Second-guessing Donald Trump is a fool’s errand.
But Saturday’s shock threat to impose tariffs of 30% on the EU is a blow to the bloc’s confidence, which had already secretly capitulated during negotiations with diplomats revealing they had to sacrifice trade for the wider prize of security and defence of the continent.
It is worth pausing to consider what happened in the last three weeks in the EU. Up to the middle of June, Brussels had brandished its economic power in negotiations with €1.4bn (£1.2bn) at stake for one of the US’s most important trading partners.
Officials and diplomats were openly critical of the position Keir Starmer had taken in the UK, saying they would never sign up to a deal as thin as that involving just cars, beef, plane parts and ethanol. One questioned whether Westminster’s deal was even “legally implementable”. Another vowed: “We will never do a deal like Starmer.”
Another characterised the deal they wanted to land as “somewhere between rollover UK and retaliatory China”.
“If the EU doesn’t stand up to Trump or demand the rigours of rules, the question will be: what is left of the international rules-based system?” one diplomat told the Guardian, speaking of the risk to employment rights, free speech, social welfare and public care.
The tough talk even extended to threats of tax on services including X, Google and Microsoft alongside trade war stables such as cars and alcohol.
But by last week, the position had changed. The EU was going for a bare bones deal just like the UK, hoping for relief from the 27.5% tax on car exports, the 50% import duties on steel in exchange for a 10% tariff for most imports. The deal was put on Trump’s table and since Wednesday the EU has waited.
Why the change? One word: Russia. As one diplomat conceded last week the Nato summit in mid-June had some hard truths – the EU could take five to 10 years to build up aircraft, missiles and intelligence capacity in the air and on the ground to defend itself from a military attack.
Some protested at the obsequiousness shown towards the US president with the Nato chief even referring to him as “Daddy”, but as one diplomat said last week: “We got what we wanted – Trump is continuing to supply weapons for Ukraine.”
Another said the EU could never have continued to hardball like Japan. “It doesn’t depend on the US for defence.”
When asked about the negotiation pivot, one diplomat in Brussels said on Thursday: “This has been extremely tough. I think it is difficult to look at these negotiations in isolation. They affect the whole spectrum of EU-US relations, including security and the defence of Ukraine.
“There is also a short-term perspective and a long-term perspective. And in an institution [EU] like this, we are negotiating to find the balance between the pain you inflict on yourself in the short term and the pain you might inflict for the long term.”
Diplomats conceded the deal they had hoped for was already a big concession. But the tables have been turned again, this time by Trump. A 30% tariff will almost certainly trigger a trade war, even a 15% tariff will be difficult to “eat” (the now widely used term for absorbing tariffs).
Trade ministers meet in Brussels on Monday, just hours before midnight when the current pause on their own retaliatory tariffs against the US expires.
There will almost certainly be calls from France and others to change tack back to hardballing.
