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

EU trade officials face tough talks today in Paris with the US as the threat of a tit-for-tat tariff fight looms large. A day earlier, President Donald Trump signed a directive formally doubling steel and aluminum tariffs to 50%. That’s likely to cast a pall over a meeting of G-7 trade chiefs in the French capital, where the EU’s Maros Sefcovic and US Trade Representative Jamieson Greer will also hold talks. The aim is to chart progress ahead of a July 9 deadline, when Trump’s so-called reciprocal duties are due to kick in. Meanwhile, the EU and China’s plan for a reset in ties also hit a snag after Beijing yesterday slammed the bloc’s plan to curb Chinese medical device manufacturers’ access to public procurement contracts. Sefcovic met Chinese Commerce Minister Wang Wentao yesterday and the pair agreed to work together on trade issues ahead of an EU-China summit next month, we’re told.

— Samuel Stolton and Jorge Valero

What’s Happening

NATO Boost | NATO wants to see a fivefold increase in ground-based air defense capabilities of European member states to counter escalating threats, particularly from Russia, we’re told. Ministers this week are set to approve one of the most ambitious commitments to raise weapons stocks since the Cold War. 

Putin Pushback | The Kremlin dismissed reports of an impending summit between President Vladimir Putin, Trump, and Ukraine’s Volodymyr Zelenskiy. Turkey earlier proposed a three-way leaders’ summit. 

Merz’s Turn | Friedrich Merz heads to Washington for his inaugural meeting with Trump tomorrow. Given the US president’s previous meetings with leaders, the German chancellor is preparing for any scenario, ranging from a warm handshake to being publicly berated, we’re told. 

Blue Checkmarks | Elon Musk's X is seeking to allay EU fears over its blue checkmarks with a broad disclaimer on the program. EU regulators have been probing the platform under its Digital Services Act rules. 

Managing Risk | The ECB wants eurozone lenders to improve risk management practices. The institution is escalating its scrutiny of lenders’ exposures to private funds in the face of new risks. President Christine Lagarde meanwhile will face scrutiny on her commitment to keep leading the institution.

Around Europe

UK Defense | The UK’s glory days as a military superpower are over. The country is now facing the full costs of rebuilding its security and defense prowess.

Frugal Four | The EU’s ‘Frugal Four’ group has lost Denmark as a member. The nation withdrew from the fiscally conservative clique to adopt a more flexible stance in upcoming budget talks due to security concerns.

Dutch Crisis | Dutch Prime Minister Dick Schoof resigned following the withdrawal of Geert Wilders' Freedom Party from the ruling coalition. The decision came after disputes over immigration policy.

Tusk Test | Polish Prime Minister Donald Tusk will hold a vote of confidence next week to bolster support for his government. The vote was prompted by the narrow presidential election victory of rival and nationalist Karol Nawrocki. 

Pride Ban | Hungarian police have banned the annual Budapest Pride parade on the streets of the capital, citing a recent law aimed at prohibiting LGBTQ public gatherings. Pride organizers have pledged to defy the ban, which is seen as part of Prime Minister Viktor Orban’s escalating culture war before elections next year.

Chart of the Day

Some of Israel’s most loyal supporters in Europe are starting to openly speak out against the war in Gaza, with the EU’s largest economy — Germany — mulling trade sanctions and curbs on arms sales as a result of the conflict. The EU’s foreign policy chief, Kaja Kallas, in May said there is “a strong majority” in favor of reviewing the bloc’s trade agreement with Israel. The EU is Israel’s largest trading partner.

Today’s Agenda

• European Commission President Ursula von der Leyen meets European Ombudsman Teresa Anjinho and delivers keynote speech at the STOA-G6 Research and Innovation Summit
• Press conference by EU jobs chief Roxana Minzatu and economy commissioner Valdis Dombrovskis on the European Semester
• Cohesion commissioner Raffaele Fitto and Dombrovskis hold press conference on critical raw materials  
• EU competition commissioner Teresa Ribera and environment commissioner Jessika Roswall present EU’s water strategy
• EU digital chief Henna Virkkunen speaks at DIGITALEUROPE’s Summer Summit 2025, meets Nokia CEO Justin Hotard
• EU commissioner Raffaele Fitto meets European Council President Antonio Costa