In late July, European Commission President Ursula von der Leyen flew to Scotland to meet US President Donald Trump at his Turnberry golf course. She had to wait until Trump had finished his day golfing, and listened as he ranted about windmills in front of the press. After enduring this, she arrived at a deal that she hoped would give some certainty to the trading relationship with the European Union’s largest partner: 15 percent tariffs on most exports to the United States, well above the average 1.47 percent rate before Trump took office. While it was a climbdown from Trump’s threatened 30 percent, to many observers, it seemed like an extraordinarily one-sided deal for the world's largest trading bloc that, in theory, should be able to flex its muscles against the great powers.
In any case, the agreement was nothing more than a handshake. While it may turn into a detailed document, it has already shown signs of crumbling. Trump has threatened further tariffs over the EU’s technology regulations. With the center-left Socialists and Democrats (S&D) caucus in the European Parliament coming out against the deal, it is not clear that von der Leyen has a majority to pass it.
One reason von der Leyen agreed to such a lopsided deal was the worry that the Trump administration would otherwise threaten to militarily disengage with Europe amid Russia's war in Ukraine. Another reason was likely that the EU faces uncertainty with two of its top three trading partners. This turbulence is an unprecedented challenge to the bloc’s economic security. The EU also has a tense relationship with China, which it has been largely powerless against. (The United Kingdom, with left the EU in 2020, concluded a framework trade deal with the EU upon its departure.)
Feeling Positive
Economic security matters to the Europeans because it is more advantageous to be part of a large, unified economy than for its member states to go one-on-one against the world’s largest economies. According to the Eurobarometer’s Spring 2025 survey, defense and economic competitiveness top the most popular answers when respondents were asked what the EU can do to “reinforce its position in the world.” 37 percent said it needed to focus on defense and security, while 32 percent said it needed to improve competitiveness, economy, and industry. International trade ranked ninth at 16 percent; however, the survey was conducted before the US-EU trade announcement in July.
Europeans also resoundingly want a stronger EU to deal with global crises. Seventy-seven percent of Europeans agreed that the EU should have more means to deal with global challenges. The numbers were high even in countries like Hungary and Slovakia with Euroskeptic governments: 82 percent and 71 percent, respectively. Europeans also resoundingly want the EU member states to be more unified when facing global challenges: 90 percent agreed with the proposition, while just 9 percent disagreed.
Despite a turbulent global environment, most Europeans feel positively about the future of the EU, with 66 percent saying that they felt optimistic and 31 percent saying they felt pessimistic. In no country was this number below 51 percent, so coupled with the number of Europeans who want a stronger EU, it suggests that attempts to strengthen the EU would be received positively.
The EU also faces turbulence with China. In July, Chinese President Xi Jinping ignored von der Leyen's warnings about refusing access to the EU’s single market unless it opened up its economy to European firms. Xi refused to guarantee a supply of rare earths to the single market, which the EU remains dependent on for batteries and other green technologies. Meanwhile, China has become more aggressive in its support for Russia in prosecuting its war against Ukraine, with Chinese companies supplying Russian firms with drone parts. The EU has proposed targeting Chinese entities in its latest Russia sanctions package, and Beijing has responded to past rounds of EU sanctions by tightening its export controls on rare earths. Unlike with the US, the EU hasn't capitulated to Chinese demands, but its threats have fallen on deaf ears.
Reducing Trade Barriers
Beyond dealing with Trump and Xi, the EU can do two things to strengthen its economic security. The first is to conclude free-trade deals with other countries and trading blocs. The rest of the world is not following Trump in bringing back tariffs; free trade remains the ideal for most major economies. The EU and India—also a target for Trump’s tariffs—hope to reach a trade deal by the end of the year. The EU and Indonesia have agreed to a new trade deal. The European Commission recently approved a free-trade deal with the Latin American trading bloc Mercosur; it now goes for ratification—15 of 27 EU members and a majority in the European Parliament are needed—and faces opposition from an unlikely coalition of environmentalists and farmers.
The second is for EU member states to reduce their internal barriers to trade. While the EU is a single market, meaning there are no tariffs between member states, a 2024 IMF report found that intra-EU trade barriers might be as high as a tariff rate of 44 percent. The IMF suggested reducing these barriers by harmonizing regulations, liberalizing protected sectors, improving cross-border infrastructure, and pursuing intra-EU trade liberalization.
For Europeans, the economic benefits of the EU have been its biggest selling point; the EU’s handling of the crises of Brexit, COVID-19, and Russia’s war in Ukraine has turned it into an outside protector. Now the EU faces a difficult relationship with Trump and China, which touches on fundamental questions of economy and security. Whether it can handle these threats will determine whether it becomes a great power or languishes as a talking shop.
Luke Johnson is a freelance reporter living in Berlin, who frequently writes about Ukraine and Eastern Europe.
