The US-EU Trade Deal. Opportunity or Trap?

Privileged Discussions is now Global Trade Deciphered, a sharper reflection of our focus on global trade and business. Same expert insights, new name. Global Trade Deciphered is a Privileged Discussions Productions podcast. Thanks for listening!

Episode Description

Is the new US-EU trade deal an historic win or a dangerous pitfall? Join host Justin Hayden Miller,  global trade and international lawyer with 30 years' experience, as he dissects the high-stakes agreement unveiled by Presidents Trump and von der Leyen. 

From tariffs to massive energy and military deals, this episode uncovers the details and hidden risks. Listen now.

 Key Topics Covered

• Differing interpretations of the Trade Deal 
• Geopolitical Secrets: What’s behind EU Trade Commissioner Shekvovich’s cryptic hints about security and Ukraine?
• Criticisms of the deal by senior political figures
• How Europe can optimise and take advantage of the situation 
• Global Ripple Effects: and could Ireland face trade and political complications because the deal?
• Justin Hayden Miller’s take on what European governments and companies might do.

#TrumpTradeDeal #USTariffs #EUEconomy, Trade Policy 2025

Audio of the US / EU Press Conferences used for non monetised purposes, courtesy of:

© C-SPAN, 2025

© European Union, European Commission’s Audiovisual Service, 2025

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Chapters

• 0:00 US-EU Trade Deal Announcement
• 3:30 Breaking Down the Agreement Terms
• 4:41 Conflicting Interpretations and Uncertainties
• 12:15 European Reactions to the Deal & Wider Implications
• 16:14 Finding Opportunity in New Challenges
• 19:58 Closing Thoughts and Outro

Transcript

JustinHaydenMiller: 0:00

Just when you thought that tariff talk was getting boring, the President of the European Union, Ursula von der Leyen, caused a news and social media storm when she confirmed this week a US-EU trade agreement with President Trump. A necessary deal for the European Union, or the signing of its death warrant by slow economic suicide? In this episode, I give you my own take on this week's apparent US-EU trade deal. Welcome to Privacy. So I just want to congratulate you. I think it's...

PresidentDonaldTrump: 0:53

I think it's great that we made a deal today instead of playing games and maybe not making a deal at all. I think it's, I'm going to let you say, but I think it's the biggest deal ever made. Thank you very much.

JustinHaydenMiller: 1:04

That was President Trump this week speaking to the European President, Ursula von der Leyen, and in front of the world's press. The two largest economies in the world, the US and the EU, together representing nearly a third of the global economy, now have an apparent trade deal. But rather than me tell you what the trade deal is, let me give the floor to President von der Leyen herself to explain it to you.

PresidentUrsulaVonDerLeyen: 1:34

on a single 15% tariff rate for the vast majority of EU exports. This rate applies across most sectors, including cars, semiconductors, pharmaceuticals. This 15% is a clear ceiling, so no stacking, all inclusive. So it gives much needed clarity for our citizens and businesses, and this is absolutely crucial. Today, we have also agreed on a zero for zero tariffs on a number of strategic products. This includes all aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources and critical raw materials. And we will keep working to add more products to this list. On steel and aluminium, the European Union and the US face the common external challenge of global overcapacity. We will work together to ensure fair global competition and to reduce barriers between us. Tariffs will be cut and a quota system will be put in place. We will also increase our energy cooperation. Purchases of US energy products will diversify our sources of supply and contribute to Europe's energy security. We will replace Russian gas and oil by significant purchases of US LNG oil and nuclear fuels.

JustinHaydenMiller: 3:31

In brief This is what we know of the trade deal so far. The US will impose a 15% tariff on most EU goods, down from a threatened 30%. Specific goods such as aircraft, plane parts, certain chemicals and agricultural products face zero tariffs. For all this, the EU has agreed to cancel tariffs on US industrial goods, including cars. There's some uncertainty concerning steel and aluminium tariffs, tariffs, but the general view is that the EU will accept US tariffs of 50% with a potential for further negotiation to address global overcapacity, which can include quota system elements. Indications are that the EU will invest $600 billion into the United States and purchase $750 billion in US energy, oil, gas, nuclear and military equipment, by 2028. Now, it's only a couple of days since the announcement, but according to Euronews and other sources, there are differences of opinion already emanating, apparently, between the different negotiating teams. Reuters even published an article titled EU-US Strike Trade Deal to Avert Tariff War, but details remain murky. So it seems that cracks could already be appearing on what was agreed. The White House fact sheet, indicates that steel and aluminium tariffs will remain unchanged at 50%, but an unnamed EU official is quoted as having stated, The agreement includes a tariff quota for steel and aluminium, allowing EU imports within the agreed volumes to face significantly reduced tariffs, compared to the 50% rate claimed by the US. The White House implies that pharmaceuticals are subject to a 15% baseline tariff tariff with potential for higher tariffs, whereas the EU seems to be saying that pharmaceuticals are currently set at zero tariffs and they will not exceed 15%. I was advising somebody on this in fact a couple of days ago and had to caution the person on the pharmaceutical elements, which to me appear to be pretty uncertain. The European Commission apparently considers that the $600 billion in investments and the $750 billion in purchases are not binding commitments, but rather simply indications of intentions. But, you know, let's get to the bottom of this. Essentially, the EU goods were subject to 2.3% tariffs on average last year. It seems that many EU goods are now going to face tariffs of 15%. That's a six-fold increase. Let's just listen for one moment to Donald Trump's version of what he understood, with van der Leyen sitting right next to him.

PresidentDonaldTrump: 6:43

European Union is going to agree to purchase from the United States $750 billion worth of energy. $750 billion worth of energy. They are going to agree to invest into the United States $600 billion more than they're investing So they're investing a large amount of money. You know what that amount of money is. It's very substantial. But they're going to invest an additional $600 billion. They're agreeing to open up their countries to trade at zero tariff. So that's a very big factor. Opening up their countries. All of the countries will be opened up to trade with the United States at zero tariff. And they're agreeing to purchase a vast amount of military equipment.

JustinHaydenMiller: 7:50

In fact, as Donald Trump describes it, it seems like whitewash. The markets also somewhat considered that the deal was pretty favourable to the US because the US dollar immediately traded higher and the euro weakened. And if you're a social media junkie, you might have noticed that Donald Trump, in a post he made last year on Truth Social on 20 December 2024, wrote, I told the European Union that they must make up their tremendous deficit with the United States by the large-scale purchase of our Otherwise, it's tariffs all the way. So if Donald Trump said in December, buy large amounts of US oil and gas, or I will impose tariffs, written in block capitals, I have to add, why did the EU agree a few months later to buy large amounts of oil and gas and accept tariffs, not to talk about everything else they've given away? There must be something else, you're saying. And you're probably right. Because the EU Trade Commissioner, Mahos Shevkovich, said just after the announcement of the deal, it's not only about trade. It's about security. It's about Ukraine. It's about current geopolitical volatility. I can't go into the details, what everything was discussed yesterday, but I can assure you it was not only about the trade. I mean to have a possibility that the two biggest economies and two closest allies can openly discuss all sensitive issues. And as I can judge from the discussion yesterday, he said, they are very much aligned on the geopolitical issues of today. I cannot go into all details, he said, talking about apparent sensitive issues. The implication is at least that that there may be agreements on sensitive international security elements in the deal that cannot be stated in public. Another way of saying perhaps, listen, you don't know everything. I can't say because it's too sensitive, but if you know what I know, you'd think it was a great deal too. So my thoughts were and are that emotions are running high and we need to take a step back to properly analyse and consider all this. Don't forget that von from 2013 to 2019 was the German Minister of Defence. So she's not stupid, and she knows a thing or two, I imagine, about negotiating military and sensitive security issues. Trump threatened 30% tariffs against the EU, which he's argued would have devastated many European industries, with millions of layoffs of jobs. So the EU has has apparently broadly settled for 15%, with a number of exceptions. The question is really, is this really it? Is this the real deal? Only a few days before, the White House published a fact sheet. President Donald J. Trump secures unprecedented U.S.-Japan strategic trade and investment agreement, only to be refuted by the Financial Times in an article which stated that Japanese officials said that there was no written agreement with Washington and no legally binding one would be drawn up. Could EU officials wriggle out of this one then? In the speech that the European President von der Leyen gave, she said a number of things that made me consider that what is described as a deal is far from a final and comprehensive agreement. She said it is a building block and the EU will continue to work to add other zero-for-zero tariffs by both countries. Pharmaceutical aspects, she said, are on a different sheet of paper. Alcohol has not been fully agreed. She said the details need to be sorted out. French Prime Minister François Bayrou joined other European leaders expressing their disappointment. He stated on X, Laurent Saint-Martin, the current French Minister of Foreign Commerce and formerly in charge of Business France, stated, These increases in customs duties serve no one's interests. They'll dry up prices, penalise European companies, create inflation in the United States and lead to a slowdown and a recession for everyone. Which begs the question why the EU, of which France is a key member, accepted these terms then. aside from potential international security issues, as I've mentioned, surely because it considers that it would have been much worse had it not done so. And von der Leyen herself said it was the best we could get, which is reminiscent of a Gillette slogan. And if this ends up being a close shave, then I'll be happy. Don't forget either that it should be necessary for the EU to get a qualified majority of support for this from the member states to be able to sign the deal. That means getting a minimum of 55% of member states representing at least 65% of the population of the 27 member states. Easy, you say. Well, if Donald Trump had required 55% of the votes of Congress as opposed to only 50%, he would not have got that one big beautiful bill act through and passed. So, steady on, until the elements have legal force, have been enacted, and an implementation date set. But before I forget, let me just say that many commentators are analysing this agreement from a US-EU perspective, but the consequences go much wider than that. Success breeds success, and this and other trade deals where President Trump seemingly obtains a favourable outcome places the American president in an even stronger position for his negotiations with countries seeking trade deals with the US. And let's not forget the UK. Not because the US-EU trade deal was at Donald Trump's Turnberry golf course in Scotland, neutral territory now that the UK, since Brexit, is no longer part of the EU. Rather, the fact that the UK obtained a more favourable deal with general tariffs at 10% might not only create divisions concerning Europe, but care needs to be taken that issues do not arise on the island of Ireland, because businesses in Northern Ireland should be able to sell to the US with 10% tariffs, whereas goods sold from the Irish Republic, a member of the European Union, could face higher tariffs of 15%. Somebody I know very well once told me that I tend to often see the positives of most situations. That's not to say that I don't see the negatives to do something about it, but how does this apply to the US-EU trade deal? Dependence in relationships, as well as in professional ones, is most undesirable, if not really dangerous. It's no less the case for nation-states, if not more so. Relying too heavily on a particular market, the US can be considered as the equivalent of putting not all but too many eggs into a single basket. And as any fund manager will tell you, you have to diversify. The US has been for too long the equivalent of a safety net for the EU. So much so, I think that Europeans feel that they cannot walk the tightrope without it. Now it has to. Looking down is making it feel very dizzy. The question as well is whether this so-called deal can be considered as a wake-up call to the EU for it to get its act together. For example... Excessive, overly bureaucratic European red tape that the US has been complaining about since last year, and it's citing that as a reason for imposing tariffs. European companies, big and small, have been complaining about that for the last 20 years or more. And sorting it out would make European companies into more efficient profit-making entities, creating jobs and wealth, which could allow a greater proportion of them overtaking their competitors in the US and in other countries of the world. Richard Corbett in episode 8 spoke of the advantages of the European Union's clout, and it appears that it could have used it a little bit more. But in the end, where does this leave governments and companies and what should they do? The EU has a difficult job on its hands. It has to take a tougher stance, but most importantly, it has to resolve its economic structural issues to get the economy moving and to get growth quickly up. French growth figures were announced this week, 0.3% for Q2, and many people are modestly happy because it was 0.1% for the previous quarter. water. If tariffs are implemented in the manner that we anticipate, then this will represent a handicap for European businesses selling into the US market. The equivalent of a handicap putting extra weight on a horse. I'm from Liverpool, and the Liverpool Aintree Grand National Steeplechase horse race is widely regarded as one of the most important horse races in the world. It attracts 600 million spectators worldwide, And it's frequently cited as one of the largest betting events in horse racing. In my childhood, there was a legendary thoroughbred called Red Rum, which won the race three times. That horse carried 12 stone. Handicap, that's 168 pounds, a top weight. That is over 76 kilograms. And he still won. proving that he could win, even with very heavy burdens. It was not a coincidence. Knowing that he would carry a heavy handicap, he trained running up the sand dunes at Southport. It made him the fittest, leanest horse in the world, and a legend loved by a nation. Tariffs will raise the bar very significantly for Europe, but the extra weight that will force Europe to find efficiencies, I want it to be turned into an advantage and an opportunity, a trigger and a catalyst to create an economy as strong and as lean as red rum. And what should EU companies do? Well... There's no one fix for all solution. The issues are far too complicated and depend on the industry concerned, the company concerned, its supply chains, classifications, and a whole load of other factors. Nevertheless, for the reasons that I explained earlier and the fact that the precise terms of the agreement are not properly understood at present, not even it seems between the parties to the agreement, I'm inclined to consider that in many cases businesses should wait a little while for the dust to settle and to understand the actual terms before making any definitive decisions if they are able to. Nevertheless, I am advising business to prepare contingency plans, supposing first a likely scenario and secondly a worst case scenario, based on our current but limited understanding of the tariffs that will be imposed. And with that, I'll leave you with a final thought that the EU still has a role to play in properly putting to paper its agreement of the ultimate terms and needs to do a good job of it. Since, as the French newspaper Le Monde reported, Trump said just before the announcement of the deal at Turnberry, if we do a deal today with the European Union, that will be the end of it. will go, I guess, a number of years at least before we have to even discuss it again. If you're listening to this, then thank you for having listened to the podcast from beginning to end. If you like it, do subscribe so you don't miss any episodes and feel free to leave a rating. This will help others find it. You can find me on X at Justin Hayden followed by the letter M or send me an email at privilegeddiscussions at gmail.com And if I didn't mention a legal caveat, then I wouldn't be worth tuppence as a lawyer. So here goes. The content of this podcast Thank you very much. Stay tuned for the next episode.