Bulletin N°59 2025 The trade war will not take place, but peace will come at a price for the member countries of the European Union, which will see their products exported to the United States hit with a 15% customs tax.
In 2023, the European Union recorded a trade surplus of €157 billion (€ billion) with the United States in goods, but a deficit of €109 billion in services. This means the EU's trade surplus in goods and services stands at €44 billion. The Trump administration is not satisfied with this and is focusing its attention on the goods sector. It believes that the European Union is exercising unfair competition to the detriment of US industry.
From cowardly relief to spite
The President of the European Commission 1 and the President of the United States presented a customs agreement in principle on Sunday, July 27, in Scotland, on Mr. Trump's estate (a "golf resort"). Finally, while the President of the United States had announced customs duties of 30% on European products from August 1 , the two parties settled on a tax of 15% (2.5% during the Biden administration).
However, the administration has made its decision, and certain products deemed strategic by the Trump administration will be exempt from this tax, such as aeronautics and spare parts (zero bilateral taxes), chemical products, generic drugs, agricultural products, and raw materials. The list is not yet complete. Finally, for semiconductors and pharmaceutical products, an agreement will be reached at a later date.
On the other hand, customs duties on steel and aluminum remain frozen at 50% for the time being.
The German Chemical Employers' Association expressed relief in climate terms: " When you expect a hurricane, you're happy about a mere storm. " The European car manufacturers' union welcomed the de-escalation of tensions (customs duties have been at 27.5% since April and will now fall to 15%) and was pleased with the end of uncertainties surrounding transatlantic trade relations. The German Chancellor took this point to heart when expressing relief for the German car industry. "We have preserved our fundamental interests ." It seems that the "we" should be understood as "we Germans" and not "we Europeans."
The Italian Prime Minister welcomed the agreement because "a trade war between Europe and the United States would have had unpredictable and potentially devastating consequences ," but cautiously, she is waiting for the details of the agreement to say more. The Spanish Prime Minister supports the agreement but without enthusiasm, he said.
Finally, the European Commission has decided that the agreement reached is better than a trade war, and the Trade Commissioner is 100% sure of it, that's saying something.
France stands out for its very cool reception of this agreement, with funereal overtones from the Prime Minister ("a dark day," "a submission") while his ministers insisted on the imbalance of the agreement. " Is European construction, is the European Union, a force? If we want the answer to be yes, then the die must not be cast, " asserts the delegate for foreign trade.
However, to date, the President of the Republic has not made any statement. We are waiting to see whether the emerging agreement is capable of "providing stability and having the lowest possible tariffs, but also, obviously, of being respected as partners, " as he declared in Berlin a few days before the agreement was announced.
Amendments to the customs agreement
Although it is not specified, while the United States is imposing 15% customs duties on most imports in the hope of restoring a balance in trade, the European Union will not modify its customs duties (almost nothing or even 0%) for products from the United States and is abandoning the package of countermeasures decided upon during the escalation of trade tensions amounting to $93 billion.
But more astonishing and illustrative of the balance of power, the Trump administration, often judged with commiseration by European elites, has obtained a commitment from the European Union to purchase $750 billion of American energy over three years ($250 billion/year for a current annual volume of around $75 billion, or 17% of the European Union's energy imports). This concerns hydrocarbons (oil and natural gas transported in liquid form by ship – LNG) but also nuclear power. According to the European Commissioner, these figures are achievable, particularly "if we look at the renaissance of nuclear power in Europe, the rise of the AI industry." On July 23, the Trump administration announced a plan to support AI made in the US and to help its international development for export. All this is consistent.
Preparing for European dependence on American AI is not enough for this fine strategist, who even thinks he can get energy at a good price and is not alerted to this intention to oust other suppliers, in particular and first and foremost Russia, which still supplies Europe with gas in the form of LNG – approximately 70 billion m3 / year – more than French consumption. The predictable result: a stronger dependence of the region on energy made in the US . Furthermore, the French nuclear industry should be on alert for the entry of new competitors. EDF had against it for a Czech call for tenders, a Korean operator who proposed a Westinghouse reactor (a US company), and Westinghouse itself (the Koreans won). But the Americans (still Westinghouse) have already obtained the Polish civil nuclear market and are present in Romania.
Finally, the European Union is committed to purchasing American weapons or making investments in the United States worth $600 billion. Regarding weapons, given that NATO member countries have committed to spending 5% of their GDP on defense, there is clearly a logic or a spirit of consistency on the part of the Trump administration. Moreover, the German Chancellor's first move, even before his inauguration, was to launch a large-scale arms plan. All of this is in line with the interests of the American military-industrial complex, which is unlikely to see a rival emerge in Europe any time soon.
As for the expected European investments, the mechanisms that will trigger them are not very clear. Especially since countries like France and Germany are also encouraging companies to invest in their countries. In particular, Chancellor Merz and representatives of German capital met for a major €600 billion program .
While some in Europe continue to rant about the Trump administration's economic illiteracy, it has succeeded in forcing the European Union to give in, as it has either not dared or not wanted to attempt a showdown. However, its steel industry, a key industrial sector, risks suffering from these negotiations (still ongoing, but given the results achieved so far, the worst is not the least unlikely).
According to Eurostat data (2020), trade in goods between European Union Member States (intra-EU trade) amounts to approximately €2,843 billion. This amount is significantly higher than extra-EU exports, which amounted to €1,932 billion, including approximately €400 billion to the United States. While the United States certainly has weight, the orders of magnitude suggest that the European Union may have had sufficient clout to put up a little more resistance. The European Council will have to decide on the finalized draft treaty, negotiated by the European Commission 4 . Initial reactions from the various governments suggest approval of the agreement as it stands.
Also, this agreement has a strong ideological scope and clearly marks the desire of European capital to align itself with the American empire because, in a certain way, it is obligingly invited to develop its activities in the United States. We will have to be attentive to the consequences and contradictions that should emerge between the desire to maintain its industrial power (strong in Germany, fluctuating in France) and to avoid the flight not of capital but of Capital which would choose to continue its work of accumulation under more welcoming skies.
1 The European Commission negotiates trade agreements on behalf of the European Union
2 By the admission of the President of the European Commission
3 See the article on this subject in Communistes-Hebdo No. 936
4 This type of agreement, to be validated, requires a qualified majority, more precisely, at least the approval of 15 States, representing 65% of the population of the European Union and can be blocked if 4 States, representing 35% of the population of the European Union, oppose it.