France lashes out as EU agrees to tariff pact with Washington
The framework agreement, announced Sunday between two economies representing nearly a third of global trade, allows the U.S. to impose a 15% import tariff on most EU goods starting next month. The deal offers limited protection for key sectors, including the automotive and pharmaceutical industries.
While the 15% rate is half of what Washington initially threatened, it still exceeds European expectations significantly.
U.S. President Donald Trump, who has sought to reshape global trade using tariff leverage since returning to the White House earlier this year, praised the accord during a visit to Scotland, calling it 'the biggest deal ever made.'
But France, the EU's second-largest economy, was outspoken in its disapproval.
'It is a dark day when an alliance of free peoples, brought together to affirm their common values and to defend their common interests, resigns itself to submission,' French Prime Minister Francois Bayrou wrote on X (formerly Twitter).
French President Emmanuel Macron has made no public statement on the matter.
While the mood across Europe was subdued, most governments agreed that failing to reach an agreement would have triggered a far worse scenario.
'This agreement has succeeded in averting a trade conflict that would have hit the export-oriented German economy hard,' said German Chancellor Friedrich Merz, whose country leads the EU bloc's economic rankings.
EU Trade Commissioner Maros Sefcovic said during a press conference that allowing 30% tariffs to be imposed would have been 'much, much worse.'
'This is clearly the best deal we could get under very difficult circumstances,' he added.
Some member states acknowledged the deal provides stability following months of trade tensions with the U.S. Sweden described it as the 'least bad alternative,' while Spain supported it 'without enthusiasm.'
A final deal will likely require ratification from EU capitals.
Still work to do
Because trade policy falls under the European Commission's authority, French objections are unlikely to derail the framework agreement. However, the deal has not yet been finalised.
Many of the agreement's specifics remain unknown. EU officials said they expect clarification in a joint statement to be released by August 1. Additional negotiations will follow to turn the agreement into a full-fledged deal.
Germany also called for further negotiations, particularly regarding the steel sector.
President Trump said the deal—alongside an investment package that exceeds the Japan agreement signed last week—would strengthen trans-Atlantic relations after years of what he described as unfair treatment of U.S. exporters.
Japan's package will include up to $550 billion in equity, loans and guarantees from state-run agencies, to be invested at Trump's discretion, according to Tokyo. In contrast, EU officials stated that the EU's $600 billion investment figure is based on non-binding intentions from the private sector.
The agreement is expected to bring regulatory clarity to European industries, including those in the automotive, aerospace, and chemical sectors. However, EU negotiators had originally pushed for a zero-for-zero tariff deal. A 15% tariff remains significantly higher than the U.S.'s average import tariff rate of 2.5% before Trump's return.
More clarity, but a challenge
European stocks opened higher on Monday, with the STOXX 600 reaching a four-month high. Tech and healthcare sectors led the gains.
'The 15% rate is better than the market was fearing,' said Jefferies economist Mohit Kumar.
Still, many European businesses remain conflicted about the outcome.
'Those who expect a hurricane are grateful for a storm,' said Wolfgang Große Entrup, head of the German Chemical Industry Association (VCI). 'Further escalation has been avoided. Nevertheless, the price is high for both sides. European exports are losing competitiveness. U.S. customers are paying the tariffs.'
A major concern remains how the EU's promise to invest hundreds of billions of dollars in the U.S. and sharply increase energy imports can be realized.
It remains unclear whether specific investment pledges have been made, or if the details are still being finalized.
While the EU has committed to $750 billion in strategic purchases over the next three years—including oil, liquefied natural gas (LNG), and nuclear fuel—the U.S. may struggle to meet the demand.
Though U.S. LNG production capacity is expected to nearly double over the next four years, analysts say it still won't be enough to meet Europe's needs. Oil production forecasts have also been revised downward.
Despite the uncertainties, analysts say the deal has reduced market instability. Oil prices edged up on Monday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
LeMonde
18 minutes ago
- LeMonde
French PM risks reaching breaking point with unions
Two weeks after French Prime Minister François Bayrou announced plans to stabilize the public debt by 2029, the government assessed the extent to which these measures had provoked hostility among the unions. On July 21, three national unions refused to attend the consultation organized by Labor Minister Astrid Panosyan-Bouvet. Those who did attend, including the more moderate CFDT and CFTC, expressed outrage upon learning the main details of the government's proposed unemployment insurance reform. There will be a further tightening of eligibility requirements for benefits, a new reduction in the duration of payments, and stricter rules for mutual contract termination agreements. This is the third round of cutbacks in five years and is intended to generate between €3 billion and €4 billion in annual savings. However, it appears to be a step too far. No serious impact study has been conducted to assess the effects of previous reforms on employment, even though the government points to 450,000 unfilled jobs. In an already bleak economic climate, the risk of increased insecurity and poverty is high. Pressed by the need to act quickly and decisively, Bayrou's government is tempted to rely on polls rather than unions to adjust the key measures of its plan before the fall. The government is well aware of how difficult it is for the unions to organize significant protests in defense of the unemployed. It also sees how much the issue of welfare abuse, promoted by the far right and the right, is gaining traction. According to an Elabe poll for broadcaster BFM-TV conducted one day after the prime minister's announcement, 82% of French people supported his decision to strengthen controls on long-term sick leave. In contrast, the proposed deletion of two public holidays is proving to be very unpopular. Long-term reforms are needed This wouldn't be the first instance of governing without input from the unions under President Emmanuel Macron. However, the greater the tension with the unions, the greater the risk of a no-confidence vote from the left this autumn. In recent months, Bayrou tried to bring the CFDT and reform-minded unions back into the fold through a series of meetings labeled as a "conclave on pension reform." However, that momentum has now been broken. The scale of the adjustments required to reduce the public deficit from 5.4% of GDP in 2025 to 2.8% in 2029 necessitates long-term reforms. The government's proposals are based on the idea of "working more to produce more." These proposals will not succeed if social partners involved in the running of businesses are not encouraged to reach a consensus, if people feel that they are always the ones paying the price and if issues of job attractiveness and pay are not addressed simultaneously. Compared with their European neighbors, companies in France are slower to integrate young people into the workforce and quicker to push out older employees. Increasing the volume of work by acting on these two factors seems to be the most viable approach, but it requires everyone to play their part, including employers. Yet, all too often, employers shift responsibility by citing fierce international competition or the high cost of labor. For this approach to succeed, the government must firmly remind employers that they are essential partners in the social contract.
Euronews
19 minutes ago
- Euronews
Greece cautiously reacts to EU-US trade agreement
The Greek government appears hesitant and cautious in commenting on the EU-US trade deal on tariffs reached between Ursula von der Leyen and Donald Trump. Greek Finance Minister Kyriakos Pierrakakis, speaking in the Greek Parliament, outlined the government's thoughts on this burning issue. He noted that it puts an end to months of uncertainty following Trump's election and the "back and forth" with the tariffs, and that is a positive thing. He stressed, however, that the government is studying the agreement to see how it can better manage the problems that will arise in areas of Greece's commercial interest. "The agreement puts an end to months of uncertainty regarding the status of perhaps the most important bilateral trade relationship in the global economy. It secures transatlantic unity and prevents a trade war with a chain of negative effects on international trade and on international distribution and production chains. The agreement also strengthens the energy security of the European economy for the foreseeable future. From this perspective, the development is positive. "As you know, as a matter of principle, Greece supports free trade based on stable rules. The agreement provides for the application of tariffs of 15% on European exports to the US, with some asterisks," Pierrakakis continued. "Based on the principled position I have described to you, the Greek government would like a lower tariff rate, ideally zero for all transatlantic trade flows. On the other hand, the announced tariff rate is lower than what was scheduled to be applied on 1 August. "The government is closely following the relevant consultations and, to the extent that the framework of the agreement will allow, possibilities will be explored that could help to better address issues related to products of particular interest to our country." "Ending intra-European tariffs" The Greek Finance Minister also raised another issue, which concerns Europe itself. He said there are still intra-EU barriers that act as tariffs and should be eliminated. "If we really want a strong, competitive and single European economy, we have to tear down the last invisible walls that still prevent the free movement of goods and services within the Union. It is not possible that, decades after the Single Market was established, there are still regulatory or administrative barriers that in practice act as intra-European 'tariffs'. "In manufacturing there are equivalent internal tariffs of 45% and in services the equivalent is 110%. This is what the International Monetary Fund has documented, and Mario Draghi has mentioned it in his column. So, what needs to be conquered and achieved is to remove the barriers, especially between the European economies. And of course we as a country should also be able to systematically address more and more markets, such as India and the Middle Eastern markets, for our exports." Chamber of Commerce: "A defining development with conditions of predictability and great challenges" The president of the Hellenic Chamber of Commerce and Industry, Yannis Bratakos noted that the agreement is a defining development for global trade as things are now more predictable. On the other hand, he stressed that it creates serious challenges for Greek and European production. "The recent agreement between the United States of America and the European Union, which includes a new tariff framework, is a decisive development for transatlantic cooperation and the global economy. "The new tariff framework resulting from the agreement creates conditions of greater predictability, but at the same time incorporates challenges for specific sectors of European production." Bratakos continued: "The exemption of strategic sectors, such as aeronautics, generic medicines, chemicals and certain agricultural goods, is a positive development. However, the imposition of uniform tariffs on high value-added products - including pharmaceutical, industrial and agri-food exports - may hurt the competitiveness of companies that support critical shares of the Greek economy. "Particular attention is needed to protect iconic Greek products, such as olive oil, feta and wines, which risk being burdened by the new regime. In this environment, the need for constant monitoring of developments and effective participation in the shaping of European decisions becomes crucial. "At the same time, the strengthening of energy cooperation with the US, through increased imports of LNG and investment in infrastructure, opens up new opportunities for Greece, especially in the fields of logistics, shipbuilding and regional energy interconnection. "The Athens Chamber of Commerce and Industry calls on the Greek government to ensure, within the framework of the European institutions, that the final implementation of the agreement will not disrupt the competitiveness of Greek exports and will not increase the dependence of specific sectors on third markets. "It is time for our country to invest concretely and more actively in interconnection with the US and at the same time to broaden its export prospects to alternative markets. The Hellenic Business Association (EBEA) will continue to support this national effort with informed interventions, services to its members and the continuous promotion of Greek entrepreneurship abroad". Piraeus Chamber of Commerce: "We hope that the situation will be manageable" The port of Piraeus is a very large trade hub, the main seaport of Athens and plays a key role in the commercial and industrial traffic of Greece and Europe. "We want to believe that the agreement to impose tariffs at the 15% level is a manageable situation and we hope that it will not create losses in US-EU bilateral trade," President of the Piraeus Chamber of Commerce and Industry, Vassilis Korkidis said. Adding that: "The announcement that the US and the European Union have reached an agreement on tariffs, following the conclusion of the meeting between US President Donald Trump and the President of the European Commission, Ursula von der Leyen, certainly brings relief to both sides of the Atlantic. In international trade, any agreement is always better than no agreement and the unilateral imposition of measures and countermeasures. The fact that it was agreed to impose a 15% general tariff on all products including cars is an element that restores balance to US-European trade relations and seems to satisfy both parties. However, the tariffs on steel and aluminium remain at 50%, and it is not clear whether pharmaceuticals and semiconductors will eventually be subject to separate tariffs. "The agreement also provides that the EU will buy US military equipment and energy worth a total of $750 billion, while making significant investments of $600 billion. The European side calls it an "all inclusive" trade agreement between the two major trading partners that brings stability. Regardless of the details and exceptions, it is significant that after months of negotiations, the agreement was reached less than a week before the August 1 deadline and the imposition of higher tariffs that would have had serious repercussions. We want to believe that the agreement to impose tariffs at the 15% level is a manageable situation and we hope that it will not create losses in US-EU bilateral trade."
France 24
19 minutes ago
- France 24
Philips chops back US tariff bill
The company had originally estimated in April that US tariffs could cost it 250 to 300 million euros this year after President Donald Trump unveiled a 20 percent tariff rate for goods from the European Union. Brussels and Washington reached a deal over the weekend that will see goods from the EU face a baseline 15 percent levy when imported into the United States. It said Tuesday it now expects between 150 and 200 million euros impact from US tariffs this year. Chief executive Roy Jakobs said Philips updated "the guidance because we have certainty now around what is happening between the EU and the US." Shares in Philips jumped more than 10 percent during morning trading, while the Amsterdam market rose around 0.4 percent overall. The trade deal has come under widespread criticism in Europe as having been lopsided, saddling its manufacturers with a costly 15 percent rate with little in return from the US as certainty is a relative concept given Trump's propensity to change positions. Jakobs said that certainty "is what we value in" in the deal, while acknowledging "it's a painful additional cost we have to carry". The company still targets a one to three percent increase in annual sales. Second quarter net profit fell by 47 percent to 240 million euros, but last year's performance was boosted by exceptional income from insurance payouts linked to long-running issues with its sleep apnoea machines. Sales slid by 2.8 percent to 4.3 billion euros, although they edged higher on a comparable basis that excludes currency changes. The company also noted orders rose by six percent on a comparable basis. The appreciation of the euro relative to the dollar and other currencies has been crimping the results of European companies as their revenues abroad result in fewer euros on the balance sheet.
