Arthur Leichthammer

// Let's see what next week brings...

Why the EU-US ‘deal’ hasn’t really been agreed Disagreements over steel, pharma, and alcohol exports "reflect the extremely short time-frame and generally chaotic nature of the deal – if you want to call it that, because it’s not really a deal,” one analyst noted

6/ For more analysis - particularly on the political dimension - see Pascal Lamy’s piece from today www.delorscentre.eu/en/publicat... or this Euractiv piece featuring my two cents
www.euractiv.com/section/eco...

5/ More broadly, the US is imposing its own unilateral trade architecture and disregarding WTO rules. The real risk would be if others followed down this path - undermining the WTO framework more broadly would come with very high costs for the EU. For now (!), that does not seem to be the case.

4/ The tariffs will impose an economic cost on the EU. But compared to other states, if it sticks, the outcome looks relatively manageable. Given MS’ clear risk aversion to a transatlantic trade war and the EU’s security dependence re Ukraine, this was probably the best result Brussels could achieve

3/ For now, the EU avoided an escalation into a full-blown trade war but in doing so made headline pledges on energy imports and investment that are, on the numbers, unrealistic. These figures create reference points Trump can later point to as unmet promises.

Further Modifying the Reciprocal Tariff Rates By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency

2/ Case-in-point: Today's Executive Order would not reduce tariffs on EU car exports from 25 to 15%, a key demand of the EU. Unresolved issues including steel and alu quotas and reducing tariffs to 0% to "strategic" goods, force the EU into continued discussions
www.whitehouse.gov/presidentia...

1/ What was announced is not a formal agreement but a political understanding. The murky, open-ended details are not a bug but a feature: they leave strategic uncertainty in place and allow Trump to revisit and reopen the file whenever it suits him.

🧵 In the trade world, this week was a rather hectic one. The Turnberry outcome underline the fact that negotiations with Trump are not one-off events but an ongoing process. A fact that undermines the idea that this week has brought stability.

Incredible effort by my colleagues, not just crunching the incredibly confusing data and making it comprehensible, but offering four principles the drawn-out negotiations should follow

Europe’s Car Industry in Transition: Stuck in Neutral or Shifting into Gear? Europe’s automotive industry is entering a decisive decade but lacks a clear map for navigating it. While global competitors accelerate their shift toward electric vehicles, Europe’s strategic focus r...

Europe’s car industry may have just dodged a +25% US tariff – but this is no reason to relax. Deep structural challenges remain, and the EU lacks a common diagnosis for fixing them.

My new policy paper argues that a coherent EU strategy needs to rest on three uncomfortable truths: 🧵

Needed that one - thank you

Red Lines and Retaliation: The EU’s Response to Trump’s Tariffs First, the idea that more accommodating EU positions – or the conclusion of a free trade agreement in the 2010s – would have spared Europe from this disruption is naïve. Calls for a fresh US-EU trade ...

From July 9th to August 1st, the tariff deadline has moved but the threat remains. The EU can consider adopting a strategy of flexible, credible retaliation, underpinned by internal burden-sharing, write @etiennehoera.d-64.social & @aleichthammer.bsky.social here 👇

bst-europe.eu/economy-secu...

On your further questions, next week @jannikjansen.bsky.social will release a v insightful policy brief on the European car industry and has crunched the numbers/conditions of various EV investment - would highly recommend!

Concentrated Chinese FDI in Hungary poses several problems: it deepens EU dependence on China, gives Beijing political leverage (see Leapmotor relocation following EV tariff support by Warsaw), fuels industrial imbalances, and risks fragmenting EU decision-making.

Very valid point - if I had more space I would have loved to expand on this point. In 2024, 31% of Chinese FDI into Europe went to Hungary. For more detailed break down check out the following report: merics.org/sites/defaul...

Der zweite China-Schock zeigt sich glasklar in den Handelsdaten.

Nur ein Beispiel – siehe Chart.

Deutschland hat viele Stärken und ist eine treibende Kraft bei der Gestaltung des europäischen Binnenmarkts.

Es gibt keinen Grund, tatenlos zuzusehen, wie die Industrie verschwindet.

Handelsdaten zeigen: Europas (v.a. DE) Exporte nach China sinken, Importe steigen – China-Schock 2.0

Sander nennt 4 Hebel die jetzt gebraucht werden: kluge Handelspolitik, gezielte Subventionen, aktivierte Binnennachfrage & außenwirtschaftliche Neupositionierung

Starker Beitrag - Berlin plz read

EU-China summit is underway in Beijing.

In this thread I will collate interesting points from remarks and readouts through the day.

First, Xi Jinping's opening remarks, as run by CCTV this morning

news.cctv.cn/2025/07/24/A...

Good balanced take from Arthur on inward-Chinese FDI.

In areas where Europe needs Chinese tech transfer, like batteries, it could make sense.

But it’s crucial to enforce conditions that prevent China from using EU-based plants to simply piece together Chinese-made components for market access.

Fact Sheet: President Donald J. Trump Secures Unprecedented U.S.–Japan Strategic Trade and Investment Agreement A HISTORIC TRADE AND INVESTMENT AGREEMENT WITH JAPAN: Yesterday, President Donald J. Trump announced a landmark economic agreement with

On this basis I suggest the EU commits to invest a trillion dollars in the US, with 150% of the profits going to the US, because numbers have ceased to have any meaning. www.whitehouse.gov/fact-sheets/...

No one’s holding their breath for big announcements from today’s EU–China summit.

But FDI remains one area where pragmatic cooperation is still possible and, under the right conditions, can strengthen EU industry.

In today’s Euractiv op-ed, I outline what it takes to make that happen.

What does the new Commission budget proposal say on funding for democracy?

It increases the funds allocated to defending democracy, rule of law and other Union values from ~1,55bn € (not adjusted for inflation) in the last MFF to 3,18bn € (in 2025 prices).

Trump: "He has these think tanks. They build buildings for people that think."

After Merz and Starmer signed the Kensington Treaty last week and the Macron-Starmer summit the week before, on Wednesday Macron will come to Berlin to meet Merz.

Read here my German version on why we are seeing the revival of the E3, backed up by a triangle of bilateral enagement:

The budget numbers proposed by the EU COM are finally out - but their interpretation is far from unequivocal. Let me give you some comparisons in 2025 prices which is more informative in terms of actual buying power:

There's a common cognitive bias in international relations where you're intimately aware of your own side's internal political dynamics and the ways they can trump (sorry) objectivity - while assuming everyone else will always just run the numbers and behave hyper-rationally.

Britain and Germany sign a historic treaty The two countries hope it will alleviate a set of mutual ailments

"German sentiment sits with the UK, but the strategy always stays with the EU”. My thoughts in @economist.com on the - otherwise highly welcome and well-crafted - Anglo-German Friendship Treaty announced today. Thanks to @sambeal.bsky.social www.economist.com/britain/2025...

Die Bundesregierung sagt, Sie könne den Kommissions-Vorschlag zum neuen EU-Haushalt nicht akzeptieren, weil ein "umfassender Aufwuchs" in Zeiten der Konsolidierung nationaler Haushalte nicht vermittelbar sei.

Ich halte das aus ein paar Gründen für keine kluge deutsche Position:

1/ The EU Commission proposes a budget 2028-2034 that is around €580bn higher than its precursor. The increase is a bit less enormous considering that NGEU repayments will already consume €168bn. However, there is still quite some additional spending in there, mainly going to the new Pillar II:

Deutsch-französisches Op-Ed der Finanzminister @larsklingbeil.bsky.social und Eric Lombard heute in Les Echos:
- gemeinsame Haltung zu Zöllen / "proportionierte Gegenmaßnahmen"
- dt-frz Zusammenarbeit in EU wichtiger denn je, um in globalem Umfeld zu bestehen
(1/2)

www.lesechos.fr/idees-debats...