Bosnia issues international arrest warrant for Serb leader Dodik
Dodik, who for years has led a campaign chipping away at the Balkan country's weak central institutions, denounced the warrant as an "abuse of the justice system for political ends" while on a visit to Israel.
A similar arrest warrant was issued for the speaker of the Serb entity Republika Srpska's (RS) assembly, Nenad Stevandic, who returned to Bosnia and Herzegovina on March 18 after a visit to Serbia.
Since the end of the 1992-1995 war, Bosnia has been split into two semi-autonomous halves -- the Republika Srpska and a Muslim-Croat federation. Both have their own governments and parliaments and share weak central institutions.
The prosecutor's office said warrants were issued for Dodik and Stevandic for "using their high-ranking positions in the Republika Srpska entity" to go abroad "while evading legally prescribed border control procedures".
After travelling to Israel on Tuesday to attend an international conference on combating anti-Semitism attended by European far-right figures, Dodik said he was "relaxed" about the warrant.
"Nothing surprising. The abuse of the justice system for political ends continues," he said from Jerusalem on Wednesday, alleging that the purpose of the warrant was "to isolate me".
Without giving details on his coming schedule, Dodik hinted that he had "some very important activities" planned in the coming days.
The RS leader, who is an ally of the Kremlin, had postponed a trip to Moscow last week.
"We will do all that and return to the RS in a calm manner next week," Dodik said.
- 'Grounds for action' -
Dodik has threatened to secede the Serb entity from Bosnia and barred central police and judicial officials from working there -- an order that was suspended by the constitutional court.
Dodik, Stevandic and RS Prime Minister Radovan Viskovic are accused of attacking the constitutional order, and an arrest warrant was issued within Bosnia and Herzegovina.
Dodik and Stevandic then defied this by travelling abroad.
"All of this suggests that both individuals could be abroad at any given moment, which provides grounds for action," the State Court said in a statement, adding that it had issued an international arrest order and the matter was now in Interpol's hands.
Stevandic was seen in the Serbian capital Belgrade on March 15.
Tensions have soared in Bosnia since Dodik was sentenced last month to a year in prison and handed a six-year ban from public office for defying Christian Schmidt, the international envoy charged with overseeing the peace deal that ended Bosnia's inter-ethnic war in the 1990s.
Bosnia's divided politics and fragile post-war institutions have faced increasing uncertainty amid the unfolding political crisis.
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The Hill
12 minutes ago
- The Hill
Trump leans into trade deals to shake off polling slump
Morning Report is The Hill's a.m. newsletter. Subscribe here or using the box below: In today's issue: ▪ Trump, Starmer meeting in Scotland ▪ Digging into the US-EU trade deal ▪ Courts hand Trump more wins ▪ Israel pauses Gaza fighting for aid Fresh off announcing a U.S.-European Union trade deal, President Trump is looking to clinch more bilaterial agreements this week before his Friday tariff deadline. The president on Sunday touted the EU trade deal, struck during talks with European officials after a round of golf at one of his clubs in Scotland, and urged the Senate to confirm more nominees before starting their August recess. Trump will play host again today, meeting with British Prime Minister Keir Starmer at his golf clubs in Scotland for talks ranging from their recent bilateral trade deal to the worsening hunger crisis in Gaza. Follow along with The Hill's live blog. But the protesters who have gathered across Scotland for Trump's visit — including outside the U.S. Consulate in Edinburgh — offer a preview of the headwinds the president faces back home. POLLING NUMBERS: Trump saw some of his lowest approval ratings of his second term over the past week, with his net approval in the Decision Desk HQ average falling to more than 9 points underwater. As part of the drop, he's seen declines in particular among independents and on his handling of certain key issues like immigration. Lee Miringoff, the director of the Marist University Institute for Public Opinion, told The Hill's Jared Gans that Trump's quickly shifting political fortunes are part of his skill at 'keeping the focus moving all the time,' which requires redirecting people's attention to his benefit. 'But you do take a cost that your victories are short-lived, and the net effect is there's still an awful lot that people feel has not been accomplished and that he hasn't fulfilled a lot of campaign promises,' he added. At the same time, Trump is trying to ease an ongoing headache stemming from the controversy surrounding his administration's handling of the Jeffrey Epstein case. While his numbers certainly haven't bottomed out, they add up to a rough patch for Trump after a series of major victories just a few weeks earlier. The president has expressed his frustration with how aides are handling the backlash, The Washington Post reports, as the White House and Department of Justice's response to the crisis lacks any apparent strategy. 'This is a pretty substantial distraction,' a source told the Post. 'While many are trying to keep the unity, in many ways, the DOJ and the FBI are breaking at the seams.' ▪ The Hill: Five unanswered questions around Trump and the Epstein saga. ▪ CNN: Trump's Scotland trip is the latest example of blending private business with presidential duties. ▪ Politico: Speaker Mike Johnson (R-La.) panned a discharge petition from Reps. Thomas Massie (R-Ky.) and Ro Khanna (D-Calif.) designed to force the release of more files on Epstein. DEMOCRATS ARE TAKING ADVANTAGE of the widespread disapproval of the White House's handling of the Epstein case. A recent Emerson College Polling survey found 51 percent of registered voters disapprove of the administration's handling of the Epstein files, while 16 percent approve and a third said they're neutral. Trump's refusal to release federal files put him at odds with the same core MAGA loyalists who helped propel him to power. Democrats are only happy to watch the unraveling, however long it endures, and goad it along when the chance arrives. 'Let them destroy each other. If we have to throw a log on the fire, we'll do it,' one House Democratic aide told The Hill's Mike Lillis. House Democrats are using their long summer recess to ramp up their blitz of town halls in GOP-held districts. The strategy is not new, but this time they're armed with a powerful new talking point: Trump's defiance on the Epstein issue. 'People … want someone to listen,' said Rep. Suzan DelBene (Wash.), the head of the Democratic Congressional Campaign Committee. 'And if their member of Congress isn't going to listen, they want to make sure their voices are heard.' Republicans are also going on offense. Vice President Vance will be at a steel plant in Canton, Ohio, today to kick off an effort to promote the 'one big, beautiful bill' that the White House pushed through Congress this month. ▪ The Wall Street Journal: A Wall Street Journal poll found 52 percent of respondents oppose the GOP funding bill, showing the party's challenges in touting its benefits ahead of the midterms. IT'S ALL ABOUT 2026: The polling numbers and town halls all lead to the next big political target — the midterm elections. Democrats are looking to claw back a majority in one, or both, chambers of Congress, while Republicans are trying to buck the historical trend of a midterm disadvantage for the party in charge. This election cycle, Trump is using his influence to help Republicans avoid messy primary fights. The president recently waded into Michigan's Senate race and the New York gubernatorial contest in an effort to convince notable potential candidates in those races — Reps. Bill Huizenga (R-Mich.) and Mike Lawler (R-N.Y.) — to opt against running. In both cases, the Republicans in question bowed to pressure. The Hill's Julia Manchester and Brett Samuels break down Trump's influence on key races, from North Carolina to Texas. Former North Carolina Gov. Roy Cooper (D) hinted over the weekend that he plans to run for the open Senate seat in his state next year. Many Democrats have been hoping Cooper would enter the race, especially as Sen. Thom Tillis (R-N.C.) announced he would not run for reelection after bucking Trump and voting against his massive tax and spending bill. The announcement is buoying Democrats, who face a tough map in the upper chamber. Despite the president's souring approval numbers in recent surveys, allies argued the president's endorsement is still a make-or-break factor in primaries because of his enduring popularity within the party. 'His numbers are stronger than ever before with the Republican base,' one Trump ally said. 'Republican voters are happier with him now than ever before.' ▪ The Hill: Rep. Nancy Mace (R-S.C.) said Sunday she plans to decide in the coming days whether to launch a bid for South Carolina governor. ▪ The Hill: Civic groups are warning Democrats their plans for redistricting could violate the Voting Rights Act, creating a new problem for the party as it seeks to answer GOP efforts to redistrict its way to more power. Editor's note: Blake Burman's 'Smart Take' will return later this week. 3 Things to Know Today At this Texas school, students spend two hours a day on academics. The Alpha School has a curriculum driven by artificial intelligence (AI), and is set to expand to a dozen cities. Fights to expand or thwart the spread of abortion pills have intensified across the country. They tee up legal clashes that experts say could drag on for years. Blockbuster GLP-1 drugs could become a cure-all. The medications don't just help with weight loss, research finds, as more uses surface. Leading the Day TRADE: Trump reached a trade agreement with the European Union on Sunday that will set 15 percent tariffs on most imports — half the rate the president had threatened to levy on EU countries starting Friday. 'It's a very powerful deal — a very big deal,' Trump told reporters while sitting next to European Commission chief Ursula von der Leyen at his Turnberry golf course in Scotland. 'It's the biggest of all the deals.' The EU trade deal is the largest the Trump administration has announced since its major 'Liberation Day' announcement on April 2. The EU countries combined represent the U.S.'s largest trading partner, with almost $2 trillion in goods traded in 2024. Under the new agreement, Trump and von der Leyen said the EU will purchase $150 billion in U.S. energy and make additional investments worth $600 billion. Trump had threatened to impose 30 percent tariffs on most goods if a deal wasn't reached beyond a temporary truce set to expire Friday. The new agreement will have no impact on steel and aluminum tariffs, which are subject to a separate 50 percent rate. ▪ The Hill: The White House has managed to secure some significant trade deals since the president's unprecedented sweeping tariffs were first announced in the spring. ▪ The Associated Press: As with other, recent tariff agreements that Trump announced with countries including Japan and the United Kingdom, some major details remain pending. ▪ The Washington Post: The EU agreement is likely to become a road map for further, more detailed talks. ▪ Politico: How the EU dashed to Trump's Scottish hideaway — and got the deal it craved. ▪ The Washington Post: The U.S. and China on Monday are set to begin their third round of trade talks in as many months. DEADLINE DAY: Trump will not extend Friday's deadline for countries that want to negotiate trade deals to prevent the president's proposed hikes, Commerce Secretary Howard Lutnick said Sunday. Since January, Trump has regularly threatened trade moves before later changing tacks. It's effectively kept the world guessing. Critics have dubbed this 'TACO' trade, short for 'Trump always chickens out.' The Commerce chief signaled the threat of tariffs will stick this time. 'No extensions; no more grace periods,' Lutnick said Sunday on Fox News. 'They'll go into place, customs will start collecting the money, and off we go.' CONGRESS: Time is ticking for Republican senators who hope to avert a government shutdown this fall, and The Hill's Alexander Bolton reports that it's pushing some to try to reach common ground with Democrats and mend growing rifts. 'I know that our side won't want a shutdown,' a Republican senator told The Hill, 'Trump hates that and rightly so.' Senate appropriations bills, unlike in the GOP-controlled House, have reached bipartisan votes on higher spending levels to avoid rematches of the blistering battles that Congress had over Trump's priority tax and spending legislation during his first six months back at the White House. Republicans who spoke with The Hill said Trump made it clear he doesn't want the federal government to lapse its Sept. 30 funding deadline. 'I think [Democrats are] going to be under an enormous amount of pressure come fall, which is why … we need to do everything we can — House Republicans, Senate Republicans, President Trump and his team — to … set it up for success, to keep the government up and funded,' Senate Majority Leader John Thune (R-S.D.) said in a recent podcast interview. OUT OF POCKET: The Trump administration's talk of using 'pocket recissions' to pare back federal spending without approval from Congress is making some Republicans nervous as they try to navigate the president's push for more cuts. White House budget chief Russell Vought recently referred to pocket rescissions as one of the executive tools available to the administration. 'It's not news that the Trump administration is going to bring a paradigm shift to this town in terms of the business of spending,' Vought said on CBS's 'Face the Nation' on Sunday. Trump signed a rescissions package last week to claw back $9 billion that Congress already appropriated, including for international aid and public broadcasting. But Trump has said he wants lawmakers to cut more, despite mounting political pressure. 'We're always gauging the extent to which the Congress is willing to participate in that process, and we're looking at a lot of different options along those lines,' Vought said. The Hill's Aris Folley spoke to experts and lawmakers about the potential tactic. COLLINS CONCERNS: Sen. Susan Collins (R-Maine) is walking a tightrope to maintain Congress's grasp of the federal purse strings while the Trump administration tries to wrangle more control. The centrist chair of the Senate Appropriations Committee is tasked with ushering the GOP's spending priorities through the upper chamber, but it's quickly becoming what most lawmakers would consider a nightmare. 'Nobody wants that job right now,' Sen. Shelley Moore Capito ( an appropriator, told The Hill's Al Weaver. The Senate is aiming to pass a three-bill appropriations package by the end of September to fund the departments of Agriculture, Veterans Affairs, Commerce and Justice. Collins, 72, is facing reelection next year for a seat Democrats hope to flip. But Collins told The Hill she's not sweating the mounting pressure. 'I've been here a number of years. I've been through many high-pressure events,' she said. 'That's the nature of the job if you're in a leadership position or if you're representing your constituents.' Where and When The president is in Scotland. He will attend a meeting with British Prime Minister Keir Starmer at Turnberry golf course at 7:30 a.m. ET (12:30 p.m. BST). Trump will then travel to Aberdeen. The Senate will convene at 3 p.m. The House is in recess and resumes work in Washington on Sept. 2. Morning Report's Alexis Simendinger will return in August. Zoom In COURTS: Trump keeps adding notches to his Supreme Court winning streak. The justices on Wednesday blessed his firings of more independent agency leaders, their latest green light for the president to resume his sweeping agenda. To date, Trump's administration has already brought more emergency appeals than former President Biden did during his four years in office, write The Hill's Zach Schonfeld and Ella Lee, making it an increasingly dominant part of the Supreme Court's work. But as the court issues more and more emergency decisions, often without explanation, the practice has sometimes come under criticism — even by other justices. 'Courts are supposed to explain things,' liberal Justice Elena Kagan said while speaking at a judicial conference Thursday. 'That's what courts do.' As Trump wins at the high court, Americans are split along party lines over their support for the institution. A majority of Republicans, 73 percent, approve of its actions, according to a Friday YouGov survey. That number is far higher than the 34 percent of independents and 14 percent of Democrats who approve of the justices' decisions. ▪ CNN: Trump's effort to end birthright citizenship could have taken effect over the weekend. Lower courts continue to block it. ▪ The New York Times: The Trump administration is planning to change the visa system for skilled foreign workers and is considering changing the U.S. citizenship test. SILVER STATE RACE: Nevada Attorney General Aaron Ford (D) is running for governor next year, aiming to unseat first-term Republican Gov. Joe Lombardo. 'Nevadans are suffering in an economy that is rigged against those trying their hardest to stay afloat,' Ford, who has been the state's attorney general since 2019, said in a statement Monday. Nevada is seen as one of Democrats' best opportunities to flip a governor's office next year. The nonpartisan election handicapper Cook Political Report rates it as a toss-up. PRESSURE CAMPAIGN: Director of National Intelligence Tulsi Gabbard 's allegations about the Obama administration's review of the 2016 election led Trump to call for prosecution of former officials, including his predecessor. But many in Congress aren't ready to go quite that far. While his Republican supporters in Congress have united in expressing outrage, they have varying ideas of what accountability looks like. Democrats, meanwhile, say the Trump administration is completely misrepresenting the facts as they abuse intelligence and the justice system. 'Tulsi Gabbard has leveled some of the most serious charges ever leveled against an American at a former president. Bring charges. Bring charges,' said Rep. Jim Himes (Conn.), the top Democrat on the House Intelligence Committee. 'And the reason I want her to bring charges is that there is not a court in the United States that will do anything other than to laugh hysterically over the bulls— that Tulsi Gabbard is peddling right now.' FEDERAL PROGRAMS: ▪ The Hill: Head Start programs face whiplash in funding and enrollment changes ahead of the new school year as big reforms from the Trump administration worry parents and staffers. ▪ The Hill: Medicaid cuts outlined in Trump's sweeping tax and spending package will harm family caregivers, experts warn, by reducing access to health care for themselves and those they care for. ▪ The Hill: Coca-Cola will offer a cane sugar version of its signature beverage, while ice cream and cereal makers pledged to phase out certain dyes. Health and Human Services Secretary Robert F. Kennedy Jr. has claimed them all as significant victories, but nutrition experts say the moves are far from signifying major change to make people healthier. Elsewhere GAZA: Israel implemented a 'tactical pause' in fighting in Gaza over the weekend amid concerns of mass starvation in the enclave. The pause in fighting, to allow in humanitarian aid via air drops and United Nations-approved routes, suspends fighting from 10 a.m. to 8 p.m. daily until further notice in accordance with government directives. Secure routes for aid delivery will be permanently established. The pause in military operations, the first of its kind since March, is part of a broader set of measures that Israeli Prime Minister Benjamin Netanyahu approved Saturday in response to increased international criticism over the dire humanitarian crisis in Gaza. U.N. statistics estimate around 470,000 people face famine-like conditions in Gaza. The U.N.'s World Food Programme praised Israel's pause and said it has 'enough food in — or on its way to — the region to feed the entire population of 2.1 million people for almost three months.' When asked about the humanitarian conditions in Gaza, Trump on Sunday said Hamas is stealing food that was meant for civilians in the enclave. The Israeli military has reportedly found no proof of that. 'It's a mess, that whole place is a mess,' Trump told reporters. 'The Gaza Strip, you know it was given many years ago so they could have peace. That didn't work out too well.' ▪ The Hill: Sen. Lindsey Graham (R-S.C.) said Sunday there will be a 'change in tactics' by the Israeli military in its war in Gaza. ▪ The Washington Post: Gazans are dying of hunger. Here's what happens to a starving human body. ▪ The New York Times: After Israeli restrictions on aid, hunger has risen across Gaza. Doctors and nurses, struggling to find food themselves, lack the resources to stem the surge. SOUTHEAST ASIA: Leaders from Cambodia and Thailand on Monday agreed to a ceasefire, ending days of attacks across their disputed border. The two countries met in Malaysia for peace talks after Trump threatened that continued violence would jeopardize both countries' trade deals with Washington. At least 35 people were killed, more than 200 injured, and more than 200,000 displaced in the fighting that broke out Thursday, CNN reports. ▪ The New York Times: The Thai-Cambodian conflict tears at remnants of a once-proud empire. ▪ CNBC: How Trump and his trade wars pushed Russia and Ukraine into the cold. ▪ The Washington Post: The Trump administration is set to destroy a large stockpile of U.S.-funded contraceptives stored at a warehouse in Belgium, which says it has 'explored all possible options to prevent the destruction.' Opinion People of good conscience must stop the starvation in Gaza, chef and World Central Kitchen's José Andrés writes in The New York Times. Gaza's aid crisis helps only Hamas,by The Wall Street Journal editorial board. The Closer And finally … 🍅 A 17 percent tariff on fresh tomatoes imported from Mexico could soon create problems for U.S. consumers, experts warn. The tomato import tax that began July 14, could lead to a dramatic spike in prices, The Associated Press reported, as about 70 percent of fresh tomatoes consumed in the U.S. are imported from Mexico. From looming higher prices to lower quality, The Atlantic describes why summer tomato season just hits 'different this year' amid the tariff tumult. The Mexican government has continued to try to negotiate down a 30 percent general tariff the U.S. is slated to tack on Friday.
Newsweek
14 minutes ago
- Newsweek
Trump's EU Trade Deal Explained
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. After months of negotiations, and the two sides exchanging threats of further tariffs and potential countermeasures, the European Union and the United States have finalized terms of a deal that offers the bloc a reduced tariff rate in return for billions of dollars' worth of purchases and investments. "I think it's the biggest deal ever made," President Donald Trump said following a meeting with European Commission President Ursula von der Leyen on Sunday afternoon. Why It Matters As well as averting a prolonged standoff and the risk of an all-out trans-Atlantic trade war, the deal substantially reduces the potential barriers that were emerging in the world's largest bilateral trading relationship—valued at just under $1 trillion last year per the U.S. Trade Representative. The announcement, which follows weeks of back-and-forth and periodic reports of stalled negotiations, also marks a major victory for the administration, which has been racing to finalize as many deals as possible ahead of the latest, August 1 deadline. Former Commerce Secretary Wilbur Ross told Newsweek recently that this could have proved one of the hardest deals to finalize, given that 27 members make up the EU, with the resulting difficulty of the bloc forming a unified front on complex issues such as trade. What Are the Terms of the New Deal? After pivotal in-person negotiations between Trump and von der Leyen, the president read out the terms of the new deal at the his luxury golf course in Turnberry, Scotland. He said that the EU has agreed to purchase $750-billion-worth of U.S. energy products, including oil, gas, nuclear fuel and semiconductors. In a press release, von der Leyen said that this will "diversify our sources of supply and contribute to Europe's energy security." In addition, the deal calls for a $600-billion investment in the U.S. by the EU, which comprises purchases of American military equipment. In exchange, the U.S. will lower the import tax on the vast majority of European products to 15 percent, half the rate that was set to go into effect on August 1, and far below the 50-percent rate Trump briefly threatened in May. President Donald Trump, right, shakes hands with European Commission President Ursula von der Leyen as they meet in Turnberry, Scotland, on Sunday, July 27, 2025. President Donald Trump, right, shakes hands with European Commission President Ursula von der Leyen as they meet in Turnberry, Scotland, on Sunday, July 27, 2025. Jacquelyn Martin/AP Photo The outcome is less favorable than the 10-percent rate negotiated by the United Kingdom, but matches that secured by Japan last week. "This rate applies across most sectors, including cars, semiconductors and pharmaceuticals," said von der Leyen. "This 15 percent is a clear ceiling. No stacking. All-inclusive." Trump said that the lower tariff rate will come with the condition of the EU "opening up their countries" to more American exports. The pair have also agreed on "zero-for-zero" tariffs on several goods, including aircraft and component parts, certain chemicals and agricultural products, and critical raw materials. The EU chief said that the bloc will "keep working to add more products to this list." However, Trump said that the 50-percent tariffs on steel and aluminum will remain unchanged. "That's a worldwide thing that stays the way it is," he told reporters. What Were the EU Tariffs Before Trump's Presidency? Given the absence of a free trade agreement between the U.S. and EU, the pair have historically traded using the most-favored nation tariffs under World Trade Organization rules. According to analysis by the economic think tank Bruegel, the average rate of tariffs on European imports was around 1.4 percent prior to Trump taking office, and his succession of tariff announcements threatened to push this average rate up to over 15 percent. However, sector-specific tariffs were higher on a range of agricultural products, as well as certain vehicles. Meanwhile, the EU reported in February that most U.S. exports were duty-free or faced a roughly 1-percent tariff. However, higher charges are also placed on certain products, including a 10-percent tariff on vehicles and apparel taxes of 12 percent, according to CNBC. What People Are Saying European Commission President Ursula von der Leyen, in a statement following the meeting, said: "Today with this deal, we are creating more predictability for our businesses. In these turbulent times, this is necessary for our companies to be able to plan and invest. We are ensuring immediate tariff relief. This will have a clear impact on the bottom lines of our companies. And with this deal, we are securing access to our largest export market. "At the same time, we will give better access for American products in our market. This will benefit European consumers and make our businesses more competitive. This deal provides a framework from which we will further reduce tariffs on more products, address non-tariff barriers, and cooperate on economic security. Because when the EU and U.S. work together as partners, the benefits are tangible on both sides." Chris Beauchamp, chief market analyst at global trading and investing platform IG, told Newsweek: "For the second time in a week, President Trump has been able to proclaim a trade deal with one of the U.S.' key partners. Like the Japan deal, it seems to involve the U.S. slapping on tariffs while the other side pledges to open up its markets. "Tariffs continue to be defanged as an issue, and the announcement of yet another 90-day pause for China merely underlines the view that Washington is now closing down the issue having gained a series of 'wins.' Now we wait to see whether the tariff price increases do start to show up in inflation data." Robert Basedow, professor of international political economy at the London School of Economics, told Newsweek: "I do not expect the deal to put trans-Atlantic differences over trade to rest. We have seen it in the past that Trump reneges on trade deals and seeks to renegotiate them…Hence, I expect the Trump administration to come back with new demands or complaints as opportune to him (typically for domestic policy reasons). "These Trump deals are not classic trade agreements that pass through parliament and are of hard law nature," he added. "They are more akin to political agreements, with often limited technical detail and thus scope for diverging interpretations." What Happens Next? Von der Leyen described the deal as "a framework." She added that there were certain details yet to be ironed out, France 24 reported, and that this would happen "over the next few weeks." The deal remains subject to EU member state approval. The bloc's ambassadors will meet on Monday for a debrief from the European Commission. Basedow told Newsweek that von der Leyen "will get a lot of pushback from member states, businesses, and media over this deal," which will hold "EU-internal political ramifications."
New York Times
14 minutes ago
- New York Times
Trump and the E.U. Have a Blueprint for a Giant Trade Deal. Is it Good for Europe?
President Trump and Ursula von der Leyen, the president of the European Commission, clearly agreed on one thing as they announced the outlines of a trade deal between their two massive economies. It would be huge. Ms. von der Leyen had emphasized the potential scale during negotiations, and she reiterated it after the two sides announced an agreement Sunday, calling it 'the biggest trade deal ever.' Mr. Trump picked up that talking point and ran with it. 'This is the biggest of them all,' he said. For a president who often fixates on superlatives, the new pact offered an attractive talking point. The United States and the 27-nation bloc have the largest economic relationship in the world by many measures, trading nearly $2 trillion in goods and services per year. But while that may have helped Ms. von der Leyen to get an agreement over the finish line — despite Mr. Trump's longstanding skepticism toward Europe — a giant deal is not necessarily a good deal for Europe. Many European companies will be worse off. About 70 percent of European products will now face a 15 percent tariff when they enter the United States, according to senior European Commission officials who spoke on condition of anonymity to discuss the details of the package before it is finalized. That would be a major increase in charges. Since consumers often pay for higher tariffs, American shoppers are likely to shoulder at least some of that additional cost. It's also likely that American companies stand to benefit from other parts of the agreement — including the European Union's promise to spend more on U.S. energy products and defense equipment. But much is uncertain, and reactions in Europe were sharply divided. Chancellor Friedrich Merz of Germany and some business groups offered statements of cautious support, voicing hope that the agreement would prevent an escalation in pain and uncertainty. Others were more critical. François Bayrou, France's prime minister, said on social media that it was a 'dark day' for Europe. 'My initial assessment: Not satisfactory,' Bernd Lange, a member of the European Parliament from Germany, wrote on social media. 'This is a lopsided deal.' Is a 15 percent tariff a good outcome for the E.U.? American tariffs on European Union goods were previously in the low single-digits on average. And just a few weeks ago, the bloc hoped to negotiate a 10 percent across-the-board rate. Given that, a 15 percent tariff on goods from the European Union marks a notable step up. Still, the rate would be in line with what other American trading partners, including Japan, have agreed. It is also much lower than the 30 percent tariffs that Mr. Trump had threatened to impose on the bloc starting on Aug. 1. 'When you prepare for a hurricane, somehow the storm feels like a relief. That is how the deal currently feels,' said Carsten Brzeski, the global head of macroeconomics for ING Research. Mr. Brzeski added that the outlined agreement could be seen as 'damage control.' One sector that will welcome the deal is the car industry. The 15 percent rate is higher than the 2.5 percent that was in place before 2025. But it would significantly lower the tariff that European carmakers, including Volkswagen and BMW, have faced since Mr. Trump imposed a 25 percent levy on foreign-made cars and car parts in April. European companies, which sent vehicles worth 38.5 billion euros ($45 billion) to the United States last year, have been suffering from the uncertainty caused by Mr. Trump's tariffs and threats. The impact on the E.U.'s top export is less certain. Pharmaceuticals are the European Union's most important export to the United States, and it remains unclear how tariffs will apply to them. The United States is still working on an investigation into the pharmaceutical industry globally that could result in higher tariffs on medicine. The senior European Commission officials on Monday suggested that their understanding is that pharmaceutical products will be set at zero for the time being, and will not be subjected to tariffs higher than 15 percent once the investigation concludes. Ms. von der Leyen had established that as a hard line. But that is a political agreement, not yet a legally binding one, the officials acknowledged. Ms. von der Leyen herself said Sunday that 'how to deal with pharmaceuticals in general, globally, that's on a different sheet of paper.' Many details are not finalized, and exceptions will be key. Ms. von der Leyen said a range of products would not face tariffs on either side of the Atlantic. The list included airplanes, some generic drugs, some agricultural products, and critical raw minerals. On some other farm goods, Europe is expected to expand how much can be imported from the United States without facing tariffs. But the senior European Commission officials on Monday said that a list of specific products — which is expected to include items like lobsters, frozen seafood and pet food — will be published only when a paper outline of the framework agreement is released. That is still in the works and could come in the coming days. And additional European exports could still face lower tariff rates. Ms. von der Leyen said that it had not yet been decided whether wine and spirits would be exempt, for instance. Ms. von der Leyen also indicated that negotiations were ongoing when it comes to steel and aluminum products, which Mr. Trump said would remain subject to a 50 percent tariff rate. Steel and aluminum products are expected to fall under a new quota system, the European Commission officials said. The system would set lower tariffs on metal products sent to the United States up to the current volume of annual exports. Only steel and aluminum in excess of those historical amounts would face higher tariff rates. But the details are not yet finalized. How quickly those negotiations will occur — and how extensive exemptions will be — remains to be seen. How big are the E.U.'s purchase plans? Mr. Trump also talked up the investments in the United States that E.U. officials had promised as part of the deal. The bloc has agreed to buy $750 billion worth of American energy, he said. Mr. Trump added that its 27 member states will also invest $600 billion more in the United States. Those are big headline numbers, even if they will be spread out over time. Ms. von der Leyen said that the energy purchases will occur over three years. In other words, $250 billion would be spent for each remaining year of Mr. Trump's presidential term. That would amount to a substantial chunk of Europe's energy spending. For context, the European Union imported 375.9 billion euros ($442 billion) worth of liquefied natural gas, petroleum, and natural gas products in 2024. The new commitment would also include nuclear-related investments, which are not included in that figure. But when it comes to both energy purchases and the broader investment pledges, spending would come from European member states. Such purchases are typically not something that the European Union as a bloc has power over. Given that, it is not clear how binding those pledges would be — or even how they would be tracked. With so many uncertainties, business groups were hesitant to give the package an immediate endorsement. 'We still need to examine the details and hope that a solution is soon found for important sectors that appear to be excluded from the deal,' Fredrik Persson, president of BusinessEurope, a lobby group that represents European companies, said in a statement.
