Big Promises, Big Problems
Let’s cut through the noise: The latest so-called “historic” trade deal between the EU and the US, hailed by Trump as the “biggest deal ever made,” is, at its heart, a masterclass in political posturing. The basics? The US throws a 15% tariff on EU goods, and the EU—rather optimistically—pledges to buy $750 billion worth of American energy over three years.
After key negotiations between US President Donald Trump and EU President Ursula von der Leyen in Scotland, the two sides claimed an agreement in which the EU pledged to buy $750 billion of US energy over three years. AP Images
On paper, the EU’s supposed to fork out $250 billion a year for American natural gas, oil, and even those much-hyped small modular nuclear reactors. EU Commission boss Ursula von der Leyen framed this as a grand pivot away from Russian energy. But, if we follow the money, things start to unravel quickly.
The Numbers Game: Reality Check
Last year, all EU imports of US energy didn’t even scrape $80 billion. For the whole of 2024, American energy exports barely topped $330 billion. Expecting the US to suddenly up its energy shipments and the EU to gobble them all up? It’s just not happening.
Last year, the EU imported from the United States about 65 billion euros of energy products, including liquefied natural gas and oil.
Economists are not mincing words. Davide Oneglia from TS Lombard, a macroeconomic forecasting consultancy establishment, put it bluntly—this $750 billion figure is “meaningless” and utterly “unachievable.” The numbers just refuse to add up. Even with substantial price hikes, as pointed out by energy expert Florence Schmit, the target would demand nearly 67% of the EU’s energy to come from America overnight. That’s not so much strategy as wishful thinking.
Deal or Just a Statement?
Dig a little deeper and you’ll see the whole thing reads more like a political press release than a legally binding pact. We’re missing the fine print: no breakdown on how these numbers would actually be met, no clarity on whether private companies are obligated, and no transparency on whether EU investment in US energy even counts toward the total.
The EU’s idea of increasing nuclear cooperation is worth a look, but the reality is, none of those shiny new reactors will be commercial before 2030. And, quite frankly, the EU’s own ambitions to boost local nuclear industries means these deals may end up fighting EU interests rather than helping them.
Kicking the Can Down the Road
If you ask around among market watchers, there’s a consensus: this is less about real trade flows and more about buying time. With US presidential elections looming, the EU might just be hedging its bets for a change in the White House. EU officials are keen to show goodwill, spinning energy procurement as a diplomatic olive branch to Washington.
But let’s not forget, this isn’t their first “big” energy handshake. After the Ukraine war upended EU gas supplies, Brussels rushed to ink an LNG import deal with then-President Biden. Fast forward to now, and EU Trade Commissioner Maros Sefcovic insists the new figures are doable—“We are ready to make purchases.” Well, we’ll see.
Deep Throat
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Trump just rolled out another tariff threat, and this time Iran's trading partners are in his crosshairs. On January 12, the US president announced a blanket 25% tariff on any country "doing business" with Tehran.
The international press immediately fixated on China—Iran's biggest trade partner. Reuters warned this could reignite the US–China trade war and shred the fragile truce both sides hammered out last year. But Chinese scholars aren't buying it. They say Trump lacks the nerve to slap Beijing with new tariffs, because China will hit back hard—and make him regret it.
Anti-government protests erupt in Iran. (AP photo)
The Financial Times reported on January 12 that these tariffs—which took effect immediately—could slam China, India, Turkey, Pakistan, the UAE, Brazil, and Iraq. All of them trade heavily with Iran. Russia sealed a new free trade deal with Iran in 2025, making it another potential target.
CNN pointed out the stakes for Beijing. China trades with both Iran and the US, so if Washington applies these tariffs, Chinese goods entering America could see costs spike. The network recalled that after last year's summit in Busan, South Korea, the Chinese and US presidents agreed to pause portions of their tariff war—a temporary truce.
Iran as Flashpoint, Again
Reuters published a piece on January 13 titled "Trump's Iran Tariff Threat Risks Reopening China Rift." The article traced how Iran became a powder keg in US–China relations during Trump's first term (2017–2021).
Back then, Washington tightened sanctions on Tehran and blacklisted Huawei, accusing the Chinese telecom giant of selling tech to Iran. That led to the arrest of Huawei founder Ren Zhengfei's daughter, Meng Wanzhou, in Canada—triggering a diplomatic crisis and sending bilateral tensions through the roof.
Now Trump's targeting Iran again. If he follows through, total US tariffs on Chinese exports could exceed 70%—way higher than the rates both sides agreed to last October when they dialed down their trade fight.
It's still unclear which countries or entities Trump will actually target. He hasn't named China explicitly. But Reuters noted Trump has a track record of making bombastic statements that could upend US foreign policy—only to back off later.
US–China "truce" forged in Busan last year now at risk if Trump's Iran tariffs target Beijing. (AP file photo)
Beijing Calls Trump's Bluff
Wu Xinbo, Dean of Fudan University's School of International Relations, told Reuters that China sees through Trump's posturing. "China will call (Trump's) bluff. I can assure you that Trump has no guts to impose the extra 25% tariffs on China, and if he does, China will retaliate and he will be punished," said Wu.
Another Chinese scholar pushed back on the narrative that China and Iran are economically intertwined, noting that "China and Iran are not as close as in the public imagination".
China Customs data backs that up. Beijing has dramatically reduced imports from Iran in recent years. Through November last year, China imported just 2.9 billion USD worth of Iranian goods—a far cry from the 21 billion USD peak in 2018, during Trump's first presidency.
Some sources claim China's major oil companies stopped doing business with Iran in 2022. Yet China's purchases from Tehran still run into the billions, thanks to independent refiners handling shipments.
China as Convenient Scapegoat
Wang Jin, a researcher at Beijing's Dialogue Think Tank, told reporters that "China is just an excuse, a kind of disguise for the Trump administration, to impose new pressure (on) Iran."
Chinese Foreign Ministry spokesperson Mao Ning responded to Trump's tariff threat on January 13. She stated that China's position on tariffs is crystal clear: tariff wars produce no winners. Beijing will firmly defend its legitimate rights and interests.
Analysts warn that Trump's renewed attempt to cut Iran off from global trade could heighten worries about the Belt and Road Initiative. Iran serves as a strategic hub for Chinese goods heading to the Middle East.
This tariff gambit has cast doubt on Trump's planned April visit to China. Observers had expected him to seal a comprehensive trade deal with Beijing during that trip.
The Wall Street Journal echoed Reuters' concerns, warning that new tariffs on Iran's trading partners could wreck the US–China trade truce.
But Reuters also cited Xu Tianchen, a senior analyst at the Economist Intelligence Unit, who questioned whether Trump's tariff policy is even enforceable. "Last year he announced tariffs related to 'illicit' Russian oil trade, but their implementation was patchy." Xu said.
He went on stating that "Trump is also the kind of person who likes bullying the weak," Xu said. "He should manage his actions to avoid these tariffs escalating into direct confrontation with China".
