How EU Divisions Handed Trump a Trade Victory

What US President Donald Trump failed to achieve in his first term, he claimed in his second. The July 27, 2025, EU-US trade deal has shown that even an economic giant like the EU can be brought to its knees when divided. Once able to present a united front against US pressure, the bloc is now riddled with economic and political fault lines, which Trump has learned to weaponize. It’s the oldest trick in the book: divide and rule. Split your rival, pit them against each other, and watch them fold. The result is a trade deal that Washington dictated and Europe swallowed. 

Under the deal, which took effect on August 7, the US imposed a 15 per cent ceiling tariff on most EU goods, including cars, pharmaceuticals and semiconductors, sparing them from the originally threatened 30 per cent. However, steel, aluminum, and copper remain at a punishing 50 per cent rate. The EU has also agreed to buy $750 billion USD worth of energy and pledged $600 billion USD in investments in the US by 2028. Meanwhile, the US maintains tariff-free access to the EU market without putting matching concessions on the table. 

The deal has become a test of EU cohesion, revealing how uneven reliance on exports and competing priorities shape how states judge its cost and benefits, and their willingness to confront Washington or compromise. Germany’s auto industry supplies about two-thirds of all EU car exports to the US, while Ireland’s pharmaceutical sector accounts for nearly half of the bloc’s drug exports. Both are too dependent on the American market to risk jeopardizing it, positioning them as natural advocates for a swift settlement rather than a tougher negotiating stance. As the Irish Prime Minister Martin claims, the deal “brings clarity and predictability,” while German Chancellor Merz declared that “this agreement has succeeded in averting a trade conflict.” In Dublin and Berlin, relief prevails. The deal may be flawed, but the outcome could have been worse. 

France took the opposite view. Less dependent on US trade, despite being the bloc’s fourth largest exporter, France sent €44 billion in goods to the US in 2023 compared to Germany’s whopping €158 billion—a gap that gives Paris more room to press for a harder line without fearing such a significant economic blowback. French Prime Minister Bayrou condemned the outcome as “a dark day when an alliance of free peoples, united to affirm their values and defend their interests, resigns itself to submission.” France was also the only member state to openly urge triggering the EU’s anti-coercion instrument or “trade bazooka” against Washington. 

For others, the deal was less about trade and more about security. Estonia is one of the EU’s smallest exporters to the US, meaning the tariffs have little direct economic impact. Yet, Tallinn backed the agreement to ensure Washington stayed committed to Europe’s defence. This was especially relevant at a time when Russia’s war in Ukraine has heightened its sense of vulnerability. For Estonia and other frontline states, geopolitical stakes outweighed commercial gains. 

The deal is testing how much self-interest each member state is willing to sacrifice in the name of a united European front. However, trade is only one front, and the political battles within the bloc may be even more challenging to win.

These divisions are, in many ways, of the EU’s own making. The governments of Italy and Hungary, two of Trump’s closest friends in Europe, are advancing his anti-liberal values across the bloc and see him as a useful ally to undermine Brussels’ authority, eroding the very cohesion that once gave the EU its strength. Both seek a conservative, sovereignist bloc that will not stand in the way of their own domestic anti-woke agendas. Giorgia Meloni, the only EU head of government who attended Trump’s second inauguration, positions herself as a bridge between Washington and the EU’s resurgent conservative movement, earning Trump’s praise as “a fantastic woman.” Orbán has made hostility towards the EU his political trademark, even calling for an “invasion of Brussels.” Trump is more than happy to endorse such leaders, as their nationalism and Euroscepticism serve his ultimate goal of dividing and ruling the EU.

Is Trump determined to destroy the EU? His disdain for the EU is no secret, claiming that it was created to “screw” the US. He loathes the EU because it has a massive trade surplus with the US, despite the fact that the gap is just three per cent. His vice president, JD Vance, escalated the attack in February. In his speech at the Munich Security Conference, he accused the EU of suppressing free speech and ignoring voter concerns on migration in the UK. He also denounced Germany’s refusal to work with the far-right AfD as undemocratic and criticized Romania’s annulled election. 

This war of words against the EU is part of a broader divide-and-rule strategy. Trump’s goal is to recast the EU as a loose confederation of states, subjugated to the US, stripped of collective leverage, and too fragmented to resist US pressure. The plan is to bypass Brussels by offering individual capitals attractive deals. He has tried this before, proposing in 2019 to purchase Greenland from Denmark, but without success. The difference now is that Trump could threaten higher tariffs to get what he wants and test the loyalty of member states to the bloc.

If the trade deal is any indication, the EU’s biggest vulnerability is not American pressure but its own fragmentation. Trump has shown he can turn that weakness into leverage. Europe’s leaders must now decide: face Washington as a single bloc or as 27 competing suitors who could gift Trump the divided Europe he wants.

Edited by Aviya Krauss

Featured image: “Meeting between Ursula von der Leyen, President of the EC, and Donald Trump, President of the United States – 2025” by Fred Guerdin is licensed under Creative Commons Attribution 4.0