FX.co ★ US trade deal unfavorable for Europe, but leaders reluctantly accept terms

European leaders are exercising extreme caution, wary of openly contradicting US President Donald Trump. Ursula von der Leyen, President of the European Commission, is convinced that a trade war with America would result in chaos for Europe, something that must not be allowed to happen. For this reason, the EU has had to accept an unfavorable trade agreement with Washington.

In her view, a trade confrontation with the United States, especially as ties between Russia and China become stronger, is detrimental for Europe. Nevertheless, von der Leyen believes there are some positives in the current situation.

Speaking at a session of the European Parliament in her annual report on the state of the Union, von der Leyen noted that as part of the trade agreement, tariffs were reduced to 15%. In exchange, eurozone countries pledged to purchase a wide range of US goods and invest in the American economy.

"Think of the repercussions of a full-fledged trade war with the US. Picture the chaos. And then put that image next to the one from China just last week. China is flanked by the leaders of Russia and North Korea. Putin gloating about how Russia-China relations are at an unprecedented high," the Commission President emphasized.

It is worth noting that a trade deal between the European Union and the United States was reached at the end of July. In return for lowering import duties to 15%, European leaders agreed to buy $750 billion worth of energy resources from Washington, import American weapons, and invest $600 billion in the US economy. However, this has offered little relief, as the 50% US tariffs on European steel and aluminum remain in force.