The European Dilemma and the Congressional Surrender

Commentary by William Alan Reinsch

Published September 22, 2025

One of the interesting trade debates right now is taking place in Brussels, not Washington, as the European Parliament wrestles with the trade agreement the European Commission negotiated with the Trump administration. It would be an understatement to say this is an unpopular agreement in Europe, and even its proponents make little attempt to argue that it is any good. Instead, they put it in the "least bad" category and suggest that any alternatives would be worse.

They're probably right about that, but it hasn't stopped the political rhetoric. As far as most Europeans are concerned, Trump bullied them into an agreement where they made far more concessions than he did, and members of the European Parliament (MEPs) across the political spectrum are reflecting that unhappiness. Political opponents of the European Commission, particularly on the left, are using it to attack the commission for fecklessness.

It remains to be seen whether the resentment engendered by the agreement and the threats that led to it will ultimately torpedo it, but there are also substantive issues underlying the complaints. Some of them were inevitable-and eternal-concerns about how lowering EU tariffs will affect domestic interests, particularly farmers, who have a long history of aggressive protectionism.

Some of them reflect the same problem all of Trump's deals are having-a lack of agreement on what was actually agreed to, and the lack of fine print to nail down the details. One major issue is whether the two sides agreed to ultimately produce a tariff rate quota on steel and aluminum. The European Union says yes, the United States has not confirmed. Another one is settling on details of the $600 billion investment commitment made by the European Union. In all the agreements containing investment commitments, Trump and Secretary of Commerce Howard Lutnick seem to regard them as giant slush funds in which the countries will give Trump a large bag of cash, and he will do what he wants with it. European Commission President Ursula von der Leyen has explained that it doesn't work that way in Europe, that the commission cannot force private companies to make investments, and it does not have the requisite bag of cash. That difference remains to be worked out, but in the case of Japan, the further details eventually provided still left questions unanswered.

A third category of uncertainty is the list of topics punted into the next round of talks, notably digital trade regulation. Here, MEPs have already weighed in, pointing out that this is a matter of EU law where the various rules have been put into statutes that cannot be removed or amended without the parliament's action.

It is not surprising that members of parliament either object to or, at the very least, want further clarification on these issues. It is a bit more surprising that another issue has occupied center stage in the debate-the extent of the agreement's compliance with World Trade Organization (WTO) rules. This comes as a surprise because the European Union's commitment to WTO rules could charitably be described as selective. While it has been loud and vigorous in its rhetorical support for the rules, its actual compliance when it has lost complaints, such as over its refusal to permit imports of genetically modified organisms (GMOs), other features of its agriculture policy, or aircraft subsidies, has been conspicuously lacking.

That has not stopped MEPs from criticizing the U.S.-EU agreement-as I have often said, the WTO has no rule against hypocrisy-largely on the grounds it violates Article I of the General Agreement on Tariffs and Trade (GATT), which requires "most favored nation" treatment-essentially that a concession given to one WTO member must be given to all. Since the agreement is a preferential one-the concessions benefit only the United States-it is clearly not compliant.

The commission's defense has been that they're working on it. GATT Article XXIV permits preferential trade agreements if they cover substantially all trade. The U.S. pre-Trump free trade agreements meet that standard, although many others do not. The rules also permit an interim agreement leading to a free trade agreement, and the commission's defense rests on that, even though it has acknowledged the United States is not presently interested in going further. It also knows that most of the 620 trade agreements registered with the WTO do not comply with this rule, and nobody has complained.

We shall see if the MEPs can get over their frustration and resentment, ignore the WTO problem, and approve the agreement. It does appear that there will be an amendment offered to bring the agreement into compliance with the WTO. The easiest way to do that would be to make the tariff concessions available to all, but I doubt they'll take that path. I don't sympathize with the MEPs' hypocrisy about the WTO, but I do sympathize with their plight. The agreement is not fair and balanced, but rejection would not likely make things better.

I also cannot help but contrast their process with the lack of a similar one in the United States. None of these agreements are being submitted to Congress, whose members have largely surrendered their role in trade policy to the president, most recently last week when they tabled an effort to undo the 50 percent tariffs on Brazil and extended a rules change that prevents a vote on repealing the national emergencies Trump has declared. The Supreme Court may ultimately dump the problem back into their laps, but at this point, they appear to have little interest in receiving it.

William A. Reinsch is senior adviser and Scholl Chair emeritus with the Economics Program and Scholl Chair at the Center for Strategic and International Studies in Washington, D.C.

Trade continues to be the hottest policy topic in Washington, which is why we're bringing back our ⁠ Crash Course: Trade Policy with the Trade Guys⁠ this fall. If you missed our spring course, now is the perfect time to register. The course runs October 8-9 at CSIS or via Zoom. Registration is open until October.

Programs & Projects