Competitiveness Check – June 30 Edition

The Quick Take

The pressure is on. July 9 marks the deadline to finalize trade deals before US President Donald Trump’s retaliatory tariffs return. The EU is reportedly open to a 10% universal tariff if sectors such as pharmaceuticals, alcohol, semiconductors, and commercial aircraft are spared. At the same time, European Commission President Ursula von der Leyen has called for closer EU alignment with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Meanwhile, the US-UK deal kicked into gear on June 30. Canada, under threat of suspended trade talks, scrapped its digital tax on US tech giants just before its implementation on June 29. Separately, G7 leaders met in Canada on June 16–17, and NATO allies convened in The Hague on June 24–25. Key developments are outlined below. Summit season will continue with a planned EU-China meeting in July. Catch up with GMF’s event on that summit here.

Against this backdrop, GMF laid out its transatlantic roadmap on June 24. Check it out here.

Top 5 Transatlantic Trade-Related Developments

• June 20: The European Commission announced that it intends to withdraw its proposed Green Claims Directive, which would have introduced new rules for environmental marketing. The decision has sparked fresh debate over how the EU aims to streamline regulation without diluting its environmental standards.
• June 24-25: At the NATO summit in The Hague, allies agreed to raise their annual defense spending target to 5% of GDP by 2035. Of that amount, up to 1.5% of GDP is intended for critical infrastructure, networks, civil preparedness and resilience, innovation, and the defense-industrial base.
• June 25: The European Commission published its EU Space Act, which aims to create a harmonized regulatory framework for space activities across the EU to boost competitiveness, reduce fragmentation, and ensure safety, resilience, and environmental sustainability. The act introduces new rules on space debris, cybersecurity, and environmental impact that apply to EU and non-EU operators while offering support to help businesses adapt.
• June 26: The European Council summit concluded with a renewed commitment to strengthening the EU’s competitiveness and deepening the Single Market. It welcomed the Commission’s better regulation agenda and emphasized the importance of building an energy union before 2030. It also endorsed Bulgaria’s adoption of the euro in 2026.
• June 30: The US-UK trade agreement entered into force, lowering tariffs on British car exports to the United States from 27.5% to 10% for up to 100,000 vehicles annually. Tariffs on UK aerospace goods such as aircraft engines have been eliminated. In return, the United Kingdom will lift tariffs on US beef and ethanol. Steel and aluminum tariffs remain unresolved, with the United Kingdom facing potential increases to 50% on affected items if no agreement is reached by July 9.
• Also on June 30, Section 899 was removed from the “One Big Beautiful Bill” following a Treasury-brokered agreement with G7 partners. The provision had proposed retaliatory tax measures against countries imposing levies the United States considered discriminatory toward American firms. Its withdrawal came as part of a deal under which G7 countries agreed to exempt US companies from Pillar Two obligations under the Organization for Economic Co-operation and Development’s global minimum tax framework.

Figure of the Fortnight

7.7 million: The number of Americans who flew to Europe from January through May 2025, a 6% increase on the same period last year, according to the US National Travel and Tourism Office. The Financial Times reports that the number of Europeans flying to the United States dropped by 2.2% in the first four months of 2025. The paper also notes that at least 22 million more Europeans chose to travel within their own country over the same period.

Quote Unquote

“We can do whatever we want. We could extend [the deadline], we could make it shorter. I’d like to make it shorter. I’d like to just send letters out to everybody: ‘Congratulations, you’re paying 25%.’”

—US President Donald Trump at a June 27 press conference.

“Asian countries want to have a structured cooperation with the EU, and the EU wants the same. We can think about this as a beginning of a redesigning [of] the [World Trade Organization]… to show to the world that free trade with a large number of countries is possible on a rules-based foundation.”

—European Commission President Ursula von der Leyen at a joint press conference with European Council President António Costa and Polish Prime Minister Donald Tusk following the June 26 European Council meeting.