Trade Deals Mature, Wars Drag

The European Union and the United States reach a massive trade deal

Trade Deals Mature, Wars Drag

Deepak Razdan

Tuesday, 29 July, 2025

The New World born out of 2nd April, 2025 US Tariffs continues to struggle with fresh deals on trade tariffs, wars and immigration. The tariffs top the agenda; immigration comes next, while wars remain a matter of strong concern.

The Ukraine war rages on, with assurances of fresh and sophisticated weaponry for Ukraine from a large number of supporting nations to fight the Russian advances.

US President Donald Trump had set a 50 days deadline for Russian President Vladimir Putin to accept ceasefire. On Monday he was inclined to reduce the period to just 10-12 days. The war continues to devastate people.

In his latest broadcast, Ukraine President Volodymyr Zelenskyy said President Trump had made an extremely significant statement. “And it is true: it is Russia who is doing everything to undermine peace efforts and drag out this war.”

“Every night there are strikes, constant Russian attempts to hurt Ukraine. Indeed, peace is possible if we act strongly and decisively, and we have repeatedly said – and all partners know this – that sanctions are a key element. Russia factors in the sanctions, factors in such losses,” he said.

Ukraine, as always, is ready to work with America, with President Trump, in the most productive way possible, to end this war with dignity and lasting peace, he said.

Mr Zelenskyy’s determination to keep fighting is evident. He said he had signed a law that strengthens the Security Service of Ukraine giving it greater capacity to carry out combat tasks, eliminate the occupier, and conduct special operations to defend Ukraine.

The number of personnel is being increased, particularly for the “A” Special Operations Center of the Security Service of Ukraine, he said in his broadcast.

As no early end to the Ukraine war was visible, the rest of Europe went into a treaty-mode to take care of its security. The United Kingdom became a centre of pacts with France and Germany with security of Europe as the major objective.

The three European powers recognized Europe’s security begins in Ukraine and it should be adequately armed to counter Russia and contain its territorial ambitions. The world has seen Ukraine’s capacity to fight even in the fourth year of missile and drone attacks.

Immigration, particularly illegal immigration, found a strong opponent in the US President who began his second Presidency with strong steps against it. Mr Trump believed there were countries releasing criminals from prisons to create anarchy in the US.

His strong decisions have made the US borders fully defended and they report nil illegal immigration attempts.

The UK and France too have reached an agreement to stop immigration attempts by alien migrants on small boats crossing the English Channel to reach UK shores. The whole of Europe is united on pursuing tough immigration policies.

Canada too has tightened its immigration rules and will not let aliens come in easily even as visitors. There is an air of suspicion against immigrants all across the western world.

The 1st of August was Mr Trump’s deadline for trade tariffs. The US has reached trade tariff agreements with the European Union, Japan, Philippines, Indonesia and Vietnam, beginning with the UK.

Canada waits for its turn. Mr Trump’s deals with the EU and other big powers give hope for a positive deal with India.

In the latest trade deal with the 27-nation EU, the EU exports to the US will be levied a 15 per cent import tariff. President Trump said the deal would re-balance trade between the two.

The deal bolsters America’s economy and manufacturing capabilities, he said. The EU will purchase $750 billion in US energy and make new investments of $600 billion in the US, all by 2028, he said.

President Trump said the EU will pay a tariff rate of 15 per cent, including on autos and auto parts, pharmaceuticals, and semiconductors.

However, the sectoral tariffs on steel, aluminum, and copper will remain unchanged—the EU will continue to pay 50 per cent and the parties will discuss securing supply chains for these products.

This new tariff regime will generate tens of billions of dollars in revenue annually and help to close the longstanding trade imbalance between the United States and Europe by encouraging local sourcing, the US President said. The EU agreed to purchase significant amounts of US military equipment.

European Commission President Ursula von der Leyen said the deal at least creates certainty in uncertain times. It delivers stability and predictability for citizens and businesses, on both sides of the Atlantic, she said.  

She said this is a deal between the two largest economies in the world, she said. “We trade USD 1.7 trillion per year. Together we are a market of 800 million people. And we are nearly 44% of global GDP,” she said.

She said the 15 per cent rate applies across most sectors, including cars, semiconductors and pharmaceuticals. “This 15% is a clear ceiling. No stacking. All-inclusive. So it gives much-needed clarity for our citizens and businesses. This is absolutely crucial,” she said.

The European Commission President said the EU and the US had agreed on zero-for-zero tariffs on a number of strategic products.

These include all aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources and critical raw materials.

 “Purchases of US energy products will diversify our sources of supply and contribute to Europe's energy security. We will replace Russian gas and oil with significant purchases of US LNG, oil and nuclear fuels,” she said.

“US AI chips will help power our AI giga-factories and help the US to maintain their technological edge,” she said.

The European Commission President said 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,” she said.

“We are taking bold action to make Europe more competitive, more innovative and more dynamic. Our Single Market with its 450 million consumers is our greatest asset and our safe harbour, especially in turbulent times,” the EU leader said.

She said “We are also creating new trade partnerships around the world – expanding from the 76 we have.” Negotiations were concluded with Mercosur, Mexico and Indonesia.

She thanked EU-member States for their trust and their commitment. “Our unity is our strength, at home and abroad. We will continue to work hard for the benefit of all Europeans,” she said.

Germany and France have however already expressed doubts about the deal. German Chancellor Friedrich Merz said the agreement would "substantially damage" his nation's finances, while French Prime Minister Francois Bayrou said it was tantamount to "submission."

Several other countries said the uneven deal was worth it to avert an all-out trade war. On the Ukraine war or Israel’s war on Gaza, there are no deals forthcoming.