Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Ahead of a midnight deadline, President Trump has decided to extend tariff exemptions for European allies — but only for one month, the WSJ first reported and the White House confirmed.

Expand chart
Data: Census Bureau; Chart: Chris Canipe/Axios

The big picture: Trump isn’t just worried about China. The U.S. trade deficit with the EU has grown steadily — something Trump made sure to raise with German Chancellor Angela Merkel last Friday, and which had him considering opening a European front in his trade war.

The latest: Temporary exemptions from steel and aluminum tariffs granted to the EU, Mexico, Canada, Australia, Argentina and Brazil were due to expire at 12:01am. South Korea will get a permanent exemption, while the rest had their exemptions extended until June 1.

The backstory

The U.S. trade deficit with the EU ballooned from $17 billion in 1997 to $151.4 billion in 2017, and the driving force was German manufacturing. Last year, the U.S. bought $117.7 billion worth of imports from Germany — 27% of total imports from the EU.

  • The details: The major commodities the U.S. buys from Germany are cars and sophisticated machinery for factories. Trump has been particularly concerned by German autos, threatening steep tariffs.
  • The Germans have "made a very wealthy country on the backs of manufacturing," Thomas Duesterberg, a former Commerce Dept. assistant secretary for international economic policy now at the Hudson Institute, tells Axios. Germany is dependent on the U.S. market, and Merkel appears willing to work with Trump to address the trade deficit.

The bottom line: The European Union will be caught in the crossfire even if Trump aims his tariffs solely at China. And as the Trump administration threatens U.S. allies with tariffs, Beijing is courting European countries for support in case of a trade war.

The stakes

"We do need allies to take on China because it's so big now, and the subsidization and protectionism is so widespread," Duesterberg says. But Trump may alienate them.

  • Ahead of his visit to Washington, French President Emmanuel Macron said on Fox News Sunday: "It's too complicated if you make war against everybody. You make trade war against China, trade war against Europe, war in Syria, war against Iran. Come on. It doesn't work. You need allies. We are the ally."
  • The German government released a statement Sunday saying Merkel, Macron and U.K. Prime Minister Theresa May agree that the European Union is "prepared to defend its interests in the multilateral trade order."

Go deeper

40 mins ago - Politics & Policy

McConnell drops filibuster demand, paving way for power-sharing deal

Senate Majority Leader Chuck Schumer (R) and Minority Leader Mitch McConnell attend a joint session of Congress. Photo: Olivier Douliery/AFP via Getty Images

Senate Minority Leader Mitch McConnell has abandoned his demand that Democrats state, in writing, that they would not abandon the legislative filibuster.

Between the lines: McConnell was never going to agree to a 50-50 power sharing deal without putting up a fight over keeping the 60-vote threshold. But the minority leader ultimately caved after it became clear that delaying the organizing resolution was no longer feasible.

2 hours ago - Technology

Scoop: Google won't donate to members of Congress who voted against election results

Sen. Ted Cruz led the group of Republicans who opposed certifying the results. Photo: Stefani Reynolds/Pool/AFP via Getty Images

Google will not make contributions from its political action committee this cycle to any member of Congress who voted against certifying the results of the presidential election, following the deadly Capitol riot.

Why it matters: Several major businesses paused or pulled political donations following the events of Jan. 6, when pro-Trump rioters, riled up by former President Trump, stormed the Capitol on the day it was to certify the election results.

3 hours ago - Politics & Policy

Minority Mitch still setting Senate agenda

Illustration: Aïda Amer/Axios

Chuck Schumer may be majority leader, yet in many ways, Mitch McConnell is still running the Senate show — and his counterpart is about done with it.

Why it matters: McConnell rolled over Democrats unapologetically, and kept tight control over his fellow Republicans, while in the majority. But he's showing equal skill as minority leader, using political jiujitsu to convert a perceived weakness into strength.