Washington and Brussels have defused a tariff time-bomb—agreeing to a 15 % levy on most EU exports rather than the 30 % President Trump threatened. In return, the bloc pledges an extra $750 billion in U.S. energy purchases and $600 billion in new investment, safeguarding nearly $2 trillion in annual trans-Atlantic trade. (reuters.com, euronews.com)

The headline number flatters: European cars move from a punishing 27.5 % duty down to 15 %, yet steel and aluminium stay locked at 50 %. The deal echoes Japan’s concession last week and underscores a pattern—Washington using tariff ceilings, not WTO panels, to force market access. EU leaders hail “damage control,” but German industry warns of higher input costs that could shave up to 0.3 % off euro-area GDP growth next year. (reuters.com, aljazeera.com)

Seen against decades of U.S.–EU disputes—bananas, Airbus, digital taxes—this pact signals a broader shift: great-power climate goals and security commitments now hinge on transactional energy and re-shored supply chains. As political economist Daniela Schwarzer notes, “geopolitics has moved into the checkout aisle.” The question is whether Europe can turn today’s reprieve into genuine strategic autonomy before the next tariff threat rings the till.

— The Gist AI Editor

Trans-Atlantic Tariff Reset

Washington and Brussels stitched up a “mini-deal” that will slap a flat 15 % tariff on most EU goods entering the US—covering roughly €380 bn in annual exports and wiping out the zero-tariff lane created in 2018 (FT, Reuters). By contrast, the UK’s pact sealed in May fixed a 10 % ceiling, handing British exporters a cost edge just as sterling-priced inputs are sinking. For EU manufacturers, every €1,000 of export value now faces an extra €150 at the border, a margin-killer for thin-profit sectors such as machinery and wine.

Climate Cash Drain

The White House’s FY-26 budget blueprint yanks a net $42 bn from federal climate programmes—down 58 % from FY-25 levels—halting grants that once underwrote 1 in 3 US clean-tech pilot projects (Bloomberg). Foundations say they can cover barely “10 % of the gap”, imperilling early-stage carbon-capture and grid-storage research. Expect venture investors to demand faster paths to profitability or flee to EU subsidies instead.

Central America Re-hedges

Honduran opposition candidate Nasry Asfura pledged to restore ties with Taiwan and “double trade with the US in four years,” an open rebuff to President Castro’s 2023 recognition of Beijing (Bloomberg). With remittances already equal to 24 % of GDP, Tegucigalpa is betting on friend-shoring over Belt-and-Road finance—signalling that China’s sway in the isthmus may have peaked.

Paris Pushes Two-State Economics

France told a UN forum that formal recognition of Palestine will come by September 2025, arguing only statehood can unlock “peace-dividend” investment across the Levant (AFP, ST). If capital barriers drop, World Bank models suggest combined Israeli-Palestinian GDP could rise 35 % within a decade—an upside Brussels and Riyadh are eager to finance.

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

‘No alternative’ to two-state solution for Israel, Palestinians: France’s Foreign Minister
— Strait Times

Explainer-How do the US trade deals reached by the EU and UK compare?
— Strait Times

Trump’s Billions in Climate Cuts Have Nonprofits Scrambling to Survive
— Bloomberg

Trump asks for swift deposition of Murdoch in Epstein defamation case
— Strait Times

Overtourism is drowning out the rebellious spirit of Montmartre
— Financial Times

The Lionesses’ triumph is all about the money
— Financial Times

Berlin’s €92 bn Hole Tests Debt Brake

Finance Ministry tables a draft showing a €92 bn shortfall through 2029 despite record new borrowing of €44 bn in 2025; discretionary spending would have to fall 8 % to stay within the constitutional debt brake (ZDF, Finance Min.). Coalition partners now float a “special fund 2.0”—essentially off-book borrowing—inviting fresh constitutional challenges. Expect higher Bund yields and louder calls for EU fiscal rules reform, not least from frugal north bloc states that fear spill-overs into the ECB’s anti-fragmentation firewall.

Trans-Atlantic Tariffs Parked, Autos Rally

Sunday’s US-EU deal freezes mutual tariff hikes for 30 months and caps US steel imports at 15 Mt/year versus 10 Mt under Trump-era quotas (DW, Politico). STOXX Europe 600 opened +1.2 %, automakers +3.4 %, but Brussels quietly pledged to align certain digital-service taxes with Washington’s OECD proposal—potentially trimming €1.7 bn in annual revenue for France, Italy and Spain. I see leverage shifting to Washington when talks resume in 2027.

Germany’s Rails: Maintenance > Innovation

After the Riedlingen crash, experts reveal Deutsche Bahn faces a €62 bn maintenance backlog; only 3 % of cap-ex is earmarked for signaling tech that could cut accidents by 40 % (ZDF, DB data). Berlin’s plan to inject €12 bn/year until 2028 now looks insufficient, risking modal-shift targets and private freight investment.

Secondary Sanctions Threat Rattles Energy Traders

Trump signalled “secondary” penalties on nations buying Russian crude, giving Moscow “10–12 days” to yield (Le Monde). EU refiners still import 300 kbd via Turkey and India’s re-exports; a blanket ban could spike Brent by $8–10/bbl and revive the euro-zone’s headline CPI above 3 % just as the ECB eyes a September cut.

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

Milliardenlücke im Bundeshaushalt bis 2029
— Zdf

EU-US trade deal: Brussels settles — but at what price?
— Dw

Lassen sich Zugunglücke wie in Riedlingen verhindern?
— Zdf

Aktuelles zum Krieg in der Ukraine
— Zdf

Successo per Simon Zhu ad Anacapri, nel pubblico Mario Martone
— Ansa

Parigi all’Onu, nessuna alternativa a soluzione due Stati
— Ansa