Leaders from France and Germany have voiced strong apprehensions regarding the recently negotiated trade deal between the European Union and the United States. German Chancellor Friedrich Merz expressed that the agreement could "substantially damage" Germany's economy, while French Prime Minister Francois Bayrou characterized it as "submission" to US demands. The overall sentiment within the EU has been negative, despite an acknowledgment that the deal may help avoid a major trade war.
The agreement imposes a 15% tariff on most EU exports to the US, which is a significant reduction from the rates previously threatened by US President Donald Trump. In return, the EU is committed to increasing imports of American energy and reducing taxes on specific products. Following a private meeting at Trump’s golf resort in Scotland, EU chief Ursula von der Leyen hailed the deal as a "huge deal," while Trump suggested it would bring the US and EU "closer together."
The implementation of the deal requires the approval of all 27 EU member states, each having varying degrees of interest and dependence on exports to the US. Although no member state expressed intent to block the deal, European leaders remained lukewarm in their reaction. Merz emphasized that both US and European economies could suffer due to the agreement but conceded that a better outcome was unrealistic under Trump’s negotiation strategy.
Bayrou took to social media, denouncing the agreement as a sign of surrender for an alliance that should stand firm for common values and interests. Comments from other European leaders reflected similar sentiments. Hungarian Prime Minister Viktor Orban, a Trump ally, joked about the meeting, while Spanish Prime Minister Pedro Sanchez offered his support with caveats of lack of enthusiasm.
Mixed reactions included some relief that a deal was finalized. The Finnish Prime Minister noted the deal would provide "much-needed predictability," while the Irish Trade Minister highlighted the certainty essential for jobs and investment. EU Trade Commissioner Maros Sefcovic defended the arrangement as the best possible outcome under challenging conditions, emphasizing the geopolitical necessity of a stable US-EU trade relationship, especially in light of the Ukraine conflict.
Despite broader concerns about the agreement, there was a sense that the alternative–potential 30% tariffs–would have inflicted greater economic harm. Von der Leyen's positive framing of the deal faced pushback, with EU leaders like Manfred Weber labeling it as "damage control."
The initial business reaction in the US mirrored the EU's skepticism, with the National Foreign Trade Council acknowledging the avoidance of a trade war as a positive step but warning that the deal’s long-term implications could lead to increased isolation from a vital ally and a deterioration of trust. They also pointed to remaining EU policies that they saw as problematic, including aspects of a "discriminatory digital agenda" and unfair pharmaceutical reimbursement practices.
