President Donald Trump said he and Chinese leader Xi Jinping had an “amazing meeting” in South Korea in October. More than two months later, there’s still no formal agreement, however, leaving the commitments from both sides fuzzy and lowering expectations for a broader trade deal in 2026. Trump labeled his Oct. 30 meeting with Xi “a 12” out of 10, and the White House announced a series of measures the two sides agreed to in an effort to cool their trade war. That included, crucially, restarting Chinese purchases of U.S. agricultural products like soybeans and the elimination of Beijing’s restrictions on critical minerals exports. In exchange, the U.S. agreed to extend a pause on triple-digit tariffs on Chinese goods. A Chinese Commerce Ministry statement, however, did not confirm those commitments, although it did acknowledge the U.S. tariff pause. U.S. Trade Representative Jamieson Greer in late October told reporters that negotiators were “moving forward to the final details” of an agreement. Weeks later, Treasury Secretary Scott Bessent said the administration hoped to finalize the rare earth provisions of the deal by Thanksgiving. That deadline passed without any public text or announcement. The lack of written terms, affirmed by both sides, has allowed both the Trump administration and Chinese government wiggle room in how they implement their trade truce, but critics say it also leaves the commitments open to competing interpretations — and, inevitably, more conflict down the line. The absence of a wider U.S.-China deal going forward will make the irritants that roiled trade ties in 2025 — tit-for-tat tariff hikes, export curbs on key items and targeted import shutdowns — potential tripwires for fresh economic chaos in the coming year. “This is not complicated,” said Cameron Johnson, a senior partner at Shanghai-based supply chain consultancy Tidalwave Solutions. “The Chinese may or may not be slow rolling this but this is Diplomacy 101 — what have you agreed to and what’s the time frame?” They also say it bodes poorly for the type of sweeping trade realignment between the world’s two largest economies that Trump promised at the start of his term. The president has touted an upcoming visit to Beijing in April as the next step in the talks. “If they can’t even agree to something along the lines of what the U.S. fact sheet was and what the broad outlines of the commitments are, it raises concern about how much of a joint understanding there is about the follow through,” said Greta Peisch, a partner at Wiley Rein law firm in D.C. and former general counsel of the Office of the U.S. Trade Representative under President Joe Biden. The White House, nonetheless, remains upbeat about the prospects for U.S.-China trade ties. “President Trump’s close relationship with President Xi is helping ensure that both countries are able to continue building on progress and continue resolving outstanding issues,” the White House said in a statement, adding that the administration “continues to monitor China’s compliance with our trade agreement.” A USTR official pointed to previously released statements outlining the administration’s expectations from China. The Treasury Department did not respond to a request for comment. Allies of the president argue that leaving the October understanding unwritten is not a failure but a feature of Trump’s strategy, giving both sides flexibility to manage tensions without triggering disputes over minor compliance disagreements. “The Chinese don’t want a real, definitive agreement, and on Trump’s side, in some ways, he’s better off as well, assuming that they live up to their spoken commitments,” said Wilbur Ross, who served as Commerce secretary in Trump’s first term. But there are already signs of confusion. The White House fact sheet released Nov. 1 said China had agreed to buy 12 million tons of U.S. soybeans by the end of 2025. The Chinese Commerce Ministry statement referred only to “expanding agricultural trade,” rather than a specific soybean target. Beijing has begun buying U.S. soybeans again, totaling at least 4 million metric tons since late October, well off pace to meet the 12 million mark in 2025. Greer told senators last month that the White House fact sheet reflected a “discrepancy” in timing, saying the initial purchases were intended to occur over the current crop year — generally understood to run into mid- to late 2026 — rather than within a single calendar year. The spokesperson for the Chinese embassy, Liu Pengyu, declined to comment on whether China would meet its soybean purchase commitment. U.S. soybean farmers worry, meanwhile, that China’s purchase commitments are vulnerable if there’s a fresh rupture in trade ties. The deal’s lack of transparency is also hitting industries that rely on China’s rare earth magnet supplies. Rare earths are essential for producing everything from washing machines and iPhones to medical equipment. When China announced sweeping new export restrictions in October, it set off alarms across global manufacturing supply chains. The White House says China agreed to keep rare earths and magnets flowing, but companies say shipments are still gated by licensing and remain unpredictable. “Supply chains are slowing down and certain investments that potentially could be made aren’t being made because business doesn’t have certainty of what the [rare earths] road map looks like,” Johnson said. Meanwhile U.S. trade sweeteners for Beijing just keep coming. Trump on Dec. 8 announced that Nvidia would be allowed to sell its powerful H200 artificial intelligence chip in China — despite concerns the move could give Beijing a technological edge at U.S. expense. There has been no sign of reciprocal moves by Beijing. It’s prompted warnings from national security hawks that Beijing will feel emboldened to demand the U.S. lift similar restrictions on cutting-edge tech in future trade talks. “President Trump has taken more direct control of China policy in a way that he hadn’t in his first term, so we’re seeing his own personal inclination manifesting more clearly than before,” said Christopher Adams, former senior coordinator for China affairs at the Treasury Department and now senior adviser at Covington and Burling. “And he prioritizes transactional dealmaking over pushing national security concerns.” It also could disincentivize Beijing from pursuing more ambitious trade goals with the U.S. over the coming year and from putting things on paper going forward, said Peter Harrell, former senior director for international economics on Biden’s national security council. “The Chinese understand that as long as they meet some minimal expectations on soybeans and rare earth exports, they’re not going to face a ton of immediate pressure to be nailed down on final texts,” he said. That falls short of what the administration pitched when it launched its “Liberation Day” tariff campaign in April, with Bessent predicting the pressure of Trump’s steep “reciprocal” tariffs would force China to shift away from its export-driven economic model. That same month Trump predicted Beijing would rush to negotiate trade terms to avoid being locked out of the U.S. market. What ensued was a cycle of escalating tariffs that briefly hit triple digits and a weaponization of export curbs targeted at each other’s key economic vulnerabilities until Trump and Xi ceased hostilities in October. “We settled for a pretty limited bilateral deal without any kind of broad market access or structural reforms aimed at addressing unfair competition or Chinese [industrial] overcapacity,” said Barbara Weisel, a former U.S. trade negotiator from 1994 to 2017 now with the Carnegie Endowment for International Peace.

Listen on * Spotify * Apple Music * Amazon Music Vor genau einem Jahr verlor Olaf Scholz die Vertrauensfrage und Friedrich Merz wurde später Kanzler. Gordon Repinski zieht eine politische Bilanz. Was hat Merz aus der Opposition heraus damals am 16. Dezember 2024 angekündigt, was hat er als Regierungschef eingelöst und wo ist er hinter den eigenen Ansprüchen zurückgeblieben. Im Mittelpunkt stehen Außenpolitik, Wirtschaft und der Stil der schwarz-roten Koalition. Parallel richtet sich der Blick dorthin in Berlin, wo sich Bewegung in den Gesprächen über ein Ende des Krieges in der Ukraine zeigt. Erstmals seit 2022 erscheint ein Waffenstillstand zumindest vorstellbar. Hans von der Burchard berichtet von den Gesprächen im Kanzleramt und erklärt, welche Rolle Sicherheitsgarantien, territoriale Fragen und der Druck aus Washington spielen. Im 200-Sekunden-Interview spricht Marie Agnes Strack Zimmermann, FDP Verteidigungspolitikerin im Europäischen Parlament, über die Grenzen des aktuellen Prozesses. Sie warnt vor falschem Optimismus, kritisiert die amerikanische Verhandlungsführung und fordert klare Entscheidungen Europas, etwa beim Umgang mit eingefrorenen russischen Vermögen. Und: Bundestagspräsidentin Julia Klöckner feiert Geburtstag, den Spaziergang aus dem Sommer mit ihr gib es hier. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. Jetzt kostenlos abonnieren. Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: @gordon.repinski | X: @GordonRepinski. Legal Notice (Belgium) POLITICO SRL Forme sociale: Société à Responsabilité Limitée Siège social: Rue De La Loi 62, 1040 Bruxelles Numéro d’entreprise: 0526.900.436 RPM Bruxelles info@politico.eu www.politico.eu

LONDON — The British government is working to give its trade chief new powers to move faster in imposing higher tariffs on imports, as it faces pressure from Brussels and Washington to combat Chinese industrial overcapacity. Under new rules drawn up by British officials, Trade Secretary Peter Kyle will have the power to direct the Trade Remedies Authority (TRA) to launch investigations and give ministers options to set higher duty levels to protect domestic businesses. The trade watchdog will be required to set out the results of anti-dumping and anti-subsidy investigations within a year, better monitor trade distortions and streamline processes for businesses to prompt trade probes. The U.K. is in negotiations with the U.S. and the EU to forge a steel alliance to counter Chinese overcapacity as the bloc works to introduce its own updated safeguards regime. The EU is the U.K.’s largest market and Brussels is creating a new steel protection regime that is set to slash Britain’s tariff-free export quotas and place 50 percent duties on any in excess. The government said its directive to the TRA will align the U.K. with similar powers in the EU and Australia, and follow World Trade Organization rules. It is set out in a Strategic Steer to the watchdog and will be introduced as part of the finance bill due to be wrapped up in the spring. “We are strengthening the U.K.’s system for tackling unfair trade to give our producers and manufacturers — especially SMEs who have less capacity and capability — the backing they need to grow and compete,” Business and Trade Secretary Peter Kyle said in a statement. “By streamlining processes and aligning our framework with international peers, we are ensuring U.K. industry has the tools to protect jobs, attract investment and thrive in a changing global economy,” Kyle added. These moves come after the government said on Wednesday that its Steel Strategy, which plots the future of the industry in Britain and new trade protections for the sector, will be delayed until next year. The Trump administration has been concerned about the U.K.’s steps to counter China’s steel overcapacity and refused to lower further a 25 percent tariff carve-out for Britain’s steel and aluminum exports from the White House’s 50 percent global duties on the metals. Trade Secretary Kyle discussed lowering the Trump administration’s tariffs on U.K. steel with senior U.S. Cabinet members in Washington on Wednesday.  “We are very much on the case of trying to sort out precisely where we land with the EU safeguard,” Trade Minister Chris Bryant told parliament Thursday, after meeting with EU Trade Commissioner Maroš Šefčovič on Wednesday for negotiations. “We will do everything we can to make sure that we have a strong and prosperous steel sector across the whole of the U.K.,” Bryant said. The TRA has also launched a new public-facing Import Trends Monitor tool to help firms detect surges in imports that could harm their business and provide evidence that could prompt an investigation by the watchdog. “We welcome the government’s strategic steer, which marks a significant milestone in our shared goal to make the U.K.’s trade remedies regime more agile, accessible and assertive, as well as providing greater accountability,” said the TRA’s Co-Chief Executives Jessica Blakely and Carmen Suarez. Sophie Inge and Jon Stone contributed reporting.

Donald Trump’s drive to secure peace in Ukraine must not let Vladimir Putin off the hook for war crimes committed by Russian forces, a top EU official has warned, effectively setting a new red line for a deal.  In an interview with POLITICO, Michael McGrath, the European commissioner for justice and democracy, said negotiators must ensure the push for a ceasefire does not result in Russia escaping prosecution.  His comments reflect concerns widely held in European capitals that the original American blueprint for a deal included the promise of a “full amnesty for actions committed during the war,” alongside plans to reintegrate Russia into the world economy. The Trump team’s push to rehabilitate the Kremlin chief comes despite international condemnation of Russia for alleged crimes including the abduction of 20,000 Ukrainian children and attacks targeting civilians in Bucha, Mariupol and elsewhere.  “I don’t think history will judge kindly any effort to wipe the slate clean for Russian crimes in Ukraine,” McGrath said. “They must be held accountable for those crimes and that will be the approach of the European Union in all of these discussions. “Were we to do so, to allow for impunity for those crimes, we would be sowing the seeds of the next round of aggression and the next invasion,” he added. “And I believe that that would be a historic mistake of huge proportions.” Protesters in London, June 2025. There has been international condemnation of Russia for alleged crimes including the abduction of 20,000 Ukrainian children and attacks targeting civilians. | Vuk Valcic/SOPA Images/LightRocket via Getty Images Ukrainian authorities say they have opened investigations into more than 178,000 alleged Russian crimes since the start of the war. Last month, a United Nations commission found Russian authorities had committed crimes against humanity in targeting Ukrainian residents through drone attacks, and the war crimes of forcible transfer and deportation of civilians.  “We cannot give up on the rights of the victims of Russian aggression and Russian crimes,” McGrath said. “Millions of lives have been taken or destroyed, and people forcibly removed, and we have ample evidence.”  The EU and others have worked to set up a new special tribunal for the crime of aggression with the aim of bringing Russian leaders to justice for the full-scale invasion of Ukraine, which began in February 2022. In March 2023, judges at the International Criminal Court issued an arrest warrant for Putin, naming him “allegedly responsible for the war crime of unlawful deportation of population [children]” from Ukraine. But Trump and his team have so far shown little interest in prosecuting Putin. In fact, the U.S. president has consistently described his Russian counterpart in positive terms, often talking about how he is able to have a “good conversation” with Putin. Trump has expressed the hope of building new economic and energy partnerships with Russia, and the pair have even discussed organizing ice hockey matches in Russia and the U.S. once the war is over.   The draft 28-point peace plan that Trump’s team circulated last week continues in a similar vein.  It states that “Russia will be reintegrated into the global economy” and invited to rejoin the G8 after being expelled in 2014 following Moscow’s annexation of Crimea. “The United States will enter into a long-term economic cooperation agreement for mutual development in the areas of energy, natural resources, infrastructure, artificial intelligence, data centers, rare earth metal extraction projects in the Arctic, and other mutually beneficial corporate opportunities,” the document said. The U.S. peace plan proposes to lift sanctions against Russia in stages, though European leaders have pushed back to emphasize that the removal of EU sanctions will be for them to decide. Not everyone in Europe wants to maintain the squeeze on Moscow, however. Hungary has repeatedly stalled new sanctions, especially on oil and gas, for which it relies on Russia. Senior politicians in Germany, too, have floated the idea of lifting sanctions on the Nord Stream gas pipeline from Russia. 

LONDON — American pharmaceutical giants will start to shutter their U.K. operations unless Keir Starmer’s government agrees to pay more for their drugs, U.S. Ambassador to the U.K. Warren Stephens warned ministers on Wednesday. “The U.K. needs to continue addressing its pricing structures for medicines to ensure it can compete for investment from U.S. firms,” Stephens told a U.K.-U.S. business gathering in central London attended by British trade and foreign ministers. “If there are not changes made, and fast, pharma businesses will not only cancel future investments, they will shut down their facilities in the U.K.,” the diplomat said. “This would be a major blow to a country that prides itself, rightly so, on its life sciences sector.”  The U.K. is locked in drug-pricing negotiations with the Trump administration and pharmaceutical firms about how much the National Health Service pays for their products through the so-called Voluntary Scheme for Pricing, Access and Growth (VPAG) scheme. Britain has offered to increase the threshold at which the NHS pays firms for medicines by up to 25 percent, POLITICO first reported in October. But pharmaceutical executives are pushing the government to go further. American drugmaker Eli Lilly’s international business chief said on Monday that it wants to see more changes to Britain’s medicine market before it pivots on its abandoned £279 million investment in a biotech incubator project. “I don’t think we have heard enough to say that we are willing to get the Lilly Gateway Lab started,” Patrik Jonsson, president of Lilly’s international business, which covers all markets outside the U.S., told POLITICO. The focus of talks has turned to the government’s “clawback” system, where firms have to pay back part of their revenue if the total amount the NHS spends on drugs rises above a certain cap. Unless ministers agree to also raise that cap, any extra NHS spending will mean a larger clawback bill for pharma companies. Pricing talks feature in the U.K.’s ongoing trade negotiations with Washington after Starmer struck a framework trade deal with Trump in May, promising to “improve the overall environment” for pharmaceutical firms operating in Britain. U.K. negotiators are currently in Washington and “progress is being made on this literally as we speak,” Stephens said, adding he hopes “that will yield some success.”  The U.K.’s “chief obstacle” to growth is also its high energy costs, Stephens added. “If there are not major reforms to U.K. energy policy, then the U.K.’s position as a premier destination in the global economy is vulnerable.”  Britain’s Labour government is “completely signed up to an ambitious agenda for business,” said Trade Minister Chris Bryant, in an address following Stephens’ speech. He set out how the government plans to “integrate” its industrial, small business and trade strategies to grow the economy.

The president of the European Central Bank said Sunday that the world’s economy has “yet to feel the pain” from President Donald Trump’s tariffs. Speaking on CBS’ “Face the Nation,” Christine Lagarde said that at some point the exporters and importers will no longer accept smaller profit margins caused by tariffs and decide to raise prices. “These two-thirds borne by two corporates, essentially, the exporter and the importer, is based on a squeeze of their margins,” she said. “How long are they going to put up with a squeeze of the margin — to be seen. And when they don’t, because it’s becoming too tight, then it will be on the consumer. So it’s a question of time.” Lagarde told host Margaret Brennan that tariffs were one of two factors that have led to the global economy being “in transformation,” the other being advancements in technology. “Transformation,” she said, “I think caused by a couple of things. One is the tariffs, which have changed the map of trade around the world and reconstituted new alliances and reformed the way in which we trade with each other. I think the second major transformation is the impact of artificial intelligence on everything we do from data management to dating and everything in between.” Lagarde has been head of the European Central Bank since 2019. Previously, she served in France’s government, including as minister for foreign trade, and as managing director of the International Monetary Fund. She said she thought part of the current trade war between the United States and China was posturing. “I would discount a little bit of the positioning at the moment because this is typical of negotiating tactics on both sides. Typical,” Lagarde told Brennan. “You show your muscles and you say that you’re ready to kill. I’m exaggerating, of course. But people will have to come to the table because it’s the interest of both economies, despite the hostility that there is between the two.”

BERLIN — Europe will lose its independence to global economic giants if its leaders don’t act rapidly to restore competitiveness, German Chancellor Friedrich Merz warned. Speaking in the German parliament on Thursday ahead of a summit of European leaders in Brussels next week, Merz urged the bloc to undertake sweeping economic reforms or risk losing global relevance. “This is crucial for the future of our country and the countries of Europe, because in the coming weeks, months and perhaps within a few years, it will be decided whether Europe will remain an independent economic power in the global economy or whether we will become a pawn of the major economic centers in Asia or America,” Merz said. Merz has been under rising political pressure at home to do more to address Germany’s economic malaise. Following two straight years of economic contraction, economists expect little if any growth this year, in part due to U.S. President Donald Trump’s tariff policies, which hit Berlin’s export-oriented economy particularly hard. German business leaders are now urging the chancellor to undertake bolder reforms to stimulate growth. Merz’s centrist coalition has vowed to undertake labor market and welfare reforms. But in recent weeks, Merz has increasingly pointed the finger at Brussels, urging the bloc to cut red tape for business, strengthen the EU’s internal market and strike more global trade agreements. “We do not have a problem with awareness in Europe; we have a problem with implementation,” Merz said Thursday. “I therefore intend to raise this implementation issue again with our European partners. And once again, this primarily concerns the competitiveness of our European economy.” Merz suggested a plan of action is already on the table, referencing two studies by former Italian prime ministers Mario Draghi and Enrico Letta on proposals to deepen the EU’s internal market and enhance competitiveness. “These two reports must not disappear into the filing cabinets of the European Commission,” Merz said. “They now belong on the European Union’s agenda.” Merz called on the Commission to negotiate more EU-only trade agreements with nations and trading blocs around the world. He also urged the EU to sign off on a trade agreement with the South American bloc of Mercosur countries before the end of the year.

U.S. President Donald Trump on Wednesday asked the Supreme Court to quickly overturn a federal court decision striking down his administration’s wide-ranging global tariffs. Attorneys with the Justice Department urged the justices to decide the case on a highly accelerated timeline, arguing that the legal challenges against the tariffs are creating uncertainty as the administration seeks to use them to resolve a variety of foreign policy issues, including to force India to stop purchasing Russian oil. Solicitor General D. John Sauer asked the high court to accept the case by next week, hear arguments in early November and “expedite” its ultimate ruling “to the maximum extent feasible.” “The stakes in this case could not be higher,” 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 U.S. Court of Appeals for the Federal Circuit declared the tariffs illegal in a 7-4 decision last Friday, but that court put its ruling on hold to give the Supreme Court a chance to weigh in. If the Federal Circuit’s ruling stands, it could undermine ongoing trade negotiations and possibly force the government to pay back billions in collected duties. The Supreme Court is not obligated to hear the Trump administration’s appeal, but most observers expect it to do so. The case challenges the legality of a large swath of Trump’s tariffs, including double-digit duties on leading trading partners Canada, Mexico, the European Union and China. The president has used those duties to negotiate a preliminary trade agreement with the EU, among other trading partners and continues to negotiate with China. Along with its petition asking the high court to take the case, the administration filed a motion to expedite the case, citing a need for “an urgent resolution.” The businesses challenging the tariffs have agreed to the proposed rapid schedule. “The … Federal Circuit’s erroneous decision has disrupted highly impactful, sensitive, ongoing diplomatic trade negotiations, and cast a pall of legal uncertainty over the President’s efforts to protect our country by preventing an unprecedented economic and foreign-policy crisis,” the Justice Department’s motion says. The expedited treatment the administration is seeking from the high court is unusual but not unprecedented. The justices are not currently scheduled to meet in person until Sept. 29, for their so-called long conference that precedes the opening of a new term. Oral arguments for October and November have already been set, although the justices are free to add new cases to those calendars or to impose a more extended schedule than the one Sauer proposed. But Jeffery Schwab, the senior counsel and litigation director for the Liberty Justice Center, which is representing the five businesses that brought the case, indicated they, too, wanted the case resolved quickly. “We are confident that our legal arguments against the so-called ‘Liberation Day’ tariffs will ultimately prevail.” Schwab said in an e-mailed statement. “These unlawful tariffs are inflicting serious harm on small businesses and jeopardizing their survival.” Trump has spent several days criticizing the Federal Circuit’s ruling, which upheld a May decision by the U.S. Court of International Trade that Trump had overstepped his executive power when imposing “reciprocal” tariffs on nearly every country in the world. Trump argued the court was partisan and said it would be a “disaster” for the country if the tariffs were struck down. “If we don’t win that case, our country is going to suffer so greatly,” Trump told reporters in the Oval Office on Wednesday, adding that the White House would likely “have to unwind” the preliminary trade deals it struck this summer with the EU, Japan South Korea, and several other trading partners. “I can’t imagine it happening,” the president said in the Oval Office on Tuesday. “On a legal basis, they have no legal basis whatsoever, but on a commonsense basis, it would destroy America.” At issue is the president’s authority under the International Economic Emergency Powers Act, a 1977 law Trump used to impose a baseline tariff between 10 and 50 percent on goods from nearly every country in the world. He is the first president to use that law to impose tariffs. The administration claims that a “large and persistent” federal trade deficit is a national emergency that justifies the tariffs. It has also declared fentanyl abuse a national emergency, providing the administration’s justification for imposing tariffs on Canada, China and Mexico in February. Any ruling by the Supreme Court would not affect the existing 25 percent tariff on automobiles and auto parts and the 50 percent tariff on steel and aluminum — both of which have provoked consternation at home and abroad and concerns about rising costs. Despite the urgency of the administration’s request, the Supreme Court is facing no particular deadline to act. By its terms, the appeals court ruling last week will not kick in until the high court rules on the merits of the case or turns down the petition the administration filed Wednesday.

The question isn’t whether globalization will continue, but who will lead it and on what terms, says BMW’s Frank Niederländer. With geopolitical tensions and uncertainty in the world market on the rise, the EU has an opportunity to shape the global trade agenda — if it gets out of its own way. “Europe had the ambition to lead with the Green Deal, setting the pace for the global economy,” says Niederländer, BMW Group Vice President, Government Affairs Europe. “But while we focused on regulation, others moved ahead prioritizing speed, investment and outcomes.” > We need to envision growth as an imperative again. > > Frank Niederländer, BMW Group vice president, government affairs Europe Europe’s auto industry has a sterling reputation globally for manufacturing high-quality vehicles, and the EU has a goal of zero emissions for all cars by 2035. But China’s drive for innovation has helped it lead the world market for electric cars. Only one of the world’s top 15 battery electric vehicles is made in the EU. “The share of EVs sold still depends heavily on national regulatory conditions. This fragmentation in the single market remains one of the greatest challenges to the uptake of electric vehicles. Political alignment, investment scale and the ability to react with speed is essential,” says Niederländer. POLITICO Studio sat down with Niederländer to discuss what shifts need to happen to create a climate-neutral, competitive Europe. POLITICO Studio: What is BMW’s outlook on international trade in this era of geopolitical tension? Frank Niederländer: The global trading system is shifting — and it has real consequences. It shapes investment flows, supply chains and the rules of competition in real time. Other regions are acting with intent ― investing heavily to secure their industrial bases through billions in subsidies, raw material lockdowns and strategic alliances that give them an edge. Access to energy, technology and key inputs is now, very openly, used as leverage. The risk for Europe isn’t deglobalization, it’s marginalization. It’s falling behind while others move with more speed and focus. Europe must remain open with a trade policy that reinforces our competitiveness, secures our supply chains and reflects our values, while recognizing and managing strategic dependencies. PS: Amid the United States’ increasingly isolationist trade policies, is there a new opportunity for Europe? FN: There could be, if the EU stops playing defense and starts thinking strategically about where it wants to lead. Europe has a chance to position itself as a stable, credible anchor for open and fair trade. For that, we need cohesion within the EU, and alignment of environmental, economic and trade policy. More free trade agreements with core partners (such as Mercosur) are essential today after a long period of insufficient EU engagement. Europe has what it takes to lead: a strong Single Market, technological leadership and a solid rule-of-law tradition. What’s missing is the will to shape the global trading system, not just manage its consequences. We should focus on areas where the need for collaboration is highest, such as climate-neutral industry, resilient supply chains and high-value innovation. The EU must be capable of swiftly recalibrating its priorities to keep pace with the evolving geopolitical environment, or it may find itself sidelined. We need to envisage growth as an imperative again. PS: What emerging technologies could define Europe’s competitive edge? How is BMW helping to accelerate them? FN: Europe’s edge will be defined by the convergence of climate ambition and industrial competitiveness. The winning technologies will be those that deliver both. At BMW, this is already shaping how we build, invest and compete globally. We have long embedded circularity into the core of our strategy ― in the design phase, material sourcing and end-of-life recycling. We are also investing heavily in battery cell innovation and scaling European production capacity while continuing to advance a broad range of powertrain technologies ― from electric drivetrains to highly efficient combustion engines running on renewable fuels. In fact, all diesel BMW vehicles produced in Germany are now delivered with HVO100, a renewable fuel that reduces life cycle CO2 emissions by up to 90 percent. Europe has the talent and industrial base to lead. The challenge now is to translate that potential into scale — with policy that recognizes and accelerates technological leadership. We need agile policy frameworks, public-private partnerships and an ecosystem that fosters innovation, rather than policies that dictate technologies. > Europe has the talent and industrial base to lead. The challenge now is to > translate that potential into scale — with policy that recognizes and > accelerates technological leadership. PS: How can Europe turn decarbonization into a long-term competitive advantage? What role does BMW play in that transformation? FN: Decarbonization can give Europe an economic edge if we scale up cost-effective, low-carbon technologies. While Europe led with ever tighter regulation, other regions ― notably the U.S. and China ― have advanced by mobilizing massive investments, securing critical resources and rapidly scaling technologies. Still, Europe has what it takes to lead this transition through choice and innovation, not restrictions.  Take the supply chain. The largest levers for reducing CO2 emissions lie upstream from manufacturers. We prioritize renewable electricity, secondary materials and low-carbon production processes, and we actively invest in and source from suppliers that meet those standards. That creates real momentum on the demand side to accelerate the transition. This approach plays to Europe’s industrial strengths: advanced engineering capabilities, integrated supply chains and the ability to deliver premium solutions across multiple technologies. Let companies compete to deliver the best climate solutions — that’s how we’ll maintain global leadership. PS: How does life cycle assessment (LCA) affect BMW’s strategies? FN: At BMW, our strategic focus is clear ― achieving business success while reducing our climate footprint. To do that, we must look at the full life cycle of our products ― from raw material extraction to manufacturing, use and end-of-life recycling. This is essential if we want climate policy to reflect real impact. Tailpipe emissions cannot be the only measure of a vehicle’s environmental impact. We need to assess CO2 emissions across the entire value chain. This means designing with carbon footprint in mind from the start, and we’re already applying this approach with the Neue Klasse, a new, fully electric BMW model generation, where we are embedding circularity and carbon reduction every stage of development. The EU’s move toward LCA is welcome — but it needs consistency, transparency and practical application across sectors. Done right, LCA will reward innovation where it matters most: in cutting total emissions. PS: How is BMW future-proofing its global supply chain? FN: Europe’s future competitiveness will hinge on whether we treat supply chains as a strategic asset, not a logistical challenge. That’s especially true in areas such as the battery value chain, where industrial success depends on both resilience and global cooperation. This will require massive investments — just look at the figures in the Draghi report. This isn’t about reducing complexity. It’s about managing it. Engagement with partners such as China must be realistic and rules-based, because decoupling is neither feasible nor desirable. Europe cannot operate as an island. At BMW, our global production footprint is built upon a strong European foundation. We localize to serve markets more efficiently and to strengthen resilience, and our international presence amplifies Europe’s role as a hub for innovation, engineering excellence and high-value manufacturing. > Climate neutrality must be engineered — deliberately, collaboratively, and at > scale. PS: What can the EU do to ensure that companies like BMW remain globally competitive while leading the green transition? FN: Europe has the chance to define climate neutrality in a way that keeps Europe competitive and keeps jobs here. Stronger cooperation between governments and industry is key. The Strategic Dialogue launched by EU Commission President Ursula von der Leyen was an important step to this and must continue. The future will be shaped by many choices — smart regulation, strong industrial alliances and a shared commitment to progress that is measurable, not ideological. PS: What future does BMW imagine for a climate-neutral world? FN: A climate-neutral Europe is not just a moral responsibility — it’s a competitive imperative. It means rethinking how we power industries, design products and create value chains. The future will be built not on a single breakthrough but by thousands of decisions across technology, regulation and investment. Climate neutrality must be engineered — deliberately, collaboratively and at scale.   At BMW Group, we are engineering that future with purpose. Our 2030 climate targets are fully aligned with the Paris Agreement, which means reducing our CO2 emissions by 40 million tons by 2030 as compared to 2019. Europe has the potential to lead this transformation. But leadership requires the courage to move beyond outdated regulations, respond decisively to shifting geopolitical realities and streamline the path forward. This is the moment to lead with conviction.

BRUSSELS — Europe is getting fed up with Donald Trump’s trade threats — and is exploring a bold move to look east instead of west to find partners who want to play by the rules. Trump’s unilateral and arbitrary tariffs — which could ratchet up to 50 percent from July 9 if EU and U.S. negotiators fail to cut a trade deal — have tested EU chief executive Ursula von der Leyen’s patience and resolve. Her response? To team up with the CPTPP, a Pacific-centric trade group that includes like-minded nations such as Japan, Australia, Canada and Mexico. Between them, the 39 countries of the EU and (deep breath) Comprehensive and Progressive Agreement for Trans-Pacific Partnership account for 30 percent of world trade. Forming a coalition of the willing could, boosters argue, mark a first step toward reconfiguring the international trade order and escaping the institutional paralysis besetting the World Trade Organization. In a pitch to EU leaders, von der Leyen turned previous comments on possible cooperation with the CPTPP into more of a reality. The new grouping would redesign the rules of global trade, she said, reforming or perhaps even replacing the global trade rules body. Such a plan would “show to the world that free trade with a large number of countries is possible on a rules-based foundation,” von der Leyen said after an EU summit on Thursday night. “This is a project where I think we should really engage on, because CPTPP and the European Union is mighty.” MAKING THE PLEDGE But how could forming such a coalition of the willing work? One idea would be to make an up-front pledge to uphold the established rules of multilateral trade, veteran trade negotiators Tim Groser, Steve Verheul and John Clarke said in exclusive commentary shared with POLITICO. Groser, a former New Zealand trade minister; Verheul, previously Canada’s chief trade negotiator; and Clarke, until recently a senior EU trade negotiator, said the 39 EU and CPTPP countries should, in a first step, commit to a “Standstill Agreement” to keep their markets open to each other. “What it would do is send a massive signal to Washington that a very substantial part of the global economy, including nearly all the traditionally closest partners of the United States, remains committed to the rules-based system,” they said.  The U.S. had the chance to join the CPTPP, previously known as the Trans-Pacific Partnership, during the Barack Obama administration. But Trump withdrew in 2017, after taking office for the first time, before the pact could be finalized. When asked on Thursday if the U.S. would join the new initiative between the EU and CPTPP, von der Leyen replied, “As far as I understand, the Americans left at a certain point.” It would be up to the two blocs to decide if they want to let them in, she added.  Europe is getting fed up with Donald Trump’s trade threats — and is exploring a bold move to look east instead of west to find partners who want to play by the rules. | Shawn Thew/EPA Ignacio García Bercero, a former chief EU trade negotiator, believes that the potential partnership shouldn’t close the door to the Americans just yet, nor should it be seen as a move to antagonize Trump.   However, “if the U.S. is not ready to join because they don’t believe that the solution to these problems is rules, others are going to have to move ahead without the U.S.” YOU’VE GOT A FRIEND The United Kingdom has also spearheaded efforts as a newer CPTPP member to welcome the EU’s drive to strengthen ties between the two potential partners.  “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, better way with them — whether we as a group of countries can trade with other countries in an easier and better way,” Prime Minister Keir Starmer said as he launched the U.K.’s first Trade Strategy since Brexit on Thursday.  Those countries are all members of the Asia-Pacific bloc, which the U.K. joined in December. Starmer’s government has been open to the idea of the bloc and EU teaming up. “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,” the prime minister told businesses during his Trade Strategy launch in Westminster.  If the EU and CPTPP can establish a new community of values and interests, that could serve as the basis to address trade challenges that have accumulated since the WTO was founded 30 years ago — but that it has been unable to resolve because the Geneva-based trade club works by consensus and its largest member, the U.S., won’t play ball. “This must start outside Geneva with a group of countries that can move more decisively,” argued Groser, Verheul and Clarke. “In the medium term, we contend that this grouping could be a focal point for developing new rules and commitments to a trading system that can deliver continued growth and prosperity to their people.” Von der Leyen is already courting the leaders of CPTPP countries, issuing a joint statement with Kiwi Prime Minister Christopher Luxon after their meeting this week in which both supported the launch of a dialogue between the EU and CPTPP “as soon as possible.” That echoed an appeal by CPTPP ministers meeting in Jeju, Korea, in mid-May. A meeting at ministerial level is planned in July, according to an EU official. “To be clear, the EU is not joining [the CPTPP] as such, but we are building bridges between the two blocs,” the official, speaking on condition of anonymity as is customary in Brussels, said before the EU summit.