Perspective – Written by Philip Pilkington
The outcome of the negotiations between the United States and the European Union over tariffs has been met with disappointment in Europe. The leading opinion piece in Süddeutsche Zeitung lamented that “this deal is a bad deal for Europe” and that the continent was acting “ihre Hasenfüßigkeit”—“rabbitfooted,” a German phrase for being cowardly and meek. In France, the press did not need to denounce the deal because prominent members of the French government did it for them: French Prime Minister François Bayrou denounced the deal as a “dark day” for Europe and said that the continent had resolved itself to “submission,” while Deputy Minister for Europe Benjamin Haddad denounced it as “unbalanced.”
It is no surprise that many in Europe are disappointed by the deal: It seems extremely lopsided. The deal means the imposition of an additional 15 percent tariff on most European goods by the Americans. In response, not only will the Europeans not impose any additional tariffs of their own, but they have made commitments to buy more American imports. European Commission President Ursula von der Leyen said that the overall tariff rate “is not to be underestimated but it was the best we could get,” and committed to spending $750 billion on American energy, investing $600 billion in the American economy, and buying “a vast amount” of American military equipment.
The Europeans got a bad deal for three reasons. The first is Europe’s overall negotiation posture, which is highly imbalanced and self-sabotaging. The second is the European Commission’s obsession with the failing war that it has backed in Ukraine. The third is the fact that the Europeans seem to be extremely 4 misinformed about the actual economic situation between the United States and the European Union. The Europeans seem to have no understanding of the clear leverage that they have in trade negotiations with the United States and instead think that they have no cards to play.
The full analysis is available here.