The trade deal struck by U.S. President Donald Trump and European Commission President Ursula von der Leyen on Sunday at his Scottish golf resort was hugely one-sided.
The European Union faces the pain of 15 percent U.S. tariffs on most of its exports — and the bloc has had to make telephone-number-sized financial commitments both to import energy from the United States and to invest there.
However, from the powerful German auto industry to the European aviation and semiconductor sectors, there are some winners from the outline accord — which has yet to be finalized in writing.
POLITICO’s reporting team breaks down what we know so far.
Energy
What’s in the deal? As part of the agreement, Trump and von der Leyen agreed that the EU would purchase $750 billion of oil and liquefied natural gas from the U.S. — a figure that would also include other energy products such as nuclear fuel. That means $250 billion in new energy purchases each year, which the Commission chief said would also help end the EU’s remaining reliance on Russian imports.
Who wins, who loses? In theory, the deal is a huge win for U.S. oil and gas firms. In practice, experts say it’s unworkable. For starters, hitting that target would require the EU to triple its U.S. energy imports, based on last year’s figures, while asking American firms to divert all their energy flows worldwide toward the bloc — and then some. In comparison, Russia’s total energy sales to the EU totaled just €23 billion last year. Brussels also has limited tools to make that all happen: Imports are firmly in the hands of private firms.
By Victor Jack
Autos
What’s in the deal? U.S. tariffs on cars and auto parts are being reduced to the baseline 15 percent — a level that matches the deal notched earlier this month by Japanese automakers. In exchange, the EU has agreed to lower its car tariffs from 10 percent to zero, trade spokesperson Olof Gill said. The devil is in the details, however, which remain sparse. Under the U.S.-Japan deal, the Asian country will take vehicles approved to U.S. automotive standards. A senior Commission official said the EU deal includes “a commitment to work together … to see where standards are already aligned or where we need to work more closely to align them in the future.” As POLITICO scooped, the executive previously floated the idea of matching U.S. autonomous driving standards, which was mentioned in Monday’s technical briefing as a possibility.
Who wins, who loses? According to the German car lobby, this is a bad deal that will continue to burden the sector. It joined the American auto sector in decrying tariffs on cars and parts produced in Mexico, which remain at the higher 25 percent. The real loser is not the automakers, though, but their workers, according to Ferdinand Dudenhöffer, the director of Germany’s Center Automotive Research. He estimates that up to 70,000 jobs across European car companies and their suppliers could be lost as automakers move production to the U.S. to skirt the 15 percent tariff.
By Jordyn Dahl
Aviation
What’s in the deal? The EU-U.S. zero-for-zero tariffs deal on “all aircraft and component parts,” announced by von der Leyen, allows both plane makers and airlines to breathe a sigh of relief. The global supply chain that lies behind every aircraft makes this sector more vulnerable to trade barriers than others. Following the 17-year dispute between Airbus and Boeing that concluded in 2021, neither the European nor the American industries were interested in entering a new trade war involving aviation.
Who wins, who loses? Although Boeing may have benefited from tariffs on its competitor Airbus in the short term, analysts note that the U.S. aircraft manufacturer would suffer more under EU retaliation. Instead, some U.S. airlines operating an Airbus fleet, such as Delta Air Lines and Spirit Airlines, would have immediately felt the impact of tariffs on their European suppliers. Among the losers of the zero-for-zero tariff are leasing companies on both sides of the Atlantic, which — if tit-for-tat tariffs had been introduced — would have been the tool used by airlines to avoid the extra charges.
By Tommaso Lecca
Pharmaceuticals
What’s in the deal? Trump and von der Leyen flatly contradicted each other on Sunday, with the U.S. president saying the trade deal didn’t include pharmaceuticals — and the Commission chief saying it did. Commission officials clarified on Monday that the rate remains at zero for now. But Brussels is expecting a top tariff rate of 15 percent to take effect once the U.S. administration’s Section 232 investigation into the sector — under which tariffs can be imposed for reasons of national security — is complete. There are some exemptions for “certain generics,” von der Leyen said, although it’s not clear yet which.
Who wins, who loses? Generics companies — those that make the cheapest drugs of all — say they have the most to lose because of their small margins, even if the eventual tariff rate is significantly lower than the 200 percent Trump had threatened a few weeks ago. Industry association Medicines for Europe wants more clarity on which drugs would see zero tariffs applied, and is pushing the EU and the U.S. to “expand the tariff-free list of medicines as widely as possible.” Pharma company Merck said it welcomed the fact that a deal has at least been made, while in Ireland — which is particularly exposed because of its huge pharma sector — business association Ibec said Europe had “capitulated.”
By Mari Eccles
Technology
What’s in the deal? Sunday’s deal included chip equipment as one of the sectors that received a zero-for-zero tariff, meaning it’s exempt from the baseline 15 percent tariff. Von der Leyen underlined that the EU is and would remain a prominent buyer of American artificial intelligence chips. “U.S. AI chips will help power our AI gigafactories and help the U.S. to maintain their technological edge,” she said.
Who wins, who loses? The zero-for-zero tariff was widely seen as a win for Dutch chip printing machine maker ASML, one of Europe’s largest firms by market capitalization. The machines that ASML ships are worth hundreds of millions of euros apiece. ASML didn’t commit to growth this year in mid-July amid the tariff uncertainty, but its stock gained 4 percent on Monday. Von der Leyen’s commitment to buy U.S. AI chips is a setback, though, for proponents of a more technologically sovereign Europe — since continuing to buy them prolongs the bloc’s reliance on U.S. tech.
By Pieter Haeck
Digital Regulation
What’s in the deal? Nothing. The Commission called the Trump administration’s bluff on its attempt to bend the EU’s rules — and for the time being it has paid off. “There is absolutely no commitment on digital regulation, nor on digital taxes,” said a senior EU official, adding that the Commission’s defense of the bloc’s regulator autonomy hadn’t received enough attention.
Who wins, who loses? The EU’s digital rulebook — and in particular the Digital Markets Act and the Digital Services Act — has emerged unscathed. That wasn’t for a lack of pressure on the U.S. side, with Big Tech players like Meta and Apple becoming increasingly outspoken over the DMA. They are keeping up the pressure — the Computer & Communications Industry Association tech lobby group has just published a study that pegged the cost and lost revenues of the EU’s digital rules at $97.6 billion annually, including roughly $1 billion in DMA compliance costs alone.
By Jacob Parry
Defense
What’s in the deal? Trump touted the purchase of “vast amounts” of U.S. military equipment — but senior EU officials pushed back, stressing that arms procurement was not negotiated as part of the agreement. “Arms procurement is not a matter for the Commission,” one official said, adding it “was not calculated in any way into the figures we talked about.” In short: There is no formal commitment to buy U.S. weapons.
Who wins, who loses? The U.S. defense industry didn’t score a guaranteed win — but it may still benefit. EU officials acknowledged that Europe’s rising military budgets could favor American firms. “On the back of the NATO summit in The Hague, there is, of course, an understanding that our member states, with the Commission’s very active support, are increasing defense spending, and therefore that will directly or indirectly benefit the United States,” one official said. That dynamic could leave European defense firms uneasy as procurement decisions ramp up.
By Chris Lunday
Steel
What’s in the deal? Apparently, a return to quotas that sound pretty similar to the ones under the Biden administration. Above that, the 50 percent tariff would (most likely) remain in place. An EU official said on Monday that the level of the quotas themselves has not yet been negotiated. This will need more time than is available before Aug. 1. On top of that, the U.S. somewhat acknowledges that the EU is not the problem when it comes to global excess production of steel and aluminum. Brussels and Washington will discuss a “ring fence” to isolate themselves from that unfairly made steel from China, Indonesia, Egypt, Turkey and a host of others.
Who wins, who loses? If the European steel industry can — at least to some degree — keep sending specialized products to the U.S., it will prefer that over a blanket 50 percent tariff. The real loser here might be China, however. If the U.S and EU indeed manage to build a steel wall around their markets — which would be a big if considering the U.S. lack of emissions trading — the Chinese strategy might actually see some serious counterweight.
By Koen Verhelst
Food and drink
What’s in the deal? Certain agricultural products could enjoy a zero-to-zero tariff relationship with the U.S., von der Leyen told reporters, but the Commission president did not specify which goods these would be. The latest, from a senior Commission official, is that the EU will lower tariffs on what they consider “non-sensitive” agricultural goods from the United States, while “sensitive” agricultural imports will continue to face the current rates.
Who wins, who loses? It’s too early to say. Hints are that U.S. nuts, pet food and bison could face easier entry into EU markets as “non-sensitive” agricultural goods, while U.S. beef — considered “sensitive” — will continue to face tariffs. However, negotiators are still negotiating over zero-to-zero tariffs and determining the placement of key agri-food goods, including spirits and wine, within the overall deal agreed by the leaders.
By Lucia Mackenzie
Investment
What’s in the deal? A commitment by EU companies to invest an additional $600 billion in the U.S. Far from a major concession to Trump, the pledge appears to amount to little more than window dressing. “It’s largely performative,” said Nils Redeker from the Jacques Delors Centre think tank. Brussels, in fact, won’t have the power to deliver on this promise, as the investments would come exclusively from the private sector, two senior Commission officials said. One said the figure was “based on detailed discussions with different business associations and companies in order to see what their investment intentions are.”
Who wins, who loses? Extra investments from Europe are likely to boost the U.S. economy. However, it’s too early to say whether this additional funding will come at the expense of investments within Europe, which would dent EU growth.
By Gregorio Sorgi
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