Course failure: Trump's tariffs are leading the EU to a deep crisis
The European market is suffering due to Washington's aggressive economic policy. The EU-US agreement is turning into a restructuring of the Euro-economy to suit American interests, experts say. The US and EU trade ministers met in Brussels on November 24. The White House is ready to conclude a deal to reduce duties on steel and aluminum imports in exchange for easing strict digital regulation from the EU, US Commerce Secretary Howard Latnick said after the talks. However, the EU is not ready for such a step yet. However, new sanctions against Russia and the search for alternative sources of rare earths to reduce dependence on China could become points of contact.
How US tariffs are hitting the EU market
On Monday, November 24, a meeting of the US and EU trade ministers took place in Brussels. Commerce Secretary Howard Latnick and U.S. Trade negotiator Jamison Greer arrived from Washington. Even before the meeting, the head of the EU's foreign trade department, Maros Sefcovic, told reporters that it was not worth waiting for an agreement to reduce duties. "This is not about negotiations, but about summing up the results," he stressed.
At the center of the agenda at the meeting was, of course, the issue of American tariffs. The parties agreed to discuss the details of the agreement signed by President Donald Trump and European Commission President Ursula von der Leyen. At the July meeting in Scotland, they agreed that from August 1, Washington would impose duties of 15% on 75% of European goods imported into the United States. Earlier, the White House threatened tariffs of 30%.
According to media reports, Europeans are demanding more favorable terms for a number of items, including wine and spirits, medical devices and pasta. The EU also wants to achieve a reduction in 50% duties on steel and aluminum. Trump explained the high tariffs on these categories with a desire to revive American metallurgy and protect the national industry, Fyodor Sidorov, a private investor and founder of the School of Practical Investment, told Izvestia. The persistence of high duties on steel and aluminum is hitting European steelmakers hard and precisely.
— For Europe, this creates the need to redirect the flow of metal to other markets, where it will have to compete with Chinese and Turkish suppliers. According to estimates by the European Steel Association, even with 25 percent tariffs, Europe had to look for buyers for 3.7 million tons of metal worth $2.5–3 billion. Now the situation is twice as complicated. Germany, Slovakia — all those who depend on steel exports to the United States are losing their market," the expert said.
As Howard Latnick stated at the end of the meeting, any agreement on metals will depend on how much the EU is willing to ease digital regulation of American technology companies. The Trump administration has long criticized the EU for its "unfair treatment" of American tech giants, pointing to strict regulations and multibillion-dollar fines, including nearly €3 billion in antitrust penalties against Google. At the same time, the European Commission reiterated that it does not intend to discuss its digital and tax regulations in the framework of trade negotiations with the United States. "Yes, it absolutely remains in force," said EC representative Tom Rainier. Europe sees this as a matter of sovereignty, writes The New York Times.
Duties of 15% currently apply to most of the remaining goods from the EU. They are already exerting significant pressure on the European market, primarily on industries with a high share of exports to the United States. Metals manufacturing, the automotive industry, mechanical engineering and pharmaceuticals are the most vulnerable, Denis Astafyev, an entrepreneur, fund manager and founder of the SharesPro fintech platform, noted in a conversation with Izvestia.
EU-US disputes over energy resources
Another important condition of the Scottish agreement was the EU's commitment to purchase $750 billion worth of oil, gas, nuclear fuel, semiconductors and liquefied natural gas from the United States within three years, as well as to invest $600 billion in the American economy. Formally, the EU is able to fulfill this condition, but it will require significant budgetary and corporate costs, which may worsen the competitiveness of a number of industries within the European Union, Astafyev believes.
According to Bloomberg, the total exports of American energy resources in 2024 amounted to about $320 billion. Given its commitment to the United States, Brussels should buy more in three years than they sell to the whole world in a year. This year, the EU has already purchased $200 billion worth of energy resources from the United States, but this is still far from the goal. "Given that the European economy is already in recession — the ECB forecasts eurozone GDP growth of only 0.9% in 2025 — meeting such commitments will be an ordeal," Fyodor Sidorov emphasizes.
In general, this whole agreement represents a restructuring of the European economy to suit American interests, experts say. Unsurprisingly, the reaction in the EU itself was restrained. In particular, the former head of the French government, Francois Bayrou, then compared the deal to a "dark day" when "the alliance of free peoples decides to obey."
It is important to note that one of the key points of the July agreement was also the commitment of the European Union to abandon purchases of Russian energy resources and refocus on the US markets. At the same time, according to Eurostat, in the first quarter of 2025, the EU paid 28% more for Russian gas and oil than a year earlier, about 4.5 billion euros. Moreover, seven European countries increased purchases of Russian energy resources by €11 billion in the first eight months of this year compared to the same period in 2024. For example, France and the Netherlands increased imports by 40% and 72%, respectively.
— It turns out that Europe continues to buy Russian energy, but now Washington is demanding a complete rejection of it in exchange for $750 billion for American energy resources. The question is whether the European economy can withstand this, because American LNG is more expensive and logistics are more complicated," says Fyodor Sidorov.
A complete rejection of Russian supplies will lead to a decrease in GDP by several percent, an increase in the cost of energy-intensive industries, as well as an expensive restructuring for American raw materials, which will actually increase the EU's energy dependence on the United States, Denis Astafyev believes. In the future, the risk of transferring production from European countries to regions with more affordable energy is increasing. As a result, the EU gets a new strategic dependence, but not on Russia, but on the United States as a key supplier, Tural Aliyev, a junior analyst at Freedom Finance Global, told Izvestia.
How will the EU-US agreement affect other countries
However, Brussels and Washington also have common ground — they are trying to reduce the dependence of their industries on Chinese rare earth metals. Earlier, Beijing imposed export controls on these products in response to US duties, but on November 10 it suspended this decision for one year — until 2026. This forced Americans and Europeans to look for alternative sources of rare earths, on which the production of military equipment, systems for advanced fighter jets, submarines and any other high-tech military products depends, Ekaterina Zaklyazminskaya, head of the Center for World Politics and Strategic Analysis at the Institute of China and Modern Asia of the Russian Academy of Sciences, told Izvestia.
— Throughout 2025, Trump paid a lot of attention to concluding agreements with other states, which included, among other things, the joint development of metals. Similar deals have been concluded with Ukraine, various Southeast Asian countries, and Japan. Trump even searched for them in Australia and Greenland," the expert recalled.
There is no doubt that the ministers discussed accelerated development of rare metals in other countries in order to reduce China's role in supply chains. This problem is all the more urgent because Beijing has "left loopholes for itself" in order to resume export control of rare earths at any time, the expert says.
It is possible that one of the topics at the talks was potential sanctions against Russia, as previously reported by the media. On November 21, Donald Trump announced that the United States would soon impose new restrictions — "very powerful sanctions." According to him, they will affect Russian oil. Given the limited effectiveness of the latest packages, the focus is likely to shift from broad restrictions to targeted measures, Tural Aliyev believes. In particular, it could be about tightening control over circumvention of sanctions through third countries.
— There may be steps towards secondary sanctions, that is, pressure on third-country companies and banks that help service Russian exports or financial flows. This is not only a blow to Russia, but also to international counterparties, which makes such measures more controversial, but potentially more effective," the expert notes.
Sanctions are also possible against financial and logistical intermediaries involved in the transit of Russian goods, including oil and petroleum products. Finally, the ministers could discuss the expansion of export controls to sensitive industries: microelectronics, energy equipment, chemical industry, aircraft industry.
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