Europeans, Not Trump, Ended Up Chickening Out
A tariff deal at 15% brings relief to markets but also a lot of questions.
Donald Trump and President of the European Commission Ursula von der Leyen shake hands at Trump Turnberry golf club on the trade deal.
Photographer: Andrew Harnik/Getty Images EuropeDonald Trump’s world tour of arm-twisting on trade has landed its latest deal: A 15% baseline tariff on European Union goods, lowered from the recently threatened 30%, in return for an apparent smorgasbord of continental investments into the US and huge purchases of energy and military equipment. Japan sealed a similar deal last week while pushing back on some extravagant Trumpian claims. “It was the best we could get,” European Commission President Ursula von der Leyen said.
Many will agree with her. The US is the EU’s biggest trade partner and a dominant defense and technology supplier – a spiral of tit-for-tat tariffs is something Europeans simply can’t afford, as LVMH Moet Hennessy Louis Vuitton SE boss Bernard Arnault said last week. Sealing the deal before the Aug. 1 deadline at a level big companies say they find “manageable” is market positive, lifting the tariff fog and avoiding a worst-case scenario drag on euro zone gross domestic product of 1.2%, according to Barclays Plc. From German autos to French aerospace, transatlantic trade is looking a little less stuck.