The New U.S. Approach to Trade and Partnership with the EU under Trump 2.0

The second Trump administration has significantly altered the U.S. trade posture, moving away from the WTO’s non-discriminatory most-favoured-nation principle toward  a reciprocal, deficit-focused approach. This shift has direct implications for the EU, for which the United States of America remained the largest export market and a major source of imports throughout 2024.

In July 2025, the United States and the EU issued a Joint Statement on Reciprocal, Fair, and Balanced Trade that fixed tariffs at 15% for most EU exports to the U.S. while maintaining zero tariffs for U.S. exports to the EU. Even if the deal restored a measure of predictability in the EU-U.S. trade relations after months of uncertainty, it also underscored the EU’s political caution and structural dependence on the transatlantic relationship.

The July 2025 agreement came at a potentially high cost to the EU because it constrains the Union’s ability to advance its core objectives: reducing energy dependencies, shaping global climate norms, safeguarding industrial competitiveness, and strengthening defence autonomy. The asymmetry embedded in the framework may stabilise trade flows in the short term but risks narrowing the EU’s policy space in areas which are crucial to its long-term strategic autonomy.

THE PROBLEM

The EU remains structurally dependent on the United States for both economic and security-related capabilities, including access to critical energy inputs, frontier technologies, and essential components in defence supply chains. Washington has, at least since the Obama administration, signalled a strategic shift in its security focus from Europe to the Indo-Pacific, and the cancellation of the Transatlantic Trade and Investment Partnership (TTIP) negotiations during Trump’s first term underscored the fragility of the transatlantic economic agenda. Russia’s full-scale invasion of Ukraine in 2022 heightened the urgency of these dependencies by highlighting Europe’s limited capacity to compensate for a possible reduction in U.S. support. Against this backdrop, the July 2025 agreement introduced a new stability but also left significant uncertainties, as noted by observers. The subsequent joint U.S.-EU statement from August rather added confusion by being vague on several crucial points, for instance, by including several EU intentions without further clarification of how and whether they will be implemented.

The July 2025 U.S.–EU agreement introduces a notable tariff asymmetry: while U.S. imports from the EU face a 15% tariff in many sectors, EU imports from the United States are largely exempt from tariffs. This imbalance makes it difficult to view the deal as favourable for the EU. Arguably its main achievement is avoiding something even worse. At the same time, there is still uncertainty about the full scope of the agreement. Its implementation has already begun in some areas – for example, the U.S. reduced the tariffs on EU cars in September – even if the agreement still requires approval through the ordinary legislative process, which may take several months. Regarding its ratification, voices from the European Parliament’s INTA trade committee suggest opportunities for improvement. Points of contention include whether the EU will remove the tariffs on steel and steel derivates while the U.S. continues to impose 50% tariffs on EU imports.2 Observers have also noted the potential U.S. pressure on EU standards, including climate and digital regulations, which could affect supply chains.

Beyond tariffs, the agreement and joint statement target the following areas crucial to EU competitiveness and strategic autonomy. The first concerns the energy commitments. The joint statement stresses the EU’s intention to purchase up to US$ 750 billion of U.S. liquefied natural gas, oil, and nuclear fuel through 2028. Although framed as a diversification away from Russian energy, it effectively ties Europe to U.S. fossil and nuclear sources, which runs counter to the EU’s objectives of achieving energy independence through renewables and meeting climate and sustainability goals under the European Green Deal. Moreover, since refiners are mostly privately owned in the EU, the implementation will depend on private sector purchasing decisions. The EC cannot simply decide that oil and gas should be purchased from the U.S. unless it introduces legislation that stipulates this, which is unlikely. Moreover, if these goals are met by the EU, they might exceed the U.S. capacity to provide the prescribed volumes.

The second area concerns frontier technologies. In the joint statement, the EU declares its intention to procure US$ 40 billion in U.S. AI chips and channel roughly US$ 600 billion in additional European investment into the U.S. by 2029. The statement is aspirational, and it remains to be seen how and to what degree this will materialise. From a strategic-autonomy perspective, these provisions, if implemented, risk slowing Europe’s efforts to close its innovation gap, align decarbonisation with competitiveness, and reduce its reliance on third countries, as emphasised in the Draghi report (9/2024) and the Competitiveness Compass (1/2025). While the external commitments do not fully preclude domestic investment, they risk slowing the scale and pace that are needed for genuine autonomy in energy and technology.

Third, the EU also plans to substantially increase its procurement of U.S. military and defence equipment. While most EU member states, including Czechia, are increasing their domestic defence spending, and there is some capacity for both domestic production and U.S. procurement, the EU’s direct role in this respect is limited to facilitating investments though the SAFE instrument, for instance. The concern here is that the reliance on the U.S. could conflict with strengthening the EU’s own defence industry, as highlighted in the White Paper on Defence (3/2025). Moreover, the wording of the Joint Statement in this case only suggests a substantial procurement increase, and there is a clear risk of future disagreements over expectations and implementation.

The EU now faces a strategic choice: continue moderating U.S. demands or adopt a more assertive stance. By accepting the U.S. practices that depart from WTO norms – such as zero tariffs on U.S. goods – the EU risks legitimising a new economic order. At the same time, the credibility of the European Commission could be undermined if the commitments of the July deal cannot be enforced at the EU level. Maintaining a predictable trade environment is essential, both for EU member states and for the Union’s overall credibility as a trading bloc.

CHALLENGES FOR CZECHIA

Czechia is directly exposed to the U.S. market only to a limited degree with roughly
2.5% of its exports destined for the United States. Its indirect exposure to it, however, is
more significant, and a less predicable trade environment could have broader negative
effects. The Czech Ministry of Finance forecasts that the U.S. tariffs will restrain exports
in 2026.

The automotive industry is a crucial component of the Czech economy. From this perspective,
the reduction of the U.S. tariffs on EU car exports from 25% to 15% could be viewed as beneficial. Yet even if the Czech exports to the United States remain limited, the lower demand for German exports to the U.S. is likely to reduce orders for Czech subcontractors, which threatens to erode the existing growth model. Competitiveness is further strained by the EU’s zero-percent tariffs on U.S.-made pickups and SUVs entering
the EU market. The rising competition from Chinese manufacturers adds an additional layer of pressure. However, so far, the Czech economy is outperforming the negative estimates.

The harmful effects of the U.S. tariffs may be partly offset by the new Czech government’s fiscal policy and Germany’s large-scale investment programmes in 2026. Some observers even view the current global economic turbulence as an opportunity to focus on domestic improvements in competitiveness, as argued by the Czech Chamber of Commerce.

Economic considerations aside, Czechia is among the EU member states that, for security and historical reasons, have the strongest interest in maintaining a robust U.S. engagement in Europe. The relatively limited economic costs may therefore be acceptable if the agreement ultimately provides greater stability. For Czechia, the main challenge lies in the uncertainties created by the increasingly unpredictable U.S. trade behaviour.

FORESIGHT

Trump 2.0 places tariffs at the centre of its economic agenda, and the administration is unlikely to reverse course even if negative economic costs arise. Although the U.S. Supreme Court is reviewing the legality of certain tariff-related executive orders as of the time of writing in December 2025, a substantive policy change – if it comes at all – is more likely to result from clear voter dissatisfaction in the 2026 midterm elections.

The EU’s approach to international order is rules based. There is a risk that a special treatment of the U.S. can undermine the EU’s credibility in its relations with its other partners. In the EU–U.S. Joint Statement, the EU committed to additional flexibilities in implementing the Carbon Border Adjustment Mechanism (CBAM) to address U.S. concerns about its impacts on small and medium-sized businesses. Given CBAM’s sensitivity and the criticism it has triggered globally, any concessions to Washington are likely to prompt similar demands from other countries. EU Trade Commissioner Maroš Šefčovič described the July 2025 statement as “the best deal we could get under very difficult circumstances.” Yet recent experience shows that agreements concluded under similar political conditions can shift abruptly to the detriment of the partners. The U.S.–Mexico–Canada Agreement (USMCA, 2020) illustrates that provisions negotiated with the Trump administration may later be contested and reinterpreted, while the U.S.–Canada trade talks were suspended unilaterally by the U.S. The durability of the July 2025 deal is therefore uncertain. The U.S. National Security Strategy from November 2025 confirms the Trump administration’s negative approach to the EU. The EU and Czechia should therefore plan for a persistent – rather than episodic – tariff and trade uncertainty at least through 2026.

→ The U.S.’s changing approach to Europe is not a short-term deviation but a long-term change and challenge. The consequences of the new U.S. approach for the broader geopolitical dynamics are likely to be lasting, and the only long-term solution is for Europe to reduce its dependency on the U.S.

→ In light of the volatility generated by the U.S. tariff policies, the EU must avoid agreements with the U.S. that violate international agreements and instead seek collaboration with like-minded partners globally to proactively defend and reform the rules-based international order, including the trading system.

→ European priorities in technology, energy, and defence—such as those outlined in the Competitiveness Compass—should be carefully reassessed and actively safeguarded.

Kateřina Březinová, Ph.D. is an American studies scholar and historian specializing in contemporary political, social, and cultural processes in the United States and Latin America, including international migration and mobility. She is a researcher at the Spanish National Research Council (CSIC) and heads the Ibero-American Center at Metropolitan University Prague, where she also teaches. She received her PhD in history from the Faculty of Arts, Charles University, and previously studied at the University of Texas at Austin and El Colegio de México. She has held research and teaching appointments at Universidad Carlos III de Madrid, the Spanish National Research Council, the London School of Economics, and the Instituto de Historia de Cuba. Her work appears in peer-reviewed publications and media commentary on the region. ORCID ID 0000-0002-1421-913X/