Monday, July 28, 2025 - So this is the famous ‘trade superpower’. After months of tough talk, European Commission president Ursula von der Leyen announced a trade deal with Donald Trump this week which is nothing short of total capitulation. The Commission has accepted a 15 per cent baseline US tariff on most EU goods, agreed to purchase $750 billion worth of American gas and procure billions more of US military kit. What did Queen Ursula get in return? Nothing.
‘VDL’,
as she is known in the Brussels Bubble, tried desperately to spin this as a
win. Sitting anxiously next to Trump in Scotland last weekend, she
recited impressive-sounding numbers – such as the EU and US’s combined
800million consumers and the EU’s $1.7 trillion trade volume – like a nervous
student. Trump cut through the spin by greeting the deal as fantastic for US
cars and agriculture. He didn’t need to say much else – indeed, it was clear
for all to see that there was only one winner in this deal.
For
decades, even critics of the EU had to concede that whatever its many economic
and democratic shortcomings, it still possessed enormous leverage when it came
to trade. At the very least, it was more than capable of defending EU interests
in trade deals. Evidently, this is no longer the case. When even the hapless
government of Keir Starmer can negotiate a better trade deal with Trump, the
problems with the EU should be clear to see. (Tariffs on most UK goods are just
10 per cent.)
Even
the most ardent Europhiles have found it hard to put a positive spin on the
deal. Manfred Weber, leader of the European People’s Party (a coalition of
Europe’s legacy centre-right parties) described it as ‘damage control’ and
better than not reaching a deal at all. Guy Verhofstadt, former prime minister
of Belgium and usually the most maniacal of EU fanboys, slammed the deal as not
only ‘badly negotiated’, but also ‘scandalous’ and a ‘disaster’, with ‘not one
concession from the American side’. Member states, from Ireland to France, have
been similarly unenthusiastic. Yet the brutal truth is that the deal reflects
how America views the EU – as strategically weak and politically empty.
Trump
has taught the EU a harsh lesson in statecraft. The EU has long relied on its
neighbours for energy production. It has long underinvested in defence. And now
it throttles its biggest industries with green dogma. This left it with little
leverage for the negotiations with the US.
Brussels’ commitment to spend billions of dollars on
American gas and military kit confirmed that, for all its recent talk, the US
will continue calling the shots. Indeed, from a military perspective, the deal
must have been particularly humiliating. As recently as March, EU elites trumpeted their
massive re-armament plan as the key to achieving European strategic autonomy.
Shortly after, in typical EU fashion, it was forced to rename those
plans from ‘Rearm Europe’ to ‘Readiness 2030’, because some worried it sounded
too threatening. The EU, perhaps realising that it couldn’t even talk tough
anymore, might well have decided that military subservience to the US was its
best bet after all.
But it’s the economy, more than anything else, that explains
the one-sidedness of this deal. High energy costs, stringent regulation and an
overall lack of dynamism have resulted in European fortunes diverging sharply
from those of the US in recent years. The US is now roughly twice as rich
in per-capita terms as the EU, despite the pair being relatively equal
just a few decades ago. The US and China lead the way in a host of new
technologies, while the EU celebrates its regulations for an AI industry that
does not even exist on European soil. The EU’s only answer to its malaise is to propose
yet more centralisation and bureaucratisation of Europe’s economies, even
though this is one of the very things strangling Europe’s prosperity.
In any other situation, such a pitiful deal would be setting
off alarm bells for the people on the losing side of it. But for von der Leyen
and her ilk, it is seemingly just another day at the office. ‘We have averted
the worst’, they reassure themselves, while doing nothing to address the
underlying problems it revealed. They still see Trump as an aberration, rather
than a serious warning to their unaccountable, anti-democratic way of doing
politics. In truth, Trump’s election victory represents the same dynamics of
mass discontent with elite politics that are at work across Europe. They ignore
him at their peril.
Deliberately
or not, it was on the democracy question where where Trump really twisted the
knife in. In his press conference with von der Leyen, Trump openly mocked the
totems of her presidency: green energy and borderless migration,
two policies never voted on or for by Europeans, yet the ones most unsparingly
enforced by Brussels. In fact, the EU’s trade disaster is deeply connected to
the wildly unpopular migration policies favoured by EU elites. In both cases,
the problem stems from the fact that Europe is governed by a class which has no
sense of representing European, let alone national, interests. The EU’s
single-minded pursuit of open borders and environmentalism are signs of an
elite wildly out of touch with ordinary Europeans – and wildly unprepared for
the new global era that Trump is inaugurating.
Until
Europe’s political class is replaced by national movements with a strong sense
of their own interests, the subordination represented by its trade deal with
America will only be the beginning of its humiliation.
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