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

The EU is counting the cost of President Donald Trump’s tariff bazooka, as the levies push transatlantic relations to a nadir. French President Emmanuel Macron urged European firms to suspend US investments, with the government eyeing moves to hit America’s tech companies. Outgoing German vice chancellor, Robert Habeck, meanwhile suggested the EU should forge alliances with Mexico and Canada to counter the levies. Number crunching in Brussels is worsening EU fears. According to the bloc’s officials, around €290 billion of EU exports will be hit with the baseline 20% tariff  — amounting to €58 billion in extra duties. Of the industries hardest hit — a 25% tariff on EU car exports will affect €66 billion worth of goods, while €26 billion in metals exports will be impacted when the levies eventually are imposed next Wednesday. Late last night, Trump said he was open to reducing his tariffs if other nations made “phenomenal” offers.

— Samuel Stolton and Jorge Valero

What’s Happening

NATO Pledge | Despite Trump’s push for NATO members to boost spending, US Secretary of State Marco Rubio insisted the  administration has no intention of leaving the alliance. Rubio reiterated a demand for members to spend as much as 5% of gross domestic product on defense. 

TikTok Fine | TikTok owner ByteDance will be hit by an EU privacy fine of more than €500 million for illegally shipping European users’ data to China. The Irish privacy regulator is preparing the decision to be published before the end of the month, we’ve been told. 

ECB Test | Trump’s tariffs not only threaten the global economy, but also call into question the European Central Bank’s achievements in fighting inflation. Governing Council member Joachim Nagel said the ECB would have to reassess its monetary policy. 

Carbon Markets | EU and UK officials are expected to work toward linking their carbon markets at a summit next month. The two jurisdictions have been trying to boost ties as they face the upheaval unleashed by Trump on the global trading order. 

Climate Backtrack | The EU has gone back to the drawing board for its 2040 climate target in order to gain more support from lawmakers. The bloc’s executive body had initially wanted a target to cut 90% of emissions by 2040 compared to 1990 levels. 

Around Europe

Swiss Hit | Switzerland may have expected to dodge Trump’s tariff salvo. But it’s been hit with one of highest levies on the continent, raising concern for key industries, such as chocolate and luxury goods. 

Spain Defense | Spain is planning €14.1 billion of financial support in response to US tariffs and pressing the EU to build a fund for affected industries. Prime Minister Pedro Sanchez said the bloc needs to deploy an anti-tariffs package urgently. 

Portuguese Talks | Portuguese Economy Minister Pedro Reis will meet with business associations next week to mull the impact of US tariffs. Meetings with representatives of industries will kick off Wednesday. 

Austrian Drilling | Austria is drawing up incentives for companies to increase drilling for geothermal heat. The nation is seeking alternatives to Russian gas that it long relied on. 

Chart of the Day

US and European sneaker, clothing and jewelry makers plunged amid a shock to supply chains after Trump’s tariff announcements on crucial production countries including Vietnam and Indonesia. Nike plunged as much as 13% in New York trading, hitting the lowest level since 2017 and European competitors Adidas and Puma fell as much as 11% and 14% respectively. These firms have increased their reliance on factories in Vietnam and Indonesia, especially after Trump targeted China with tariffs in his first term as president. The US imposed a 46% tariff rate on Vietnamese goods and rates of more than 30% on Indonesia. 

Today’s Agenda

All times CET

• 7:15 a.m. Commission president Ursula von der Leyen and Council President Antonio Costa take part in first EU-Central Asia summit
• 8:15 a.m. Economy commissioner Valdis Dombrovskis speaks at EU Conversations 2025 conference
• 9 a.m. NATO foreign ministers meet at NATO HQ in Brussels
• 1.15 p.m. Economy chief Dombrovskis speaks at conference in Riga to mark the 35th anniversary of Latvian independence 
• 4 p.m. Foreign Affairs chief Kaja Kallas takes part in the  EU-Japan Strategic Dialogue with Japan’s Foreign Minister Takeshi Iwaya
• Competition chief Teresa Ribera speaks at a roundtable of antitrust enforcers at an American Bar Association meeting in Washington
• Climate commissioner Wopke Hoekstra speaks at INSEAD alumni forum in Amsterdam