Germany warns Trump trade deal will inflict ‘substantial damage’

 European leaders have admitted the EU’s trade deal with the US will hit their economies, after Brussels surrendered to Mr Trump’s demand for a hefty 15pc tariff.

German chancellor Friedrich Merz said his country’s economy, Europe’s largest, would suffer “substantial damage”, but “we couldn’t expect to achieve any more”.

French prime minister Francois Bayrou said the deal amounted to “submission” to Mr Trump, and was a “dark day” for Europe.

The euro fell by the most in two months against the dollar, dropping 1pc as fears grew over the impact of the deal on Europe’s fragile economies. Germany’s main stock market index led European bourses lower, while Wall Street made early gains.

EU trade commissioner Maros Sefcovic said the deal was “better than a trade war with the United States” and was “clearly the best deal we could get under very difficult circumstances”.

But few national leaders seemed willing to endorse a deal in which Brussels accepted higher tariffs on EU exports than those Mr Trump agreed with Britain, but chose not to levy any new taxes on incoming American goods.

Hungary’s Prime Minister Viktor Orban said Mr Trump had “eaten [European Commission president Ursula] von der Leyen for breakfast”, while Spanish prime minister Pedro Sanchez said he supported Brussels’ deal “without any enthusiasm”.

The European Trade Union Confederation said the deal would result in “significant job losses” for export-dependent industries, while the bloc’s pledge to buy more American weapons and energy could risk more than $1.3bn (£1bn) of “lost investment”.

“There is no escaping the fact that this is an asymmetrical deal in favour of the US,” the ETUC said.

Gilles Moec, group chief economist at Axa, said the deal could slash half a point from the eurozone’s GDP, which equates to losing about €75bn (£65bn) of economic output.