Ursula von der Leyen and Donald Trump meeting” class=”photoModule__image”>OCKSTEIN, ARCHIVES REUTERS
European Commission President Ursula von der Leyen meets with former U.S.President Donald Trump on July 27, 2023, in Washington D.C.
Washington D.C. – Agreements reached between teh United States and both the European Union and Japan under the Trump administration regarding energy purchases and investment pledges are facing scrutiny for their lack of legally binding commitments, raising questions about their future implementation. The deals, announced in late July 2023, rely heavily on political promises rather than enforceable contracts.
The agreement with the EU centers on a commitment from European commission President Ursula von der Leyen, representing the 27 EU member states, too purchase $750 billion in U.S. oil and natural gas over the next three years. Though, analysts at the Energy Facts administration (EIA) estimate that the United States’ total projected liquid natural gas (LNG) export capacity through 2026 is approximately 11.4 billion cubic feet per day, which, at current prices, would generate significantly less revenue than the pledged $750 billion. The feasibility of meeting this target is thus highly questionable.
Parallel to the energy deal, the EU also pledged $600 billion in U.S. investments before the end of the Trump presidency in January 2025. This commitment faces similar hurdles. The European Union lacks the authority to compel its member states or their private companies to invest specifically in the United States. Individual governments, such as germany and France, maintain control over their investment strategies and cannot dictate where their private sector allocates capital. Furthermore, the agreement lacks specific sector targets for these investments.
Former President Trump characterized the EU’s investment pledge as a “gift,” explicitly stating there would be no repayment or detailed stipulations. He indicated the funds were to be used for investments “in everything I want,” highlighting the broad and undefined nature of the agreement. This contrasts with typical foreign direct investment agreements which include specific project details and oversight mechanisms.
The European Union itself acknowledged the non-binding nature of the July 27th agreement in an official statement. In Japan, opposition parties, including the Constitutional Democratic Party of Japan, have formally requested access to the full legal text of the agreement with the U.S., citing concerns over transparency and accountability.as of August 1, 2023, the text remains undisclosed.
Critically, the agreements lack any enforceable mechanisms to hold the United States accountable. The commitments rest solely on the word of the former President, who has a history of altering his positions. Trump has also warned that he would impose higher tariffs on countries failing to meet their pledged commitments, creating a potential trade conflict. The lack of legal safeguards raises significant doubts about the long-term viability of these agreements and their impact on transatlantic economic relations.
