The trade deal is the EU’s Suez moment – its surrender to Trump can be seen by everyone | Larry Elliott

tIn 1956, his Suez crisis was a humiliating moment for Britain. Faced with no objection from the United States, Anthony Eden’s government was forced to abandon military operations in Egypt. The surrender of pressure on the United States is a recognition of Britain’s decline in its position on the world stage.

The trade deal between Washington and Brussels this week lacks the drama of sending troops to retake one of the world’s major waterways, but it’s the EU’s Suez moment. More importantly, European politicians understand this.

Donald Trump says the result is “great” and that’s true for the United States, because the EU Make all concessions Nothing was found. Most European goods exported to the United States will face a 15% tariff, while tariffs on goods already entering the United States will be completely eliminated. European companies are forced to accept higher costs as prices to enter the world’s largest market.

That’s definitely not all. The EU has also promised to reach a $60 billion (£45 billion) investment, long-term purchase of fossil fuel energy and buy more U.S. military kits. AN’s plan EU Digital Service Tax This will affect the US tech giants that have been removed.

As far as financial markets are concerned, this is a reassuring reason, as this unilateral peace agreement eliminates the threat of a trade war. It’s not that economists believe tariffs are good for the global economy, but that they fear that the outcome will be even worse. The EU trade negotiator also had the same opinion. For Brussels, any trade is better than no trade.

However, there are always critics, and condemnation of the deal comes soon, especially from France. Prime Minister François Bayrou said it was a “dark day” for Europe. His predecessor, Michel Barnier, The agreement says It is to admit weaknesses.

Entrepreneur and commentator Arnaud Bertrand posted the agreement on X with the most terms Expensive Empire Tribute In history. He added: “It’s not even like the type of agreement reached by two equal sovereign powers. It looks like the type of unequal treaties imposed by colonial power in the 19th century – except for this time, Europe is on the receiving side.”

This is a reasonable conclusion. The rationale behind the closed alliance within the group is that the EU, which owns its own currency, can match the United States not only in terms of economic strength, but also in terms of geopolitical influence. The euro will be a competitor to the dollar, and strong growth will have a political influence for Europe. Gathering sovereignty in areas such as trade will ensure that Europe is more weight than it is.

According to the plan, it did not completely disappear. Europe’s economic performance has been frustrating since the monetary union, with the gap with the United States widening rather than narrowing. The individual country systemically reduces independent action and is subject to restrictions on state aid, procurement and industrial policies. The responsibility for delivering the EU Commission’s negotiated trade deals did not prevent Europe from being dragged down by the United States. Indeed, the trade deal agreed by the EU and the United States is actually not as good as Keir Starmer. Registered Brexit UK.

EU countries need to ratify the U.S. EU agreement, which could be a problem if hostile French reactions are to take any measures. Many details are still unclear, and some of these terms will be difficult to execute (if not impossible). For example, the EU cannot force private companies in Europe to invest in the Atlantic Ocean.

Furthermore, if it is increasingly possible to increase the cost of U.S. goods, the deal could prove to be a Trump victory. Coupled with the constraints of migration, the obvious risk is that growth will slow down and inflation will rise. Wall Street shares are high and we expect good times to continue. They probably won’t.

But while there will be some schadenfreude in Europe as a bubble of U.S. asset prices, any joy of Trump’s unfortunate will prove to be short-lived.

The fate of Europe is related to the fate of the United States. First, it needs to enter the U.S. market because its economic model relies heavily on exports. This is especially true for Germany, Running large and lasting trade surplus. German automakers may be able to live with a 15% tariff, but they will be ruined if Trump is threatened to impose a 30% tax.

Secondly, the EU needs the United States to deal with Russia’s threat. It believes that U.S. energy is an alternative to Russian oil and gas, and the agreement to buy more U.S. military products is a way to tie the U.S. to NATO more firmly.

In sharp contrast with China. Beijing didn’t roll when Trump imposed punitive tariffs earlier this year. Instead, it stands in our bullying behavior Announce retaliation measures My own. The market fell into a full-scale panic mode, and China’s strong reaction led to a sharp decline in U.S. bond prices. In the face of financial collapse, Trump downplayed his tariff plan.

The EU’s surrender to Trump shows that China is now the only serious opponent of US hegemony. Like Britain since Suez, the EU’s surrender to the United States is also obvious.