BRUSSELS — The next obstacle to the trade deal between the European Union and the United States won’t come from the Oval Office — but rather from the second-biggest party in the European Parliament. The European Socialists have come out against the accord that Commission President Ursula von der Leyen struck with U.S. President Donald Trump in July. That will make her job of building the majority she needs to enact the tariff truce a tough one — and failure to do so could plunge the transatlantic trade relationship back into turmoil. “We firmly oppose the agreement,” Iratxe García Pérez, president of the Socialists and Democrats (S&D) parliamentary group, told POLITICO.  The Socialists’ opposition imperils the EU’s efforts to present the pact as guarding transatlantic unity against Moscow. It also deepens a rift with von der Leyen’s center-right allies the European People’s Party (EPP) — who support the deal — which has in the past worked with the S&D to pursue a moderate agenda. The standoff comes just weeks after von der Leyen had to make long-term commitments on social spending to secure the support of the Socialists to win a high-stakes motion of no confidence. The S&D lost leverage in the 2024 European election, when an electoral shift made it possible for the EPP to pass measures with the support of political groups on the right of the political spectrum. As their presence in the Commission and in national governments has dwindled, the Socialists have become increasingly strident in their criticism of the EU executive and the EPP — and are eager to leverage their remaining political weight to extract political concessions. EXPLOITING WEAKNESS Since the transatlantic trade agreement was sealed at Trump’s golf resort in Turnberry, Brussels has faced charges that it surrendered to Washington and did not make use of the EU’s economic heft, as a market of 450 million people, to respond to Trump’s aggressive negotiating tactics. García Pérez comments came after Trump threatened last week to punish countries that impose digital rules and taxes that discriminate against American companies. She insisted the EU should make use of its toughest trade weapon, the Anti-Coercion Instrument, to hit back at Trump’s bullying.  “Trump will exploit any sign of weakness to escalate the trade war,” she added. García Pérez’s defiance followed criticism of the trade deal by Teresa Ribera, the top-ranking Socialist in von der Leyen’s Commission. Ribera, who oversees competition policy, told the Financial Times last Friday that the EU needed to be ready to walk away from the deal if Trump acts on his tech threats. And on Monday, European Council President António Costa — another Socialist — said he acknowledged “the frustration felt by many Europeans, who perceive the Union as having been too passive in shaping this summer’s developments on trade, relations with the U.S. and Ukraine.” European Council President António Costa — another Socialist — said he acknowledged “the frustration felt by many Europeans, who perceive the Union as having been too passive in shaping this summer’s developments on trade, relations with the U.S. and Ukraine.” | Rodrigo Antunes/EPA Costa, a former Portuguese premier who now represents the interests of EU governments, said in a speech in Slovenia that Washington’s attack on the EU over its tech regulations amounted to regulatory overreach and censorship. “Our partners — including the U.S. — must know that the EU will always defend its sovereignty, its citizens, its companies and its values,” Costa said. “Diplomacy should never be mistaken for complacency.” Under the deal, most EU exports are subject to an all-in 15 percent U.S. tariff. To complete its side of the bargain, the EU should pass legislation to abolish all tariffs on U.S. industrial goods, including the 10 percent it charges on U.S. autos, and ease market access for some farm produce and seafood. “In the bigger picture, the Socialists have good reasons to oppose this deal, because it is very unclear what the rationale was for von der Leyen to give away the EU’s WTO orientation and these massive concessions for security guarantees that are nowhere in near sight,” said David Kleimann, a senior trade expert at the ODI Europe think tank in Brussels. Kleimann was referring to concerns that the agreement goes against global trade rules as enshrined at the World Trade Organization. UPHILL BATTLE The most immediate test for the deal will be when the Parliament weighs in on the legislation proposed by the Commission last week to scrap the tariffs on U.S. industrial goods — a prerequisite for Washington in turn to lower its tariffs on European autos to 15 percent from 27.5 percent. With autos the largest transatlantic export of the bloc’s largest economy, Germany, the stakes are high. The most immediate test for the deal will be when the Parliament weighs in on the legislation proposed by the Commission last week to scrap the tariffs on U.S. industrial goods — a prerequisite for Washington in turn to lower its tariffs on European autos to 15 percent from 27.5 percent. | Andrew Harnik/Getty Images Bernd Lange, a German S&D lawmaker who chairs the Parliament’s trade committee, warned that Brussels must be ready to act fast if Washington fails to deliver on its pledge to reduce car tariffs — and especially if Trump moves against the EU’s regulatory sovereignty on digital or green rules. Lawmakers will get their first opportunity to vent their frustration when Sabine Weyand, the top official in the Commission’s trade department, testifies before Lange’s committee on Wednesday. Lange, who will be the lead lawmaker on the proposals, said that if the United States doesn’t reduce tariffs on European cars, “then we will not lower the 10 percent U.S. tariffs. That is clear.” To pass, the legislation would require a simple majority of votes cast. If von der Leyen can’t persuade the S&D group to back the trade deal, her party would, along with the moderate coalition allies that elected her to a second term, need the votes of the right-wing European Conservatives and Reformists group and the far-right party Patriots for Europe to secure its passage. “The S&D has always been more critical of the United States trying to strong-arm the EU into following their position. They are generally more opposed than the transatlanticist EPP on the other side, which would want to keep this truce alive,” Kleimann added. The EPP, von der Leyen’s political family, broadly backs the deal but has also raised concerns. “I support the Commission in its efforts to create predictability in trade with one of our most important partners — but I have concerns about how the agreement is compatible with [World Trade Organization] rules, which I am in the process of analyzing now,” said Jörgen Warborn, the EPP’s trade policy lead. Koen Verhelst and Seb Starcevic contributed reporting. 

BRUSSELS — The European Commission on Thursday proposed new legislation to eliminate tariffs on U.S. industrial goods, a move that should unlock a reduction in Washington’s own tariffs on European autos. Putting forward the legislation is a precondition for President Donald Trump’s administration to drop tariffs on European cars to 15 percent from the current 27.5 percent. Under the terms of the transatlantic trade deal unveiled a week ago, the U.S. would in turn backdate the reduction in its auto tariffs to Aug. 1. “The first act concerns a proposal to eliminate tariffs on U.S. industrial goods and provide preferential market access for a range of US seafood and non-sensitive agricultural goods,” the European Commission said in a press release. “The second one proposes to prolong the tariff-free treatment of lobster, now including processed lobster.” The agreement, EU trade chief Maroš Šefčovič said last week, was good news for the bloc’s auto industry, which has been “bleeding a lot of cash” in recent months. “This will save car makers more than €500 million in duties that would have otherwise been paid for exports in one month only,” Brussels added in its statement. The handshake trade deal reached between Trump and European Commission President Ursula von der Leyen in Scotland at the end of July would set a baseline U.S. tariff on European exports of 15 percent. The EU would meanwhile scrap industrial tariffs — including the 10 percent it currently levies on autos made in the United States. Brussels has also committed to open its market wider for a basket of U.S. farm exports. The next key question is whether the United States will indeed make good on its side of the bargain. Trump cast the fragile transatlantic trade truce into doubt earlier this week when he threatened new tariffs on countries who apply digital policies that he deems discriminatory.  A senior Commission official was confident this would go through.  “There should not be any doubt: their tariffs on cars and car parts should go down. That is the U.S. part of the bargain,” the official, speaking on condition of anonymity, told a briefing.  LOBSTER IN, BEEF OUT Commission officials underlined that no “sensitive” farm goods were included, stressing that U.S. beef and poultry remain explicitly excluded from the concessions. These products are politically explosive in Europe, where stricter hormone and hygiene rules have long limited American imports. Instead, Brussels offered tariff-rate quotas on a limited list of U.S. agrifood exports such as dairy, pork, nuts, seafood and even bison meat. It also kept all U.S. lobster imports tariff-free, a politically potent win in Washington, landing as Maine’s lobster season is in full swing. One official described the concessions as “meaningful, but not very costly” for the EU. That offers little relief for European farm lobbies which were already critical of the outline of the deal last week. Groups like Copa-Cogeca and Farm Europe argue that European agriculture “footed the bill” for the handshake deal. It won no reciprocal gains, they said, while still facing a 15 percent tariff ceiling on most exports to the U.S., including products that previously traded tariff-free, like wine and spirits. Farm groups say rural interests were effectively sidelined while Europe’s carmakers walked away with the prize. EU HURDLES Proposing the tariff legislation is only a first step, as the Commission will still need the assent of at least 15 of the EU’s 27 member countries and a simple majority in the European Parliament for it to take effect.  Since the Commission negotiated the trade deal with the political blessing of member countries, the Council of the EU that represents them shouldn’t present a major hurdle. The European Parliament could be a different proposition, however, with Bernd Lange, the chair of its international trade committee, telling POLITICO on Wednesday “there are disagreements about what the exact reduction in numbers should look like, particularly in the agricultural sector.” Another issue, he added, was how the deal would be implemented and for how long. European lawmakers will reconvene next week in Strasbourg for the first time after the summer recess. Sabine Weyand, the top official at the Commission’s trade department, will testify before the trade committee on Wednesday. “We have a parliament with a very divided configuration, and ‘reason’ may not always be the first characteristic,” said Marie-Pierre Vedrenne, a French lawmaker from the Renew group. That said, Manfred Weber, leader of the European People’s Party that has the largest caucus, has said his conservatives would stand by the deal struck by von der Leyen, describing it as “painful but right.” This story has been updated.