The European Commission on Tuesday reversed its flagship ban on producing new combustion engine cars by 2035, even as it vowed to meet its ambitious climate targets. In a major win for industry, the current requirement for automakers to reduce tailpipe emissions from new vehicles by 100 percent by 2035 is now gone. The reformed legislative proposal, published Tuesday, will now call on companies to lower these emissions by 90 percent from 2021 levels. “This will allow for plug-in hybrids, range extenders, mild hybrids, and internal combustion engine vehicles to still play a role beyond 2035, in addition to full electric and hydrogen vehicles,” the Commission said in a press release unveiling its automotive package on Tuesday afternoon. The package, which includes a new regulation on greening corporate fleets, a battery initiative and regulatory simplification measures, marks a major victory for the automotive industry and the center right, which had campaigned ahead of the 2024 European election on overturning the ban. European People’s Party chief Manfred Weber was elated by the changes, telling media on Tuesday morning that the 90 percent target was “clearly an EPP request. We were amending this also when the legislation was first time discussed in the Parliament four years ago. So we are coming back to our original EPP positioning.” For its part, the Commission staunchly maintains the ban is still in place but with added flexibilities for European automakers struggling with a U.S.-led trade war, lackluster car sales and stiff competition from Chinese incumbents with their glitzy electric vehicles. ALL ABOUT AVERAGES The Commission is also watering down its target of a 50 percent reduction in emissions by 2030 by allowing automakers to calculate average emissions over three years (2030 to 2032). The change mirrors an amendment signed into law earlier this year that averaged the 2025 emissions target over three years after intense lobbying from the industry and their political allies. Both the 2025 and 2030 targets are part of the overarching 2035 law that banned new CO2-emitting vehicles, with the interim targets intended as goalposts to keep automakers on track. The EU executive is also altering the 2030 emissions-reduction target for light-commercial vehicles, such as delivery vans, lowering it from a 50 percent reduction to 40 percent of 2021 levels. CREATING DEMAND The measure for greening corporate fleets — vehicles owned or leased by companies for business purposes — sets targets for what proportion of each EU country’s fleet should be zero- or low-emission, based on their GDP. It is hoped the regulation will create a second-hand market for EVs to foster a “swifter transition away from older combustion engine” cars, and act as a demand mechanism to complement the 2035 law. While the targets are binding, the Commission says it is giving discretion to the capitals on how the targets should be achieved. It anticipates most will incorporate favorable tax policies for companies, pointing to Belgium as an example, which has boosted its share of EVs on the road through tax breaks. Under the proposal, plug-in hybrids, range extenders and combustion engine vehicles would all count toward the target but with the same caveats. Under the reform, all powertrains will be available as part of the 10 percent, but the Commission is mandating that automakers offset the emissions with made-in-EU green steel and alternative fuels. Small and mid-sized companies will be exempt from the law, a Commission official said in a media briefing Tuesday ahead of the Parliament presentation. SMALLER IS BETTER The automotive omnibus — a regulatory red-tape cutting scheme — focuses on a small-car initiative that Commission President Ursula von der Leyen announced during her September State of the Union address. A small EV will be defined as measuring 4 meters and 20 centimeters in length, the size of a compact car. The cars have their own regulatory category in the legislation and have been given specific concessions like subsidies and reserved parking spaces. Companies that produce small cars would also get a coefficient of 1.3 in the emissions target calculations, meaning that if a carmaker sold 10 small EVs they would get emissions credits worth 13 cars. But the initiative will only be in place until 2034, the EU executive said. As with corporate fleets, manufacturers will have to comply with local content requirements when manufacturing small EVs in order to get the emissions credits. France has long demanded that any flexibilities around the ban be tied to local content requirements — a request it put forward in October alongside Spain.

The European Commission is set to water down the EU’s 2035 de facto combustion engine ban by requiring automakers to lower their emissions by 90 percent instead of the original 100 percent, multiple officials with knowledge of the discussions told POLITICO. The change effectively marks the end of the ban, giving the center-right political parties and the automotive sector a massive win after months of heavy lobbying. Under the deal, which is still being negotiated at the time of publication, automakers can sell plug-in hybrids and range extenders after 2035. But those flexibilities will be tied to automakers “offsetting” the 10 percent extra emissions by using green steel and alternative fuels. How the offsets will work and what percentage of fuels or steel will need to be consumed in production is still being negotiated. The industry argues the law banning the new sale of CO2-emitting vehicles cuts them off at the knees and makes them less able to compete against Chinese incumbents that are ahead of them on electric vehicles.  Automakers are facing further headwinds courtesy of a trade war launched by U.S. President Donald Trump and sluggish sales at home. Climate advocates say the Commission needs to stay the course.  “The EU is playing for time when the next game has already started. Every euro diverted into plug-in hybrids is a euro not spent on EVs while China races further ahead,” said William Todts, executive director of green NGO Transport & Environment. The deal mirrors one announced by Manfred Weber, head of the European People’s Party, on Dec. 11. He told German media that the combustion engine ban had been overturned, with the 2035 target of 100 percent CO2 reduction cut to only 90 percent. The Financial Times was the first to report the 10 percent reduction. New details are emerging, however, about what powertrains will be allowed after 2035. In the current plan, range extenders — small combustion engines that give batteries more range — will count for a further emissions reduction than plug-in hybrids, which have both a combustion engine and an electric motor. Essentially, the scheme would give automakers more emission credits for range extenders than plug-in hybrids because they emit less CO2 than the hybrids, two officials said. The 2035 reform is part of a broader automotive package being put forward by the Commission on Tuesday that will include a new regulation on greening corporate fleets — vehicles owned or leased by companies for business purposes — and an automotive omnibus that was obtained by POLITICO. Essentially, the scheme would give automakers more emission credits for range extenders than plug-in hybrids because they emit less CO2 than the hybrids, two officials said. | Lorenzo Di Cola | Getty Images For the 2035 legislation, automakers will be allowed to pool, meaning that a brand that doesn’t meet the 90 percent target can buy credits from an automaker that over delivers. The pooling scheme is a lucrative business for all-electric manufacturers like Tesla. A separate initiative will focus on boosting small electric vehicles — a demand put forward by Commission President Ursula von der Leyen in her State of the Union address in September. Companies that produce the small cars would get a coefficient of 1.3 in the target calculations. So if a carmaker sold 10 of the small EVs, they would get the emissions credit of 13 cars. Manufacturers will have to comply with yet-to-be-defined local content requirements when creating the small EVs in order for the automaker to get the emission credit. France has long demanded that any flexibilities around the ban be tied to local content requirements — a request it put forward in October alongside Spain. The draft marks the first step in a long, politically fraught journey to becoming law. It will now go to Parliament and the EU capitals, where political groups remain divided over how far the Commission should go to rescue the automotive sector. The EPP has pushed hard to overturn the ban and the far right has campaigned on the issue, too, which could prompt yet another alliance between the two in Parliament to push to further weaken the law. EU capitals also have competing ideas. Spain wants the target to remain unchanged, while Germany is balking at France’s push for “Buy European” requirements, over fears it will spark a global trade war with the U.S. and China.

BRUSSELS ― As usual, a summit of the European Union looks like a summit of European disunity. What’s different is that this time it’s not just the usual suspects threatening to throw a spanner into Brussels’ well-oiled machine, which usually tries to prioritize consensus over everything else. From how to use frozen Russian assets to finance Ukraine to questioning the EU’s climate targets, the agenda is packed with potential flashpoints. Here’s a look at the leaders who are sharpening their elbows and readying their vetoes.  SLOVAK PRIME MINISTER ROBERT FICO  The Slovak strongman has already signaled his intent to derail Thursday’s summit, announcing on X that he is “not interested in dealing with new sanctions packages” against Russia unless the EU comes up with a plan to help Slovakia’s struggling automotive sector. Leaders are expected to finally approve the 19th package, announced last month, at the summit. Fico is among the most Kremlin-friendly leaders in the EU, visiting Moscow last December and again in May, and has raised objections to sanctions before, though he has ultimately always backed down from his repeated threats to block each new package. It’s likely he will do so again, perhaps after extracting some concessions for Bratislava’s car industry.   HUNGARIAN PRIME MINISTER VIKTOR ORBÁN  The EU’s agitator-in-chief is, as always, expected to cause a ruckus. Orbán has stood in the way of unanimity at previous summits, especially on the subject of funneling financial and military aid to Ukraine, forcing the other 26 EU member countries to put out a joint statement without his signature. He could do so again. He has also repeatedly spoken out against a plan to seize Russian assets, arguing it could harm Budapest’s relations with Moscow. As a result, the EU is working on a way to legally sidestep his veto — which, if the bloc can pull it off, is sure to rile the typically pugnacious Hungarian leader. Orbán’s foreign minister,  Péter Szijjártó, denied Hungary would block the 19th package of sanctions. Unusually, Orbán is expected to skip much of the summit due to a national holiday commemorating the Hungarian Revolution of 1956. He will arrive later in the day (though his presence is still sure to loom over the proceedings) and be represented at the discussions in the meantime by Fico.  BELGIAN PRIME MINISTER BART DE WEVER  Who’d have thought that compromise-obsessed Belgium would become the one to throw its weight around at a European Council? It’s certainly not a role the Belgians have been used to playing. But that’s before they elected a right-wing Flemish nationalist steeped in the politics of upsetting the status quo as prime minister. The issue that’s concerning him is niche but affects Belgium in a unique way. The EU has warmed to the previously unthinkable idea of seizing €140 billion in Russian assets to fund a big new tranche of aid for Ukraine. (The plan that everyone had agreed on in the past was just to use the interest those assets were accruing.) The problem for de Wever is that most of these assets are housed in Belgium, at the Brussels financial depository Euroclear. The Belgian government is worried that it could bear the brunt of Moscow’s legal and financial retaliation if the EU breaks open the piggy bank.  After days of tension, Belgium has signaled it won’t stand in the way, but wants some legal assurances that the bloc will share the risks before signing onto any proposal. Other leaders, including Orbán, but also Luxembourg’s Prime Minister Luc Frieden and Croatian Prime Minister Andrej Plenković, have voiced similar concerns about the legal complexity of the plan. GERMAN CHANCELLOR FRIEDRICH MERZ  Merz has one thing on his mind going into Thursday’s EUCO: the fate of Germany’s automotive sector.  Ahead of the last leaders’ summit in Copenhagen, he vowed to put a “stick in the wheels” of the EU’s “legislative machine,” and now he is urging the European Commission to overturn its de facto combustion engine ban, co-signing a letter with Italy earlier this month calling for a radical overhaul of the legislation.   Berlin is backed by Slovakia, the Czech Republic and Poland — all of whom have a strong automotive supplier industry — and Austria. France is also open to giving automakers concessions on the 2035 zero emissions target if they include a certain percentage of European components in their vehicles. With the Commission putting forward a revision of the legislation by the end of the year, it’s a question of how many concessions Merz can extract. Scrapping the 2035 deadline outright remains politically difficult, but Merz is pushing for tweaks — notably “technological neutrality,” code for allowing alternative fuels into the mix and, in practice, keeping the combustion engine alive well beyond 2035.   Jordyn Dahl contributed to this report. 

DOUAI, France — The EU’s vision of ending sales of greenhouse-gas-spewing cars by 2035 is under fire. The idea was a key priority of the previous European Commission, which was dedicated to the fight against climate change. But war, a populist backlash, economic stagnation and a car industry hemorrhaging red ink are forcing Brussels to backtrack. Europe’s automakers scored a massive political win this week when Commission President Ursula von der Leyen gave in to their pleas for leniency on emission targets that went into force this year and for an earlier review of the 2035 legislation as part of her plan to rescue the troubled car industry. Buoyed by that success, automakers and their political backers want more. “Give the car industry an inch and they’ll take a mile. Before the ink was dry on the automotive plan, there were calls for technology openness,” said Julia Poliscanova, senior director for vehicles at green NGO Transport & Environment. “The Green Deal will suffer a death by a thousand cuts unless lawmakers stand up for it.” While the original measure was approved in 2023 by all member countries (despite last-minute resistance from Germany), it’s turned into a political punching bag. Over the last year, elections across the EU saw national governments, lobbyists and automakers pick up the call to weaken or reverse it. The European People’s Party — part of von der Leyen’s political family and the largest grouping in the European Parliament — promised to reverse the law. In Germany, angst over the auto sector’s decline helped fuel the winning campaign of Christian Democrat Friedrich Merz, whose party also has its sights set on undoing the legislation. Germany is keen for an exception for e-fuels — a synthetic alternative to gasoline, but one that is much more expensive than fossil fuels and not made in large quantities. Italy wants the law changed to make an exception for biofuels, despite worries about deforestation, biodiversity loss and soil erosion from using the fuel. Poland also backs that idea. POPPING CHAMPAGNE French policymakers — including Commission Vice President Stéphane Séjourné — went on a victory lap to a Renault factory on Wednesday. European Commission Vice President Stéphane Séjourné presented the EU’s plan to save the car industry in the Renault factory of Douai last week. | Giorgio Leali/POLITICO They were celebrating the Commission announcement that it would water down this year’s emissions targets after carmakers complained they could pay billions in fines for missing the target. Now, instead of the target being based on this year’s sales, it’ll be based on a three-year average, which makes it easier to hit for companies that have done less to clean up their fleets. “I have probably been the first one to raise the hand on this,” Renault CEO Luca De Meo told POLITICO at the Renault factory at Douai in northern France. As former president of EU car lobby ACEA, De Meo beat the drum for leniency on emission targets. De Meo also welcomed the Commission’s support for technological neutrality — meaning that not only battery-powered cars can meet green targets — although he insisted he doesn’t want to scrap the 2035 measure. “It opens a window on a logic that we have always supported. Tell us where you want us to go, but don’t tell us how,” he said, noting that “the enemy is not a technology rather than another — the enemy is CO2.” Yet, not every automaker was in a celebratory mood. Swedish brand Volvo, which was bought by Chinese firm Geely in 2010, wanted the targets to remain the same. “Those that have done their homework, should not be disadvantaged by last-minute changes to existing legislation, not least during the year in which they come into effect,” the company said in a statement. Renault’s CEO Luca De Meo, France’s Industry Minister Marc Ferracci and European Commission Vice President Stéphane Séjourné visiting the Renault factory of Douai. | Giorgio Leali/POLITICO Paris still defends the combustion engine ban but insists that softening this year’s emission targets will help carmakers to meet the 2035 deadline.  “It was paradoxical to ask manufacturers to pay fines and at the same time to support them,” Séjourné said in Douai. PILING ON The Commission also agreed to move up a review of the 2035 law from 2026 to this year — another key demand from carmakers that makes it easier to undermine the overall legislation. Opponents smell blood in the water. “We have forced the Commission to remove the fines trap and to anticipate the review of the CO2 regulation. Now we must immediately make a common front to overcome the madness of the Green Deal,” Italy’s Industry Minister Adolfo Urso said in a written statement. Czech MEP Filip Turek with the far-right Patriots for Europe grouping, said that Commission’s automotive plan marks the beginning of the end for the 2035 ban. Czech MEP Filip Turek with the far-right Patriots for Europe grouping, said that Commission’s automotive plan marks the beginning of the end for the 2035 ban. | European Parliament Germany’s newly elected Christian Democrats called the Commission’s announcement “half-hearted and unsatisfactory.” “I am convinced that the greatest threat to the European automotive market is no longer competitors from China, but the flood of European regulation,” said Thomas Bareiß, grouping’s transport spokesperson in the German Bundestag. “The emission targets could have been cancelled completely; so far nobody has been able to explain to me conclusively why we need emission targets at all for successful climate protection.” Maintaining the ban, he said, is creating uncertainty in the market and delaying the uptake of alternative fuels.  Bareiß and other opponents of the 2035 legislation are latching on to technological neutrality to further weaken the law, which some automakers and political groups say should allow hybrids and other types of vehicles that combine combustion engines and batteries. Hildegard Müller, president of German car lobby VDA, said more needs to be done to “implement technological openness. This also includes giving greater consideration to the role of plug-in hybrids beyond 2035.” Climate groups say that hybrids still emit CO2, violating the 2035 law. The law’s defenders are fighting a rear-guard battle to keep the legislation from being so watered down that it becomes useless. “The EU Commission is opening Pandora’s box, because the EPP wants to do more than just turn a few screws, it wants to completely overturn the combustion engine ban,” said Green MEP Michael Bloss. Socialist MEP François Kalfon approved the EU auto rescue package but fears the Commission’s review might turn into an effort to kill the 2035 ban. “It has to be a review clause, not a dropout clause, and that’s the risk,” he told POLITICO on a train back from the Renault factory. Gabriel Gavin and Nicolas Camut contributed to this report.

Russia’s state-owned natural gas company Gazprom will end its gas deliveries to Austria this weekend, Austrian energy firm OMV said, but Chancellor Karl Nehammer reassured his country that there is a secure supply of fuel. OMV said on Friday that Gazprom will stop supplying it with gas on Saturday, according to media reports.  The cutoff follows OMV’s announcement that it would stop paying for Gazprom gas to its Austrian arm to offset a €230 million arbitration award OMV won over an earlier cutoff of gas to its German subsidiary. The prospect of Gazprom shutting off supplies had made gas prices jump. It’s unclear whether Russia has carried through with the threat, Euronews reported on Saturday. Gazprom is sending gas to Europe via Ukraine at normal levels, Bloomberg reported on Saturday. Nehammer said on Friday that Austria has a secure supply of alternative fuel and that “no one will freeze this winter, no home will be cold.” Russia cut off most natural gas supplies to Europe in 2022, blaming disputes over payment in rubles. EU leaders described the move as energy blackmail over their support for Ukraine against Russia’s invasion. The cutoff sent gas prices soaring and contributed to a sharp burst of inflation that went into double digits but has since been going down. European governments had to scramble to line up alternative supplies. Still, three European countries — Austria, Slovakia and Hungary — have been getting supplies of Russian gas via a pipeline through Ukraine despite the fighting there. Ukraine has said it will not extend the transit agreement with Gazprom beyond January 2025 in a bid to choke off a source of income that Kyiv says Russia uses to fund its war and pushing these countries to diversify supplies. Austria gets most of its natural gas from Russia. Last December, the country’s dependence on Russia for gas rose to 98 percent and Vienna has been looking to accelerate the end of its Russian gas ties. In February, Vienna announced plans that would force domestic energy firms to slowly phase out Russian gas and explore options for an early end to the country’s long-term gas contract with Moscow. German Chancellor Olaf Scholz, meanwhile, on Friday spoke by phone with Russian President Vladimir Putin in their first direct exchange in nearly two years.

Well, the Trump show’s just been rebooted. And Europe can’t look away. European policymakers have spent months preparing for Donald Trump’s potential return to the White House. But let’s be honest, they don’t really know how this will all unfold. For instance, Trump has promised to slap tariffs on every single European good entering the U.S. So the EU has preemptively locked and loaded some retaliatory measures. Seems logical — but that only works in a world where Trump is not erratic and impulsive. Also, remember Trump’s boast that he could instantly “end” Russia’s war in Ukraine? Whatever his bluster means, it has ramifications in Europe. And that’s just what’s consuming the headlines. Trump’s victory will inevitably affect every area of EU policy, from drug pricing to green technologies to artificial intelligence standards. So buckle up while POLITICO futurecasts what this all means for the EU. The remake will be unmissable, if nothing else. Energy Climate Trade Central banking Sustainability Financial services Health Mobility Defense Tech Competition Cybersecurity ENERGY Trump has boiled his energy policy down to three words: “drill, baby, drill.” His vow to boost oil and gas extraction, and ship more fossil fuels abroad, has raised eyebrows among environmentalists but has industry eyeing big profits. Despite American exports of natural gas hitting a record high last year, Trump wants to ax a Biden administration freeze on permits for new liquified natural gas (LNG) projects, a restriction that creates uncertainty for the European market. His crusade against the green transition could be less crowd pleasing. Some in Trump’s camp want him to scrap the Inflation Reduction Act (IRA), which allocates more than half a trillion dollars for projects like clean tech, hydrogen and renewable energy. That program, however, has created jobs in key states and drawn business away from Europe, giving the U.S. a head start over the EU in industries such as wind, solar, alternative fuels and electric vehicles. Its repeal could be a boon for Brussels as it sets its sights on competition with Washington. Back to the top CLIMATE Donald Trump’s victory spells environmental disaster. To avert catastrophic levels of global warming, the world has very little time to dramatically slash emissions. Yet under Trump — who plans to pull the U.S. out of the Paris Agreement once again and double down on fossil fuels — the pace of the green transition is projected to slow down rather than speed up.  With the U.S. responsible for more than a tenth of planet-warming pollution, any shift in American climate policy has global consequences. A hotter planet means more disasters, including within the EU, which has to prepare accordingly for worse climate impacts. And some fear Trump’s win may reduce momentum for climate action worldwide, putting the Paris Agreement goals even further out of reach.  Funding for climate action in poorer countries is the hot topic at this year’s global climate summit starting Nov. 11, and Trump’s victory may plunge the conference into uncertainty — with many looking toward the EU to step up and fill the leadership vacuum. Yet without U.S. backing for much-needed reforms of the global financial architecture to cope with the climate challenge, debt-distressed developing countries will struggle to raise the necessary funds to switch away from fossil fuels.  Back to the top Donald Trump’s victory spells environmental disaster. | Chip Somodevilla/Getty Images TRADE “America First” will again sum up Trump’s approach to trade policy.  He’s vowed to bring back jobs to the U.S. and punish friends and foes with across-the-board tariffs of 10 or 20 percent (and up to 60 percent on goods coming from China), despite economists’ warnings of a detrimental impact on U.S. economic growth and higher costs for consumers. Trump’s trade policy is focused more on reducing the sizable U.S. trade deficit than on opening up new market opportunities. Trade policy will mainly be seen through the national security and geopolitical lens.  The EU failed to capitalize on the détente with the Biden administration to fix lingering trade disputes on steel and aluminum tariffs, green subsidies on electric cars, and reviving the highest court of the World Trade Organization. These rifts are expected to worsen under Trump.  The most immediate stress tests for Brussels and Washington will be to find a solution to the EU’s paused retaliatory tariffs against Washington (the truce elapses in March 2025), as well as its aircraft dispute over subsidies for Airbus and Boeing by 2026.  Back to the top CENTRAL BANKING Call it Trumpageddon.  If the president-elect goes ahead with even half the ideas he’s floated on the campaign trail, expect serious pain for the European economy. Analysts at Goldman Sachs said the euro could drop as much as 10 percent against the dollar if the new administration enacts its across-the-board tariff plan, while earnings among a group of Europe’s largest companies could fall by more than 5 percent next year.  Trump has explicitly called for more White House interference into the working of the U.S. Federal Reserve — America’s central bank — which has made its independence from politicians into a calling card. That could have huge implications for the stability of the global financial system, as well as the continued dominance of the dollar as the world’s reserve currency. Less direct, but no less impactful, are plans to deport undocumented migrants by the millions. It’s not yet clear who will be in the crosshairs of the mass deportation program, but given the importance of migrant labor, even the undocumented kind, for key sections of the American economy, there will be an unavoidable upwards pressure on prices. That could translate to higher U.S. interest rates, and put pressure on the European Central Bank to follow, screwing with an already shaky economic recovery. Back to the top SUSTAINABILITY It’ll come as no surprise to Brussels that the president-elect is not a fan of green policymaking. While the Trump administration probably won’t impact Brussels’ own rule-setting on green issues, Trump’s animosity for environmental policy will widen the gap between the two blocs on the international stage and harm the EU’s ambitions to promote multilateral cooperation. Under Biden, efforts to mandate American businesses to report on their environmental footprint were already stalling, frustrating Brussels’ hopes of creating global standards so companies operating in Europe don’t feel unfairly burdened. Under Trump, Brussels can kiss that dream goodbye.  Waltzing into the Oval office for a second time, Trump could also start backtracking on international commitments made by the U.S. The Republican Party is strongly against the U.S.-backed proposal to limit plastic production as part of the ongoing negotiations for a global plastics treaty. This could crush the EU’s hopes of American support in the final round of talks later this month. Back to the top Domald Trump’s animosity for environmental policy will harm the EU’s ambitions to promote multilateral cooperation. | Chip Somodevilla/Getty Images FINANCIAL SERVICES Trump’s victory will set the teeth of the world’s finance regulators on edge. Many global rules aimed at preventing another global financial crisis are drawn up in international bodies like the Financial Stability Board, IOSCO and the Basel Committee on Banking Supervision – all of which could be under threat from an uncooperative U.S.  In the short term, the Trump win looks like bad news for the global rollout of bank capital rules known as Basel III, drawn up after the 2007-2008 crisis to make sure lenders have enough reserves to cope with economic shocks. The U.S. has already changed its plans and postponed its rollout of the global rules after massive lobbying from the banking industry, and now could well scrap the rules altogether, prompting fears of financial instability.  But Wall Street is likely to be happy with Trump’s “America First” economic policies which boost manufacturing and loosen regulations, particularly on competition. Trump didn’t rock the boat on financial services policy the first time around, stacking regulators with Wall Street grandees. But while campaigning this time he launched a crypto venture. So the jury’s out on that one.  Back to the top HEALTH In his previous stint as president, Trump attempted to curb drug prices with little impact. Since then, the Biden administration has used the IRA to push through far-reaching drug price restrictions for people on Medicare, the health insurance for older Americans. Trump is unlikely to roll this back, meaning Big Pharma in the U.S. and Europe will be considering their investment options as both regions push to limit pharma profits. Global health advocates might also be fearing that Trump will once again withdraw from the World Health Organization (Biden overturned Trump’s previous withdrawal on his first day in office). The U.S. is the largest funder of the U.N. body, so its disengagement would have a huge impact on global health projects. Abortion has been one of the top voter concerns this election campaign. Trump, who claimed victory for overturning women’s right to abortion via Roe v. Wade, has since said he would veto a federal ban, leaving power with the states on the extent to which abortion is or isn’t allowed. Back to the top MOBILITY Donald Trump’s victory is likely to hurt European carmakers. “I want German car companies to become American car companies,” Trump recently told his supporters, promising “the lowest taxes, the lowest energy costs and the lowest regulatory burden” for automakers that choose to move production to the U.S. and “a very substantial tariff” on the others. Republicans also promised to cancel Biden’s electric vehicle mandate, which aims to ensure that half of all new cars and trucks sold in 2030 are zero-emission. Trump’s reelection could also spell bad news for Airbus and the rest of the European aircraft sector, with a possible wave of aerospace protectionism aimed at rescuing Boeing from troubled waters. It also remains to be seen if Trump will maintain his skepticism of green tech policies or continue to subsidize sustainable aviation fuels, which benefited massively from the Biden administration’s tax cuts under the IRA. As for shipping, which is most exposed to the negative effects of tariffs, the sector will be closely watching any type of trade war that a second Trump administration might launch. Back to the top DEFENSE A Trump win means Europe can no longer — or at least much less — rely on the U.S. for its defense and security. Donald Trump threatened during his first term to leave NATO and has repeatedly said on the campaign trail that Washington wouldn’t come to the rescue of allies who don’t invest enough in their military in case of a Russian aggression.  In a way, this may be a blessing in disguise for the EU, forcing European governments to work more closely together and make bold decisions — such as agreeing to joint borrowing to boost the bloc’s defense industry. France could revive discussions on the European aspect of its nuclear doctrine, while Brussels and London could accelerate talks for a defense and security agreement. Most countries would likely raise defense spending as much as possible.  On the other hand, we may see European capitals bilaterally try to curry favor with a Trump administration to ensure Washington remains interested in their security, namely by increasing even more purchases of U.S.-made weapons when the European Commission is trying to incentivize EU countries to buy local.  A Trump win means Europe can no longer — or at least much less — rely on the U.S. for its defense and security. | Chip Somodevilla/Getty Images The Trump win could mean the end of U.S. military aid to Ukraine and pressure on Kyiv to negotiate a peace deal with Russian President Vladimir Putin, even if the terms are more favorable for Moscow.  Back to the top TECH Under Biden, the EU was on speaking terms with the U.S. on tech. The Trump win could change that by spelling the end of the U.S.-EU Trade and Technology Council, the biannual transatlantic political gathering founded in 2021 as a place for the U.S. and the EU to discuss tech policy and coordinate on topics such as semiconductors and artificial intelligence standards. The collapse of such a diplomatic backchannel could come when international alignment on AI governance is needed the most.  Another liability is Trump’s proximity to Elon Musk, the owner of X, who has become a big Trump supporter. If the EU fines X for breaches of the bloc’s content-moderation rulebook, the relationship between Trump and the European Commission could sour very quickly and reinvigorate a well-known narrative that the EU is only trying to “take U.S. Big Tech companies down.”  Back to the top COMPETITION A Trump win opens up an uncertain era, as he hasn’t expressed clear lines on industrial policy or antitrust regulation, beyond an “America First” approach. While no fan of Big Tech, he has expressed frustration over European efforts to rein in American companies. He told a podcast in October that Apple Chief Executive Officer Tim Cook had called him to complain about an EU antitrust fine and losing a court ruling that required it to hand over billions of euros in back tax. He appears to oppose U.S. and EU antitrust efforts to split off parts of Google’s business, saying that “China is afraid of Google.” Trump has been backed by tycoon Elon Musk who has run into several digital regulation battles with the European Commission. Ultimately, Trump’s win may speed up European efforts to rely less on the U.S. as a partner, pushing on with an economic security strategy that emphasizes European production and a wide range of international suppliers and markets. That could see more pressure within Europe for EU merger reviews to allow bigger European companies and for more government help to boost European champions. Back to the top CYBERSECURITY The biggest cybersecurity impact of a Trump win is that his administration could remove Israeli spyware firms from the U.S. entity list of companies deemed a national security concern. Some of them, like NSO Group, have already been lobbying Republicans. The U.S. could also abandon American-led international efforts to clamp down on the proliferation and misuse of commercial spyware, which would have a ricochet effect on global efforts to rein in the surveillance tool.  Any distancing of the U.S. from NATO under Trump could also affect the Western alliance’s cyber capabilities.  Back to the top Gabriel Gavin, Zia Weise, Camille Gijs, Marianne Gros, Kathryn Carlson, Helen Collis, Tommaso Lecca, Laura Kayali, Pieter Haeck, Aude Van Den Hove, Antoaneta Roussi and Cory Bennett contributed to this report.