The EU must stand up to Trump

[Passages]

Whatever their views on existing regulations, Europeans must decide whether to surrender sovereignty and democratic processes to a bullying authoritarian populist. Joseph E. Stiglitz
Sunday, October 12, 2025


EXCLUSIVE TO THE SUNDAY TIMES IN SRI LANKA

NEW YORK – On July 27, 2025, the United States and the European Union announced a preliminary trade and investment deal in Turnberry, Scotland. But nothing was actually signed, and even if it had been, it would not have been worth the paper it was written on. After all, US President Donald Trump did sign a formal trade agreement with Canada and Mexico during his first term, only to tear it up as soon as he returned to office.

Any agreement with Trump, therefore, must be regarded as, at best, a temporary truce. It will hold only until America’s capricious leader sees or hears someone or something that makes a new whim official policy.

Still, it is worth remembering the specifics of the Turnberry deal, because some were quite peculiar. Given that Europe has 30% more people and only a slightly smaller economy (in purchasing power terms) than the US, standard bargaining theory would imply that any deal would be roughly symmetrical. Instead, it was entirely one-sided. In addition to the US imposing unfair tariffs on European imports, Europe committed itself to investing in the US and purchasing US energy.

But, of course, the EU can promise no such thing. As I have jokingly pointed out to EU trade negotiators, Europe is not (yet) a centrally planned economy. The EU cannot force Europeans to make specific investments or purchases; the Turnberry numbers were offered merely to placate Trump, allowing him to boast that he had used America’s power to claim another scalp and extract more of the value from global supply chains. Who cares if international law was trampled? That is simply what great powers do. Just look at Russia, with its war of conquest against a peaceful neighbour.

https://www.sundaytimes.lk/251012/sunday-times-2/the-eu-must-stand-up-to-trump-615796.html