The EU–US Deal Is ‘About Ukraine’

It has been days now since the European Commission announced that it has reached a trade deal with the US. The precise details and how exactly the Commission will try to enforce some of its promises to the United States nevertheless remain unclear. Albeit the President of the European Commission emphasized that the deal was ‘hard-fought’, Europe will have to pay 15 per cent tariffs on most of its consumer and industrial goods exports to the US. While this figure is lower than the 30 per cent tariffs Donald Trump threatened to impose on European goods, it is significantly higher than the average 4.8 per cent that European exports faced before January this year. On top of paying 15 per cent tariffs on exported goods, the EU also promised to import up to 750 billion USD worth of energy from the United States and invest 600 billion USD in the US economy. In addition, the EU also waived reciprocal tariffs.

Critics of the deal highlighted that—although some ridiculed the UK in May for agreeing to 10 per cent tariffs with Washington—the post-Brexit United Kingdom managed to strike a more favourable deal with the US administration than the economically more powerful 27-member European Union.

The European Commission’s energy purchase and investment-related promises soon turned out to be dubious. The promised investment would come from private companies, which the European Commission does not have the power to instruct; therefore, in fact, these promises cannot be enforced; they can only be incentivized. Neither the EU’s ability to deliver on these promises nor the cost of these so-called ‘incentives’ is known as of now, which, all things considered, might make this deal even more unfavourable than it seems at the moment.

‘The European Commission’s energy purchase and investment-related promises soon turned out to be dubious’

Hardly surprising that not every European leader was satisfied with the agreement. Trump ‘ate von der Leyen for breakfast,’ Hungarian Prime Minister Viktor Orbán stated. ‘It is a dark day when’ Europe resigns itself to submission,’ French Prime Minister Francois Bayrou opined. German Chancellor Friedrich Merz was also critical of the deal, which hits European carmakers with a 15 per cent tariff (higher than the 10 per cent tariffs US carmakers had to pay on EU exports at the beginning of the Brussels–Washington trade negotiations) and argued that a ‘further easing of transatlantic trade’ would have been desirable. Even Spanish socialist Prime Minister Pedro Sanchez showed only limited support for the deal: ‘I support this trade agreement, but I do so without any enthusiasm.’ Given the wide disillusionment with the deal negotiated by the European Commission, Hungarian Foreign Minister Péter Szijjártó argued that it is ‘another sign that Brussels needs new leadership.’

Earlier this year ,when Brussels did not have a place at the negotiating table with Russia and the US about trying to settle the conflict in Ukraine, proponents of the EU’s leadership defended Ursula von der Leyen, saying that foreign policy is not a strength of the EU due to internal disputes between Member States—but in trade negotiations the EU will show strength, as this is its specialty. Six months on, the arguments defending the EU’s current leaders’ capabilities now seem hollow—the EU could not even assert its strength in trade negotiations with the US.

‘The MFF and the EU–US deal demonstrate that the current European Commission is not serving the interests of Member States’

The issue is not only that the deal favours the United States. EU trade chief Maroš Šefčovič defended the agreement as the ‘best deal we could get under very difficult circumstances’ while adding that ‘it’s not only about…trade: It’s about security, it is about Ukraine.’ Šefčovič’s comments suggest that Brussels urged the deal to ensure Washington’s continued support for Kyiv. According to Euractive, ‘Šefčovič…hinted that the deal was an “additional price” to pay for getting Washington to be “aligned” with Brussels “on the geopolitical issues of today.”’

Brussels’s eagerness to reach a deal simply to secure support for Kyiv highlights the Commission’s main flaw: it prioritizes a country that is not even an EU Member State at the expense of the economic and financial interests of Member States. If the EU–US deal is truly ‘about Ukraine’, then it seems to repeat the same mistake as the EU’s next Multiannual Financial Framework (MFF). Nearly 20 per cent of the €2 trillion MFF is expected to go to Ukraine—see the Hungarian Conservative for more. Both the MFF and the EU–US deal demonstrate that the current European Commission is not serving the interests of Member States but of a country that is not even a member of the Union. This not only harms the interests of Member States but also violates the mandate of the European Commission.

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