Germany and France have expressed strong opposition to a newly concluded EU-US trade agreement, warning that the deal could severely damage the European economy. The criticism came as the euro weakened sharply and European markets reacted negatively to the announcement.
The agreement, brokered by European Commission President Ursula von der Leyen and US President Donald Trump, includes a 15% tariff on most imports from the European Union. While this is lower than the 30% rate initially threatened by Washington, it still represents a significant increase from pre-agreement levels.
Chancellor Merz: “Considerable Damage”
German Chancellor Friedrich Merz described the deal as harmful, stating it would cause “considerable damage” not only to Germany but also to Europe and the US itself. “Not only will there be a higher inflation rate, but it will also affect transatlantic trade overall,” Merz warned. He called the outcome disappointing but admitted it was “the best result achievable in a given situation.”
France: “A Dark Day” for Europe
French Prime Minister François Bayrou went further, labeling the agreement a “dark day” and accusing the EU of having “resigned itself into submission.” The deal, he implied, sets a dangerous precedent for future trade negotiations and European autonomy.
Economic Fallout
The euro dropped more than 1% against the US dollar and lost 0.7% against the British pound following the deal’s announcement. European stock markets also reflected investor anxiety. Germany’s DAX index closed 1% lower, while France’s CAC 40 dropped 0.4%. Tariff-sensitive industries, particularly automotive stocks on the Stoxx Europe 600, fell by 1.8%, reversing early-session gains.
Despite the backlash, the euro remains 12% stronger against the dollar this year, buoyed by Germany’s increased defense spending and broader expectations of economic stimulus across the Eurozone in response to Trump’s protectionist policies.
Mixed Reactions from Business and Politics
While the US Chamber of Commerce in the EU welcomed the deal as providing “relief” to businesses, it also noted the significant costs imposed by the new tariff structure. The organization urged both sides to expand the agreement’s zero-for-zero tariff provisions to additional sectors.
The White House praised the agreement as a major strategic win, claiming it “achieves historic structural reforms and strategic commitments that will benefit American industry, workers and national security for generations.”
Spanish Prime Minister Pedro Sánchez offered tepid support, stating he backed the agreement “but without any enthusiasm.”
Meanwhile, far-right political leaders in Germany and France used the moment to criticize the EU’s leadership. Alice Weidel, co-leader of Germany’s Alternative for Germany (AfD), posted on X: “It’s not an agreement, but a slap in the face to European consumers and producers!”
Global Trade Landscape Shifts
The deal comes amid wider shifts in global trade dynamics. US President Trump met with UK Prime Minister Sir Keir Starmer at his Turnberry golf course in Scotland to discuss a separate US-UK trade pact and global conflicts in Ukraine and Gaza. Trump also announced plans for broader global tariffs of up to 20% on countries without bilateral trade agreements and hinted at new tariffs on pharmaceuticals “in the near future.”
As transatlantic trade relations face a new chapter, critics warn that the EU’s position in global commerce may have been significantly weakened.
