President Donald Trump on Sunday announced a major trade deal with the European Union, which he portrayed as a major policy win, but American families are likely to see significant cost increases as a result.
Trump announced the deal after meeting with European Commission President Ursula von der Leyen. The agreement will impose a 15% tariff on most goods imported from European countries, which is below the 30% rate that Trump had previously threatened—but far more than the average 1.2% rate last year.
“It’s a very powerful deal, it’s a very big deal, it’s the biggest of all the deals,” Trump said, attempting to spin the announcement as a victory for his unpopular administration.
Tariff costs historically have been passed on to consumers, which is a concept that economic experts—and political leaders like former Vice President Kamala Harris—have warned about. Trump has disregarded these concerns and pursued economically harmful policies.
Joe Brusuelas, chief economist at accounting-firm network RSM, told CNN after the latest announcement, “You’re going to pay more for your European imports. That’s what this means.”
“These trade deals are all underwhelming for one simple reason: While trade barriers were a big deal in Trump’s youth, they’ve been tiny for decades. When tariffs are 1-2%, there’s not much to gain from a trade war,” Justin Wolfers, a University of Michigan economics professor, wrote on social media. “But you can do a lot of harm by charging Americans a 15% (or higher) import tax.”
Despite his victory proclamation, Trump failed to secure an agreement from the E.U. to eliminate value-added taxes and digital taxes.
Trump’s approach to trade runs contrary to the economic improvements experienced under the Biden administration. The tariffs he has imposed and negotiated increase prices for American consumers. The agreements have also been slammed by major American-based industries, like auto manufacturers, for giving foreign competitors a leg up over U.S. companies.
Trump is desperate for wins after the bulk of his campaign promises have failed to materialize. His “big” tariff deal is more of the same and not a victory.