Brussels Edition: Room for negotiations

Trump paused tariffs for 90 days on all non-retaliating countries, including the EU, after a chaotic days in markets

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Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. Donald Trump announced an unexpected 90-day pause on his universal tariffs just hours after the EU approved measures to hit around €21 billion of US goods. The bloc's move is retaliation for an earlier set of 25% duties the president imposed on steel and aluminum imports. Trump's suspension, which came after his tariff plan set off panic in the bond market, sparked a relief rally as investors and governments hoped the pause would allow time for talks. Germany's soon-to-be chancellor Friedrich Merz hailed Trump's move as proof of the effectiveness of European unity. Before the backpedaling, EU trade chief Maros Sefcovic held a call with his US counterparts, Howard Lutnick and Jamieson Greer, on how to initiate meaningful negotiations. The EU will be grateful for the chance to talk, but the bloc still has to decide whether to move ahead with additional retaliation, since Trump's baseline 10% across-the-board global tariffs remain in effect. — Andrea Palasciano

What's Happening

Stalling Plans | The UK and France-led "coalition of the willing" to secure Ukraine after a possible ceasefire risks stalling after failing to obtain firm commitments from the White House. The defense ministers in the group will meet at NATO today as French and British leaders debate whether a peacekeeping force would require a US backstop. Big Ambitions | With a German ruling coalition finally formed, the EU will be able to move forward after months of limbo. The SPD's Lars Klingbeil, poised to become the next finance minister, will have to steer the bloc's largest economy through a crashing global trade order while overseeing the allocation of a €500 billion infrastructure fund and continuing the modernization of Germany's ailing army. Green Ambition | Germany's new government will support the EU's goal of cutting emissions by 90% by 2040 as long as it doesn't require Berlin to boost its own climate ambitions. The country's aim is to eliminate 88% of emissions by 2040 compared to 1990 levels.  Cut Throat | US Treasury Secretary Scott Bessent warned the EU against seeking to pivot to China and away from the US. "That would be cutting your own throat," he said, singling out Spain's apparent endorsement of that tack. Spanish Prime Minister Pedro Sanchez is due in Beijing tomorrow as the first European leader to visit since Trump's tariff onslaught. Space Access | The EU signed an agreement permitting Ukraine to participate in some aspects of the bloc's space program. Kyiv will get access to the earth observation and space weather components, and its satellites would be protected from disruptions by weather events. It would also play a role in post-war damage assessment and reconstruction.

Around Europe

Price Cut | Air France-KLM CEO Ben Smith told Bloomberg that the carrier is cutting prices to keep its transatlantic economy cabins full as airlines grapple with signs of faltering demand for international travel. The company has not shifted its flying capacity so far, he said, but a recession would pose new risks. EU Mojo | Edi Rama thinks Trump is "good for everyone." The Albanian prime minister told us that the US president provides an opportunity for the EU to redefine its priorities and expand its global influence. Trump's shadow is hanging over Albania's parliamentary elections next month. If Rama wins it, he has promised to take Albania into the EU by 2030. Defense Tour | Thirty Estonian defense businesses visited Ukraine this week in an effort to cultivate industry ties and seek out opportunities to test products in a war zone. As the EU tries to deepen relations with Ukraine's vibrant defense sector, issues such as joint procurement and closer collaboration are coming into sharper focus. Election Countdown | Bucharest Mayor Nicusor Dan clinched the backing of Romania's main opposition party in advance of next month's presidential election. The pro-European candidate is seen as having the best shot at defeating a nationalist politician currently leading the polls. The May 4 vote will be a re-run of a November ballot that was voided after allegations of Russian meddling.

Chart of the Day

To avoid destabilizing NATO defenses, European allies are urging the US to coordinate on any plans to reduce its military presence on the continent, we've learned. European officials have accepted that Trump's administration will almost certainly withdraw some of the roughly 80,000 US troops deployed in Europe — including in countries most exposed to Russia. The focus is now on mitigating the effects of the shift.

Today's Agenda

All times CET Defense ministers in the "coalition of the willing" meet at NATO in Brussels EU-Ukraine Business Summit in Brussels 10 a.m. Commission President Ursula von der Leyen meets Ukrainian Prime Minister Denys Shmyhal

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