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Euractiv
18-07-2025
- Business
- Euractiv
Beware of the bazooka!
Journalism has many rules: be accurate; be balanced; protect your sources. Donald Trump, however, has apparently prompted EU hacks to endorse yet another edict: never – ever – write about the US president's tariffs without mentioning Brussels' 'trade bazooka ' . This propensity has dramatically intensified since last Saturday, when Trump threatened to hike the baseline US levy on European exports from 10% to 30% from 1 August. Indeed, reporters – many of whom appear to have spent their youths overindulging in explosion-filled Arnold Schwarzenegger films – now seem incapable of writing about US trade policy without mentioning the likely imminent activation of the 'anti-coercion instrument', or 'ACI'. (Full disclosure: I've also written about the ACI, and I also love Arnie.) Typically, journalists are careful to couch their language in such a way as to ensure their claims are almost tautologically true: the Financial Times , for instance, recently claimed that the 'bazooka' tool [is] being considered ' by Brussels – an assertion that would, strictly speaking, be correct if Björn Seibert fleetingly pondered its use while tying his Asics sneakers. Other, similarly vacuous ways of describing Brussels' attitude towards the ACI include 'floats' and 'mulls' ( Bloomberg ); the clunkier 'looking to use' (also the FT ); and the hilariously in correct 'agonises over' ( Politico ). (Arguably, the image of vapid Eurocrats 'agonising over' whether or not to fire a bazooka is reminiscent of George Carlin's joke about the inventor of flamethrowers: 'Gee, I'd sure like to set those people on fire over there – but I'm way too far away to get the job done.') Jokes aside, there are three key questions for us to, er, consider. First, what is the ACI? Second, will it be used? And third, should it be? Ironically, the ACI was actually conceived as a direct result of Trump's policies during his first term. In particular, the US withdrawal from the Iran nuclear deal in 2018 prompted EU officials to develop an instrument that would protect the bloc from US 'secondary sanctions', which Washington threatened against firms and countries that continued to trade with Tehran. The efforts were subsequently turbocharged by China's imposition of export controls on strategically critical minerals on Lithuania in 2021, after the Baltic nation upgraded diplomatic ties with Taiwan, a self-governing island whose independence Beijing refuses to recognise. According to experts, the instrument, which came into force in 2023 but has never actually been used, is undoubtedly Brussels' most powerful – and versatile – trade weapon. 'The term 'bazooka' is trendy in Brussels, but it's also pretty accurate,' said Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations. 'The range of potential responses is unrivalled: hypothetically, you can do a lot of damage.' This potential damage includes imposing investment restrictions, withdrawing intellectual property protections, suspending individual companies' licences, banning access to EU public procurement markets, and sanctions targeting specific individuals, he said. Crucially, the ACI can legally empower the European Commission, which oversees EU trade policy, to impose countermeasures targeting not just a 'coercing' nation's goods but also its services . This is important for two reasons. First, because the EU, which has already threatened to slap retaliatory levies on €93 billion worth of US goods, is now running out of goods to target. Second, because unlike trade in goods, the bloc runs a substantial deficit in services with the US – thus in theory giving it 'escalation dominance' over Washington in this area. Thus, it would seem that the ACI could be the perfect tonic for Brussels' transatlantic malaise: at a time when Trump is continuing to escalate his tariff threats, a bazooka blast might be just what the trade doctor ordered. Trigger-happy journalism Unfortunately – and unlike with an actual bazooka – there are numerous practical, political, and strategic obstacles standing in the way of the ACI's use. The first is timing. The first stage of the ACI's activation involves a four-month investigation by the Commission to determine whether 'coercion' has actually taken place. Then, member states can take up to two and a half months before voting on the Commission's findings. Then, if member states approve, the Commission has six months to negotiate with the coercing party and outline potential countermeasures if talks fail. In short: even if member states were keen on loading it, it would probably take a year, if not more, before the bazooka could fire. By that point, Trump may have succeeded in cowing the EU into submission – or, if we're lucky, market forces may already have forced him to back down. Second, it is far from clear whether member states do , in fact, want the bazooka to be loaded. Activation of the ACI requires the support of a 'qualified majority' of EU member states, or 15 of the bloc's 27 countries, which collectively represent at least 65% of the bloc's population. As it stands, however, no countries are currently in favour of triggering the ACI, according to three diplomats briefed on EU ambassadors' closed-door discussions this week. Instead, only a handful of countries – including France, Spain, and Portugal – are open to more explicitly threatening to use the ACI during negotiations with the US. A couple more countries are similarly open to exploring the possibility of targeting services using other, less powerful trade defence tools (e.g. the Enforcement Regulation). This, in turn, suggests that Bloomberg's 'scoop' earlier this week that a 'growing number' of member states 'want the bloc to activate' the ACI if trade talks with Washington fail is largely false, insofar as it conflates the threat of using the ACI with actually using it. Moreover, it is similarly likely that Bloomberg confused invoking the ACI with the EU's increasing openness to targeting services – something the FT and Politico separately 'scooped' earlier this week and which, in fact, is true. Unfortunately, it is also not a scoop: the Commission publicly admitted earlier this week that it is drawing up ways of targeting US services. Leopoldo Rubinacci, a senior Commission official involved in US trade negotiations, told the European Parliament's International Trade Committee on Monday that Brussels 'is practically ready on also considering [trade] measures that do not cover goods ( sic )'. He also denied that these measures would be imposed under the auspices of the ACI. 'We will decide when the time comes whether we need to use, also, the anti-coercion instrument,' he said. (Interestingly, Rubinacci also denied that the Enforcement Regulation allows for retaliation against services – which raises the question of what the Commission's legal justification for targeting US services actually is.) 'A dangerous escalation'? In addition to legal and political difficulties, however, there are also huge geoeconomic risks associated with triggering the bazooka – namely, the possibility of massive US retaliation. In a recent note, Deutsche Bank warned that triggering the ACI could constitute 'a dangerous escalation' of the EU-US trade war and 'has the potential for enormous self-harm if directed at US tech services in particular'. 'Europe is highly dependent on these service imports,' Deutsche added. 'Any counterresponse by the US to curb access to tech services would be massively disruptive to business in Europe. This is an escalation that only has downside for the EU.' To further bolster Deutsche's point, it is possible – if not likely – that any EU push to target US service providers could prompt other forms of US retaliation. Trump could, for instance, step up attempts to annex Greenland, threaten to withdraw US military support for Europe, or even pull out of NATO. Other analysts, however, argue that such warnings are based on a fundamental misconception of the ACI's nature and purpose. 'You can't generalise that the ACI will massively backfire because you can take a million different measures,' said Gehrke. 'You can withdraw entire licenses and take away intellectual properties protections – that's obviously a nuclear bomb. Or you can be very limited and just crank up some regulatory hurdles here and there to make life more difficult or costly for these companies.' Other analysts stress that the main goal of 'triggering' the ACI is precisely for the threat of countermeasures to boost the EU's chances of a trade deal during the six-month negotiation process. 'The ACI wasn't designed to be used, but rather to be threatened to be used,' said Arthur Leichthammer, a policy fellow at the Jacques Delors Centre. The Commission appears to be thinking along similar lines. 'The anti-coercion instrument is not an end in itself,' Rubinacci said on Monday. 'The anti-coercion instrument is an instrument.' In short: to journalists' likely dismay, use of the bazooka remains exceedingly unlikely. Moreover, even if it were used, only a worst-case scenario would see the bazooka eventually firing an explosion of trade countermeasures. However, such countermeasures would not only take many months to be imposed, but would also carry risks of severe political and economic blowback. This, of course, is a truth that all Arnie fans instinctively recognise: bazookas can cause enormous explosions – but they can also massively backfire. Economy News Roundup Brussels proposes largest long-term EU budget in the bloc's history. The post-2027 Multiannual Financial Framework (MFF) should amount to €1.98 trillion, or 1.26% of the bloc's gross national income (GNI), the European Commission said on Wednesday. This is well above the current budget, which was pitched at 1.11% and negotiated to 1.05% GNI. If implemented, the plan – which must be approved by all 27 member states – would also merge historically separate farming and regional spending programmes into country-specific national plans and create a €451 billion fund to boost ailing industry. Read more. The Commission's plan was widely criticised, including by members of von der Leyen's own centre-right political family, the European People's Party. 'We, the [European Parliament], cannot accept that the budget of the European Union becomes the sum of 27 national, eventually conflicting different agendas,' Siegfried Mureșan, the EPP's lead rapporteur for the MFF, wrote on Twitter on Wednesday. Dutch Finance Minister Eelcon Heine also warned that the Commission's proposed MFF 'is too high' and that 'difficult choices' (i.e. cuts) must be made. See our must-read explainer. Europe's wine sector condemns Brussels' plan to wine on €72 billion US retaliation list. Ignacio Sánchez Recarte, who runs CEEV, a Brussels-based lobby group, told Euractiv that US and EU wine groups have 'made it clear' that wine should be 'kept out of trade disputes'. Other American-made spirits, including bourbon, are also on the Commission's list, which must still be approved by member countries. The EU has also already drawn up a retaliatory package targeting €21 billion worth of US goods, including motorbikes, diamonds, and soybeans. Read more. Donald Trump's threatened 30% tariff on European exports would "practically" end EU-US trade, warns EU trade chief. Maroš Šefčovič said the US president's latest tariff threat, announced on Saturday, would have 'super negative' consequences if it enters into force on 1 August by disincentivising EU exporters from shipping goods to the US. "30% or anything above 30%... it has more or less the same effect: practically, it prohibits trade," Šefčovič told reporters ahead of a meeting of EU trade ministers in Brussels. Read more. US is urging EU to adopt Washington's more hawkish policy on China, says Brussels. Leopoldo Rubinacci, a European Commission official involved in US trade negotiations, said Washington has urged Brussels to 'follow us 100%' vis-à-vis Beijing, despite the EU's insistence on forging independent ties with the world's second-largest economy. The remarks amid growing speculation that the bloc could impose tougher measures on Beijing in order to clinch a trade deal with the US. Read more.
Telegraph
16-07-2025
- Business
- Telegraph
First EU-wide taxes to pay for Covid debt
The European Commission is attempting to introduce its first bloc-wide taxes on tobacco, e-cigarettes and large companies to repay a mountain of coronavirus debt. Electronic waste and carbon emissions could also be targeted in the drive to raise much-needed cash and pay off a €650 billion pandemic loan. The European Union's executive arm will present the proposal to member states on Wednesday as part of the unveiling of plans for the bloc's next budget between 2028 and 2034. Brussels raised €650 billion in joint debt to provide much-needed economic boosts to its pandemic-stricken economy. But when the deal was signed off by member states in 2021, there was no agreement over how the money should be repaid The EU is currently looking to set aside between €25 billion and €30 billion annually – equivalent to a fifth of its budget – to pay off the loan. Using Brussels-mandated taxes – known as 'own resources' – would be the first time the Commission has supplemented its budget with levies it controls. Eurocrats argue that the radical shift is needed to pay back the existing debt, but also to raise further cash to fund a continent-wide rearmament. The taxation on tobacco products could raise €15 billion annually for the Commission, De Telegraaf, the Dutch newspaper, has reported. Member states will be charged the tax based on the number of smokers in their country, meaning the likes of Greece, Germany and Bulgaria could be among the hardest hit by the levy. It would in effect enforce an increase on the minimum excise rates on cigarettes and cigars, hitting those capitals that enforce lower rates, like Luxembourg. Dozens of member states have been lobbying the Commission to include vapes, nicotine patches and heated tobacco in the scheme because of health concerns and cash already lost to illicit trade, estimated to be about €10 billion a year. A separate tax could be introduced on companies with a net turnover of €50 million a year that have a permanent base in the EU. The move could generate billions of euros to help pay off the Covid-era debt, but is seen as deeply unpopular and uncompetitive in member states. Other revenue streams looking to be opened up include targeting a charge for non-recycled electronic waste and a handling fee for long-distance e-commerce packages. The Commission is expected to unveil a proposal to increase that to €1.78 trillion, or 1.26 per cent of gross national income. The hikes will likely be resisted by countries that pay the most towards the budget, including France, Germany, Denmark and the Netherlands. When the plan is presented to member states on Wednesday, it will fire the starting pistol on a two-year scrap between national capitals and EU institutions in Brussels over the bloc's future finances.
Euronews
23-05-2025
- Politics
- Euronews
How connected is the EU to its capital, Brussels?
Commissioner for Brussels Alain Hutchinson, credited for building bridges between the EU and its capital, tells Radio Schuman how the once weak ties blossomed into a strong synergy that benefits both. He argued that Brussels, including its public administrations, is more open to accommodating expats, while Eurocrats have started to break out of their bubble. In this episode, we also look at a NATO Parliamentary Assembly in the US state of Ohio as the Trump administration casts doubt over US' defence of NATO allies in Europe. And finally, which countries in Europe get harmed most by the import of fake goods? Radio Schuman is hosted and produced by Lauren Walker. Audio editing by David Brodheim. Music by Alexandre Jas. The show is taking a break to brainstorm over bringing you even better content. Thank you for your continued support, and stay tuned!
Daily Mail
20-05-2025
- Politics
- Daily Mail
Ursula found it hard to disguise her disbelief and glee at Deer Keer's cave-in: QUENTIN LETTS watches the Brussels big-shots swaggering around London
Standing between two Brussels grand-fromages, Sir Keir Starmer could have been an escapee returned to the gaolers. To make it even more galling, the scene was on supposedly sovereign soil. The Brussels big shots had swaggered into London and nabbed their man. Ursula von der Leyen, twinkly in her triumph, kept calling him 'deer Keer' and widened her taut little jaw. It is the jaw of a cat. Good for killing unsuspecting warblers. On Sir Keir's other side was a burly Portuguese socialist, Antonio Costa, apparently president of the European Council. One of the blessed things about Brexit was that we no longer needed to care who such Eurocrats were. Now Labour has thrown us back into the political food-mixer from Hell. They arrived by Audi, to be met at the doors of Lancaster House by Sir Keir who waited alone on a yard of red carpet. The building's honey-stoned facade had been covered in funereal hoardings that said 'UK-EU Summit 2025'. There is to be one of these every year from now on. More money spent on politicians' vanity. More foot-steps in the glue. 'Summit' was a glorified noun for an hour's meeting followed by a press conference, then lunch aboard the frigate Sutherland, moored in the Pool of London. The Royal Navy once fired broadsides when foreign marauders invaded our waters. Now ward-room matelots were waiting on them, silver-service. 'Who's having the fish?' The Brussels duo: 'We are.' Press photographers were allowed to snap the main players at the start of their meeting. David Lammy rubbed his thumbs together, looking ecstatic. Nick Thomas-Symonds, minister i/c surrender agreements, was given a rare invitation to sit at the top table. He spent the time nodding. Mr Lammy, on arrival outside, had been accompanied by his food-taster (and ministerial colleague) Stephen Doughty. You can imagine a tuba's parp with each stride Brother Doughty takes. At the start of the press conference Sir Keir invited Senhor Costa to speak. This was a decision – one of many, perhaps – that he would come to rue. 'For us ees great pleasure to be ear,' began o presidente. 'We are ear not to talk about our shelled values.' And to talk about them at length. Minutes passed. The room stilled, as if for a siesta. But Sir Keir was loving it. As old Costa Living droned on about having felt 'a new positive energy' from Sir Keir at some meeting in February, our PM licked his lips and blinked with pride. He did that Bill Nighy thing of pursing his mouth. What a dork he looked. He even tilted a few degrees towards the Portuguese Man O'Bore, but maybe he was just finding it hard to stay awake as were the rest of the room. 'We both believe in free trade,' continued Costa Lot. This was debatable, for it was gratuitous EU bureaucratic tangles on free trade that blackmailed Sir Keir into his capitulation. 'Your leadership has been instrumental,' added Portugal's finest. This, at least, was true. No one else but the nasal knight would have swallowed such a bad prawn as this deal. Frau von der Leyen, palpably relieved when Costa finally shut up, began by saying 'my deer Keer, it is a success – the excellent result we have!' She was finding it hard to disguise her glee and disbelief at London's cave-in. Sir Keir bit on the inside of his right cheek and hopped from one sole to the other. Jittery in front of his new boss? When he reached inside his jacket to retrieve a slip of paper he made his microphone crunch. When it was his turn to speak he claimed 'Britain is back on the world stage'. Britain has been stuffed back behind bars, more like, here in the person of its air pocket of a premier. Not that Sir Keir himself ever escaped. He was arguably on the EU's side all along. The returned captive in his country. Freedom's frolic is done. Lock the doors. Clank.
The Sun
19-05-2025
- Business
- The Sun
Starmer has made Britain the EU's gimp – Brussels get EVERYTHING they wanted while all we get is using passport gates
WHAT a humiliation. We have given Brussels everything it wanted and ended up paying for the privilege. Sir Keir Starmer always hated Brexit. For three years, he campaigned to overturn the referendum. 6 6 6 Now, unable to go back in, has agreed that Brussels should set our laws from the outside. We will be a non-voting member, a captive market for EU exports, a supplier of fish for French and Spanish skippers, of soldiers for EU deployments, of subsidised university places for Eurocrats' children. Britain will become the EU's gimp, trussed up in black leather and zips, with a ball-gag in its mouth. And all because, since 2016, Starmer has felt a deep emotional need to apologise on behalf of the British electorate. To see how one-sided the agreement is, let's think of what the two sides' objectives were before. The EU had a long list. Since Donald Trump effectively withdrew the US security guarantee from Europe, Eurocrats have wanted Britain, a nuclear state with the most powerful Armed Forces in the region, to take up some of the slack. They wanted continued access to the richest fishing grounds in Europe, something that was supposed to be phased out gradually after Brexit. They wanted to send their unemployed youngsters here and to continue to educate their children at UK universities without paying overseas fees. Above all, they wanted to control our trade policy. The UK is by far their biggest export market for foodstuffs. Their fear throughout was that Britain might lift the barriers Brussels that had put in the way of non-EU imports, usually dressed up as consumer protection measures, though in reality they are about keeping out competition. If Britain were to follow the science and remove these barriers, it would cease to be a captive market. Beef from Australia, Uruguay, the US and Canada would replace imports from France and Ireland. To prevent that outcome, it was not enough for Britain to adopt the same food standards as the EU. No, we had to cede control. We had to let the EU set our food standards in perpetuity. The agreement just signed makes it impossible for British farmers to get a competitive edge in areas like gene editing. It could force us to undo the reforms we have made over the past four years and might threaten our existing trade deals. THE SUN SAYS Will today go down in history as the day Sir Keir Starmer betrayed Brexit and the British people? WILL today go down in history as the day Sir Keir Starmer betrayed Brexit and the British people? From the moment he entered No10, or Remainiac Prime Minister — who spent years in Opposition trying to reverse the historic 2016 vote — has been hellbent on securing a so-called 'reset' with the EU. His approach to the negotiations with Brussels has been naive at best, and craven at worst. Indeed, the message his public desperation sent to the hard-nosed Eurocrats was 'I want a deal at any price, so shaft me'. The vengeful EU — which will never get over Brexit, and cannot stand the idea of us being a sovereign nation again — duly obliged. Its list of demands, in return for a defence partnership, a sop on passport queues and the simple lifting of some spiteful checks on British food exports, would put a mafia extortionist to shame. So much for what the EU wanted. What of Britain? Actually, our position was pretty comfortable. We already hadthe most comprehensive deal that the EU has with any state not in the process of joining it, with no tariffs or quotas. We had finally started to use our Brexit freedoms to be more competitive in fields like AI. We had struck trade deals with the Pacific bloc, India and (much to Eurocrats' annoyance) the US. No, the only real irritation we had, a legacy of the Benn Surrender Act, when Europhile MPs prevented us from leaving the EU other than on terms that Brussels approved, was checks at the Irish border. The only fair way to dismantle those checks was to agree a mutual recognition deal on food. We would accept stuff that the EU passed as fit, and they would do the same. Brussels has long had such a deal with New Zealand, and our standards are closer to its own than those of Kiwi exporters. But mutual recognition would not keep the UK as a captive export market. So the EU held out for total control, what it called 'dynamic alignment' (though few things are less dynamic than the EU). Naturally, it has got its way. On this, as on every other issue, Labour has been reduced to pretending that, in giving in to the EU, it is somehow getting what it wanted all along. Thus handing Brussels control of our regulations becomes 'easier exports'. Caving into EU demands on free movement becomes 'a balanced youth experience scheme'. Though how anyone can justify giving EU students a better deal than Commonwealth students is utterly beyond me. To see how totally we have caved in, consider what ministers are trumpeting as their big victory, namely the ability to use EU passport e-gates. It is extraordinary that this right was ever withdrawn. We have always allowed EU nationals to use our gates, and quite right, too: we want our airports to be efficient. If the EU wants to treat e-gates as a bargaining chip, the bargain should be simple reciprocity: you use ours, we use yours. But, no, to get even something so basic, we make a bunch of unrelated concessions. And to cap it all, we are paying the EU unspecified sums for accepting all these concessions. That is what happens when our leaders can't forgive us for Brexit. Labour negotiates, Britain loses. 6 6 6
