Week Ahead (7 July)

W/C Monday, 7 July – EU-US tariff negotiations continue as Trump administration extends deadline to 1 August 

With the Trump administration’s “Liberation Day” tariff suspension originally set to expire on 9 July, EU–US trade talks have been granted a temporary reprieve. US Treasury Secretary Scott Bessent announced on Sunday that the tariffs imposed in April, ranging between 10% and 50%, will now be reinstated on 1 August for countries that fail to finalise new trade agreements with Washington. Bessent clarified that this is “not a new deadline” but a fixed implementation date. Letters are expected to be sent to over 100 countries this week, warning that unless progress is made, tariffs will “boomerang back” to 2 April levels as of next month. In the interim, the current 10% baseline tariff on EU exports is expected to remain in place. 

Talks between Brussels and Washington have intensified in recent weeks, though officials on both sides admit that a comprehensive trade deal remains out of reach. Such an understanding would lock in the 10% tariff for now, allowing negotiations to continue into the autumn.  

The current tariff standoff dates back to April, when the Trump administration imposed 25% tariffs on EU steel, aluminium, and automotive exports, followed by a 20% “reciprocal” tariff package on EU goods. The EU had prepared retaliatory measures but suspended their implementation after Trump agreed to a 90-day pause and reduced the new tariffs to 10%. However, on 23 May, Trump unexpectedly threatened to raise the reciprocal rate to 50%, before stepping back again after a call with von der Leyen. 

Despite nearly daily negotiations since early June, US officials have ruled out reducing the baseline 10% tariff. Brussels appears to accept this, especially as a 10% across-the-board tariff may be more tolerable than targeted measures on sensitive sectors like pharmaceuticals, semiconductors, or raw materials, which Trump recently threatened to include. 

Meanwhile, Trump’s trade team has been negotiating bilateral pacts with other trading partners. Last Wednesday, the US and Vietnam unveiled a vague but strategic trade agreement allowing Hanoi to avoid a threatened 46% tariff by accepting a minimum 20% rate and agreeing to prevent Chinese transshipments. Negotiations are also ongoing with Japan, South Korea, India, and others, though talks remain fluid. 

If no agreement is reached by 1 August, the Commission is expected to activate its retaliatory package first unveiled in April, including tariffs on up to €95 billion worth of US exports. A revised list, finalised after public consultation, targets politically sensitive sectors such as aerospace, agriculture, and spirits, with tariffs on Boeing aircraft and US whiskey actively under review. Beyond tariffs, EU capitals are also preparing a more aggressive “phase three” retaliation targeting services and digital regulation, including the possible deployment of the Anti-Coercion Instrument (ACI) and revived debate over digital services taxes and “fair share” telecom levies potentially targeting US digital platforms. 

Nevertheless, the EU would rather avoid this scenario, aiming to strike a deal instead, even in the form of a general framework, that would prevent higher tariffs and lay the groundwork for a broader agreement at a later stage. 

Monday, 7 July – Eurogroup to elect new chair, discuss Bulgaria’s euro accession and digital euro roadmap 

Eurozone finance ministers will meet in Brussels today for a Eurogroup session centred on the election of a new president. Three candidates are in the running: Ireland’s Paschal Donohoe, who is seeking a third term; Spain’s Carlos Cuerpo, positioning himself as a reformist; and Lithuania’s Rimantas Sadzius, a seasoned finance minister with EU credentials, having previously served as a member of the European Court of Auditors. A simple majority of 11 votes is required and Donohoe, who presents himself as a continuity figure and consensus-builder is confident of reaching this, possibly even in the first round. Cuerpo, who has gained momentum in recent weeks, has called for a more decision-driven Eurogroup that can break policy deadlock, particularly on financial integration, and the deepening of the Capital Markets Union. 

Bulgaria’s progress toward euro adoption will also be on the agenda. Following last month’s green light from the European Central Bank (ECB) and European Commission, Bulgaria is now on track to join the eurozone on 1 January 2026. Finance Minister Temenuzhka Petkova will brief her counterparts on next steps, including technical preparations, dual pricing, and public communication. Bulgaria’s formal accession process is expected to move forward in the second half of the year, pending approval from EU leaders. 

The meeting will also feature the first political discussion on the digital euro under the Danish Council Presidency. The presidency is aiming to secure political agreement on the digital euro and the broader Single Currency Package by end-2025. In a letter sent earlier this week, Danish Finance Minister Jeppe Bruus urged fellow ministers to give their political backing to that goal. Monday’s debate will focus on key unresolved issues flagged in recent preparatory notes, including privacy safeguards, commercial bank compensation, and the governance of holding limits. Ministers are expected to signal their overall level of ambition ahead of more detailed negotiations in the autumn. The ECB’s preparation phase for the digital euro, which commenced in November 2023, is also expected to conclude by October 2025. It involves finalising the digital euro scheme rulebook, selecting service providers, and conducting experiments to refine technical aspects.    

Tuesday, 8 July – General Court to hear Booking’s appeal against Commission’s block of eTraveli takeover 

Tomorrow, the General Court, the EU’s lower court, will hear Booking Holdings v Commission (T-1139/23), a landmark challenge to the European Commission’s September 2023 veto of Booking’s €1.63 billion acquisition of Swedish flight booking platform eTraveli. The ruling marked the first time the Commission blocked a merger solely on a “conglomerate” theory of harm: the rationale behind the bloc was not due to the two companies being direct competitors, but because the acquisition would allow Booking to expand its digital travel ecosystem and further entrench dominance in its core hotel OTA (online travel agency) market. 

The Commission found that Booking, which already holds an estimated 60% market share in hotel OTAs across the EEA, would gain additional leverage through cross-selling and bundling services, making it harder for smaller rivals to compete. The proposed remedies were deemed insufficient to prevent market foreclosure or preserve competition. 

Consequently, Booking lodged its appeal in December 2023, claiming the Commission’s decision was vitiated by serious legal and factual errors. The company argues that the Commission departed, without proper justification, from its longstanding decisional practice and its 2008 non-horizontal merger guidelines, which require concrete evidence of foreclosure effects.  

Thus, the appeal is closely watched by digital platforms and M&A practitioners alike, as it could set a precedent for how the EU treats so-called “ecosystem mergers.” The Commission, for its part, has welcomed the legal scrutiny. Shortly after the lodge of the appeal in late 2023, DG COMP’s head of mergers Guillaume Loriot stated that while the conglomerate theory may be untested, “the facts warranted that type of review and that type of discussion.” 

Tuesday, 8 July – Thursday, 10 July - Macron in England for UK-France summit 

This week, Emmanuel Macron will pay a state visit to the UK, culminating in a bilateral summit with Keir Starmer at Number 10 on Thursday. Notably, this will be the first state visit from a French president since Nicolas Sarkozy in 2008 and marks a symbolic reset in Franco-British relations following years of Brexit-related tension. 

The visit will begin on Tuesday with a ceremonial welcome by King Charles and Queen Camilla in Windsor, joined by the Prince and Princess of Wales. Macron will then travel to London for a series of engagements, including a speech to parliamentarians in the Royal Gallery at Westminster and meetings with UK opposition leaders. The following day, Macron will join Prime Minister Starmer for lunch at Downing Street, in a diplomatic prelude to Thursday’s official UK–France summit. Overall, the summit will focus on reinforcing bilateral cooperation on defence, migration, and regional security. 

A key deliverable is expected to be a new “one in, one out” migrant returns deal aimed at curbing small boat crossings in the English Channel. Under the reported proposal, the UK would return migrants arriving illegally by boat to France, while accepting an equivalent number of individuals with legitimate family reunification claims. The scheme, still in development, would include a joint processing mechanism and relocation of returned migrants away from northern France’s coastal zones. 

The summit also builds on momentum from the May EU–UK defence and security partnership agreement, which paves the way for the UK’s participation in the EU’s SAFE defence loan programme. The two sides will also revisit shared priorities on Ukraine, the Middle East, and migration diplomacy. In a June bilateral on the G7 sidelines, both leaders called for “high-ambition outcomes” at the summit, framing it as an opportunity to “deliver tangible benefits” for both French and British citizens amid growing international instability.  

Thursday 10 July – European Parliament to vote on motion of no confidence against von der Leyen 

European Commission President Ursula von der Leyen is facing a formal motion of censure this week, the first such challenge to a Commission chief in over a decade. While the vote, scheduled for Thursday, is widely expected to fail, it represents a politically charged moment with broader implications for von der Leyen’s leadership in her second term. 

The motion was tabled by Romanian far-right MEP Gheorghe Piperea, who secured the required 72 signatures from across the chamber. It centres on von der Leyen’s refusal to release private text messages exchanged with Pfizer CEO Albert Bourla during COVID-19 vaccine negotiations. Although the issue itself has long been in the spotlight, the timing of the motion reflects broader tensions within the Parliament over her leadership style. 

An in-person debate will take place in Strasbourg this afternoon. Von der Leyen is expected to address the plenary shortly after 5 pm. She will be accompanied by her full College of 26 Commissioners, a clear warning to MEPs that any vote against her would bring down the entire executive, potentially plunging the EU into an institutional crisis at a time of global instability and trade conflict with Washington. 

Even though the centre-right EPP, liberals (Renew), and centre-left S&D groups have all publicly rejected the motion, many MEPs intend to use the debate to express deep frustration with von der Leyen’s increasingly unilateral approach to governing. Recent flashpoints adding to their frustration with the executive include the Commission’s decision to bypass Parliament when enacting the €150 billion SAFE defence loan scheme and concerns over her perceived reliance on support from hard-right parties, particularly during negotiations on green reforms.  

Should the motion unexpectedly pass, which remains highly unlikely, it would trigger the collective resignation of all 27 commissioners and initiate a complex, high-stakes appointment process. More likely, today’s debate will act as a high-profile warning, early in von der Leyen’s second term.