THE TRADE deal now concluded between Donald Trump and the European Union has positioned the EU more completely as a war-fighting organisation and cemented its submission to the United States more completely, albeit with signs of internal disunity.

Two months ago the new and aggressively right-wing German Chancellor Friedrich Merz swore fealty to Trump, both to assure the US president that Europe was willing to buy big into the US arms industry and restock its munitions and, incidentally, to try his hand with a plea to escape the 30 per cent tariffs the notoriously transactional Trump was trailing.

By the end of July Trump and European Commission president Ursula von der Leyen — meeting at Trump’s Scottish golf resort — reached a provisional agreement that imposes a 15 per cent tariff on all exports from the EU to the US.

The quid pro quo is that Europeans are committed to massive investments in the US and are committed to buying huge amounts of armaments plus eye-watering quantities of US energy.

Von der Leyen signed up for EU states to buy $750 billion of oil and liquified natural gas and even some nuclear energy. The EU Commission president gave a gloss on this by arguing that this reduced European dependence on Russian energy imports. The deal signified a symbolic political submission to Trump but the reality is that the deal is expected to prove difficult to engineer, given the limits private ownership places on even robust efforts by the EU machinery.

Merz is in a difficult position. His more aggressive foreign policy doubles down on the difficulties Germany faces in maintaining a competitive edge on its manufactured exports with its supplies of cheap Russian energy compromised as a result of sanctions the EU (and Britain) have imposed on Russia.

It is ironic that, just as soon as this self-mutilating commitment was given, German prosecutors announced that a Ukrainian had been arrested in connection with the sabotage of the pipeline that delivered cheaper Russian gas to Europe.

Dissent within the EU quickly appeared. While Merz and Italy’s Giorgia Meloni welcomed the deal French President Emmanuel Macron said the EU had not be “feared enough” by US negotiators while his Prime Minister Francois Bayrou said the EU had “capitulated” to Trump’s threats and said it was a “dark day” for the bloc when it resigned itself to “submission.”

Just last Friday week, former European Central Bank chief Mario Draghi took aim at Von Der Leyen’s deal.

The leading business establishment voice Corriere della Sera led its account with Draghi’s stark verdict: “For years, the European Union believed that its economic size, with 450 million consumers, brought with it geopolitical power and influence in international trade relations. This year will be remembered as the year this illusion evaporated.

“We had to resign ourselves to the tariffs imposed by our largest trading partner and long-standing ally, the United States.”

His speech to the annual Rimini meeting of business, political (and Catholic) figures spelled out his alternative message that a more neoliberal business-orientated federal Europe needs more political integration and EU-level initiatives to challenge the US.

This he served up with a side order of opposition to national sovereignty and argued for his longstanding view that the key to asserting the EU’s influence lay in further liberalisation and an agreement on how to finance an annual €1.2 trillion investment and devise “a trade policy suited to a world abandoning multilateral rules.”

Under Von der Leyen’s deal, the EU automobile industry has to meet a 15 per cent tariff on exports to the US, the same as Japan, while the EU has lowered from 10 per cent to zero its tariff on US car imports. European car industry sources put the potential job losses at 70,000, with car-makers and supply chain firms likely to move production to the US.

European steel and aluminium continue to face a 50 per cent tariff until the EU and US agree on measures to deal with Chinese imports and wine and spirits lose their tariff exemption and face the standard 15 per cent.

Trump has been playing hardball with the European pharmaceuticals industry threatening a 200 per cent tariff. The US has a trade standards investigation running on EU drug imports and, although the outcome is yet uncertain, a standard 15 per cent tariff is likely. Ireland, with its big pharma industry, will be hard hit and Irish industry chiefs say the EU has capitulated to Trump’s blackmail.

It is a standoff on digital while the EU regulatory framework remains intact, although under enormous pressure.

A critical element in the agreement is the EU commitment to buy more US-manufactured weapons. This dovetails with the long standing drive by the EU Commission to build up the EU role in military confrontation with, in the first instance, Russia.

A decade ago the EU response to its humiliation over the developing civil war in Ukraine — when the US deputy secretary of state imposed Washington’s candidates for political office in the new Ukrainian administration over EU objections — was to accept the new dispensation.

When Victoria Nuland told the US ambassador “Fuck the EU,” she gave an early demonstration of who is in charge. Now that Trump, by all appearances, has recognised a different reality in Ukraine and is minded to strike a deal with Vladimir Putin in line with US capitalism’s longer-term interests and strategy to isolate China, the EU agreed to up its military spending to 2 per cent of GDP.

With Keir Starmer in No 10 the new British commitment is upped to 5 per cent thus more clearly falling in with Trump’s longstanding demands and the EU’s acceptance of Trump’s target.

While coverage in Britain and Europe of the deal is muted, in the US Trump’s triumphalist tone made a mockery of von Der Leyen’s protestations.

The White House proclaimed that the deal “will provide Americans with unprecedented levels of market access to the European Union” and that it “bolsters America’s economy and manufacturing capabilities.”

Bigging up the EU commitment to invest in the US and buy US energy Trump’s press office grandstanded: “Through decisive leadership and an unyielding commitment to American workers, President Trump has delivered yet another agreement that positions the United States as the world’s pre-eminent destination for investment, innovation, and advanced manufacturing.”

Behind the hype are new stages in the long recalibration of the trade and military relationship between the US and Europe. Beyond the bombast the framework agreement is more a road map for continuing negotiations with the notoriously capricious Trump.

Prime battlegrounds are tech industry regulation and the auto industry. The US says it will only lower tariffs on car imports after the EU eliminates “tariffs on all US industrial goods.”

The problem for the EU is that so much remains unclear and unnegotiated with the tariff structure still subject to Trump’s whims. This is starkly similar to the earlier US-Britain trade deal where expansion of British exports to the US of steel and vehicles is limited to quotas over which higher tariffs come into play.

The implications of this landscape of irreconcilable interests for Britain’s fledgling new left party lie not simply in the realm of foreign policy where the urgent necessity is to make a clear break from the Labour tradition of marching in lockstep with US imperialism, but in the ways in which a new direction in economic policy carries with it the need for a further break with liberal and neoliberal illusions about the EU.

Draghi has performed a service in making clear the steps needed for an effective assertion of the interests of European capital. But in doing so he has made it equally clear that this entails a doubling down of the European federal project that entails a further surrender of national sovereignty by national states and a renewed programme of EU-enforced austerity.

A progressive turn in British politics entails, of necessity, a decisive break with both the now irredeemably unequal “Atlantic alliance” and illusions that realignment with European capital is compatible with a policy of peace and progress.