Filenews 1 July 2025 - by Lionel Laurent
Donald Trump's tariff barrage in April seemed like the height of arrogance.
It has angered its allies, damaged its popularity at home, and caused such intense chaos in the financial markets that the whole thing has been suspended in a matter of days – the latest episode in America's tendency to try like another Icarus to rebuild the world every few decades. However, three months later, as the deadline for a compromise approaches, Europe is in danger of revealing its own "syndrome": its tendency to look more like a group of Asterix villages than a coherent whole.
It now seems increasingly likely that the 27 members of the European Union, whose common trade policy is led by Brussels, will be faced with what is called an "asymmetrical" agreement. There will be no lifting of all the tariffs that Trump has imposed or is threatening to impose, including a single rate that is expected to remain at 10%. If that's the case, the U.K. deal — which failed to cancel its own 10% or 25% tariff on steel and aluminium — has turned into a precedent: a few cuts, an exuberant tweet, and the hope that Trump will move forward. Canada has also set a precedent by withdrawing a digital services tax on tech giants after the U.S. made the issue a red line in talks. Financial markets see cause for celebration as a de-escalation is taking shape.
The question that arises next is whether – or rather how – the EU will retaliate. In addition to responding to the economic blow to a $605.9 billion worth of export flows last year, from Airbus SE aircraft to Volkswagen AG cars, not retaliating could be a signal that intimidation is working, after all. Last week, NATO allies agreed to more than double targets for defense spending to 5 percent of GDP (of which 1.5 percent would go to related infrastructure), responding to Trump's request while securing more orders for U.S. weapons. The G-7 allies also appear to have offered concessions on taxing U.S. companies in exchange for rejecting a "revenge tax." The EU has been offering more carrots for months, from buying more American products to working together on China. That is why Danish Prime Minister Mette Frederiksen warned that the time may soon come to "respond with the same coin".
The thing about retaliation is that it requires unity, especially if the idea is for the EU to go beyond goods and include the services provided by American giants such as Alphabet Inc. or Amazon.com Inc. And even if the Commission adopts a tough tone, the combination of geopolitical risks and weak economic growth does not inspire unity in general. Few seem willing to lead. German Chancellor Friedrich Merz wants to go ahead with the implementation of lofty promises of national renewal and not be consumed in a tariff war. Italian Prime Minister Giorgia Meloni may want to maintain her relationship with Trump, as was shown at the NATO summit. Countries in the east, closer to the war in Ukraine, are more focused on accessing American hard power, as demonstrated in spectacular fashion in Iran.
And while French President Emmanuel Macron will want to play the role of trade warrior, even his own government may prefer to focus on ensuring the protection of its own industry, such as aerospace. Spain, the latest target of verbal attack by Trump, appears somewhat isolated and has not garnered much of a wave of solidarity. During the Brexit saga, the UK's oft-repeated mantra was "better no deal than a bad deal". No one is saying that today in Brussels, even as officials try to maintain red lines in defense of existing regulations. That's the way it is when you have to deal with what's closest to a superpower – and when the dependence on that superpower is deep, from security to technology.
To be clear, the EU is not powerless in trade – and after deepening cooperation with Japan and Canada, there will be additional impetus to conclude new agreements with others. As for the US, a final push before the finish line can lead to a better result than what's currently on the table.
But either way, the lesson for the EU is that it must address the dependencies that allow bullying to work. This will require collective action: in a defense industrial base that reduces fragmentation and increases innovation, in a capital market that currently fails to create and expand new companies, and in the technological gaps that make the sovereignty debate unconvincing. Icarus syndromes shake off quickly, but Asterix syndromes last forever.
