"Trump ate von der Leyen for breakfast", an irate Hungarian PM Viktor Orban commented after the EU-US trade deal was announced.
It wasn't just the terms of the deal, it was the optics that led up to it. EU chief Ursula von der Leyen had fly to Trump's golf course in Scotland. She was made to wait until Trump and his son had finished their second round of gold. Then came the "talks" and the announcement.
Under the deal, most EU exports to the US would be subject to a15 per cent tariff. There is a small list of exempted items. The EU, in addition, commits to buying $250 bn worth of American oil and gas over the next three years and will also invest ove $600 bn in the US (the time period for which is not specified). EU car exports will face a lower tariff of 15 per cent compared to the 25 per cent they now face. However, steel and aluminium exports will continue to face a tariff of 50 per cent. Trump has also indicated repeatedly that punitive tariffs on pharmaceutical imports into the US are in the offing.
What does the EU get in return? Well, it doesn't have to face the 30 per cent tariff that its exports would otherwise have faced. EU exports and growth will be adversely impacted but less so than if Trump had hit EU with the 30 per cent tariff he had threatened in the absence of a deal.
It's hard to think of a more humiliating moment for Europe. The EU's commitment to raise defence spending to 5 per cent of GDP under pressure from Trump was humiliating but at least that could be defended as self-interest. It was meant to protect Europe from the alleged Russian threat.
The Europeans fear not just for their economy in the face of Trump's determination to effect tariff walls but about the US exiting NATO if they rub Trump the wrong way. It's hard to tell what Trump would do if annoyed. But the Europeans know that he can seriously hurt them.
As WW2 headed towards a finish, the Allies (Europe, the US and the then Soviet Union) framed an objective with respect to Germany: Unconditional Surrender.
That would be an apt characterisation for the EU- Trump deal
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