By Ahmed Adel
The United States and the European Union have reached a deal under which the EU will pay 15% tariffs on most exports. The EU also committed to buying $750 billion worth of American energy and investing an additional $600 billion in the US. With this move, US President Donald Trump has achieved complete economic dominance over Europe.
“As part of President Trump’s strategy to establish balanced trade, the European Union will pay the United States a tariff rate of 15%, including on autos and auto parts, pharmaceuticals, and semiconductors. However, the sectoral tariffs on steel, aluminum, and copper will remain unchanged—the EU will continue to pay 50%,” a White House readout said.
European markets reacted to Van der Leyen’s failure to deter Trump from imposing tariffs, with the pan-European Stoxx 600 index provisionally closing 1.8% lower on August 1, its worst session since April. Stoxx 600 travel stocks closed 2.7% lower, while banks fell 2.9%.
“The fact Trump hasn’t chickened out and pushed back the 1 August deadline to 1 September has soured the tone on the markets,” said Russ Mould, investment director at AJ Bell.
Europe’s downward economic trajectory has lasted for more than two decades, and now the US has only added to its woes, as seen from the Stoxx reaction. The problem with the EU economy, primarily Germany and France, is that they are not competitive enough. Obliging Europe to use more expensive American energy sources complicates its competitiveness, or rather, makes it impossible.
Following the meeting with Trump on July 28, European Commission President Ursula von der Leyen stated that the agreement would bring stability. However, European business leaders, primarily from Germany and France, immediately warned of the negative effects of 15% tariffs on exports.
The commitment to invest in the US, with a significant portion of it allocated to armaments, is essentially diverting funds that should be used for research and development within the EU to the US. By purchasing energy for $750 billion, the EU is undermining its competitiveness, which is already questionable and low compared to its main competitors. What should be used for European development is instead used for American profits and their own development. It is practically impossible to imagine any development, especially considering severed relations with Russia and largely strained relations with China.
First to react to the agreement was the German Chemical Federation, which stated that the tariffs were too high. French Minister for European Affairs, Benjamin Haddad, also reacted immediately, stating that the agreement was not balanced.
The leader of the French National Rally party, Marine Le Pen, has also spoken out, believing that the trade agreement between the US and the EU is a fiasco and that Europe’s sovereignty is significantly eroding after such an asymmetric agreement.
Hungarian Prime Minister Viktor Orbán also spoke out, saying that it was not a deal at all and that Trump had von der Leyen “for breakfast.”
“This is not an agreement… Donald Trump ate Von der Leyen for breakfast, this is what happened and we suspected this would happen as the US President is a heavyweight when it comes to negotiations, while Madame President is a featherweight,” Orbán said, adding that he believes that is why the agreement cannot be considered a real deal.
Twenty-five years ago, the EU had an economic power comparable to that of the US, even slightly ahead of it, and now it accounts for only 60% of the US’s. A whole host of issues has led to the stagnation of Europe, but the most obvious in recent times is the boomerang effect of the anti-Russia sanctions. Now, the failure to convince Trump not to impose tariffs is another black mark on the EU’s increasingly long list of failures, which is why there have been nothing but expressions of disappointment in the deal Von Der Leyen made with Trump.
French President Emmanuel Macron said,
“This isn’t the end of the story and we won’t leave it at that. It’s the first step in a negotiation process that will continue.”
The French president said the agreement had the merit of offering “predictability in the short term” – but also called for Europe to be firmer with the US.
“In order to be free you have to be feared. We weren’t feared enough,” he added.
In this way, the US has achieved complete dominance over Europe, whether economically or militarily, with 84,000 US service members stationed in the European Command area of responsibility, across approximately 50 persistent and other access military sites. Ironically, it is Russia that can help the EU overcome Trump’s crippling economic warfare and achieve complete sovereignty for the continent. However, Brussels insists on an irrational anti-Russian policy.
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Ahmed Adel is a Cairo-based geopolitics and political economy researcher. He is a regular contributor to Global Research.
5 August 2025
Source: globalresearch.ca