The American author Charles Bowden once said that summertime is always the best of what might be. As the traditional European summer break approaches, there are a number of issues for politicians to ponder as they head to the beach. The need for free trade, less stifling regulation and the importance of completing the EU single market should be top of mind, along with the need for passports, hotel bookings and sufficient sunscreen.
The need for free and open trade
While the EU is facing a moving target in the form of stop-start Trump “reciprocal tariffs,” Brussels should realize that there is never a right way to do a wrong thing. The self-inflicted damage to U.S. economic and company growth, as well as investment and jobs creation prospects represent a cautionary tale for any country crazy enough to contemplate following the U.S. down the trade barriers and isolationism route.
In this way the European Union should avoid retaliating with tariffs on U.S. goods and services, as such actions risk escalating trade tensions and undermining transatlantic cooperation at a time when geopolitical stability and economic resilience are paramount. Tariff retaliation often leads to tit-for-tat measures, harming businesses, consumers, and supply chains on both sides of the Atlantic. The EU and U.S. are strategic allies with deeply integrated economies as such disputes are better resolved through structured dialogue and multilateral forums rather than lashing out.
Retaliatory tariffs may provide short-term political leverage, but they undermine the long-term goal of open, rules-based trade. In this same vein the EU should stay well away from even contemplating the imposition of tariffs on services. Additionally, targeting U.S. industries could provoke countermeasures that damage key European sectors, from manufacturing to agriculture. Instead of retaliation, the EU should reinforce diplomatic engagement, seek negotiated solutions, and champion stability in global trade – demonstrating leadership through restraint, not escalation.
The EU should scale back its regulatory zeal
For too long the EU has been a byword for excessive rules and overregulation. The EU’s AI Act is a case in point. With parts of the legislation set to come into force next month, companies – including 45 leading European organisations who signed an open letter – and politicians alike are calling for a pause. The EU should take heed and delay implementation of the AI Act to allow for greater clarity, consistency, and alignment with global standards. As currently drafted, the Act imposes complex obligations that risk stifling innovation, particularly for startups and SMEs.
Many key technical definitions and compliance mechanisms remain unclear, making immediate enforcement impractical and potentially disruptive. A delay would provide essential time for regulators, businesses, and developers to prepare, test guidance, and ensure a balanced approach that safeguards rights without undermining competitiveness. Rushing implementation risks regulatory overreach and fragmentation, weakening Europe’s position in the global AI race at a critical moment.
Parallels could also be drawn with the EU’s Carbon Border Adjustment Mechanism (CBAM) and Deforestation laws, which have received criticism from business and politicians as well as third-countries. Although well-intentioned – and aimed at advancing environmental goals – both pieces of legislation risk serious economic and geopolitical fallout as well as disrupt global supply chains and should be delayed. Both impose heavy compliance burdens on producers and exporters in developing countries, many of whom lack the technical capacity to meet stringent EU requirements.
The deforestation law could marginalize smallholder farmers by demanding precise geolocation data, while CBAM may be perceived as a protectionist measure, straining trade relations and potentially triggering retaliation. These policies also risk increasing costs for EU importers and consumers, while disrupting supply chains at a time of global economic uncertainty.
Crucially, both laws were developed without sufficient consultation or coordination with trade partners, undermining trust and cooperative action. A delay would allow for more inclusive dialogue, better technical support for affected regions, and a more realistic, phased approach. The EU should lead through collaboration, not unilateral regulation.
On the whole, the EU needs to become more pro-industry in its approach and avoid the temptation to meddle in areas that will ultimately be counterproductive for the European economy, consumers and the continent’s standing in the world.
Breathing new life into the single market
A perfect place for the EU to recover its mojo and add the growth, productivity gains and dynamism that it so badly needs is to complete the EU internal market for goods and services.
The EU’s new Single Market Strategy – adopted in May 2025 – marks a vital step toward unlocking Europe’s economic potential in an increasingly competitive global landscape. By tackling longstanding internal barriers – such as fragmented regulations on services, product standards, and cross-border operations – the strategy aims to revitalize one of the EU’s greatest achievements: a unified market of 450 million people. It prioritizes improved access for SMEs and mid-sized companies, simplifies administrative procedures, and enhances digital infrastructure to enable seamless trade and innovation. With geopolitical tensions and global supply chain disruptions on the rise, a stronger, more integrated single market is key to boosting Europe’s resilience and competitiveness. Delays and fragmentation have cost growth and jobs for years; this strategy signals renewed political will to modernize the EU’s economic core. Its success will be essential for Europe’s long-term prosperity – and the new Single Market Strategy is a step in the right direction – but the devil, as always, is in the detail.
EU decision-makers and opinion-formers have a great deal of food for thought as they contemplate these issues from their sun loungers and chiringuitos. Summer is the perfect time to consider the best of what might be, while ensuring that the benefits of policies adopted last throughout the rest of the year and beyond.
