What brought the recent meeting of Donald Trump and Ursula von der Leyen concerning trade between EU and US? Was it a deal, or was it just another misunderstanding between the two trading partners? Anyway whatever it was, it resulted in chaos and confusion. That is not untypical for negotiations when Trump is involved, as with all so-called deals. Also, his actions inside the US government result in chaos. And perhaps the European Commission was just happy to have any kind of agreement - and I could share their eagerness to have any sort of agreement with which one could move on. But the question remains whereto can Europe move on now.
Was it a good deal?
Of course, we still must put the question if it was a good deal, pretending there was an agreement. Was the compromise to have a 15% tariff on most EU exports and no tariffs on US export a good deal for Europe? Well, most commentators agree, that the deal with its different components does deserve a lot of criticism. One of the first international comments by Alberto Alemanno from the College of Europe underlined how unnecessary the agreement would be: “As America’s largest economic partner with nearly $1 trillion in annual trade, the EU has considerable leverage. While the US runs a $235.6 billion goods deficit with the EU, the bloc’s €148 billion services deficit with the U.S. offered clear avenues for retaliation, from digital taxes to restrictions on American tech giants.” (Project Syndicate, 30.07)
And he adds: ”Trump’s ability to extract sweeping economic concessions and defense-spending commitments shows how effectively the US can weaponize Europe’s security anxieties to pursue broader geopolitical objectives.” In this connection, one has to confess that the promise of buying additional military equipment from the US is in stark contrast to the willingness and necessity to develop the European military production capacity. This restructuring of military procurement towards European products needs time, but it must be started quickly in view of the U.S. hesitation to support European security.
Similar to Alemanno argues Zaki Laidi, professor at Science Po, when he speaks about the „Trumping of Europe” : “The resulting deal is a disaster, because it confirms that the EU is ultimately driven by fear of losing US protection in today’s dangerous geopolitical context. The implication is that any form of continued transatlantic alignment, no matter how humiliating, is preferable to uncertain independence.“( Project Syndicate 30.07)
Would an alternative strategy for the EU have been possible?
Both academics imply that an alternative to the „agreed deal“ would have been possible. This is questioned vehemently by Ross Douthat who wrote his comment in the York Times (31.07) under the title “The lesson in the E.U. trade deal” For him „the American economic power is just too big to escape or isolate or ignore.“ Foreign leaders have to recognize, that „a world economic order that isolates America and a liberal order that continues on without „ is a no-go. The U.S. is too „booming, youthful, dynamic, entrepreneurial of a zone” to be neglected.
I would add that two conditions would have to be met, to make an opposition to Trump’s trade and tariffs policy possible and at the end successful. First Europe would have to find several big and influential partners from China to India, Canada, Japan, Australia, Brazil etc. Some of them would be ready to join such a coalition without conditions. Others - like China - are keen to dump their cheap goods on European markets etc. which is not acceptable for Europe.
Independently of other countries’ willingness to cooperate, we have to recognize how difficult it is to get public support inside the EU for trade agreements like the one with Mercosur, a condition for closer cooperation with the relevant countries. But such trade agreements are important to build a community of countries which could pressure the U.S. to a more multilateral trade policy.
The second condition would be to have a strong unity inside the EU concerning the relations to the U.S. In this respect it is interesting that the right wing which is always very keen on defending national interests is not putting pressure on their ideological mentor and idol, Donald Trump, for a fair deal. Anyway, a divided EU is not a very reliable and forceful partner in an alliance to counter Donald Trump.
Both, the internal divisions and the lack of an international alliance have to be overcome. This would be one of the most important but also most difficult endeavors the leadership of the EU should aspire for. This is the lesson the European Union should learn, not least after the deal Europe seems to have concluded with Trump.
Some positive aspects
But there is one prominent voice - beside the European Commission - who sees things differently, and that means rather positive. Adam Posen - President of the Peterson Institute for International Economics - speaks about “A European Victory Disguised as Defeat”: “Yes, we face tariffs on our exports. That’s not ideal, but it’s primarily American consumers who will foot the bill….escalating the trade war would have been monumentally stupid…. When we impose tariffs, we don’t protect jobs - we protect inefficiency”. And he concludes: “We’ve secured an agreement that leaves European consumers BETTER off than before.” (The Market Monetarist 28.07)Well there is some truth in that argument, but still Adam Posen neglects the negative consequences for European producers and exporters.
Additionally, we do not know how to evaluate the promises concerning European investments and purchases of weapons. These vague promises already produced a conflict and Trump is threatening with new tariffs. We never know with Trump what he will do next and what kind of new threats he will throw against Europe. That he is no friend of the European Union is well known.
In a comment on the F.A.Z. (04.08) - Adam Posen argues that Europe is - economically - too weak in relations to the U.S., because it does not have enough goods the US is depending on - differently to China. But he is of the opinion, that Europe as a region of stability and reliability will attract many countries to trade with it. It should attract foreign investments from these countries. It should also continue its strategy of green investments and climate policies. Here it should set and implement standards which should have global impact. Europe must develop a leading role in developing and offering green technologies. The more the U.S. loses on reliability and is withdrawing from global institutions and rules, the more should the EU stick to its values and be a global reliable partner.
Is a return to multilateralism possible?
In fact the consequences of Trump’s fight against multilateral frameworks and economic cooperation is the most disturbing feature of his policies. As Nathan Gardens writes in his introduction to the recent edition of NOEMA ( August 2025): “ Under President Trump and his allies, America has effectively joined the revisionist powers of China and Russia by baldly asserting sovereigntist self-interest unencumbered by rules that also encompass the interests of others. Tariff walls, outright trade wars and unraveling alliances are supplanting the expansive web of global commerce, Western unity and cultural cross-fertilization that characterized times only recently.”
Is it principally possible to go back to that global, more or less rules based, system and is the European Union strong enough and determined to convince other countries to join it in fighting for such a system? The European Union should try, but first it must convince its own citizens to go that way. And that will be difficult enough.
Dr. Hannes Swoboda, President of the International Institute for Peace (IP), started his career in urban politics in Vienna and was elected member of the European Parliament in 1996. He was Vice President of the Social Democrat Group until 2012 und then President until 2014. He was particularly engaged in foreign, enlargement, and neighborhood policies. Swoboda is also President of the Vienna Institute for International Economics, the Centre of Architecture, the University for Applied Science - Campus Vienna, and the Sir Peter Ustinov Institute.