> Edit: also, for the historians, it's absolutely stunning how little power the legal system has.
For historians (and political scientists, for similar reasons), it is not stunning at all. It might be stunning for other people, but people who study history are likely to be very aware that the legal system isn’t magic and is ultimately only a notional agreement about what society will tolerate which has only the weight that people refusing to tolerate violations gives it.
Indeed, checks and balances mean absolutely nothing if there is no will to enforce. This is the main innovation of the Trump administration: to prove that the checks and balances that we thought were in place are absolutely meaningless.
> I'm American and kinda stunned how little salience the issue has. Please punish us as much as possible.
The EU has already agreed to one of the most lopsided trade deals in history as a result of all of this. It's a business arrangement just like any other, and at this point it's pretty clear where the leverage is. It's not with the EU.
The 15% flat tariff (with 0% reciprocal tariff), was only a small part of the agreement.
> They'll just ramp up economic production and turn toward China like we're seeing with BYD penetration.
EU also agreed to $750 billion in USA energy purchases over the next three years and another $600 billion in miscellaneous investments in USA companies and industries.
That stuff isn't legally binding and is unlikely to happen.
> The European Union's pledge to buy $250 billion of U.S. energy supplies per year is unrealistic because it would require the redirection of most U.S. energy exports towards Europe [0, emphasis mine]
The EU negotiates as a bloc. If the trade deal includes $750 billion in energy purchases and $600 billion in investments, those commitments came from the EU's negotiating mandate, not from separate members acting on their own.
Maybe some of the EU member states don't like how the "union" operates. In that case, they should pull a Brexit. We already saw it happen once.
I'm not sure where you're getting your information, but this is a quote from the European Commission itself:
> The political agreement of 27 July 2025 is not legally binding. Beyond taking the immediate actions committed, the EU and the US will further negotiate, in line with their relevant internal procedures, to fully implement the political agreement.
You might consider updating your mistaken prior beliefs.
Edit: I see another comment made the same point. I'll have to presume that after you've been presented with this new information, you'll realize that you are in fact very wrong.
> EU also agreed to $750 billion in USA energy purchases over the next three years and another $600 billion in miscellaneous investments in USA companies and industries.
Kinda. The EU have no power to make that happen, so it was more of an agreement to aim for that. But even if the EU buys, say, $750bn oil and natural gas from the USA, because of how interchangeable most (but not all) of that stuff is, even if they did agree to it in an enforceable manner it would only really mean the EU wouldn't buy the same stuff from somewhere else and also the USA wouldn't sell the same stuff to someone else.
America also agreed to quite a few things, alongside the EU, with the Iranian nuclear deal. Then, we left the EU hanging when we pulled out. One could be forgiven for thinking that "done deals" are renegotiable in the current paradigm.
> America was founded on the intellectual rejection of one man taxes on imports
The 1789 constitution created a federal government that was funded chiefly by import duties! Setting up the system of import taxes was one of the first things Congress did. Import taxes were also a founding plank of Lincoln’s GOP.
Fair enough, but in this case the "theater" seems to have produced tangible, one-sided terms that will impact billions in USA-EU trade.
Regardless of whether it's rooted in principle or posturing, the EU still has to live with its economic reality. And that reality heavily favors USA in whatever they deem necessary to facilitate their economy.
The EU didn't agree to the one-sided trade deal for no reason.
I'm honestly confused, you sort of repeated "but the US was willing to impose higher taxes on its citizens than the EU"
I get there's the pandemic of the braindead thinking they've invented new economics like new gravity, but I'd think it'd feel a bit absurd when it's that bald-faced.
I'd especially think it was absurd when you can check on how the markets, the real skin in the game, price this fantastic W.
The countries that have 10-20% VAT don’t think consumption taxes are bad, lol.
Most countries that aren’t the U.S. take affirmative steps to discourage imports and encourage exports. Sometimes they even engage in currency manipulation to make exports artificially cheap while making imports more expensive.
Many of the big EU countries are export-oriented economies. Germany is not upset about the trade deal because they perceive it as a “fantastic W.” https://www.euronews.com/my-europe/2025/07/29/german-politic.... They don’t want Germans buying American products tax free. They want Americans to buy German products tax free.
The compilation of unrelated "water is wet" things like VAT is a consumption tax, opposition party complains in Germany, belies that you are violently agreeing that yes, the big W is the US is in fact willing to have higher "consumption taxes" than anywhere else.
I think it's reasonable to need to perform a ritualistic EU sneering with this much Winning occuring, but it's a little bit disquieting see it sort of cause this black hole where you can't discuss the thing at hand, just complain about other things.
You’re just glibly saying “haha taxes.” But Germany (1) clearly doesn’t think consumption taxes are bad—and tariffs are just consumption taxes that have the added benefit of discouraging imports; and (2) don’t think they’re winning with this trade deal.
The EU made a bad deal from a propaganda point of view, and as a European I wish it had not.
But the truth is: there is no concrete deal beyond the tariff. There are supposed investments and expenses the EU will do which have not been specified and would need to be approved by national governments.
This will be a nothingburger, cause all Trump cares about is the announcement, not any actual effect.
You may know this cause even in his first term he made a deal to export beef to the EU, which sounded big, but was effectively un-impactful once the details were hammered out.
Sure, we import more beef from Mercosur countries than US beef from soy fed cattle. The EU customer is rather educated about what they eat.
This is just how the $600 bn worth of investments will pan out, leading Trump to state time again that the EU has screwed the US. Fortunately he'll be too old by then to be taken seriously.
>I'm American and kinda stunned how little salience the issue has. Please punish us as much as possible.
The majority of major economies are all exporters, it's only a few and mostly just the USA that is both large enough and willing to absorb their surpluses. Without the USA, the entire system collapses because nobody else is willing to run that deficit. You cannot have a room filled only with sellers.
The root of the dispute here is the right to freely sell to the USA while simulatenously pursuing their own protectionist tariffs and subsidies. When you realize the absurdity of a relationship which requires both parties to believe in different things, then it's also understandable that the gravy train has stopped and it's time to negotiate to a more realistic deal. Ironically enough, it's for the same reasons in their beliefs in protectionism that they won't be able to coordinate together.
You won't be keeping the USD as the global reserve. Trump wants his cake and to eat it, but that position is likely unsustainable long term anyways. Mind you, the role of reserve currency today is larged hoisted by the rest of the world onto the USA, there is no rule dictacting its role. But the thing is anybody who is large enough to support it (EU/China) dosen't want that role either, lest they end up deindustrialising like USA.
The actual alternative, with the so-called multilateral "Bancor" and the International Clearing Union as originally proposed by Keynes works via directly controlling exchange rates to punish surplus nations and provide relief to deficit nations. Well, it's for that reason there isn't a serious effort to create it from these other nations, which leaves them at an impasse. That's why as much as I hate to admit, Trump may actually win here because other countries don't really have any good options. Unfortunately the USA is playing a necessary systemic role here that nobody else wants to do.
> the role of reserve currency today is larged hoisted by the rest of the world onto the USA
> Unfortunately the USA is playing a necessary systemic role here that nobody else wants to do
Well. I know what you're trying to say, but it's not like the USA just does nothing to maintain the system. The military, the middle east bases, the petrodollar - none of this is free. The economy is larger than oil, of course - but at the end of the day, most countries still need oil, most oil is still paid for in USD, and will continue to be as long as the USA is the final underwriter of security in that region (and asian, and europe.. until recently).
That's always been the deal. The USA provides the security at the end of the day, and everyone else agrees to use its currency. The unwritten promise part is that the US government won't allow too much inflation, keeps an independent central bank, and the debt it offers is to be considered risk-free.
The US military isn't going away but the security guarantees which were such an important part of the compact are fading, and inflation - serious inflation - seems to be coming into view. It won't happen overnight but it does smell a bit like the beginning of the end.
> EU/China) dosen't want that role either, lest they end up deindustrialising like USA
I don't actually think there's any law of nature that reserve currency status == de-industrialization. The UK didn't do so when it wore the crown and I don't think there's any reason the EU or PRC would inevitably do so either should they step up. I think it just happened to overlap - plenty of rich countries also de-industrialized without being the USA!
I think/hope that it will eventually be the EU that steps up but it obviously won't happen quickly and they aren't exactly covering themselves with glory over the current crises. There would need to be a lot of changes needed on their side, not least of which the mechanisms and mandate to issue a much, much larger amount of debt. But if the USA sees 5% inflation for a year or two - I think the opportunity would be there.
This is a bit of popular myth on sites like this but isn't supported by economists, historians or people in finance. The total volume of oil trade is small fraction of total global trade or capital flows.
Like I said, the USD is the reserve partly because it's beneficial to these surplus economies to have somebody else holding the bags, but also because there aren't viable alternatives because anybody else who can do it dosen't want to. And given there are 180^180 possible exchanges, a reserve currency will exist for practical reasons.
>I don't actually think there's any law of nature that reserve currency status == de-industrialization.
A currency that assumes reserve currency status will strengthen due to increased demand, thus making their exports more expensive and thus uncompetitive on the international stage. Which is incompatible with the export-driven strategies of the EU, China or Japan, all the main contenders for alternative reserve currencies. If you look at the behaviour of their central banks, when they receive capital inflows, they in turn buy assets elsewhere to offset the appreciation to maintain the value of their currency. But the Fed cannot and dosen't do that.
> Which is incompatible with the export-driven strategies of the EU, China or Japan, all the main contenders for alternative reserve currencies. If you look at the behaviour of their central banks, when they receive capital inflows, they in turn buy assets elsewhere to offset the appreciation to maintain the value of their currency. But the Fed cannot and dosen't do that.
Late reply. Could you supply some source material to look into this. What "assets elsewhere"?
But that is counter-balanced by being able to issue debt in your own currency at low interest rates. So while yes you do run a deficit, you are in control of your own destiny so to speak, with the ability to print your way out of it (providing you do so wisely so as not to trigger runaway inflation), rather than being at the mercy of lenders due to foreign-currency issued debt (i.e., South America and the IMF).
Well clearly America has decided that costs of the reserve currency outweight\ the benefits conferred. Many other countries after all manage large debts but also confer the advantages of a surplus economy.
>mercy of lenders due to foreign-currency issued debt (i.e., South America and the IMF).
Countries come to the IMF when nobody else want to lend to them. It's that or national insolvency. That obviously means some harsh and politically unpopular reforms need to made with spending if they want to restore confidence with everyone else. The IMF is a useful scapegoat that diverts the heat from government to make the actions it needs to make.
Nobody is forced to go the IMF, yet despite all the critique, people are still going to them today. In fact the alternatives like China are alot harsher now in their debt relief terms when they realised how many of their lending projects were failing. It's a bit ironically actually when they realise themselves why debt to troubled countries tends to come with stipulations.
> clearly America has decided that costs of the reserve currency outweight\ the benefits conferred
The Trump admin has decided this; that's not necessarily the consensus among economists. Bessent seems capable, but otherwise it's not like this admin is staffed with the best and the brightest by any means, given that the number one criteria is abject loyalty to Trump and his agenda.
> This is a bit of popular myth on sites like this but isn't supported by economists, historians or people in finance. The total volume of oil trade is small fraction of total global trade or capital flows.
What's a popular myth? That oil, still the strategic commodity worldwide, plays a large role in the USA's security relationships and use of the USD is, written or unwritten, a tacit part of those relationships?
That's completely wrong and you have a lot of reading to do to understand the entire post-WWII geopolitical order. Oil is receding yes, but it's still critical and you can't understand anything about the postwar security order - which is very closely tied to the rise of the USD - until you understand that.
I mean, the Nimitz is in the Persian Gulf right now keeping the sea lanes open for their client states in the region. That's the USA's part of the deal right there.
I'll leave it to readers to look up on the details of Bretton Woods or the Nixon Shock or any basic econ resource to understand why oil or military aid is not really the main factor behind the reasons of the US reserve currency.
The Nimitz cannot physically stop the Iranians from closing the Straits of Hormuz if they wanted BTW, it's rather that there isn't much point to Iran closing said straits and just angering pretty much everyone else in the world. You can look at Yemen to see how things really go when an actor dosen't care anyways.
Trump is being pulled in too many different directions to the point where nothing coherent is going to emerge from his strategies (or lack of). You can't promise Wall Street/Corporate America the moon and keep the economy running along nicely while rounding up and deporting immigrants, cutting federal spending, and implementing regressive taxes via tariffs. If he would have just limited himself to the goal of balancing trade while maintaining reserve currency status, I think that he would have had a shot to pull it off. But there is the very real risk that the rest of the world just starts routing around the US so even that is not a given. But when you combine this with all the other things he is trying to do, I think he is seriously risking sending the U.S. economy off a very tall cliff. That is also why he probably is so obsessed with lower interest rates. It is an attempt to try and jolt the economy before all the head winds from his policies start to have an impact.
You can read Bern Bernanke's hypothesis on the Global Savings Glut. But there are plenty of articles by almost all economic insitutions that are talking about the imbalanced nature of trade today.
> Mind you, the role of reserve currency today is largely hoisted by the rest of the world onto the USA
It’s the opposite [1]. Trump openly threatens anyone who tries to replace dollar. It even goes beyond Trump. I bet it will go to war if there are real threats to replace USD.
> there is no rule dictating its role
There’s also no rule dictating other countries to honor US sanctions, but they do.
The current account balance (BoP) considers goods and services. And it's not bilateral relationships that matter, but the aggregate global imbalance. To say that America is the engine of the deficits that absorbs the world's surpluses is trivially accepted by economists.
There's a nice table to understand how skewed things are really with the balance of payments here. America's deficit is 10x higher than the second rank with the UK, which should illustrate how difficult it is for the surplus countries to find alternatives. In any case, this whole situation on excessively relying on one country to buy all the world's exports is a stupidly unstable situation.
>"well, if Herr Daddy says he fixed it, we can all say it's fixed, in fact it'd be damaging not to" territory.
Worked for Biden. Which is not me, as a progressive, saying that Trump is any better, or that the two are even close to comparable on a number of important (mostly social) issues. However, common across admins and parties is an absolute terror of even the suggestion that we've entered a recession. That's because we're in a massive bubble, completely dislocated from fundamentals; in fact, the only thing keeping sentiment and performance afloat is... sentiment.
I think the tacit plan may be to inflate their way out of debt (personal, corporate, national...) while strong-arming the rest of the world into keeping the dollar the reserve currency, which allows us to continue "exporting" a portion of that inflation. It's obviously supervillain shit that will never work, but I suppose that they consider it the superior choice to letting the "bust" part of the "boom-bust cycle" actually take place.
> Why isn’t [sic] tariffs within the “emanations from penumbras” of the president’s foreign policy powers?
Says the consistent mocker of Justice Douglas's use of the quoted phrase to support privacy rights. It seems you'd like to have your cake and eat it too.
These tariff powers are given for emergency use only under the IEEPA, so you're being disingenuous IMO. I don't think most reasonable people would see what's going on with Trump cooking up a "national emergency" over trade deficits and think it's a legitimate emergency.
