Bonds

Brussels suspended its countermeasures against the U.S. president’s steel and aluminum tariffs before they even took effect. Now the two sides have 90 days to do a deal.

It was a week when penguins, bonds, the new German coalition, Louisiana soybeans, fossil fuels, the EU’s Digital Markets Act, France’s creaking politics and American bourbon all became one news story. POLITICO explains what got us all yippy.

President’s decision to pause so-called reciprocal tariffs on the same day as implementing them came after his administration previously insisted the new rates were here to stay.

China tariffs will go up to 125 percent while other countries get a 90-day reprieve.

The president’s posts and his aides’ comments have failed to calm the markets.

Merz signals a tougher stance on economic policy.

Citizens of the EU “feel let down by our oldest ally,” European Commission President Ursula von der Leyen says, warning that the bloc is “prepared to respond.”

Bank of Finland governor says the EU should draw up “proportionate countermeasures” against U.S. tariffs.

France, Italy and Spain are seeking to boost military spending based on grants rather than loans to avoid increasing their debt loads.

Emergency measures as Ankara tries to stave off yet another financial crisis.

But analysts agree that talk of the greenback’s demise is premature.

Trump and Russia are pushing the EU toward a “Hamiltonian moment,” where common debt helps build greater federalism.   

Western allies are worried the U.S. president could go either way on decisions that will ripple across the Atlantic.

Officials in Paris and Berlin are excited about the good relationship incoming German Chancellor Friedrich Merz has with French President Emmanuel Macron.

ECB President Christine Lagarde has reiterated the central bank’s cautious stance, but opposition is growing at the Russian frontier.

Investors have developed a taste for EU-branded debt — Brussels may soon test their appetite again. 

Prime Minister Keir Starmer confirmed defense spending will rise to 2.5 percent by 2027, funded by reduced spending on international aid.

Repayment of the EU’s €300 billion joint borrowing hangs like a cloud over the European Commission’s budget brainstorm.

Madrid wants governments to be jointly liable for borrowing huge amounts of money to boost the bloc’s coffers.

Britain used to lead the world on international development. But in the era of right-wing populists, its Labour government is now treading carefully.

Antonio Tajani says the new U.S. president can be dealt with, and that he’s unlikely to invade Greenland.

If Rachel Reeves succumbs, “the wolves” are likely to turn on embattled PM Starmer.