EU Insight 14 March 2025

Brussels, 14 March 2025

EU HITS BACK AT US TARIFFS WITH COUNTERMEASURES ON €26 BILLION IN US IMPORTS
The EU-US trade war intensified this week as the Commission announced its imposition of trade countermeasures targeting €26 billion worth of US exports. The EU’s retaliation came following the US introduction of 25% tariffs on steel, aluminium and related. Effective 1 April, legacy EU retaliatory tariffs from the first Trump administration, will automatically be reinstated impacting around €8 billion in US goods. Additionally, by mid-April, the European Commission intends to introduce further measures covering an additional €18 billion of US products, with a stakeholder consultation underway to determine their scope. While the EU remains open to resolving the escalating trade war through negotiations with the Trump administration, the US does not seem willing to take such offer. For instance, responding to the EU’s actions Trump has threatened additional tariffs on European goods such as champagne.

UKRAINE ENDORSES US-BACKED CEASE-FIRE DEAL PUTTING THE BALL IN PUTIN’S COURT
The explosive meeting between US and Ukraine at the end of February cast doubt on future collaboration between the two nations as regards the Russian invasion. However, after discussions among UK, EU, and Ukrainian officials, discussions on a potential peace plan resumed between US and Ukraine in Saudi Arabia this week. The outcome was a US-backed 30-day ceasefire proposal, welcomed by European leaders amidst their pledges to increase the continent’s military spending. With Ukraine’s endorsement of the plan, the US has also resumed providing aid to and sharing military intelligence with Kyiv, following a two-week suspension. Ukraine’s agreement also puts the ball in Russia’s court as regards the US-brokered negotiations towards peace, but negotiations will have to continue over the coming week before a deal is reached.

COMMISSION UNVEILS HARMONISED EU FRAMEWORK ON MIGRATION RETURNS
Aiming to address migration concerns through the Union, the Commission proposed a new legal framework for a Common European System for Returns. The framework should simplify and streamline migrant return procedures across the EU and thus improve the current 20% return rate. Amongst others, the initiative aims to harmonise at European level the existing 27 different legal frameworks on migrant returns. Additionally, the new system would also introduce the legal possibility to return individuals who received a final return decision to return hubs based in third countries, essentially shifting related burden away from EU countries. The Commission claims the new framework also introduces safeguards to protect fundamental rights. However, the initiative has been heavily criticised by civil society organisation, labelling it as a “new low” for the EU’s migration policy.

COMMISSION PRESENTS CRITICAL MEDICINES ACT TO ADDRESS VULNERABILITIES
The Commission presented the Critical Medicines regulation, an initiative which aims to resolve the EU’s problems with medicine procurement. This measure comes as the EU has faced numerous shortages in critical medicines since the outbreak of the COVID-19 pandemic, due to manufacturing issues, global competition and supply chain vulnerabilities. To address these, the new framework aims to boost the EU’s pharmaceutical manufacturing capacity and promote partnerships with like-minded partners to safeguard the continent’s medicine supply chains. The Commission also intends to facilitate the use of state aid and an increased use of joint public procurement to support the EU’s pharmaceutical sector.

VON DER LEYEN COMMISSION MARKS ITS FIRST 100 DAYS IN OFFICE
The second von der Leyen Commission reached 100 days in office this week. To mark the occasion, the Commission present held a special press conference, in which she outlined the progress achieved thus far and the path forward. Looking back, von der Leyen celebrated the finalisation of the Mercosur trade deal as well as recently presented initiatives such as the Clean Industrial Deal or the first Omnibus Simplification packages. While the Commission president underlined her intention to continue working towards regulatory simplification and the EU’s decarbonisation objectives, the press conference strongly focused on the upcoming REARM Europe plan on European Defence. Anticipating next week’s proposals on the matter, von der Leyen once again underlined the importance of boosting a long-neglected, European military sector in the face of the growing geopolitical tensions.

COMING UP NEXT WEEK

• 17 March: Foreign Affairs Council. On the agenda: Russia’s war against Ukraine, EU-US relations.
• 18 March: General Affairs Council. On the agenda: Preparation of the March European Council, European Semester, EU-UK relations.
• 19 March: College of Commissioners. On the agenda: Defence package including the REARM Europe plan on Defence, Savings and Investment Union (SIU).
• 20 March: Euro Summit
• 20-21 March: European Council. On the agenda: Ukraine and Defence, Competitiveness, Multiannual Financial Framework.

Tuomas Tierala, Managing Partner Brussels, Kreab

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Kreab • Tel: +32 2 737 6900 • tuomas.tierala@kreab.com • www.kreab.com/brussels • X: @KreabEU • LinkedIn: Kreab Worldwide