In a major announcement from Scotland on Sunday, President Trump and European Commission President Ursula von der Leyen unveiled a new, far-reaching trade deal between the United States and the European Union. Hailed as a “rebalancing” of the world’s largest economic relationship, the agreement promises to reshape trans-Atlantic commerce.

For the average American, this is not a distant diplomatic event. This deal will have a direct impact on the price of goods, especially the cars we buy, and on jobs in key American industries like energy. But beyond the economic headlines, this presidential-led agreement forces a profound constitutional question: In the 21st century, who truly controls America’s trade policy—the President or the Congress?

The State of Play: America’s Trillion-Dollar Trade Relationship

To understand the significance of this deal, it is essential to understand the scale of the U.S.-EU economic partnership. It is the largest in the world, with more than $1.3 trillion in goods and services traded annually. For decades, however, this relationship has been imbalanced. The European Union consistently runs a trade surplus, meaning it sells more to the U.S. than it buys, leaving the United States with a significant trade deficit—the very issue President Trump and President von der Leyen said this deal aims to “rebalance.”

The trade flows are defined by key industries on both sides of the Atlantic.

• The U.S. primarily exports high-value goods like aircraft, machinery, and medical equipment to Europe, along with a growing volume of energy, particularly liquefied natural gas (LNG).
• The EU primarily exports pharmaceuticals, luxury goods, and, most visibly, automobiles from iconic brands like BMW, Mercedes-Benz, Volkswagen, and Audi.

The Impact at Home: From the Showroom to the Power Plant

This new deal will create clear winners and losers for American families and workers. The centerpiece of the agreement is a new, “straight-across tariff of 15%” on automobiles. For the average consumer, this will almost certainly mean higher prices for European cars at the dealership. Tariffs are taxes paid by importers, and those costs are typically passed on to the customer.

On the other side of the ledger, the deal includes a commitment from Europe to purchase an additional $150 billion worth of U.S. energy and make $600 billion in other investments into the United States. This could translate directly into job growth and economic expansion in America’s energy sector and other industries, providing a significant boost for American workers. The agreement is a classic trade-off: potentially higher costs for consumers of foreign goods in exchange for greater opportunities for producers of American goods.

A Constitutional Question: Who Controls America’s Trade?

While the President announced this deal, the Constitution is explicit about who holds the primary power over trade. Article I, Section 8, the Commerce Clause, grants Congress the sole power “To regulate Commerce with foreign Nations.” Furthermore, the Treaty Clause in Article II requires the President to get a two-thirds vote of approval from the Senate to ratify any formal treaty.

So how can a president single-handedly strike a deal of this magnitude? Over the past century, Congress has delegated significant authority to the executive branch to allow for more nimble trade negotiations. This is often done through a mechanism called Trade Promotion Authority (TPA), or “fast-track,” where Congress agrees to hold a simple up-or-down vote on a deal the President presents, without amendments.

This new U.S.-EU pact brings this constitutional tension into sharp focus. Is this an agreement that the President will now submit to Congress for an up-or-down vote under TPA, honoring the legislative branch’s ultimate authority? Or will the administration attempt to implement parts of it, particularly the tariffs, through the President’s own executive authority, citing national security or other powers?

This deal is a momentous economic event. Its greatest significance, however, may be constitutional. It represents the pinnacle of presidential power in an area the framers originally gave to Congress. How this agreement is implemented—whether with the explicit consent of Congress or by the pen of the President alone—will be a powerful indicator of the true state of our separation of powers.