New US tariffs take effect on EU, much still unclear

A week or two ago, the EU and the US reached a deal in Scotland. In short, the US would impose a 15 percent tariff on EU imports, instead of the 30 percent previously threatened. European cars, currently subject to a 27.5 percent tariff, would also be subject to the 15 percent tariff.

In exchange for that American "concession," which effectively amounts to a substantial increase in import duties on almost all goods, the European Commission promised to abolish a number of duties on industrial goods and to allow more fisheries and agricultural goods onto the European market.

The 15 percent tariff is significantly lower than the 20 percent tariff the Americans announced on April 2, and certainly lower than the 50 percent and 30 percent tariffs Trump later threatened.

Still, it's a significant setback for the EU. Before Trump's trade war, the average US import tariff on US goods was between 1 and 2 percent. Meanwhile (since April), a temporary 10 percent tariff was in effect.

But after that, things quickly became much more vague. For example, the Americans write in their summary of the deal that the EU promises to buy $750 billion (€700 billion) worth of American energy products through 2028, about $250 billion per year.

The European Commission has stated its intention to do so. A firm commitment is simply not possible, as the European Commission has no say in how much energy companies or member states purchase, nor where they do so.

Experts have previously calculated that the amounts are unreasonably high. To reach €250 billion in coal, oil, and LNG, the EU would have to purchase 85 percent of its energy from the US (four times as much as it does now). Even more complicated: all US energy exports combined (to the EU and the rest of the world) currently amount to around €140 billion.

Besides being both unfeasible and unwise to purchase all energy from a single partner, it would also be a self-inflicted offense to ignore Norwegian oil and gas. Replacing all of that with energy from the US would be absurd, as energy expert Martien Visser previously explained.

Furthermore, the European Union writes in its summary that the US and the EU are working together to reduce the high import duties on steel, copper, and aluminum by 50 percent. But the Americans seem to have a different approach: "The sectoral tariffs on steel, aluminum, and copper remain unchanged. The EU will continue to pay 50 percent, and the parties will consult on securing the supply chains for these products."

Meanwhile, European automakers are still stuck with the consequences. Although the 15 percent tariffs on most goods took effect today, the paperwork to reduce the tariffs on cars isn't yet ready. And it's unclear when this will happen.

Neither the European Commission nor the European car manufacturers' interest group have yet responded to questions from RTL Nieuws.

It seems like cracks are quickly appearing in the deal. These could quickly develop into rifts, as was evident again this week. President Trump threatened on American television to raise tariffs to 35 percent if the EU doesn't invest sufficiently in the US in the coming years.

Because there, too, a vague agreement has been made. The European Commission writes, at the very bottom of its explanation of the deal, that European companies would be interested in investing an additional $600 billion (€550 billion) in the US.

The US, on the other hand, puts the EU's investment of an additional 600 billion up to and including 2028 at the very top of the list. But the same applies here: the European Commission simply has no say in this matter.

Yet Trump seems to believe this is the case, and that if the EU doesn't pay up, he'll raise the tariffs to 35 percent. Incidentally, Trump also claimed on CNBC that the EU would simply pay $600 billion, allowing the Americans to do whatever they want. This, however, is certainly not the case.

Trump always chickens out? That credo no longer applies: