“I’m very surprised how the EU gave in to Trump’s demands,” said Douglas Irwin, a professor of economics at Dartmouth College.
“I thought the EU would be the most prone to retaliation. And yet, they didn’t do it. They really gave in to most of what Trump wanted.”
Though many details of the agreement were unclear, the EU and the US agreed to a broad-brush trade deal that sets a 15% tariff on most EU goods, including cars, averting what could have become a painful trade war with a bloc that is the US’ single biggest source of imports.
The EU also agreed to purchase US$750 billion worth of US energy, which Ursula von der Leyen, president of the EU’s executive branch, said would be spread over three years.
That, she noted, is roughly the length of Trump’s remaining term in office.
The bloc also agreed to increase its investment in the US by more than US$600b.
The two sides agreed to drop tariffs to zero on a range of goods including aircraft, plane parts, certain chemicals, certain generic drugs, semiconductor equipment and some agricultural products, von der Leyen said.
She acknowledged that the tariffs could prove tough for some European businesses but defended the deal in light of higher tariffs Trump had threatened.
“Fifteen per cent is not to be underestimated, but it is the best we could get,” she said.
It was a positive political development for Trump on a number of fronts.
Economists have mostly been sour on the idea of his sweeping tariffs, warning of dire consequences including inflation and rising unemployment.
And even as many criticised the wisdom of Trump’s economic policies, his Administration came under added fire over its struggle to negotiate deals.
The agreement with the EU, the America’s largest trading partner, may tamp down some of the criticism.
The agreement may also offer Trump a way to divert the news cycle from his Administration’s handling of the Jeffrey Epstein files - a controversy that has dogged him for weeks.
At a news conference on the trade deal, a reporter asked Trump whether he had rushed the agreement forward in an attempt to knock the Epstein story line out of the news.
“You’ve got to be kidding,” a frustrated Trump responded. “That had nothing to do with it.”
Trade negotiations are famously complex and time-consuming, so most analysts doubted that Trump could have much success in quickly striking deals.
The Peterson Institute for International Economics said in a 2016 analysis that negotiations for a single trade deal can take more than a year, with implementation taking multiple years.
That didn’t stop the White House from issuing bold predictions.
Within days of the April 2 announcement of tariffs on countries across the globe, White House officials said about 70 countries were calling to strike deals. Trump’s trade adviser predicted 90 agreements in 90 days.
As the deals proved tougher to negotiate than advertised, Trump lamented the pressure he was under.
“Everyone says, ‘When, when, when are you going to sign deals?’” he said in May. At one point he said: “We don’t have to sign deals”.
The agreements Trump has announced in recent days contain mostly top-line figures.
They are not the detailed, complex documents that the US has historically negotiated, which can number in the hundreds of pages.
And the new deal with the EU could still run into trouble.
The Trump Administration faces nearly a dozen lawsuits seeking to have its tariffs declared illegal on the grounds that Trump does not have the authority to impose them without the consent of Congress.
Should those suits succeed, Trump would be back to square one.
Andrew Hale, a trade policy analyst for the conservative Heritage Foundation, cautioned against reading too much into the deal with the EU until the text is released and the lawsuits are resolved.
“These are not comprehensive free trade agreements,” he said.
“Let’s make that very clear. And much of this may evaporate.”
This article originally appeared in The New York Times.
Written by: Luke Broadwater
©2025 THE NEW YORK TIMES
