On 18 March 2026, the European Parliament’s Committee on the Internal Market and Consumer Protection (“IMCO”) and the Committee on Civil Liberties, Justice and Home Affairs (“LIBE”) adopted their joint negotiating position on the European Commission’s proposed Digital Omnibus on AI (which we previously analysed here). The position will now proceed to a plenary vote, expected on 26 March 2026. The Council of the EU had previously adopted its negotiating position on 13 March 2026. This sets up trilogue negotiations between the Parliament, Council, and Commission.
Continue Reading MEPs Adopt Joint Position on Proposed Digital Omnibus on AI
European Commission Publishes the Proposed Industrial Accelerator Act
On 4 March 2026, the European Commission (the “Commission”) published its proposal for a regulation establishing a framework for the acceleration of its industrial capacity and decarbonisation in strategic sectors (“Proposed Industrial Accelerator Act”, or “Proposed IAA”), accompanied by four annexes. The initiative is intended to strengthen the EU’s industrial base while accelerating decarbonisation in key manufacturing sectors considered strategically important (i.e., energy-intensive industries, net-zero technology manufacturing, and the automotive manufacturing ecosystem). These sectors currently represent less than 15% of EU GDP, and the Commission’s objective is to increase this share to 20% by 2035. The Proposed IAA was delayed three times before publication and underwent significant rewriting, which reflects both internal debates within the Commission and diverging reactions from Member States. It also reflects the challenges posed by the broader geopolitical context, as the Commission aims to address economic security concerns through industrial policies whilst navigating international trade relationships and commitments.
The Proposed IAA introduces a regulatory framework combining three policy tools. First, it establishes demand-side measures designed to create “lead markets” for low-carbon and “Made in EU” industrial products through public procurement and certain public support schemes. Second, it introduces conditions for allowing certain foreign direct and indirect investments (“FDI”) in strategic sectors, aimed at maximising the industrial benefits of such investments within the EU. Third, it includes measures to streamline permitting procedures and facilitate industrial clustering, with the objective of accelerating the deployment of manufacturing projects.
This blog summarises the key aspects of each tool and their potential implications for companies active in the covered industries or looking to invest in the covered industries.
Continue Reading European Commission Publishes the Proposed Industrial Accelerator ActThe EU Automotive Package: Increased Compliance Flexibility, but Growing “Made in the EU” Conditionality
On 16 December 2025, the European Commission presented the Automotive Package (the “Package”), a set of interlinked legislative and policy initiatives aimed at supporting the European automotive sector’s transition to clean mobility. The Package has four core components: (i) a proposal to revise the CO₂ emission performance standards for cars and vans, (ii) the so-called “Battery Booster Strategy”, (iii) a proposal on greening corporate vehicle fleets, and (iv) a proposal for an “Automotive Omnibus” regulation that would amend several pieces of automotive legislation to simplify regulations for vehicle manufacturers. Together, these initiatives signal a material recalibration of the EU’s approach to vehicle decarbonization.
Continue Reading The EU Automotive Package: Increased Compliance Flexibility, but Growing “Made in the EU” ConditionalityU.S.-EU Trade Framework: Outcome and Next Steps
On July 27, the United States and the European Union announced a trade framework agreement, following a meeting between President Donald Trump and European Commission President Ursula von der Leyen. The deal avoided imposition of a 30% reciprocal U.S. tariff on EU goods that was set to take effect August
Continue Reading U.S.-EU Trade Framework: Outcome and Next StepsEuropean Commission hints at delaying the AI Act
EU lawmakers are reportedly considering a delay in the enforcement of certain provisions of the EU Artificial Intelligence Act (AI Act). While the AI Act formally entered into force on 1 August 2024, its obligations apply on a rolling basis. Requirements related to AI literacy and the prohibition
Continue Reading European Commission hints at delaying the AI ActEU Consults on New Tariffs on €95 Billion of U.S. Imports
On 8 May 2025, the European Union launched a public consultation on potential countermeasures in response to U.S. automotive tariffs and the potential imposition of a 20% “reciprocal” tariff on EU-origin goods—covering around €379 billion of EU exports to the U.S. In particular, the EU is considering imposing tariffs on U.S. imports worth approximately €95 billion, covering a wide range of industrial and agricultural products. The Commission is also evaluating possible restrictions on EU exports to the U.S., principally steel scrap and certain chemical products, valued at €4.4 billion. If implemented, the export restrictions could take the form of export duties, quantitative restrictions such as quotas or licensing requirements, additional administrative charges, or a combination of these measures. No specific tariff rates have been proposed at this stage and the consultation is open until 10 June. Notably, the EU has not thus far targeted U.S. services as part of its retaliatory measures.
These countermeasures could be activated if ongoing EU-U.S. negotiations fail to deliver a mutually acceptable resolution, and the U.S. tariffs remain in place. While the U.S. currently imposes a 10% global reciprocal tariff on most imports, the negotiations follow a decision by President Trump to pause higher, country-specific tariff rates that were scheduled to come into effect on April 9 and would have increased the reciprocal tariff rate on U.S. imports from the EU to 20%. Those higher tariffs are paused for 90-days, or until 9 July 2025, absent an extension. EU exports of autos and auto parts to the U.S. are also subject to 25% tariffs, while the U.S. is also considering imposing additional sector-specific tariffs on—among other sectors—imports of pharmaceuticals and related ingredients; semiconductors and semiconductor manufacturing equipment and their derivative products; critical minerals and their derivative products; as well as commercial aircraft, jet engines, and related parts. Should it proceed with any of these measures, the EU is likely to increase the scope of its proposed response.
If adopted, the EU countermeasures would supplement the existing EU “Rebalancing Tariffs” previously introduced—and suspended until 14 July—in response to increased U.S. steel and aluminum duties. Most of the products covered by the Rebalancing Tariffs would be subject to a 25% ad valorem duty, with some facing a reduced rate of 10%. The Rebalancing Tariffs would apply to U.S. goods exports worth up to €26 billion.
The Enforcement Regulation and the Anti-Coercion Instrument
In preparing for a scenario in which negotiations with the U.S. fail to bring tariff relief, the EU has several legal instruments at its disposal to take responsive countermeasures, most notably the Enforcement Regulation and the Anti-Coercion Instrument (ACI), with some overlapping and some distinguishing features.
A. Intended Use of the Two Instruments
The Enforcement Regulation is a long-standing mechanism designed to enforce the EU’s rights under international trade agreements, including under World Trade Organization (WTO) agreements. Initially adopted in 2014 and amended in 2021, it empowers the EU to respond to breaches of trade obligations—particularly when a trading partner withdraws concessions granted under WTO agreements or fails to implement a ruling adopted by the WTO Dispute Settlement Body. Crucially, the amended Regulation now allows the EU to act unilaterally when multilateral adjudication is not possible, including in the absence of a functioning WTO Appellate Body (which has lacked the necessary quorum since late 2019, following a U.S. refusal to appoint additional members to the body).
Continue Reading EU Consults on New Tariffs on €95 Billion of U.S. ImportsEU’s Reaction to New U.S. Tariffs on Steel and Aluminum
On 12 March, the European Commission responded to the imposition of new U.S. tariffs on EU steel and aluminum imports. The Commission pledged to implement “swift and proportionate countermeasures on U.S. imports into the EU,” signaling a firm stance while leaving the door open for future negotiations.
Announced Countermeasures under the Enforcement Regulation
The EU’s response is made up of two measures:
- The reinstatement of 2018 and 2020 EU additional ad valorem duties on certain U.S. imports (“Old Rebalancing Measures”): In 2018, the first Trump Administration introduced 25% and 10% tariffs on EU steel and aluminum exports, respectively, under Section 232 of the Trade Expansion Act of 1962. As a response, the EU adopted a list of additional ad valorem duties on certain U.S. imports. In 2020, the first Trump Administration extended the tariffs to cover certain steel and aluminum derivative products. The EU then adopted a broader list of additional ad valorem duties on certain U.S. imports. Adopted under the Enforcement Regulation, these Old Rebalancing Measures were designed to maximize political pressure on the first Trump Administration to rescind its tariffs. They were suspended in 2023 following an agreement with the Biden Administration.
As the suspension of the Old Rebalancing Measures expires automatically on 31 March, the Commission will reimpose them. These Old Rebalancing Measures cover approximately €8 billion worth of EU imports from the U.S., intended to be proportionate to addressing the economic damage inflicted by the U.S. tariffs, and concern products ranging from boats to bourbon to motorbikes. - New EU measures under Article 5 of the Enforcement Regulation (“New Rebalancing Measures”): In response to the fresh U.S. tariffs impacting another €18 billion of EU exports, the Commission now plans to roll out new or additional ad valorem duties under Article 5 of the Enforcement Regulation (see the suggested product list). A stakeholder consultation is open for comment from 12–26 March, gathering input from affected industries. Following this, the Commission will draft an implementing act and consult Member States through the comitology procedure (as provided by the Enforcement Regulation). The implementing act is scheduled to take effect mid-April, bringing the total value of U.S. exports potentially impacted by the Old and New Rebalancing Measures to €26 billion.
What Does the New European Commission Mean for EU Tech Policy?
The new European Commission, which took office in December 2024, will likely rebalance its policy priorities, putting greater emphasis on competitiveness and innovation and less on risk-prevention and regulation. Over the past five years, the EU adopted several sweeping tech regulations, such as the Digital Services Act (DSA), the Digital Markets Act (DMA), and the AI Act. For the next five years, the focus is likely to be on implementing and streamlining these rules, rather than adopting new overarching tech regulatory frameworks. The Commission will also seek to facilitate greater public and private investment in technology, a sector in which the EU has lagged over the past 20 years, as noted by Mario Draghi in his report on Europe’s competitiveness.
Tech Policy Central to the EU
For the 2024-2029 term, Henna Virkkunen has been appointed as the Executive Vice-President (EVP) for Tech Sovereignty, Security and Democracy. Virkkunen’s portfolio places tech policy at the heart of the new Commission’s agenda, reflecting its strategic importance for EU competitiveness.
Virkkunen, a former Member of the European Parliament from Finland with a robust track record in tech policy, assumes leadership of the Directorate-General for Communications Networks, Content and Technology (DG CNECT). In contrast to the often-aggressive stance of her predecessor, Thierry Breton, towards industry leaders, Virkkunen is expected to be more collaborative. Virkkunen’s alignment with von der Leyen’s vision is anticipated to bring coherence to the Commission’s tech agenda. DG CNECT no longer reports to two Commissioners (Vestager and Breton in the last Commission), which will simplify its management. Placing it under EVP Virkkunen, who is relatively senior in the College of Commissioners, underscores that digital policy is a priority for this Commission.
Virkkunen will need to coordinate closely with other Commissioners, such as Stéphane Séjourné (EVP for Prosperity and Industrial Strategy), who will oversee the development of a European competitiveness fund to support emerging technologies. This initiative should align with Virkkunen’s efforts to strengthen EU capabilities in AI and semiconductors through Important Projects of Common European Interest. Virkkunen also effectively oversees four other Commissioners, including Ekaterina Zaharieva (Startups, Research and Innovation), who has been mandated to set up a European AI Research Council in order to bolster innovation, and Michael McGrath (Democracy, Justice, the Rule of Law and Consumer Protection), who will revise data retention rules to address potential privacy and security concerns.
Virkkunen’s Ambitious Policy Agenda
Henna Virkkunen’s mission is both expansive and strategically aligned with the EU’s overarching goals of digital sovereignty and competitiveness. She has three core priorities: artificial intelligence (AI), cloud computing, and quantum technologies.
Continue Reading What Does the New European Commission Mean for EU Tech Policy?Policy Implications for Europe Under a Second Trump Administration
As the world anticipates the return of Donald Trump to the White House, the European Union (“EU”) braces for significant impacts in various sectors. The first Trump administration’s approach to transatlantic relations was characterized by unpredictability, tariffs on imported goods, a strained NATO relationship, and withdrawal from the Iran nuclear deal and the Paris climate agreement. If past is prologue, the EU must prepare for a renewed era of uncertainty and potential adversarial policies.
Trade Relations
Trump’s self-proclaimed identity as a “tariff man” suggests that trade policies would once again be at the forefront of his administration’s priorities. His campaign promises, which include imposing global tariffs on all goods from all countries in the range of 10 % to 20%, signal a departure from traditional U.S. trade policies. Such measures could have severe repercussions for the EU, both directly through increased tariffs on its exports and indirectly via an influx of dumped products from other affected nations, particularly China. Broad-based tariffs of this nature would likely provoke retaliatory measures from the EU.
The EU’s response toolkit would likely mirror many of the actions it employed between 2018 and 2020 in reaction to U.S. tariffs imposed during the first Trump administration. These measures would include retaliation on U.S. products to maximize political pressure by targeting Trump-supporting constituencies, pursuing chosen legal challenges against the U.S. at the World Trade Organization, and implementing safeguards to shield the EU market from an influx of Chinese and other diverted goods following U.S. tariff hikes. Very practically, the EU has suspended tariffs on US exports of steel and aluminum to its market worth €2.8 billion. The suspension expires on 1 March 2025, requiring an active decision on whether to reintroduce them or not.
In executing these measures, the EU is expected to collaborate with allies such as the UK, Canada, Japan, Australia, and South Korea to amplify its response. The EU may also explore smaller trade agreements or informal “packages” with the U.S. as part of a negotiated tariff truce. Broader protective measures could also be pursued, focusing on subsidies and industrial policies aimed at strengthening Europe’s strategic sectors, beyond actions specific to the U.S. Some cooperation with the U.S. on China may also be possible in areas like export control, investment control, and dual-use technologies.
Continue Reading Policy Implications for Europe Under a Second Trump AdministrationTrade Policy Under a Second Trump Administration and Implications for Business
November 25, 2024, Covington Alert
The inauguration of President Trump on January 20 is expected to bring important changes to U.S. trade policy that are likely to affect companies that supply international customers, or are reliant on global supply chains. As discussed in our prior client alert, international trade is expected to be a key focus of President Trump, who has repeatedly expressed a preference for using tariffs as a policy tool to create perceived leverage for dealmaking with international partners on both economic and non-economic issues. Recent announcements by the Trump transition team regarding cabinet and staff appointments reinforce the view that trade policy under a second Trump administration could involve significant unilateral U.S. action, including the imposition of substantial new tariffs and a hawkish stance toward China. These new tariffs could be implemented swiftly after Trump takes office, or could alternatively be subject to more extensive investigative and reporting procedures, depending on the legal authority invoked. New tariff measures, as well as other trade actions Trump has proposed, could lead to retaliatory responses by U.S. trading partners, including key U.S. allies. This alert explores how trade policy may be implemented by a second Trump administration, and considers how companies may prepare for and mitigate the risks associated with these developments.
Cabinet Nominations and Other Economic Appointees
In recent weeks, Trump has announced several cabinet and staff appointments for his second administration, including individuals responsible for implementing trade policy. Key among them is Howard Lutnick, chairman and CEO of a Wall Street investment firm and co-chair of Trump’s transition team, whom Trump has selected to be Secretary of Commerce. Echoing Trump’s own views, Lutnick has been a strong advocate for using tariffs as an industrial policy tool and bargaining chip to rebalance U.S. trade, though he has suggested tariff measures under a second Trump administration may be more “targeted” than the universal 10 to 20 percent tariffs proposed by Trump during his campaign. In announcing Lutnick’s forthcoming nomination, Trump noted Lutnick would lead the administration’s “Tariff and Trade agenda,” and that he would have direct responsibility over the Office of the United States Trade Representative (“USTR”). As USTR is a separate agency established by Congress within the Executive Office of the President to lead on trade issues, it is uncertain if the announcement was referring to informal oversight over USTR or a formal restructuring of the agency. Should Trump seek to consolidate USTR within or under the Commerce Department, he may face opposition from Congress, whose approval would be required for such a reorganization.
Continue Reading Trade Policy Under a Second Trump Administration and Implications for Business