BRUSSELS — Political groups in the European Parliament failed to reach a common position on a simplification bill Tuesday, exposing fault lines in Commission President Ursula von der Leyen’s centrist coalition. Lawmakers had geared up for an all-nighter to reach a deal on how far to roll back several EU green laws as part of the first “omnibus” simplification package. But the meeting ended after less than four hours as relations between the Conservatives, Liberals and Socialists broke down. The center-right European People’s Party (EPP) threatened to side with right-wing groups to pass massive cuts to the rules, unless its traditional coalition partners — the centrist Renew group and the center-left Progressive Alliance of Socialists and Democrats (S&D) — agreed to an alternative with fewer cuts. While Renew seemed willing to accept the second option with some caveats, S&D refused. The omnibus bill aims to reduce reporting obligations for companies under the bloc’s sustainability disclosure and supply chain transparency rules. Cutting red tape for businesses has become a top priority for von der Leyen in her second mandate, as the EU strives to boost competitiveness and aid flaccid economies. “My goal has always been to simplify and cut cost for business. I have presented two packages that deliver on that,” said the EPP’s Jörgen Warborn, who leads negotiations on this file. The first option — which exempts even more companies from having to report on their environmental footprint — has the backing of right-wing and far-right groups. “I do not exclude any majority as long as we cut costs for businesses and strengthen Europe’s competitiveness,” Warborn added. The so-called von der Leyen majority includes the three moderate groups and the Greens that backed her for a second term, after last year’s European election results saw the balance of power in the Parliament tilt to the right. The EPP has since flirted on some issues with forming an alternative majority with conservative and far-right parties. THREATS AND THEATER The S&D’s Lara Wolters said that during the meeting, there was “not a single decent conversation. Only threats and theater.” But “these are serious matters. So let’s not waste more time, and start real negotiations,” she added. Pascal Canfin, who leads Renew’s work around the omnibus, said: “The far-right-leaning ‘option one’ is totally unacceptable.” This sustainability omnibus bill is the first major piece of legislation the three parties need to agree on, and the breakdown could set a precedent for future contentious bills. There was tension in the room. One Parliament official — granted anonymity to speak freely about the closed-door meeting — said it was clearly “badly prepared” and that negotiations were “a waste of time.” The lawmakers needed a break just 10 minutes after the meeting had started, the official said. At the heart of the dispute is a push from the EPP to scrap the so-called civil liability regime, which leaves companies across the EU legally liable for possible environmental or human rights violations in their supply chains. The European Commission proposed to scrap this possibility for lawsuits in the omnibus; a position EU governments agree with. However, the S&D — backed by the Greens — want to keep this safeguard to hold companies accountable for their supply chains. “We have been nothing but constructive in the negations, while EPP has constantly been flirting with the far right and threatening with an alternative majority,” said the Greens’ Kira Marie Pieter Hansen. The EPP, Renew and S&D said they remained open to further negotiations, which are expected to continue. EU lawmakers in the legal affairs committee are expected to vote on a final text on Oct. 13.

The European Union and the United States have issued a statement to formalize their tariff truce. Now the hard work begins. The framework agreement builds out the handshake trade agreement struck by European Commission President Ursula von der Leyen and U.S. President Donald Trump in Scotland in late July. The text sets out a roadmap for implementing the trade commitments they made. “This is not the end; it’s the beginning. This framework is a first step,” EU Trade Commissioner Maroš Šefcovič said. But the document, which runs to only four pages, skirts several issues. For one, it doesn’t mention U.S. calls for the EU to dilute its regulation of Big Tech. Nor does it refer to a call by Brussels for European wines and spirits to be exempted from the 15 percent U.S. baseline tariff that took effect this month. That’s one that Šefcovič still hopes to get a deal on. We break down the wins, the losses, the fudges — and the omissions — from the Framework on an Agreement on Reciprocal, Fair, and Balanced Trade. CARS  Under the joint statement, the U.S. will lower its 27.5 percent tariffs on cars and automotive parts to match the baseline 15 percent.  But there’s a catch: The U.S. will only meet its lower tariff commitment after the EU eliminates “tariffs on all U.S. industrial goods,” including its own 10 percent tariff on vehicles. Šefčovič said the Commission will initiate legislation this month to ensure Washington lowers tariffs retroactively on cars and auto parts effective Aug. 1, as foreseen in the deal. A separate clause of the joint statement makes clear that the two governments will start collaborating in other areas around cars, including to “provide mutual recognition on each other’s standards.”  The joint statement doesn’t clarify which standards will be mutually recognized, but any change will have ripple effects across the sector. “By signing up to mutual recognition of vehicle standards with the United States, the European Union has waved the white flag on road safety,” said Antonio Avenoso, executive director of the European Transport Safety Council. “This is not a technical detail — it is a political choice that puts trade convenience ahead of saving lives.” — Jordyn Dahl DRUGS, SEMICONDUCTORS, STEEL These industries are at the heart of Washington’s efforts to relocate industry back to the United States and are covered by separate trade investigations, known as Section 232, which allow the U.S. president to restrict imports to protect national security.  The U.S. will cap tariffs on European pharmaceuticals, lumber and semiconductors at 15 percent regardless of the results of the ongoing investigations.  Steel and aluminum imports will continue to face a 50 percent tariff until the EU and the U.S. explore the possibility of joining forces to tackle overproduction. | Erik S. Lesser/EPA This ceiling doesn’t apply to steel and aluminum imports, however, which will continue to face a 50 percent tariff until the EU and the U.S. explore the possibility of joining forces to tackle overproduction — especially coming from China — and the possibility of setting tariff-rate quotas. The European pharmaceuticals industry warns that the outline trade deal could cost companies up to €18 billion. “We remain concerned for the future of patients and our sector in Europe,” said Nathalie Moll, director general at Europe’s EFPIA pharma lobby. Still, while branded pharmaceuticals could end up being subject to the tariffs, the EU did succeed in broadening an exemption for lower-priced generics. — Camille Gijs and Mari Eccles DIGITAL RULES  The European Union managed to keep its rules on digital competition and content moderation out of the U.S. trade deal, despite heavy pressure. For now.  The Commission has for months maintained that its ability to regulate U.S. Big Tech companies is not part of the trade negotiations.  The Trump administration has been on a campaign, attacking both rulebooks and claiming they amount to censorship of Americans (the Digital Services Act) and unfairly target U.S. companies (the Digital Markets Act). While Šefčovič confirmed to reporters on Thursday that the rules weren’t part of the talks, he didn’t rule out that the two sides would return to the issue in the future.  “We kept these issues out of the trade negotiations. We were focusing on what was very clearly the priority and therefore you won’t find it referenced in the joint statement,” he said. “Will it come later, will it be discussed? Our relationship is so vast that for sure there will be a lot of issues which will be discussed.” European Parliament lawmakers will continue to pressure the Commission not to treat the rules as a bargaining chip. “Tech legislation and tariffs are two distinct matters and should remain such,” said Bulgarian conservative lawmaker Eva Maydell. — Pieter Haeck WINES AND SPIRITS Wines and spirits won’t be exempted from tariffs, even though the European Union pushed hard to obtain relief for a sector that has been caught in the crossfire from both Washington and Beijing. This means they will be subject to a 15 percent U.S. tariff.  That’s a blow for European exporters, who long benefited from tariff-free access on most spirits until successive trade wars tore it up. Wines and spirits won’t be exempted from tariffs, even though the European Union pushed hard to obtain relief for a sector that has been caught in the crossfire from both Washington and Beijing. | Guillaume Horcajuelo/EPA Šefčovič admitted that the talks had fallen short — but insisted the fight isn’t over.  “The tariffs on wine and spirits was one of the very important offensive interests of the European Union. Unfortunately, here we didn’t succeed … but the doors are not closed forever,” he told reporters.  — Bartosz Brzeziński GREEN RULES  The EU made a vague promise to address U.S. concerns regarding EU laws on mandatory sustainability reporting (the Corporate Sustainability Reporting Directive), supply chain oversight (the Corporate Sustainability Due Diligence Directive) and deforestation (the EU Deforestation Regulation). Brussels mainly pitched ideas it already wants to implement, however.   The EU will ensure its rules “do not pose undue restrictions on transatlantic trade” by reducing the administrative burden on businesses in the CSDDD and by proposing changes to the EU’s civil liability regime, which holds companies legally accountable for human rights violations and environmental damage in their supply chains.   Scrapping the EU’s liability regime is already a major point in the Commission’s omnibus proposal announced last February, which rolls back many features of the CSRD and CSDDD among other files.  Crucially, those changes have not yet received the official green light from EU countries or lawmakers.   On deforestation, the EU says it recognizes that U.S. commodities production “poses negligible risk to global deforestation,” having already labeled the country as “low risk” in its classification system last May.  — Marianne Gros AVIATION Washington commits to exempting aircraft and parts from higher tariffs, applying its very low most favored nation duties to the industry. Irish lobbyists are breathing a collective sigh of relief. A trade war slapping American tariffs on Airbus and European tariffs on Boeing would have hit the industry’s key middleman, Dublin, particularly hard. The Irish capital is the world’s biggest hub for aircraft leasing with an ecosystem of lessors and financial advisers overseeing most of the world’s leased aircraft. Ireland’s Central Statistics Office values that Irish-managed fleet at €268 billion.  Small wonder, then, that Prime Minister Micheál Martin singled out aviation when welcoming the newly published details of the EU-U.S. agreement. “Given the significance of the airline sector to Ireland, a specific carve-out for aircraft and aircraft parts is welcome,” he said. — Shawn Pogatchnik DEFENSE  The EU promised to buy more American weapons under Thursday’s trade deal, although a senior official downplayed any impact on efforts to boost Europe’s military industrial complex. The EU “plans to substantially increase procurement of military and defence equipment from the United States, with the support and facilitation of the U.S. government,” the joint statement said.  That could deal a blow to the European defense industry, which Brussels has been trying to strengthen with initiatives like the €150 billion loans-for-weapons Security Action for Europe regulation to boost joint procurement, or the €1.5 billion European Defence Industry Programme still under discussion with the European Parliament. — Jacopo Barigazzi INVESTMENTS Although it’s unclear how exactly it will fulfill its promises, the EU “intends to” procure $750 billion worth of U.S. energy, including liquefied natural gas, oil and nuclear energy products, through 2028.  It will also buy “at least” $40 billion worth of U.S. artificial intelligence chips. Europe already relies heavily on U.S.-based AI chip suppliers such as Nvidia, since it has no own-production capacity in that space.  On top of that, “European companies are expected to invest an additional $600 billion across strategic sectors in the United States through 2028,” the document adds. — Camille Gijs and Pieter Haeck