BRUSSELS — Most thumbs were up. Some smiles were uneasy. And, in the middle of it all, the EU’s top trade official, Sabine Weyand, wore the kind of look that told the whole story: The bloc had gotten itself into a tricky spot. The photo, taken as the European Union and the United States sealed a fragile tariff truce at President Donald Trump’s Scottish golf resort on July 27, captured the discomfort on the European side over an agreement that was merely “the best it could get.” > President Trump's historic deal with the European Union reinforces our > strategic partnership with a key while expanding unprecedented market access > for American exporters. > > This colossal deal secures $750 billion in energy purchases and $600 billion > in investments, bolstering… pic.twitter.com/fcF2jdMP1f > > — United States Trade Representative (@USTradeRep) July 28, 2025 The two sides have finally firmed up Trump’s handshake deal with European Commission President Ursula von der Leyen into a joint statement that sets a 15 percent baseline U.S. tariff; promises a reduction in tariffs on European cars; caps levies on pharmaceuticals and semiconductors; and fully exempts EU exports of aircraft. Throughout, Europe has been engaged in a delicate dance with Trump — seeking to hold him to his trade promises while its leaders lobby him to commit to security guarantees for Ukraine against Russian aggression. “We’re still hostage to American military and strategic protection with a horribly neuralgic point, which is Ukraine,” said Pascal Lamy, a former EU trade commissioner. “And if we laid into Trump, which we have the economic capacity to do, he would have been able to say: ‘Well, if Europeans are enemies, now I don’t see why I should continue to help Ukraine.’ Nobody wants to take responsibility for that.” A less pressing, yet more awkward, task will be for Brussels to show the world it didn’t break the very rules of international trade that it helped to craft. After all, it has lectured Beijing, Washington and New Delhi for years on the importance of the World Trade Organization as an umpire of rules-based commerce. “We have completely sat on the rules that we helped to create, together with the Americans, and we will be accused of continuing to undermine them in the future if things continue as they are,” said Lamy, who after his stint in Brussels went on to helm the Geneva-based WTO between 2005 and 2013.  Von der Leyen’s admission at Trump’s Turnberry golf club that the EU had a “surplus” with the United States that the deal would help “rebalance” was the last nudge the Trump administration needed to declare victory and bury a system it had long seen as obsolete.  “By using a mix of tariffs and deals for foreign market access and investment, the United States has laid the foundation for a new global trading order,” Trump’s top trade negotiator Jamieson Greer wrote in a newspaper op-ed days after the agreement.  “[T]he Turnberry system is by no means complete, but its construction is well underway,” he added. CREDIBILITY CRUNCH The transatlantic trade accord, say leading trade authorities, risks undermining the very principles that Brussels has long championed at the WTO in a world increasingly shaped by no-holds-barred geopolitical confrontation. “It is going to be very difficult for the EU to say, ‘We are defending the multilateral trading system,’ because they are one of many members that decided to negotiate a bilateral deal with the United States,” said Marco Molina, a trade lawyer and a former senior diplomat who led talks on reforming the WTO’s dispute settlement body until 2024. The core problem of the deal is that it goes against the basic principles of the multilateral trading system: reciprocity and nondiscrimination.  Europe has been engaged in a delicate dance with Donald Trump — seeking to hold him to his trade promises while its leaders lobby him to commit to security guarantees for Ukraine against Russian aggression. | Pool Photo Annabelle Gordon via EPA For one, the two partners need to give each other roughly equivalent concessions — which the framework agreement currently hardly does. Nondiscrimination, set in the WTO’s most-favored nation rule, requires that any benefit granted to one trading partner needs to be immediately extended to all members — unless their agreement covers “substantially all trade.”  So while the EU has agreed to eliminate all tariffs on U.S. industrial goods and on cars, it has to do it under a full-blown trade accord. The Commission insists the agreement will eventually meet that bar.  Because most tariffs are set to be phased out over time, Brussels argues, the deal will ultimately respect the established rules of global trade. A senior Commission official told reporters on Thursday that the opening passage of the joint statement spelled out a “commitment for both sides to make an effort of progressive liberalization.”  They stressed it was “ongoing work that will also help us to meet the standards of the World Trade Organization rules around these issues.” On the record, the Commission’s commitment is unequivocal. “The European Union is and will remain a champion and supporter of WTO and rules-based trade — this will not change,” said Olof Gill, the Commission’s spokesperson for trade.  Yet even former Commission officials aren’t buying it. “The EU’s credibility as a linchpin of the WTO rules-based system would be seriously compromised if it decides to implement tariff reductions on a preferential basis,” said Ignacio García Bercero, who was the Commission’s point person for the transatlantic relationship and was responsible for its WTO policy until 2024.  This was met with enthusiasm from the leader of the bloc’s biggest economy, German Chancellor Friedrich Merz. | Filip Singer/EPA “There is zero credibility behind the argument that the EU-U.S. ‘deal’ is a step toward a WTO compatible [free-trade agreement],” added García Bercero, who is now a nonresident fellow at Brussels think tank Bruegel.  OUTBULLYING THE BULLY So what do you do when the biggest kid on the playground stops playing by the rules? For the EU, the response is increasingly: You don’t stand alone — you build a gang.   At first, Brussels resisted the idea of coordinating with other countries hit by Trump’s tariffs, such as Canada or Mexico. But it eventually changed course. “The main criticism that can be made against the Commission is that it did not seriously try to build an international anti-Trump coalition,” former WTO chief Lamy said.  That’s something that Brussels tried to fix in late June, when at a leaders’ summit, von der Leyen floated the idea of a new club in which the EU’s 27 countries would join forces with the members of the Pacific-focused Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, bloc, which counts the U.K., Canada, Japan, Mexico and Australia among its members. This was met with enthusiasm from the leader of the bloc’s biggest economy, German Chancellor Friedrich Merz. “If the WTO is as dysfunctional as it has been for years and apparently remains so, then we, who continue to consider free trade important, must come up with something else,” he told reporters.  Talks between EU and CPTPP negotiators are now expected later this year, with the goal of coordinating efforts to defend rules-based trade in the face of Trump’s tariff offensive, a top New Zealand finance official told POLITICO.  “The only way the EU can rebuild trust in the system is by coordinating with other members, beyond the U.S., to ensure WTO rules are respected,” said Molina, who now heads up his own law firm, Molina & Associates. “That will require leadership and teamwork — and the hope that Washington eventually realizes this trade war hurts American interests and consumers.”

LONDON — Britain has confirmed plans to join an international trade dispute system — a move that risks riling up its U.S. allies, while bringing Britain closer to the EU. Ministers announced on Wednesday night that the U.K. would sign up to the World Trade Organization’s Multi-Party Interim Appeal Arbitration Arrangement (MPIA). The mechanism was set up in 2019 as an alternative to the WTO’s appeals court, the Appellate Body, which has been paralyzed since the United States blocked new judicial appointments. The dispute system includes 27 WTO members, including the EU, Canada, Australia and China — but notably not the U.S. In a release touting its new Trade Strategy, due Thursday, the U.K. government said joining the MPIA was a demonstration of its commitment to an “effective rules-based international trading system.” The move is likely to go down a treat with the EU, a key proponent of the mechanism. But the news may not be received so well by the Trump administration “Brussels will be happy to see that the U.K. is joining the MPIA — many see this as long overdue,” Emily Lydgate, co-director of the UK Trade Policy Observatory at the University of Sussex Law School told POLITICO. “China is also a party to MPIA, so the U.K. is continuing to walk a tricky line between making trade deals with Washington D.C. and working constructively with other important trade partners.” CHANGE IN TONE The U.K.’s decision to join the MPIA marks a change in tone from its previous stance on the WTO trade dispute system, which was in line with the U.S. position, said Lorand Bartels, a professor of international law at the University of Cambridge.  “The U.K. used to say that the reason it was not joining [the MPIA] was that it wanted to focus on durable reform of the WTO dispute settlement system,” he said. “This was also the stated view of the U.S. and it seems plausible that the U.K. was aligning with the U.S. on this issue not only out of conviction but also to maintain the relationship.” Bartels said it was not clear if the move would affect the U.S. relationship. “It is possible that the U.S. is less concerned now about the MPIA than it was,” he said. “But even if this is not the case, the U.K. must now have decided that trade relations with the U.S. are sufficiently stable for it to be able to sign up to the MPIA anyway.” “There is an alternative explanation,” Bartels added, “which is that this was a ‘reset’ deal-breaker for the EU, and the U.K. chose the EU over the U.S. But that seems less likely.” PRIORITIES ELSEWHERE But Simon Lester, President of WorldTradeLaw.net and a fellow at the Baker Institute, cautioned against reading too much into the U.K.’s decision, which he describes as a “commonsense way forward so that it can take full advantage of WTO dispute settlement.” “It is possible that some people in Brussels and Washington may try to read into it a broader statement related to U.K. alliances and alignment,” he added. “I think it is probably a mistake to view it this way, though, as the impact of the U.K.’s decision to join the MPIA is fairly narrow, and is much more limited than, say, the substantive trade deal that the U.K. government recently signed with the Trump administration.” A senior consultant familiar with the Office of the United States Trade Representative’s stance on WTO matters said: “Their position is that they’re immune to pressure at the moment on restoring the appellate body. Until China, the EU and India come forward with meaningful WTO reform, proposals are not going to move.” The consultant, who was granted anonymity to speak freely, added: “While they won’t love the U.K. announcement, they’ve got bigger issues on their plate — not least all the bilateral deals which are meant to be done in the next two weeks.”

Armenia and Azerbaijan agreed to the terms of a long-awaited peace treaty Thursday that could end a decades-long conflict that began with the fall of the Soviet Union. After Armenia accepted the two remaining elements of a peace deal from Azerbaijan, the latter laid out several formal requirements that Armenia must complete before the deal can be signed.  “As the next step, Azerbaijan expects that Armenia will amend its Constitution and … eliminate claims against the territorial integrity and sovereignty of the Republic of Azerbaijan,” said Azerbaijani Foreign Minister Jeyhun Bayramov. Bayramov added that in order to seal the deal, Armenia must also dissolve the Minsk Group, a 1992 format created under the Organization for Security and Co-operation in Europe and co-headed by the U.S., Russia and France to resolve a conflict over the Nagorno-Karabakh border region between the two countries. Meeting these demands could take some time, given that amending the constitution requires that a referendum be held. The Armenian PM called for a referendum on a new constitution in February. Still, observers hailed the agreement as representing significant progress toward peace. “This is an unprecedented breakthrough in what was deadlocked diplomacy,” said Richard Giragosian, director of the Regional Studies Center, an independent think tank based in Armenia. Given how long it will take to meet Azerbaijan’s final demands, they should not be prerequisites for signing the peace treaty but rather a matter for further discussion, Giragosian added. “Both sides [should] sign the peace treaty and continue talks,” he said, though noted that skepticism remained a barrier. “There is a degree of wariness in Armenia that this may be too good to be true. There are expectations that Azerbaijan may actually continue to demand more concessions.” The two countries have yet to negotiate when and where the peace deal will be signed. Armenia proposed issuing a joint statement following the agreement of terms but Baku declined, Armenia’s Foreign Ministry said. Armenia and Azerbaijan have fought a series of conflicts in recent years, with an Azerbaijani offensive in Nagorno-Karabakh last September forcing the region’s 100,000 residents to flee.

Beijing struck back on Tuesday after U.S. President Donald Trump imposed 10 percent tariffs against China, announcing levies of 15 percent on U.S. liquefied natural gas and coal, and 10 percent on crude oil, farm equipment and some autos. Beijing also set further export controls on rare metals, and announced an anti-monopoly investigation into Google, the search engine owned by Alphabet, and a number of other U.S. companies.  The Chinese measures will take effect on Feb. 10, leaving time for Trump to talk to President Xi Jinping about how to avoid further trade escalation. The U.S. president on Monday suspended higher tariffs against Canada and Mexico for 30 days after Prime Minister Justin Trudeau and President Claudia Sheinbaum pledged action to shore up U.S. border security. While the U.S has applied tariffs across the board for Chinese goods, China’s response was cautious in comparison, only applying levies to specific imports.  Beijing also filed a complaint to the World Trade Organization (WTO), invoking its dispute settlement procedure. “The U.S.’s unilateral imposition of tariffs seriously violates the rules of the World Trade Organization,” read a statement from the finance ministry. “It is not only unhelpful in solving its own problems, but also damages the normal economic and trade cooperation between China and the U.S.” Trump told reporters in the Oval Office on Monday that his trading partners want to avoid U.S. tariffs, and “in all cases, they all want to make deals.”

China said on Monday it had launched a dispute at the World Trade Organization against the EU’s definitive duties on Made-in-China electric vehicles. Beijing had threatened to do so last week, after the EU finalized its decision to impose duties of 8 percent to 35 percent on Chinese EV brands. The duties came after a year-long investigation found that Chinese manufacturers had benefited from unfair subsidies. The Chinese Commerce Ministry said that “in order to safeguard the development interests of the electric vehicle industry and global green transformation cooperation, China has decided to file a lawsuit against the EU’s final anti-subsidy measures.” A WTO official confirmed the complaint had been lodged. “We can now confirm that a request from China for consultations with the European Union regarding the EU’s definitive countervailing duties on electric vehicles has been received,” the official said. This new request covers the EU’s definitive measures, its investigation and the provisional measures, which were the subject of an earlier dispute launched by China on Aug. 9. It’s the latest salvo in escalating trade tensions between Beijing and Brussels. The EU is meanwhile expected to imminently send a negotiating team to China in a bid to find a compromise with Beijing under which manufacturers would make minimum price undertakings that would render the duties moot. China is asking for consultations with the EU, the first step in any WTO dispute settlement, which will last for 60 days before a panel might be requested to adjudicate on the dispute. However, the WTO’s highest appeal body is out of action due to a lack of judges caused by U.S. frustrations with the organization. However, China and the EU could settle their case through the back-up system, known as MPIA, of which they both are members. Additional reporting by Koen Verhelst.

WASHINGTON D.C. — Senior U.S. Republicans attacked the British government for its decision to cede control of the Chagos Islands, warning the move is a coup for Chinese interests.  The chairs of both the Senate and House foreign affairs committees warned the deal, struck Thursday, could put U.S. and U.K. security at risk. The British government has agreed to hand power over the disputed Indian Ocean archipelago to Mauritius, which has links with Beijing and struck a free trade agreement with China in 2021. Under the terms of the deal, the military base Diego Garcia, used by the U.S. government to house navy ships and long-range bomber aircraft, will remain in U.K. and U.S. jurisdiction for at least the next 99 years. The British government insisted its U.S. allies were foursquare behind the move, after a report claimed Washington raised concerns about the decision with the U.K. But top Republican lawmakers echoed criticism from Conservatives in Britain that conceding to the long-standing Mauritian campaign for control of the islands could be a mistake.  Idaho Senator James Risch, a senior member of the Senate Foreign Relations Committee and a Donald Trump supporter, said the move “gives in to Chinese lawfare and yields to pressure from unaccountable international institutions like the International Court of Justice at the expense of U.S. and U.K. strategic and military interests.” He added: “The U.S. and our allies must take a long term approach when it comes to making decisions that affect our strategic competition with China, or we will all lose.” Texas Representative Michael McCaul, who chairs the House Foreign Affairs Committee, said the Diego Garcia base was “essential” to countering China and co-ordinating partners in the Indo-Pacific, adding: “The administration must ensure that U.S. security interests in the Indo-Pacific are protected by this agreement.” ‘FOREIGN POLICY FUMBLE’ Conservative thinkers in the U.S. also weighed in against the move by the new Labour government in the U.K. “Of course this deal benefits China,” said Luke Coffey, a senior fellow at the Hudson Institute think tank and a former adviser to British Defense Secretary Liam Fox.  “People should not let the 99 year use of the military base in Diego Garcia by the U.S. and the UK provide any comfort,” he added. “Just look at the regrets and consequences resulting from the transfer of Hong Kong in 1997 under a similar arrangement. Texas Representative Michael McCaul, who chairs the House Foreign Affairs Committee, said the Diego Garcia base was “essential” to countering China. | Anna Moneymaker/Getty Images “This was the first major foreign policy fumble by the Labour government. If I was a Falkland Islander or a Gibraltarian I would be a little nervous.” U.S. President Joe Biden said in a statement that the deal was “a clear demonstration that through diplomacy and partnership, countries can overcome long-standing historical challenges to reach peaceful and mutually beneficial outcomes.” Nevertheless, a report in The Times newspaper said U.S. officials warned the Labour administration in Britain against handing the islands to Mauritius, due to fears the Chinese could use them to house listening posts. A U.K. government spokesperson insisted: “We strongly reject these claims. This historic agreement, welcomed by the U.S. president and the U.S. Department of State, will secure the future of the U.K.-U.S. military base on Diego Garcia. “For the first time in over 50 years, the base will be undisputed and legally secure with full Mauritian backing and is now more protected than ever from foreign malign influence.” Others supported the deal. David Vine, co-ordinator of Chagossian advocacy group Let Us Return USA, said the agreement “could have been done decades ago.” He said it was a “major exclusion” to exclude Diego Garcia from the right of return for Chagossians. The U.K. and U.S. expelled the islanders when the area was detached from Mauritius. A 2019 advisory opinion from the International Court of Justice, which adjudicates on disputes between nations, found that the detachment of the Chagos Islands from Mauritius was “not based on the free and genuine expression of the will of the people concerned.” It said the U.K. was “under an obligation to bring to an end its administration of the Chagos Archipelago as rapidly as possible.” Phelim Kine contributed to this report.