Brussels – Growth, competitiveness, investment, sustainability, and even defense. While the tariff agreement reached between the European Union and the United States produces certainty, clears the field of doubts, and thus allows the economy to take its course, it also seems to hijack the EU’s agenda in many respects. The fundamental trade-off for this agreement, sought at all costs, seems to be the set of efforts made in the past legislature and the current one: the Green Deal, the Draghi report, the White Paper on Defense: everything seems to have been sacrificed and then set aside in the name of a relationship with the United States that distances Europe from itself and its ambitions of strategic independence and geo-political power.
Growth and competitiveness: a puzzle
The benefits of a trade agreement come from lowering tariffs. It is what free trade agreements are for. In this specific case, however, the EU and the US have opted for a regime of increased tariffs. True, on some products, tariffs have been reduced to 15%, but on others, far more, they have risen to the same level. Before the agreement, the United States collected between 7 and 8 billion dollars in taxes from tariffs. With the agreement, the figure rises to 80 billion dollars, almost ten times more. All costs are passed onto the buyers, including companies, suppliers, retailers, and the end customer.
“We have to see how 15 percent will work for the US economy,” they reason in Brussels. Across the Atlantic, the consumption of European products could decline, leading to a decrease in demand. For a Europe heavily dependent on exports, a drop in demand due to higher costs may pose a significant problem. So much for growth, then. And with less growth, competitiveness also declines.
Speaking of competitiveness, the EU has pledged to spend EUR 600 billion in the US on purchases and investments. All money that will not be invested in Europe. And it is private capital, no less, since the EUR 600 billion pledged is private funds. It is the EU that is encouraging its companies to invest outside the EU. It is the EU that is encouraging its companies to invest outside the EU. A suicidal move, at a time when no less than EUR 620 billion a year in private contributions are needed to carry out just the sustainability (Green Deal) and energy independence (RePowerEU) agendas.
European competitiveness requires annual investments of an additional 750-800 billion, but the EU diverts 600 billion of it to the other side of the Atlantic, along with its companies. It also thwarts Enrico Letta’s efforts to relaunch the single market. In the end, there is a serious risk that the report will end up in the drawer, as Letta himself had urged against doing. “Make America Great Again” thanks to the EU, which will lose ground: Trump leads his battle and Europe capitulates of its own accord.
Sustainability, Trump’s blow to the Green Deal
Cyclone Trump strikes Europe with full force, taking away what remains of the Green Deal. Ursula von der Leyen, in her dual capacity as President of the European Commission from 2019 to 2024, and then again from 2024 to 2029, has begun taking on the role of Penelope, a mythical figure known for weaving and unweaving her own tapestry. This Commission has already started to lower its sustainability ambitions compared to the previous one. Trump, through the tariff agreement, seems to be giving the decisive blow: buying energy from the United States, totaling 750 billion dollars over three years, 250 billion per year, means, by agreement, buying liquefied natural gas (LNG), nuclear (fuel and nuclear mini-reactors), and also oil. There is no trace of renewables: no technology for solar photovoltaics or wind power. 
In addition, the EU is opening up its market to American pickup trucks, as well as non-electric vehicles that are also large. These vehicles consume high amounts of traditional fuels (petrol and diesel), leading to high and ongoing CO2 and greenhouse gas emissions. In a skillful move, the US is striking a blow to the Paris climate agreement and at European ambitions to change a production model on which the US has built its fortunes.
Defense spending moves to the US – goodbye to Europe’s industrial base
In Brussels, they are covering their bases, reminding everyone that the EU cannot buy military equipment or initiate procurement. These are national prerogatives, and only governments can make defense purchases. There is no agreement to buy from the US. However, within the tariff deal lies the agreement in principle to buy from the US and fill the EU with American technology. The advance of US industrial products consequently puts the European industry in difficulty, which finds market penetration and US competition difficult to counter. Needless to say, the more the EU invests resources in American companies, the less it invests in European ones. Here, too, the result is a US economic and strategic advantage at the expense of EU dreams of independence.
English version by the Translation Service of Withub
