One of the EU’s most painful trade disputes with the U.S. is heading for a respite. The two sides are set to announce today they’ve reached a truce in their spat over steel tariffs, sparing products such as U.S. bourbon whiskey from a doubling of EU import duties as soon as next month. Officials in Brussels and Washington have been in talks for the past weeks, eager to avoid the escalation of a tit-for-tat war. Under the deal, the bloc will refrain from increasing its retaliatory tariffs next month and both sides will engage in a dialog on steel overcapacity. The move, which offers huge relief to Washington, marks a shift in tone for Brussels, where officials had been pushing for a mutual suspension of duties. The EU’s gesture of goodwill sets up a more harmonious summit with Joe Biden in June, and talks between the two sides can move to eventually scrapping the tariffs altogether.

What’s Happening
Corporate Taxes | The Commission will vow tomorrow to propose a directive setting a floor on the tax paid by large multinationals. The draft of the policy document we’ve seen includes no concrete proposals for now, pending a global deal on corporate taxation, which is due later this year. However, the U.K.’s objections cast some doubt over this timeframe.

Brexit Tensions | New Democratic Unionist Party leader Edwin Poots will try to “strip away” parts of the Brexit trade agreement covering Northern Ireland, as tensions in the region intensify. David Frost, the British minister in charge of relations with the EU, said that until issues arising from the so-called Northern Irish protocol, which draws a trade border in the Irish Sea, are settled, “our new relationship with the EU won’t be right.”

Israeli Defiance | EU foreign ministers will hold an emergency video call tomorrow to discuss the escalating clash between Israel and Palestine. The region is witnessing its worst violence in years, with calls for restraint so far falling on deaf ears. Here’s our latest. 

The Big Choke | Copper, iron ore and steel. Corn, coffee, wheat and soybeans. Lumber, semiconductors, plastic and cardboard for packaging. The world economy is suddenly running low on everything. Read our Big Take on how Covid supply shocks and surging corporate demand are upending supply chains.

Polish Stimulus | The Polish government will boost spending on health care and housing as part of its stimulus plan —  financed mainly from EU funds — in an attempt to rejuvenate the economy and win voters. The opposition says that instead of tackling the country’s ills, the plan is a glorified pork-barrel spending aimed keeping the Law & Justice party in power after 2023. Here’s the program’s key components. 

In Case You Missed It
Green Leap | Germany’s Greens narrowed the gap to Chancellor Angela Merkel’s conservative alliance to one percentage point in the latest Insa poll for the Bild am Sonntag newspaper. With just over four months until the national election, the Greens have overtaken the conservatives in most recent polls.

Green, Too | Meanwhile, Merkel’s conservative bloc and her Social Democrat junior partners are seeking to burnish their environmental credentials. The chancellor urged EU peers to match Germany’s more ambitious path to net-zero greenhouse gas emissions, and said wealthier nations must increase their contribution to funding global efforts to tackle climate change.

Off the Grid | A thousand-year-old Swedish village could become a blueprint for local energy grids of the future. Simris, with a population of about 200, has shown that operating independently from the national grid is technologically possible. In an age when the risk of sweeping blackouts is growing, it’s an experiment that could be replicated elsewhere.

LGBTQ Rights | Italy ranks lowest in western Europe for gender equality, and a postponed piece of legislation offering basic protection against hate crimes has people taking to the streets. Read our dispatch from Rome on why something so basic — a bill that criminalizes violence and hate speech targeting a person’s sexual orientation or identity — is still so controversial. 

Chart of the Day

There’s an unwritten rule in global bond markets: never short Germany. But when Europe’s safest asset is in the midst of a retreat that threatens to push yields on bunds above 0% for the first time in more than two years, a paradigm shift may be underway, John Ainger reports.

Today’s Agenda
All times CET.

• 11 a.m. Commission President Ursula von der Leyen and Chancellor Merkel speak at the German Rail Summit

• 1 p.m. EU lawmakers will debate criteria for the new green classification system for economic activities with Commissioner Mairead McGuinness

• 4 p.m. EU health chief Stella Kyriakides delivers speech on pandemic response in virtual Die Zeit forum

• Informal meeting of European Affairs ministers