Our Best Stuff on the EU-U.S. Trade Deal

Hello and happy Saturday. With the European Union facing the prospect of 30 percent tariffs on exports to the United States, President Donald Trump and European Commission President Ursula von der Leyen announced last Sunday they had agreed to a framework for a trade deal.

On the surface, the deal appeared lopsided in favor of the United States. EU nations would face 15 percent tariffs on exports to the U.S., but exports from the U.S. to the EU would face none. And, as media reports noted, the EU pledged to purchase $750 billion in U.S. energy and invest $600 billion in the United States. Leaders of EU member nations groused publicly about the terms, while Trump called it the “biggest deal ever made.”

It appears the president might not have read the fine print. Or perhaps he has not studied the intricacies of EU politics. Luckily for The Dispatch, John Gustavsson has. He explained that a framework is not a deal, and that the path from the former to the latter is arduous and convoluted. And he argues that von der Leyen played Trump. 

The fastest trade agreement ever passed by the EU was the one it reached with the United Kingdom after Brexit, which took a mere 10 months. Durations of three to five years are more typical, even when the agreements are highly favorable for the EU.

What Ursula von der Leyen did was buy the EU time.

EU exporters can breathe a little easier, as their goods will be subject to 15 percent tariffs rather than 30 percent as negotiations continue. But what did Trump get out of it? As Jonah Goldberg noted in the Friday G-File, “What Trump got was a great headline.” 

Indeed, the currency of the Trump administration is the headline, the photo op, and the press release. It’s the condo-salesman approach to politics. In his first term, Trump announced a historic pact with North Korea on “denuclearization.” He got the handshake and the headline, but North Korea expanded its arsenal. … He proclaimed his replacement of NAFTA was a complete rewriting when it was a modest updating. He wanted Ukraine to say Joe Biden was under investigation for corrupt practices, and he’d do the rest. He made a similar demand of the Department of Justice after he lost the 2020 election, asking it to simply say they were investigating corrupt practices, and he’d do the rest. He’s very good at selling the sizzle as proof that there’s a steak.

One more note on the EU trade deal: Longtime readers know that our co-founder Steve Hayes is a big fan of Spanish wines. But I have it on good authority that he was not the editor who assigned Michael Warren’s piece on how U.S. wine producers feel about the tariffs. Spoiler alert: They’re not happy.

American wine distributors, retailers, and producers aren’t exactly popping their champagne (or California sparkling, as it were). That’s because this deal amounts to massive disruption in their relatively small but growing industry, both when it comes to importing European wine and exporting American wine.

Thank you for reading, and I hope you have a great weekend. Please note that there will be no Weekly next Saturday. We’re escaping the Ohio bureau for a little trip to the Smoky Mountains and I’m hoping the Wi-Fi isn’t working at our cabin. See you in two weeks!

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