Morning opening: The art of the deal
Jakub Krupa
Good news: the EU has a new trade deal with the US.
Bad news: There don’t seem to be many people who think it’s a particularly good deal.
The framework agreement, agreed by European Commission president Ursula von der Leyen and US president Donald Trump at a late meeting in Scotland, manages to avert a damaging transatlantic trade war, imposing a 15% import tariff on most EU goods – half the threatened rate.
German chancellor Friedrich Merz focused on the fact that it managed to keep the unity of the European Union and offer some stability to businesses on both sides of the Atlantic, even if he would have liked the deal to achieve more.
Italian prime minister Giorgia Meloni said she needed to see the details of the deal to assess it further, asking questions about possible exemptions, promises of European investment and gas purchases from the US, and how to help affected industries.
French Europe minister Benjamin Haddad said that while the deal would “bring temporary stability,” it was generally “unbalanced,” calling the situation “not satisfactory and … not sustainable.”
Not ideal.
Global markets responded positively, as you can see on our business live blog, but there is much more to this deal than that. It is not business as usual.
Elsewhere, I will be looking at Spain where the country’s embattled prime minister Pedro Sánchez is due to give a summer press conference and the latest reports from Ukraine.
I will bring you all key updates from across Europe today.
It’s Monday, 28 July 2025, it’s Jakub Krupa here, and this is Europe Live.
Good morning.
Key events
French PM Bayrou says EU-US deal marks ‘sombre’ day
French prime minister François Bayrou joined the growing list of European leaders expressing their less-than-enthusiastic reactions to the EU-US trade deal.
In his first reaction on social media, he said:
Von der Leyen-Trump Agreement: it is a sombre day when an alliance of free peoples, united to affirm their values and defend their interests, resigns themselves to submission.
‘There will be no defeat,’ defiant Zelenskyy aide says after another night of Russian attacks
Senior Zelenskyy aide Andriy Yermak posted a video of a tower bloc in Kyiv hit by Russian drones saying “this is how Putin responds to calls to end the war and sit down at the table” after another night of attacks on Ukrainian cities.
324 Russian drones and 7 missiles were reported overnight.
Yermak sought to increase pressure on Russia, saying “there is no alternative to sanctions, increasing Ukraine’s long-range capabilities, and tough actions against Putin’s entourage and himself.”
[Putin] wants nothing but war and Ukraine’s defeat. And there will be no defeat.
Yermak also warned that Russians were also “testing Nato’s reactions” with drones crossing into other countries, warning that these “signals cannot be ignored” – a reference to the earlier drone incident in Lithuania (10:20).
Lithuania investigating second drone incident in month
An unmanned drone is believed to have entered the Lithuanian airspace overnight from Belarus, a second this month, with residents in the capital city of Vilnius reporting the characteristic sound and later receiving an alert from authorities about the incident.
Locals were told to be cautious and not to approach the object, which was believed to have crashed in the early hours of this morning.
It was earlier sighted close to Vilnius, flying at an altitude of 200 meters, Lithuanian media reported, posting a grainy footage of the object.
The search for the drone continued this morning, and authorities told reporters they had no clarity on whether the object posed any danger.
But defence miniser Dovilė Šakalienė said that additional resources will be directed to monitor the Lithuanian-Belarusian border.
If confirmed, it would be a second case of an unmanned flying object entering Lithuanian airspace from Belarus after a decoy Gerbera drone crashed near the border at the beginning of July.
EU deal seen as victory for Donald Trump – snap analysis
Lisa O’Carroll
in Brussels
While EU leaders can breathe a huge sigh of relief that a trade deal with the US is done, the agreement is being widely seen as a victory for Donald Trump.
Several commercial banks have told clients this morning it is an “asymmetrical” deal favouring the US over the EU.
As if to underline the contrasting fortunes of China which imposed retaliatory tariffs from the beginning, Trump has just made further concessions to Beijing.
It emerged on Monday, that Washington has paused curbs on tech exports to China to avoid disrupting trade talks with Beijing and support Trump’s efforts to secure a meeting with President Xi Jinping this year.
The industry and security bureau of the US Commerce Department, which oversees export controls, has been told in recent months to avoid tough moves on China, the newspaper said, citing current and former officials.
The EU acknowledges that the deal is worse than the zero-zero tariff deal it offered Trump in April.
“Fifteen percent is not to be underestimated, but it is the best we could get,” European Commision chief Ursula von der Leyen admitted last night.
Stability and predictability would be returned to Europe’s businesses and markets, she said describing the deal in Trump like terms as “huge”.
But Renew group MEP Sandro Gozi described the deal as “unbalanced and dangerously shortsighted.”
Hildegard Müller, president of the German car industry federation, the VDA, said “further escalation” of a tariff and potentially trade war has been averted but added the deal would push costs up for an industry, already struggling against Chinese rivals.
“The US tariff of 15 per cent on automotive products will cost German automotive companies billions annually and place a burden on them in the midst of their transformation.”
And financial institutions?
“Is this a good deal for the EU? Probably not. The outcome is heavily asymmetrical, and it leaves US tariffs on imported EU goods at much higher levels than EU tariffs on imports from the US,” Unicredit said in a note to clients.
Morning opening: The art of the deal
Jakub Krupa
Good news: the EU has a new trade deal with the US.
Bad news: There don’t seem to be many people who think it’s a particularly good deal.
The framework agreement, agreed by European Commission president Ursula von der Leyen and US president Donald Trump at a late meeting in Scotland, manages to avert a damaging transatlantic trade war, imposing a 15% import tariff on most EU goods – half the threatened rate.
German chancellor Friedrich Merz focused on the fact that it managed to keep the unity of the European Union and offer some stability to businesses on both sides of the Atlantic, even if he would have liked the deal to achieve more.
Italian prime minister Giorgia Meloni said she needed to see the details of the deal to assess it further, asking questions about possible exemptions, promises of European investment and gas purchases from the US, and how to help affected industries.
French Europe minister Benjamin Haddad said that while the deal would “bring temporary stability,” it was generally “unbalanced,” calling the situation “not satisfactory and … not sustainable.”
Not ideal.
Global markets responded positively, as you can see on our business live blog, but there is much more to this deal than that. It is not business as usual.
Elsewhere, I will be looking at Spain where the country’s embattled prime minister Pedro Sánchez is due to give a summer press conference and the latest reports from Ukraine.
I will bring you all key updates from across Europe today.
It’s Monday, 28 July 2025, it’s Jakub Krupa here, and this is Europe Live.
Good morning.
