talks began. Still, von der Leyen said they agreed "zero-for-zero tariffs on a number of strategic products" including aircraft and aircraft parts, some chemicals, and certain agricultural products. She added that the framework trade deal did not contain any decision regarding the spirits sector. The trade pact will need to be approved by all 27 member states. After the US and European Union reached a trade deal, Dutch Prime Minister Dick Schoof thanked the European Commission, which is responsible for EU policy on trade, for a determined effort "to secure the best possible outcome for our businesses and consumers." But Schoof also wrote that: "Of course, no tariffs would have been better, but this agreement provides more clarity for our businesses and brings more market stability." German Chancellor Friedrich Merz welcomed the trade agreement between the European Union and the US which will see a 15% tariff on EU goods entering the US. "We have thus managed to preserve our fundamental interests, even if I would have wished for more relief in transatlantic trade," Merz said in a government statement issued on Sunday evening. The no-deal scenario would have "hit the export-oriented German economy hard," according to Merz. He added that this applied in particular to the automotive industry, where the current tariffs of 27.5% have been almost halved. The US is Germany's main trading partner. The EU and US have struck a trade deal, with European Commission President Ursula von der Leyen saying the deal "will bring stability." She later told reporters that the tariff level on cars was "the best we could get." Though specifics are yet to be revealed, she also told reporters that bilateral tariff exemptions had been agreed on for a number of strategic products. But a decision was still pending on other critical sectors like pharmaceuticals and steel and aluminum. Follow along for the latest news and reactions to the deal.
The Guardian
2 days ago
- Automotive
- The Guardian
US-EU trade deal criticised by German business leaders and French minister
The US-EU trade deal clinched in a ballroom at Donald Trump's golf resort in Scotland on Sunday has been criticised by business leaders in Germany and by a French government minister. The deal, which will impose 15% tariffs on almost all European exports to the US including cars, ends the threat of a punitive 30% import duties being imposed on Trump's 1 August deadline for a deal, but it is a world apart from the zero-zero import and export tariff the EU offered initially. It also means European exporters to the US will face more then triple the average 4.8% tariff they now pay, with negotiations to continue on steel which is still facing a 50% tariff, aviation, and a question mark over future barriers to pharmaceutical exports. The German chancellor, Friedrich Merz, rapidly hailed the deal, saying it avoided 'needless escalation in transatlantic trade relations' and averted a potentially damaging trade war. But German exporters were less enthusiastic. The powerful BDI federation of industrial groups said the accord would have 'considerable negative repercussions', while the country's VCI chemical trade association said the accord left rates 'too high'. It is also clear that the US tariff of 15% on automotive products will place a burden on German automotive companies in the midst of their transformation, hitting sales and profits. The president of the car industry federation VDA, Hildegard Müller, said it was 'fundamentally positive' that a framework deal was agreed but warned of huge costs to come. European stock markets rallied at the start of trading on Monday, amid relief that a deal had been reached. Germany's Dax jumped by 0.86%, and France's Cac 40 index rose by 1.1%. Ireland, one of the EU's top exporters to the US, said on Sunday it welcomed the deal for bringing 'a measure of much-needed certainty', but that it 'regrets' the baseline tariff, in a statement by its deputy prime minister, Simon Harris. France's minister for Europe, Benjamin Haddad, said on Monday that the agreement would provide 'temporary stability … but it is unbalanced'. The German bank Berenberg said the deal brought the 'crippling uncertainty' to an end but said it was a victory for Trump. 'It is great to have a deal. In two major respects, however, the outcome remains much worse than the situation before Trump started his new round of trade wars early this year,' said Holger Schmieding, Berenberg's chief economist. 'The extra US tariffs will hurt both the US and the EU. For Europe, the damage is mostly frontloaded,' Schmieding said in a note to clients on Monday morning. 'The deal is asymmetric. The US gets away with a substantial increase in its tariffs on imports from the EU and has secured further EU concessions to boot. In his apparent zero-sum mentality, Trump can claim that as a 'win' for him,' Schmieding added. The Italian bank UniCredit also said Trump had got the better out of the EU. 'Is this a good deal for the EU? Probably not. The outcome is heavily asymmetrical, and it leaves US tariffs on imported EU goods at much higher levels than EU tariffs on imports from the US,' UniCredit said in a note to clients. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion 'Fifteen per cent is not to be underestimated, but it is the best we could get,' the European Commision president, Ursula von der Leyen, acknowledged. Initially the EU had tried to hardball the US by threatening but pausing €21bn (£18bn) worth of retaliatory measures in April, and adding another list of €73bn worth of US imports that would be taxed earlier this month. But it pivoted to a quick UK-style deal after the Nato summit in June, swapping a comprehensive trade deal for security and defence promises from Trump. By contrast, China, which threatened the US with a cascade of punitive tariffs, is still negotiating with Trump, who over the weekend froze technology transfer restrictions to create space for a deal with Beijing. Berenberg said the deal would impact the German economy, but the decline in growth would be offset by the Bundestag's recent growth stimulus package, it added. The EU had pushed for a compromise on steel that could allow a certain quota into the US before tariffs would apply. Trump appeared to rule that out, saying steel was 'staying the way it is', but von der Leyen insisted later that 'tariffs will be cut and a quota system will be put in place' for steel. He also ruled out a carve-out for pharmaceuticals but later von der Leyen said the 15% tariff would apply to EU medicine exports and that any other tariffs were up to the US president. The EU is now subject to a 25% levy on cars, 50% on steel and aluminium, and an across-the-board tariff of 10%, which Washington had threatened to increase to 30% in a no-deal scenario. The bloc had been pushing hard for tariff carve-outs for critical industries from aircraft to spirits, and its car industry, crucial for France and Germany, is already reeling from the levies imposed so far.
Local Germany
2 days ago
- Automotive
- Local Germany
German Chancellor Merz welcomes EU trade deal with US
"We have thus managed to preserve our fundamental interests, even if I would have wished for more relief in transatlantic trade," he said in a statement released soon after the deal was announced. The agreement sets 15-percent tariffs on most exports from the European bloc. The United States is Germany's main trading partner. Advertisement Merz said he was particularly relieved for the car industry, which before Sunday's accord was facing tariffs of 27.5 percent. In addition to cars, Germany's chemical and machinery industries are particularly dependent on exports to the United States. And Germany's powerful BDI federation of industrial groups said the accord would have "considerable negative repercussions" and sent "a fatal signal to the closely interdependent economy on both sides of the Atlantic". Germany's chemical trade association VCI said the accord left rates "too high". "When one expects a hurricane, you rejoice at a simple storm," it said in a statement. "An escalation was avoided, but the cost is high for both sides." The country's BGA exporters association called it a "painful compromise" that creates an "existential threat" for many companies. Clemens Faust, head of the prestigious IFO economic institute, said the agreement represented a "humiliation for the EU that reflects the imbalance in power". There are still many details in the accord that need to be ironed out, and the Chancellor expressed his "full support" for the European Commission "for the negotiations that will now begin". German Finance Minister Lars Klingbeil said the agreement was "a good thing as a first step. "We will now assess the outcome of the negotiations and its impact on the economy and employment in Germany," he added. READ ALSO: Impact of US tariffs varies across European Union
