If we were in 2019 everything would be different. But we are not and now there is a war in the midst of Europe, who preferred not to open a new conflict and continue to have two things that only the United States can give for now
By the seaside and under the spotlight of world politics, Donald Trump and Ursula von der Leyen: 15% fixed rates on all European Union products exported to the US, accompanied by a European foreign investment package that exceeds 500 billion euros, which total almost 650 billion in American energy imports and a substantial reinforcement of military purchases.
The president of the European Commission says that the trade agreement will bring stability. The US President speaks of the “biggest business ever”. But the European continent woke up on Monday deeply divided, with political, industrial leaders, and experts questioning whether Europe will not actually be given too much.
“It’s a defeat. But it was the possible agreement”
Francisco Pereira Coutinho, an international relations expert, has no doubt: “It’s a defeat. But it was the possible agreement.” And explains why: “US-decreed tariffs to Europe were 1.5%. Now they go to 15%. They multiply for ten.” Still, he acknowledges that the scenario could be worse: “There was the threat of 30%tariffs. Between evil and bad, it was the minor evil.”
For Pedro Thunder of the Rosary, there is a word that stands out: “relief.” Not enthusiasm, not celebration, just relief. “With regard to what was the expectation for two days, the feeling is some clearance. It was avoided the worst.”
The international law expert draws, however, attention to legal and political uncertainty around the trade agreement.
“There is talk of 15%, but this number is still open. There are sectors where the rate will go down, but there is obviously a widespread aggravation. Many details remain undefined: goods, services, raw materials.”
“Donald Trump ate Ursula von der Leyen to breakfast”
In Hungary, Prime Minister Viktor Orban criticized the trade agreement brutally directly.
“It was not Donald Trump who concluded an agreement with Ursula Von der Leyen, it was before Donald Trump who ate Ursula von der Leyen to breakfast. That’s what happened,” he said in an interview.
For the Hungarian leader, the European Union left “defeated” and the deal “is worse” than that obtained by the United Kingdom in May.
Francisco Pereira Coutinho considers that the real problem is structural: “It is above all a defeat that results from the dependencies we have from the US in the domain of security and energy – and that they will only get worse with this agreement. This dependence was explored by Donald Trump to maximize business earnings.”
The expert also points to his finger to the lack of cohesion between European countries: “Trump only reacts to power positions. But there was a great spread among European states to reach a common position to face the US. What we observed were very different positions. Each state pulled to its side. We could not get a better agreement because we could not get a strong common position.”
Result? An agreement lower than desired. “The United Kingdom got 10%and this had been the base negotiated in early July. There were other countries that got 19%, but we are one of the largest economic powers. These countries are an economic power like the European Union? No, not. How did we get a better deal? It is true that Japan also had a 15%agreement, but the Japanese economy is smaller than the European,” he adds.
Paris joined the choir of criticism. French Foreign Minister Laurent Saint-Martin considered the agreement “unbalanced” and warned that “Europe needs to assert itself as an economic power.” Prime Minister François Bayrou was even harder: “It is a dark day when a covenant of free peoples, gathered to affirm their common values and defend their common interests, resigned to submission,”
Von der Leyen played for insurance
Despite the criticism, Pereira Coutinho understands the strategy of the European Commission’s chairman: “Above all, von der Leyen wanted to keep relationships stable with the US. We have a war in Europe and we need an ally across the Atlantic, not an opponent. I wanted to avoid a trade war.”
Will Europe chosen stability at any cost? Francisco Pereira Coutinho argues that yes.
The deal, he believes, more than an economic concession, is an attempt to avoid a greater political conflict: “We were in 2019 and possibly this would not be the agreement, it would be a very different agreement, but the geopolitical situation in Europe is what von der Leyen preferred a bad agreement to a very unstable and very problematic situation.”
Italian prime minister Giorgia Meloni, although more committed, made it clear that “the agreement is not legally binding” and “lacks details”, especially with regard to natural gas investments. Still, he preferred to focus on the fact that he had avoided “a devastating aggravation of trade relations.”
For Pedro Trovão do Rosário, Europe entered this negotiation in clear structural disadvantage. While the US acts with the unit and centralization of a federal state, the EU was divided.
“The US President acts with a superior margin of maneuver. The EU needs to navigate between a diversity of very diverse political and diplomatic sensitivity. There are several forms of understanding the relationship with the US. The UK, for example, obviously has a completely different sensitivity from that countries such as Germany, Spain or France have because there are historical bonds involved,” he argues.
Germany, which has in the automotive industry one of its vital columns, has already been concerned. Hildegard Mueller, president of the Federation of Automobile Manufacturers (VDA), estimates that 15% rates will “cost thousands of € a year” to German companies. German manufacturers have so far had a strategic advantage in access to the US market, which is now weakened.
The country’s Minister of Economics, Katherine Reiche, said the trade agreement offers security in tough times, although the 15% tariff rate represents a challenge for companies.
“The agreement, with the base rate of 15%, is certainly something that will challenge us. But what is good is that it offers security,” he said.
The minister also added that it is important to clarify how the agreement will be implemented. Something that the international relations expert considers “essential”.
“There is still a lot to define. The agreement is not a closed document. It is a stage,” says Pedro Trovão do Rosário. The concrete application will depend on the decisions made in the coming weeks, both in Washington, DC and Brussels.
Divided Europe, misaligned positions
European Commissioner for Commerce, Maros Sefcovic, said Monday was 100% safe that the deal brings stability and is better than a trade war.
“If I had to summarize this agreement in a sentence, I would say that it brings renewed stability and opens the door to strategic collaboration,” he said at a press conference.
In Spain, Prime Minister Pedro Sánchez adopted a position of tactical support, but “without enthusiasm.”
“I value the construction of the European Commission, but support this agreement without enthusiasm,” said Sánchez, underlining the distance between what was achieved and the initial expectations.
In Portugal, the Secretary-General of the Socialist Party, José Luís Carneiro, argues that the Portuguese government should quickly make an assessment of the impacts on sectors such as shoes, clothing, metallomechanics and health.
“It is essential to realize the direct effect of these rates on the national economy, but also their indirect impact on the European framework, as we sell more than 70% to Europe,” he said.
In a statement, the Ministry of Foreign Affairs of Portugal thanks the European Commission “the commitment to achieve this platform for stabilizing trade relations” and promises to support Portuguese companies in mitigating “negative effects” and facilitating “access to new markets”.
