Right at the death of a long EU summit in Brussels last night, Emmanuel Macron threw a curveball into Europe's tense trade negotiations with America. The talks are reaching fever pitch ahead of a 9 July deadline, when Donald Trump is threatening to impose a massive 50% tariff on the bloc if no deal is reached.
Macron, who spoke to Trump by phone during the summit about the Middle East, told reporters that France wants a quick, pragmatic, and balanced deal with the US. Then he said this: “The best tariff [deal] between Europe and America – especially in the geopolitical situation that we’re facing – is zero-for-zero, but if it’s 10-for-10, or the equivalent of ten, then that will be the case."
The EU has so far kept open the option of retaliating with billions of euros worth of sector specific tariffs. There has been speculation – officially denied – that the EU could accept a 10% baseline tariff, much like the UK did.
In a parallel briefing room in the bowels of the Council, Friedrich Merz reiterated his plea that a "fast, simple" deal be prioritised over a full-fledged trade deal with the US. Merz’s economy is already suffering from the 25% tariffs on cars.
Meanwhile, the EU-Hungary phoney war rolls on.
Hungary and Slovakia maintained their blockade on the latest package of EU sanctions against Russia on Thursday, with Hungary also blocking any meaningful advancements on Ukraine’s EU membership bid. And Hungary did not join the other 26 EU countries’ conclusions on Ukraine.
In an interview mid-summit, Viktor Orbán accused Ursula von der Leyen and Manfred Weber of "working to install a pro-Ukrainian and Brussels-subordinated government in Hungary”. Orbán has clashed with von der Leyen this week over his banning of Saturday's Budapest Pride Festival – and the pair had no tête-à-tête at the summit.
Hungary unveiled the results of a referendum it held on Ukraine’s bid to join the EU, telling the EU leaders that 95% of those surveyed – making up around 30% of the country’s voters – had backed the government’s position against Ukraine’s membership.
“Hungary officially is saying no to any development on this field,” Balázs Orbán, the political director of the PM (and no relation), told the Capitals. Viktor Orbán, who described the summit as his roughest yet, said that other EU leaders had met his announcement of the poll with “unanimous disapproval”. António Costa said the EU’s goal to get Ukraine in remained “firm and unchanged” and that the work on a new sanctions package against Russia is “well underway”. “We should be in a position to have an agreed package soon,” said von der Leyen.
Slovak PM Robert Fico also played for time saying that his EU ambassador would request a delay in deciding on the 18th package of sanctions – which requires all 27 countries’ approval – pending more concessions on the EU’s plan to phase out all Russian energy.
The one big area of convergence, though, was a decision by all the leaders to extend the current EU sanctions on Russia for another six months. Costa brought it up right at the end of the summit, after the dinner. The rollover had to be done by unanimity and the leaders – including Orbán and Fico – did it a month before the end-of-July deadline.
In other news:
Middle East: Thursday’s summit was the first time EU leaders addressed the EU-Israel trade pact review, flagging possible breaches over Gaza. EU foreign ministers have postponed any major decisions on Israel until mid-July.
Trade: Von der Leyen said that she sees the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – known as CPTPP – as a potential replacement of the World Trade Organisation, which has a paralysed dispute settlement system.
Defence: EU countries regrouped after most of them agreed in The Hague to raise their defence expenditure to 5% of GDP. Von der Leyen and EU's top diplomat Kaja Kallas were tasked with presenting a roadmap on financing in October.
Migration: The real action on migration happened on the sidelines, with the morning migration breakfast club, and the first appearance of Germany's Merz. But despite the buzz, little progress was made beyond taking stock of earlier developments.
Climate: Macron said he was in favour of an ambitious 2040 EU climate target – but argued that the bloc lacks the means to make it happen. “We need investment, technological neutrality, and commercial coherence,” he argued.
Read our Euractiv team’s summary of the EUCO summit here.
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