An impending trade war with the USA Avoid European Union this week (EU), but markets and a growing number of critics have a collapse of expectations initial hopes that the trade agreement will restore the sense of stability to transatlantic relations.
After the trade agreement of the EU – US, the euro fell the largest dollar over two months, falling by more than 1% on Monday (28.7.25). This happened after the rise of the common currency to nearly three years high last week, due to the prospects of an agreement with the US, according to Bloomberg.
On the weekend, the EU has agreed to accept a 15% duty for most of its exports, while the average tax rate on US products should be reduced below 1% as soon as the agreement entered into force. Brussels also said they would buy US energy products worth $ 750 billion and invest $ 600 billion in the US.
“The principles of free trade that have supported the prosperity of the two sides of the Atlantic since the end of World War II are systematically abolished. The risk of Europe’s marginalization at the economic and political level is increasing with every concession made, “Karin Karlsbro, a Swedish member of the European Parliament Committee, said in a statement.
German Chancellor Friedrich Mertz, who initially welcomed the agreement as “successful” in avoiding trade war and protecting EU interests, appeared to have changed his mind about the agreement.
French Prime Minister Francois Bairou was also critical, citing social media: “It is a black day when a alliance of free peoples united to confirm their values and defend their interests, chooses submission.”
The EU and the US will seek to reach a non -legally binding joint statement by August 1st, which will extend some of the figures negotiated over the weekend, according to a senior EU official. As soon as the USA will be finalized, the US will be finalized by the US. They are subject to a tax of 27.5%.
The two sides will then begin working for a legally binding text, said the official, who spoke on the condition of anonymity. The content and legal form of this document is not clear, but will require the support of at least the special majority of EU countries and, possibly, the European Parliament.
The EU official said that consensus on the legal text could take a long time, as many trade agreements require years of negotiations. The EU will not begin to implement the terms it has agreed – such as the reduction of tariffs on US products – except after approval of this legal text, according to the official.
“The deal eliminates some risks of fall, but it is incomplete in details that should be discussed in detail in the coming weeks, with the risk of causing new instability. Uncertainty is likely to remain high, “Oxford Economics’ chief economist on Germany said in a note.
The EU is the largest US import source
European Commission President Ursula von der Laien said that the US has agreed to bilaterally reduce duties to zero for certain strategic products, such as aircraft and components, some generic medicines, semiconductor equipment and some agricultural products.
One possible point of disagreement in the negotiations will be EU metal exports, which are currently subject to a 50%duty rate. The EU is pushing for imposition of quotas on metals, which will reduce duties in a certain volume of goods, while anything exceeding this limit will apply the rate of 50%, according to the EU official.
“There is still uncertainty about all the details of the European steel industry,” said Axel Egeret, general manager of the European Steel Union.
EU ambassadors will meet on Tuesday to discuss the trade situation.
According to the EU official, discussions are continuing whether some products, such as wine and alcoholic beverages, will be excluded from the 15%duty rate.
Another possible issue is the EU’s promise to buy US energy imports worth $ 750 billion over three years, an integral part of securing the agreement. However, it is difficult to imagine how the EU will achieve such ambitious goals in such a short time.
Total US energy imports amounted to less than $ 80 billion last year, well below the promise of von der Laien to Trump. Total US energy exports were just over $ 330 billion in 2024.
The EU’s commitment to invest an additional $ 600 billion in the US is equally problematic. Investment is merely a set of commitments from companies and not a binding objective, as the European Commission cannot commit to such a goal, the EU official said.
The uncertainty from the trade war has influenced EU financial forecasts, with the Commission reducing its expectations for GDP growth to 1.1%in May. In November, it had a 1.5%forecast.
Despite the reviews, the Commission, which handles EU commercial issues, insists that this was the only possible course of action.
“This is clearly the best agreement we could achieve under very difficult circumstances,” said Maros Sefkovich, EU trade leader, to reporters on Monday.