I’m increasingly convinced that Donald Trump will be remembered as the most impactful deal-making president, not just in U.S. history, but in the world. His strategy of applying pressure and being willing to walk away to get his desired outcome is something I haven’t witnessed before in politics. Even European Union President Ursula Von Der Leyen has acknowledged Trump’s tough negotiating style and deal-making prowess.
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I know praising Trump can be controversial, but his business acumen and ability to get things done are undeniable. Whether you agree with his policies or not, world and business leaders should study and potentially emulate his unique approach to deal-making. There’s a lot to learn from how he operates.
After months of anticipation, the US and EU finally struck a deal. The initial deadline was August 1st, with the EU facing the threat of 30% tariffs on all exports to the United States. While they managed to avoid that 30% tariff bomb, their exports to the US will still be hit with 15% tariffs, particularly for automobiles. Additionally, the 50% tariffs on steel and aluminum remain in place.
This deal highlights Trump’s negotiation tactics. He created a high-pressure situation with the threat of massive tariffs, forcing the EU to the table. While a complete trade war was averted, the EU still had to make significant concessions. This raises the question: Is this a win for the US, or a sign that Trump’s methods are effective in reshaping global trade?
The previous trade arrangement was largely one-sided, with the EU maintaining a significant surplus with the US, while often restricting American exports. This new deal, however, demonstrates Trump’s willingness to push for a fairer trade balance, rebalancing trade between two of the world’s largest economies.
Under this new agreement, the EU is opening its markets to American exports, including agriculture and automobiles. This is undoubtedly good news for American farmers and car manufacturers, who will now have greater access to European consumers. The deal signals a potential shift towards more equitable trade relationships, where both sides have the opportunity to benefit. It remains to be seen how these changes will play out in the long term, but the initial signs suggest a more level playing field.
In 2024, total trade in goods between the EU and US was estimated at a staggering $975.9 billion. Together, these economic powerhouses account for almost a third of global trade in goods and services. Last year, the US imported approximately $606 billion in goods from the EU while exporting around $370 billion. This significant imbalance is what Trump has aimed to address with this new deal.
If implemented effectively, this agreement has the potential to substantially reduce the trade imbalance. By opening EU markets to more American exports, the US could see a boost in its export revenues, bringing the trade relationship closer to equilibrium. The success of this deal hinges on both sides adhering to the terms and ensuring that the promised market access becomes a reality. The coming months will be crucial in determining whether this deal truly delivers on its promise of a fairer trade balance.
For Ursula, the EU president, there’s a sense of relief. The threat of a major 30% tariff looming just days away on August 1st has been averted. Trump’s reputation as a tough negotiator and dealmaker is once again underscored by this agreement. His approach, while often unconventional, has proven effective in bringing the EU to the negotiating table and securing concessions.
However, not all issues have been resolved. Decisions regarding spirits have yet to be made, and we’re still awaiting details on how this sector will be included in the framework agreement. The absence of a clear resolution on spirits leaves some uncertainty in the overall picture, highlighting that while progress has been made, further negotiations will be necessary to address all outstanding concerns.
As part of the agreement, the EU has committed to investing billions of dollars into the US and purchasing energy from American sources. This influx of investment and increased energy exports will provide a significant boost to the US economy, creating jobs and stimulating growth. It’s a clear win for the US, showcasing the tangible benefits of Trump’s negotiating tactics.
The EU, and indeed the world, has never witnessed a president quite like Trump. His aggressive approach and relentless pursuit of his goals have disrupted traditional diplomatic norms, but have also yielded significant results. Whether one agrees with his methods or not, it’s undeniable that Trump’s toughness and determination have left an indelible mark on international trade relations.
A key aspect of this new deal is the EU’s commitment to relying on American liquefied natural gas (LNG), effectively replacing Russian oil and gas. In my view, this is a strategic masterstroke to counter Russia and put them in a precarious position. By reducing their dependence on Russian energy, the EU gains significant leverage to confront Russia more forcefully.
With America now stepping in to fill the energy void, European nations have greater freedom to pursue stronger actions against Russia. This shift in energy reliance not only strengthens the transatlantic alliance but also reshapes the geopolitical landscape, limiting Russia’s ability to use energy as a weapon. The implications of this move are far-reaching, setting the stage for a more assertive stance against Russian aggression and influence.
In summary, this new trade agreement appears to be a win-win scenario for both the US and the EU. The EU avoids the imposition of massive 30% tariffs on their exports to the US, safeguarding their economic stability and competitiveness. Simultaneously, the US gains increased access to the EU market for its agricultural products and automotive exports, boosting American industries and creating new opportunities for growth.
This mutually beneficial outcome underscores the potential for strategic trade agreements to foster economic cooperation and strengthen alliances. By addressing key concerns and opening up new avenues for trade, both the US and the EU stand to gain significantly from this deal. It represents a step forward in transatlantic relations, demonstrating the power of negotiation and compromise in achieving shared economic goals.
