By agreeing trade tariffs with US, Europe has bought its security for a while - MEP Stakis

RIGA - By agreeing trade tariffs with the US, Europe has bought its security for a while, European Parliament member Martins Stakis (Progressives) believes.

As reported, US President Donald Trump and European Commission President Ursula von der Leyen on Sunday struck an accord with US President Donald Trump that will see exports from the bloc subjected to 15 percent tariffs - but no tariffs for US exports to Europe. The agreement meant Brussels staved off a threat from Trump to hit Europe with levies twice as high if no deal was struck by August 1.

The Latvian MEP told LETA that the European Union's (EU) room for maneuver against the US remains limited, as Europe needs US security guarantees, US military presence in Europe and US military technology. In his view, it is hard to imagine that defense issues were not discussed in these talks.

"It is therefore natural that the EU made concessions. The outcome of the negotiations shows once again the importance of developing the European defense industry and strengthening the armies of the bloc's member states," said Stakis.

As for the US-EU agreement, the only positive thing in Stakis's view is that a broad tariff war has been avoided and clear rules of the game have been established. He also pointed out that the agreement is not the end of the story, as negotiations will continue on certain groups of goods and the tariffs to be applied to them.

Asked whether the agreement gives Europe the opportunity to raise other issues of importance in its negotiations with the US, Stakis said that peace has been achieved and it is in peace that negotiations take place. The MEP stressed that the political victory that the US President has achieved is important to Trump and that his attention will now probably turn to other issues, so Europe can start to negotiate other issues on the diplomatic level.

Stakis pointed out that it is also interesting to compare the White House and EC statements, where there are noticeable differences. The EU, for example, is saying that it will invest USD 600 billion (EUR 558.7 billion) in the US economy over the next four years. Stakis explained that the EU already invests around USD 100 billion (EUR 93.1 billion) a year in the US economy, but the bloc has no tools to force private companies to invest more in the US.

Stakis noted that the US is currently saying that the EU will buy US military equipment in large volumes, while the EC statement does not say so. The MEP pointed out that the EU is committed to investing more in security in the coming years and will not be able to do so without the US military industry, while the EU has also announced its move towards strategic independence and will give preference to the bloc's military industry.

"The good news for Europe is that the war axe is no longer raised. (...) But it is clear that the trade tariffs will have a negative impact on the EU economy. The tariffs will also be a tax on US citizens. In this situation, the US budget will be the only beneficiary," said Stakis.

The MEP concluded that this would affect both the EU and the US. The MEP stressed that tariffs are a tax on consumers, which will make European products more expensive in the US, affecting purchasing power, but Stakis does not think that this will be something disastrous for the EU, as the bloc's economy is large and resilient enough to cope with it.