Big Talk, Bad Timing? EU-US Trade Pact Faces Backlash Over Climate Contradictions

A major new trade deal between the European Union and the United States has triggered a wave of criticism from climate advocates, economists, and legal experts. At the centre of the controversy is a fossil fuel pledge valued at €700 billion, which critics argue is out of step with Europe’s climate ambitions and may not be achievable under current conditions.

The agreement was reached this week after tense negotiations in Scotland between US President Donald Trump and European Commission President Ursula von der Leyen. It includes wide-ranging provisions aimed at boosting transatlantic energy trade and cutting tariffs. One of its key outcomes was the prevention of a planned US tariff hike on European imports that would have doubled duties from 15 to 30 per cent.

Von der Leyen described the deal as a stabilising moment for two economic powerhouses that together account for nearly one-third of global trade. Trump, meanwhile, celebrated it as a significant victory for American exporters and domestic energy producers.

But not everyone is applauding. The response from environmental groups and trade analysts has been deeply critical.

The European Environmental Bureau, which represents the largest network of environmental organisations in Europe, condemned the agreement as a serious step backwards for climate action. According to the group, the scale and substance of the fossil fuel commitment are fundamentally misaligned with the EU’s 2030 climate targets.

From the US side, the federal government claimed that the agreement includes a commitment from the EU to import $750 billion worth of energy and related products. European officials have echoed the desire to shift away from Russian energy supplies in favour of US exports. However, environmental groups say the numbers do not add up.

Current figures from Eurostat indicate that the US already provides around half of the EU’s liquefied natural gas. Even replacing all the remaining imports from Russia would only account for an additional € 9 billion in trade annually.

Even in the most optimistic scenario, increasing oil and gas purchases from the United States would generate less than 100 billion euros a year in trade value. That is far below the 700 billion euro figure stated in the agreement.

The European Environmental Bureau has urged both the European Parliament and national governments to scrutinise the deal closely and push back against provisions that could undermine climate goals, reduce energy sovereignty, or damage the EU’s credibility on the global stage.

On the other side of the Atlantic, the US has stated that Europe will commit to an additional $ 600 billion in purchases and investments under the agreement.

Several economists have also weighed in, questioning both the feasibility and enforceability of the deal. Nobel Prize-winning economist Paul Krugman wrote this week that the agreement is more symbolic than practical. He argued that the European Commission lacks the legal or institutional authority to compel private companies to invest or dictate their energy procurement decisions. Officials confirmed to Politico that any investments would come from private firms, not public institutions, and would not be backed by government guarantees.

Krugman also pointed to significant logistical challenges. Liquefied natural gas exports require specialised infrastructure. At present, facilities in both the US and Europe are operating at or near full capacity. Expanding this capacity would require years of construction and permits, far beyond the three-year timeline set out in the agreement.

He further argued that oil and gas are part of global commodity markets. Suppose the United States increases energy shipments to Europe. In that case, exports to other nations such as Japan or China would likely decline, meaning the total volume of exports would remain essentially unchanged.

Beyond the economic and environmental critiques, the deal could also face legal hurdles in the United States. A case currently before the US Court of Appeals for the Federal Circuit, known as VOS Selections versus Trump, may challenge the very foundation of Trump’s trade policy. The lawsuit, brought by a group of small business owners, argues that the president misused the International Emergency Economic Powers Act to impose tariffs.

The plaintiffs maintain that the law does not permit the executive branch to enact broad trade measures without congressional oversight. If the court rules in their favour, it could undercut not only this new deal with the EU but also other trade arrangements that rely on the same legal justification.

With legal battles unfolding in Washington and growing opposition in Brussels, the future of the trade deal remains uncertain. Although the agreement has been formally announced and key figures have endorsed its goals, many of the details remain unclear.

Implementation is likely to face significant obstacles, including political resistance and infrastructure bottlenecks. Whether the sweeping energy commitments outlined in the agreement can be fulfilled at all is an open question.