Trump Pushes Ahead With Reshaping Global Trade
By Brett Rowland | The Center Square
(Worthy News) – President Donald Trump pushed ahead Monday with his plan to reshape the global economy to give U.S. companies an advantage during talks with the United Kingdom and China after reaching a deal with the European Union on Sunday.
Germany and France were openly critical of EU deal, which includes a 15% tariff on imports to the U.S. and pledges from the EU to buy $750 billion in U.S. energy and invest $600 billion in the U.S. by 2028.
French Prime Minister François Bayrou called it a “dark day” for the EU.
“It is a dark day when an alliance of free peoples, gathered to affirm their values and defend their interests, resolves to submit,” he wrote on X.
France’s deputy minister for European Affairs, Benjamin Haddad, called the pact “unbalanced.”
“But let’s be clear: the current state of affairs is unsatisfactory and cannot be sustainable,” he wrote on X. “The free trade that has brought shared prosperity to both sides of the Atlantic since the end of the Second World War is now being rejected by the United States, which has opted for economic coercion and complete disregard for WTO rules. This is a structural change. We must quickly draw the necessary conclusions or risk being wiped out.”
Trump’s deal with European Commission President Ursula von der Leyen will require the approval of all 27 members of the EU, including Germany, the largest economy in the bloc.
“It made it possible to prevent a trade conflict that could have severely impacted Germany’s export-oriented economy,” German Chancellor Friedrich Merz said.
He added: “Everyone benefits from stable and predictable trade relations with market access for both sides – on this side of the Atlantic and the other, for both businesses and consumers.”
Viktor Orban, the Hungarian leader, said that Trump “ate von der Leyen for breakfast.”
Simon Harris, deputy prime minister of Ireland, said it was a step forward.
“While Ireland regrets a baseline tariff of 15%, it is important that we now have more certainty on the foundations for the EU-U.S. trade relationship,” he said.
VDA President Hildegard Müller, who represents German’s automotive industry, said the baseline tariff will hurt the auto industry despite avoiding even higher tariffs.
“But one thing is also clear: the U.S. tariff of 15%, including for automotive products, will cost the German automotive industry billions annually and will burden them in the midst of the transformation,” Müller said.
He added: “It is of great importance that the automotive supply chains, which have been distorted and restricted by the tariff dispute, will work smoothly again. This makes it all the more necessary, among other things, to find a solution for the previously interconnected North America – the USA, Mexico, and Canada – within the framework of the USMCA agreement. This is particularly important for the supplier industry.”
The deal is likely to frustrate U.S. automakers, who are pushing Trump to lower tariffs on the North American industry, which is connected across the U.S.-Canada and U.S.-Mexico borders.
Detroit automakers previously questioned Trump’s trade deal with Japan and his deal with the UK. The group said it will give the U.S. ally a lower tariff rate than those imposed on Canada and Mexico, two neighboring countries with close connections to the U.S. auto industry.
The U.S. auto industry is highly integrated across North America, with vehicles crossing the border with a neighboring country multiple times before final assembly and sale in the U.S.
The American Automotive Policy Council, representing U.S. automakers, said it was still reviewing the trade pact, but it doesn’t like what it has seen.
“American Automakers still need to review the details of the U.S.-Japan agreement but any deal that charges a lower tariff for Japanese imports with virtually no U.S. content than the tariff imposed on North American built vehicles with high U.S. content is a bad deal for U.S. industry and U.S. auto workers,” said Governor Matt Blunt, president of the American Automotive Policy Council.
Blunt was similarly critical in May after Trump announced a trade deal with the United Kingdom. Under the terms of that deal, the first 100,000 vehicles imported from UK manufacturers each year will be subject to a 10% tariff. Any additional cars each year would be subject to the higher 25% rate.
Ford, GM and Stellantis could be at a disadvantage under terms of the United States-Mexico-Canada Agreement, a trade pact Trump signed during his first term.
“Under this deal, it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts,” Blunt said at the time. “This hurts American automakers, suppliers, and auto workers. We hope this preferential access for UK vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors.”
The American Automotive Policy Council represents Ford Motor Co., General Motors Co. and Stellantis.
The Center for Automotive Research issued a report in April showing that American automakers Ford, General Motors, and Stellantis could face increased costs of more than $42 billion because of the 25% tariff on foreign automakers and auto parts.
In March, Trump announced a 25% tariff on vehicles built outside the U.S. and a 25% tariff on imported auto parts.
Trump has been working to reorder global trade through tariffs to give U.S. companies an advantage at home.
Economists, businesses and some publicly traded companies have warned that tariffs could raise prices on a wide range of consumer products.
Trump has said he wants to use tariffs to restore manufacturing jobs lost to lower-wage countries in decades past, shift the tax burden away from U.S. families and pay down the national debt.