Donald Trump has assessed the likelihood of a deal between the United States and the European Union- two of the globe’s largest economies- as ” one hundred percent. ” In a conversation with Italian Prime Minister Giorgia Meloni, he stated, “Oh, there’ll be a trade deal, 100%. They want to make one very, very much, and we’re going to make a trade deal; I fully expect it. But it’ll be a fair deal.”
The requirement for an agreement has been a top priority for both, though for dissimilar reasons. For the EU, a solution to escape the agonizing agony of the 20% tariff that Trump made public last week, and then suspended. For the US, a method of soothing the markets, assuring nervous investors and scoring a PR success.
The White House has tailored the 90-day deferment as a make-or-break window of opportunity for other nations to embark on a pilgrimage to Washington DC, request an audience with the American president and discover a compromise. Whether or not that compromise shall be mutually or unilaterally advantageous remains to be made clear.
Meloni’s trip, the first by an EU leader since the filing of so-called “reciprocal tariffs”, was another instalment in this whirlwind of diplomatic activity. Yesterday, Trump received a trade delegation from Japan.
“Everyone’s on my priority list,” Trump stated. The Italian premier, who has used her hard-right background to brand herself as a trans-Atlantic bridge-builder, joined the mood in the room with one of hope and invited the president for an official visit to Italy.
“I’m certain we can reach an agreement, and I’m here to assist on that,” she said to the press.
Meloni then issued a pointed clarification that inadvertently or otherwise revealed the limits of her authority. “I cannot negotiate in the name of the European Union,” she said.
Italy, being an EU member, belongs to a huge single market and customs union of 26 other countries. The same taxes, quotas, preferences, and sanctions are charged over the common border, and thus the bloc is one entity to commercial partners.
Practically, what this entails is that Germany cannot introduce a 10% import tariff on a Chevrolet SUV and Italy introduce a half rate tariff on the same product. It further entails that Germany cannot conclude an agreement with Japan to eliminate taxes on each other’s automobiles, while Italy concludes the same with the US. All 27 member states are subject to the same rules and the same bargains.
The only authority to determine how high and how low tariffs rise is the European Commission, granted sole competence to regulate the bloc’s commercial and customs policy by the
founding treaties.
This clause immediately limits the number of individuals Trump can call to negotiate and finalize the trade agreement he desires to one name: Ursula von der Leyen. And yet, he has not spoken or met with the Commission president since his return to the White House.
There is a clash of narratives going on
Trump’s antipathy towards the EU is well known. The Republican has time and again condemned the bloc as a monopolistic entity that, in his opinion, was created to “screw” with the US and will not buy American products. His insistence that he loves European nations, as individual countries, only serves to highlight his distaste for the EU as a political and economic integration project.
“You think of the European Union (as) very nice. They take advantage of us. It’s so pathetic to see. It’s so sad,” Trump said when he announced his tariffs. Brussels officials have attempted to dispel this myth by referring to the wider picture: while the EU traditionally has a surplus of goods with the US, valued at €156.6 billion in 2023, it has a large deficit of services, valued at €108.6 billion. This is a more balanced relationship than one portrayed by Washington to justify its retaliatory tariffs.
Despite the billions on the line, both sides have seen little or no progress to prevent what is on the brink of becoming an all-out, devastation-causing trade war. The lack of communication between Trump and von der Leyen has become increasingly prominent and alarming by the day.
