EU still divided over Trump tariff response as deadline looms

Good morning. News to start: The EU is refusing to sign a joint declaration on climate proposed by China at a planned summit this month, unless Beijing pledges greater efforts to cut its emissions.

Today, my colleagues report on the internal EU divisions over how to respond to Donald Trump’s trade demands as his deadline for a deal looms, and I explain why Ursula von der Leyen will win a no-confidence vote in parliament this week but is slowly losing the chamber’s long-term support.

Trade-off

The EU faces a key choice this week between swallowing higher tariffs to avoid a full-blown trade war with Washington, or retaliating to put pressure on the US to compromise, write Barbara Moens and Andy Bounds.

Context: Wednesday is the threatened deadline for a trade deal between the two trading giants, following almost three months of negotiations to avert Donald Trump’s threatened 50 per cent tariffs on goods from the EU next week.

Yesterday, US Treasury secretary Scott Bessent warned that US tariffs on imports from some countries will “boomerang” back to the steep levels set by Trump in April unless they quickly offer concessions and strike deals with Washington.

Ursula von der Leyen, the European Commission president, reached out to European leaders over the weekend to get guidance on whether she should accept a deal with some higher tariffs, which many favour, or raise the pressure on the US. The commission leads the trade negotiations on behalf of the bloc.

Last week, von der Leyen said she hoped for an agreement in principle that would allow the sides to keep negotiating a final deal. 

With time running out, the bloc is still divided on the best strategy to deal with Trump. A number of countries, especially those that rely heavily on exports such as Ireland, Germany or Hungary, are in favour of a swift deal.

While the two sides talk, so-called sectoral tariffs of 25 per cent for cars and car parts, and 50 per cent for steel and aluminium, remain in place, as well as a 10 per cent tariff on most other imports.

German Chancellor Friedrich Merz, who is under pressure from German industry suffering from the measures, said last week that “it is better to reach a quick and simple solution than a long and complicated agreement that remains on the negotiating table for months”.

Other countries, including France and Spain, are sceptical about accepting a deal just for the sake of it.

They argue that the EU, with its 450mn consumers, should have the economic self-confidence to stand up to Trump and use its trade defence arsenal to hit back if Washington refuses to strike a fair deal.

Chart du jour: Looming crisis

Trouble is brewing in Bosnia and Herzegovina, exactly three decades after the Srebrenica massacre.

Warning shot

Ursula von der Leyen this week faces the first no-confidence vote in a commission president for over a decade, with a foregone conclusion but unclear ramifications.

Context: Brought by a Romanian far-right MEP who secured the necessary 72 signatures in the European parliament, the censure vote is ostensibly about von der Leyen’s handling of private text messages exchanged with a pharmaceutical CEO during the Covid pandemic.

The vote, which will take place on Thursday after an in-person debate in the Strasbourg chamber later today, will almost certainly fail. The biggest parties have said they will support her; few want to be associated with those who are championing the motion.

But many lawmakers who will vote to support von der Leyen are still looking forward to making her squirm at today’s debate, and hope she interprets the mere staging of the ballot as a clear shot across her bows: a warning signal to a leader who has pushed her strong-handed leadership of the EU’s executive to a point of testing the spirit — if not the letter — of the bloc’s laws.

There is little love lost between the parliament and von der Leyen’s Berlaymont. Many MEPs see her regime as aloof and dismissive of the bloc’s legislature. Senior commission officials in turn believe the chamber to be unproductive, obstructive and self-aggrandising.

For example, von der Leyen’s decision to use emergency powers bypassing parliament to legislate the recent €150bn loans-for-arms scheme has triggered a move by the chamber to bring legal action against the commission.

Additionally, the increasing use of support from hard-right parties to push through legislation is straining the ties between the coalition of the centre-right, liberals, and socialists that voted her into power.

MEPs will not bring down von der Leyen’s commission this week. But they will send her a few unsubtle reminders that it’s a lot harder to run the EU if you choose to do it while picking a fight with the parliament.

What to watch today

European parliament plenary session kicks off in Strasbourg.

Eurogroup meets.

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