The EU's Trade Truce With the U.S. Is Already in Danger of Unraveling

European equipment manufacturers have demanded changes to the July trade deal

- Bertrand Benoit & Kim Mackrael

When President Trump unveiled his trade deal with the European Union in July, businesses across the bloc thought it would end months of uncertainty for one of the world's most lucrative trade relationships.

Less than two months on, frustration with the deal is growing in Europe. Businesses are halting exports to the U.S., complaining about new bureaucratic hurdles and warning about a new era of unpredictability.

The reason: the Trump administration's decision to expand its 50% metals tariffs to cover hundreds of additional products that contain steel and aluminum, slapping a large number of European manufacturers with tariffs higher than the 15% that Trump and the EU agreed on for most products.

While the U.S. steel and aluminum tariffs initially targeted only the metals themselves and mostly metal parts, such as screws, they now apply to such objects as motors, pumps, machine tools and construction equipment.

"About 30% of U.S. machinery imports from the EU are now subject to 50% tariffs on the metal content of the product," Bertram Kawlath, president of the German Mechanical Engineering Industry Association, or VDMA, wrote in a letter to European Commission President Ursula von der Leyen at the end of August. The sector, he added, is facing an "existential crisis."

The White House and the Commerce Department didn't immediately respond to requests for comment.

The grudging acceptance that greeted the July deal is now threatening to unravel. Discontent is spreading not just among politicians within EU member states but also to the European Parliament, whose approval is required for key parts of the deal to take effect.