Mateusz Michnik & Eryk Ziędalski // 19 August 2025

The EU–US trade deal was reached under the shadow of Donald Trump’s sweeping tariffs and growing fears of a transatlantic trade war. While the deal safeguarded EU exporters from renewed US tariffs and provided short-term economic stability, it left the Union with only partial relief and exposed its limited negotiating leverage.

The briefing distinguishes between the economic and political outcomes of the agreement. Economically, the EU gained breathing space by avoiding punitive tariffs. Politically, it failed to secure full tariff removal and left broader US trade policy largely unchallenged. This highlights both the risks of asymmetry in transatlantic relations and the urgency of long-term structural reforms within the EU.

The main conclusions of the report are:

• Tariffs harm all sides, primarily consumers in the imposing country and secondarily exporters abroad, making them an inefficient policy tool.
• The agreement protected EU industry from billions in potential losses but conceded ground by accepting partial tariff removal.
• Its temporary nature leaves the EU vulnerable to future US trade policy shifts, underscoring the importance of structural resilience.
• Deeper Single Market integration, including the removal of remaining internal barriers, would strengthen competitiveness.
• Developing a Capital Markets Union could improve Europe’s investment capacity and global economic clout.
• Diversifying export markets through free trade agreements is crucial to reduce dependence on US policy swings.
• Revitalising the WTO and restoring rules-based trade would help stabilise global commerce and strengthen the EU’s role.

The briefing concludes that while the EU achieved an economic win under constraints, it was a political loss. To prevent future vulnerabilities, the Union must use this window to pursue ambitious reforms at both the internal and external level.