This story was originally published by Inside Climate News and is reproduced here as part of the Climate Desk collaboration. The US Securities and Exchange Commission issued an unusual warning this week to the country’s largest asset managers and a climate-focused investor group over their roles in a 2021 campaign that replaced board directors at ExxonMobil. The commission published a letter saying it had concluded a probe into the entities, and while it found no evidence of violations, it expressed “serious concerns” about their actions. Investor advocates and some former SEC staff say the letter clearly aims to suppress shareholder advocacy on climate change and pressure large asset managers like BlackRock, State Street, and Vanguard, each of which were named in the letter, to steer clear of the topic entirely. It is only the latest move by the SEC this year to limit investors’ ability to address climate risks and engage with corporate boards more broadly. The Trump administration and Republican officials across the country have spent years clamping down on efforts to press corporations for climate action.  In 2022, Republicans in the U.S. House of Representatives opened an antitrust investigation into some of the same groups, accusing them of acting like a “cartel.” More than a dozen Republican state attorneys general also launched probes. Oil industry campaign contributions have gone overwhelmingly to Republican candidates. Mika Morse, who was a policy counsel on climate risk to former SEC Chair Gary Gensler, said many investors and asset managers view climate change as a significant risk to their portfolios and feel a fiduciary duty to engage with companies on the topic, but may now hesitate to continue that work. > “This is just part of this pressure campaign to ensure that the financial > system doesn’t take climate into account.”  “Investors are feeling really inhibited because of this fear that they will become the target of investigations,” Morse said. “And this type of harassment is really effective, unfortunately.” SEC Enforcement Director David Woodcock, who began that position in May, was an attorney at Exxon during the investors’ campaign, according to his LinkedIn profile. An SEC spokesperson said the investigation began last year and that Woodcock recused himself. The investigation probed the communications of some of the country’s largest asset managers and pension funds—including BlackRock, State Street, Vanguard, the California Public Employees’ Retirement System, and the New York State Common Retirement Fund—with a group called Climate Action 100+, an investor initiative that pushes for climate action by large corporate emitters. The report traced what it called a campaign by Climate Action 100+ beginning in 2019 to change Exxon’s board because of the company’s inaction on global warming. The California and New York pension funds were active in the climate group, and BlackRock and State Street joined the initiative in 2020. By 2021, a small activist investor firm called Engine No. 1 had launched a campaign to replace some of Exxon’s directors. That campaign focused on what the firm said was the company’s poor financial performance—Exxon had been removed from the Dow Jones Industrial Average the previous year as its stock price lagged—rather than inaction on climate change. But the SEC letter said Engine No. 1 had communicated with some Climate Action 100+ members and with Ceres, a sustainable business advocacy group that helps coordinate the climate investor organization. That year, the campaign succeeded in appointing three new members to Exxon’s board, in large part by convincing large asset managers like BlackRock to vote yes.  It was a huge blow to Exxon and came at a low point for the oil industry. Profits had plummeted during the COVID-19 pandemic. Some analysts were predicting peak oil consumption had passed. Major investors lined up behind the notion that climate risks were systemic, and President Joe Biden had won election the prior year after pledging to shift away from fossil fuels. In the following years, the oil industry and its allies in public office and think tanks pushed back forcefully, filing lawsuits, launching investigations, and pushing legislation that targeted opponents in the financial sector, academia and elsewhere.  The Trump administration has incorporated this effort as public policy through the Department of Justice, SEC, and other agencies, siding with the oil industry in numerous lawsuits, for example. The SEC investigation examined whether the asset managers and other members of the climate organization coordinated their votes, which could have triggered onerous reporting requirements under SEC rules meant to give public insight into campaigns by activist investors to influence companies.  > “Climate Action 100+ supports investors as they assess and address the > financial risks that climate poses to the companies they invest in.” Firms like BlackRock are exempt from these reporting requirements even though they hold large stakes in many companies because they are considered passive investors. The SEC letter raised the question of whether the firms should have been required to report more extensively in the case of the Exxon campaign. Experts in securities law say the difference is significant and that a finding of violation could have had serious implications. Ultimately, the commission did not find evidence to support any of these claims but still issued a public report. Jim Moloney, director of the SEC’s Division of Corporation Finance, said the “report reminds asset managers and investors of their responsibilities with respect to shareholder engagement, especially in the context of organized efforts that follow a playbook similar to that of Climate Action 100+.” Shareholder advocates have criticized the SEC report, arguing that it sought to intimidate investors. “What we’ve seen in the ongoing investigations and attacks on climate groups is simply an opinion that shareholders should not be considering climate,” said Danielle Fugere, president and chief counsel of As You Sow, a nonprofit shareholder advocacy group that is part of the Climate Action 100+. “This is just part of this pressure campaign to ensure that the financial system doesn’t take climate into account.”  Andrew Behar, As You Sow’s chief executive, said the campaign to remake Exxon’s board was an attempt to reverse the company’s declining financial performance, and it worked. He pointed to a sustained increase in Exxon’s value that coincided with the addition of new board members. Overall, Behar said, the campaign showed how capitalism is meant to work. Michael Boudett, general counsel at Ceres, said in a statement, “Climate Action 100+ has always operated within US securities law. It supports investors as they assess and address the financial risks that climate poses to the companies they invest in. It is up to every participating Climate Action 100+ investor to make their own decisions, including how they vote their shares.”  He added, “Understanding material risks, including financial risks from climate change, is central to that duty.” Many shareholder advocates have criticized the SEC more broadly under the Trump administration. It is generally supposed to have five commissioners with at least two from each party, but there are currently only two total, and President Donald Trump has not appointed any Democratic commissioners. Last week, the commission issued a rule saying it can reach a quorum with only one commissioner. BlackRock and State Street declined to comment, with a BlackRock spokesperson pointing to the SEC report’s declaration that the investigation “did not develop evidence that BlackRock or State Street agreed to vote proxies in certain manners or shared their proxy voting intentions with investors or others associated with” the Climate Action 100+. Exxon did not respond to a request for comment. As conservatives have targeted BlackRock, its positions have shifted. The asset manager left the Climate Action 100+ in 2024. Behar said that a few years ago, BlackRock voted in favor of nearly half the proposals his organization supported, which cover numerous social and environmental topics. Last year BlackRock backed hardly any. Morse said the SEC has identified all the ways investors try to press companies to manage climate risk and is working to shut down each path, from limiting their ability to file shareholder resolutions to making it harder for investors to meet with companies. “The total picture is pretty stunning,” Morse said.  After the commission proposed rescinding a rule on climate-related disclosures, Morse said she heard from many investors and people at corporations that they disagreed with the proposal but declined to submit comments because they feared retribution.  While she understood their position, she said, “This is such a low point for our democracy, that companies and investors would disagree with a policy but be afraid to comment.”

After two weeks of escalating threats toward Europe, President Donald Trump blinked on Wednesday, backing away from the unthinkable brink of a potential war against a NATO ally during a speech at the World Economic Forum in Davos. Trump’s vow not to use military force to seize Greenland from Denmark eased European fears about a worst-case scenario and prompted a rebound on Wall Street. And his declaration hours later after meeting with NATO’s leader that he may back off of his tariff threat having secured the “framework” of an agreement over Greenland continued a day of backpedaling on one of the most daring gambits of his presidency to date. But his continued heckling of allies as “ungrateful” for not simply giving the U.S. “ownership and title” of what he said was just “a piece of ice” did little to reverse a deepening sentiment among NATO leaders and other longtime allies that they can no longer consider the United States — for 80 years the linchpin of the transatlantic alliance — a reliable ally. “The takeaway for Europe is that standing up to him can work. There is relief, of course, that he’s taking military force off the table, but there is also an awareness that he could reverse himself,” said a European official who attended Trump’s speech and, like others interviewed for this report, was granted anonymity to speak candidly. “Trump’s promises and statements are unreliable but his scorn for Europe is consistent. We will have to continue to show resolve and more independence because we can no longer cling to this illusion that America is still what we thought it was.” Trump’s abrupt about-face after weeks of refusing to take military intervention off the table comes a day after Greenland shock waves sent global markets plunging, wiping out over $1.2 trillion in value on the S&P 500 alone. The president’s policy shift mirrored a similar moment in April, when he quickly reversed sweeping tariffs after a market downfall tied to his policies. If Trump’s refusal to use the military to threaten Greenland and the U.S.’s NATO allies holds, it would represent a win for administration officials such as Treasury Secretary Scott Bessent, who on Tuesday counseled the Davos set not to overreact or escalate the fight with Trump, assuring concerned Europeans that things would work out soon. The threat of force appeared to have the strong backing of deputy chief of staff Stephen Miller, who offered the most forceful articulation of those desires in an interview this month where he claimed that America was the rightful owner of Greenland and insisted the “real world” was one “that is governed by force, that is governed by power.” But Miller aside, most saw the threat of force as an attempt to create leverage for an eventual negotiation. If Trump were to have pursued using military force, there could have been pushback from his closest allies like Secretary of State Marco Rubio and Vice President JD Vance, said a person close to the administration and granted anonymity to describe the private dynamics. “Do some senior administration people talk to their best friends in conservative world and media and basically say, ‘Yeah, I don’t know why we’re doing this?’ Sure, but I think those are all in confidence,” the person said. Increasingly, Europeans have been voicing their growing fears aloud. When Trump arrived in the snowy Swiss Alps Wednesday afternoon for this annual confab of business and political titans, the West remained on edge after the president announced last weekend that he intended to increase tariffs on several European countries that had sent troops to Greenland for military exercises. As they contemplated the fact that an American president was threatening the territorial sovereignty of one ally and turning to economic coercion tactics against others, European leaders strategized openly about retaliating in kind. That posture marked a major shift from Trump’s first year back in office, when European leaders put up a fight but ultimately and largely accepted his terms — NATO begrudgingly agreeing to spend more on defense, taking on all of the financial burden for Ukraine aid and the European Union accepting a 15 percent tariff on all exports to the U.S. — in order to keep the president from breaking with the alliance and abandoning Ukraine. But the president’s brazen challenge to Denmark over Greenland and shocking disregard for Europe’s territorial sovereignty amounted to a disruption that is orders of magnitude more concerning. Demanding that Denmark, a steadfast NATO ally, allow him to purchase Greenland — and, until Wednesday, holding out the prospect of using military force to seize it — threatened to cross a red line for Europe and effectively shatter 80 years of cooperation, upending an alliance structure that America largely built to avoid the very kind of imperialistic conquest Trump suddenly seems fixated on pursuing. “We’ve gone from uncharted territory to outer space,” said Charles Kupchan, the director of European studies at the Council on Foreign Relations and a former adviser to President Barack Obama. “This is not just strange and hard to understand. It borders on the unthinkable, and that’s why you’re seeing a different response from Europe than before Greenland was center stage.” Trump’s social media posts last weekend announcing that he intended to increase tariffs on the European countries that had sent troops to Greenland for training exercises drew harsh public responses from heads of state across Europe and prompted a flurry of private phone calls and even text messages — some of which the president shared on social media — urging him to work with them more constructively to address security in the Arctic. That didn’t stop Trump on Wednesday from continuing to assert an intention to acquire Greenland through negotiations, despite an overwhelming majority of Greenlanders being opposed to living under U.S. control. “Let’s not be too cheerful on him excluding violence, as that was outrageous in the first place,” said a second European official in Davos. “And his narrative on Greenland is BS. It should be called out.” Trump, who met with European leaders to discuss Greenland on Wednesday afternoon, suggested in his remarks that the U.S. acquiring the massive island between the Arctic and North Atlantic was in the best interests of Europe as well as America’s. “It’s the United States alone that can protect this giant, massive land, this giant piece of ice, develop it and make it so that it’s good for Europe and safe for Europe,” he said. “You can say yes, and we will be very appreciative, or you can say no and we will remember,” Trump continued. Those words did not appear to fully allay the growing anxieties of democratic leaders that the world is spinning in a new and frightening direction, away from decades of relative peace and stability and back to a prewar era of global conquest. Canadian Prime Minister Mark Carney, addressing Davos on Tuesday ahead of Trump’s arrival, was emphatic in declaring that there is no going back. “Every day we are reminded that we live in an era of great power rivalry,” Carney said. “That the rules-based order is fading. That the strong do what they can, and the weak suffer what they must.” Calling for democratic nations to take steps to lessen their reliance on the U.S. and their vulnerability to pressure from this White House, Carney urged other leaders to accept a new reality that, in his view, the longstanding postwar order was already gone. “Let me be direct: We are in the midst of a rupture, not a transition.” Trump made it clear on Wednesday that he saw Carney’s remarks, alluding to Canada’s reliance on the U.S. and going as far to suggest that its safety continues to depend on American defense technology. “They should be grateful to us,” he said. “Canada lives because of the United States. Remember that, Mark, next time you make your statement.” The implied threat, in a way, may have underscored the Canadian leader’s point. With persistent threats of higher tariffs from the White House even after Trump backed off his saber rattling over annexing the country, Canada has looked to rebalance its trade relationships with other countries, including China, to reduce its economic dependence on the U.S. In Europe, leaders may be following suit. Just last week, Brussels approved a landmark free trade agreement with the Mercosur bloc of South American countries, a long-sought deal that took on greater urgency in recent months to provide Europe with a bulwark against Trump’s protectionism and coercive economic measures. There is still hope in Europe that Trump will eventually accept something less than U.S. ownership of Greenland, especially after his apparent walkbacks Wednesday on the threats of tariffs and military force. That could include accepting a standing offer from Denmark to boost America’s military presence on the island, not to mention economic cooperation agreements to develop natural resources there as climate change makes mineral deposits more accessible. But European leaders increasingly seem to accept that there are limits to their ability to control Trump — and are looking to hedge their reliance on the U.S. as urgently as possible. Anders Fogh Rasmussen, the former Danish prime minister and secretary general of NATO, wrote this week that it’s time for Europe to shift its posture toward the U.S. from one of close allies to a more self-protective stance defined by a stronger military and reciprocal tariffs. “Mr. Trump, like Vladimir Putin and Xi Jinping, believes in power and power only,” he wrote, likening the U.S. president to the leaders of Russia and China. “Europe must be prepared to play by those same rules.” Trump’s threats against Denmark have obliterated the long-held view about the U.S., that after 80 years of standing up to imperialist conquerors from Adolf Hitler’s Germany to Saddam Hussein’s Iraq, Washington would always be the tip of the spear when it came to enforcing a world order founded on shared democratic ideals. Suddenly, that spear is being turned against its longtime allies. “The jewel in the crown of our power and of our role in the world has always been our alliance system,” said Jeremy Shapiro, a veteran of the State Department under the President Barack Obama administration who is now a fellow at the European Council on Foreign Relations in Washington. Shapiro noted that the U.S. has at times still employed hard power since the end of World War II, especially in its own hemisphere. But overall, American foreign policy has largely been defined by its reliance on soft power, which he said “ is much less expensive, it is much less coercive, it is much more moral and ethical, and it’s more durable.” Returning to the law of the jungle and a world where larger powers gobble up smaller ones, Shapiro continued, will make the U.S. more like Russia and China — the two countries he claims threaten U.S. interests in Greenland — and weaker over the long term. “Moving from our trusted methods to Putin’s methods is worse than a crime,” he said. “It’s an idiocy.”

President Donald Trump backed down from the most extreme “Liberation Day” tariffs after bond traders revolted at the prospect of economic upheaval. Now, his push to coerce Denmark into ceding Greenland has threatened to trigger a similar market rout. Bond yields spiked and stocks sank on Tuesday as investors reckoned with how Trump’s threat to impose new tariffs on Europe could hammer alliances that are critical to the global economy. That reignited fears that the “Sell America” trade that dominated market narratives last spring could reemerge, undercutting Wall Street’s hopes for U.S. assets in 2026. As global leaders and top financial CEOs gathered in Davos for the World Economic Forum, where Trump is scheduled to speak on Wednesday, the blowback from bond traders threatened to undermine the president’s bullish case for both the U.S. economy and its market outlook. “The narrative just won’t go away,” said Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute. Foreign investors flooded back into U.S. assets as tensions eased during the latter half of 2025, but now “they’re hedging because they’re not sure what Trump is going to do with tariffs next.” Trump has historically been highly sensitive to how the bond market responds to his policies, and he regularly cites the stock market’s surge as evidence of how his agenda is working. The latest turmoil has echoes of the volatility that hit global bond markets shortly after he announced eye-popping tariffs last April on dozens of trading partners at a White House press conference. The president later announced a temporary pause on the new import duties after the bond market started “getting a little bit yippy,” in his words. His threat on Saturday to impose more tariffs on Europe sparked a similar response. The Dow Jones Industrial Average fell by more than 870 points on Tuesday. The Nasdaq and S&P 500 both closed down by more than 2 percent — erasing the gains notched through the first three weeks of the year. Yields on the 10-year and 30-year Treasury securities — which are benchmark rates for consumer and corporate lending products — jumped to their highest levels since last September, and the dollar sank. The president warned that he would impose additional 10 percent tariffs on eight European countries that have sought to block his ambitions to acquire Greenland, the sparsely populated Danish territory that’s been a fixation of the president since his first term. French President Emmanuel Macron has said he’s planning to activate the EU’s so-called trade bazooka — the Anti-Coercion Instrument — to respond to Trump’s saber rattling. That would allow the EU to impose restrictions on investment and access to public procurement schemes, as well as limits on intellectual property protection. The White House pushed back on the notion that the markets were rejecting Trump’s policies. “The S&P 500 is up over 10 percent and 10-year Treasury bond yields are down nearly 30 basis points over the past year because the markets have confidence in the Trump administration’s pro-growth, pro-business policies,” White House spokesperson Kush Desai said. “Accelerating GDP growth, cooled inflation, and over a dozen historic trade deals all prove that this Administration continues to deliver for American workers and companies.” Banking leaders — including Bank of America CEO Brian Moynihan, Citi’s Jane Fraser and State Street’s Ron O’Hanley — signaled optimism at the U.S.’s economic outlook in separate media appearances in Davos as they urged government leaders to find a resolution. “Let the people go to work,” Moynihan told CNBC. “They’re here in this beautiful place, and they’ve got a week to a few days to work on it. So, give them 48 hours and see if they can come up with solutions.” Throughout his first year back in the White House, Trump’s costly tariffs and insistence that Europe do more to finance its own defense have caused economic disruption and forced leaders across the continent to reckon with the possibility that the U.S. is no longer as strong a partner as it once was. And while markets have grown increasingly confident that the president’s frequent escalations result in policies that are far less severe than his initial threats, finding an off-ramp in the fight over Greenland’s future could prove challenging. “The market’s very complacent to the idea that this is just a negotiating tool,” said Brij Khurana, a fixed-income portfolio manager at Wellington Management. “I’m more nervous about it because I don’t, I don’t see what the middle ground is here.” In an appearance on Fox Business from Davos on Tuesday, Treasury Secretary Scott Bessent said it’s “very difficult to disaggregate” the market’s reaction to Trump’s Greenland push from a massive sell-off in Japanese bonds that was triggered by mounting concerns about the country’s fiscal trajectory. As European leaders consider taking steps to retaliate against Trump, Bessent urged caution. “Sit back, take a deep breath, do not retaliate,” he said. “The president will be here tomorrow, and he will get his message across.” Aiden Reiter contributed to this report.

Meta named former Trump adviser Dina Powell McCormick to serve as president and vice chair Monday, further cementing the company’s growing ties to Republicans and President Donald Trump’s White House. In addition to a long career on Wall Street, Powell McCormick served as Trump’s deputy national security adviser during his first term. She was also a member of the George W. Bush administration. She first joined Meta’s board last April, part of a broader play by the social media and artificial intelligence giant to hire Republicans following Trump’s election. In a statement, Meta CEO Mark Zuckerberg praised Powell McCormick’s “experience at the highest levels of global finance, combined with her deep relationships around the world, [which] makes her uniquely suited to help Meta manage this next phase of growth.” Rightward trend: Powell McCormick’s time in global finance — she spent 16 years as a partner at Goldman Sachs and was most recently a top executive at banking company BDT & MSD Partners — could be a major asset to Meta as it raises hundreds of billions of dollars to build out data centers and other AI-related infrastructure. But her GOP pedigree and proximity to Trump likely played a significant role in her hiring as well. Since Trump’s election, Meta has worked to curry favor with Republicans in the White House and on Capitol Hill. The company elevated former GOP official Joel Kaplan to serve as global affairs lead last January, simultaneously tapping Kevin Martin, a former Republican chair of the Federal Communications Commission, as his No. 2. Under pressure from Republicans, last year Meta also rolled back many of its former rules related to content moderation. In 2024, the company apologized to congressional Republicans — specifically Rep. Jim Jordan (R-Ohio), chair of the House Judiciary Committee — for removing content that contained disinformation about the Covid-19 pandemic. A Meta spokesperson declined to comment when asked whether Powell McCormick’s ties to Trump and Republicans played a role in her hiring. Trump thumbs up: In a Truth Social post Monday, Trump congratulated Powell McCormick and said Zuckerberg made a “great choice.” The president called her “a fantastic, and very talented, person, who served the Trump Administration with strength and distinction!”

BRUSSELS — The U.S. must preserve and grow the dominance of its financial sector worldwide, President Donald Trump argues in his new National Security Strategy. The 33-page document is a rare formal explanation of Trump’s foreign policy worldview by his administration, and can shape U.S. policy priorities. “The United States boasts the world’s leading financial and capital markets, which are pillars of American influence that afford policymakers significant leverage and tools to advance America’s national security priorities,” the document states. “But our leadership position cannot be taken for granted,” it continues, calling on America to leverage “our dynamic free market system and our leadership in digital finance and innovation to ensure that our markets continue to be the most dynamic, liquid, and secure and remain the envy of the world.” The strategy lists the “world’s leading financial system and capital markets, including the dollar’s global reserve currency status” as one of the U.S. key levers of power. Trump’s comments come as Europe looks to grow its own finance system to reduce the continent’s dependence on Wall Street. The EU has put forward a broad plan to boost its own finance industry by strengthening its single market for investment, and it will draft policy plans in the coming months aiming to boost its banks’ ability to compete globally. It is also creating a digital version of the euro currency, which would reduce its reliance on the dollar and on U.S. payment giants.

LONDON — Britain’s shortest-serving Prime Minister Liz Truss is launching her own YouTube show. She wants it to be the home of a “counter-revolution.” “The Liz Truss Show,” which launches Friday, will be a “bold new program in a media landscape dominated by groupthink and timid consensus,” a press statement announcing the show declared. She will be “taking the gloves off,” it added. Truss, who spent just 49 days in office before being ousted by her own party, has been active on the lucrative U.S. speech circuit since leaving office in 2022. She has repeatedly insisted the market crisis which triggered her downfall was not her fault. “The Deep State tried to destroy me but now I’m back and excited to launch this show,” she said. Truss is making the show with American journalist John Solomon’s Just the News network. Episodes will be released each week on both video and audio platforms including YouTube, Rumble and Spotify. The ex-PM said:  “People in Britain, America, and across the free world are tired of being talked down to. They’re tired of experts who get everything wrong, elites who refuse to listen, and weak leaders who won’t stand up for Western values.” After losing office, Truss wrote her memoir, which blamed the Bank of England, Treasury and Office for Budget Responsibility watchdog for her economic woes.

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?”

The looming Supreme Court showdown over President Donald Trump’s tariffs amounts to an epic clash between two of the most deeply ingrained tenets of the conservative legal movement. The first is that presidents need and are entitled to extreme deference on matters of national security and foreign policy. That precept suggests the six conservative justices may be willing to uphold Trump’s unprecedented move to bypass Congress and unilaterally impose sweeping global tariffs. On the other hand, an indisputable hallmark of the Roberts court is a deep mistrust for government meddling in the free market. That ideological predilection, which has fueled a slew of pro-business, anti-regulatory rulings, could prompt the court’s conservatives to view Trump’s tariffs more skeptically than they view many of his other, non-economic policies. “I think that some of the justices that matter are going to feel a bit torn,” said Jonathan Adler, a professor at William and Mary Law School. “What’s interesting here is that this case requires some of the conservative justices to confront a conflict between different strands of their own jurisprudence.” In the case set for oral arguments Wednesday, Trump is asking the justices to overturn lower-court decisions that declared many of the tariffs — the centerpiece of Trump’s economic agenda — an illegal overreach. The lower courts found that a 1977 law, the International Emergency Economic Powers Act, did not authorize the president to impose such broad tariffs. FOREIGN RELATIONS AND THE KAVANAUGH FACTOR Lurking just below the surface in the case is a key dynamic: Should Trump’s tariffs be treated as a garden-variety economic policy, or are they a core part of the president’s management of international relations and national security? “How this case comes out will depend in large part on what the frame or the lens on it is,” said Vikram Amar, a law professor at the University of California at Davis. “Is this a case about unbridled, unauthorized — at least not explicitly authorized — broad executive authority, or is this a case about presidential ability to discharge foreign affairs and national security responsibilities?” That question could be most acute for Justice Brett Kavanaugh, whose public appearances frequently include an account of his searing experiences working in President George W. Bush’s White House after 9/11. Kavanaugh is often the high court’s most outspoken voice for the president’s need for flexibility and dexterity in response to international challenges. But he is also highly skeptical of government power in the economic realm. A year before Trump nominated him to the Supreme Court, Kavanaugh declared his fealty to the conservative theory known as the “major questions doctrine” — the notion that courts should block executive branch actions of widespread impact when their legal basis is ambiguous. Staking out his position in a case involving net neutrality rules, Kavanaugh said he saw the doctrine applying to “a narrow class of cases involving major agency rules of great economic and political significance.” “If an agency wants to exercise expansive regulatory authority over some major social or economic activity … an ambiguous grant of statutory authority is not enough,” Kavanaugh wrote. “Congress must clearly authorize an agency to take such a major regulatory action.” Under this sort of test, the widespread tariffs Trump implemented would be on shaky legal ground because the 1977 law at issue, known as IEEPA, does not expressly empower the president to enact tariffs. However, just four months ago, Kavanaugh emphasized that the court’s skepticism about legally dubious executive branch actions has an important limit. “The major questions canon has not been applied by this Court in the national security or foreign policy contexts. … The canon does not translate to those contexts because of the nature of Presidential decisionmaking in response to ever-changing national security threats and diplomatic challenges,” he wrote in a solo concurring opinion in a case about funding to improve internet and phone service for low-income and rural Americans. TRUMP CLAIMS TARIFF POWER Trump announced his sweeping, worldwide “Liberation Day” tariffs in April, hitting nearly every country in the world with a minimum 10 percent tariff and including rates reaching 50 percent on some nations. The president claimed the authority to impose the tariffs under IEEPA, which Congress passed to try to rein in broader powers granted by a predecessor statute. IEEPA gives the president the right to “regulate … importation” of items from foreign countries during a presidentially declared national emergency. It’s fairly clear that in such an emergency the president has the power to put an embargo on foreign individuals or particular foreign countries. The administration contends that broader power to regulate and prohibit imports implies the related power to impose import taxes better known as tariffs, but opponents of Trump’s move say Congress knew how to confer that power on the president if it wanted to do so. “Nowhere does it say tariffs, taxes, duties,” noted Elizabeth Goitein, who studies emergency powers at New York University’s Brennan Center. A federal appeals court ruled, 7-4, in August that Trump’s broad tariffs exceeded his authority under IEEPA. However, the Federal Circuit’s majority stopped short of saying the law could never be used to impose more targeted tariffs. WATCHING THE COURT’S CENTER Many experts consider Kavanaugh likely to lean toward blessing the tariffs, although his vote isn’t a sure thing. Justices Clarence Thomas, Samuel Alito and Neil Gorsuch are thought by court watchers to be even more likely to uphold the tariffs. Assuming the three liberal justices vote against the administration, that leaves Chief Justice John Roberts and Justice Amy Coney Barrett in play, although under that scenario both Roberts and Barrett would have to join the liberals to assemble enough votes to strike down the tariffs. “The center of the court is going to be especially interesting to watch,” Roman Martinez, a former law clerk to Kavanaugh and Roberts, said during a discussion at Georgetown Law. “I think this case will probably split the conservatives,” said Cary Coglianese, a University of Pennsylvania law school professor who specializes in administrative law and regulatory processes. Among the liberal justices, the Trump administration’s strongest prospect for support in the tariffs cases may be Obama appointee Elena Kagan. Like Kavanaugh, she saw presidential decisionmaking up close in White House jobs, although hers were under President Bill Clinton.thathis travel ban policy. That seemed to show deference to the president’s need for flexibility, although she joined the court’s liberal wing in dissent six months later when the court issued a final, 5-4 ruling upholding the travel ban. ‘THE STAKES IN THIS CASE COULD NOT BE HIGHER’ Some court watchers say the conservative justices, including Trump’s three high court appointees, could be hesitant to rule against Trump on an issue so central to his policy agenda. Just as many saw politics at work in the Supreme Court’s 2012 decision to leave a key part of President Barack Obama’s signature health care law in place, the justices might decide not to provoke the political fury that would be unleashed by striking down the tariffs. “This, along with ICE and immigration … is the paramount domestic policy initiative of this president,” said Donald Verrilli, who served as solicitor general under Obama. “One way of thinking about this is that the justices who are going to determine the outcome of this case feel like they need a really pretty strong case on the legal merits before they’re going to decide to cross swords with the president.” The tariffs case also comes to the court amid an extraordinary winning streak for Trump and his policies. Since January, Trump has brought an unprecedented number of emergency appeals to the justices and has prevailed in more than 20 of them, freeing his hand to gut foreign aid, fire leaders of federal agencies, and strip hundreds of thousands of immigrants of deportation protections. Trump and his administration have sought to keep that streak going by painting a potential defeat for his tariff policy as so cataclysmic that the justices would be ill-advised to take that risk. Trump warned on the eve of the arguments that the case “is, literally, LIFE OR DEATH for our Country.” Trump’s lawyers have also pushed the rhetorical envelope. The Trump administration’s formal plea to the high court to take up the tariff case turned heads in the legal community by including language so hyperbolic that it seemed designed to remind the justices of the intense retort they are certain to receive from Trump if they rule against him. “The stakes in this case could not be higher,” Solicitor General D. John Sauer wrote. “The President and his Cabinet officials have determined that the tariffs are promoting peace and unprecedented economic prosperity, and that the denial of tariff authority would expose our nation to trade retaliation without effective defenses and thrust America back to the brink of economic catastrophe.” THE WALL STREET JOURNAL EFFECT That sort of apocalyptic verbiage is a rarity in Justice Department filings with the high court. While the justices will likely be reluctant to mount a direct challenge to those sorts of presidential predictions, the administration’s sky-is-falling claims could actually prompt some of the court’s conservatives to give Trump less running room, lawyers who practice before the court said. Even as the legal challenges have been playing out, Trump has raised doubts about whether the tariffs his imposed are a response to bona fide emergencies or more mundane concerns. Last month, Trump declared he was imposing an additional 10 percent tariff on Canada to express his irritation at a TV advertisement the province of Ontario aired showcasing President Ronald Reagan’s opposition to tariffs. “If the justices think that these assertions are kind of pretextual, I think that could shape their thinking about the other more purely legal issues in the case,” said Martinez, who authored an amicus brief for the Chamber of Commerce opposing the tariffs. “It could … bring into sharp relief in their eyes the dangers of giving the president this broad authority to impose tariffs. So, that’s a dynamic that could play out, as well.” Another factor undercutting the potential political blowback the court could receive from voiding the Trump tariffs: Most of the Republican establishment is profoundly unenthusiastic about them. Even some Trump backers might quietly celebrate a court ruling preventing the kind of broad-based tariffs the president announced in April. For decades, liberals and many legal academics have argued that the Roberts court is beholden to business interests, delivering a broad blow to the power of federal government agencies to regulate businesses, reining in federal authority to prevent development on environmental grounds and weakening federal enforcement of securities laws. If one subscribes to the notion that the opinions of some billionaires hold outsized sway at the court, well-heeled business people and investors have been sharply negative about the tariffs, although the markets have shrugged them off at least for now. “Tariffs are taxes,” one of many Wall Street Journal editorials skewering Trump’s tariffs declared. “If he can impose a tax on any imported product any time he wants, he really has the power of a king.” In short, while a ruling against the tariffs would surely infuriate Trump, it wouldn’t do much if anything to hurt the conservative justices’ standing in their legal, political and social circles. A RULING AGAINST HIM WOULDN’T LEAVE TRUMP WITHOUT TOOLS If the justices are looking for some sort of middle ground on tariffs or are divided in a way that makes an up-or-down ruling on Trump’s powers infeasible, they have a couple of options. The court could reject Trump’s broadest and most extreme tariffs, while highlighting his options under laws other than IEEPA. Many legal experts have pointed to powers Congress gave the president in 1974 to put quotas on imports and impose tariffs of up to 15 percent “to deal with large and serious United States balance-of-payments deficits,” a concept that trade specialists say encompasses trade deficits. Those experts argue that Congress’ decision to pass that law, known as the Trade Act, undercuts Trump’s arguments that he should be able to use IEEPA to address the trade deficit problem. However, the Trade Act comes with clear limits, declaring that those tariffs and trade restrictions must be “temporary” and last no longer than five months, unless Congress extends them. That may not represent enough of a cudgel for the Trump administration to use in talks with foreign countries in an effort to get them to agree to longer-lasting trade deals. Another concession the Supreme Court could offer Trump is to allow some tariffs involved in the legal fight to remain in effect. Part of the battle is over tariffs he imposed on Canada and China over trafficking in fentanyl and drug precursors into the U.S. and on Mexico to address those problems as well as migration and human trafficking. A ruling upholding those tariffs, but striking down the more global import taxes linked to trade deficits, would allow Trump to claim a partial win but probably won’t insulate the justices from a presidential rebuke. THE OPTICS OF TURNABOUT Despite the efforts some justices may make to distinguish the worldwide tariffs from other policies federal courts have blocked under the major questions doctrine, if the court allows Trump’s tariffs, many politicians and commentators are likely to accuse the justices of a double-standard. Exhibit No. 1 in this argument will be the Supreme Court’s ruling striking down one of President Joe Biden’s signature policies: his student debt relief plan. That 6-3 decision, wielding the doctrine to invalidate student debt forgiveness, was handed down by the same nine justices over two years ago. “It’s arguably quite analogous,” Goitein said. “Will the Supreme Court act consistently? Of course, the justices might say in a ruling upholding the Trump tariffs that they are pivoting based on legal substance and not politics. But for a court that many members of the public already view skeptically, the result may look partisan. “This will be a true test of the Supreme Court in many, many ways,” Goitein said. Erica Orden contributed to this report.

Although the White House is pushing to resume ceasefire talks between Israel and Hamas, President Donald Trump and his closest aides are worried that Israel’s brazen strike against Hamas leaders in Qatar this week has derailed such negotiations — possibly for good. The administration’s frustrations with Israeli Prime Minister Benjamin Netanyahu have deepened since the Israeli strike on Tuesday, according to a person close to the president’s national security team and a U.S. official familiar with the situation, both granted anonymity to discuss internal deliberations. In fact, Trump and top aides have come to question whether Netanyahu, who authorized the strike and has threatened more, was trying to sabotage the talks, according to the person close to Trump’s team. “Every time they’re making progress, it seems like he bombs someone,” the person said. “That’s why the president and his aides are so frustrated with Netanyahu.” Reports from the region have suggested that Israel failed to kill the top Hamas members it was targeting but hit others in the group in Doha. At the same time, the two people said, the White House has been working to calm the Qataris, whose top leaders have used words such as “barbaric” to describe the Israeli move. Qatar’s prime minister will be visiting New York and Washington on Friday, and is expected to meet U.S. officials to discuss the Israeli strike and the status of ceasefire talks in Gaza, according to a person familiar with his visit. He is expected to see Trump, Vice President JD Vance, Secretary of State Marco Rubio and Trump peace envoy Steve Witkoff. The person close to the president’s national security team said Rubio has also spoken in recent days with the Qatari premier, Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani, about prioritizing a plan to expand its defense cooperation agreement with the U.S. Rubio is scheduled to visit Israel next week. It’s not clear if he will swing by Qatar, but such trips usually involve stops in multiple capitals. The initial response from the White House, a statement from spokesperson Karoline Leavitt at Tuesday’s briefing, made clear that Trump was frustrated with Israel’s decision to carry out a mission inside Qatar, a key partner and home to a major American military base that Trump visited in May. The administration has also stressed that it learned about the attack from the U.S. military, and that Israel did little to notify and did not consult with U.S. officials in advance. Leavitt’s initial statement asserted that the administration had warned officials in Doha ahead of the strike. After a Qatari official responded online and noted that they’d received no such warning, Trump amended Leavitt’s statement in a post on social media, saying that Israel hadn’t given the White House an adequate warning about the attack, and that phone calls from special envoy Steve Witkoff to Qatari officials came “too late.” According to a defense official, also granted anonymity to discuss the internal conversations, “the vague notice given was wholly insufficient [and] lacked the specifics needed to adequately warn regional partners.” That’s partly why Trump’s statement, which went further than Leavitt had, was so blunt in declaring that the decision was “made by Prime Minister [Benjamin] Netanyahu, it was not a decision made by me.” He continued: “Unilaterally bombing inside Qatar, a Sovereign Nation and close Ally of the United States, that is working very hard and bravely taking risks with us to broker Peace, does not advance Israel or America’s goals.” “That was the most publicly critical I’ve seen a Republican president be of an Israeli leader in quite some time,” the person close to Trump’s national security team said. Trump’s phone call with Netanyahu on Tuesday, the first of two conversations between them following the attack, was even more “heated,” the person added. “The president was very displeased, and he made that known.” The tense phone conversation was first reported by the Wall Street Journal. When Trump traveled to the Middle East in May, he opted not to visit Israel. And he told leaders in Saudi Arabia, Qatar and the United Arab Emirates that, even then, he’d grown frustrated with Netanyahu, the person close to his team said. According to the U.S. official, Trump’s “inability to control Netanyahu” is especially vexing to American officials when the Israeli prime minister makes moves that directly affect U.S. relations in places such as Syria and Qatar. The official was unaware, however, of any Trump administration plans to penalize Netanyahu. The Israeli attack has frustrated many Arab countries who had staked hopes on the Qatar-led mediation to end the fighting in Gaza. The war in the strip has angered many of these countries’ populations, leaving their governments — which tend to be monarchies or otherwise autocracies — worried about their own stability. Netanyahu’s threat in the days since the Qatar strike that Israel will attack any country that hosts Hamas representatives is particularly worrisome for U.S. allies because it could undermine efforts at mediation in many places. There’s also the question of whether Hamas itself will engage in talks now. As far as Qatar, the “focus is on our national security and sovereignty, which were directly threatened by this attack. All other political considerations have taken a back seat,” a Qatari official said, having been granted anonymity to discuss a sensitive issue. “When one party chooses to bomb the mediator and one of the negotiating delegations, what kind of talks can be considered valid?” Paul McLeary and Felicia Schwartz contributed to this report.

LONDON — Britain’s Ambassador to the United States Peter Mandelson referred to disgraced financier Jeffrey Epstein as his “best pal,” according to a letter released by U.S. lawmakers. A note purportedly from Mandelson is included in a “birthday book” marking Epstein’s 50th birthday in 2003, arranged by the sex offender’s accomplice Ghislaine Maxwell. It was released Monday by the U.S. House of Representatives Committee on Oversight and Reform. POLITICO has not been able to independently confirm the note’s veracity. A number of pages in the document include pictures of Mandelson — at the time a Labour member of parliament — and a message which reads: “Once upon a time, an intelligent, sharp-witted man they call ‘mysterious’ parachuted into my life.” It continues: “You would spend many hours just waiting for him to turn up. And often, no sooner were you getting used to having him around, you would suddenly be alone…. again. “Leaving you with some ‘interesting’ friends to entertain instead…. Or just some dogs to keep you company (he wasn’t always so keen on them). “But then he would parachute back in… Very occasionally, taking you by surprise in some far off places. “Or in one of his glorious homes he likes to share with his friends (yum yum). It concludes: “But, wherever he is in the world, he remains my best pal! Happy birthday, Jeffrey we love you!!” The existence of Mandelson’s contribution to the book was first reported by the Wall Street Journal in July. The British ambassador has previously distanced himself from Epstein, and a spokesperson told the BBC Monday: “Lord Mandelson has long been clear that he very much regrets ever having been introduced to Epstein.” The British government has so far rowed in strongly behind Mandelson, who has been a key point person between Prime Minister Keir Starmer and the Trump administration, earning praise from the U.S. president in the Oval Office earlier this year for his “beautiful accent.” Health Secretary Wes Streeting on Tuesday denied the message could lead to a change of ambassador, as he warned against implying any wrongdoing by association. The Cabinet minister told LBC that “the ambassador has been clear that he regrets ever having been introduced to Epstein.” “And who can blame him? Who would want to be associated with Epstein given what we know now about the horrific crimes that he perpetrated.” He added of Mandelson: “I’m sure he will have more to say. But I don’t think we should tar everyone as kind of guilty by association.”