When European Commission President Ursula von der Leyen and U.S. President Donald Trump announced a long-awaited EU-U.S. trade agreement—just ahead of Trump’s August 1 deadline—it was all handshakes and smiles.
Across Europe, there was widespread relief that negotiators had seemingly dodged the 30% tariffs Trump had previously threatened. Meanwhile, other nations are still scrambling to strike their own deals with the U.S. to avoid broad tariffs.
However, since the deal’s announcement last weekend, criticism has been growing. It has become evident that many key details remain unresolved, discrepancies exist between the two sides, and some EU countries may bear an unequal share of the impact.
Just the beginning?
Few European leaders celebrated the news that a 15% tariff would be imposed on most EU exports to the U.S.—a reduction from Trump’s initial 30% threat, but still a significant increase from the previous average rate of 4.8%.
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Still a Long Way to Go?
While many European leaders criticized the EU for not taking a firmer stance in negotiations, there was reluctant acknowledgment that the deal offered some stability and predictability for businesses after months of uncertainty.
“I would have preferred a different result,” said Germany’s Finance Minister Lars Klingbeil. “But overall, it’s good that we’ve reached an agreement with the U.S. and avoided further escalation.”
As of Thursday, no joint statement had been issued. The European Commission clarified that the agreement is not legally binding but rather a “set of political commitments.”
“These commitments will lead to additional negotiated exemptions that we aim to integrate into the final deal,” said Commission trade spokesperson Olof Gill.
While the Commission emphasized the informal nature of the deal, the White House fact sheet made no mention of this and described the agreement as achieving “historic structural reforms.” However, U.S. Commerce Secretary Howard Lutnick admitted on Wednesday that negotiations were ongoing and both sides were still finalizing parts of the framework.
“This isn’t the end of the road,” said French President Emmanuel Macron. “It’s only the first step in a longer negotiation process.”
Trade expert Cinzia Alcidi from the Centre for European Policy Studies in Brussels noted that bilateral trade agreements typically take 18 to 24 months to finalize. In the meantime, a 15% blanket tariff will be applied to give businesses some certainty, although further adjustments will be negotiated for specific goods.
Key Points of Disagreement
According to the U.S., pharmaceuticals and semiconductors will be subject to a 15% tariff, with no clarification that this is a cap. The EU, on the other hand, insists these sectors will remain tariff-free under the current 0% rate until new global agreements are made. Any future tariffs, the EU says, will be capped at 15%.
The U.S. also claims steel and aluminum tariffs will remain at 50%, whereas the EU asserts both sides will work toward lowering them and eventually replacing them with a quota system after August 1.
Perhaps the most striking differences lie in energy and investment commitments. The U.S. claims the EU “will” purchase $750 billion worth of American oil, LNG, and nuclear energy. The EU merely states it “intends” to do so while reducing reliance on Russian energy. Experts point out that it’s unclear whether the U.S. can even supply this volume and that the EU cannot compel private firms to make such purchases.
Similarly, the U.S. says the EU will invest $600 billion by the end of Trump’s second term. The EU, however, notes that “companies have expressed interest” in reaching that figure by 2029—hardly a binding commitment.
The U.S. also states that the EU has agreed to buy large quantities of American military equipment, a claim entirely absent from the EU’s statement. Given that nearly 80% of current EU defense procurement already goes to the U.S., further increases may be limited—and would clash with von der Leyen’s recent “ReArm Europe” initiative focused on strengthening Europe’s own defense industry.
Meanwhile, the U.S. will impose a 15% tariff on European wine and spirits, although the Commission has stated it will continue pushing for an exemption.
On Wednesday, President Macron said the deal brings “short-term predictability” but emphasized that Europe must take a tougher approach with the U.S.
“To be free, you must be feared,” he said. “We weren’t feared enough.”
With many unresolved issues still on the table and growing criticism from within Europe, the next phase of talks is expected to be lengthy—and EU negotiators will likely face mounting pressure to defend European interests more assertively.
Who Will Be Hit the Hardest?
While the 15% tariffs will impact all EU countries, the effects will vary significantly from one nation to another.
Germany, Ireland, and Italy are among the most vulnerable due to the nature of their economic ties with the U.S. For Germany’s car industry, the U.S. accounts for 13% of exports—worth €34 billion (£29 billion). Hildegard Müller, head of the German Association of the Automotive Industry, warned that the new tariffs would impose a heavy financial burden.
Ireland is the most dependent on the U.S. export market among EU members, especially in the pharmaceutical sector, which brings in $50 billion annually. The Irish government expressed muted approval of the deal. “It is what it is, and we move on,” said Neale Richmond, Minister of State in the Department of Foreign Affairs.
Italy’s agriculture, pharmaceutical, and automotive industries are also expected to suffer, with the country’s GDP projected to decline by 0.2% due to the new tariffs, according to the Italian Institute of International Political Studies. Cristiano Fini of the Italian Confederation of Farmers described the agreement as more of a “surrender” than a true deal. Multiple Italian trade groups are already demanding EU compensation for their anticipated losses.
But such compensation would be a mistake, argues Cinzia Alcidi.
Offering broad reimbursements to EU exporters would place the burden on European taxpayers, she warns—ultimately playing into Trump’s hands by forcing Europe to absorb the cost of his tariffs.
