New Alliances: How Europe Plans to Rebel Commercially Against America

Amid escalating trade tensions with the United States, the European Union is turning to Asia to form a new trade alliance aimed at protecting the rules-based trading system and overcoming the deadlock at the World Trade Organization.

This move comes in direct response to the new tariffs threatened by the administration of US President Donald Trump, which could reach 50% starting July 9 if a trade deal with the EU fails.

According to EU estimates, current US tariffs affect €380 billion of its exports, representing approximately 70% of its total exports to the US market.

The EU is already subject to US tariffs of 50% on steel and aluminum imports, 25% on cars and car parts, and 10% on most other EU goods, which Trump has threatened to raise to 50% if no agreement is reached.

The EU has suspended levies on €21 billion US goods until mid-July to allow more time for negotiations. It is consulting on further retaliatory tariffs targeting €95 billion of US goods.

Despite pressure from some countries for quick concessions, Brussels insists that any agreement must respect European standards on the environment, food safety, and data protection, issues that frequently clash with the Trump administration's trade policies.

European Demands

As US President Donald Trump's deadline for a new trade deal with the EU approaches, the bloc is trying to secure immediate tariff exemptions for key sectors, warning that any deal without these exemptions will be rejected by some member states.

These efforts come amid a tacit European acceptance that the 10% US base tariff on certain sectors may be unavoidable, but Brussels is demanding compensatory steps from the U.S.

During the Brussels summit held on June 26, it became clear during discussions on US tariffs that Germany and France, the EU's largest exporters to the U.S., were rushing to reach a deal with Washington.

German Chancellor Friedrich Merz said he wanted a quick and simple trade deal, while French President Emmanuel Macron said he wanted it practical and balanced.

Belgian Prime Minister Bart De Wever called for avoiding a trade war with the U.S.

It is worth noting that the European Commission, as the body responsible for trade negotiations on behalf of member states, recently set three main priorities for negotiations with Washington.

First, the Commission seeks to eliminate tariffs imposed by the Trump administration on European products or return them to pre-trade escalation levels, particularly in the sectors of alcoholic beverages, medical technology, and semiconductors.

It also demands that commercial aircraft, spare parts, and medical products be included in the scope of the anticipated agreement.

Second, the Commission insists on a comprehensive exemption from the 25% tariff on cars and auto parts, which it considers a red line. If a fair settlement cannot be reached, Brussels may resort to countermeasures.

The demands also include an immediate reduction in tariffs on steel and aluminum, which Washington raised to 50% last June.

Third, the Commission calls for any tariff exemptions to be implemented immediately after a preliminary deal is reached, even if the technical details take longer.

Some EU countries have considered a delayed agreement to be politically and economically unacceptable.

Despite the complications, it is not unlikely that the deadline will be extended again. 

US Treasury Secretary Scott Bessent recently said that the deadline could be extended for some countries negotiating in good intention, indicating that the new proposed deadline for completing deals is September 1.

Last week, the Trump administration sent a short negotiating document outlining its expectations from the European side without offering any corresponding concessions, according to European diplomats.

So far, the U.S. appears to be committed to imposing tariffs on vital sectors, including pharmaceuticals. Trump previously stated that tariffs on this sector would be announced very soon.

In a last-ditch effort to reach a settlement before the deadline, EU Trade Commissioner Maros Sefcovic and Chief of Staff of the European Commission President Bjoern Seibert are heading to Washington this week.

The delegation hopes to reach a preliminary deal that guarantees immediate tariff relief and avoids trade escalation.

If the talks fail, the EU will have to choose between accepting significant imbalances or responding with countermeasures.

Trade Rebellion

Separately, European Commission President Ursula von der Leyen unveiled a bold plan to form a new global trade alliance without the U.S., in the face of escalating trade threats from US President Donald Trump.

This European initiative comes after Trump spent six months upending the global trading system, threatening to impose tariffs, then easing them to open negotiations, with the warning of reimposing punitive tariffs if the terms are not satisfactory.

According to a report published by Politico, von der Leyen seeks to strengthen cooperation with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a bloc of 12 Asia-Pacific countries, including the UK, Japan, Australia, Canada, and Mexico.

This move is part of a new European strategy aimed at diversifying partnerships and strengthening the EU's role in shaping a fairer and more stable global trading system.

The EU and the CPTPP bloc together represent 39 countries and account for approximately 30% of total world trade.

Von der Leyen believes that forming this alliance based on shared values could be a first step toward reforming or even replacing the World Trade Organization, which has been suffering from institutional paralysis for years due to its reliance on consensus and the United States' refusal to engage in reform.

Former chief trade negotiators—including New Zealand's Tim Groser, Canada’s Steve Verheul, and EU’s John Clarke—suggest that the 39 EU member states and the CPTPP should begin by signing a standstill agreement that would keep markets open and send a strong message to Washington.

Washington withdrew from the previous agreement, known as the Trans-Pacific Partnership (TPP), in 2017, at the start of Trump's first term, although the previous Obama administration had been working on it.

In response to a question about the possibility of the U.S. joining the new European initiative, von der Leyen said: “As far as I know, the Americans left at a certain point, and it is now up to the two blocs to decide whether they want to open the door to them in the future.”

For his part, former EU chief negotiator Ignacio Garcia Bercero warned against closing the door completely to the U.S., noting that other countries must move forward if Washington is not prepared to return to a rules-based system.

In the same vein, the UK government, which joined the CPTPP last December, has expressed its support for the new European approach.

Von der Leyen has already begun engaging with CPTPP leaders, issuing a joint statement this week with New Zealand Prime Minister Christopher Luxon, declaring their support for launching a formal dialogue between the EU and the Asian bloc as soon as possible.

According to a European official, a ministerial meeting between the EU and CPTPP countries is scheduled for this month.

This European move represents a strategic turning point in the international trade landscape, amid efforts to reduce its dependence on the U.S. and strengthen its global role as a reliable partner seeking to build a trading system based on transparency, multilateralism, and mutual respect.

US Blackmail

The U.S. is taking advantage of trade negotiations with the EU to seek concessions regarding European regulations, which Washington believes particularly target its tech giants, such as Apple, Google, and Meta.

The US administration is seeking to ease the implementation of legislation aimed at limiting abuses of power by tech giants, particularly in areas such as competition, online content, and artificial intelligence (AI).

US demands also include quotas for fish exports from Europe that may be inconsistent with World Trade Organization rules, as well as non-reciprocal customs procedures and a series of conditions related to economic security.

In contrast, the European Commission has expressed its willingness to discuss common standards with the Americans, but the legislative texts that resulted from democratic debate remain a red line for it.

It has confirmed that it will evaluate any final deal and decide in due course on the level of asymmetry it is willing to accept, in full coordination with member states.

It is worth noting that energy could form part of a potential trade deal, with the EU potentially increasing its imports of American gas to replace flows from Russia.

The U.S. and the EU are among the world's largest trading partners, with bilateral trade exceeding $1.1 trillion in 2024.

Trade between the two sides spans several sectors, most notably the automotive, aviation, pharmaceutical, agriculture, and tech industries.

Despite attempts at reconciliation in recent years, issues such as agricultural subsidies, digital privacy, and environmental carbon taxes remain major points of contention between the two sides.

In turn, economic analyst Dr. Mahmoud Jebaee explained to Al-Estiklal that “Trump is using tariffs as a negotiating weapon to extract greater concessions from the United States' partners, not as a punitive tool or long-term economic policy.”

“Any unbalanced trade agreement could be perceived domestically in Europe as a political concession to US blackmail, which could fuel anti-globalization populist sentiment,” he added.

He pointed out that “the EU cannot continue on the defensive while the US administration adopts an increasingly protectionist approach under the slogan America First.”

Dr. Jebaee believes that “the biggest problem is that the U.S. is no longer willing to make multilateral concessions as it has in the past.”

“We are entering a new phase of transatlantic economic relations, characterized by mistrust, shifting balances of power, and the declining role of international institutions as a platform for resolution, making any comprehensive agreement a difficult and long-term task,” he said.