by Malek Dudakov
[REGNUM] The US and the EU waited until the very last minute, but ultimately managed to conclude a trade agreement before the deadline set by Donald Trump. Moreover, both sides - both the Americans and the Europeans - immediately called it their big victory.
Joyful statements from representatives of the Euro-Atlantic elite immediately began to be heard, considering what was happening as a de facto declaration of a truce in the conflict between Trump and Brussels. However, if you read the terms of the concluded deal, the objective reality turns out to be somewhat more complicated.
The trade negotiations between the Trump team and the European bureaucracy in Brussels have been very long and difficult for many months.
At certain moments it seemed that no agreement would be reached. To some extent, these fears were confirmed. After all, the current deal is essentially a framework. It describes only the general conditions within which further discussions will take place.
There are still a lot of contradictions, and the parties have chosen to simply bypass them.
The White House considers the agreement a victory based on the formal terms of the deal.
Europeans are putting up with 15% tariffs on their goods that enter the US on a general basis. However, exceptions will be made for certain categories - for example, the auto industry will receive quotas for a certain number of cars that can be supplied bypassing tariffs. The same applies to the aviation industry - duties do not apply to aircraft and components.
At the same time, Brussels does not plan to introduce retaliatory symmetrical tariffs on American products such as cars or agricultural goods. However, their access to the European market is mainly limited not by duties, but by regulations such as restrictions on the sale of GMO products.
Here, Trump's team has failed to force the Europeans to change their approach in any meaningful way. Brussels has not given up on implementing the "Digital Services Act," which increases pressure on US IT giants.
In turn, the Europeans promised to invest 600 billion dollars at once in the American economy, as well as to purchase energy resources and weapons in the United States for a total of 750 billion.
The figures look fantastic, and they are. In the current crisis-ridden European economy, there are nowhere near the same funds that could be invested in the US. All the major European countries - Britain, France, Poland - are currently suffering from an acute budget crisis.
Europe's total expenditure on oil and liquefied gas from the US is estimated at 60-80 billion dollars annually. Increasing it tenfold is simply impossible. America cannot supply so much, and Europe does not need so much.
The situation is similar with the arms market.
Yes, no one is stopping contracts worth hundreds of billions of dollars from being placed in the US. But the Europeans want to develop their domestic military-industrial complex now. And the American military giants are already overloaded with orders from all over the world, which they are unable to fulfill due to logistical problems. The same queue for new F-35 fighters or Patriot systems reaches five years.
Therefore, the current promises of the Europeans look more like an attempt to depict mythical golden mountains in front of Trump. Moreover, no one in the European Union will be in a hurry to fulfill these obligations.
The Euro-bureaucracy followed the example of the representatives of Japan and the Persian Gulf monarchies, who also drew fantastic investment figures for Trump in the hundreds of billions and even trillions of dollars. Although Japan is currently in the midst of an acute budget crisis, the yen rate is devalued, and debt markets are in turmoil. And the Middle Eastern monarchies, although they earn well, will not be able to fulfill their promises to Trump.
Moreover, all parties call the concluded deals their victory.
Brussels is celebrating the possibility of avoiding a “nuclear scenario” with the collapse of transatlantic trade worth $1.7 trillion annually, which would have happened if tariffs of 30-50% had been introduced.
The current tariff level of 15% will also be unpleasant for European businesses, which will have to put up with reduced profits. But it will not be fatal for the EU. The impact of the deal on European economic growth may well end up being minimal.
There is only one risk - it is associated with a strong split within the European Union.
Immediately after the deal was concluded, European capitals began to crawl away from it. France and Germany publicly expressed skepticism in the context of additional purchases of goods from the United States. Paris itself is the main lobbyist for investing in the development of its own military-industrial complex. And no one in Europe will refuse to purchase gas from Norway for the sake of American LNG. It is unlikely that we will see a refusal to buy liquefied gas from Russia or Qatar, which Europeans also actively use.
This makes it difficult for the Euro-bureaucracy to even formally pretend that it can actually comply with Trump's conditions. And it will be harder for the US president to sell the deal to the American electorate as his great triumph.
Especially against the backdrop of other issues like the scandal surrounding the Jeffrey Epstein case or the renewed support for Ukraine, which has already caused a strong split in Trump's MAGA electorate.
The White House still has other levers of pressure on the European Union, outside the framework of trade agreements.
Take, for example, the intensification of negotiations on reducing the US military presence in the Old World. By the end of the summer, the Pentagon will issue a corresponding report, which will recommend redeploying some US troops from Europe to other areas. To some extent, this process is already beginning to happen.
In particular, the 101st and 82nd Airborne Divisions of the US Army, considered among the most elite, were withdrawn from Romania, where they had been conducting endless exercises, immediately after Trump's inauguration. Now American paratroopers have been transferred to the southern border of the US to fight migrants and drug cartels. There are also other priority areas - the Middle East and Asia.
Trump's team could well begin reducing the number of US troops in Europe to levels seen a decade ago as early as this fall. This would not mean a complete withdrawal of troops from the EU.
Key US bases like Ramstein in Germany and the naval hub in Sicily will continue to operate as usual. However, everything related to military logistics in Eastern Europe will be transferred to the control of other NATO countries.
Moreover, the decision to reduce the US presence in Europe may be made regardless of further progress within the Russian-American negotiating track.
Immediately after signing the deal with the European Union, Trump tried to cavalry charge to speed up the conclusion of an agreement in the context of Ukraine. Hence his threats to make a decision on introducing secondary tariffs on countries buying Russian oil as early as mid-August.
Trump's toughening rhetoric is also an attempt to put pressure on China and India, with whom the US is currently engaged in very difficult trade negotiations.
The American president is eager to secure meaningful deals with the world as quickly as possible, with fewer questions asked about the contentious terms of those agreements. But there is a risk that Beijing and New Delhi will not follow Brussels' example and help Trump save face.
Instead, they will follow the path of Brazil, which has already responded sharply to Trump's tariffs.
In the context of Trump's trade wars, we need to get used to the fact that he always tries to bluff in the negotiation process. This can and should be used. At the same time, the media image of his victory is much more important to him than its actual implementation in life.
Trump may well try to implement a similar scenario in the context of Ukraine. However, resolving this real conflict – as in the Middle East – will be much more difficult than “winning” virtual trade wars.