US vice president JD Vance met with European commission president Ursula von der Leyen and Italian Prime Minister Giorgia Meloni in Rome on May 18, 2025. The discussions focused on advancing trade negotiations between the US and the European Union.

After attending Pope Leo’s inaugural Mass with the European leaders, Vance acknowledged differences in trade policies but expressed hope for progress.

“Hopefully, it will be the beginning of some long-term trade negotiations and advantages between Europe and the US,” he said.

The US has imposed tariffs on imports of steel, aluminum, and cars, including a 25% tariff on steel and aluminum and a 10% tariff on most countries.

Additional tariffs, including a 20% rate targeting the EU, are scheduled to take effect if current negotiations do not succeed after a 90-day pause.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ The US-EU trade relationship represents historic economic interdependence

The sheer scale of transatlantic commerce creates significant mutual dependencies despite recurring political tensions, with bilateral trade exceeding $1 trillion annually as of 2022 1.

This economic relationship constitutes the largest bilateral trade and investment partnership globally, representing half of global GDP and nearly a third of world trade flows 2.

The EU serves as a crucial supplier of pharmaceuticals and machinery to the US, while the US has become the largest buyer of EU natural gas and oil, highlighting their strategic economic integration 3.

Despite this massive economic interconnection, the relationship has operated without a dedicated free trade agreement since previous negotiations for a Transatlantic Trade and Investment Partnership (TTIP) stalled in 2016 2.

This historical context helps explain why both sides continue engaging in negotiations despite recurring disputes, as their economies remain fundamentally linked regardless of political leadership changes.

2️⃣ Current tariff escalation represents the most protectionist US trade policy in a century

The US average effective tariff rate is projected to reach 22.5% under recent policies, marking the highest level since 1909, reflecting a dramatic shift away from decades of trade liberalization 4.

The trend began in 2018 when the US imposed steel and aluminum tariffs on national security grounds, leading to EU retaliation and establishing a pattern of escalating trade barriers 56.