How U.S. President Trump steamrolled the EU in trade deal
Amid Donald Trump’s trade offensive, the EU began its path to capitulation on April 10th, suspending its retaliatory tariffs and agreeing to U.S.-led talks under pressure, facing 10% tariffs on most of its trade plus higher duties on steel, aluminum, and vehicles.
Amid Donald Trump’s trade offensive, the EU began its path to capitulation on April 10th, suspending its retaliatory tariffs and agreeing to U.S.-led talks under pressure, facing 10% tariffs on most of its trade plus higher duties on steel, aluminum, and vehicles. Unlike Canada and China, which responded with immediate retaliation, the EU, constrained by differing member state opinions, opted for compromise to negotiate a better outcome.
Under the framework deal struck by European Commission president Ursula von der Leyen and Trump at his Turnberry golf resort on Sunday, the EU has swallowed a broad-based “baseline” US tariff of 15 per cent, including crucially for cars, but not for steel, which will be subject to a quota system.
Relief among policymakers about avoiding an immediate transatlantic trade war was tinged with regret: could the EU, the world’s largest trading bloc and supposedly an economic heavyweight, have extracted better terms had it not pulled its punches early on?
Trump views the EU as a parasite, feeding off the lucrative American market while closing its own through regulation and standards. The US president has said the union was “formed to screw the US” and “nastier than China”.
Germany, France and a few others pushed for the commission to consult on using its new “trade bazooka”, the anti-coercion instrument. Designed after Trump’s first term to counter trade policy being used to pressure governments over other matters, it would allow Brussels to bar US companies from public tenders, revoke intellectual property protection and restrict imports and exports.
However, it was not clear a majority of member states agreed with the threatening move, diplomats said… While EU technocrats were boxing under Queensberry rules, Trump was in a New York street fight…
There was also concern that a more confrontational stance towards Washington could spill over into other areas. Europe’s dependency on America’s security guarantee was a further argument against trade confrontation, especially for the bloc’s eastern and northern members.
A further priority for the commission president was to preserve the EU’s right to regulate. The US tech industry has pushed hard for Trump to pressure the EU to weaken laws regulating online speech and data management. They also opposed national digital taxes. So far von der Leyen has refused to compromise on those issues.
MacDailyNews Take: After all, regulation plus taxation is the lifeblood of the EU vampire. Of course, any national digital taxes and EU laws regulating online speech and data management directly impact Apple.
After Trump rebuffed the deal hatched by his own officials, the commission’s negotiating team concluded they had no option but to accept a US tariff of 15 per cent. They pitched the number to member state ambassadors this week…
There is no hiding the fact the EU was rolled over by the Trump juggernaut, said one ambassador. “Trump worked out exactly where our pain threshold is.”
MacDailyNews Take: This lopsided US-EU trade deal wad always was a fait accompli.
The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead. The best thing you can do is deal from strength, and leverage is the biggest strength you can have. Leverage is having something the other guy wants. Or better yet, needs. Or best of all, simply can’t do without. – Donald Trump, The Art of the Deal, 1987
The United States of America is the far and away No.1 economy on this planet, with nominal GDP of $30.34 trillion. China is a distant number two with $19.53 trillion, followed by Germany ($4.92T), Japan ($4.39T), and India ($4.27T).
If countries want unfettered access to sell their goods and services into the world’s preeminent economy, they should, at the very least, provide unfettered American access into their far lesser economies. (In pure business terms, they should actually pay for the privilege of selling in America’s rich environment).
Any country that wants to try to forgo America by keeping or increasing their import tariffs, have at it. They’ll be begging for access sooner than later.
Anyone who thinks Americans can’t make or get whatever they want/need without importing it from any other country, failed history 101.
In 2024, the EU’s nominal GDP was reported by the World Bank to be $19.423 trillion; China-sized, but still dwarfed by the American economy.
Here is a list of the top 5 consumer markets by country, based on household final consumption expenditure (HFCE) in U.S. dollar value (consumer spending):
Add up the 2nd – 5th consumer markets on earth and they still total $4.4 trillion less than the U.S.
Annualized estimates based on quarterly figures suggest the EU’s total HFCE for 2024 is roughly $10 trillion, though exact annual figures are not yet finalized.
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