Diplomacy
EU-US tariff deal on brink of collapse amid internal conflict and confusion
As reactions from the continent rise against the tariff agreement reached by EU representatives with the US, the European Commission has claimed that the “agreement is not legally binding.”
According to a statement released by the Commission on Tuesday, the agreement is a “political understanding” that is “not legally binding.”
Indeed, Washington and Brussels have also published their own versions of the tariff agreement’s content, and these versions contain significant differences on important issues.
On the other hand, it is undisputed that the agreement stipulates a 15% tariff on most exports from the EU to the US, while the US will have tariff-free access to the EU market.
On Monday, French government officials stated that the agreement signifies the EU’s “submission” to the US. Paris argued that if the EU wants to maintain its claim as an “economic power,” the agreement should not be accepted without resistance.
The agreement was supported by the German government as it considered the interests of the German automotive industry. The industry is in a deep crisis and cannot afford to take risks in the crucial US market.
A “defensive” negotiation strategy was systematically supported by the German government. France, for example, had advocated for a more confrontational approach from the beginning, demanding the implementation of counter-tariffs and threatening harsh measures against US technology companies in Europe.
Germany, however, favored de-escalation. During a meeting with German business representatives in early June, Chancellor Friedrich Merz reportedly said that during his White House visit, he “explained the trade flows to Trump.”
Merz noted that the number of vehicles German car manufacturers export to the US is the same as the number of vehicles Germany imports from the US.
On the other hand, Merz only agreed to adopt a slightly tougher stance during his meeting with French President Emmanuel Macron in the middle of last week; however, it is said that at that point, he had “long known the content of the agreement.”
Contradictory statements from Brussels and Washington
Yesterday (Tuesday, July 29), concerns began to emerge that the agreement could genuinely collapse at the last minute.
Washington claimed that von der Leyen had made crucial concessions on issues like food standards and digital topics, while the EU categorically denied this.
Furthermore, the Commission announced that “the political agreement of July 27, 2025, is not legally binding” and that new negotiations would take place in the near future.
For example, the Commission stated that Washington had committed to establishing a “quota system” for steel and aluminum, under which a limited amount of metal would fall below Donald Trump’s 50% tariff.
However, the White House’s fact sheet denied this claim, stating, “Sectoral tariffs on steel, aluminum, and copper will not change… The EU will continue to pay 50%, and the parties will discuss securing the supply chains for these products.”
Under pressure over this contradiction, EU trade spokesperson Olof Gill directed journalists to the Commission’s press release. This statement, however, says the opposite: “The EU and the US will lower tariff rates on EU exports to historic levels, eliminating the current 50% tariffs.”
There is also confusion regarding pharmaceuticals. Gill said the EU believes its pharmaceutical exports will be subject to only a 15% tariff after the US completes its Section 232 investigation in the coming weeks. But the US statement made no mention of any delay in the investigation.
Gill said all issues would be clarified in a joint US-EU statement and that the bloc “hopes this statement will be published very soon.”
Still, Brussels appears to be preparing for the worst. The Commission announced it would not withdraw its €93 billion retaliation package against US goods until a joint statement is reached.
The measures, covering aircraft, automobiles, and food products, are set to take effect on August 7, giving negotiators a very short time to prevent a conflict.
Germany capitulated to the US due to the crisis in its automotive sector
According to German Foreign Policy, Germany’s stance was based on the interests of the German automotive industry, which is in a deep crisis. One of the most significant reasons for this crisis is the delay in transitioning to electric cars and the loss of its once-leading share in the important Chinese market.
For example, in the spring, Mercedes and BMW reported significant declines in sales and profits; in the first quarter, sales decreased by 7% and 7.8% respectively, while profits fell by 43% and 26.4% respectively.
Volkswagen announced last week that despite relatively stable sales, its profit for the first half of 2025 fell by more than 38%, marking the third consecutive half-year of decline.
Comprehensive layoffs have been planned for a long time. At VW, the main brand of the Volkswagen Group, nearly a quarter of the 130,000-strong workforce will be laid off by 2030.
Audi plans to reduce its workforce in Germany by approximately 7,500 by the end of 2029. According to reports, Mercedes is also considering laying off up to 20,000 people.
Automotive supplier ZF plans to lay off up to 14,000 people by the end of 2028.
The automotive sector is dependent on exports
In this situation, the German government has made stabilizing the German automotive industry a priority.
The sector is heavily dependent on exports: last year, 78.2% of all passenger cars produced in Germany (over 3.18 million vehicles) were sold abroad.
However, German manufacturers have faced some serious setbacks in recent years. For example, car exports to the United Kingdom, once the largest buyer of German vehicles, have decreased after Brexit due to the EU imposing retaliatory measures on the country.
While German manufacturers sold 593,000 cars to the United Kingdom in 2019, this figure dropped to just 390,000 in 2024.
Exports to China fell by about 17% last year; in the first five months of 2025, exports of cars and car parts to China decreased by approximately 36%.
The reason for this is the increasing purchase of domestic brand electric cars in China. The German industry cannot afford further declines in the US, its largest sales market, where 448,000 cars were sold from Germany in 2024.
In the first half of 2025, VW lost €1.3 billion to avoid passing on the 27.5% tariffs to its US customers and to not lose its market share in the US.
The German automotive lobby is still worried
Accordingly, the German automotive industry, in particular, had lobbied against imposing tariffs on the US.
On one hand, it was argued that Trump should not be encouraged to increase US tariffs under any circumstances, as this could have devastating consequences for the German industry.
On the other hand, Hildegard Müller, President of the German Association of the Automotive Industry (VDA), stated that tariffs against imports from the US would also affect cars produced in the US facilities of German automotive companies and exported from there to the EU.
These numbers are not insignificant: “About two-thirds of car exports from the US to the EU come from German manufacturers,” says Müller.
According to Müller, any counter-tariff imposed by the EU on automotive products from the US would have cost German manufacturers about €100 million per year for every 1% of the tariff.
Berlin-Paris tensions surface
When Merz took this pressure into account, serious disagreements with France began.
French Prime Minister François Bayrou said on Monday that the agreement, which was also “unsuccessfully” negotiated by the European Commission, meant the EU’s “submission” to the US.
Similar statements came from government and opposition members in Paris. Foreign Trade Minister Laurent Saint-Martin went a step further on Monday, stating that he was strongly opposed to leaving the outcome of the negotiations as it is, otherwise the EU could no longer be considered an “economic” power, and added, “The final word has not yet been spoken.”
The trend of German industry moving to the US could strengthen
Claims are becoming increasingly widespread that the tariff agreement, approved by Berlin on Sunday to support the German automotive industry, will encourage the relocation of car factories from Germany to the US.
According to automotive expert Ferdinand Dudenhöffer from the Center Automotive Research, if the agreement is implemented, it could be more profitable to produce high-volume models like the Mercedes E-Class or BMW 5 Series in the US rather than in Germany.
This is because, according to the rules agreed upon by von der Leyen and Trump, no tariffs will be paid on exports from the US to Europe.
If Mercedes and BMW centralize the production of these models in the US, they could supply both sides tariff-free from a single location, which would be logical and profitable for the companies.
Diplomacy
Iran rejects Turkish foreign minister’s comparison of regional policy to Israel
Iranian Foreign Ministry Spokesperson Esmaeil Baghaei strongly criticized Turkish Foreign Minister Hakan Fidan’s recent statements comparing Iran’s regional actions to those of Israel, calling the comparison “astonishing and incorrect” during his weekly press conference.
In a comprehensive briefing on Monday, Baghaei addressed a wide range of foreign policy developments and regional security matters, including relations with Türkiye, the current state of diplomatic understandings with the United States, and Iran’s nuclear program.
“Hakan Fidan’s comparison is astonishing and incorrect”
When asked about Fidan’s assertions regarding Iran and his comparison of Iranian actions to those of the Israeli government, Baghaei sharply rejected the assessment.
“It is astonishing that a figure of Mr. Fidan’s standing would make such an unwarranted comparison,” Baghaei said. “He knows very well that the Israeli regime is expansionist by nature and seeks to harm the entire region, including Türkiye. How they arrived at such a bizarre comparison remains a major question for us.”
Baghaei asserted that Iran maintains no proxy forces in the region and argued that Israel represents the only true proxy entity in the Middle East. “We ask our Turkish friends to align their analyses with existing realities and to avoid repeating analyses that serve the exploitative interests of the Israeli regime,” the spokesperson added.
The remarks follow recent statements by Fidan, in which he addressed the ongoing conflict involving Hezbollah and Hamas, describing them as Iranian proxies in the region.
“We need to return to a situation where the sovereignty and territorial integrity of every nation is fully recognized,” Fidan had stated. “Iran has long claimed to pursue a preventive security policy by maintaining proxies in these countries, just as the Israelis occupy the rest of the region as part of their own security.”
“The Islamabad Agreement has entered a crisis phase”
Responding to a question regarding the status of the Islamabad Agreement, Baghaei stated: “There is no doubt that this agreement has entered a crisis phase.”
While emphasizing that Iran approaches all negotiations with seriousness and precision, and fulfills its commitments in good faith once an agreement is reached, Baghaei accused the opposing party of failing to honor its pledges.
“They were so eager to breach the agreement that they did not even allow the one-month period specified in Article 5 regarding the Strait of Hormuz to run its course. They began backsliding from the very first days,” Baghaei said. “Looking at the 14 articles of the memorandum of understanding, the Americans dismantled different components of the agreement within this short timeframe. We have maintained from the beginning that it is a matter of ‘commitment for commitment.’ As long as the other party fulfills its obligations, we will remain committed to ours.”
“We reject the IAEA’s request to access damaged facilities”
Asked about the request by International Atomic Energy Agency (IAEA) Director General Rafael Grossi for inspectors to return to Iran and visit damaged nuclear facilities, Baghaei delivered a flat rejection, stating that the request would not be granted.
Addressing separate reports regarding satellite imagery of nuclear facility reconstruction, Baghaei noted that he had not yet seen the satellite images in question and therefore declined to comment.
“We will not allow the Strait of Hormuz to be threatened by the US”
Commenting on maritime security in the Strait of Hormuz and allegations that the United States is providing military escorts to 20 vessels, Baghaei reiterated Iran’s opposition to the presence of extra-regional forces.
Baghaei stated that regional security can only be achieved without foreign intervention, through consultative mechanisms among regional countries. He added that the US military presence is a source of insecurity in the region.
“We will not allow the Strait of Hormuz to become an area of threat against Iran’s interests,” the spokesperson said. “We made genuine efforts to ensure navigation security, but the US was the party that undermined the process. The claims regarding vessel escorts demonstrate that the US is continuing its interventionist and aggressive policies in the region.”
Regarding the interpretation of Article 5 of the memorandum of understanding, Baghaei stated that the text is clear and leaves no room for interpretation.
He noted that provisions designating the management of the strait to Iran, in consultation with Oman, were included in the text to protect Iranian interests. He added that the US is attempting to establish parallel routes by provoking regional countries, which he warned causes environmental issues and jeopardizes maritime safety.
“The declaration by the three European countries is null and void”
Referring to a joint declaration issued by France, Germany, and the United Kingdom, Baghaei dismissed the statement as entirely invalid, accusing the European nations of attempting to distort facts.
He stated that the actions of the US and Israel are the source of instability and harm in both the region and the wider world, adding that such declarations do not contribute to any resolution.
Addressing claims made by the French Foreign Minister, Baghaei added that French officials should cease attempting to assume roles in matters that do not concern them.
“We have not conditioned cooperation with Afghanistan on recognition”
Baghaei provided details on a recent visit to Afghanistan by Alireza Jalalzadeh, the Deputy Foreign Minister for Consular Affairs, noting that discussions were conducted within the framework of consular affairs and people-to-people relations.
Highlighting that Iran shares a border of more than 900 kilometers with Afghanistan, hosts a large number of Afghan migrants, and maintains extensive commercial ties, Baghaei said: “We have not conditioned the official recognition of the Afghan administration on the cooperation necessary for the interests of both countries. The recognition process is a legal procedure, and a decision on this matter will be made when the time comes.”
“We do not make decisions on behalf of Lebanon”
Rejecting allegations that Iran is interfering in the internal affairs of Lebanon and Oman, Baghaei said: “We do not make decisions on behalf of anyone. The inclusion of Lebanon’s name in the memorandum of understanding demonstrates Iran’s sense of responsibility toward maintaining international security. In the first article of the text, we emphasized the need to end the war on all fronts, including Lebanon. This is not a matter of decision-making; the decision belongs to the Lebanese people.”
Addressing international pressure regarding the disarmament of Hezbollah, Baghaei stated that the Lebanese people are best positioned to understand the value of the resistance’s weapons in protecting their sovereignty, and that any decision on the matter rests solely with them.
“Trump’s claims are false”
Baghaei denied claims made by former US President Donald Trump regarding Iran’s conduct during nuclear negotiations.
“Lying has become a behavioral pattern and an addiction for the US,” Baghaei said. “The talks held in Muscat on Saturday focused exclusively on the Strait of Hormuz. We attempted to establish a mechanism to ensure the safe passage of vessels through Omani mediation, but this outcome was not reached due to pressure exerted on Oman.”
He added that alleged assassination plots against Trump were never a subject of negotiation.
“The death of Lindsey Graham will not grieve free people”
When asked to comment on the death of US Senator Lindsey Graham, Baghaei remarked:
“The Angel of Death is just. One cannot expect the peoples of the region to mourn a figure who built his life philosophy on aggression, war, and terror, and who boasted of being the greatest supporter of genocide. The death of this aggressive senator will not grieve the heart of any free person.”
Diplomacy
NATO leadership sees no evidence of Russian preparations for attack on Baltics by 2030
The military and political leadership of NATO sees no evidence that Russia is preparing for a potential attack on the Baltic states by 2030, according to a report by The Times, citing a senior alliance source.
“I see absolutely no sign that Russia is interested in engaging in any conflict with NATO,” the high-ranking source told the newspaper. The official added that they had no intention of speculating on the date of a potential conflict, as some other officials within the alliance have done.
The Times noted that rhetoric suggesting an open military conflict between NATO and Russia could begin in 2030 is primarily being used to mobilize the resources of the alliance’s member states. The report stated that this framing aims to encourage members to meet a defense spending target set at 5% of their gross domestic product (GDP) by 2035. Speaking to the newspaper on the sidelines of the NATO summit in Ankara, Martin O’Donnell, spokesperson for the Supreme Headquarters Allied Powers Europe (SHAPE), said that allies currently have a “window of opportunity” to build up the capabilities already agreed upon.
Kremlin Spokesperson Dmitry Peskov has previously stated that the militarization of Europe would require Russia to take additional measures to guarantee its national security.
As the implications of these developments continue to play out in the military arena, Lithuanian President Gitanas Nauseda announced on July 9 that NATO leadership has converted the mandate of the Baltic air policing mission from air patrol to a combat footing.
The day before this decision, leaders attending the NATO summit in Ankara pointed to the “long-term threat Russia poses to Euro-Atlantic security and stability” in a joint declaration.
NATO has repeatedly expressed concerns over a potential conflict with Russia. NATO Secretary General Mark Rutte has urged member states not to be “naive” about threats coming from Russia and to increase their defense spending. Similarly, the commander of the German Army, Christian Freuding, asserted on June 12 that his country must “be ready for a Russian attack” by 2029 or sooner, stating, “We must be ready for war.”
In contrast, Russian Deputy Foreign Minister Aleksandr Grushko claimed in a June 22 interview with the Izvestia newspaper that NATO and the European Union are preparing for a military conflict with Russia on the horizon of 2030. Grushko noted that from a military perspective, there is now little difference between NATO and the EU regarding aggressive ambitions toward Moscow, and that their main objective is to inflict a strategic defeat on Russia.
The Moscow administration has repeatedly emphasized that it has no intention of attacking Europe. Russian President Vladimir Putin has stated that there are no geopolitical, economic, or military reasons to fight the alliance. Nevertheless, Putin has also stated that “all NATO countries are virtually at war with Russia.”
Last year, representatives of NATO countries approved a declaration agreeing to raise military spending to 5% of GDP by 2035. Under this target, 3.5% of spending is projected to go directly to the military budget, while 1.5% is to be allocated indirectly to defense through cybersecurity and the modernization of highways.
Diplomacy
Zelenskyy announces sweeping Ukrainian cabinet shakeup as Prime Minister Sviridenko resigns
Ukrainian President Volodymyr Zelenskyy has announced a sweeping structural overhaul of the government, confirming that a new prime minister will soon take office.
Following the announcement, the Ukrainian leader held a series of meetings over a two-and-a-half-hour period with potential candidates positioned to succeed Yulia Sviridenko as prime minister.
“Political strategy is changing”
Writing on his Telegram channel, Zelenskyy announced that the structure of the cabinet of ministers will change and that Sviridenko, who is stepping down from her post, will be assigned to a new role.
The Ukrainian president stated that the country is renewing its political strategy. Under the new approach, specific individuals with extensive experience will be put in charge of each priority foreign policy direction to implement agreements reached at the leadership level and to meet the expectations of the Ukrainian people.
Approximately one hour after Zelenskyy’s statement, Sviridenko confirmed her departure from the post of Prime Minister of Ukraine via a message on social media.
Thanking the president for his high valuation of her work, Sviridenko stated that she and Zelenskyy had discussed future steps.
Sviridenko began her career in the Ukrainian government in 2019 as Deputy Minister of Economy. Between 2020 and 2021, she served as deputy head of the presidential office, during which time she participated in negotiations regarding the Donbas.
In November 2021, she assumed control of economic management as First Deputy Prime Minister. In the spring of 2025, she signed a resource agreement with the US on behalf of Ukraine.
Zelenksyy proposed that Sviridenko lead the government in July 2025, and the Verkhovna Rada, Ukraine’s parliament, approved her candidacy with 262 votes in a session held on July 17, 2025.
Prior to Sviridenko, Denys Shmyhal had led the cabinet since March 2020. He currently serves as the Minister of Energy.
Priority targets of the new cabinet established
Zelenskyy outlined the primary areas of focus for the renewed government, listing relations with the US—specifically licensing agreements for the production of Patriot systems and security cooperation—as top priorities.
Other core objectives include the European anti-ballistic missile project, the European Union accession process, relations with neighboring states—particularly Poland and Hungary—cooperation with the Middle East, the Gulf countries, and China, as well as relations with international organizations.
The Ukrainian leader also stressed the need to strengthen operations along the front lines and border regions, increase weapons supplies, complete winter preparations, accelerate the transformation of state-owned enterprises, and implement agreements reached with partners regarding the reconstruction of Ukraine.
Who could succeed Sviridenko as prime minister?
The last major reshuffle in the Ukrainian government took place a year ago, with Sviridenko assuming the premiership in July 2025.
Under Ukrainian law, the candidate for prime minister must be proposed by the majority coalition in the Verkhovna Rada.
Once appointed, the prime minister submits the majority of the cabinet members to parliament for approval.
Russian President Vladimir Putin previously stated that the only legitimate power in Ukraine is the Verkhovna Rada. According to Putin’s assessment, the only authority qualified to participate in peace talks is the speaker of the Ukrainian parliament, asserting that Zelenskyy lacks legitimacy and therefore has no authority to sign any document.
According to a report by the Ukrainska Pravda newspaper, citing sources familiar with the matter, potential candidates being considered for the premiership include:
- Sergiy Koretskyy, Chairman of the Board of Naftogaz and Director of Ukrnafta
- Denys Shmyhal, Minister of Energy
- Mykhailo Fedorov, Minister of Defense
- Ihor Terekhov, Mayor of Kharkiv
Zelenskyy announced that he met with all of these officials, as well as Ukrainian Interior Minister Ihor Klymenko, during the day.
Sources familiar with the matter who spoke to RBC-Ukraine stated that the president’s decision to renew the government came as a surprise to many. The sources informing the publication also put forward Koretskyy’s name for the premiership.
Sources speaking to Bloomberg also pointed to Koretskyy alongside Shmyhal. The agency reported that both Koretskyy and Shmyhal possess extensive experience in the energy sector, which partially explains their candidacy to succeed Sviridenko.
Meanwhile, Verkhovna Rada Deputy Yaroslav Zheleznyak reported that the parliamentary vote on the prime minister’s resignation could take place on July 13 or 14.
Zheleznyak stated that following this vote, the entire government will function in an interim capacity, with Shmyhal temporarily leading the administration in his capacity as deputy prime minister.
According to information shared by Zheleznyak, Sviridenko will become Ukraine’s new ambassador to the US. The Financial Times also reported, citing two sources, that the outgoing prime minister will be appointed to this post.
Zelenskyy stated that he had offered Sviridenko the opportunity to head a new and important direction in relations with a key partner, though he did not share specific details regarding which country or organization this would involve.
Subsequently, a report by the Interfax-Ukraine agency, citing sources, stated that Olga Stefanishyna, who currently serves as Ukraine’s Ambassador to the US, wishes to end her diplomatic service due to personal reasons.
Stefanishyna has held the post for less than a year, with Zelenskyy having signed the decree for her appointment in August 2025.
-
Middle East2 weeks agoQatar and Saudi Arabia acquire hundreds of millions of dollars in Israeli defense technology, report says
-
Europe2 weeks agoBuckingham Palace updates King’s official role to focus on securing faith in multi-faith Britain
-
Interview2 weeks ago“Capitalism does not require a free social order”
-
Asia2 weeks agoSouth Korea unveils $518 billion plan for new southwestern semiconductor cluster
-
Europe2 weeks agoBillionaire Peter Thiel deepens ties with German and Austrian right-wing political elite
-
America2 weeks agoAnthropic withdraws covert China user tracking feature after online backlash
-
Europe2 weeks agoGermany’s BSW proposes cooperation with AfD to break political ‘firewall’
-
Europe2 weeks agoEurope faces 15-year low in winter gas reserves as June storage targets fall short
