Inside the EU-U.S. Trade Deal: Compromise or Capitulation?

Good deal or capitulation? The EU-U.S. agreement that resulted in a unilateral 15% tariff on most EU exports has drawn reactions ranging from “very bad” to “it could be worse.” French Prime Minister François Bayrou described it as “a dark day,” while Maroš Šefčovič, the EU’s chief negotiator and European Commission vice president, argued it was “better than a trade war with the United States.”

The July 27 meeting in Scotland between U.S. President Donald Trump and European Commission President Ursula von der Leyen produced two separate fact sheets where the White House amplified its gains, while the EU minimized its concessions. There were also small but significant differences in content.

TARIFF TALK.

On food trade, the EU not only accepted the 15% tariff, but also agreed to open its market further to American products. The White House fact sheet hailed this as a “colossal deal” that will enable U.S. food producers to export more. The European Commission described it far more cautiously, noting only that tariff-rate quotas (TRQs) would be increased for “limited quantities” of U.S. fishery products and “non-sensitive” agricultural goods such as soybean oil, planting seeds, grains, nuts and processed foods.

As a counterpart to these concessions, the EU appeared to carve out an exception to the 15% tariff. In her press statement after the talks in Scotland, von der Leyen claimed the agreement included zero-for-zero tariffs on a number of strategic products, including “certain agricultural products,” with the explicit intention of adding more over time. The White House, however, made no reference to such an exemption.

The EU-U.S. agreement that resulted in a unilateral 15% tariff on most EU exports has drawn reactions ranging from “very bad” to “it could be worse.”

Non-tariff barriers were also discussed. The White House mentioned the mutual goal of “streamlining requirements for sanitary certificates for U.S. pork and dairy products.” This has been a point of contention for decades, with Washington arguing that EU sanitary standards are overly restrictive. The EU echoed the commitment, but in more guarded terms, referring only to “cooperation” on the issue.

NEGOTIATION OUTCOMES.

The joint statement that followed on Aug. 21 revealed that the four weeks of negotiations didn’t exactly go as the EU expected.

What the EU initially described as modest increases in TRQs turned into a pledge of “preferential market access.” This means higher TRQs not only for the products already listed, but also for dairy, pork and bison meat. The existing zero-tariff arrangement on U.S. lobster was also renewed and extended to cover processed lobster. By contrast, beef and poultry, explicitly marked as sensitive by the EU, were absent from the final list, signaling that the EU held the line on those sectors.

The promise of zero-for-zero tariffs on “certain agricultural products” vanished from the final text, and the EU’s push to secure a tariff exemption for wine clearly fell flat.

On non-tariff barriers, the joint statement reproduced the U.S. wording verbatim. Yet how far the EU’s commitment to “streamlining requirements” will actually go remains uncertain. In a follow-up Q&A, the Commission stressed that “negotiating EU sanitary and phytosanitary rules or standards […] is a clear red line.”

However, as Varg Folkman, a policy analyst at the European Policy Centre, a Brussels think tank, noted, “Since this is very much a deal dictated by the U.S., and Washington is highlighting it, I would be very surprised if the EU had not made some compromise to facilitate imports of U.S. pork. Whether that will actually translate into higher pork exports to Europe is another matter, as the EU is largely self-sufficient in pork.”

WHAT DID THE EU GET?

Apart from averting a trade war, the EU did get something from the deal — for example, very low or zero tariffs for exports of aircraft and generic pharmaceuticals. Also, for automobiles and auto parts, the 15% tariff will be lower than the current 25%.

However, the joint statement makes it clear that U.S. tariff reductions will only take effect once the EU has “formally introduced the necessary legislative proposal” to expand access for U.S. food products. Folkman said, “For this deal to become law and be enforceable, it will have to be approved by the Commission, the European Council and probably also the European Parliament. So it’s still facing a lot of hurdles.”

The Commission has framed the 15% ceiling as providing predictability for EU–U.S. trade and argued that liberalizing certain food imports will benefit EU consumers and its processing industry. Still, the impression is that the EU had to pick its battles, and food was not one of them.

“Overall, it’s a political capitulation by the EU,” said Folkman. “A lot of commentators said that it’s probably the best worst deal they can get at the moment, which is bad in and of itself. Whether it’s going to harm most U.S. consumers or EU businesses is still too soon to tell, but in general, it’s a bad deal for everyone.”