Ecaterina MAȚOI
Introducere
The two major markets and trade blocks on the shores of the Atlantic had been negotiating to reach a now defunct Transatlantic Trade and Investment Partnership (TTIP) for more than a decade, as a potential alternative to an effective Transatlantic Free Trade Area, the latter being a rather idealistic vision on international cooperation.
In the post-FTA (Free Trade Agreements) and post-WTO (World Trade Organization) era, US-led bilateral agreements have become a common American tool for trade realignment, insofar these will prevail as cooperation model.
According to official reports, the agreement refers to EUR 1.6 trillion goods and services bilaterally traded as of 2024, while EUR 5.3 trillion in bilateral investment as of 2022 is mentioned. The European Commission lists among key commitments a flat 15 % tariff ceiling in the US on most EU goods, special treatment for strategic products (aircraft parts, certain chemicals, drugs, and natural resources, joint protection of steel, aluminum and copper sectors, a liberalization of certain trade sectors (like US fishery, soya bean oil, planting seeds, grains or nuts, ketchup, cocoa and biscuits, reducing non-tariff barriers, increased cooperation on economic security, increasing reliable access to critical energy, and promotion of mutual investment.1,2
While the European report emphasized that the agreement is not legally binding, the White House insists that the deal allows farmers, ranchers, fishermen and manufacturers to increase exports and the US to reduce the trade deficit with the EU. Furthermore, the EU reportedly committed to address “unjustified” digital trade barriers and to purchase “significant” quantities of U.S. military equipment.
Observers from the U.S. and elsewhere hinted that the increase in trade volumes, at least those of energy would be “unrealistic”3 or “a Potemkin illusion”4, while other reports equate the report as a European “capitulation”5. Even after filtering out the propaganda aspects of selling the political agreements to home audiences, clear opportunities were added by the American side to increase exports to the European Union, and the Artificial Intelligence chips sales to Europe confirm the relative strategic aspect of owning and utilizing, in comparison to developing and commercializing them at premium prices.
The shift in Trans-Atlantic Trade
The other relative aspect of this tectonic shift in trans-Atlantic trade is EU’s trade surplus with the US, amid rising extra-EU exports in 2024, amounting to EUR 2.864 trillion6, whereas the US exported in the same year $ 2.084 trillion7, significantly less when considering the exchange rates.
Although not all EU countries have a positive trade balance, Europe generally exported more than the US and maintained a slightly positive trade balance whereas US trade balance is overall negative. However, the trade deal is not necessarily addressing the trade balance, but historic attempts to penetrate EU’s food market with products like genetically modified soybeans, that are deemed safe by health agencies based on increasingly complex definitions, and assumptions related to food and health choices anchored in custom definitions, or strengthened with pesticides or other substances that are deemed safe also according to complex rules8.
There are only two arguments that suggest the deal might have been necessary for Europe as well: short-term strong shocks are not beneficial for a potentially less flexible economic structure like the European one, and secondly, the fact that the actual implementation might transform the deal itself at least 50 %. Otherwise, very few third-party observers attempt to present the deal as beneficial for Europe as well, and the exchange rate variation from 1 EUR = 1.175 USD 0n 28.07.2025 to 1 EUR = 1.14 USD on 31.07.2025 is a clear outcome of the deal.
With this deal, Europe is becoming more American than before, while the U.S. is committing co-build Europe’s future with the soya beans that were originally destined to Asia or other partners, shale gas and oil at relatively high prices and besides innovative products like software and AI chips, with an old-fashioned energy and industrial base.
Towards a new tariffs-based world?
The renewed American approach to international trade is relying on the assumption that Washington can unilaterally impose its will in global affairs, as it did in the period 1991 – 2001. However, in doing this, the scattered international community that was still resembling to a cooperation organization in last two decades is willingly or unwillingly transformed into a battleground that aims to treat the very large U.S. political and economic footprint, with potential overcapacity in hydrocarbon production and trade, as well as military equipment production, with relatively simple but tough measures taken against competitors and allies alike9.
Challenging the assumption that the new tariffs-based world order entails more components. First and first most, the question whether the path selected is a reiteration of American 20th century, power, and historically, slightly upgraded approaches to new global challenges have hardly defined history when compared to progress and innovation. Secondly, US trade imbalance is entangled with many other power instruments, like debt market and military guarantees, among others. While insisting on current account may represent a solution, there are many other solutions that a financial superpower can utilize in order to re-balance global economic relations, a classical one being inflation.
The bilateral agreements can be equated to a new order, but from a rule-of-law perspective at international level, that although not perfect probably averted potential conflicts after 1948, the non-WTO developments can also be perceived as lawlessness and a legalization of protectionism in the name national-level considerations, like national security or preservation of domination.
Even if presumably achievable, the U.S. dominance over world affairs may prevail but the world is inevitably changing. Consequently, the costs of enforcing a global order in the absence of mechanisms like a functional United Nations Security Council (UNSC) or WTO may rise exponentially, irrespective if spent for economic or military mercenary activity, or other coercion tools.
The impact of the EU-US trade deal
With or without European substantial contributions to Washington’s economic efficiency, it would be for the latter to structurally improve its economic model and competitiveness in order to remain relevant in the 21s century. The overall stability of global trade may be affected by both potentially deceptive deals and overspending for achieving goals considered strategic in conflictual situations, rather than transparent and relatively fair competition.
Arguments for and against relying on and investing in the U.S. are being generated simultaneously. For accountants, it is relatively easy to demonstrate that investment returns in certain US economic or industrial sectors and select the periods and indexes that support the arguments. Likewise, European politicians are able to plausibly demonstrate that the Old Continent may be overdependent on American industries, energy, and ideology.
The Sustainable Development Goals and a fast transition to renewable energy were not simple idealistic endeavors, but a real plan that contributed among others, to Germany’s decision to close its nuclear power plants. As one of the main engines of European economy, consequential for many countries, Germany faced a downfall after shrinking its energy choices when closing nuclear energy facilities, another one when the US was attempting to compete China in electric vehicles while trying to convince Germany to maintain its internal combustion engine automotive industry, especially if Europe was to remain dependent on American oil and gas, another one during the COVID pandemic and European lockdowns, and another one with Nord Stream Pipeline sabotage. President Trump’s recent statements that Europe’s windmills are neither esthetical nor useful10, are just a testament to the now-clear trend to limit Europe’s energy flexibility as much as possible.
It is probably not the trade deal that significantly impacts on EU’s capacity to thrive on long term. Neither the COVID crisis, nor Nord Stream breakdown, the failed attempt to become a leader in renewables, or the image problems due to seizing foreign funds, taken separately. But when combined, and added to the inability become a leader in any future domination sectors, Europe’s tendency to solve foreign-imposed problems and paradigms rather than creating them may become a symptom difficult to tackle.
In pursuing the EU-US trade deal, Europe ensures a short-term relative stability, that is indeed necessary for such a large construct. But losing structural competitive edges at lower speed, failing to impose a fair taxing system for digital economy and helping therefore to channel vast amounts of capital on obscure islands that it allegedly fights, in a bid to enrich already wealthy oligarchic circles, instead of developing competitive and self-reinforcing systems by design, Europe risks to become less rather than more relevant in global affairs.
Conclusions
In agreeing to enter a renewed oil- and gas-based industrial development, Europe risks having its exports subjected to scrutiny and objectively taxed, due to excessive pollution if economies like China or South-East Asia push a transformation at the 21st century speed, in a relatively peaceful and responsible manner.
Europe contributes to strengthening America in terms of economy for a potential war that it can hardly win with oil and gas exports alone. Likewise, investing in obsolete defense concepts that rely on Patriot systems and F-35s, can lead to economic default considering that countries like China and the Russian Federation are both nuclear powers, and Israel had to interrupt hostilities after 12 days of defending a very small territory with a missile cost of $ 2 billion.
Hence, the only question in the aftermath of US-EU deal is what else can Europe do to become truly competitive in a diverging and potentially less stable 21st century, besides addressing challenges in a balanced manner?
În ultima mea analiză pentru Financial Intelligence despre acordul comercial UE-SUA! Explorez dacă acest parteneriat aduce stabilitate pe termen scurt sau ascunde riscuri de declin pe termen lung pentru Europa. Ideea centrală: echilibrul fragil dintre beneficiile imediate și provocările strategice pe care le implică acest acord. Citește mai mult: [Link către articol] #Economie #UE #SUA #Comerț #Analiză #FinancialIntelligence
- https://ec.europa.eu/commission/presscorner/detail/en/qanda_25_1930 31.07.2025. ↩︎
- https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-the-united-states-and-european-union-reach-massive-trade-deal/ 31.07.2025. ↩︎
- https://www.reuters.com/sustainability/boards-policy-regulation/eus-250-billion-per-year-spending-us-energy-is-unrealistic-2025-07-28/ 31.07.2025. ↩︎
- https://asiatimes.com/2025/07/us-eu-trade-pact-like-japans-a-potemkin-illusion/ 01.08.2025. ↩︎
- https://asiatimes.com/2025/07/the-cost-of-europes-great-capitulation-to-trump/ 01.08.2025. ↩︎
- https://ec.europa.eu/eurostat/web/products-euro-indicators/w/6-17022025-ap#:~:text=In%202024%2C%20extra%2DEU%20exports%20of%20goods%20rose,2024%2C%20down%20by%202.2%25%20compared%20with%202023. 01.08.2025. ↩︎
- https://www.bea.gov/news/2025/us-international-trade-goods-and-services-december-and-annual-2024 01.08.2025. ↩︎
- https://www.nongmoproject.org/blog/the-gmo-high-risk-list-soybeans/ 01.08.2025. ↩︎
- https://www.eia.gov/todayinenergy/detail.php?id=61545#:~:text=The%20United%20States%20produced%20more,over%20the%20past%20five%20decades. 01.08.2025. ↩︎
- https://www.theguardian.com/environment/2025/jul/28/are-trump-claims-about-wind-power-correct 01.08.2025. ↩︎
Image credit: Zulfugar Karimov, via Unsplash.
About the author: Ecaterina MAȚOI is the President and the executive director of SDGAi