US-EU trade deal is a ‘dark day’ for Europe, says French PM

 

US-EU trade deal is a ‘dark day’ for Europe, says French PM

 

Trump tariff of 15% means European exporters will face more than triple the average 4.8% levy now in force

 

Lisa O’Carroll in Brussels

Mon 28 Jul 2025 14.52 BST

https://www.theguardian.com/us-news/2025/jul/28/us-eu-trade-deal-germany-france-tump-tariff

 

The French prime minister, François Bayrou, said the EU had capitulated to Donald Trump’s threats of ever-increasing tariffs, as he labelled the framework deal struck in Scotland on Sunday as a “dark day” for the EU.

 

“It is a dark day when an alliance of free peoples, brought together to affirm their common values and to defend their common interests, resigns itself to submission,” Bayrou wrote on X on Monday.

 

The German chancellor, Friedrich Merz, and the Italian prime minister, Giorgia Meloni, welcomed the deal, which the European trade commissioner Maroš Šefčovič described on a Monday as a “breakthrough” in the face of a potential ruinous trade war between the world’s two biggest economies.

 

The deal will impose 15% tariffs on almost all European exports to the US including cars, about triple the 4.8% tariff now in force, but avoid the threat of punitive 30% import duties being imposed on Trump’s 1 August deadline for a deal.

 

The high-level French criticism, and Emmanuel Macron’s silence since the deal was signed between Trump and the European Commission president, Ursula von der Leyen, shows potential divisions as Brussels seeks to get approval for the deal from member states.

 

Merz hailed the deal, which was clinched in a ballroom at Trump’s golf resort in Scotland, saying it avoided “needless escalation in transatlantic trade relations” and averted a potentially damaging trade war.

 

Meloni welcomed the deal, saying it had avoided “potentially devastating” consequences.

 

Speaking at a summit in Ethiopia, she said a “trade escalation between Europe and the US would have had unpredictable and potentially devastating consequences”, while adding that Rome would have to “study the details” of the deal.

 

European stock markets hit a four-month high at the start of trading on Monday, amid relief that a deal had been reached. Germany’s Dax jumped by 0.86%, and France’s Cac 40 index rose by 1.1%, lifting the pan-European Stoxx 600 index to its highest level since late March.

 

The rally fizzled out after France, considered the co-pilot of the EU project along with Germany, made clear its disapproval.

 

“This state of affairs is not satisfactory and cannot be sustained,” the French European affairs minister, Benjamin Haddad, said on X, urging the EU to activate its “anti-coercion instrument”, which would allow for non-tariff retaliation.

 

The French trade minister, Laurent Saint-Martin, criticised the EU’s handling of the negotiations, saying the bloc should not have refrained from hitting back in what he described as a power struggle initiated by Trump.

 

“Donald Trump only understands force,” he told France Inter radio. “It would have been better to respond by showing our capacity to retaliate earlier. And the deal could have probably looked different.”

 

The euro fell by almost 1% against the US dollar, down one cent to 1.163.

 

Fresh details have emerged of the deal, with senior officials saying the 15% tariff on EU exports would apply to 70% of goods sold to the US.

 

Zero rates will apply to EU exports in important sectors including aircraft parts, some chemicals, semiconductor equipment and some agricultural products such as cork used in wine bottles and flooring.

 

The EU pharmaceutical sector will not face tariffs of more than 15% under the deal it struck with Trump, officials have said.

 

Senior EU officials revealed that pharma exports from the EU will remain duty free until such time as Trump completes his section 232 national security investigation into pharmaceuticals.

 

Even if he does decide to impose tariffs on pharmaceuticals in the future, EU officials extracted a commitment from Trump that they will be set at a top level of 15% when it comes to EU products.

 

He started his negotiations on Sunday by demanding the EU pay 30% tariffs on exports to the US, followed by 21% and finally settled on 15% in talks that were described as “very intense”, it has emerged.

 

The side deal will come as a big relief to Belgium, Germany, Denmark and Ireland, which have strong pharmaceutical sectors and were looking at potential tariffs of up to 200% next year, according to Trump.

 

Further details of the deal emerged on Monday but tariffs on important sectors such as steel and wine and spirits will now be the subject of detailed negotiation.

 

Tariffs on steel will remain at 50% until a new deal, centred on quotas, is agreed, officials have said.

 

“The US are very much in need of our high-speciality steel,” Šefčovic said on Monday.

 

EU officials said agriculture barriers still firmly applied to US food imports, apart from a list of duty-free products that will be finalised in the coming days, and will include some products not produced in the EU such as nuts, some processed fish, dairy products and pet food.

 

Wines and spirits are still on the negotiating table, and EU officials expect the list of products that will get a zero rate in the US will be extended in the coming weeks.

 

Technically the European Commission has the mandate to press ahead with the deal, but it has sought consensus backing from member states throughout the past four months and this is not expected to change.

 

It expects a “relatively light” joint statement to emerge before, or on Friday, followed by executive orders issued by Trump.

 

This will give legal status to the 15% tariff rates immediately in the US but the EU suite of tariff changes will not come into force until legal instruments have been signed, which may take longer than a week.

 

The German bank Berenberg said the deal brought to an end the “crippling uncertainty” but said it was a victory for Trump.

 

“It is great to have a deal. In two major respects, however, the outcome remains much worse than the situation before Trump started his new round of trade wars early this year,” said Holger Schmieding, Berenberg’s chief economist.

 

“The extra US tariffs will hurt both the US and the EU. For Europe, the damage is mostly front-loaded,” Schmieding said in a note to clients on Monday morning.

 

“The deal is asymmetric. The US gets away with a substantial increase in its tariffs on imports from the EU and has secured further EU concessions to boot. In his apparent zero-sum mentality, Trump can claim that as a ‘win’ for him,” Schmieding added.

 

The Italian bank UniCredit also said Trump had got the better out of the EU. “Is this a good deal for the EU? Probably not. The outcome is heavily asymmetrical, and it leaves US tariffs on imported EU goods at much higher levels than EU tariffs on imports from the US,” UniCredit said in a note to clients.