The Italian government is satisfied with new funding promised by Brussels to European farmers and is signaling that it may cast its decisive vote in favor of the EU’s huge trade deal with the Latin American Mercosur bloc. Ahead of Friday’s vote by EU member countries, Foreign Minister Antonio Tajani said Rome was happy with the European Commission’s efforts to make the deal more palatable. Agriculture Minister Francesco Lollobrigida also said the accord represented an opportunity — especially for food exporters. “Italy has never changed its position: We have always supported the conclusion of the agreement,” Tajani said on Wednesday evening. Yet they stopped short of saying outright that Italy would vote in favor of the deal. Instead, within sight of the finish line, Rome is pressing to tighten additional safeguards to shield the EU farm market from being destabilized by any potential influx of South American produce. Rome’s endorsement of the accord, which has been a quarter century in the making and would create a free-trade zone spanning more than 700 million people, is crucial. A qualified majority of 15 of the EU’s 27 countries representing 65 percent of the bloc’s population is needed. Italy, with its large population, effectively holds the casting vote. France and Poland are still holding out against a pro-Mercosur majority led by Germany — but they lack the numbers to stall the deal. If it goes through, Commission President Ursula von der Leyen could fly to Paraguay to sign the accord as soon as next week. The bloc’s other members are Brazil, Argentina and Uruguay. ‘AN EXCELLENT OPPORTUNITY’ Italy praised a raft of additional measures proposed by the Commission — including farm market safeguards and fresh budget promises on agriculture funding — as “the most comprehensive system of protections ever included in a free trade agreement signed by the EU.” Tajani, who as deputy prime minister oversees trade policy, has long taken a pro-Mercosur position. He said the deal would help the EU diversify its trade relationships and boost “the strategic autonomy and economic sovereignty of Italy and our continent.” Even Lollobrigida, who has sympathized in the past with farmers’ concerns on the deal, is striking a more positive tone. At a meeting hosted by the Commission in Brussels on Wednesday, Lollobrigida described Mercosur as “an excellent opportunity.” The minister, who is close to Prime Minister Giorgia Meloni and is from her Brothers of Italy party, also said its provisions on so-called geographical indications would help Italy promote its world-famous delicacies in South America. It would mean no more ‘Parmesão,’” he said, referring to Italian-sounding knockoffs of the famed hard cheese. ONE MORE THING … Lollobrigida said Italy could back the deal if the farm market safeguards are tightened. The EU institutions agreed in December to require the Commission to investigate surges in imports of beef or poultry from Mercosur if volumes rise by 8 percent from the average, or if those imports undercut comparable EU products by a similar margin. Even Francesco Lollobrigida, who has sympathized in the past with farmers’ concerns on the deal, is striking a more positive tone. | Fabio Cimaglia/EPA “We want to go from 8 percent to 5 percent. And we believe that the conditions are there to also reach this goal,” Lollobrigida told Italian daily IlSole24Ore in an interview on Thursday. Meloni pulled the emergency brake at a pre-Christmas EU summit, forcing the Commission to delay the final vote on the deal while it worked on ways to address her concerns around EU farm funding. In response Von der Leyen proposed this week to offer earlier access to up to €45 billion in agricultural funding under the bloc’s next long-term budget. Giorgio Leali reported from Paris and Gerardo Fortuna from Brussels.

PARIS — Parisian voters will in March choose a new mayor for the first time in 12 years after incumbent Anne Hidalgo decided last year against running for reelection. Her successor will become one of France’s most recognizable politicians both at home and abroad, governing a city that, with more than 2 million people, is more populous than several EU countries. Jacques Chirac used it as a springboard to the presidency. The timing of the contest — a year before France’s next presidential election — raises the stakes still further. Though Paris is not a bellwether for national politics — the far-right National Rally, for example, is nowhere near as strong in the capital as elsewehere — what happens in the capital can still reverberate nationwide. Parisian politics and the city’s transformation attract nationwide attention in a country which is still highly centralized — and voters across the country observe the capital closely, be it with disdain or fascination. It’s also not a winner-take-all race. If a candidate’s list obtains more than 10 percent of the vote in the first round, they will advance to the runoff and be guaranteed representation on the city council. Here are the main candidates running to replace Hidalgo: ON THE LEFT EMMANUEL GRÉGOIRE Emmanuel Grégoire wants to become Paris’ third Socialist Party mayor in a row. He’s backed by the outgoing administration — but not the mayor herself, who has not forgiven the 48-year-old for having ditched his former job as her deputy to run for parliament last summer in a bid to boost his name recognition. HIS STRENGTHS: Grégoire is a consensual figure who has managed, for the first time ever, to get two key left-wing parties, the Greens and the Communists, to form a first-round alliance and not run their own candidates. That broad backing is expected to help him finish first in the opening round of voting. Emmanuel Grégoire. | Thomas Samson/AFP via Getty Images His falling-out with Hidalgo could also turn to his advantage given her unpopularity. Though Hidalgo will undoubtedly be remembered for her work turning Paris into a green, pedestrian-friendly “15 minute” city, recent polling shows Parisians are divided over her legacy. It’s a tough mission, but Grégoire could theoretically campaign on the outgoing administration’s most successful policies while simultaneously distancing himself from Hidalgo herself. ACHILLES’ HEEL: Grégoire can seem like a herbivorous fish in a shark tank. He hasn’t appeared as telegenic or media savvy as his rivals. Even his former boss Hidalgo accused him of being unable to take the heat in trying times, a key trait when applying for one of the most exposed jobs in French politics. Polling at: 32 percent Odds of winning: SOPHIA CHIKIROU Sophia Chikirou, a 46-year-old France Unbowed lawmaker representing a district in eastern Paris, hopes to outflank Grégoire from further to the left. HER STRENGTHS: A skilled political operative and communications expert, Chikirou is one of the brains behind left-wing populist Jean-Luc Mélenchon’s last two presidential runs, both of which ended with the hard left trouncing its mainstream rival — Grégoire’s Socialist Party. Sophia Chikirou. | Joel Saget/AFP via Getty Images She’ll try to conjure up that magic again in the French capital, where she is likely to focus her campaign on socially mixed areas near the city’s outer boundaries that younger voters, working-class households and descendants of immigrants typically call home. France Unbowed often performs well with all those demographics. ACHILLES’ HEEL: Chikirou is a magnet for controversy. In 2023, the investigative news program Cash Investigation revealed Chikirou had used a homophobic slur to refer to employees she was feuding with during a brief stint as head of a left-wing media operation. She also remains under formal investigation over suspicions that she overbilled Mélenchon — who is also her romantic partner — during his 2017 presidential run for communications services. Her opponents on both the left and right have also criticized her for what they consider rose-tinted views of the Chinese regime. Chikirou has denied any wrongdoing in relation to the overbilling accusations. She has not commented on the homophobic slur attributed to her and seldom accepts interviews, but her allies have brushed it off as humor, or a private conversation. Polling at: 13 percent Odds of winning: ON THE RIGHT RACHIDA DATI Culture Minister Rachida Dati is mounting her third bid for the Paris mayorship. This looks to be her best shot. HER STRENGTHS: Dati is a household name in France after two decades in politics. Culture Minister Rachida Dati. | Julien de Rosa/AFP via Getty Images She is best known for her combative persona and her feuds with the outgoing mayor as head of the local center-right opposition. She is the mayor of Paris’ 7th arrondissement (most districts in Paris have their own mayors, who handle neighborhood affairs and sit in the city council). It’s a well-off part of the capital along the Left Bank of the Seine that includes the Eiffel Tower. Since launching her campaign, Dati has tried to drum up support with social media clips similar to those that propelled Zohran Mamdani from an unknown assemblyman to mayor of New York. Hers have, unsurprisingly, a right-wing spin. She’s been seen ambushing migrants, illicit drug users and contraband sellers in grittier parts of Paris, racking up millions of views in the process. ACHILLES’ HEEL: Dati is a polarizing figure and tends to make enemies. Despite being a member of the conservative Les Républicains, Dati bagged a cabinet position in early 2024, braving the fury of her allies as she attempted to secure support from the presidential orbit for her mayoral run. But the largest party supporting President Emmanuel Macron, Renaissance, has instead chosen to back one of Dati’s center-right competitors. The party’s leader, Gabriel Attal, was prime minister when Dati was first appointed culture minister, and a clash between the two reportedly ended with Dati threatening to turn her boss’s dog into a kebab. (She later clarified that she meant it jokingly.) If she does win, she’ll be commuting from City Hall to the courthouse a few times a week in September, when she faces trial on corruption charges. Dati is accused of having taken funds from French automaker Renault to work as a consultant, while actually lobbying on behalf of the company thanks to her role as an MEP. Dati is being probed in other criminal affairs as well, including accusations that she failed to declare a massive jewelry collection. She has repeatedly professed her innocence in all of the cases. Polling at: 27 percent Odds of winning: PIERRE-YVES BOURNAZEL After dropping Dati, Renaissance decided to back a long-time Parisian center-right councilman: Pierre-Yves Bournazel. HIS STRENGTHS: Bournazel is a good fit for centrists and moderate conservatives who don’t have time for drama. He landed on the city council aged 31 in 2008, and — like Dati — has been dreaming of claiming the top job at city hall for over a decade. His low profile and exclusive focus on Parisian politics could also make it easier for voters from other political allegiances to consider backing him. Pierre-Yves Bournazel. | Bastien Ohier/Hans Lucas/AFP via Getty Images ACHILLES’ HEEL: Bourna-who? The Ipsos poll cited in this story showed more than half of Parisians said they “did not know [Bournazel] at all.” Limited name recognition has led to doubts about his ability to win, even within his own camp. Although Bournazel earned support from Macron’s Renaissance party, several high-level Parisian party figures, such as Europe Minister Benjamin Haddad, have stuck with the conservative Dati instead. Macron himself appears unwilling to back his party’s choice, in part due to Bournazel being a member of Horizons, the party of former Prime Minister Édouard Philippe — who turned full Brutus and publicly called on the president to step down last fall. “I don’t see myself putting up posters for someone whose party has asked the president to resign,” said one of Macron’s top aides, granted anonymity as is standard professional practice. Polling at: 14 percent Odds of winning: ON THE FAR RIGHT THIERRY MARIANI Thierry Mariani, one of the first members of the conservative Les Républicains to cross the Rubicon to the far right, will represent the far right National Rally in the race to lead Paris. Though the party of the Le Pen family is currently France’s most popular political movement, it has struggled in the French capital for decades. Thierry Mariani. | Bertrand Guay/AFP via Getty Images HIS STRENGTHS: The bar is low for Mariani, as his party currently holds no seats on the city council. Mariani should manage to rack up some votes among lower-income households in Parisian social housing complexes while also testing how palatable his party has become to wealthier voters before the next presidential race. ACHILLES’ HEEL: Mariani has links to authoritarian leaders that Parisians won’t like. In 2014, he was part of a small group of French politicians who visited then-President of Syria Bashar al-Assad. He has also met Russia’s Vladimir Putin and traveled to Crimea to serve as a so-called observer in elections and referendums held in the Ukrainian region annexed by Russia — trips that earned him a reprimand from the European Parliament. Polling at: 7 percent Odds of winning: SARAH KNAFO There’s another candidate looking to win over anti-migration voters in Paris: Sarah Knafo, the millennial MEP who led far-right pundit-turned-politician Éric Zemmour’s disappointing 2022 presidential campaign. Knafo has not yet confirmed her run but has said on several occasions that it is under consideration. HER STRENGTHS: Though Zemmour only racked up around 7 percent of the vote when running for president, he fared better than expected in some of Paris’ most privileged districts. The firebrand is best known for popularizing the “great replacement” conspiracy theory in France — that white populations are being deliberately replaced by non-white. She appeals to hardline libertarian conservatives whose position on immigration aligns with the far right but who are alienated by the National Rally’s protectionism and its support for the French welfare state. Sarah Knafo. | Bastien Ohier/Hans Lucas/AFP via Getty Images Knafo, who combines calls for small government with a complete crackdown on immigration, could stand a chance of finishing ahead of the National Rally in Paris. That would then boost her profile ahead of a potential presidential bid. If she reaches the 10 percent threshold, she’d be able to earn her party seats on the city council and more sway in French politics at large. ACHILLES’ HEEL: Besides most of Paris not aligning with her politics? Knafo describes herself as being “at an equal distance” from the conservative Les Républicains and the far-right National Rally. That positioning risks squeezing her between the two. Polling at: 7 percent Odds of winning: EDITOR’S NOTE: Poll figures are taken from an Ipsos survey of 849 Parisians released on Dec. 12.

The EU will on Thursday unveil plans to supercharge its finance industry, tearing up swathes of rules in a bid to take on Wall Street. The package, which is massive in scope and ambition, would amend at least 10 financial laws to crack down on protectionism and unclog the EU’s financial plumbing. But Brussels’ ambitions to create a U.S.-style financial market will reopen political wounds, especially its plan to create a powerful EU watchdog for financial markets. Despite the bloc’s urgent need for private investment, progress could be bogged down by political divisions over the strategy. “If we’re stuck in a never-ending discussion about how to organize supervision … that will not take us closer to our objective,” Swedish Minister for Financial Markets Niklas Wykman said. The Commission’s overarching goal is to remove barriers to investment in the bloc, allowing more money to flow to struggling businesses so the EU can better keep up with economic powerhouses like the U.S. and China. With national budgets under strain from a bruising pandemic and years of inflation, Brussels is hoping to unlock €11 trillion in cash savings held by EU citizens in their bank accounts to breathe life into the economy. It plans to do that by breaking down technical barriers and busting protectionism between the EU’s 27 national money markets, as well as by changing rules that create national barriers to finance flows and by creating a powerful EU watchdog for financial markets. The EU’s finance chief, Maria Luís Albuquerque, who has led work on the revamp, told POLITICO in an interview: “It’s going to be a difficult discussion, of course, but these are the ones worth having, right?” | Dursun Aydemir/Anadolu via Getty Images Some capitals, though, view the proposal as a power grab and are determined to keep oversight of financial markets at the national level. And there are other tweaks in the package that will dredge up painful recent debates over issues like crypto rules or trading data. Countries are already warning that the Commission should keep its nose out of their business. Sweden, the EU’s best-in-class country for financial markets, has warned the EU executive not to interfere with any rules but instead to focus on boosting the appetite of EU citizens to invest in products like stocks and bonds, rather than parking their cash in savings accounts. Supervision is “not the problem and it’s not the solution to the problem,” Wykman told POLITICO. Among other ideas the Commission was mulling ahead of the official publication — according to documents seen by POLITICO — are a stronger EU-wide public ‘ticker tape’ of trading data, an expanded pilot program for decentralized finance to include all products and crypto firms, and a reduction in paperwork to make it easier to sell investment funds across the EU. The plans are sure to please some industry players, like stock exchanges or central securities-depositary groups that operate in multiple EU countries. But they will also inevitably be opposed by others, such as asset managers who are reluctant to be subject to increased EU oversight, or stock exchanges that don’t want to see their pricey trading data services undercut by a stronger public EU ticker tape. The technical shifts, plus the idea of an EU-wide watchdog, are ambitious but are also reminders of how limited the Commission’s powers are compared those deployed by EU countries at the national level. The Commission can’t make game-changing reforms in areas like national pensions, taxation or insolvency law for businesses, all of which are major obstacles to a single money market. Nor will many national governments spend the political capital needed to make domestic reforms for the sake of the EU economy. Nonetheless, the Commission is sticking to its guns. The EU’s finance chief, Maria Luís Albuquerque, who has led work on the revamp, told POLITICO in an interview: “It’s going to be a difficult discussion, of course, but these are the ones worth having, right?”

Opponents of President Donald Trump’s “Liberation Day” tariffs are finally getting their day in the U.S. Supreme Court. And while the justices may not rule for some time, their lines of questioning could offer hints about which way they are leaning in the blockbuster case. On Wednesday, the high court will hear from the plaintiffs — a dozen Democratic-run states and two sets of private companies — and the Trump administration. Each side will have 40 minutes to make their arguments and then get peppered with questions from the nine justices. The court then has until the end of its term next July to issue a ruling, although some of the lawyers who brought the initial cases hope it will move faster given the real-world impact the decision will have. “It’s very reasonable to expect that this will be decided before the end of the year, if not much, much more before that,” said Jeffrey Schwab, senior counsel at the Liberty Justice Center, a constitutional rights law firm representing companies in the case.  Advertisement Three federal courts have ruled against Trump’s use of a 50-year-old emergency law to impose broad “reciprocal” duties that he then deployed to strike trade deals with the EU, Japan and other partners. The case does not address sectoral tariffs on products like steel, aluminum or autos, which have also been part of negotiations, but were imposed under a different legal authority that is not in dispute. If the Supreme Court rules that the tariffs Trump announced in April are illegal, will those deals fall apart? We analyze the risks: -------------------------------------------------------------------------------- United States European Union United Kingdom China Canada Mexico -------------------------------------------------------------------------------- UNITED STATES Risk assessment: Many legal experts think there is a strong chance the Supreme Court will strike down the duties that Trump imposed under the International Emergency Economic Powers Act (IEEPA), a 1977 sanctions law that empowers Trump to “regulate” imports but does not specifically authorize tariffs. Not all agree, arguing the conservative-led court is likely to back the Trump administration’s view that the president has broad authority to conduct foreign affairs and that imperative  outweighs any concerns about executive branch overreach that the court has expressed in previous cases. Coping strategy: In the worst-case scenario for the administration, the Supreme Court would strike down all the duties and order it to repay hundreds of billions of dollars in duties paid by companies and individuals.  But even in that scenario, Trump may be able to use other authorities to recreate the tariffs, including Section 122 of the 1974 Trade Act. That provision could allow the president to impose a 15 percent global import “surcharge” for up to 150 days, according to the Cato Institute, a libertarian think tank. Trump would have to get congressional approval to keep any Section 122 tariffs in place for longer — a tall order even in a Republican-led Congress. However, he might be able to use the provision as a stopgap measure while he explores other options.  Those include Section 301 of the 1974 Trade Act, which he used in his first term to impose extensive tariffs on Chinese goods and recently deployed against Brazil. Unlike IEEPA, which Trump believes merely allows him to declare an international emergency to impose tariffs, Section 301 requires a formal investigation into whether the United States has been harmed by an unfair foreign trade practice.  However, Trump could also just use those investigations — and the implied threat of tariffs — to pressure trading partners like the EU into reaffirming the trade deals they have already struck with him.  Trump could also launch additional sectoral investigations under Section 232 of the 1962 Trade Expansion Act, a provision that allows the president to restrict imports determined to pose a threat to national security. He has employed that measure in his first and second term to impose duties on steel, aluminum, autos, auto parts, copper, lumber, furniture and heavy trucks. In one variation, he’s used an ongoing investigation into pharmaceutical imports to pressure companies to invest more in the United States and to slash drug prices. He has also used the threat of semiconductor tariffs to prod countries and companies into concessions, without yet imposing any duties. The Commerce Department has other ongoing Section 232 investigations into processed critical minerals, aircraft and jet engines, polysilicon, unmanned aircraft systems, wind turbines, robotics and industrial machinery, and medical supplies. And, as Trump’s lumber and furniture duties demonstrate, the administration’s expansive definition of national security provides it with broad leeway to open new investigations into a variety of sectors. By Doug Palmer Back to top -------------------------------------------------------------------------------- EUROPEAN UNION Risk assessment: The European Union isn’t counting on the Supreme Court to save it from Trump’s 15 percent baseline tariff — knowing full well that if U.S. tariffs don’t come through the front door, they’ll come through the window. “Even a condemnation or a ruling by the Supreme Court that these reciprocal tariffs are illegal does not automatically mean that they fall,” the EU’s top trade official, Sabine Weyand, told European lawmakers recently. “There are other legal bases available.” Trump invoked IEEPA to impose the baseline tariff on the 27-nation European bloc. But Brussels is more worried about sectoral tariffs that Trump has imposed on pharmaceuticals, cars and steel using other legal avenues — chiefly Section 232 investigations — that aren’t the subject of the case before the Supreme Court. Advertisement Coping strategy: Brussels is in full damage-control mode, trying not to stir the pot too much with Washington and focusing on implementing the deal struck by European Commission President Ursula von der Leyen at Trump’s Turnberry golf resort in Scotland in July — and baked into a bare-bones joint statement the following month.  Crucially, the EU asserts that it has locked in an “all-inclusive” tariff of 15 percent on most exports — so even if the Supreme Court throws out Trump’s universal tariffs it would argue that the cap should still apply. “Even if all IEEPA tariffs are eliminated, the EU would have an interest in keeping the deal,” Ignacio García Bercero, who used to be the Commission’s point person for its trade talks with the U.S., told POLITICO. The Commission is also still in negotiations with the Trump administration to secure further tariff exemptions for sensitive sectors such as wines and spirits.  The European Parliament, which will need to approve the Turnberry accord, is taking a more hawkish line over what many lawmakers have criticized as the one-sided trade deal with the U.S.: It wants to add a “sunset” clause that would effectively limit the EU’s trade concessions to Trump’s term in office. EU countries have given that idea the thumbs down, however, saying deals that have been agreed must be respected. The EU has invited Commerce Secretary Howard Lutnick to a meeting of its trade ministers in Brussels on Nov. 24. The focus there will be on reassuring him that the legislation to implement the trade deal will pass, and on fending off U.S. charges that EU business regulation is discriminatory. By Camille Gijs Back to top -------------------------------------------------------------------------------- UNITED KINGDOM Risk assessment: Should the Supreme Court strike down Donald Trump’s universal tariffs, Britain won’t be off the hook. London may have secured a favorable, 10 percent baseline rate with Washington back in May — but that only goes so far.   That protection does not extend to Trump’s Section 232 steel and auto levies, which remain in place. Under the current deal, Britain gets preferential tariffs on its car exports, as well as a 50 percent reduction to the global steel tariff rate.  If Britain tried to renegotiate its baseline tariffs, the U.S. could quickly retaliate by withdrawing those preferential deals, and take a harder line in ongoing negotiations covering pharma and whisky tariffs. Coping strategy: The U.K. is pressing ahead with its negotiations with the Trump administration on other parts of the deal — despite the ongoing court case. British officials fly out to D.C. in mid-November to push forward talks, shortly before Trade Representative Jamieson Greer is due in London on Nov. 24. “I don’t think the U.K. or others would attempt to renegotiate in the first instance — we might even see some public statements saying we plan to honour the deal,” said Sam Lowe, British trade expert and partner at consultancy firm Flint Global. “There’s too much risk in trying to reopen it in the first instance, given it could antagonise Trump.” Meanwhile the U.K. is seeking to strengthen its trade ties with other nations. It struck a free trade agreement with India over summer, is renegotiating aspects of its trading relationship with the European Union and hopes to close a trade deal with a six-nation Gulf economic bloc including Saudi Arabia and the United Arab Emirates in the coming weeks. The U.K. is expected to maintain its current deal with the U.S., even if legal challenges were to weaken Trump’s wider tariff regime. By Caroline Hug Back to top -------------------------------------------------------------------------------- CHINA Risk assessment: Chinese leader Xi Jinping exited his meeting with Trump in South Korea last week with a U.S. commitment to cut in half the 20 percent “emergency” tariff imposed in March to punish Beijing for its role in the U.S. opioid epidemic. A possible ruling by the Supreme Court that overturns the residual “emergency” tariffs on Chinese imports — the remainder of the fentanyl tariff and the 10 percent “baseline” levy added in April — would leave Beijing with an average 25 percent tariff rate. The judges will test the administration’s position that its IEEPA tariffs are legally sound because they constitute a justified regulation of imports. But a blanket ruling on the levies on Chinese imports isn’t guaranteed. “The Supreme Court is likely to make a binary ruling — the court might decide the trade deficit tariffs are illegal, but the fentanyl tariffs are lawful,” said Peter Harrell, former senior director for international economics in the Joe Biden administration. The Chinese embassy declined to comment on how Beijing might respond to a SCOTUS ruling in China’s favor. But it would mark a symbolic victory for the Chinese government whose Foreign Minister Wang Yi has described them as an expression of “extreme egoism.”    Coping strategy: Celebration in Beijing about a possible revocation of any of these tariffs may be short-lived. That’s because Trump can wield multiple other trade weapons even if the Supreme Court deems the tariffs unlawful. His administration signaled that it’s priming potential replacements for the IEEPA tariffs with the Office of the U.S. Trade Representative’s announcement last week of Section 301 probes of Beijing’s adherence to the U.S.-China Phase One trade deal in Trump’s first term. It is also undertaking Section 232 probes — geared to determine national security threats — of Chinese-dominated imports including pharmaceuticals, critical minerals and wind turbines. “There’s ample opportunity for the Trump administration to use other legal instruments in the event that the IEEPA tariffs get struck down,” said Emily Kilcrease, a former deputy assistant U.S. trade representative during Trump’s first term and under Biden. The 301 investigation into the Phase One deal is already active, and “will allow them to be fairly quick in responding in the event that the Supreme Court rules against the administration,” Kilcrease said at a Center for a New American Security briefing. By Phelim Kine Back to top -------------------------------------------------------------------------------- CANADA Risk assessment: It’s a bit of a lose-lose situation for Canada.  Trump pre-emptively blamed a Canadian provincial government for weaponizing Ronald Reagan in an ad to influence the SCOTUS ruling. The 60-second spot launched on U.S. networks on Oct. 16 to bring an anti-trade war message to Republican districts rather than to nine Supreme Court justices. It riled Trump enough that he ended trade talks eight days later. Then he vowed to increase tariff levels by 10 percent in retribution. If the court sides with Trump, it will justify an impulse to use IEEPA to raise rates higher without a need for findings or an investigation. And if the court rules against the president — Ottawa will have to prepare for more of Trump’s fury over the ad. The U.S. increased the IEEPA tariff rate on Canada to 35 percent from 25 percent in July, citing a failure to crack down on fentanyl trafficking across the northern border. This 35-percent rate excludes the promised 10-percent retributive increase — an executive order hasn’t been released. It’s unclear which legal authority Trump will use if his stated reasoning is to punish Canada over an ad about Reagan’s warning about protectionism.  Advertisement Prime Minister Mark Carney has called the IEEPA tariffs “unlawful and unjustified.” And he’s been able to play down the threat, for now, by reminding Canadians that these “fentanyl tariffs” have a carve-out for goods covered under the United States-Mexico-Canada Agreement (USMCA). Carney regularly says 85 percent of Canadian exports enter the U.S. tariff free. Section 232 tariffs on industry have hit the economy harder than the IEEPA tariffs. Coping strategy: Canada is frantically pursuing trade diversification coupled with a high-level charm offensive while its trade negotiators try to limit the scope of the upcoming review of the USMCA to minimize U.S. tariff exposure. “Our priorities are to keep the review as targeted as possible, to seek a prompt renewal of the agreement, while securing preferential market access and a stable and predictable trading environment for Canadian businesses and investors,” Canadian Ambassador to the U.S. Kirsten Hillman recently told a parliamentary committee. Carney has, meanwhile, apologized to Trump for the Reagan ad. By Zi-Ann Lum Back to top -------------------------------------------------------------------------------- MEXICO Risk assessment: Trump has hit Mexico, the largest U.S. trading partner, with multiple tariffs since taking office. Those include a 25 percent duty imposed under IEEPA to pressure the country to do more to stop fentanyl and precursor chemicals — as well as illegal immigrants — from entering the United States.  Trump softened the blow by excluding goods that comply with terms of the U.S.-Mexico-Canada Agreement from the new IEEPA duties. That has encouraged more and more companies to fill out paperwork to claim the exemption.  About 90 percent of Mexican goods entering the U.S. now have the necessary USMCA documentation, compared to around 60 percent last year, said Diego Marroquín, a fellow in the Americas program at the Center for Strategic and International Studies. Still, U.S. customs officials report collecting $5.7 billion in IEEPA duties on Mexican goods between Mar. 4 and Sep. 23, according to the most recent data available. Trump also has threatened to raise the IEEPA tariff on Mexico to 30 percent, but reportedly recently agreed to delay that move for several more weeks to allow time for talks. Coping strategy: President Claudia Sheinbaum has stayed on Trump’s good side by declining to retaliate and working with the U.S. on fentanyl and illegal immigration concerns. She has kept that forbearance while Trump has piled new tariffs on Mexico’s exports of autos, auto parts and certain other products using Section 232. Mexico’s ultimate goal is to maintain the preferential access it enjoys to the U.S. market under the USMCA, which is up for review next year, when countries have to say if they want to continue the pact past July 1, 2036, its current expiration date.  Sheinbaum told reporters on Oct. 27 that she hopes to resolve U.S. concerns over 54 Mexican non-tariff trade barriers in coming weeks. While a return to tariff-free trade with the U.S. seems unlikely while Trump is in office, Mexico hopes to be treated better than most other trading partners, or at least no worse. That drama will play out in the first half of 2026. By Doug Palmer Back to top -------------------------------------------------------------------------------- Doug Palmer and Phelim Kine reported from Washington, Camille Gijs from Brussels, Caroline Hug from London and Zi-Ann Lum from Ottawa. Advertisement

The European Union is “struggling” to respond to the changing world order, former Italian Prime Minister Mario Draghi said late Friday, promoting “pragmatic federalism” as a way to overcome the bloc’s difficulties. “Almost all the principles on which the Union was founded are under strain,” Draghi said in a speech in Oviedo, Spain, after receiving the Princess of Asturias Award for International Cooperation. “We built our prosperity on openness and multilateralism, but now we are faced with protectionism and unilateral action” and the “return of hard military power,” he continued, arguing that the EU as it currently works is not equipped to address these challenges. The problem, Draghi said, is that “our governance has not changed for many years” and the European structure that exists today “simply cannot meet such demands.” To overcome the economic, social and security challenges facing the bloc, the EU urgently needs to reform itself and change its treaties, argued the former president of the European Central Bank and author of a landmark report on the EU’s competitiveness in 2024. “A new pragmatic federalism is the only viable path,” Draghi stressed. Such federalism would be “built through coalitions of willing people around shared strategic interests, recognizing that the diverse strengths that exist in Europe do not require all countries to advance at the same pace,” Draghi explained. “All those who wanted to join could do so, while those trying to block progress could no longer hold others back.” Concretely, that would mean a multi-speed Europe. Such coalitions could support the emergence of European champions in industrial sectors such as semiconductors or network infrastructure, cutting energy costs and pulling innovation efforts across the bloc, according to Draghi. But this federalist leap would require national governments to give up their veto power, something that has historically drawn resistance from smaller EU member countries which fear being sidelined by their larger counterparts. It’s not the first time Draghi has advocated for a more federal Europe. He made a similar push in 2022 while prime minister of Italy, calling on his EU colleagues to embrace “pragmatic federalism” and to put an end to national vetoes in order to speed up the bloc’s decision-making process.

BRUSSELS — Call it a digital love triangle. When EU leaders back a “sovereign digital transition” at a summit in Brussels this Thursday, their words will mask a rift between France and Germany over how to deal with America’s overwhelming dominance in technology. The bloc’s founding members have long taken differing approaches to how far the continent should seek to go in detoxing from U.S. giants. In Paris, sovereignty is about backing local champions and breaking reliance on U.S. Big Tech. In Berlin the focus is on staying open and protecting Europe without severing ties with a major German trading partner. The EU leaders’ statement is a typical fudge — it cites the need for Europe to “reinforce its sovereignty” while maintaining “close collaboration with trusted partner countries,” according to a near-final draft obtained by POLITICO ahead of the gathering.    That plays into the hands of incumbent U.S. interests, even as the bloc’s reliance on American tech was again brought into sharp focus Monday when an outage at Amazon cloud servers in Northern Virginia disrupted the morning routines of millions of Europeans.   As France and Germany prepare to host a high-profile summit on digital sovereignty in Berlin next month, the two countries are still seeking common ground — attendees say preparations for the summit have been disorganized and that there is little alignment so far on concrete outcomes. When asked about his expectations for the Nov. 18 gathering, German Digital Minister Karsten Wildberger told POLITICO he wanted “to have an open debate around what is digital sovereignty” and “hopefully … have some great announcements.”  In her first public appearance following her appointment this month, France’s new Digital Minister Anne Le Hénanff, by comparison, promised to keep pushing for solutions that are immune to U.S. interference in cloud computing — a key area of American dominance.   CONTRASTING PLAYBOOKS   “There are indeed different strategic perspectives,” said Martin Merz, the president of SAP Sovereign Cloud. He contrasted France’s “more state-driven approach focusing on national independence and self-sufficiency in key technologies” with Germany’s emphasis on “European cooperation and market-oriented solutions.”  A recent FGS Global survey laid bare the split in public opinion as well. Most French respondents said France “should compete globally on its own to become a tech leader,” while most Germans preferred to “prioritize deeper regional alliances” to “compete together.” The fact that technological sovereignty has even made it onto the agenda of EU leaders follows a recent softening in Berlin, with Chancellor Friedrich Merz becoming increasingly outspoken about the limits of the American partnership while warning against “false nostalgia.” The coalition agreement in Berlin also endorsed the need to build “an interoperable and European-connectable sovereign German stack,” referring to a domestically controlled digital infrastructure ecosystem.  The fact that technological sovereignty has even made it onto the agenda of EU leaders follows a recent softening in Berlin, with Chancellor Friedrich Merz becoming increasingly outspoken about the limits of the American partnership while warning against “false nostalgia.” | Ralf Hirschberger/AFP via Getty Images Yet Germany — which has a huge trade deficit with the U.S — is fundamentally cautious about alienating Washington.   “France has been willing to accept some damage to the transatlantic relationship in order to support French business interests,” said Zach Meyers, director of research at the CERRE think tank in Brussels.   For Germany, by contrast, the two are “very closely tied together, largely because of the importance of the U.S. as an export market,” he said.   Berlin has dragged its feet on phasing out Huawei from mobile networks over fears of Chinese retaliation, against its car industry in particular.   The European Commission itself is walking a similar tightrope — dealing with U.S. threats against EU flagship laws that allegedly target American firms, while fielding growing calls to unapologetically back homegrown tech. STUCK ON DEFINITION  “Sovereignty is not a clearly defined term as it relates to technology,” said Dave Michels, a cloud computing law researcher at Queen Mary University of London.   He categorized it into two broad interpretations: technical sovereignty, or keeping data safe from foreign snooping and control, and political sovereignty, which focuses on strategic autonomy and economic security, i.e safeguarding domestic industries and supply chains.  “Those things can align, and I do think they are converging around this idea that we need to support European alternatives, but they don’t necessarily overlap completely. That’s where you can see some tensions,” Michels said.  Leaders will say in their joint statement that “it is crucial to advance Europe’s digital transformation, reinforce its sovereignty and strengthen its own open digital ecosystem.” “We don’t really have a shared vocabulary to define what digital sovereignty is. But we do have a shared understanding of what it means not to have digital sovereignty,” said Yann Lechelle, CEO of French AI company Probabl. Berlin isn’t the only capital trying to convince Europe to ensure its digital sovereignty remains open to U.S. interests.   Austria, too, wants to take “a leading role” in nailing down that tone, State Secretary Alexandre Pröll previously told POLITICO. The country has been on a mission to agree a “common charter” emphasizing that sovereignty should “not be misinterpreted as protectionist independence,” according to a draft reported by POLITICO. That “will create a clear political roadmap for a digital Europe that acts independently while remaining open to trustworthy partners,” Pröll said.   Next month’s Berlin gathering will be crucial in setting a direction. French President Emmanuel Macron and Merz are both expected to attend. “The summit is intended to send a strong signal that Europe is aware of the challenges and is actively advancing digital sovereignty,” a spokesperson for the German digital ministry said in a statement, adding that “this is not about autarky but about strengthening its own capabilities and potential.” “One summit will not be enough,” said Johannes Schätzl, a Social Democrat member of the German Bundestag. “But if there will be an agreement saying that we want to take the path toward greater digital sovereignty together, that alone would already be a very important signal.” Mathieu Pollet reported from Brussels, Emile Marzolf reported from Paris and Laura Hülsemann and Frida Preuß reported from Berlin.

Kristen Hopewell is a professor and Canada research chair in global policy at the University of British Columbia. She is the author of “Clash of Powers” and “Breaking the WTO.” With U.S. President Donald Trump threatening to jack up tariffs to massive heights starting July 9 — including 50 percent tariffs on nearly all goods from the EU — the global economy hangs on a cliff edge. Last week, the bloc floated the idea of creating an alternative to the World Trade Organization (WTO), cooperating with like-minded countries to maintain the rule of law in trade. But there is a better option: Keep the WTO, but kick out the U.S. Since his reelection, Trump has essentially launched a full-scale assault on the global trading system, terrorizing countries around the world with a seemingly endless barrage of tariffs and threats. The U.S. leader isn’t even pretending to abide by WTO rules anymore. Moreover, his tariffs threaten to send the world back to the 1930s, when the spread of trade protectionism and beggar-thy-neighbor policies — spurred by America’s Smoot-Hawley Tariff Act — exacerbated the Great Depression. Under these circumstances, allowing the U.S. to remain a member makes a mockery of the institution and its principles. And countries committed to preserving a rules-based trading order need to fight back and defend the system, punishing his blatant violation of WTO rules. Today, the U.S. accounts for only about one-tenth of world trade. The global trade regime can survive without it — but only if the rest of the world continues to follow the rules. | Olivier Hoslet/EFE VIA EPA The international legal order governing trade can only be sustained if countries face penalties for noncompliance. But by disabling the WTO Appellate Body, the U.S. has made it impossible to enforce global trade rules. Now, any country that loses a WTO dispute can block the ruling by simply filing an appeal to the defunct body. And by doing this in repeated disputes challenging its WTO-illegal policies, the U.S. has been able to break the rules with impunity. In addition to the substantial harm caused by Trump’s policies, the broader danger here is that rule violation will spread, leading to the collapse of global trade. If his brazen rule-breaking goes unpunished, why should other countries abide by the rules? Today, the U.S. accounts for only about one-tenth of world trade. The global trade regime can survive without it — but only if the rest of the world continues to follow the rules. It won’t, however, survive other countries imitating Trump’s rule-breaking, tariffs and other protectionist measures. This risk of contagion represents a grave threat to global economic security. This is why WTO members must come together in a clear rejection of Trump’s trade aggression and show that it won’t be tolerated. What once would have been inconceivable has now become a necessity: The only way to preserve the rules-based system is to expel or suspend the U.S. The mechanism to do this exists. Although the WTO has no specific procedures for expelling a member, it is possible under Article X, which sets out procedures for amending the WTO agreement. The U.S. could be expelled from the organization by a two-thirds majority vote to alter the agreement. If it refuses to accept the changes, then a three-fourths majority would be required. The U.S. shouldn’t be allowed to continue enjoying the benefits of membership without any responsibility to uphold its obligations. And denying it the rights of WTO membership could finally create the necessary leverage and force Trump to abandon his destructive tariffs. The U.S. president has repeatedly threatened to withdraw from the WTO — it’s time to call his bluff.  The economic harm would be considerable: The U.S. would lose its access to global markets at favorable WTO tariff rates and could be subject to tariffs without limit. It would also lose market access for its services exports and protections for its intellectual property, which are the foundation of America’s contemporary economic success and its dominance in leading high-tech sectors. It would lose the WTO’s protections against trade discrimination too, which would allow other countries to impose export restrictions that could cut off its supply of vital goods. Trump has made the U.S. a rogue state on trade, showing a total disregard for international law — and even the notion that trade should be governed by the rule of law. Casting the U.S. out would make clear its status as an international pariah. It’s true, no country has been expelled from the WTO before. But the magnitude of Trump’s rule violation is entirely without precedent, and thus demands an unprecedented response. Without a functional Appellate Body, there’s now no other way to enforce WTO rules against the U.S. Supporters of the rules-based trading order should come together and seek broad support for an amendment to suspend or revoke the U.S.’s membership. If the U.S. comes to its senses and abandons Trump’s tariffs, showing that it’s willing to abide by the rules, the rest of the world would happily welcome it back to the rules-based trading system with open arms. Until then, the WTO must take steps to counter and contain the disastrous effects of his misguided policies. To combat Trump, we must be prepared to construct a WTO without the U.S.

LONDON — In a world blighted by tariffs and increasing protectionism, U.K. Prime Minister Keir Starmer is starting to realize that teamwork really is the only way to make his free trade dream a reality. “I do think that it’s [a] difficult environment, but there are significant opportunities if we’re agile about it, if we understand the world we’re living in, and get ahead of the curve,” Starmer told businesses in Westminster on Thursday as he set out the U.K.’s first Trade Strategy since Brexit. While underscoring the importance of trade deals with the likes of India and the U.S., Starmer hinted at a more multilateral approach to trade policy. “I think we should also talk to like-minded countries, because they recognize that the world is changing,” he said. “I’ve been talking to the leaders in Japan, in Singapore, in Australia, New Zealand, Canada, about how we, the U.K., can trade in an easier and better way with them and whether we as a group of countries can trade with other countries in an easier and better way.” The countries mentioned are all members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an Asia-Pacific trading bloc which the U.K. joined in December. ASIA-PACIFIC BLOC ‘MORE IMPORTANT THAN EVER’ Starmer’s words were borne out in the government’s new trade strategy, where the U.K. committed to working alongside partners and allies to negotiate and agree an “ambitious agenda for future plurilateral agreements.” It describes the role of groupings such as CPTPP as “more important than ever in the current global context.” “We will use CPTPP as a platform to support the wider multilateral and plurilateral system, and to encourage deeper trading relationships between countries and groupings committed to liberal rules-based trade,” the strategy said. At a recent meeting in Korea, CPTPP members committed to work with the EU and the Association of Southeast Asian Nations — a regional grouping of 10 states in Southeast Asia — to liberalize global trade in light of “significant challenges” facing the international trading environment.   This could include discussions on areas such as tariffs, digital trade, rules of origin, supply chains, customs administration and innovation, the Trade Strategy said, adding that these dialogues could “create a platform for other trade-focused economies to participate, so broadening our network of collaborative partnerships.” In another sign of the U.K.’s commitment to a multilateral trading system, the U.K. announced it would join the World Trade Organization’s Multi-Party Interim Appeal Arbitration Arrangement (MPIA), an alternative system for resolving WTO disputes. The U.K. had previously dragged its heels on signing up to the mechanism. “Joining MPIA sends a clear signal that the U.K. is committed to the principles of free and fair trade and that we will champion progress wherever and whenever necessary,” the strategy said.

BRUSSELS — Donald Trump’s return to the White House is forcing Europe to reckon with a major digital vulnerability: The U.S. holds a kill switch over its internet. As the U.S. administration raises the stakes in a geopolitical poker game that began when Trump started his trade war, Europeans are waking up to the fact that years of over-reliance on a handful of U.S. tech giants have given Washington a winning hand. The fatal vulnerability is Europe’s near-total dependency on U.S. cloud providers. Cloud computing is the lifeblood of the internet, powering everything from the emails we send and videos we stream to industrial data processing and government communications. Just three American behemoths — Amazon, Microsoft, and Google — hold more than two-thirds of the regional market, putting Europe’s online existence in the hands of firms cozying up to the U.S. president to fend off looming regulations and fines. Sovereignty hawks in Europe have long voiced concerns that cloud reliance means U.S. agencies can snoop on sensitive data of Europeans stored on American-owned servers in any location, thanks to U.S. laws.  Now, in a political cycle that has seen the U.S. president flip laws on a dime and the International Criminal Court’s chief prosecutor lose access to his Microsoft email after being sanctioned by Washington (following arrest warrants for top Israeli officials), there are genuine fears the U.S. could weaponize its tech dominance for leverage abroad. “Trump really hates Europe. He thinks the whole purpose of the EU is to ‘screw‘ America,” said Zach Meyers, director of research at the CERRE think tank in Brussels. “The idea that he might order a kill switch or do something else that would severely damage economic interests isn’t quite as implausible as it might have sounded six months ago.” Alexander Windbichler, the CEO of Austrian cloud firm Anexia, said he wished the “IT guys” like him had spoken up earlier about the “unhealthy dependency,” arguing that the European cloud industry has for too long avoided lobbying and politics in favor of focusing on technological competitiveness. Would Trump pull the plug on cloud services in Europe? “I don’t know. But I never expected that the U.S. would be threatening to take Greenland away,” Windbichler said. “It’s crazier than shutting down the cloud.” HOW ‘WHAT IF’ BECAME REALITY Warnings began a couple of months after Trump moved back into the White House.  “It is no longer reasonable to assume that we can totally rely on our American partner. There’s a serious risk that all of our data is used by the U.S. administration or infrastructure [is] made inaccessible by other countries,” Matthias Ecke, a German social-democrat lawmaker in the European Parliament, told an event in March. “The risk of a shutdown is the new paradigm,” the boss of French champion OVHcloud, Benjamin Revcolevschi, told the same event. “Cloud is like a tap of water. What if at some moment the tap is closed?” The technology equivalent of turning off the tap would be cloud companies being ordered by the U.S. administration to stop services in Europe. Cloud computing works by giving businesses virtual access to data storage and processing power, massively widening capabilities thanks to their vast networks of physical data centers around the world.  And while a breakdown in service remains an extreme scenario, U.S. tech giants no longer dismiss it as a possibility. Microsoft in April said the company would add a binding clause to its contracts with European governments to keep them online, and fight any suspension orders in court. While President Brad Smith claimed the risk of the U.S. administration ordering American tech firms to stop operations in the EU was “exceedingly unlikely,” he admitted this was “a real concern of people across Europe.” Microsoft also outlined fresh features this month in a bid to calm European nerves. Amazon announced a new governance structure for its so-called “sovereign offer” in Europe to ensure “independent and continuous operations” and alleviate concerns. The company reportedly prepared staff to address questions from customers about international bans, instructing them to say that “in the theoretical case that such sanctions ever came to pass, [Amazon’s cloud unit] would do everything practically possible to provide continuity of service.” Several experts are asking what power U.S. companies would have to resist the White House. “If that political dimension turns hostile, how credible is it that companies with the best intentions can challenge their president?” Cristina Caffarra, a tech and competition economist and honorary professor at University College London, told POLITICO. The news that the chief prosecutor of the International Criminal Court Karim Khan in May had access to his Microsoft-hosted email cut after U.S. sanctions over the arrest warrant for Israeli Prime Minister Benjamin Netanyahu has further raised concerns. Microsoft declined to comment on its exact involvement leading to Khan’s email disconnection, saying only more generally: “At no point did Microsoft cease or suspend its services to the ICC.” “Naturally, U.S. companies must comply with U.S. law,” Aura Salla, a center-right Finnish lawmaker in the European Parliament and Meta’s former top lobbyist in Brussels, wrote in reaction to the ICC news, adding that “for Europeans, this means we cannot trust the reliability and security of U.S. companies’ operating systems.” Politicians and experts are arguing for a real European technology alternative. “You can feel that you are one executive order away from losing access to critical technology and critical infrastructures,” said Francesca Bria, an innovation professor at University College London. “It’s become clear that Europe must not depend on any external power that holds the ability to pull the plug.” A €300 BILLION BACKUP PLAN The push for Europe to move off the U.S. cloud confronts a stark reality: unwinding American technological dominance won’t be easy, nor cheap. “If you look at the cloud, if you look at artificial intelligence, data centers, unfortunately, there simply aren’t sufficient alternatives to the offerings by the American digital industry,” Germany’s former Finance Minister Jörg Kukies said in April as he urged the bloc to proceed with caution on trade retaliation against Trump. One industrial policy initiative gaining steam as a blueprint for how the bloc might go about rebalancing the scales puts the price tag at €300 billion. Authored by a group of tech experts and economists and supported by the European industry, the so-called “EuroStack” initiative aims to make Europe self-reliant in digital infrastructure all the way through to software.  The movement wants the EU to rally around three goals: “Buy European,” “Sell European,” and “Fund European.” They urge decision-makers to give EU firms priority in public contracts, setting quotas for government purchases and launching a EuroStack fund to back homegrown tech. “There is nothing exceptional in this approach: these industrial policy tools have been widely used in other jurisdictions, including the U.S., for decades — as large public contracts powered the growth of today’s tech giants,” the organizers write. It won’t be that easy, says Meyers from the CERRE think tank. “They are asking a lot of money for this project. Hundreds of billions. The idea that it is going to magically appear is pretty fanciful,” he said. Opponents such as the American trade group the Chamber of Progress argue the costs could soar past €5 trillion. Several European countries and top lawmakers in the European Parliament have already expressed support for the EuroStack initiative, which was explicitly mentioned in the recent coalition deal in Germany.  Yet politicians are also walking a tightrope as they figure out how to balance any moves towards European sovereignty without being accused of protectionism, which could antagonize a U.S. reaction. “No country or region can lead the technological revolution alone,” the EU’s tech sovereignty chief Henna Virkkunen told reporters in Brussels on June 5, presenting a strategy that also acknowledged the bloc “faces the risk of weaponisation of its technological and economic dependencies.” IN A BIND One rulemaking initiative in the works in Brussels could significantly limit Trump’s future influence to generate widespread digital disruption. But the initiative, setting conditions for a new label designed to level up the cybersecurity of cloud solutions used by companies and administrations, has been stuck in limbo for months among EU countries precisely because it’s a sore spot for the U.S. The proposal could include a top-tier certification guaranteeing immunity from foreign laws. It’s divided countries based on how strongly they are willing to pivot away from U.S. tech, and to speak out against the transatlantic relationship. A freedom of information request filed by POLITICO in October revealed multiple communications from the U.S. State Department to the European Commission dating back to September 2023, as Washington lobbied on the draft plans. The Commission’s tech department refused to release the documents, arguing that disclosure “would affect the mutual trust between the EU and the U.S. and thus undermine their relations.”  France has been a vocal advocate for using the label to put European data beyond the reach of extraterritorial laws like the U.S. Cloud Act, de facto sidelining Big Tech. “Geopolitical tensions are forcing us, more than ever, to question the sovereignty of our data, and therefore its hosting,” French Digital Minister Clara Chappaz said. The Netherlands, heavily relying on U.S. tech, remained until recently a key opponent to using the label to shut out American hyperscalers. But the country’s strong Atlanticism has shown signs of shifting amid the recent transatlantic political turmoil. As the European Commission’s first tech sovereignty chief picks up the initiative, the pressure is growing to unapologetically back made-in-Europe tech and to stand its ground as Washington pushes back. “Europe blindly trusted the U.S. to always be there, and always on their side,” said Bria, the University College London professor. “The situation feels very different now.”

Dalibor Rohac is a senior fellow at the American Enterprise Institute in Washington, D.C. As the transatlantic alliance braces for this week’s NATO summit in the Hague, its defenders are caught between a rock and a hard place. On the one hand, anyone can see that relations with Washington are as bad as ever — from U.S. President Donald Trump’s musings about Russia at the hastily shortened G7 summit in Alberta to the vacuous so-called trade deal with the U.K. that still hits the country with 10 percent tariffs. It is increasingly hard for Europeans to find common ground with the Trump administration. But saying it out loud carries the risk of worsening relations and turning it into a self-fulfilling prophecy, much like when France’s President Emmanuel Macron called NATO “braindead” back in 2019. However, to feed false hopes and unrealistic expectations of constructive engagement with the second Trump administration is both dishonest and irresponsible. What the British and the Europeans need is less talk and more action: on defense, on Ukraine, on trade, and other priorities, without either waiting for strategic direction from Washington or agonizing about Trump’s possible reactions. Clarity about facts is a necessary first step. With shrewd diplomacy, the upcoming NATO summit may avoid being a complete embarrassment. But that will not change the fact that as community that shares a common strategic perspective, the alliance may not be braindead yet — but it is certainly on life support. To be fair, due to recent — and ongoing — increases in defense spending by allies, NATO’s joint capabilities are becoming impressive. But what matters for the alliance is the collective willingness to use them. There, U.S. leadership is acutely failing. The planned withdrawals of U.S. troops from Europe will inevitably cast a long shadow on the summit’s proceedings. Worse yet, at a recent congressional hearing, U.S. Secretary of Defense Pete Hegseth struggled to answer a simple question about the U.S. commitment to NATO’s Article 5. Likewise, he failed to rule out planning for a U.S. invasion of Greenland. Even the debate about increasing defense spending to 3.5 or 5 percent has to be read against the background that the United States is unwilling to increase its own defense budget to such levels — quite the contrary. Then, there’s Ukraine. We are past the two-week deadline set by President Trump to assess Russia’s willingness to engage constructively in peace negotiations, to which the Kremlin responded by pounding Ukrainian cities and civilian infrastructure with massive drone and ballistic missile attacks. The “coalition of the willing” appears to be sitting in the sidelines, waiting for Washington to make a move. That’s a mistake. No disinterested observer, after all, can avoid the impression that the administration’s preferred policy is — well — to do nothing. “I’m very disappointed in Russia,” Trump said at a press conference earlier this month, before adding that he was also “disappointed in Ukraine” and appearing to give credit to Vladimir Putin for Russia’s sacrifices in World War II. The same day, June 12, Secretary of State Marco Rubio congratulated Russia on its National Day — a step not taken by a U.S. administration since 2022. Meanwhile, Hegseth assiduously dodged answering the question of whether Russia is the aggressor in the war. The Russian rhetoric indicates the direction of travel is toward normalizing the U.S.-Russian relationship. | Maxim Shipenkov/EFE via EPA The Trump administration might be constrained by the fact that many of the sanctions against Russia are mandated by Congress and thus hard to reverse. The Russian rhetoric indicates the direction of travel is toward normalizing the U.S.-Russian relationship, not toward Senator Lindsey Graham’s punitive bill penalizing countries buying Russian oil with a de-facto trade embargo. All of these facts are unpleasant — but they are part of the reality that the U.K. and Europeans have to deal with. The best way to do so is with stoicism and determination — and with a European version of Teddy Roosevelt’s dictum about being quiet and carrying a big stick. The EU is a $20-trillion economy. The U.K. adds another $4 billion, give or take. With a leadership that understands what is at stake — and it appears that Macron, Germany’s Friedrich Merz, Poland’s Donald Tusk, Italy’s Giorgia Meloni, and Commission President Ursula von der Leyen do, among others, do — it can re-arm itself and bankroll Ukraine to eventual membership in the European bloc. Both the U.K. and the EU should be also pursuing, jointly, an ambitious agenda of trade liberalization, working around America’s arbitrary protectionism rather than trying to accommodate Trump’s every whim. Talk of “special relationship” notwithstanding, Trump’s commitment to protectionism should provide a straightforward impetus for likeminded and geographically close economies to huddle. On all of those fronts, the British and the Europeans need action – and definitely fewer high-stake summits at which Trump tries to épater les bourgeois. The current moment in transatlantic relations shall pass and we will see a day when the United States will be ready to be a constructive partner again, one hopes. Until then, however, both the U.K. and the EU are committing an act of self-harm by letting the parameters of the American political debate frame the conversations on security, Ukraine, and trade that the old continent needs to have.