[Salon] EU admits it can’t guarantee $600B promise to Trump

[Chas Freeman <cwfresidence@gmail.com>]

https://www.politico.eu/article/eus-600bn-us-investment-will-come-exclusively-from-private-sector/

EU admits it can’t guarantee $600B promise to Trump

The extra investments pledged under the trade deal would come from private companies, which Brussels conceded it has no power to control.

Two senior European Commission officials clarified that money would come exclusively from private European companies, with public investment contributing nothing. | Olivier Matthys via EPA

July 28, 2025

By Gregorio Sorgi

BRUSSELS — The European Union has admitted it doesn’t have the power to deliver on a promise to invest $600 billion in the United States economy, only hours after making the pledge at landmark trade talks in Scotland.

That’s because the cash would come entirely from private sector investment over which Brussels has no authority, two EU officials said.

On Sunday, European Commission President Ursula von der Leyen struck a deal with U.S. President Donald Trump to avoid an all-out EU-U.S. trade war. The deal included a pledge to invest an extra $600 billion of EU money into the U.S. over the coming years.

But speaking Monday, two senior European Commission officials clarified that money would come exclusively from private European companies, with public investment contributing nothing.

“It is not something that the EU as a public authority can guarantee. It is something which is based on the intentions of the private companies,” said one of the senior Commission officials. The Commission has not said it will introduce any incentives to ensure the private sector meets that $600 billion target, nor given a precise timeframe for the investment.

However, the first official said that the $600 billion figure was "based on detailed discussions with different business associations and companies in order to see what their investment intentions are."

Tariffs averted

Trump had threatened to impose 30 percent tariffs on most EU imports from Aug. 1, but after negotiations Sunday he dropped the figure to 15 percent.

The EU’s $600-billion promise played a key role in facilitating this agreement, but quickly drew criticism that an investment of that size would come at the cost of investment within Europe.

The Commission pointed out that the figure would come from private companies, not European taxpayers, contrasting with Japan’s promise to mobilize $550 billion of both public and private investments in the U.S. as part of a recently agreed trade deal.

But the idea that the private sector can be relied upon to provide that level of investment was met with skepticism.

"This part of the deal is largely performative," Nils Redeker from the Jacques Delors Centre think tank told POLITICO. "[The EU] is not China, right? So nobody can tell private companies how much they invest in the U.S."

The EU officials said that the estimated $600 billion will add to the EU’s current $2.8 trillion private investments in the U.S. that accounts for approximately 3.4 million jobs.