Why the EU Agreed to a Disadvantageous Deal with Trump?

The EU’s draft trade “framework” with the United States reportedly sets a 15% tariff on most EU exports to the U.S. while keeping U.S. exports to Europe at 0%, alongside $750bn in compulsory EU purchases of U.S. energy, €600bn-plus in EU investment commitments in America, and expanded orders for U.S.-made defense equipment.

Critics across Europe have branded the package lopsided; one of the sharpest assessments came from former EU foreign-policy adviser Zaki Laïdi, who called the outcome “an unmitigated disaster.”

Why did Brussels accept terms so adverse to its near-term economic interests, and could it have bargained for more? Multiple accounts of the talks, as well as subsequent commentary by former officials and trade watchers, help explain both the EU’s decision and its options.

Project Syndicate, the Financial Times, Reuters, and trade-industry briefings reported these headline terms and the political backlash that followed.

The Leverage Map

Tariffs as coercion + timeline pressure

Washington paired the “offer” with active or threatened tariff escalations that would have hit core EU sectors (autos, machinery, agro-food) during a cyclical slowdown. The White House also pressed for rapid signature, reducing the EU’s ability to coordinate internally or line up partners for countermeasures. Analysts say this front-loaded leverage shaped the EU’s cost-benefit.

Security links to Ukraine

European leaders weighed trade pain against perceived risks that a breakdown with Washington could undermine U.S. security commitments to Europe and Ukraine. Former U.S. Ambassador to the EU Anthony Gardner argued the EU overestimated this risk and undervalued its leverage but acknowledged the political fear driving the choice, the FT wrote.

Energy policies

The package hard-wires massive U.S. energy purchases. Supporters pitched this as price stability and diversification; critics note market realities make fixed-value purchase pledges difficult to implement without distortion or cost overruns. Trade press and policy reporters flagged feasibility concerns immediately after the announcement.

Did the EU Leave Cards on the Table?

Laïdi and other critics argue Europe had real leverage and chose not to use it:

• Targeted retaliation & coalition-building. Coordinated counter-tariffs calibrated to swing-state goods, combined with joint positioning with Japan and Canada, could have raised Washington’s political cost. Several experts urged this path in advance.
• Deploy the Anti-Coercion Instrument (ACI). The EU’s new ACI was designed to respond when a third country uses economic pressure to force policy change. While not a silver bullet, activating the ACI could have signaled resolve, opened EU-wide countermeasures, and improved bargaining power, analysts claim.
• Activate the energy feasibility card. Brussels might have traded down the headline $750bn purchase pledge in exchange for time-bound, market-indexed offtake formulas with escape clauses—avoiding a future scramble if LNG and refined-product prices or shipping capacity shift. Early coverage highlighted this vulnerability.
• Exploit reciprocal dependence. Roughly a fifth of U.S. imports originate in Europe, and U.S. manufacturing relies heavily on EU capital goods and intermediate inputs. A measured, rules-based EU response aimed at those chokepoints could have strengthened its hand. This issue is a central point of Laïdi’s criticism.

What the US Achieved?

From Washington’s perspective, the framework locks in three wins:

1. Tariff asymmetry protects U.S. exporters while taxing EU suppliers.
2. The framework supports U.S. producers and domestic tariff-revenue politics by boosting energy volumes.
3. Defense orders align with a wider movement towards “on-shore” European security investments.

At the same time, the administration has been wielding tariffs as strategic pressure in other theaters—e.g., warning China of 100%+ duties tied to Russian oil purchases—signaling a broader doctrine of coercive economics that Europe must now plan around.

The Cost of the Deal: Beyond Headline Tariffs

• Industrial competitiveness. A 15% U.S. border tax on EU goods compresses margins and may re-route investment to the U.S.—especially in autos, chemicals, and machinery. Over the next three years, mandatory energy purchases could increase European input costs compared to those of Asian competitors.
• Precedent risk. Accepting asymmetric terms may invite future demands—on digital taxes, health regulation, or agriculture—if Washington reads Brussels’ stance as driven by fear of security.
• Internal EU politics. The deal complicates cohesion between member states differently exposed to U.S. tariffs and energy-purchase burdens, potentially fragmenting a unified trade line.

What Can the EU Still Do?

1) Hardwire reviews & escape clauses. Insist on frequent joint reviews, “snap-back” provisions tied to market conditions for energy, and sunset clauses on tariff asymmetries.

2) Activate the ACI—at least as a deterrent. Even signaling preparatory steps under the Anti-Coercion Instrument raises Europe’s option value in the next round, experts said.

3) Offset at home. Deploy temporary, WTO-compliant support (e.g., green CAPEX credits, accelerated depreciation, export-credit enhancements) to cushion hit sectors and anchor investment in the EU single market. Policy think tanks have specifically recommended these actions as a response to coercive tariffs.

4) Build coalitions. Coordinate with Japan, Canada, and the UK to develop common defensive tools and aligned red lines for the subsequent negotiation, ensuring a united front for the next request.

Can the EU rebalance the agreement?

Europe’s leaders opted for short-term stability over a protracted tariff war, betting that security assurances and political calm were worth high economic costs. The criticism—that the EU underused its leverage and set a dangerous precedent—is serious and well-sourced.

But the story isn’t over: with smart implementation, targeted offsets, and credible deterrence tools like the ACI, the EU can still rebalance the agreement with the US over time.