The art of fraud
Olivier de Berranger, CEO, La Financière de l’Échiquier (LFDE) | September 2025
Article 1137 of the French Civil Code states that fraud occurs when one party to a contract obtains the consent of the other party through deception or lies.
While Donald Trump presents himself as a master in the art of the deal,[1] it would seem that Europe has become a master in the art of submission. Trade ‘negotiations’ with the United States boiled down to Ursula von der Leyen being summoned in the middle of summer to one of the US President’s private golf courses in Scotland to be told that tariffs of 15% would be imposed, with a few exceptions such as aerospace and certain strategic raw materials that have not yet been clearly defined.
This came as a relief to some, as the rate is lower than the 20% announced on Liberation Day in April, and well below the 30% threatened in the absence of a joint agreement. Nevertheless, it is astronomical compared with the 1-2% that prevailed until then, and is the highest rate in nearly a century.
And as if that were not enough, the European Union has committed to importing $750 billion in fuel, LNG[2] and oil over the next three years. Added to this is a commitment to increase purchases of microchips and weapons. The icing on the cake is that – as if Europe were suffering from an excess of internal investment – the EU has also committed to investing $600 billion in America. Europe’s excess savings will therefore continue to be invested across the Atlantic rather than financing its own domestic companies. In ‘return’, European tariffs on imports of American products will be lowered to 0%…
Attempting to justify herself in an op-ed, Ursula von der Leyen admits that ‘while not perfect, it is a solid agreement’. However, the solidity of this agreement is questionable given the volatility and unpredictability of the decisions of the 47th US President. But it is true that Europe is very good at shooting itself in the foot. Mario Draghi noted that internal regulatory and normative barriers in Europe pose a greater obstacle to trade than US customs duties.[3] The IMF estimates that the total value of non-tariff barriers to trade within the EU is equivalent to 44% tariffs on manufactured goods and 110% on services.[4] As a result, intra-European trade represents half the level of trade between America’s federated states. Mario Draghi adds that the application of the GDPR[5] in Europe has reduced the profits of small and medium-sized enterprises and mid-cap companies by 12%.
While we can take comfort in seeing the shock treatment inflicted on Switzerland, with 39% tariffs and a few rare sector exceptions, it is high time for Europe to react and, through renewed governance, to assert its role as a leading global internal market. To paraphrase Mark Twain, rumours of the EU’s death are greatly exaggerated, but the time for action has come, otherwise a hypothetical future reconstruction agreement for Ukraine could also turn into a fiasco.