Weekly Briefing: Trump’s EU Tariff Threats & Iran’s Nuclear Brinkmanship
This week is all about trust - or lack thereof.
In his Truth Social post, Trump lambasted the U.S trade deficit with the EU, calling the $250,000,000 the US spends on European goods every year ‘totally unacceptable’. In the same post, he called for a ‘straight’ 50% tariff on all EU goods.
We’ve been here before – Trump has threatened and followed through on major tariffs on Chinese imports. Markets tumbled. Then, as negotiations inevitably carried through either a pause or even a trade deal (in the case of the UK), markets have cautiously returned to a sense of normalcy. It’s important to remember that none of this is normal.
Trump is overseeing a fundamental transformation of the international trading system through coercive trade practices that no one, allies or adversaries, are accustomed to. While Trump’s America-first approach might be re-wiring the global trading system, it’s also re-wiring how trust works in the international system.
Neoclassical realist take: Trump’s threats are not purely rhetorical; this is a real lever of US power. But the EU’s 27-member bloc has more collective bargaining power than he perhaps acknowledges. Trump’s unilateral approach challenges established transatlantic trust norms, creating a reputational ‘shock’ that reshapes future trade negotiations — even if, as before, these threats often resolve in deals rather than a true rupture.
This move is less about trade per se and more about leveraging economic tools for broader geopolitical repositioning. Trump’s transactional style is recalibrating not just trade balances but the deeper social contract of Western alliances. Here, structural realism sees states balancing power, but neoclassical realism adds the role of domestic political pressures (Trump’s electoral base) and elite perceptions (his desire to project strength). The EU’s cohesiveness — and how it plays out internally (especially with Germany and France’s different economic exposure), will be decisive.
Still no agreement on Iran’s uranium enrichment
The fifth round of indirect US-Iran nuclear talks in Rome ended without a deal, but both sides signalled progress and agreed to reconvene. The US insists on a halt to domestic enrichment; Iran sees this as a sovereign right under the NPT, especially given sacrifices under US sanctions. Israel’s threat of military action looms as Tel Aviv’s trust in Iranian-US negotiations dwindles. Meanwhile, Gulf states (especially the UAE and Oman) are pushing for a negotiated outcome to avoid wider conflict.
Neoclassical Realist Take: Iran’s strategy here is to buy more time. Tehran is leveraging the slow pace of Western diplomacy to maintain its nuclear program’s momentum, betting that Western states (and their publics) want to avoid escalation. Meanwhile, the US is balancing a triangle of competing imperatives: (1) stopping enrichment, (2) containing potential Israeli military action, and (3) not alienating Gulf allies who oppose a new regional war.
Trump’s indirect signals of wanting a deal, perhaps spurred by Gulf states’ fears of escalation, add a layer of domestic political calculus. Israel’s military posturing is a reminder of regional realpolitik, while Oman’s quiet mediation channels a centuries-old practice of “small state balancing” in the Gulf.
We’re witnessing a clash between national sovereignty claims (Iran’s enrichment), external balancing (Israel’s threats and Gulf states’ pressure for regional calm), and the US domestic driver (Trump’s deal-maker persona). Unlike past rounds, this dynamic is more complex because of Trump’s personal instincts to seek a ‘big win,’ even as the systemic pressures — Israel’s lack of trust in Iran and its nuclear programme and the Gulf’s fear of conflict — remain unchanged.
If you’ve read along this week, thanks for taking the time. I’ll be back next week with more.