Europe and Washington are again gambling with the wiring of the world economy. In Glasgow on Sunday, President Trump and Commission chief von der Leyen will try to shrink a looming 30 % blanket tariff to a “compromise” 15 % on the EU’s €1.4 trn annual trade with the United States, sparing cars, steel and pharmaceuticals from an outright cliff-edge before the 1 August deadline. Officials concede the odds are only “50-50,” yet global markets are already pricing in the outcome. (reuters.com, theguardian.com, apnews.com)

This brinkmanship is no aberration; it extends a pattern that began with the 2018 tariff skirmishes and echoes the beggar-thy-neighbour logic of Smoot-Hawley in 1930. But today’s supply-chain compression, higher real rates and fragile post-pandemic demand mean the shock could ricochet faster—Germany estimates every percentage-point tariff slice knocks 0.1 % off its export GDP. The EU’s willingness to accept a permanently higher baseline exposes the limits of its leverage under weaponised interdependence. (reuters.com, theguardian.com)

If this becomes the new floor for transatlantic commerce, it will confirm that managed trade is displacing rules-based liberalism—an inconvenient truth for both Brussels and corporate America. As economist Dani Rodrik warns, “globalisation works only when domestic bargains are honoured abroad.” —Dani Rodrik, Project Syndicate, 2024.

The Gist AI Editor

Washington vs Powell

With US core inflation now running at 2.3 % y/y and GDP growth cooling to 1.1 % q/q annualised (BEA), the White House urged the Federal Reserve to slash its policy band—presently 5.25-5.50 %—to “dramatically lower” levels ahead of Wednesday’s Federal Open Market Committee. A public clash would widen the institutional rift first exposed in 2019; for households, every quarter-point cut typically trims roughly €20 a month from a €250,000 20-year mortgage, but also shaves savers’ deposit returns. (FT, WSJ)

Golf-Course Geoeconomics

Donald Trump told Commission chief Ursula von der Leyen that a US-EU trade accord is “50-50.” Tariffs now average 3.4 % on EU goods vs 3.1 % on US goods (WTO); eliminating them could lift bilateral trade by €90 bn a year—about the size of Portugal’s exports. Expect friction over agriculture and digital taxes, yet libertarian instinct cheers any move toward freer exchange. (FT, Politico, Reuters)

Gaza: Starvation Triggers “Tactical Pause”

After UNICEF warned that 1 in 3 Gaza children suffers acute malnutrition, Israel announced a daily 10-hour cease-fire zone to let aid convoys through Rafah and Beit Hanoun. Aid groups say corridors must last weeks, not hours, to reverse irreversible developmental damage in infants such as 18-month-old Mohammad al-Motawaq, who weighs under 4.5 kg—half the WHO healthy minimum. (Politico, NPR, AP)

Silent Screws in French Hulls

Naval Group, builder of France’s Barracuda submarines, is probing a hacker claim that 37 GB of propulsion and sonar schematics are for sale on the dark web. A leak could force design overhauls costing upward of €500 m and delay deliveries to Australia and Brazil, complicating already testy Indo-Pacific security partnerships. (FT, Le Monde)

Stay tuned for the next Gist—your edge in a shifting world.

White House presses Fed for ‘dramatically lower’ rates as meeting looms
— Financial Times

Trump says he would ‘like’ to strike a trade deal with the EU
— Financial Times

His name is Mohammad Al-Motawaq. He is 18 months old. And he is starving in Gaza
— Npr

French defence firm Naval Group investigates cyber leak
— Financial Times

Kartik Kumra Was Ready for Indian’s Fashion Moment
— Nyt-Global

Trump, von der Leyen hopeful of trade progress
— Politico.Eu

Tariff Truce for Digital Peace?

Brussels meets Washington today over the dormant US-EU steel dispute. Commission president von der Leyen is floating a “12-month freeze” on the planned Digital Services Tax applied in France, Italy & Spain—worth €2.8 bn/yr in expected receipts—in return for the US shelving the re-imposition of 25 % Section 232 duties on EU steel and aluminium from 1 Aug (ECB/Politico). If sealed, the swap would spare euro-area manufacturers an estimated €6.4 bn in annual penalty costs and give OECD talks on a global digital-tax framework breathing room. I read this as a pragmatic climb-down that favours open trade over revenue-chasing nationalism. Watch Nordic capitals, which oppose any new industrial tariffs, to push hardest for a quick signature.

SFR Break-Up: Jobs vs. 5G Consolidation

French unions warn that carving up debt-laden SFR could erase 8,500 of the firm’s 13,000 domestic posts (Le Monde). Economy Minister Bruno Le Maire vows “heightened scrutiny”, but Paris quietly likes the idea of shrinking the market to three carriers to lift brutally low ARPU—currently €14 vs. €29 in Germany (ARCEP). A forced sale to Orange/Bouygues would raise antitrust heat in Brussels yet could accelerate 5G capex by €1 bn/yr industry-wide. Labour unrest aside, this is a litmus test of whether Europe prizes competition over scale in critical infrastructure.

Ancient Lamps, Modern Identity Politics

Spanish archaeologists now date oil-lamp shards from Cástulo to 390-430 AD, suggesting the “early church” on site was a synagogue (Guardian/CSIC). Andalusia eyes EU cultural-heritage funds—up to €12 m—to develop the dig into a tourism hub. Expect Madrid’s education ministry to seize the find to bolster Jewish-Spanish curriculum content, complicating ongoing church-state property rows.

Catch the next Gist for the continent’s moving pieces.

Dazi, oggi il vertice Usa-Ue. Von der Leyen pronta a giocare la carta “stop web tax”
— Il Sole 24 Ore

SFR : les syndicats alertent le gouvernement sur des suppressions massives d’emplois en cas de démantèlement de l’opérateur
— Lemonde

Spanish discovery suggests Roman era ‘church’ may have been a synagogue
— Theguardian

Weber und Mihambo siegen wieder in Berlin
— Zdf

“Der gesamte Gazastreifen hungert”
— Zdf

Fußball-EM der Frauen Matchbar
— Zdf