Trump’s ultimatum to the EU – Today it will be decided how trade relations will be

After the president Donald Trump took his oath of office in January 2025, an unprecedented trade storm began to roil Europe. The reason for Trump’s tariff threats and their implementation is that he hates the trade deficit with Europe and wants to bring industrial jobs and investment back to the United States.

To calm the situation, the EU contracted the president of the Commission Ursula von der Leyenin led by the Turnberry agreement with the United States last July, i.e. the political trade agreement framework. It agreed on a 15 percent tariff ceiling for EU industrial exports to the United States. At the same time, the EU must remove all tariffs on US industrial products and some agricultural products.

Almost a year has passed since Turnberry, but the agreement has still not been approved in the EU.

On Monday, the US ambassador to the EU Andrew Puzder in his opinion piece published in Politico, accused the EU of flirting and moving the goalposts.

According to Puzder, the EU has not implemented the agreed tariff concessions, but is trying to add new terms to the agreement, such as deadlines, suspension mechanisms and security clauses.

Puzder stated that the US will only honor the agreement if the EU does the same. At the same time, he reminded that President Trump “has seen enough” and can move to the path of confrontation if the agreement is not accepted in the agreed form.

Late night negotiations

On Tuesday evening at ten o’clock Finnish time, the negotiations of the Commission, the Parliament and the Council of the Member States on the legislation that is supposed to be implemented in the trade agreement between the USA and the EU will begin.

According to the sources interviewed by Kauppalehti, the preliminary expectation is that an agreement will be reached, because the political pressure has grown so great that the process is wanted to finish.

However, there are several controversial issues on the table. One key one concerns the role of the European Parliament, as the Parliament has demanded a stronger role for itself if changes were made to the legislation later. However, this claim is expected to fall.

Another dispute is related to the so-called conditional clauses. The Parliament has introduced into the agreement, among other things, “sunrise” and “sunset” mechanisms, i.e. suspension clauses, with the help of which the EU could freeze its own concessions if the United States does not follow the agreed line.

According to preliminary estimates, the agreement will not necessarily include preconditions for its entry into force, i.e. the so-called sunrise mechanism.

The Commission has presented relaxed versions compared to the Parliament’s previous demands, but the outcome of the negotiations is still open. For example, the question of whether the entry into force of the agreement will be tied to the reduction of US steel tariffs has been a difficult one.

The third difficult entity is more broadly related to whether the United States can continue unilateral customs measures alongside the Turnberry Agreement. The suspicions are related, among other things, to the fact that the United States launched a 301 investigation against the EU about a month ago, which is yet another way to launch possible new trade sanctions. On the basis of the 301 investigation, the United States wants to find out whether forced labor and overproduction have been committed in the EU.

Although an agreement in Tuesday night’s trilogues is considered likely, an agreement is not a foregone conclusion in the European Parliament, which must approve the final agreement, as well as the Council of Member States.

Germany wants a deal

In Parliament, the chief rapporteur for EU-US trade relations is a German social democrat and chairman of the trade committee Bernd Lange (S&D).

The German MEP is not believed to be able to bring a package to parliament that his own S&D political group could not accept. The situation is sensitive in other political groups as well: the left-wing group is basically against the agreement, the Greens’ position is uncertain and the center group may break up in its positions. Despite this, the majority in the parliament seems to be sufficient, as the right and part of the center support the agreement. In addition, it is expected that the Social Democrats will eventually stand behind the negotiation result – at least partially.

Germany, the largest member state of the EU, plays a significant role in the approval of the trade agreement because it wants the agreement to move forward. This will also bring German MEPs behind the approval. Parliament is supposed to vote on the agreement at the beginning of June.

The decision is supposed to be made in the Council of Member States already next week. The decision can be made by a qualified majority, which makes it easier to accept. Although, for example, France has made critical observations about the agreement, the general line in the member countries is the same as Germany’s, that is, that the agreement must be pushed forward.

Security and the future

The central problem of the Turnberry agreement from the EU’s point of view is its imbalance.

The EU would commit to eliminating tariffs on US industrial products, while the US would raise its own tariffs to 15%, which is clearly higher than the previous EU countries’ tariff level of 3%.

The reasons for accepting an unbalanced contract can be found in stability and security. Prior to the agreement, the United States imposed rapidly fluctuating, overlapping tariffs that could rise to more than 100 percent in some sectors. Such unpredictability was a serious risk for European companies, and the agreement is believed to bring at least some of the predictability that companies need.

In the background, the security of Europe also has an impact. At the time of the creation of the Turnberry agreement, Europe’s main goal was to ensure the commitment of the United States to support Ukraine, and this is still hoped for. The escalation of the trade dispute could also be reflected in the wider transatlantic relationship. The fear is that the US could increasingly use rising tariffs as a means of geopolitical pressure.