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
FIFA abandons $4.2 billion commercial stake sale following widespread revolt
FIFA and Gianni Infantino have backed down from plans to sell a stake in the organization’s commercial and event operations following widespread backlash.
In a statement issued late Friday night, the embattled FIFA president said:
“After carefully listening to all views, it has become clear that this project, regardless of the level of support, causes divisions that are now contrary to the interests of the objective originally established. Our goal has always been, and will always be, to unite and improve. As a result, this proposal will not be implemented.”
Infantino’s proposal met with fierce resistance from UEFA, CONCACAF, and the Asian Football Confederation (AFC).
UEFA indicated that all 55 of its members would boycott FIFA competitions, including the World Cup, if the plans remained on the table.
In its statement, FIFA noted that “nobody is selling football,” and while asserting that it “acknowledges and respects the feedback and concerns expressed publicly,” emphasized that it would continue to implement suggestions.
It added that it “reaffirms its commitment to an open and democratic process of consultation.”
Shortly after FIFA issued its statement, the AFC released its own declaration of solidarity with UEFA and the Confederation of North, Central America and Caribbean Association Football (CONCACAF).
Infantino subsequently suffered two major internal blows.
First, his adviser Carlos Cordeiro resigned from his position, sharply criticizing the plan in a statement as “a bad deal for FIFA member associations, a bad deal for football, and a bad deal for the long-term future of the game.”
Then, FIFA Chief Operating Officer Kevin Lamour told the Associated Press that staff felt “deceived” by Infantino and that after raising the issue, he would “sleep better, even at the cost of losing his job.”
Lamour said:
“This is the project of a single person. Leaving aside that this project should not proceed… it is now time for the political leaders of world football to ask themselves the right questions and make the right decisions.”
These developments left Infantino cornered, and by Friday afternoon, numerous figures within the organization—speaking to The Athletic on condition of anonymity to protect their jobs—believed it was no longer a question of “if” the cord would be cut, but “when.”
Joshua Kushner’s venture capital firm Thrive had not withdrawn from the deal as of Friday night, but that became moot when FIFA management ultimately decided to kill the project via a public statement.
Joshua Kushner is the brother of Jared Kushner, the son-in-law of Donald Trump.
On Tuesday, world football’s governing body had announced its intention to establish FIFA Forward Enterprises (FFE), a new private entity to manage its flagship events, including the World Cup and the Club World Cup, with plans to sell a 21% minority stake in FFE to external investors.
The sale was targeted to generate $4.2 billion (£3.2 billion) in revenue. FIFA stated that this amount could be immediately distributed to its 211 member associations under a new funding stream named the “FIFA Fast-Forward Program” (FFFP).
Under the plan, FIFA’s total development funding would have exceeded $10 billion over the next four years.
Despite mounting criticism in recent days, FIFA confirmed that if member associations opposed the FFE plan but the proposal was accepted, the dissenting federations would each receive $20 million (£14.9 million) for the 2027–30 cycle, regardless of whether shares in FFE were sold to private investors (to be followed by $22 million for 2031–34 and $24 million for 2035–38).
However, had a given member association accepted the FFE proposal, it would have received $40 million for the 2027–30 period, with subsequent payouts remaining the same.
The three confederations that explicitly took a stand against FIFA’s plan represent 137 of the 211 FIFA member associations.
FIFA had stated that for the proposal to move forward, it required the approval of a majority of the 211 member associations as well as the 37-member FIFA Council, which consists of Infantino and eight FIFA vice presidents.
Strategic reactions and leadership crisis
South American football confederation CONMEBOL did not reject the plans in a statement on Friday, but noted that financial and commercial decisions “must always serve the interests of football and never take precedence over the essence of the game.”
According to a report by The Athletic, Infantino’s future leadership of FIFA was called into question during UEFA and CONCACAF meetings held on Thursday.
Infantino assumed the FIFA presidency in February 2016, succeeding Sepp Blatter, and was expected to run unopposed in the next election scheduled for March 2027.
There is also talk among European officials of putting forward Nasser Al-Khelaifi, the Qatari CEO of beIN Media, to run against Infantino.
Lise Klaveness, President of the Norwegian Football Federation, told VG: “My clear impression right now is that he has suffered a major loss of trust. We did not vote for him last time and were skeptical about this. There are many good aspects to FIFA, but if you take a lax approach to governance principles and rules, you lose trust quickly.”
Diplomacy
Defense Priorities director warns US air strategy in Middle East faces tactical limits
The collapse of a tentative memorandum of understanding between Washington and Tehran, coupled with the diminishing strategic returns of American air power, has left the United States locked in an unsustainable, low-intensity conflict with Iran, according to Benjamin Friedman, Policy Director at the Washington-based think tank Defense Priorities.
Speaking in an interview on the YouTube channel Harici with host Sarp Sinan Hacır, Friedman attributed the failure of the short-lived US-Iran memorandum primarily to the Trump administration’s diplomatic missteps, vague draft language, and unrealistic expectations regarding a comprehensive settlement.
“Both sides really deserve some blame, but the Trump administration deserves the bulk of the blame for drafting an agreement that was so vague on key terms,” Friedman said, citing ambiguities surrounding the timeline for unfreezing Iranian assets and the scope of American commitments to restrain Israeli military operations in Lebanon.
Friedman emphasized that deep-seated mistrust in Tehran, exacerbated by repeated instances where diplomatic engagement was followed by Israeli or American military strikes, led Iranian negotiators to adopt an unyielding posture. At the same time, he noted that Iran likely miscalculated by using disruptions in the Strait of Hormuz to aggressively force leverage.
“The Trump administration remained intent on this sort of grand bargain that would restrain Iran seeking weapons development… and I think they continue to misread the Iranian willingness to sign that kind of deal,” Friedman noted, adding that Tehran viewed its leverage over the Strait of Hormuz as essential despite the risk of provoking further strikes.
Expressing deep skepticism over the prospects for a lasting diplomatic breakthrough, Friedman criticized the administration’s reliance on informal envoys such as Steve Bannon and Jared Kushner over professional diplomatic channels, predicting that the baseline outcome will remain an unpredictable, episodic conflict.
“What’s more likely is a kind of on-off-again kind of war—sort of what we’re in now, where we have occasional strikes, with the United States perhaps by accident adopting the Israeli model of ‘mowing the lawn’ periodically,” Friedman said.
Addressing the efficacy of US air power, Friedman argued that military operations against Iranian targets have reached a point of diminishing returns. While early strikes successfully eliminated critical high-value assets—such as over-the-horizon radar systems that targeted anti-ship missiles—Iran’s ballistic missile and long-range drone capabilities remain largely intact and operational.
He pointed to a recent strike on a base hosting US personnel in Jordan, launched from western Iran over a distance exceeding 1,000 kilometers, as evidence of Tehran’s sustained strike precision and the tactical limits of American interdiction efforts.
“The war is a failure for air power even in a tactical sense,” Friedman stated. “Initially, we looked at it and said we had a lot of success in destroying targets, but as more information came out, it turned out they had maybe more than half of their missiles and launchers survive the initial phase of the war.”
Friedman observed that the global proliferation of low-cost, high-precision guidance technology has permanently altered the strategic landscape, neutralizing the traditional invulnerability of forward-deployed US installations. “The precise effects of air power that used to be almost a monopoly of the United States… is actually making our posture in the region less sustainable,” he said, warning that similar vulnerabilities would be vastly amplified in any potential high-intensity conflict with China.
As an alternative to open-ended military engagement, Friedman suggested that Washington consider a complete military withdrawal from the region, even if it entails accepting Iranian transit fees on commercial shipping through the Strait of Hormuz. “The cost of preventing that through perpetual outbursts of warfare is much higher than just accepting it,” he noted.
Turning to regional dynamics, Friedman addressed Israel’s current absence from active strike operations against Iran, characterizing it as a calculated move to preserve its own air defense interceptors while relying on Washington to bear the operational and political burdens of containment.
On European security and the broader alliance structure, Friedman offered a critical assessment of the NATO summit in Ankara and the administration’s “NATO 3.0” concept. He described the white paper led by Defense Secretary Pete Hegseth as an effort to coerce European states into escalating defense expenditures and purchasing American hardware under the threat of reduced security guarantees, rather than executing a structured, strategic US posture adjustment.
“This is not a real US withdrawal; it’s a kind of pressure to up your loyalty in a particular way,” Friedman said, noting that major European powers such as Germany, France, and the UK lack a compelling existential incentive to construct independent, large-scale conventional war-fighting capabilities.
Regarding bilateral relations with Ankara, Friedman noted that US-Turkish tensions have eased considerably following the shift in American posture in Syria and progress toward resolving long-standing friction points, including the F-35 program and S-400 procurement. He added that while Israeli leadership under Prime Minister Benjamin Netanyahu has expressed frustration over Washington’s constructive engagement with President Recep Tayyip Erdoğan, the White House has maintained its strategic course despite pressure from domestic pro-Israel lobbying groups.
Addressing internal Republican Party dynamics, Friedman highlighted the evolving public stance of Vice President J.D. Vance, whose cautious criticism of Israeli influence and emphasis on divergent national interests reflects broader ideological shifts within the conservative base.
“Vance is more representative of the shift in the Republican Party,” Friedman said. “He’s criticizing them in a limited way and saying, ‘Our interests are different.’ From the perspective of those of us who would like the United States to have a more distant relationship from Israel, it’s progress.”
Looking ahead to the upcoming US midterm elections, Friedman anticipated that a loss of congressional control by the Republican Party would severely curtail the administration’s domestic executive overreach, though its structural impact on foreign policy execution and Middle Eastern operations would remain comparatively limited.
Diplomacy
UK Prime Minister Andy Burnham pledges full support to Ukraine in meeting with Zelenskyy
UK Prime Minister Andy Burnham has met with Ukrainian President Volodymyr Zelenskyy in Portsmouth, England.
Zelenskyy is the first world leader Burnham has met in person since taking office, with the prime minister committing to building a “firm partnership” between the United Kingdom and Ukraine.
Demonstrating their support, the two leaders toured a military base in Portsmouth where 200 Ukrainian troops are currently undergoing naval training exercises.
Burnham described his meeting with the Ukrainian president as “warm” and said he plans to visit Ukraine soon.
“We will build this together and address the various issues President Zelenskyy is facing, many of which we discussed today,” Burnham said.
The meeting follows an announcement by London that it will share intellectual property rights to assist Kyiv’s war effort.
The new prime minister announced that the UK will share the “Stone Cloak” electronic warfare system—which is fitted to drones to prevent detection—and will assist Ukraine in mass-producing the technology.
Burnham has focused primarily on domestic matters since replacing Keir Starmer, who faced criticism from elements within his own party for spending too much time abroad and focusing heavily on foreign affairs.
However, Burnham sought to signal continuity in Britain’s policy toward Ukraine. In one of his first phone calls after becoming prime minister last week, Burnham invited Zelenskyy to visit the UK “as soon as possible.”
Starmer spent his final full day as prime minister in Kyiv, where he announced £255 million in funding for Ukraine.
Speaking to Sky on Monday, Zelenskyy said his telephone conversation with Burnham had been “very good.”
The Ukrainian leader noted that Starmer had previously assured him that “the new government would maintain the policy of supporting Ukraine during the war.”
The new prime minister told the Ukrainian leader it was “no coincidence” that he was his first international visitor since moving into Downing Street.
“The purpose of this is to send a very clear message. We stand 100% with Ukraine, I personally stand 100% with you, and I will fully deliver on every commitment this country has made to Ukraine,” Burnham said.
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