Europe Lost This Trade War—It Won’t Lose the Next

July 27 was a “dark day” for Europe, said French Prime Minister François Bayrou. The European Union has been “eaten for breakfast,” said Hungarian Prime Minister Viktor Orbán. German Chancellor Friedrich Merz said the deal struck between European Commission President Ursula von der Leyen and United States President Donald Trump would “substantially damage” Germany’s finances. “There is no hiding the fact that the EU was rolled over by the Trump juggernaut, said one ambassador,” wrote the Financial Times. “‘Trump worked out exactly where our pain threshold is.’”

The EU avoided a full-on confrontation with America by signing a deal with President Trump. But there is no doubt who won the negotiation. The U.S. will impose a 15 percent tariff on most EU goods. To bring that down from the threatened 30 percent, the EU promised that its businesses will invest $600 billion in the U.S. by 2028. It also promised to spend $750 billion on U.S. energy over three years.

To rub salt in the wound, the deal was worse than the one Britain concluded with President Trump, despite Europe’s insistence that better deals come from being part of a large trade block.

“[N]o matter how much the Euro-fanatics try to spin it, in reality Donald Trump, as he might put it himself, has knocked this one out of the park,” Matthew Lynn wrote in the Telegraph. “Short of having to ship the Mona Lisa to Mar-a-Lago, it is hard to see how it could have worked out better for President Trump. After two decades of relative economic decline, and with crushing taxes and regulation suffocating the life out of its industry, the EU is now too weak to stand up to the U.S. Its fragility has been painfully exposed—and this deal will only make it worse.”

Alberto Alemanno, hec Paris’s professor of EU law, said the deal reflected “Europe’s economic and ideological surrender.” Jacob Reynolds of the think tank mcc Brussels said it was “nothing short of total capitulation.”

But the EU will not take this kind of humiliation and move on. Its loss will prompt some major changes.

Europe is taking big lessons from this. “This failure exposes the fundamental weakness of European governance,” wrote Alemanno. “Lacking a true EU-wide governance system, the bloc remains incapable of translating competing national agendas into a unified position.” With all its competing national interests, the EU couldn’t agree on a way to fight back. Retaliation against America would have hurt Europe—and some countries would suffer more than others. No one would agree to such uneven pain, so the bloc had little choice but to do a deal.

It was also hamstrung by its reliance on America for military protection. If America threatened to withdraw from its military bases and withdraw its nuclear umbrella, the EU would have little choice but to back down. The EU has its anti-coercion instrument, often called its “nuclear option.” But you can’t go nuclear against the nation responsible for keeping you safe.

“The trade deal is a humiliation for the EU, but it reflects the imbalance of power,” Clemens Fuest, president of German think tank the Ifo Institute, posted on X. “The Europeans need to wake up, focus more on economic strength, and reduce their military and technological dependence on the U.S. Then they can renegotiate.”

“Europe’s dependency on America’s security guarantee was a further argument against trade confrontation, especially for the bloc’s eastern and northern members,” wrote the Financial Times. “Fears that Trump would cut off weapons supplies to Ukraine, pull troops out of Europe, or even quit nato overshadowed the talks, diplomats said.”

Europe understands exactly why it lost the war. Watch for it to prepare for the next.

Another round is guaranteed to break out soon. It’s not clear how the EU will fulfill its promises to invest $600 billion in America or spend $750 billion in energy. As socialist as the EU is, it doesn’t control every business there. How would it ensure EU businesses follow through?

The energy commitment in particular is gigantic. In 2024, the EU imported $75 billion in energy from America. To raise that to $250 billion a year, the EU will have to get two thirds of its total energy needs from the U.S. Even if it completely stopped buying liquified natural gas from Russia, Algeria, Qatar, Nigeria and Norway and got it all from America, it would struggle to make half the amount it has committed to.

The U.S. would struggle to supply that much. Total U.S. energy exports to the entire world last year were $318 billion. Other countries like Japan have also committed to buying much more energy as part of their trade deals.

What happens when it becomes clear that the EU is nowhere near the $750 billion in energy imports it committed to? What happens if European companies fail to follow through on the EU’s promise of $600 billion in investments? The seeds of the next trade war are already planted.

This defeat will give the EU more impetus to get its act together. Germany is already working on replacing America as the foundation for Europe’s defense.

It is also laying the international foundation for a victory. Von der Leyen and Merz called for the creation of an alternative World Trade Organization (wto) at a meeting of EU leaders in June. “You all know that the wto doesn’t work anymore,” Merz said.

It’s true. Starting with Barack Obama, U.S. presidents have sabotaged it by refusing to appoint anyone to its Appellate Body, effectively its supreme court. This prevents the wto from ruling on any appeals. Von der Leyen suggested joining with the giant Asian trade bloc, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, to form this new body.

These nations are talking about setting up a new body to encourage world trade, open to everybody—but not the U.S. Or at least not in such a way that allows the U.S. to gum the whole thing up again.

Von der Leyen herself may not be around to see these new wto, however. She is already plagued with scandals around her conduct during the covid-19 pandemic. Her contacts with Pfizer ceo Albert Bourla have been covered up, and various government bodies have launched investigations.

This deal shows she cannot go toe-to-toe with President Trump. After Trump was elected in 2024, the New York Times ran the headline “Missing in Europe: A Strong Leader for a New Trump Era.” The trade deal shows how true that is. Generally, leaders of individual nations want a weak leader in charge of Europe. A strong leader might boss them around. But this is exposing the real costs of weak European leadership.

Karl Theodore zu Guttenberg, a man we’ve long watched, as we believe he could fill that role, heavily criticized the deal on msnbc. “This is something I would connect with the term coercion,” he said. He said that the U.S. could soon demand more. “Who knows what the President may decide in a week or two weeks from now,” he asked.

A strong leader could quickly turn around the other factors Europe is missing. This could be the most important change the trade defeat ushers in.

Everything is lining up in exactly the way we have forecast for years based on Bible prophecy. Many would scoff at that source—but consider these statements made decades ago by Herbert W Armstrong:

• 1978: Watch for “a sort of soon-coming ‘United States of Europe’—a union of 10 nations to rise up out of or following the Common Market of today. Britain will not be in that empire soon to come.”
• 1954: “Germany inevitably [will] emerge as the leader of a united Europe. It will require some spiritual binding force to inspire this confidence—to remove these fears—and that spiritual binding force must arise from inside Europe! All Europe is actually ready—just waiting for the confidence-inspiring leader ….”
• 1953—“Ten powerful European nations will combine their forces ….”
• 1959: This European power will set up “a gigantic world-trading system.”

These statements are backed by specific prophecies. And world events are forcing Europe in this direction. Revelation 17 and 18 describe a “beast power” led by “10 kings,” or 10 nations. Revelation 18 describes its total dominance of the global economy. Once it falls, the businessmen of the earth all weep.

Other passages describe the U.S. and Britain being shut out from this world trade system, brought low until they are conquered.

Europe lost this first trade war against America. It will not lose the last.