When news first broke on Sunday that the United States and the European Union had agreed a new trade deal, all we had to go on were the broad assurances of President Trump and Ursula von der Leyen, President of the European Commission, that it was a historic triumph for both sides.
‘The greatest deal ever made,’ claimed Trump, with characteristic understatement.
Then we saw the details. And it was indeed a great deal – for America. For the EU, the self-styled greatest trading bloc in the world, it was more like a humiliation. By lunchtime yesterday that grim truth had also dawned on several European leaders.
French prime minister Francois Bayrou said it was a ‘dark day’ for Europe and accused von der Leyen of indulging in an act of ‘submission’. His trade minister stated defiantly: ‘This matter is not settled.’
Meanwhile, prime minister Viktor Orban of Hungary, never one to moderate his language, accused von der Leyen of being a ‘featherweight’ who had been ‘eaten for breakfast’ by Trump.
And Guy Verhofstadt, the Belgian Euro-federalist blabbermouth, who took such joy in Britain’s humiliation during the Brexit talks with the EU, described the deal as a ‘disaster’ in which the American side had ‘not made one concession’.
One distinguished European commentator even claimed the EU had been forced into making an act of ‘imperial tribute’ to Washington DC.
So I think we can take it that many European leaders are not happy with ‘the greatest deal ever made’. You could see the Eurocrats who’d negotiated the trade agreement sensed that when they posed for a photograph to mark its signing.
Ursula Von der Leyen reacts during a joint press briefing with Trump following their meeting in Turnberry, Scotland. According to Neil, ‘it’s easy to see why her job is now hanging by a thread when you dig into the details’ of the trade deal between the US and EU
Trump and his US team were beaming from ear to ear, their thumbs up. Von der Leyen and her folks had rictus grins on their faces, almost looking as though they’d been taken hostage.
As European anger mounts, it’s not just the agreement that’s in danger of unravelling. So is von der Leyen’s career. It’s easy to see why her job is now hanging by a thread when you dig into the details.
The deal allows the US to slap 15 per cent tariffs on most EU goods exported to the US. That’s certainly less than the 30 per cent Trump once threatened. But a lot more than the average of 5 per cent tariffs on EU exports at the start of the year, before Trump returned to the Oval Office. More importantly, most American exports to the EU will face zero tariffs.
That’s right. Fifteen per cent on those goods heading west across the Atlantic, nothing on those coming the other way. It’s not exactly quid pro quo. Moreover, though the details remain unclear, it’s likely EU steel, aluminium and pharmaceuticals could face much more than 15 per cent tariffs.
The humiliation does not end there. The EU also agreed to spend $600billion (£450billion) in America, including on the purchase of US military equipment, for no other reason than it pleases Trump.
There’s worse. The EU also promised to import over the next three years $750billion-worth of US liquefied natural gas (LNG). Thus did Brussels, the great proponent of all things Net Zero, abase itself before The Donald by agreeing to purchase massive quantities of US fossil fuel.
No wonder he’s smiling. At huge expense, the EU encouraged a European-wide rundown of the continent’s fossil fuel industries because of its messianic belief that renewables were the future. Now it’s committed to importing vast quantities of fossil fuel from America – at even greater expense.
Of course, there’s a lot of smoke and mirrors in all this. The European Commission has no power to buy military equipment nor instruct EU member states how to do so.
‘Though Starmer is prepared to exploit Brexit when it’s to our advantage, his heart lies in ever closer ties with the EU,’ writes Andrew Neil. Pictured: Donald Trump and Sir Keir Starmer boarding Air Force One
Nor does it import energy or dictate to member states what energy they should import. But Brussels has signed up to all this and Trump will be assiduous in checking if it delivers.
The trade deal was especially galling for Brussels because it’s not as good as the one Britain managed to strike with Trump, in which the base tariff for exports to the US is only 10 per cent. This has upset the Euro elite no end. After all, Britain was widely predicted to lose out in all manner of areas when it lost the collective clout of the EU, which suddenly doesn’t look all it’s cracked up to be.
Even Jonathan Reynolds, the anti-Brexit Business Secretary in an anti-Brexit government led by an anti-Brexit Prime Minister, admitted yesterday he was in ‘no doubt’ Brexit had allowed the UK to strike a better deal. Wonders never cease.
Some European leaders are at a loss to work out why von der Leyen didn’t negotiate harder. But what did she have to negotiate with? The EU runs a massive $220billion trade surplus with America.
Last year more than 20 per cent of its global exports went to the US. It had most to lose if the talks had turned sour and Trump had levied penal tariffs. The EU is stagnating. A trade war with America would likely have tilted it into a recession.
It makes you wonder why British politicians didn’t play similar hardball during the Brexit talks. After all, 14 per cent of EU exports go to Britain – not as much as goes to America but a massive chunk nevertheless. And, of course, we run a huge trade deficit with the EU.
So the EU had a lot to lose in the Brexit talks just as it had a lot to lose in the current talks with Trump. Yet at no stage did a British prime minister ever try to leverage that fact in anything like the plain-speaking manner Trump has just employed.
Instead the Brexit negotiations got off to a terrible start with the hapless, feeble Theresa May and never really recovered. From then on we seemed reconciled to punishment-beating and made no attempt to assert our strengths. It was the signal failure of the British political establishment in modern times, from which Brexit has suffered ever since.
By the time our negotiators discovered their bottle (after Boris Johnson won the 2019 General Election by a landslide) it was too late. The deal was effectively done, the punishment beating complete.
Trump said at the time that our negotiating tactics had been pathetic. But we ignored him. There are times when it is right to disparage Trump. Plenty of times. But there are also times when it’s wise to emulate him. This was one of them. We failed, to our lasting loss.
This won’t change under Keir Starmer. He flew to Scotland yesterday to see Trump, for, truth be told, there are still a lot of loose ends to be tied up in the UK’s trade deal with America, which is always the way with Trump.
We are still seeking clarity on long-term US tariffs on British steel, aluminium and pharmaceuticals, just like the Europeans.
Moreover, though Starmer is prepared to exploit Brexit when it’s to our advantage, his heart lies in ever closer ties with the EU.
There was a time when Britain prospered mightily for being enmeshed with the EU. But that was a long while ago.
Why Starmer is still so desperate to tether us once again to a trading bloc in relentless economic decline – one that can’t even negotiate a decent trade deal with America – is just one of the many mysteries of his floundering premiership.
