Crypto News: Brussels Edition: Tariffs on the horizon

Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union.

The EU wants to avoid a trade conflict with the US, but it will be ready to respond if Donald Trump wins the election and acts on his threat to hit Europe with punitive trade measures. The bloc has prepared a list of US goods it could target with tariffs, we're told. Speaking to Bloomberg Editor-in-Chief John Micklethwait in an interview in Chicago, Trump defended his tariff-heavy plan, saying his proposals were for the "protection of the companies that we have here and the new companies that will move in." Pushing back on projections that tariffs would harm Americans whose jobs depend on trade, Trump said, "The higher the tariff, the more likely it is that the company will come into the United States, and build a factory in the United States so it doesn't have to pay the tariff." The EU's favored approach would still be to seek an agreement with Trump on some areas of common interest.

— Andrea Palasciano

Difficult Conversations | The first summit between the EU and nations in the Gulf Cooperation Council today is aimed at strengthening ties with countries including Saudi Arabia and the United Arab Emirates. But differing views from climate to human rights risk leaving the EU empty handed. The bloc's interest in trade deals is also unlikely to yield results, while Gulf states' demands for visa liberalization have so far not been met, we're told.

Self Defense | NATO's European members are contemplating the possibility of a full-scale land war on their own territory — and one that may need to be fought without the full US support. After decades of underinvestment, Europeans are now trying to rebuild their armies.

Tougher Measures | Italian Prime Minister Giorgia Meloni will convene an informal meeting of leaders on the sidelines of this week's EU summit to push for tougher migration measures. She will co-host the gathering in Brussels on Thursday with her Dutch and Danish counterparts.

Under Pressure | Pedro Sanchez is facing the biggest corruption scandal in his six years as Spain's prime minister following a report alleging that a criminal network was operating inside the transportation ministry in 2020 and 2021. The ministry at the time was run by one of Sanchez's closest allies, Jose Luis Abalos.

European Tanks | Italy's Leonardo and Rheinmetall of Germany agreed to form a joint venture to build combat tanks in Europe, combining efforts as defense spending rises across the region. The deal represents one of the most high-profile cross-border military collaborations in Europe since the start of the war in Ukraine.

Expiring Deal | EU Energy Commissioner Kadri Simson warned the region's gas companies that any potential new deals to keep gas flowing from Russia through Ukraine would be a "dangerous" choice, as a key gas transit agreement between Moscow and Kyiv expires on Dec. 31. Negotiations are ongoing to keep the pipelines flowing.

Budget Plan | Italy's cabinet agreed on a budget for 2025 at a gathering late Tuesday, just in time to meet a deadline to submit the plan for EU scrutiny. The country is tapping banks and insurers to help deliver on giveaways pledged to voters.

Strange Things | Major economies across the world are in very different places. Some have grappled with unwanted inflation (the US, Europe); others welcome rising prices (Japan); and others still facing deflation (China). As a result, the world's biggest central banks are no longer marching to the Fed's beat. And strange things happen when pathways diverge.

Office Politics | A new office complex in Budapest looked destined to lose money until Prime Minister Viktor Orban stepped in and arranged for Hungary's government to buy the buildings, which were linked to his son-in-law, Istvan Tiborcz. Now, the transaction has become a weapon for opposition leader Peter Magyar, Orban's most serious challenger in more than a decade.

In Ireland, Italy, the UK, Germany and elsewhere, European governments are selling banking sector stakes that they've held since the financial crisis gripped the region over a decade ago. They're cashing in on soaring valuations to plug gaping budget holes. The process has the potential to reignite banking consolidation and reshape a regional industry that has long trailed Wall Street.

All times CET

9 a.m. NATO Secretary General Mark Rutte meets Latvian Prime Minister Evika Siliņa and Swedish Prime Minister Ulf Kristersson
10 a.m. Commission President Ursula von der Leyen receives Kristen Michal, prime minister of Estonia, followed by meetings with Council President Charles Michel and Parliament President Roberta Metsola
12:10 a.m. Hanno Pevkur, Estonia's defense minister, gives keynote address at the 4th European Defense and Security Conference
1 p.m. EU top diplomat Josep Borrell speaks at the 4th European Defense and Security Conference
3 p.m. Start of the first EU-Gulf Cooperation Council summit in Brussel

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