On July 27, the European Commission and the United States administration under Donald Trump struck what has been hailed by some as a breakthrough trade agreement, and decried by others as a humiliating climbdown.

Billed as a tariff stabilisation deal, the new arrangement imposes US duties on EU goods at a flat 15% rate. But behind this facade of transatlantic unity lies a deeply asymmetrical compromise, raising questions about the EU's geopolitical coherence and economic sovereignty.

The scope of the agreement

In short, the agreement averts a full-blown trade war. It caps US tariffs on EU exports at 15%, preventing a threatened hike to 30%. Certain strategic sectors like aircraft parts, semiconductors, and some pharmaceuticals are partially shielded, and a few niche agricultural products escape duties altogether. However, the deal does not reverse Trump's existing 50% tariffs on steel and aluminium, which remain in place pending further negotiations.

In exchange, the EU committed to purchasing $750bn in US energy over three years (including oil, gas, and nuclear fuel), investing another $600bn into the US economy, and further opening its market to tariff-free American goods. In terms of actual economic reciprocity, the EU received little to nothing in return.

What the EU gave up

Let’s be clear: the EU yielded significantly. It not only accepted a substantial tariff burden on key exports such as cars, wine, and chemicals but also agreed to massive financial outflows towards US energy and defence industries. All of this was framed as a way to avoid the spectre of protectionist escalation. Pharmaceutical goods remain duty-free for now, subject to the outcome of a US national security review. But the EU seems to have delayed rather than removed the threat altogether.

While von der Leyen framed the deal as a necessary step to ensure stability, it’s hard to ignore the imbalance. The US extracted a one-sided commitment package, while the EU lowered its own tariffs on US goods to zero in some categories.

Political reactions in Europe: fractures and frustrations

The responses across European capitals reflect deep divisions. German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni welcomed the agreement as damage control, portraying it as a way to avoid an all-out trade war. French reactions were far more critical. Prime Minister François Bayrou labelled it a "dark day for Europe," accusing Brussels of capitulating to Trump’s coercive tactics.

Trade Commissioner Maroš Šefčovič, who oversaw negotiations with Trump, celebrated the deal’s conclusion, but key voices in France – including ministers and senior parliamentarians – demanded activation of the EU’s anti-coercion instrument. Emmanuel Macron remained silent.

Institutionally, the European Commission has the competence to negotiate trade deals. Yet, depending on the final structure of this agreement, approval may still be required from the European Parliament and, if it encroaches on national competences, from all 27 member states. Analysts are split: some see this as a political deal that skirts formal ratification, while others anticipate prolonged legal scrutiny.

Why did the EU agree? Fear and dependence

The fundamental driver appears to be fear. Brussels faced a US administration brazenly wielding tariffs as geopolitical weapons. There was a real concern that failure to concede could lead to retaliation not just in trade, but also in defence, including a potential drawdown of US military support to Ukraine or a reduction of American presence in NATO.

The EU’s decision to pour hundreds of billions into US energy and infrastructure projects is a symptom of strategic anxiety rather than economic rationale. This is not just a trade agreement: it is a transactional alignment designed to curry favour with Washington. As one analyst noted, it resembles a "rescue payment" more than a deal.

What this means for Europe’s future

The political symbolism is difficult to ignore. The EU has long talked about strategic autonomy, yet when the moment came to assert it, Brussels blinked. Worse still, the bloc accepted tariff terms worse than those offered to the UK or Japan, even though its market dwarfs both. For many, this is the clearest signal yet that Europe remains a commercial bloc without geopolitical identity.

By surrendering in the name of stability, the EU has shown that it still operates under the American security umbrella at a high cost. The economic consequences will be felt most acutely in Germany’s export-driven manufacturing base, which stands to lose up to 15% of production, according to the Kiel Institute for the World Economy.

This is not just about trade. It’s about Europe’s very identity. Without a coherent geopolitical stance, the EU remains reactive rather than strategic. As the global order shifts, this kind of vassalage not only undermines Brussels’ credibility but also sets a precedent for future concessions. If today it is tariffs and defence procurement, tomorrow can be foreign policy blind alignment.

What Brazil can learn: warnings from Europe’s unequal deal

For Brazil, currently cornered in its own stalled trade dispute with Washington stemming from Trump’s support for beleaguered former president Jair Bolsonaro, the EU–US agreement offers sobering and strategic lessons. First, it exposes the risk of entering talks with a partner unwilling to compromise. The US Trade Department has made clear that negotiations are no longer within their hands, but “at the White House.” Despite Brazilian efforts, Trump has not opened any negotiation channel.

In Brazil’s case, political ideology and geopolitical motivations have entered the trade equation. Trump made his position clear: he would consider alleviating or dropping charges against his far-right ally Bolsonaro and applying pressure on the BRICS in exchange for trade concessions. He sees Brazil as the weakest link in the bloc and believes the country’s president could interfere in the judicial process against Bolsonaro. But that is not the case. Under Brazilian law, such interference would amount to multiple crimes and could lead to potential impeachment of the president.

Despite the EU’s market size and regulatory influence, it still yielded to unilateral pressure, accepting terms dictated by Trump. Brazil, with less global clout and no military alliance with the US, would likely face even starker asymmetries.

Second, the EU’s willingness to pay a "rescue cost," funnelling hundreds of billions into US energy, infrastructure, and defence industries, sets a precedent that could embolden similar demands on Brazil. If Europe, a strategic partner and economic heavyweight, buckled under US pressure, Brazil can expect even harsher terms and far less room to negotiate.

Third, the EU deal demonstrates the limits of relying on old-school multilateralism when the counterpart prefers transactional leverage. Brazil should be cautious not to count on WTO rules or goodwill diplomacy to shield itself. Trump's negotiating pattern has consistently favoured blunt instruments: tariffs, security threats, and economic coercion, all bundled in a mafia-style tactic.

Fourth, the EU experience underscores the importance of strategic diversification. Europe’s over-dependence on US security and energy left it geopolitically exposed. Brazil should avoid concentrating its trade and investment expectations on the US and instead deepen South-South ties, particularly within MERCOSUR, BRICS+, and with partners in Asia and Africa.

Finally, Brazil must define a clear negotiation bottom line. The EU entered talks lacking a coordinated red line, which fragmented its position internally and weakened its external leverage. Brazil’s foreign policy, still oscillating between non-alignment and Western courting, risks a similar incoherence. A strong, unified domestic consensus is essential before engaging further with Washington.

The EU–US deal serves as a cautionary tale. For Brazil, it is a reminder that entering high-stakes negotiations with a power like Trump’s America requires preparation, clarity of purpose, and above all, the courage to walk away if the terms violate national interest.

Deal, defeat – or deterrent?

Ursula von der Leyen called it the “best deal possible under the circumstances.” But if these are the conditions the EU accepts, what does that say about the bloc's place in the world? This agreement may have defused a tariff bomb, but it should ignite a broader debate about sovereignty, leadership, and Europe’s willingness to act as more than a junior partner to the United States.

For Brazil, this is more than a European drama. It is a strategic warning. A negotiation without leverage leads to submission. A dependency without conditions leads to coercion. As Brasília contemplates how to engage with a US administration that prizes hardball tactics over reciprocity, the EU’s missteps serve as a mirror—and a deterrent. If Brazil is to preserve its autonomy and dignity on the world stage, it must prepare to defend its red lines and, if necessary, walk away. What is at stake is not just trade, but sovereignty itself.

Ricardo Martins is based in Utrecht, the Netherlands, and has a PhD in Sociology specialising in European politics, geopolitics and international relations.