BRUSSELS — Senior EU lawmakers want the European Parliament to freeze the EU-U.S. trade deal in response to Donald Trump’s threats to take over Greenland. The deal was deeply unpopular across party lines as it was seen as overwhelmingly favoring Washington, but European Commission President Ursula von der Leyen sold it as the price of keeping Trump onside. However, Trump ratcheted up his rhetoric this week, saying “we need Greenland from the standpoint of national security,” and has repeatedly refused to rule out military intervention. As a result, MEPs from the center-left, liberal, green, and left-wing groups say the deal should be blocked. “I cannot imagine that in the current situation MEPs would vote for any trade measures benefiting the U.S.,” the Greens’ top trade lawmaker and chair of the Internal Market Committee Anna Cavazzini told POLITICO.  “We should have such a discussion, it’s inevitable,” added Brando Benifei, the Socialist lawmaker who chairs Parliament’s delegation for relations with the U.S. Under the deal, most EU exports are subject to a 15 percent U.S. tariff. To complete its side of the bargain, the EU also needs to pass legislation to abolish all tariffs on U.S. industrial goods, including the 10 percent it currently slaps on U.S. cars, and ease market access for some farm produce and seafood. “If we are to give it the green light, we need guarantees that the U.S. will stop its tariffs and its security-related threats,” said Renew’s trade heavyweight Karin Karlsbro. “The United States cannot take the EU’s support for the trade agreement for granted.”  Danish MEP Per Clausen, of The Left group, has circulated a letter among all MEPs asking them to support his call for Parliament President Roberta Metsola to freeze parliamentary work on the deal. The deadline for adding signatures is Tuesday. “If we accept this agreement while Trump is threatening the international order and making direct territorial claims against Denmark, it will be seen as rewarding his actions — and will only add fuel to the fire,” Clausen said.  The biggest political group in the Parliament, the European People’s Party (EPP), remains noncommittal. “These are separate matters,” said Željana Zovko, the group’s negotiator on the U.S. file, when asked whether the Parliament should freeze the trade deal over Greenland. The EPP’s top trade MEP, Jörgen Warborn, left the door to blocking the trade deal ajar. While the EU “must preserve” the deal as a basis for stable transatlantic trade, he said, “we are ready to act if necessary.” But the EPP lacks the numbers to pass the deal with right-wing and far-right allies alone. A united front by the Socialists, Renew and the Greens would be enough to put the agreement on ice.  The Parliament’s U.S. deal negotiators will meet on Wednesday to discuss next steps.

BRUSSELS — Donald Trump says he wants to reshape politics in Europe. For many voters in major European democracies, it feels like he already has. Trump’s return as U.S. president is far more significant for voters in Germany, France and the U.K. than the election of their own national leaders, according to respondents to the first international POLITICO Poll. The finding vividly illustrates the impact of Trump’s first year back in the White House on global politics, with his sway felt particularly keenly in Europe. The online survey, conducted by the independent London-based polling company Public First, also shows many Europeans share Trump’s critical assessment in a POLITICO interview earlier this week of the relative weakness of their own national leaders. The poll had more than 10,000 respondents from the U.S., Canada and the three biggest economies in Europe: Germany, France and the United Kingdom. For leaders like Germany’s Chancellor Friedrich Merz and French President Emmanuel Macron, it makes particularly grim reading: They are seen by their own voters as having largely failed to handle the unpredictable American president effectively so far. EU leaders fared worst of all. In France, only 11 percent thought Brussels had done a good job of handling Trump, with 47 percent saying EU leadership had navigated the relationship badly. Britain’s Prime Minister Keir Starmer gets a slightly better rating — his record on managing Trump is seen as neither good nor bad. “These results show how much Trump has shaped the last year of political conversation not just in the U.S., but globally,” said Seb Wride, head of polling at Public First. “This is true for the public as much as it is for policymakers — the fact that so many believe Trump’s election, on the other side of the world, has been more significant for their own country than their own leaders’ election lays this bare.” The polling comes at an acutely sensitive moment for transatlantic relations. A new White House National Security Strategy unveiled last week destroyed any notion of American neutrality toward its historic allies in Europe, instead launching a crusade to convert the region’s democracies to his own MAGA ideology. POLITICO on Tuesday named Trump as the most powerful person shaping European politics, at the top of its annual P28 list. The list is not an endorsement or award. It reflects, instead, each individual’s capacity to shape Europe’s politics and policies in the year ahead, as assessed by the POLITICO newsroom and the power players POLITICO’s journalists speak with. In a White House interview on Monday with POLITICO’s Dasha Burns for a special episode of “The Conversation,” Trump expanded on the message, saying he would endorse candidates from parties in Europe who shared his outlook — especially on shutting down immigration. ELECTIONS MATTER, BUT SOME MORE THAN OTHERS In an effort to unpack Trump’s disruptive influence on international affairs since he returned for his second term in January, Public First conducted an online survey of 10,510 adults aged 18 and over, between Dec. 5 and Dec. 9. The research found that in Germany and the U.K. over half of respondents considered Trump’s election even more important than the elections of their own leaders, even though both Merz and Starmer have only relatively recently won power themselves. In Germany, 53 percent of people thought Trump’s election was more significant for their country than the election of Merz, compared with 25 percent who thought the German election was more important. In the U.K., 54 percent said Trump’s return was more significant than Starmer’s Labour Party taking power and ending 14 years of Conservative rule, compared with 28 percent who said the change of national government last year was more important for Britain.  French voters were a little less stark in their view, but still 43 percent thought Trump’s victory was more significant, against 25 percent who believed Macron’s election had a bigger impact on France. In Canada, however, respondents were split. Mark Carney’s victory in April, on the back of a campaign promise to stand up to Trump, was viewed by 40 percent as more significant than Trump’s return to power. Only slightly more — 45 percent — said Trump’s win was more significant for Canada than Carney’s. TRANSPARENCY TRUMPS STRENGTH In his interview with POLITICO, Trump denounced European leaders as “weak,” provoking retorts from politicians across the European Union and even prompting the pope to urge him not to “break apart” the transatlantic alliance. The researchers found that Europeans broadly shared Trump’s view that their leaders were weak, at least in comparison to him. They rated Trump as more “strong and decisive” than their own leader, by 74 percent to 26 percent in Germany; 73 percent to 27 percent in France; and 69 percent to 31 percent in the U.K. Canada was again the notable exception, with 60 percent saying Carney is stronger and more decisive compared to Trump, and only 40 percent saying the reverse.  Overall, however, the quality of being a strong and decisive leader is not seen as the most desirable trait among voters questioned in the survey. Far more important across all five countries in the research, including the U.S., is being honest and transparent.  “Strength is not the most important trait for a leader, but it is clearly an area where European leaders’ approach fall short so his words in the POLITICO interview will ring true,” said Wride.  Pollsters also asked how people felt their own leaders were handling the whirlwind of geopolitical upheaval in Trump’s second term. In France and Germany, more people think their leaders handled Trump badly than approved: Only 24 percent thought Merz had done a good job, while 34 percent thought his handling of Trump had been bad.  In France, Macron fared even worse. Just 16 percent of respondents said he had done well compared to 39 percent who thought he had done badly at managing relations with the White House. The verdict on Starmer was mixed: 29 percent thought he was handling Trump well, the same proportion as said he was doing badly. That represents an underwhelming verdict on a prime minister who has made a priority of maintaining a warm and effective alliance with the U.S. president.  RESISTANCE VS. STANDING UP TO TRUMP The research found that people in Europe wanted their leaders to stand up to Trump and challenge him, rather than prioritize getting along with him. However, when asked how their own particular national leaders should behave, Europeans took the opposite view, saying collaboration was more important than challenging the president.  Canadians remained punchy regardless, with a slight preference for Carney to confront Trump.  “Perhaps the only opportunity Trump has offered national leaders is the opportunity to stand up to him, something which we find tends to improve perceptions of them,” said Wride, from Public First. “Having fallen short on this, from the public’s perspective, leaders are seen to have largely failed to respond for the last year.” This edition of The POLITICO Poll was conducted from Dec. 5 to Dec. 9, surveying 10,510 adults online, with at least 2,000 respondents each from the U.S., Canada, U.K., France and Germany. Results for each country were weighted to be representative on dimensions including age, gender and geography, and have an overall margin of sampling error of ±2 percentage points for each country. Smaller subgroups have higher margins of error. The survey is an ongoing project from POLITICO and Public First, an independent polling company headquartered in London, to measure public opinion across a broad range of policy areas. You can find new surveys and analysis each month at politico.com/poll. Have questions or comments? Ideas for future surveys? Email us at poll@politico.com.

BRUSSELS — Europe isn’t popping the champagne corks just yet even after U.S. Supreme Court judges cast doubt on the future of Donald Trump’s sweeping tariffs.  In a highly anticipated hearing on Wednesday, both conservative and progressive judges sharply questioned the U.S. president’s use of emergency powers to impose tariffs on the rest of the world — including the European Union.  Yet officials and observers across the Atlantic know full well that should the court strike down the tariffs, in cases brought by a dozen Democratic-run states and two sets of private companies, Trump will find a way to replace them. “The president’s authority is not limited,” German lawmaker Bernd Lange, who chairs the European Parliament’s international trade committee, told POLITICO. “New legal bases will be sought, which will again entail significantly greater effort and perhaps further uncertainties for certain product groups.”  Trump imposed his duties — including a 15 percent baseline tariff on the 27-nation bloc — under the International Emergency Economic Powers Act, a 1977 sanctions law that empowers the president to “regulate” imports but does not specifically authorize tariffs.  A key question now is whether Trump, in imposing his “Liberation Day” tariffs in April, grabbed power that is constitutionally bound to Congress. During the hearing, Chief Justice John Roberts questioned why Trump believed he had the authority to impose tariffs under a law that has never been used for that purpose.  Tariffs are a form of taxation and “that has always been the core power of Congress,” Roberts said. “So, to have the president’s foreign affairs power trump that basic power for Congress seems to me to kind of neutralize between the two powers, the executive power and the legislative power.” The skeptical tone struck by judges from both U.S. political camps has led some observers to predict a majority ruling by the nine-judge bench to kill the tariffs. For that to happen, some or all of Trump’s own conservative appointees on the bench — Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett — would need to vote against them.  “Not only the Court’s liberal judges but also key conservative judges such as Justice Roberts, Coney Barrett, Gorsuch and Kavanaugh advanced a deeply skeptical line of questioning,” said David Kleimann, a senior researcher at think tank ODI Global.  The hearing, Kleimann said, “will certainly give rise to hopes among international stakeholders that the Court will annul the tariff orders, which will, however, remain a matter of first seeing and then believing.” FIXING A ‘GLOBAL PROBLEM’  Even if the Supreme Court strikes down the tariffs, Brussels wouldn’t be out of the woods.  Trump’s sectoral tariffs on pharmaceuticals, cars and steel using other legal avenues — chiefly Section 232 investigations into specific industrial sectors — aren’t the subject of the case before the Supreme Court. And it is those measures that are inflicting the most pain on European exporters. Precisely because of that, former EU Trade Commissioner Pascal Lamy cautioned his fellow Europeans to “not rejoice too quickly.”  “If Trump loses this case, he will use other legal grounds, albeit more complicated ones,” Lamy told POLITICO, referring to the sectoral tariffs.  “It would be great if they were overturned and they had trouble reinstating the latest tariffs, but we’re not counting on it,” agreed an EU trade diplomat, who was granted anonymity to speak candidly.  One argument made by the Trump administration — including by the government’s lawyer, Dean John Sauer — is that the tariffs are needed because America’s trade deficits with many of its trading partners are, in fact, a genuine emergency. Sauer argued that the trade deficits the tariffs are intended to address are “a global problem.” Countries hit by tariffs “haven’t disputed … that the president has correctly identified that virtually every major trading partner has this longstanding, so asymmetric, unfair treatment of our trade.” In Europe’s case, that is true: Commission President Ursula von der Leyen admitted, as she struck the EU’s trade deal with Trump, that it was “actually about rebalancing. So you can call it fairness, you can call it rebalancing. We have a surplus, the U.S. has a deficit, and we need to rebalance it.”  By buying into Trump’s narrative, von der Leyen handed his team a victory — allowing Trade Representative Jamieson Greer to boast about a new trading era, dubbed the “Turnberry system” after the Scottish golf course where Trump and von der Leyen shook hands on their deal in July.  HOW FIRM IS A HANDSHAKE?  For the EU, the question now is how solid a foundation it has built with the Turnberry accord, which was baked into a bare-bones joint statement the following month.  EU officials assert that the 15 percent tariff cap on most exports should hold even if the Supreme Court throws out Trump’s tariffs. A decision is expected by the end of this year, but could come much sooner. The European Commission declined to comment on legal proceedings in another country as a matter of policy. “But I can say that the Commission’s focus is on implementing the commitments spelled out in the EU-U.S. joint statement,” deputy chief spokesperson Olof Gill said Thursday. Ultimately, however, the court’s decision could have knock-on effects on legislation to implement the EU’s side of its deal with Washington. The European Parliament, which needs to pass the enabling legislation, has taken a critical view of the U.S. deal. Many lawmakers fault the EU executive for agreeing to a humiliating one-sided deal by agreeing to abolish all tariffs on U.S. industrial goods. A Supreme Court verdict striking down the U.S. tariffs could swell the camp of lawmakers determined to vote down the procedure.  “It would be very unlikely that the EU Parliament [would] continue its work on lowering EU tariffs on U.S. products in case the Court declares the U.S. tariffs illegal,” said Brando Benifei, a Spanish Socialist who chairs the Parliament body responsible for strengthening ties with the U.S.  “It would be absurd.”

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

BRUSSELS — What began as a push to free Europe’s businesses from crippling rules has morphed into yet another tactic to appease Donald Trump.  Since taking office, the U.S. president has repeatedly threatened to hike tariffs on EU goods unless the bloc agrees to roll back some of its laws that also apply to American companies. That presents Brussels with a dilemma. If it bows to the U.S. pressure, it risks ending up with strict regulations that only apply to European businesses — potentially destroying their competitiveness. Conversely, if it scraps the rules altogether, it abandons key aims like digital sovereignty and environmental protection. Enter the simplification agenda, Brussels’ new plan to get the best of both worlds. Cutting red tape is one of the few areas of policymaking on which EU countries largely agree; in fact, they want more of it. Later this week, European leaders meeting in Brussels will instruct the European Commission to speed up its work “as a matter of utmost priority, on all files with a simplification and competitiveness dimension,” according to draft conclusions obtained by POLITICO.  Driving home that message, 19 EU leaders — including Friedrich Merz of Germany, Emmanuel Macron of France, Giorgia Meloni of Italy and Donald Tusk of Poland — have issued a presummit appeal for “a systematic review of all EU regulations to identify rules that are superfluous, excessive, or unbalanced.” In a letter, obtained by POLITICO, they also called on Brussels to dismantle outdated rules, demanded a “constant stream” of simplification measures and urged self-restraint when it comes to new legislation. Still, the simplification drive is being spun as a way to address some of Washington’s concerns with what it sees as regulatory overreach by Brussels.  “Since Trump is willing to swallow a number of jokes — he doesn’t look too closely at it anyway — if we can say to him, ‘Donald, thank you very much, it’s thanks to you that we’ve cleaned things up a bit,’ why not?” asked Pascal Lamy, a former EU trade commissioner and head of the World Trade Organization. SWEEPING ROLLBACK In a bid to bring struggling European industries back from the brink, Commission President Ursula von der Leyen has made deregulation — or “simplification” — the North Star of her second term. In less than 12 months, her Commission has come up with plans to cut much of the red tape crafted during her first mandate, touching on almost all areas of EU law, from defense and agriculture to digital rules and the environment.  At first, the logic was straightforward: Fewer rules would be good for European companies struggling to remain competitive against their U.S. and Chinese rivals.  Now, the simplification push comes as a diplomatic gesture — to smooth relations with Washington after Trump made it clear that U.S. companies shouldn’t be bound by European rules he has denounced as discriminatory.  Commission President Ursula von der Leyen has made deregulation — or “simplification” — the North Star of her second term. | Thierry Monasse/Getty Images Under the trade deal von der Leyen struck with Trump at his Scottish golf resort in July, the Commission pledged that its green rules would “not pose undue restrictions on transatlantic trade.” The list agreed by the two sides included Europe’s rules on supply chain oversight, sustainability reporting, a carbon border tax and rules aimed at preventing the import of goods produced on deforested land. All have already been the target of simplification measures launched by the Commission.   Explaining the strategy, Danish Foreign Minister Lars Lokke Rasmussen likened it in an interview with POLITICO to a Kinder Egg — an Italian-made children’s treat with chocolate on the outside and a toy on the inside. Cutting red tape is in Europe’s “own self best interest. But at the same time, it also serves others’ interest as well,” explained Rasmussen, whose country holds the presidency of the Council, the bloc’s intergovernmental branch. Others say it’s not so clear cut.  “We can’t say on the one hand that we’re willing to pay for American strategic protection in terms of tariffs, and on the other hand that we’re not going to change our regulations for that, neither on data, nor on DMA, DSA, nor everything else that Americans criticize about what they see as our hyper-regulation,” Lamy said, referring to the twin pillars of EU tech regulation, the Digital Markets Act and the Digital Services Act.  The Commission stressed that while Washington and Brussels have agreed to look at ways to cut red tape, “this will not lead to a lowering of EU standards or legislation,” said Olof Gill, deputy chief spokesperson for the Commission.  “The EU has been firm on defending our fundamental principle — our legislative framework and our regulatory autonomy are not up for negotiation,” added Gill, whose remit covers trade.  LEADERS JUMP IN The letter from the 19 EU leaders intensifies the pressure on the EU executive from the bloc’s leading economies to keep deregulating — above all from Macron and Merz. Backed by their largest businesses, the two leaders have echoed U.S calls for the EU to ditch its supply chain oversight directive. But the European debate has the added benefit of having — apparently — convinced Trump’s new ambassador to Brussels, Andrew Puzder, that the EU’s drive to slash red tape is in its own essential interest.  “Chancellor Merz and President Macron have both said it should be repealed … not because that’s in America’s best interest. They’re saying it’s the best interest of Germany and France,” Puzder told a recent event in Brussels, referring to the supply chain rules. For a veteran like Lamy, the simplification imperative arose from internal EU pressure following strategy recommendations by former Italian Prime Ministers Mario Draghi and Enrico Letta. The former leaders warned that Europe must become more competitive or face the “slow agony” of decline. “If we look at the history of these simplification packages, they were entirely generated within the EU by pressure from employers,” Lamy said.  But even with the political wind in her sails, delivering on simplification won’t be a pleasure cruise for von der Leyen.  Negotiations on the first simplification package — aimed at cutting green reporting obligations for companies — nearly destroyed the coalition of political groups that elected her to a second term, while efforts to simplify Europe’s farming policy and budget have sparked another backlash from the agriculture sector.  National calls for massive cuts to EU rules have also drawn criticism from EU decision-makers who are reluctant to see trade talks or corporate interests derail the bloc’s green agenda.  “No one should be mistaken, we will not lower these standards because there is no competitiveness in a race to the bottom,” said Teresa Ribera, the Commission’s No. 2 and top competition regulator. Nor are European lawmakers giving up on the “Brussels effect” — whereby rules set by the EU set a standard for how business is done internationally. That EU rules should apply to foreign companies is “a fundamental element of … Europe’s normative power,” said Pascal Canfin, a centrist member of the European Parliament, who has worked on several of the simplification packages.  Hans von der Burchard and Nette Nöstlinger contributed to this report from Berlin. This story has been updated. 

Listen on * Spotify * Apple Music * Amazon Music “Europe is in a fight.” With those words, Ursula von der Leyen set the tone for her State of the European Union speech — framing this as Europe’s “Independence Moment.” She proposed sanctions on extremist Israeli ministers over Gaza; floated using frozen Russian assets for Ukraine; and backed calls for a drone wall to protect the bloc’s eastern flank against Russia. She also pledged action on jobs, poverty and housing. But were those fighting words enough to bridge the gap between promises and reality — or did they simply paper over a fraying coalition? Host Sarah Wheaton is joined by Rym Momtaz, editor-in-chief of Carnegie Europe’s Strategic Europe blog; Carsten Brzeski, ING’s global head of macro research; and Sorcha Edwards, secretary general of Housing Europe, to unpack the geopolitics, economics and social policy in the speech. We’ll also hear from POLITICO’s Max Griera in Strasbourg, with on-the-ground reactions from MEPs — and look across the border to France, where President Emmanuel Macron faces fresh political turmoil after the government of Prime Minister François Bayrou collapsed.

European lawmakers accused Commission President Ursula von der Leyen of striking a bad, one-sided trade deal with U.S. President Donald Trump after she defended the accord in her annual State of the Union address Wednesday.  “Where was Europe when you signed an unfair deal with Trump?” asked Socialists & Democrats leader Iratxe García Pérez. Responding to von der Leyen’s speech, she called the EU’s decision to accept a 15 percent tariff on most EU exports while scrapping its own tariffs on U.S. industrial goods “unacceptable.”  The EU’s strategic autonomy, said García Pérez, has been buried “under a golf course.”  She was referring to the trade deal that von der Leyen struck with Trump at his Turnberry resort in Scotland in July. Von der Leyen and her aides have defended the deal as the best that could be done in difficult circumstances. Many critics fear, however, that it will condemn the bloc to an era of economic subjugation. Ahead of Wednesday’s speech, the European Socialists had already come out against the deal — and others leaped at the chance to criticize the agreement or voice specific concerns.  Both on the left and radical-right side of the Parliament, the truce with Trump was criticized widely. Martin Schirdewan, the German leader for The Left, said that “fighting overcapacity with more trade is like throwing lighters on the fire of the European economic crisis.” LEFT-RIGHT PILE ON Bas Eickhout of the Greens and Jordan Bardella of the right-wing Patriots for Europe both slammed von der Leyen’s promise that the EU would buy €750 billion in U.S. energy — mostly fossil-based — albeit for very different reasons.  Eickhout argued that, amid climate change, this money should be invested into European renewable energy. Bardella claimed, falsely, that EU countries would be coughing up that amount. In reality, this number is based on projections of investments and market developments, not hard agreements. While less harsh in her assessment, Valérie Hayer, chief of the liberal Renew Europe group, urged von der Leyen to “continue standing firm” on the bloc’s regulatory power and autonomy in trade talks. Trump has repeatedly attacked the EU’s digital rulebook, arguing that it puts U.S. companies at a disadvantage. European People’s Party leader Manfred Weber — von der Leyen’s political ally and fellow German conservative — seemed relatively isolated in his defense of the trade deal, asking: “What is the alternative to Scotland?” In her speech, von der Leyen called on lawmakers to support the agreement. Their votes will be needed to pass legislation to scrap the EU tariffs on U.S. industrial goods, which in turn would unlock a reduction in the levies on European cars being exported to the U.S. “I have heard many things about the deal we agreed on over the summer,” she said in her hour-long address. “I understand the initial reactions … But when you account for the exceptions that we secured and the additional rates which others have on top — we have the best agreement. Without any doubt.” “The deal provides crucial stability in our relations with the U.S. at a time of grave global insecurity,” she told MEPs. “Think of the repercussions of a full-fledged trade war with the U.S.” Trump, however, is ready to demand more and on Tuesday told the EU it should put 100 percent tariffs on both China and India to pressure them into abandoning support for Russian leader Vladimir Putin and his war against Ukraine, the Financial Times and other news outlets reported. Von der Leyen, in her speech, did not respond to the U.S. demands, but did stress the need to keep up the pressure on Russia. “We need more sanctions,” she said, referring to a 19th round of measures that will prioritize phasing out imports of fossil fuels more quickly. This proposal is expected to land this week, with negotiations between EU governments to follow. 

A slim majority of EU citizens think European Commission President Ursula von der Leyen should resign, a survey published Tuesday shows. When asked about von der Leyen’s future, 39 percent said they were “very favorable” to her resignation, 21 percent “somewhat favorable,” and just 8 percent “very against.” Much of the criticism stems from the EU-U.S. trade agreement finalized this summer. The deal came after U.S. President Donald Trump threatened to impose 30 percent tariffs on European exports if no agreement was reached. While the final compromise capped tariffs at 15 percent — far below Trump’s threat but still much higher than the previous average of 1.47 percent — the outcome left many Europeans disillusioned. According to the survey, 52 percent of respondents said they felt “humiliated” by the deal, with the sentiment particularly strong in France (65 percent) and Spain (56 percent). Three-quarters believe von der Leyen failed to defend European interests, while only 19 percent gave her a positive rating. A further 77 percent said the trade agreement primarily benefits the U.S. economy, and 42 percent think European companies will be hit hardest. The Eurobazooka survey was conducted by Cluster17 between late August and early September across five major EU countries — France, Spain, Italy, Germany and Poland — representing more than 60 percent of the EU’s population. The poll surveyed around 1,000 people in each country.

The European Commission president’s big set-piece speech of the year is upon us. The State of the Union address is where Ursula von der Leyen sets out her vision for the year ahead, and it promises to be a very challenging 12 months, for her and for Europe. So we tapped into the POLITICO newsroom’s deep knowledge of the political and policy realms and have attempted to preempt her speech by writing our own version. This is what we think she’ll say. Remember, this is not the actual State of the Union but our version of it. As it says on all speeches sent to journalists ahead of time, “please check against delivery.” Madam President, Honorable members, My fellow Europeans, This comes at a pivotal moment for Europe. We live in a world that presents many challenges for our Union; challenges that we as Europeans will have to face together. It is also a time for Europeans to decide which kind of future they wish to embrace; one of unity, one of strength, one of making our continent a better, more secure place; or one of conflict and dissent, in which we let external forces dictate the direction of our lives. There are people out there who want to destroy Europe; who side not with those of us who want a peaceful, prosperous Europe, but with our enemies. I know which path I will choose. And I believe, as I am sure you do too, that the people of Europe will take the right road. That is why, as we reflect on the State of our Union, we must acknowledge the advances we have made but also build the foundations of a more stable Europe, one that is less reliant on others in critical areas. UKRAINE AND DEFENSE Mesdames et Messieurs, les députés, Russia’s brutal war against Ukraine has presented us with challenges not seen since World War Two. As a result, we must take greater responsibility for our own security. That means investing in robust defense, safeguarding our people, and ensuring we have the resources to act when needed.  The EU’s likely message to Ukraine? We are at your side. | Olivier Hoslet/EPA Investing in European defense means investing in peace and long-term stability for current and future generations. It also means boosting technological innovation, supporting European competitiveness, promoting regional development, and powering economic growth.   Our ReArm Europe plan gives member states greater flexibility to spend more on defense while ensuring that the European defense industry can produce at speed and volume. It will also allow the rapid deployment of troops and assets across the EU. Red tape needs to be slashed to reach these aims. In a first step to simplify regulations, the Commission has already proposed a Defence Readiness Omnibus that will help untangle investment rules. However, simply spending more is not enough. Member states need to spend better, work together, and prioritize European companies. The EU will support this by helping coordinate investments and making sure that defense equipment is ‘Made in Europe’.  Yet the challenges caused by Russia are great and varied, including the threats caused by hybrid warfare attacking European infrastructure, and the increasing spread of disinformation online. We already have plans for an early-warning system and rapid response teams to help hospitals fight off cyberattacks. We can only overcome these problems by working together and, rest assured, Europe will also maintain diplomatic and, in particular, economic pressure on Russia. This week we will publish the 19th package of sanctions, as we tighten the net on those who do business with Russia. Working with our partners in the U.S., we are continuing to limit Russia’s potential and showing Vladimir Putin that we are serious about bringing an end to this war. Because a predator such as Putin can only be kept in check through strong deterrence. Our boost to defense is not just for our own security but for that of our allies and neighbors, and those who share our European values and wish to join the bloc. That is why our message to Ukraine is clear: Your future is in the European Union and we have been, and will continue to be, at your side every step of the way. REVIVING THE EUROPEAN ECONOMY Meine Damen und Herren Abgeordnete, As we look to advance our goals to boost European competitiveness, we have strong foundations such as our potential to unleash vast resources and latent technological and industrial power. I asked Mario Draghi to deliver a report on how to revive the European economy. One year ago, he delivered that report and we have been delivering on his recommendations. The year since the publication of Mario Draghi’s report has been all about cutting red tape and … boosting European competitiveness. | Olivier Hoslet/EPA As part of the Commission’s plans for the next multiannual financial framework — an ambitious and dynamic budget that will help us meet the challenges of the future — we created a €409 billion cash pot to fund Europe’s industrial revival, allowing European firms to rapidly scale up and cut red tape when accessing EU funds. And after a very clear signal from the European business sector that there is too much complexity in EU regulation, we launched the Omnibus Package to simplify legislation for sustainable finance, due diligence and taxonomy rules, and save companies €37 billion a year by 2029.   Mr. Draghi also recommended a single market for investment in the EU, and we have pushed forward plans for a Savings and Investments Union that would integrate supervision of capital markets and break down national barriers for the likes of stock exchanges and clearinghouses. The other major challenge we face is trade. The Commission has taken steps to deepen partnerships with trusted allies, partners and friends, which is an essential step in today’s uncertain geopolitical climate. We have in recent weeks secured trade deals with the United States as well as with Mexico and the Mercosur bloc of Latin American countries. I urge everyone in this House who believes in making our Union stronger to support these trade deals as they, and others, will help businesses across the continent, opening up our markets and diversifying our exports. The Mercosur deal alone opens up a market of over 280 million people for European exports, while the U.S. trade deal saves trade flows, saves jobs in Europe and opens up a new chapter in EU-U.S. relations. MIGRATION Señoras y señores diputados, Europe remains a place of safe refuge for those fleeing conflict and climate change. But I am of the firm belief that migration needs to be managed. That is why, after the launch of the Migration and Asylum Pact, we created a plan to streamline deportations, toughen penalties for rejected migrants who do not leave the bloc, and create hubs in countries outside the EU to house people awaiting deportation. Migration is often exploited by populists for political gain. But we want to create a system that supports those with a genuine asylum claim while making clear the rules on forced returns, and incentivizing voluntary returns. We also want to continue attracting talent from across the globe in areas where Europe is a world leader, such as in the life sciences and biotech spheres. Migration is a key issue for European citizens, but there are others. The latest Eurobarometer survey shows that the No. 1 issue Europeans want the EU institutions to resolve is the cost of living crisis. Across the continent, families are struggling to pay for homes, and this Commission is determined to do everything in its power to ease the pressure they are facing.  Migration is a key issue for European citizens. | Gene Medi/NurPhoto via Getty Images Early next year, we will present Europe’s first-ever European Affordable Housing Plan, which will aim to accelerate the construction of new homes, the renovation of existing buildings, and ensure no one sleeps on the streets by 2030. To do so, we will move to put in new measures to limit speculation, introduce regulations for short-term rentals in stressed housing markets, and cut red tape to boost public and private investments in the construction of new homes. People are also concerned about their energy bills and, here, the Commission is taking action. We must never forget Putin’s deliberate use of gas as a weapon, and that is why the EU will phase out Russian gas by 2027 thanks to the REPowerEU roadmap. As part of our deal with Washington, we will increase our energy imports from the U.S. over the next three years, a plan that is fully compatible with our medium- and long-term policy to diversify our energy sources and part of our commitment to the green agenda that so many in this House, myself included, fully support. That is why we have drawn up the Grids Package, which will come out later this year and aims to turbocharge investment in power networks, which is the key bottleneck in the uptake of more renewables. ARTIFICIAL INTELLIGENCE Signore e signori, deputati, The time is coming when artificial intelligence will match human thinking. That is why this week we published a report looking at the challenges and opportunities of AI. In Europe, we must take a leading role in shaping high-impact technologies. We will make sure there is smart yet strategic regulation while creating the right incentives, including funding and investment, to prevent AI and other technologies from becoming destabilizing forces. But we must not forget our traditional industries. The automotive sector is a critical pillar of the European economy, supporting more than 13 million jobs. The industry is facing increased competition from those who have benefited from unfair subsidies, and we have taken big steps to ensure this critical sector remains competitive and made in Europe. With our Automotive Action Plan, we set a strong course for building European batteries and ensuring our companies are the technological leaders in autonomous driving. At the same time, we have made big strides in maintaining our climate goals while giving our companies the necessary flexibility to stay competitive. THE EU BUDGET Panie i panowie, posłowie, We want a stronger European Union, stronger member states, and stronger regional and city governments, and we will work with local leaders — those closest to Europe’s citizens — to ensure they get the funds they need.  Cohesion Funds have helped build our Union with bridges and railways, public sports halls and libraries. Our cohesion policy is a central pillar of the European Union, and we will ensure that it continues to bridge gaps between regions, while also earmarking funds for the cities in which nearly three-quarters of all Europeans live. But we also want to protect and promote one of the most important elements of Europe, its agriculture and farmers. With our budget proposal we are safeguarding direct payments to farmers, boosting the funding available to rural communities, and giving more money to national governments to spend on agriculture. Farmers are essential to Europe, and what matters to Europeans matters to Europe. We need a continent that is united, safe and prosperous. I believe we can rise to the challenge. Long live Europe. Thanks to Victor Jack, Sam Clark, Max Griera, Pieter Haeck, Jordyn Dahl, Aitor Hernández-Morales and Helen Collis.

Robert Benson is the associate director for National Security and International Policy at the Center for American Progress. History will likely remember the U.S.–EU Turnberry trade deal less for its technicalities than for what it symbolizes: the moment Washington openly rewrote the transatlantic bargain. Far from a victory for Brussels, this terse 19-point deal merely codified the structural disadvantages the bloc faced in earlier trade talks. Building on the understanding reached at U.S. President Trump’s Turnberry golf resort in July — which European leaders had called “a dark day” — the agreement imposed a 15 percent tariff on most European exports to the U.S. and formalizes a commitment to bring auto tariffs to the same level, while leaving the levies on Europe’s car industry punishingly high. Yet, somehow, the release of the deal’s framework text was met with grudging acceptance — and even relief — on the grounds that it was the best bargain Europe could hope for. Essentially, what began as a trade standoff ended in a lopsided pact formalizing America’s leverage over Europe. Then, before the ink had even dried, Washington drew a new battle line, threatening fresh tariffs that would strike at the core of the bloc’s digital sovereignty. This broadside exposes a deeper truth: Europe is adrift in a world where it no longer shapes the norm and stands increasingly vulnerable to American revisionism. This realization may be frightening, but it shouldn’t come as a surprise. U.S. Treasury Secretary Scott Bessent had already laid out this vision last fall — that the U.S. must leverage Europe’s security dependence to rewrite the global economic order in its favor. Turnberry is simply the first full implementation of this strategy, and pressure will only mount from here. The deal itself is structurally skewed, front-loading a 15-percent asymmetric tariff in favor of U.S. industries and shielding American sectors from reciprocal obligations. Its bold promises — including $750 billion in U.S. energy exports and $600 billion in EU investment — are also unrealistic and deliberately designed to collapse under their own weight. So, when the EU inevitably falls short, the U.S. can then seize the opportunity to press for greater concessions on tech regulation and digital services. The real purpose isn’t compliance, it’s coercion. And while the fact that we’ve so far managed to avoid a full-blown trade war may appear to some as evidence of successful diplomacy, this reading overlooks the real cost of Brussels’s concessions: sharp economic contraction, political backlash and the normalization of bullying in international diplomacy. Europe is navigating a maze of interdependencies, and Washington knows exactly how to exploit that. As evidenced by Congressman Jim Jordan’s August visits to Brussels, London and Dublin, MAGA will now frame the EU’s digital regulation — on content moderation, data privacy and platform accountability — as violations of “free speech” and anti-American bias. This is more than a rhetorical ploy, it’s a calculated effort to destabilize Europe’s liberal democracies by amplifying fringe political actors, sowing division and undermining trust in centrist institutions. Beyond pushing back against tech standards, Washington is positioning itself to challenge Europe on the ideological legitimacy of its entire regulatory model. Thus, the battle over digital sovereignty will be cast in civilizational terms — free markets versus bureaucratic overreach, expression versus censorship, sovereignty versus globalism. And Europe’s far-right narrative of elite censorship will have the imprimatur of U.S. policy. These grievances will then likely merge with U.S. demands for greater burden-sharing on defense or security concessions on Ukraine. It’s also entirely possible the Trump administration will exploit divisions among member countries on digital sovereignty, tying reviews of America’s force posture to regulatory rollbacks, a retreat on digital taxes or alignment with its own tech standards.  Brussels needs to be prepared for the battles ahead. Thankfully, some of the consequences are already coming into focus: First, driven by anemic growth forecasts of 0.5 to 0.9 percent — particularly in export-heavy economies like Germany — the risk of a far-right surge across Europe is growing. This economic pain will translate into political volatility. Populist parties will frame Brussels as complicit in Washington’s coercion and incapable of defending national interests. And despite its ideological affinities with the U.S., Europe’s far right won’t have any qualms with turning on its ideological bedfellows in the White House. Germany’s Alternative for Germany and France’s National Rally are already exploiting anger over the deal and are calling for a loosening of transatlantic ties.   Brussels needs to be prepared for the battles ahead. | Brendan Smialowski/AFP via Getty Images Next, when it comes to security, the U.S.–EU decoupling that’s already in motion will only accelerate. France and Germany are currently reviving proposals for a European Security Council, accelerating cooperation under Permanent Structured Cooperation and weighing investment in a European Defense Fund. Public opinion is shifting too. Majorities in Germany and France now support greater autonomy in defense planning and procurement, with pluralities favoring a European army. Even staunchly Atlanticist Poland is moving away from reflexive alignment with Washington. Finally, there’s the fact that, sooner or later, markets will wake up to the implications of this global reordering. So far, they’ve largely shrugged it off, treating Turnberry as theater, and investors have priced in volatility without grasping the deeper structural shift underway. But if capital flows start reflecting the risk of permanent transatlantic divergence — on currency regimes, regulatory frameworks and trade access — the spiral could be swift. And unlike the 2008 financial crisis, the shock wouldn’t be easily sutured. Europe isn’t powerless here. It retains economic scale, regulatory clout and unused tools — but it must be prepared to use them. This means treating economic security like national security, and embedding defense autonomy, energy resilience and technological sovereignty into a unified strategic doctrine. It also means strengthening Europe’s defenses against asymmetric coercion. Brussels’s Anti-Coercion Instrument, a trade tool meant to counter economic blackmail by imposing targeted measures on U.S. service providers, was a step in the right direction — even if it ultimately wasn’t deployed. Now, the EU must also build legal firewalls against extraterritorial enforcement and deploy its regulatory power to actively shape global norms. Europe’s challenge isn’t to restore the old transatlantic bargain but to build a new one before the next crisis hits and Trump dictates the terms once more. If the bloc hesitates, it won’t get to choose at all.