By Jim Geraghty
Monday, July 28, 2025
As far as second-term Trump administration trade deals
go, this is a big one. When you add up U.S. trade with all the European Union’s
27 member states, they’re America’s biggest trading partner, and the clock was
ticking closer to the August 1 deadline that would have imposed 30 percent
tariffs on all EU goods, which would have severely reduced European exports to
American consumers.
For free traders, it’s not great, but it does at least
provide some stability, assuming the president doesn’t change his mind some
time down the road.
From President Trump’s remarks Sunday, we can discern that
the European Union agreed to purchase $750 billion worth of energy from the
U.S. and will invest “$600 billion more than they’re investing already,” as
well as “agreeing to purchase a vast amount of military equipment. We don’t
know what that number is.”
European Commission President Ursula von der Leyen
announced that the price of avoiding a 30 percent tariff was accepting a deal
that places a 15 percent tariff on most EU goods headed to America. I say most
exports because von der Leyen’s statement said that exempt products
included “aircraft and component parts, certain chemicals, certain generics,
semiconductor equipment, certain agricultural products, natural resources and
critical raw materials. And we will keep working to add more products to this
list.”
The headline on the European edition of Politico declares
Europe “got the deal it craved.”
The Financial Times headline is the opposite: “How the EU succumbed to Trump’s
tariff steamroller.”
Trump began his remarks by saying, “We have the opening
up of all of the European countries, which I think I could say were essentially
closed.”
According to the office of the U.S. Trade Representative, “U.S. goods
exports to the European Union in 2024 were $370.2 billion, up 0.7 percent ($2.6
billion) from 2023.” Keep in mind, that’s just goods. The U.S. exported $277 billion in services — business
consulting, banking, etc. — to the EU in 2024. That adds up to $647 billion; if
U.S. exports in goods and services to the European Union formed their own
country, they would rank about 48th in gross domestic product, right around the
Czech Republic, below Austria and above Peru.
That’s a very curious form of an “essentially closed”
market, as President Trump contended.
Sunday, Trump continued, “Cars, uh, cars basically, were
not invited. We’re not, I, I don’t know if the word is not allowed or just, you
know, you just kept ’em out somehow, right?” This is a longstanding vexation of
the president; earlier this year, he fumed, “I asked a couple of the
leaders — I don’t want to use names — but how many Chevrolets or Fords do you
see in the middle of Munich? And the answer is none.”
This is not a blanket defense of EU rules, but let’s
observe that about 70 percent of the cars made in the United States are SUVs and pickup trucks. If
you’ve ever visited a European city, you’ve probably noticed that a lot of
their streets are narrow, built upon medieval paths laid out long before the
invention of the automobile. Gasoline costs an arm and a leg, thanks to significantly higher taxes. (In August 2024, the Tax Foundation calculated that the
taxes on gasoline in Europe range from 42 cents per gallon in Malta to $3.23
per gallon in the Netherlands. That’s not the total cost of the gasoline, that’s
just the tax!) The current cost of gasoline in Germany is $1.96 per liter — argh, darn you, Metric System — or $7.42 per gallon.
So, fuel efficiency is likely a much higher priority of a
European car buyer than an American one!
And as for parking, well, as Bill Bryson wrote:
“I love the way the Italians park.
You turn any street corner in Rome and it looks as if you’ve just missed a
parking competition for blind people. Cars are pointed in every direction, half
on the sidewalks and half off, facing in, facing sideways, blocking garages and
side streets and phone booths, fitted into spaces so tight that the only
possible way out would be through the sun roof.”
Shockingly, European urban dwellers in a driving
environment of narrow streets, extremely limited parking, and expensive gas
aren’t interested in buying SUVs and pickup trucks, which make up a significant
chunk of the cars made in America.
Now, did the European Union’s 10 percent tariff on
American cars hinder sales of U.S.-made cars? Sure. And under
this deal, it’s going down to 2.5 percent. But you’re still left with the
problem that most cars made in America are poor fits for the needs of the
European car buyer.
Analyzing the details of the deal is a little tough,
because what Trump said and what von der Leyen said did not line up precisely. The Wall Street Journal reports:
Trump indicated in comments to the
press that his global steel and aluminum tariffs, which are currently at 50
percent, would remain unchanged. Von der Leyen said the two had agreed to a
quota system that would keep tariffs lower for some EU metals exports to the
U.S.
Trump also said the EU had agreed
“to open up their countries to trade at zero tariff.” Von der Leyen said the
two had agreed to zero-for-zero tariffs for certain strategic products
including aircrafts and their parts, certain chemicals, semiconductor equipment
and certain agricultural products, among others, and said the two sides would
work to add more products to that list.
The Journal notes this is part of a pattern in the
administration’s trade deals so far:
Details on Trump’s other trade
deals have also been scant. The administration has released no documentation
for deals it claims to have reached with the Philippines or Japan, and details
released of the Indonesia deal last week remain incomplete. The U.K.’s
framework, released in May, also left some big items unresolved, like steel
tariff levels.
Hey, has anybody thought about writing these details down
during the negotiations? That would probably be helpful.
The editors of the Journal are deeply underwhelmed:
Alas, the deal doesn’t appear to
address America’s biggest commercial grievances with Europe, such as digital
taxes, punitive regulation against U.S. tech firms, and such faux food-safety
rules as GMO restrictions and bans on hormone-treated U.S. beef. Nor does it
require Europeans to pay more for drugs, one of Mr. Trump’s longstanding
complaints.
Mr. Trump seems to have abandoned
these goals in favor of his beloved tariff, which is a tax increase on American
consumers and businesses, including for pharmaceutical imports and ingredients.
Making Americans pay more for drugs via the tariff is an odd way to punish
Europe for its price controls that let it free ride on American drug
innovation.
The U.S. and Europe dodged the bullet of an all-out trade
war starting at the end of the week. The bad news is, we’re getting a 15
percent tariff on most goods instead.
Pardon the Interruption . . .
For
those with deeply flawed reading comprehension skills, no, Thursday’s newsletter did not “agree” with the argument
that Ghislaine Maxwell should get a pardon or a commuted sentence.
Could Maxwell know something about Jeffrey Epstein’s
network and its sordid deeds that could lead to the indictment of other
figures? Sure, that’s possible, but keep in mind, Maxwell would be an
incredibly weak witness in any future case. Besides her five convictions, the
government charged Maxwell with perjury but agreed to drop the charges in 2022 after her conviction on
the other, more serious charges, “in light of the victims’ significant
interests in bringing closure to this matter and avoiding the trauma of
testifying again.”
Any accusation from Maxwell would need to be corroborated
with other evidence. The defense attorney of anyone accused by Maxwell is
likely to argue that she’s making up stories to get herself off the hook, and a
jury would have a lot of reasons to greet her testimony with great skepticism,
absent serious supporting proof.
Even if Maxwell could provide evidence of others involved
in Epstein’s sex trafficking, there’s the giant moral problem of letting her
walk out of prison. So far, the 63-year-old has served about five years of a
20-year sentence. So, color me extremely skeptical that anything Maxwell has to
offer is worth sparing her another 15 years of prison time, unless it comes
along with some sort of airtight supporting evidence that will nail some
deserving bastards to the wall.
On Friday, President Trump spoke to reporters before boarding Marine One:
Q: Would you consider a pardon or
commutation for Ghislaine Maxwell if —
Trump: It’s something I haven’t
thought about. It’s really something —
Q: If someone recommended it to you
—
Trump: It’s something — I’m allowed
to do it, but it’s something I have not thought about.
Now, that is certainly not announcing an intention to
pardon Maxwell, but it also is not ruling it out, either. And then on Meet
the Press this weekend, House Speaker Mike Johnson punted on the question
as well:
KRISTEN WELKER: Well, listen, this
week, President Trump didn’t rule out a pardon for Ghislaine Maxwell. Of
course, that’s one of the big questions looming over all of this. So, let me
put this to you, Mr. Speaker, would you support a pardon or a commutation for
Ghislaine Maxwell, a convicted sex trafficker?
SPEAKER JOHNSON: Well, I mean,
obviously that’s a decision of the president. He said he had not adequately
considered that. I won’t get it in front of him. That’s not my lane. My lane is
to help direct and control the House of Representatives and use every tool
within our arsenal to get to the truth. I’m going to say this as clearly and
plainly and repeatedly as I can over and over. We are for maximum disclosure.
We want all transparency. I trust the American people. I and the House
Republicans believe that they should have all this information to be able to
determine what they will, but we have to protect the innocent, and that’s the
only safeguard here that we’ve got to be diligent about, and I’m insistent upon
doing so.
There are those who argue that this is all clickbait, and
that there is no news value in discussing Epstein, Maxwell, potential new
information about Epstein’s criminal network, or a potential pardon.
One complication is that the second-highest figure
at the Department of Justice spent nine hours over two days interviewing
Maxwell; like it or not, that is news. And when the president of the United
States refuses to rule out a pardon and the speaker of the House refuses to
object to the idea of giving her a pardon, that’s news, too, whether we like it
or not.
Separately, while this appears to be referring to the
Russiagate stuff and not Epstein, someone should probably tell FBI
deputy director Dan Bongino that he’s not being helpful when he posts on X:
[W]hat I have learned in the course
of our properly predicated and necessary investigations into these
aforementioned matters, has shocked me down to my core. We cannot run a
Republic like this. I’ll never be the same after learning what I’ve learned.
The FBI should not be running the social media equivalent of teaser trailers.
No comments:
Post a Comment