Vulcan View: The latest EU developments 1 September – 5 September

EU-US tariff deal faces tough opposition in the European Parliament

On 28 August, the European Commission officially tabled a new legislative proposal to eliminate tariffs on a range of industrial goods from the United States. The move, stemming from the EU-U.S. tariff deal and the Joint Statement of 21 August, seeks to de-escalate trade tensions between the two major economic blocs. However, the proposal faces a significant hurdle as it enters the EU’s legislative process, with opposition mounting from key political groups within the European Parliament.

The legislative proposal, which lists a wide range of industrial and agricultural goods is not a done deal. The European Commission has tabled it under the “ordinary legislative procedure”, which means both the European Parliament and EU Member States in the Council have the power to amend, or even block, the proposal entirely.

The political landscape in the European Parliament is proving particularly challenging. While the centre-right European People’s Party (EPP) has largely supported the deal, the second-largest group in the European Parliament, the Socialists and Democrats (S&D), has broken ranks. Iratxe García Pérez, president of the S&D group in the EP, stated, “We firmly oppose the agreement.” This opposition complicates the job of Commission President von der Leyen, a member of the EPP, who needs a majority to enact the tariff truce.

The opposition extends beyond the Parliament. Leading Socialist figures within the EU’s institutions, such as European Commission Executive Vice-President Teresa Ribera and European Council President António Costa, have also voiced their concerns. Mr. Costa acknowledged the “frustration felt by many Europeans, who perceive the Union as having been too passive.” He further admitted that the EU may have conceded “unfair terms” to the Trump administration to secure its support on the war in Ukraine.

The trust problem

Another significant factor undermining the EU-U.S. deal is the growing lack of trust in the Trump administration’s commitments. The U.S. has yet to lower its tariffs on European cars, a key part of the original agreement. At the same time, the administration has repeatedly issued tariff threats against the EU’s new digital rulebook, which includes the Digital Services Act (DSA), the Digital Markets Act (DMA), and the AI Act.

This has led to senior EU officials, including European Commission Executive Vice-Presidents Séjourné and Ribera, publicly questioning the overall agreement. Both have warned that the deal may need to be “reviewed” or even “dropped altogether.”

This uncertainty makes the future of the legislative proposal unpredictable. The deal’s most immediate test will be in the European Parliament, where Bernd Lange, Chair of the International Trade (INTA) committee and member of S&D, has refused to commit to ensuring its approval. With this potential blockade in Parliament, the timeline for the proposal is currently unstable and politically fraught.

European Parliament presents its draft report on the Critical Medicines Act

On Monday, 1 September, MEP Tomislav Sokol (EPP/HR) presented the Critical Medicines Act Draft Report. MEPs from various political groups had the opportunity to voice their views and concerns on the Act. They shared different opinions as avoiding unnecessary duplicities, ensuring equitable access to medicines, and supporting collaborative procurement.

A brief rundown of the political groups is as follows:

S&D: Tiemo Wolken (S&D/DE) shared that there is support for multi-owner contracts and coordinated contingency stock. He warned against unnecessary duplication between national and EU stocks, as well as cautioning on regulatory fast-tracking. In addition, he called for stakeholder involvement and advocated for EU manufacturing and more investments in the EU.

Patriots: Viktoria Ferenz (PfE/HU) highlighted the opportunity to secure vital medicines and reduce dependency. She shared that the framework must be clear and precise – defining which products are critical and clarifying procurement rules beyond cost. In addition, she stated that duplication and contradictions with other frameworks, such as the GPL, must be avoided and that financial support, flexibility, and long-term resilience are essential.

ECR: Aurelijus Veryga (ECR/LT) emphasised the need to bring production of active substances back to Europe and avoid overlapping production across countries. He showed support for joint procurement to protect smaller Member States and highlighted that environmental requirements must be considered alongside pharma.

Renew: Vlad Vasile-Voiceulescu (Renew/RO) welcomed the creation of a union coordination mechanism and inclusion of stakeholders. He also supports the extension of the deadline for amendments.

Greens: Tilly Metz (Greens/LU) shared that equitable access is a priority, as well as coordination and a common EU approach. Public health and environmental standards must come hand in hand, and strategic projects should be targeted towards the highest dependency.

Shadow for Opinion, ITRE: Oliver Schenk (EPP/DE) suggested that the proposal does not go far enough and that the whole pharmaceutical sector must be strengthened. He added that financing innovation and new technologies, as well as securing stable partnerships for supply chains, is vital.

Shadow for Opinion, IMCO: Marion Walsmann (EPP/DE) shared that collaborative procurement is strong but must have clear rules and avoid inconsistencies. Additionally, she shared that patients should not suffer delays due to procedural barriers and instruments must align with WTO and attract investment.

The added value of a fully established SANT Committee is evident in the handling of the Critical Medicines Act, as the draft report already shows significant improvements compared to the Commission’s original proposal from March. A broad consensus has emerged among MEPs in favour of reshoring pharmaceutical manufacturing to the EU, though the practical feasibility of such measures remains uncertain. Suggested amendments for the draft report are due on 19 September. 

In terms of timeline, Rapporteur MEP Sokol is aiming to finalise work on the act before the end of the year, but this is not a realistic scenario. After MEPs table their amendments on 19 September, shadow meetings will begin to consolidate these amendments together with the opinions of ITRE, ENVI, and IMCO into a single compromise text. This draft will then need to be voted on in the SANT Committee before trilogue negotiations can start.

In parallel, the Council must prepare its own position, which requires approval in COREPER ahead of the trilogues. Only once both Parliament and Council are ready can negotiations between the two institutions, with the participation of the European Commission, formally begin. These discussions are likely to take several months. Afterward, the final compromise text will need to be endorsed again by the Council and then approved in plenary by the European Parliament.

Even if policymakers push to move as quickly as possible, it is clear that all of these steps cannot realistically be completed before the end of the year.

Taoiseach Martin urges EU to tackle high energy costs for chipmakers

The EU’s future as a hub for semiconductor production could be at risk unless urgent action is taken to curb soaring energy prices, Ireland’s Taoiseach Micheál Martin warned the European Commission. In a March letter to Commission President Ursula von der Leyen, Mr. Martin called for interim EU measures to ease the “very high” electricity costs facing chipmakers such as Intel, arguing that otherwise companies may shift investment to lower-cost regions.

Semiconductors require vast, stable electricity supplies for production, and Irish-based producers, including Intel, face significantly higher energy bills than competitors in Asia or North America. These costs have grown as Europe transitions toward greener energy sources, leading to short-term price increases despite broad support for climate targets. Mr. Martin warned this could cause chipmakers to pause expansion or move plants elsewhere, threatening Ireland’s industrial base and the EU’s technological ambitions.

The call comes amid a global contest to secure chipmaking capacity. The United States and China have poured billions into subsidies, recognising that semiconductors underpin everything from defence systems to artificial intelligence. Europe has its own ambition: the EU Chips Act aims to double the continent’s share of global chip production by 2030.

In June, Ms. von der Leyen replied that Europe’s semiconductor goals depend on addressing energy challenges. She cited new EU legislation to help energy-intensive industries transition to cleaner sources while staying competitive. Along with lower costs, the Commission aims to foster innovation, cut red tape, and streamline investment approvals, giving European firms a fairer global position.

For Dublin, this dialogue is part of a broader effort to attract further chipmakers, potentially giants like Nvidia, to build next-generation fabrication plants. Government officials see interim cost relief as essential if Ireland is to win such investment and retain existing players.

Conclusions

The correspondence underscores a delicate balancing act: decarbonising Europe’s power grid while keeping high-tech manufacturing viable. If progress stalls, Europe risks ceding ground to regions where energy is cheaper and subsidies are larger. For now, negotiations continue between Dublin and Brussels on how to cushion chipmakers until renewable energy becomes more affordable and abundant.

Compliments of Vulcan Consulting – a member of the EACCNY