This episode examines the structural logic behind the new U.S.-EU trade deal. At the surface: a 15% tariff on European exports, framed as a victory for balance. But beneath that surface lies a deeper contradiction between how trade deficits are perceived and how they actually function.

We trace the system that sustains the U.S. trade deficit: not as a policy failure, but as a reflection of capital inflows, reserve currency demand, and domestic consumption fueled by external financing. Tariffs do not alter this structure. They tax the symptom without addressing the cause.

For Europe, the deal institutionalizes asymmetry. Energy purchases and investment pledges were exchanged for conditional market access, while core industries now face structural disadvantage. This is not reciprocity; it is compliance under leverage.

We follow how these dynamics redistribute risk, suppress industrial policy, and displace production from Europe to the U.S., with long-term political consequences.

What’s at stake is not just trade. It’s autonomy, institutional coherence, and the ability to govern the terms of economic adjustment.

This is not a trade war. It’s the normalisation of managed imbalance.

Political Economy is written and hosted by Werner Mouton.

This episode is part of an ongoing attempt to examine how economic and political systems structure the world—and how we think within them.

More work at wernermouton.com