US President Donald Trump shakes hands with European Commission President Ursula von der Leyen after talks in Scotland last Sunday. (Reuters)
By agreeing to 15% tariffs on most exports to the United States, the European Union has capitulated to Trump’s zero-sum worldview. In doing so, it has abandoned the principles of multilateralism that have long guided global trade.
The economic consequences are immediate and severe. European exporters now face tariffs nearly ten times higher than the previous trade-weighted average of 1.6%. Volkswagen alone has reported a €1.3bn ($1.5bn) hit due to higher US tariffs.
But the tariff rate itself is just part of the problem. The real damage lies in what the EU agreed to pay for the “privilege” of maintaining access to the US market: a commitment to purchase $750bn worth of American energy over three years and to invest another $600bn in the US economy.
These staggering sums will inevitably divert resources from European development and innovation while legitimising bilateral coercion over the multilateral, rules-based World Trade Organisation system. As critics have rightly pointed out, this massive outflow comes directly at the expense of domestic investment.
What makes the EU’s surrender especially troubling is how unnecessary it was. As America’s largest economic partner, with nearly $1tn in annual trade, the EU has considerable leverage. While the US runs a $235.6bn goods deficit with the EU, the bloc’s €148bn services deficit with the US offered clear avenues for retaliation, from digital taxes to restrictions on American tech giants.
Weeks earlier, anticipating a stalemate, European policymakers had prepared counter-tariffs targeting €93bn worth of American goods. But the EU had far more potent weapons at its disposal. Its Anti-Coercion Instrument, for example, could have barred US companies from government contracts, revoked intellectual-property rights, and imposed broader trade restrictions. Yet national leaders, fearing Trump’s retaliation and under pressure from domestic industries eager to maintain access to the US market, refused to authorise Von der Leyen to use any of these tools, forcing her to negotiate from a position of weakness.
The contrast with other US trading partners could not be starker. When the United Kingdom secured a 10% tariff rate from Trump in May, European leaders expressed concern about accepting similar terms. Now, they hail 15% tariffs on EU exports as a diplomatic breakthrough. The uncomfortable truth is that Britain, acting alone, negotiated better terms than the EU as a whole.
This failure exposes the fundamental weakness of European governance. Lacking a true EU-wide governance system, the bloc remains incapable of translating competing national agendas into a unified position. With Von der Leyen hamstrung by member states prioritising narrow domestic interests over European cohesion, the result was a deal that pleases no one but Trump and locks Europe into a state of structured dependency.
The EU’s failure to push back against Trump is especially troubling given its stated goal of achieving strategic autonomy. Some may argue that the deal – technically not a formal trade agreement but rather a set of statements outlining an ongoing negotiation process – buys time. By appeasing Trump, the argument goes, the Commission has maintained transatlantic ties while creating space for future carve-outs.
But if this were truly a time-buying strategy, we would expect the EU to take concrete steps to advance strategic autonomy: boosting defence spending, accelerating supply-chain diversification, and investing in retaliatory capabilities. Instead, after years of pledging to reduce reliance on foreign powers, EU leaders chose to replace Russian energy imports with American supplies and commit to massive purchases of US military equipment.
Europe’s subordination both reflects and reinforces the continent’s dependence on US power. For decades, European countries have failed to meet Nato’s defence-spending targets, content to shelter under the US nuclear umbrella. Now, the same deference is playing out on the economic front, as the EU proves unable to marshal its collective weight in the face of Trump’s pressure tactics. This military and economic dependency has created a structural imbalance that extends across defence, trade, and energy, leaving Europe in a state of permanent vassalisation.
Trump’s ability to extract sweeping economic concessions and defence-spending commitments shows how effectively the US can weaponise Europe’s security anxieties to pursue broader geopolitical objectives. The $600bn investment pledge, much of it earmarked for military-equipment purchases, forces Europe to subsidise American defence contractors while undermining its own industrial base.
By giving in to Trump’s demands, the EU missed a rare opportunity to demonstrate that large markets cannot be bullied. Instead of setting a powerful precedent for other regions confronting US economic pressure, it has validated Trump’s transactional approach, emboldening not only future American administrations but also other global powers eager to turn trade into an instrument of geopolitical coercion.
While the immediate crisis may have passed, the long-term damage to EU credibility and autonomy will be long-lasting. The widespread perception that Europe surrenders without resistance will undoubtedly invite further challenges to European interests.
Rather than attempting to shift the blame to Von der Leyen, EU member states must ask themselves whether avoiding a trade war was worth abandoning Europe’s foundational commitment to multilateralism and forfeiting any credible path toward strategic autonomy. Until European leaders find the courage to break the cycle of dependency by empowering EU institutions to act decisively against external coercion, these humiliating capitulations will only multiply, reducing the continent to a prosperous yet powerless appendage of the American empire. — Project Syndicate
KEY POINTS
• EU capitulation: The EU accepted 15% US tariffs (up from 1.6%) while pledging $750bn in energy purchases and $600bn in US investments, signalling economic and political surrender.
• Strategic failure: Despite holding leverage, EU leaders sidelined stronger countermeasures and negotiated from weakness, unlike the UK which secured better terms alone.
• Structural dependency: The deal deepens Europe’s reliance on the US in trade, energy, and defence, undermining its credibility and goal of strategic autonomy.
Alberto Alemanno, Professor of European Union Law at HEC Paris and visiting professor at the College of Europe in Bruges and Natolin, is Founder of The Good Lobby and the author of Lobbying for Change: Find Your Voice to Create a Better Society.
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