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EU Criticizes US Trade Deal Amid Economic Concerns

Updated: 2025-08-29 08:12 BST

Top Lines

Germany and France sharply criticize the EU-US trade deal, expressing concerns over its economic impact.
The agreement imposes a 15% tariff on most EU imports, raising fears of higher inflation and economic strain.
European leaders call for increased defense spending and economic investment to address the challenges posed by the deal.

What Happened

On August 28, 2025, Germany and France publicly criticized the recently concluded EU-US trade agreement, warning of potential harm to the European economy. German Chancellor Friedrich Merz stated that the deal would lead to higher inflation and damage transatlantic trade, describing it as the "best result achievable" under the circumstances. French Prime Minister François Bayrou labeled the agreement a "dark day" and accused the EU of yielding to US pressure. The deal, announced on Sunday, imposes a 15% US tariff on most EU imports, a significant increase from the previous level. European Commission President Ursula von der Leyen had hailed it as "the biggest trade deal ever," but concerns over its economic impact have led to a decline in the euro and EU stocks, particularly in the automotive sector. (ft.com)

Why It Matters

Economic Impact: The 15% tariff is expected to increase costs for European exporters, potentially leading to higher inflation and reduced competitiveness in the US market.
Market Reactions: The announcement has caused the euro to drop over 1% against the dollar, and EU stocks, especially in the automotive sector, have declined.
Political Tensions: The criticism from Germany and France highlights growing divisions within the EU regarding the trade deal and its implications for European sovereignty and economic stability.

Key Numbers / Facts

15%: The new US tariff rate on most EU imports, up from the previous level.
1%: The decline in the euro against the dollar following the announcement.

Timeline (Today, 2025-08-29)

08:00 BST: German Chancellor Friedrich Merz criticizes the EU-US trade deal, citing potential economic harm.
08:15 BST: French Prime Minister François Bayrou labels the agreement a "dark day" and accuses the EU of yielding to US pressure.

Sources

Financial Times – Germany and France hit out at EU-US deal — published 2025-08-28 17:00 BST
Financial Times – The economic costs of Trump's assault on the global order — published 2025-03-03 12:00 GMT
Axios – Europe's twin crises — published 2025-02-15 08:00 EST
AP News – U.S. protectionism could undermine modest growth forecast for eurozone, says EU Commission — published 2024-11-15 15:03 GMT
Financial Times – Transatlantic interest rate rift widens as Trump piles pressure on Powell — published 2025-06-15 12:00 BST