10/04/2025
EU Insight April 11 2025
Brussels, 11 April 2025
EU SEEKS TO SAFEGUARD ECONOMIC RESILIENCE DESPITE TRUMP’S TARIFF PAUSE
In an abrupt policy U-turn, US President Donald Trump announced a 90-day suspension of the targeted “reciprocal” tariffs, including on the EU, only days after their imposition. As such, while the 10% universal base tariff will be maintained, EU goods will be temporarily exempted from the additional 20% tariff presented on 2 April. Welcoming the suspension, the Commission decided to also pause the EU’s own trade countermeasures (targeting a specific set of US goods), underlining the EU’s ambition to find a negotiated resolution to the trade tensions. Nonetheless, the Commission continues to proactively prepare further sets of countermeasures – should they become necessary at a later stage. Along the same lines, seeking to safeguard the EU’s economic resilience, the Commission aims to continue diversifying the EU’s trade partnerships, evidenced by this week’s agreement between the EU and UAE to kickstart FTA negotiations.
GERMANY CLOSES IN ON NEW GOVERNMENT FOLLOWING CONCLUSION OF COALITION TALKS
After weeks of negotiations, following the February election, the German conservative parties (CDU/CSU) reached a coalition agreement with the centre-left SPD. The agreement should pave the way for CDU leader Friedrich Merz to become Germany’s next chancellor. The relatively swift agreement is aligned with the CDU’s original ambition to “form a government before Easter”, in light of the challenging geopolitical landscape. Within the agreement itself, the incoming coalition parties pledge to enact tax cuts, significantly boost defence spending and follow through with an ongoing burden reduction and simplification agenda to boost economic competitiveness. Once in office, apart from the chancellery, the CDU will head, amongst others, both the Economy and Foreign ministries, while the junior coalition partner SPD’s ministries will include Defence, Finance, and Labour and social affairs.
COMMISSION UNVEILS FLAGSHIP 5-PILLAR AI CONTINENT ACTION PLAN
Amid rising global competition, the Commission unveiled its AI Continent Action Plan designed to foster the development of AI across the Union. Although the EU has been at the forefront of regulating AI in the past few years, the sector and European companies have been lagging in the global AI race. To address that, the Commission’s new strategy seeks to enable the development of computing infrastructures throughout Europe with AI factories, increase access to high-quality data through the creation of data labs and foster the industrial use of AI in strategic sectors. In light of the tense geopolitical landscape, the plan also aims to ensure the EU’s tech sovereignty in the long term while easing regulatory compliance costs in the near future.
PARLIAMENT AND COUNCIL AGREE ON MONITORING LAW TO COMBAT SOIL DEGRADATION
With an estimated 60–70% of EU soils in poor condition, the Parliament and the Council have come to a provisional agreement on the Soil Monitoring and Resilience Directive to tackle soil degradation. The law, now awaiting formal approval, provides the framework for national soil monitoring systems to track and improve soil health, without placing heavy burdens on farmers and foresters. Member States will be expected, for example, to create flexible monitoring systems with criteria for healthy soil, map contaminated sites, support soil managers, and mitigate land take impacts. Once adopted, the Member States will have 3 years to implement the new measures, which constitute a step forward in boosting the EU’s resilience to climate threats like erosion and extreme weather increasingly affecting the continent.
VON DER LEYEN OPENS UP DIALOGUES WITH AUTOMOTIVE AND PHARMACEUTICAL INDUSTRIES
As Trump’s tariffs keep on shaking the global economy, representatives of the automotive and pharmaceutical sectors respectively exchanged views with the Commission this week. The high-level dialogues, hosted by President von der Leyen, touched upon participants’ concerns about the impact of the US Administration’s tariffs on two of the most important European industries. Representatives notably asked the Commission to work with the US to lower tariffs, as well as continue its effort in boosting European competitiveness and simplifying regulatory frameworks. With the aim of ensuring the EU’s industry and workers’ interests, market participants and the Commission agreed to remain in regular contact to navigate these troubled times.
COMING UP NEXT WEEK
- 14 April: Foreign Affairs Council. On the agenda: Russian aggression against Ukraine, Middle East, EU-Africa relations, and Western Balkans.
- 14 April: 1st EU-Palestine High-Level political dialogue.
- 14-15 April: Informal meeting of social affairs Ministers. On the agenda: digital changes and algorithms, equality in the labour market.
- 16 April: College of Commissioners. On the agenda: Security College.
- 16 April: Informal meeting of gender equality Ministers. On the agenda: gender inequalities in the digital environment, Roma and misinformation, equality policies.
The EU Insight will be back on 25 April, after the Easter break. Enjoy the Holidays!
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