Harry Geels: What we forget about the trade deal between the EU and the US

July 29, 2025

_{This column was originally written in Dutch. This is an English translation.}

By Harry Geels

The news about the recent trade deal between the EU and the US is largely framed as a victory for Donald Trump. But if you look deeper, you will see three important points that are almost completely overlooked in the current discussions.

Media attention is now mainly focused on the tariff rates: 15% import tariffs and additional EU investments in the American economy, such as in the defence industry. But behind these headlines lie deeper, structural questions. Is this just about the outcome, the 15%, or are there other important issues at play? Broadly speaking, there are three points that are hardly discussed: the background, the democratic process and the question of power in Europe itself.

1) Restoring the trade balance

Trump has been harping on about the enormous US trade deficit with Europe and Asia for years. It is tempting to dismiss this as economic nationalism, but he does have a point. A structural trade surplus on one side and a deficit on the other can disrupt the global financial system, lead to tensions on currency markets and, in the worst case, contribute to financial crises. I previously wrote a column arguing that Trump has four valid reasons for imposing tariffs.

In addition, prolonged imbalances have political side effects. Countries with large trade deficits feel economically dependent or abused, which fuels protectionism. Trump has been using this argument as a weapon in public opinion for years, striking a chord with American voters. The EU cannot simply ignore this. By giving in partially now and bringing the trade balance more into equilibrium, Europe may be able to avoid a prolonged trade war.

2) What about the democratic mandate?

Although the deal was negotiated by the European Commission, it still needs to be approved by the European Parliament (EP).

Yet there has been remarkably little debate about these negotiations. As is often the case with major trade agreements, the talks took place largely behind closed doors. National parliaments and even government leaders seem to have been consulted very little. The question is therefore how good the deal is. It seems that the UK has a better deal.

The criticism from our own outgoing prime minister – that he does not exactly agree with the deal – is telling. After all, he seems to be suggesting that he had no influence. If a trade deal of this magnitude has such direct consequences for businesses, consumers and investments, then a broad democratic debate should be the norm. Fortunately, this can still take place in the EP. Let's take a close look at how this debate unfolds this time around. It should be widely reported in the media.

3) An unprecedented centralisation of power within the EU

Perhaps this is the most overlooked point: this is possibly the largest negotiation ever in which the EU is acting on behalf of all Member States. Even the joint purchase of coronavirus vaccines – seen at the time as a precedent for European unity – pales in comparison. The EU is increasingly acting as a single bloc, not only in trade, but also in industrial policy and defence. The question is: do we want to go in this direction? Or are individual Member States gradually losing all their freedom of action?

In conclusion

It is easy to view this deal solely through the lens of “gain” or “loss” in relation to Trump. But there is more at stake here. It is about structural shifts in how the EU exercises power, how democratic processes work, how we deal with global economic imbalances and how these apparently (must) be resolved today.

The discussion about this agreement should therefore not only focus on tariffs, but also on who in Europe is at the table when such decisions are made and in whose interests, companies or consumers, action is taken.

This article contains the personal opinion of Harry Geels

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