One by one Donald Trump has bulldozed his way to new trade deals. With the stick of losing access to America’s vast market and the carrot of negotiating down his hefty April 2 tariff threats ahead of an impending August 1 deadline, the US president has compelled nations including the UK, Japan, Indonesia, the Philippines, and Vietnam to yield to his terms. The EU, with its economic heft and leverage as a net importer of US services, had one of the better shots at finding a middle ground. Instead it, too, capitulated.
On Sunday, Trump and European Commission president Ursula von der Leyen struck a deal that imposes US tariffs of 15 per cent on most imports from the bloc, including cars, pharmaceuticals and semiconductors. US imports into the EU will not face higher tariffs as part of the agreement, which also requires the bloc to spend hundreds of billions of dollars on US energy products and weapons. This was largely Trump’s dream scenario.
All that Europe really gets is the avoidance of even higher tariffs, and slightly less uncertainty. The US president had threatened 30 per cent duties on the EU if no deal was struck by August 1. Another consolation was an agreement on zero-for-zero tariffs covering €70bn of trade.