Draghi not mincing his words, but where are active policymakers on this? Improving things is hard if the official line still is that the EU got a great deal and other great opportunities await. Diversification through FTAs is good, but we really shouldn’t expect this to replace US demand.

To the trade people on here: I'll be at the @wto.org public forum in Geneva next week, happy to connect!

How did this not make it into SOTEU?

Some thoughts on trade in #SOTEU: Aftermath of the EU-US trade deal is the biggest theme (also keeping in mind upcoming votes). VDL: EU got the 'best deal', better than 'competitors' (JP, KOR, UK?). Alternative would have been trade war 'chaos'.

Great point on the contradictory messaging from VDL: Rubbing other countries' noses in the "best deal" the EU got with the US vs trying to convince those same countries that the EU is the last-standing reliable partner

Some thoughts on trade in #SOTEU: Aftermath of the EU-US trade deal is the biggest theme (also keeping in mind upcoming votes). VDL: EU got the 'best deal', better than 'competitors' (JP, KOR, UK?). Alternative would have been trade war 'chaos'.

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It's Commission predecessor birthday! 🎉🥳

Nuanced take by @aslak.bsky.social - it's just very difficult to bargain when the other side does not believe in negative consequences, and convincing them that they do exist has a disproportionate cost.

Here we go again. EU just isn't dealing with a good-faith actor on the other side. The lack of interest in anything stable, permanent or predictable doesn't fit into EU's mental model. Ultimately it's about incentives - if there's no negative consequence, US is always going to come back for more.

I hope the Commission made it clear that the €600 billion figure of course refers to current prices - and that most of it will be mobilised through EIB loans, with a leverage ratio of approximately 1:19.

This is insane. Queue the point that I keep on banging on about: tariff negotiations with Trump are not a one-time occasion (and there is no such thing as a deal yet). His last sentence on pharma being excluded from 15% ceiling will bring some renewed worries to EU (and especially Ireland).

15% tariffs, breaches of WTO rules, more tech dependency – the US deal is a far cry from what the EU wanted. This was not a one-off accident, but exposes longstanding structural weaknesses in EU trade policy that will affect any future negotiation. My analysis🧵 bst-europe.eu/economy-secu...

EU‘s challenge now is to play both games: not just turning the other cheek when it comes to coercion and other hostile stuff in trade, but also remaining able to build mutually beneficial cooperation with others. There‘s a very interesting feminist foreign policy angle here too (’macho exercise‘).

EU‘s challenge now is to play both games: not just turning the other cheek when it comes to coercion and other hostile stuff in trade, but also remaining able to build mutually beneficial cooperation with others. There‘s a very interesting feminist foreign policy angle here too (’macho exercise‘).

Worth looking into not just for budget nerds - your favourite EU policy (and a lot out there in real life) depends on getting this right. Great job to the team for making this complicated stuff accessible.

Worth asking what ’others have it worse‘ should mean for our assessment. No need for defeatism, but we did see real & substantial weaknesses in the EU‘s approach to this (member states blaming Brussels, inconsistent messaging etc.), which can and should be fixed for when the US comes back for more.

Macron says EU wasn't "feared enough" to get a better deal. True: As things stand, EU isn't particularly scary. But: This is not a cosmetic problem that could be solved through more tough talk. EU's inability to deter in trade comes down to structural flaws, and member states are partly to blame.

15% tariffs, breaches of WTO rules, more tech dependency – the US deal is a far cry from what the EU wanted. This was not a one-off accident, but exposes longstanding structural weaknesses in EU trade policy that will affect any future negotiation. My analysis🧵 bst-europe.eu/economy-secu...

Important takeaway for the next round of this: by itself, COM isn’t equipped to manage the domestic politics of this, it needs stronger backing from capitals. Convenient for member states to hide behind it and then blame it for the outcome (sometimes more than they blame the US I feel).

An absolute comms failure- this could have been a moment of ’we‘re in this together‘. And a failure in substantial policy - there‘s no EU plan at all for those countries that are hit the hardest (Lesotho won‘t be the only case where impacts are devastating). All of this while cutting aid spending.

Good point by Aslak: US won’t be able to substitute many imports domestically, esp without good industrial policy. Question is then where those imports come from -cue relative tariff levels. I would add demand elasticity: Tariffs will make some things so expensive that people don’t buy them anymore.

This. No surprise that those involved now praise what objectively is neither great nor a reliable deal with the US. EU should‘t be misguided by its own comms, the 15% ceiling can only hold if it‘s backed up by credible threats of retaliation.

More on the EU-China summit: It‘s unsurprising that there wasn‘t a breakthrough, main contentious issues like overcapacity are structural and the result of 🇨🇳 policy choices, highly costly to change even if 🇨🇳 wanted to. 🇪🇺 created new trade instruments precisely because of that, more measures likely.

Meine Gedanken zum EU-China-Gipfel: An den Rändern gibt es Verhandlungsspielraum (etwa 🇨🇳-Strafzölle auf Cognac). Grundproblem Überkapazitäten bleibt, 🇪🇺sollte auf keine Änderung hoffen, weil Kosten für 🇨🇳 sehr hoch wären. Spricht für mehr Zölle in strategischen Industrien und aktive Industriepolitik.

Stimmt. Ich glaube, manche sehen die Risiken durchaus – sind aber defaitistisch. Warum glauben so viele in Berlin, Deutschland könne Chinas Industriepolitik nichts entgegensetzen? Dabei haben wir riesige fiskalische Spielräume und eine starke industrielle Basis. 1/

It‘s not a bug, it‘s a feature (and partly a consequence of the EU finally starting to apply the new trade instruments it decided it needed to deal with Chinese practices - more of this to come). We really shouldn’t let summit optics be the metric of success.

EU-China summit is underway in Beijing. In this thread I will collate interesting points from remarks and readouts through the day. First, Xi Jinping's opening remarks, as run by CCTV this morning news.cctv.cn/2025/07/24/A...

Service post for anyone who knows a bit of R - you can really do interesting stuff with the data.

Etienne is right that the rare earths chokehold is about a lot more than money. Building know-how, developing components and necessary machine tools should be a core focus. Where the small market size does matter: it means that Europe and allies can easily pay higher prices to wean off China.

Especially as the developing countries that embraced trade-based growth models and supply chain integration are hit the hardest by US protectionism now. I‘d be happy but surprised if the EU and others found an answer other than ’wouldn’t it be bad if China stepped in??‘.

Especially as the developing countries that embraced trade-based growth models and supply chain integration are hit the hardest by US protectionism now. I‘d be happy but surprised if the EU and others found an answer other than ’wouldn’t it be bad if China stepped in??‘.

Die Bundesregierung sagt, Sie könne den Kommissions-Vorschlag zum neuen EU-Haushalt nicht akzeptieren, weil ein "umfassender Aufwuchs" in Zeiten der Konsolidierung nationaler Haushalte nicht vermittelbar sei. Ich halte das aus ein paar Gründen für keine kluge deutsche Position:

Ziemliche Nebelkerze: Wenn EU und 12 weitere Länder enger zusammenarbeiten, entsteht daraus noch lange keine neue WTO (was auch niemandes Absicht ist). Genausowenig wird alles toll, wenn die EU CPTPP beitritt. www.tagesschau.de/wirtschaft/w...

1/ The leak for the European Competitiveness Fund has just been made public. Here's a breakdown of the main elements of the proposal. As expected, the COM proposes consolidating several of its directly managed programmes. The draft points to 12/14 programmes merged under a single legal framework

Can someone nudge DG Trade on this? Need to get them posting here.

Classical collective action problem: almost everyone is unhappy with the status quo, but no alternative would get sufficient support. Especially not a non-initiative discussed at EUCO once.

Tricky question, but @aleichthammer.bsky.social and @etiennehoera.d-64.social make some very good points in this piece. Well worth reading.

Wir haben eine tolle neue Stelle in Berlin offen für alle EU-Budget-Wonks und insbesondere für alle, die es noch werden wollen. Bewerbung direkt im Link, bei Interesse gerne DM an mich und please spread the word!

With July 9 nearing and rumours flying what the EU may accept as an interim deal, here @etiennehoera.d-64.social and my two cents on what a durable EU strategy could look like

Also the demand question remains unresolved- easy to build a coalition with another bunch of surplus economies agreeing that it would be nice if everyone kept their markets open and kept buying their products.

@etiennehoera.d-64.social and @aleichthammer.bsky.social in our new issue: ip-quarterly.com/en/red-lines...

Europe needs a summer break!

1/ This is good. In our new piece for @ipq.bsky.social, @etiennehoera.d-64.social and I argue that while the EU’s cautious approach served it relatively well, it now needs a credible retaliation strategy to achieve favourable trade conditions and lock such in. ip-quarterly.com/en/red-line...

New piece by @aleichthammer.bsky.social and me in @ipq.bsky.social: EU‘s cautious approach in the 🇺🇸🇪🇺 trade war has been useful, but has run its course as the 9 July deadline approaches. EU should prepare for flexible retaliation. 🧵 ip-quarterly.com/en/red-lines...

Coming this week: Our summer issue, featuring @josephdeweck.bsky.social @rebeccawire.bsky.social @samirpuri.bsky.social @andriuskubilius.ec.europa.eu @drfranksauer.bsky.social @helenalegarda.bsky.social @dougsaunders.bsky.social @etiennehoera.d-64.social @aleichthammer.bsky.social & more!

Hier sicher nicht der Hauptpunkt, aber: wenn wir das Gewaltverbot als wichtigste Norm des Völkerrechts in solchen Fällen nicht einmal erwähnen, können wir die normative Kraft des Rechts bei allem darunter genauso vergessen. Das gilt natürlich auch für regelbasierten Handel.

„Neue Strategie“ heißt hier: wir versuchen, uns auf irgendwas in 5 Sektoren zu einigen, verabschieden uns auf dem Weg von den WTO-Regeln (die verbieten vereinzelte bilaterale Zollsenkungen) und tun so, als hätte das keine Nachteile. Selbst wenn man dafür ist: Wir müssen über trade-offs reden.

How bad are things looking in EU-US trade negotiations? More hints that EU accepts 10% baseline tariffs for now, hoping to get something better on steel, cars, pharma (confirmed by Clauss yesterday), agreement in principle first (like UK). US seems to drop (entirely unreasonable)VAT demands.

Not every day that you get the President of the ECB citing your work, @sandertordoir.bsky.social @lucas-res-car.bsky.social www.ecb.europa.eu/press/key/da...