European Parliament Pushback Clouds EU-US Trade Deal Hopes

A growing rebellion in the European Parliament is clouding the outlook for a transatlantic trade pact, as lawmakers denounce the agreement as unbalanced and threaten to delay ratification. The uncertainty has already spilled into markets, with traders marking down the euro (Zorrox: EURUSD) on fears that prolonged political friction could undermine confidence.

Lawmakers Criticize Imbalanced Terms

Members of Parliament from across the political spectrum have blasted the deal, claiming it leans too heavily toward Washington. Reduced EU tariffs on U.S. industrial goods have not been matched, with European exports still facing a uniform 15% duty. Critics argue that the absence of a sunset clause and weak alignment with World Trade Organization standards leaves Brussels at a disadvantage. Some lawmakers went further, accusing EU negotiators of capitulating to U.S. demands.

Trade Chief Defends Deal as Best Available Option

Sabine Weyand, the EU’s chief trade negotiator, defended the agreement as the strongest possible safeguard against a tariff war. She highlighted that cross-border trade flows have remained resilient under the framework, while cautioning that politically sensitive industries like steel and autos remain vulnerable.

Parliamentary Tests Ahead

The European Parliament holds final approval power, and procedural doubts from senior figures have raised questions about the timeline. Bernd Lange, head of the trade committee, voiced strong reservations and suggested amendments may be inevitable. Combined with lingering threats of tariff escalation from Washington, the hesitancy places the deal on uncertain ground heading into autumn ratification votes.

Tips for Traders

• Watch the euro (Zorrox: EURUSD) as parliamentary delays or amendments could spark sharp FX swings.

• Track trade-sensitive sectors such as autos and steel, which remain vulnerable to tariff headlines.

• Monitor rhetoric from Brussels and Washington—hawkish tone may widen risk premiums across markets.

• Stay alert to alternative trade deals like Mercosur, which could offer hedging opportunities.

• Position cautiously ahead of ratification deadlines, as surprise amendments may trigger volatility.