How Trump humiliated Europe
But while Ursula von der Leyen claimed her '15pc across-the-board, all-inclusive' trade agreement with Donald Trump was a bargain, everyone else in Europe was left feeling they'd been massively ripped off .
The president of the European Commission smiled through gritted teeth as she announced the deal, which was quickly criticised across the Continent by politicians, economists and business leaders alike.
French prime minister François Bayrou branded the 'submission' by Brussels as a 'dark day' for Europe, while Viktor Orbán, Hungary's prime minister, said Von der Leyen had been 'eaten for breakfast' by the US president.
Entrepreneurs said the deal epitomised the 'century of humiliation' for a bloc that 15 years ago was slightly bigger than America's but is roughly a quarter smaller today.
Economists warned both sides of the Atlantic would be hit by lower growth, while several points of uncertainty remain.
Nothing to celebrate
Blanket tariffs of 15pc will now be applied to almost all EU exports headed to the US. However, steel and aluminium tariffs will remain at 50pc, while a cloud of uncertainty remains over the pharmaceutical sector – which accounts for a fifth of EU exports to the US.
This is a blow to industrial giants such as Germany. Official data shows the EU exported €8bn (£6.9bn) worth of iron and steel to the US last year, up 45pc compared with 2019.
Peter Bofinger, a former member of the Council of Economic Experts dubbed Germany's 'wise men', says many businesses will be reeling despite the deal.
'It really hits the core industrial sectors of our economy,' he says. 'And while the overall impact is somewhat limited, it hits those core sectors quite hard and is therefore not good news for the German economy.'
What's more, von der Leyen left Scotland with a shopping list worth hundreds of billions of dollars. Brussels agreed to buy $750bn of US energy products as part of the deal, increase foreign direct investment in the US by $600bn as well as buy 'vast amounts' of US military equipment.
There was initial confusion about the pharma deal, with Trump going into the meeting telling reporters that drugs were not on the table. While the pharma sector appears to be exempt for now, analysts at Rabobank said there remained a 'small risk' that the Trump administration would impose fresh tariffs in future, citing national security.
'This could weigh on the European, and particularly the Irish, economy – if any dispute about these sectoral tariffs does not sabotage the broader agreement,' analysts said in a note.
Others highlighted that it will be almost impossible for Brussels to keep its promise on energy.
While there has been a steep increase in US liquefied natural gas (LNG) imports after Trump struck a deal with Von der Leyen's predecessor, Jean Claude-Juncker, in 2018, Rabobank said purchasing $750bn worth of US energy over the remainder of Trump's term would be a 'massive stretch', even if Europe completely weans itself off Russian gas.
It noted that last year 'all energy flows from the US to the EU totalled only around $65bn.
Even if Europe were to source all of its diesel and LNG from the US, this is a massive stretch – and would go against Europe's agenda of diversifying suppliers for key resources.'
Brexit dividend
A blanket 15pc tariff means Brussels has struck a worse deal with the US than the UK, with tariffs of 10pc.
Jonathan Reynolds, the Business Secretary, said there was 'no doubt' the difference was down to Brexit.
'I'm absolutely clear, this is a benefit of being out of the European Union, having our independent trade policy, absolutely no doubt about that,' he told Good Morning Britain.
European anger is clear. Brando Benifei, the Italian MEP who chairs the European Parliament's committee on US relations, said: 'We seem to have gotten worse conditions than the UK.
'That's not a good starting point and we need to look at the details to understand what we actually get.'
The deal also creates a division in Ireland, with businesses in Northern Ireland able to sell into the US on a 10pc tariff rate, while their southern neighbours in Ireland are subject to a 15pc tariff.
Lord Frost, Brexit minister under Boris Johnson's premiership, welcomed the admission. 'Well done to [Mr Reynolds] for saying what the PM wouldn't,' he posted on X.
Well done to @jreynoldsMP for saying what the PM wouldn't. https://t.co/hAmK8eTz64
— David Frost (@DavidGHFrost) July 28, 2025
Hungary's Orban also said the US-UK deal was 'much better than this', as he branded Von der Leyen a 'featherweight' for negotiating the deal.
Danny McCoy, head of the Irish business lobby group IBEC, says the UK's relative success in its negotiations with Mr Trump had created a particular headache for Ireland.
Under what he called a 'fairly punishing' EU-US deal, goods exported from the Republic of Ireland will be hit with the 15pc rate, but goods from Northern Ireland will only attract the UK deal's 10pc rate.
Ireland exports almost €100bn pharmaceutical products every year, with a significant chunk of that headed to the US.
Mr McCoy warns of potentially 'significant losses' for Irish exporters from the EU deal.
'It's quite tragic that we are in this situation. If Europe had equal strength, it could have confronted the United States,' he says.
The lower British tariff could lure struggling EU exporters to shift some operations from the Continent to the UK, says Alex Altmann, head of the German desk at London-based accountancy firm Lubbock Fine.
'Without that move to the UK the increase in tariffs could wipe out the profit margins of many EU exporters,' says Altmann.
'The UK could be a big indirect winner of this agreement … [It is] a major opportunity for the UK to regain some of its lost status as a key European manufacturing hub.'
The economic damage will be broad
While there is no doubt who will benefit more from this deal, higher tariffs will hurt both the US and the EU.
The deal means the new tariff on EU imports into the US is significantly higher than the roughly 1.5pc that was in place before the April 2 'liberation day' levies were announced.
In Europe, the cost will be slower growth in an already sclerotic economy. Holger Schmieding, at Berenberg, expects the damage to be front-loaded.
He believes the tariffs will knock 0.3 percentage points from European growth as well as 0.5 percentage points from German growth over 2025 and 2026.
Schmieding says Germany's public spending spree will come to the rescue of Europe's biggest economy, which has barely grown for the last two years.
'Fortunately, the unexpectedly sizeable German fiscal stimulus will offset this fully for Germany and mostly for the eurozone as a whole,' he says.
'As the US is only one of many markets for the eurozone, the damage to eurozone trend growth, which we put at around 1.2pc, will remain small.'
But a hit of tens of billions of pounds every year is not insignificant. As former wise man Bofinger highlights, Germany's carmakers will still be left reeling from the deal.
While the tariff faced by importers bringing EU cars to the US has been nearly halved from 27.5pc initially imposed by Trump in April, German industry group VDA warned that a rate of 15pc would 'cost the German automotive industry billions annually'.
Bofinger says: 'Germany definitely needs to see growth and this of course comes at the wrong time and is extremely bad for our automotive industry, which is still the beating heart of our economy.'
For the US, higher tariffs will show up as higher prices for US consumers.
'Inventories built up ahead of the tariffs should be mostly depleted soon and importers will not accept major hits to their margins for long,' Schmieding says.
'We expect US inflation to edge up to 3.4pc by late 2025.' It is a figure that is likely to keep US interest rates higher for longer – which is in turn likely to anger Trump further.
With no winners and the risk that tariffs go higher from here as details are ironed out, entrepreneurs were struggling to hide their frustration in the wake of the deal being struck.
Arnaud Bertrand, who sold his business to TripAdvisor, wrote on X: 'One of the key rules of geopolitics is that weakness only encourages further exploitation. This is Europe's century of humiliation.'
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