BRUSSELS — The EU has struck a political agreement to overhaul the bloc’s foreign direct investment screening rules, the Council of the EU announced on Thursday, in a move to prevent strategic technology and critical infrastructure from falling into the hands of hostile powers. The updated rules — the first major plank of European Commission President’s Ursula von der Leyen’s economic security strategy — would require all EU countries to systematically monitor investments and further harmonize the way those are screened within the bloc. The agreement comes just over a week after Brussels unveiled a new economic security package. Under the new rules, EU countries would be required to screen investments in dual-use items and military equipment; technologies like artificial intelligence, quantum technologies and semiconductors; raw materials; energy, transport and digital infrastructure; and election infrastructure, such as voting systems and databases. As previously reported by POLITICO, foreign entities investing into specific financial services must also be subject to screening by EU capitals. “We achieved a balanced and proportionate framework, focused on the most sensitive technologies and infrastructures, respectful of national prerogatives and efficient for authorities and businesses alike,” said Morten Bødskov, Denmark’s minister for industry, business and financial affairs. It took three round of political talks between the three institutions to seal the update, which was a key priority for the Danish Presidency of the Council of the EU. One contentious question was which technologies and sectors should be subject to mandatory screening. Another was how capitals and the European Commission should coordinate — and who gets the final say — when a deal raises red flags. Despite a request from the European Parliament, the Commission will not get the authority to arbitrate disputes between EU countries on specific investment cases. Screening decisions will remain firmly in the purview of national governments. “We’re making progress. The result of our negotiations clearly strengthens the EU’s security while also making life easier for investors by harmonising the Member States’ screening mechanism,” said the lead lawmaker on the file, French S&D Raphaël Glucksmann. “Yet more remains to be done to ensure that investments bring real added value to the EU, so that our market does not become a playground for foreign companies exploiting our dependence on their technology. The Commission has committed to take an initiative; it must now act quickly,” he said in a statement to POLITICO. This story has been updated.

Iris Ferguson is a global adviser to Loom and a former U.S. deputy assistant secretary of defense for Arctic and global resilience. Ann Mettler is a distinguished visiting fellow at Columbia University’s Center on Global Energy Policy and a former director general of the European Commission. After much pressure, European leaders delayed a decision this week amid division on whether to tighten market access through a “Made in Europe” mandate and redouble efforts to reduce the bloc’s strategic dependencies — particularly on China. This decision may appear technocratic, but the hold-up signals its importance and reflects a larger strategic reality shared across the Atlantic. Security, industry and energy have all fused into a single race to control the systems that power modern economies and militaries. And increasingly, success will hinge on whether the U.S. and Europe can confront this reality together, starting with the one domain that’s shaping every other: energy. While traditional defense spending still grabs headlines, today’s battlefield is being reshaped just as profoundly by energy flows and critical inputs. Advanced batteries for drones, portable power for forward-deployed units and mineral supply chains for next-generation platforms — these all point to the simple truth that technological and operational superiority increasingly depends on who controls the next generation of energy systems. But as Europe and the U.S. look to maintain their edge, they must rethink not just how they produce and move energy, but how to secure the industrial base behind it. Energy sovereignty now sits at the center of our shared security, and in a world where adversaries can weaponize supply chains just as easily as airspace or sea lanes, the future will belong to those who build energy systems that are resilient and interoperable by design. The Pentagon already understands this. It has tested distributed power to shorten vulnerable fuel lines in war games across the Indo-Pacific; it has watched closely how mobile generation units keep the grid alive under Russian attack in Ukraine; and it is exploring ways to deliver energy without relying on exposed logistics via new research on solar power beaming. Each of these cases clearly demonstrates that strategic endurance now depends on energy agility and security. But currently, many of these systems depend on materials and manufacturing chains that are dominated by a strategic rival: From batteries and magnets to rare earth processing, China controls our critical inputs. This isn’t just an economic liability, it’s a national security vulnerability for both Europe and the U.S. We’re essentially building the infrastructure of the future with components that could be withheld, surveilled or compromised. That risk isn’t theoretical. China’s recent export controls on key minerals are already disrupting defense and energy manufacturers — a sharp reminder of how supply chain leverage can be a form of coercion, and of our reliance on a fragile ecosystem for the very technologies meant to make us more independent. So, how do we modernize our energy systems without deepening these unnecessary dependencies and build trusted interdependence among allies instead? The solution starts with a shift in mindset that must then translate into decisive policy action. Simply put, as a matter of urgency, energy and tech resilience must be treated as shared infrastructure, cutting across agencies, sectors and alliances. Defense procurement can be a catalyst here. For example, investing in dual-use technologies like advanced batteries, hardened micro-grids and distributed generation would serve both military needs and broader resilience. These aren’t just “green” tools — they’re strategic assets that improve mission effectiveness, while also insulating us from coercion. And done right, such investment can strengthen defense, accelerate innovation and also help drive down costs. Next, we need to build new coalitions for critical minerals, batteries, trusted manufacturing and cyber-secure infrastructure. Just as NATO was built for collective defense, we now need economic and technological alliances that ensure shared strategic autonomy. Both the upcoming White House initiative to strengthen the supply chain for artificial intelligence technology and the recently announced RESourceEU initiative to secure raw materials illustrate how partners are already beginning to rewire systems for resilience. Germany gave the bloc one such example by moving to reduce its reliance on Chinese-made wind components in favor of European suppliers. | Tan Kexing/Getty Images Finally, we must also address existing dependencies strategically and head-on. This means rethinking how and where we source key materials, including building out domestic and allied capacity in areas long neglected. Germany recently gave the bloc one such example by moving to reduce its reliance on Chinese-made wind components in favor of European suppliers. Moving forward, measures like this need EU-wide adoption. By contrast, in the U.S., strong bipartisan support for reducing reliance on China sits alongside proposals to halt domestic battery and renewable incentives, undercutting the very industries that enhance resilience and competitiveness. This is the crux of the matter. Ultimately, if Europe and the U.S. move in parallel rather than together, none of these efforts will succeed — and both will be strategically weaker as a result. The EU’s High Representative for Foreign Affairs and Security Policy Kaja Kallas recently warned that we must “act united” or risk being affected by Beijing’s actions — and she’s right. With a laser focus on interoperability and cost sharing, we could build systems that operate together in a shared market of close to 800 million people. The real challenge isn’t technological, it’s organizational. Whether it be Bretton Woods, NATO or the Marshall Plan, the West has strategically built together before, anchoring economic resilience with national defense. The difference today is that the lines between economic security, energy access and defense capability are fully blurred. Sustainable, agile energy is now part of deterrence, and long-term security depends on whether the U.S. and Europe can build energy systems that reinforce and secure one another. This is a generational opportunity for transatlantic alignment; a mutually reinforcing way to safeguard economic interests in the face of systemic competition. And to lead in this new era, we must design for it — together and intentionally. Or we risk forfeiting the very advantages our alliance was built to protect.

BRUSSELS — The head of Wall Street’s top watchdog is “absolutely not” concerned about the body’s independence from the White House. Securities and Exchange Commission Chair Paul Atkins told POLITICO in an interview that President Donald Trump has the power to oust the head of the body and its commissioners. “It’s clear from the law and Supreme Court rulings that we’re part of the executive branch and the president can fire me and the other commissioners,” he said. “He’s [Trump] the head of the executive branch. So I think that goes without saying.” His comments come amid Trump’s repeated attacks on the head of the Federal Reserve, Jerome Powell, as well as his attempts to fire Lisa Cook, a member of the board. Asked whether he has concerns about the SEC’s independence, Atkins said: “No. Absolutely not.” But, he added: “As far as the SEC goes,” he is “confident we could do our job as we have been doing it now for 90 years.” Atkins declined to provide an opinion on Trump’s attacks on Powell — the president has described the Fed chair as a “moron” and a “numbskull” — saying: “That’s another agency altogether. They can — Jay Powell and the president — work out those sorts of things.” CRYPTO RESERVE Atkins praised Trump for his plans to set up a strategic Bitcoin reserve and digital assets stockpile following a presidential executive order. “The U.S. government has seized a lot of Bitcoin and other things. … I think it’s smart not to dump it on the market, frankly, and so I salute the efforts of the president and the Treasury Secretary [Scott Bessent] and others to address that issue.” The SEC chair has unveiled an ambitious agenda for stablecoin regulation known as “Project Crypto,” which he described as a move away from a “head-in-the-sand” approach from the regulator toward the digital technology. “The SEC needs to embrace change. And if you do the opposite … if you are not embracing it, then it goes offshore,” he said, citing the example of FTX, the crypto exchange which was headquartered in the Bahamas and collapsed in 2022. GREEN STANDARDS Atkins has made his dislike of EU rules for corporate sustainability reporting clear, criticizing them in a speech in Paris earlier this week. He has also threatened to withdraw U.S. recognition of international accounting standards over the inclusion of sustainability in their methodology. Asked whether he disagrees with the European Central Bank’s approach of factoring the risks posed by climate change into their policymaking, Atkins said: “Yes, in a word.” “We’re not here to be environmental police or social police or whatever. That’s not our job. And if others want to do that, then that’s up to them,” he said. Atkins said “it doesn’t matter what I believe” regarding his personal views on climate change, adding that the SEC’s position “long before me” was that climate change does not pose a risk to the orderly functioning of financial markets. “I’m just continuing with that. I agree with that position,” he said. ENFORCEMENT AGENDA Separately, Atkins defended the appointment of Meg Ryan, a judge, to the role of head of the SEC’s enforcement division. Her hire broke with a precedent of appointing someone with long experience in securities law. But Atkins said critics are “people who are ignorant, frankly, of how things work.” “Judges don’t come ready-made with knowledge of the securities world,” he said, adding that Ryan is “eminently qualified to take this position.” Judges “learn it on the job, they apply their experience and their knowledge to the case at hand, and they study up and they’re smart people and that’s their job,” Atkins said.

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.

BRUSSELS — The EU’s attempt to stop China from buying out its top chipmakers and AI companies is being hollowed out from within.  National capitals are pushing to weaken rules that would require them to screen foreign investments in sensitive technologies, such as semiconductors or artificial intelligence, according to the latest draft compromise text on the review of the rules governing foreign direct investment (FDI) screening seen by POLITICO.  The FDI review is part of a signature initiative from European Commission President Ursula von der Leyen’s first mandate: a new economic security strategy for the EU. As part of the agenda she proposed to revamp rules in January 2024 governing how EU countries scrutinize inbound investments.  The strategy comes as part of a broader EU-wide effort to rein in foreign investors from taking control of European companies in strategic or sensitive sectors, such as when Chinese shipping giant Cosco attempted to buy a container terminal in the Port of Hamburg two years ago. The draft document waters down the original Commission proposal by narrowing the list of strategic sectors subject to mandatory FDI screening, where the EU executive said that EU countries would be required to screen foreign investments into AI, chips, quantum technologies, energy technologies, space, drones or critical medicines. But while it adds more detail — explicitly naming “core components or software of semiconductor manufacturing equipment,” lithography, microprocessors and memory chips — the new Council text stops short of requiring national authorities to act.  Instead, the new text, dated April 14, only recommends that EU governments “take [those sectors] into consideration” when assessing whether a foreign investment poses a threat to security or public order.  By contrast, in its own position on the rules, the European Parliament doubled down on the Commission’s original intent — seeking to add more sectors that capitals must monitor such as aerospace, rail transport or the automotive industry. Diplomats from national capitals do not expect their final position to significantly change before institutions enter into negotiations to finalize the legislation. Agreeing on which sectors should be subject to screening will likely be the most contentious aspect of those talks.  The latest draft, which was discussed by EU trade diplomats last week, comes after POLITICO reported that capitals wanted to ditch the list of sensitive sectors altogether during the Hungarian presidency of the Council of the EU in the second half of last year. TRUMP’S SHADOW While the rules were drafted amid fears of Chinese takeovers, the European Union is currently more worried about corporate acquisitions by U.S. companies — such as American private equity CD&R buying a subsidiary of French paracetamol-maker Sanofi, or the failed attempt by American industrial machinery giant Flowserve to acquire control of French nuclear firm Segault in 2023.  Now that Trump is in power, the EU executive is clearly worried.  Chinese shipping giant Cosco attempted to buy a container terminal in the Port of Hamburg two years ago. | Caroline Brehman/EPA “We cannot afford discussing this for months and months,” said Damien Levie, who heads the FDI screening unit at the Commission’s trade department, citing a changing global security environment in which, for example, the United States is no longer “unequivocally” on the EU’s side.  Levie said at an event last week that he hoped member countries would be in a position to agree “in the coming weeks” on a Polish presidency proposal of the text, which “fine-tunes” an earlier proposal by the Hungarians.  INVESTING FROM SCRATCH Another substantial difference compared to the Parliament’s position is that EU countries want to remain free to decide whether to include so-called greenfield investments in their mandatory screening — which is when a foreign company sets up an entirely new operation in the EU, like building a factory from the ground up. “Greenfield foreign investments should fall within the scope of this Regulation. However, they should not fall within the minimum scope of screening mechanisms,” adds the text, prepared under the current Polish presidency. The Parliament’s own position — set to be voted on May 7 in the plenary — states that EU countries should screen greenfield investments in sensitive sectors. European lawmakers also sought to give the European Commission an adjudicatory role when an investment is disputed between capitals. In their own position, EU capitals don’t give the EU executive such a role. The draft text is still subject to change before countries adopt their position. This story has been updated with comments from Damien Levie of DG TRADE.

European institutions are expected to kick off their negotiations on the review of the screening of foreign direct investment (FDI) in May, with the legislative work expected to be concluded this year, the EU’s trade chief Maroš Šefčovič said on Thursday. The European Commission’s proposal to revamp its rules on screening FDI mostly aims at harmonizing the bloc’s fragmented system of screening of foreign investments across member states. This regulation is one of the key planks of the Commission’s broader economic security strategy that seeks to bolster Europe against the risks of growing geopolitical tensions. “I look forward to trilogues starting in May, and I see no reason for us not to complete this work by the end of this year,” Šefčovič told trade lawmakers, referring to the negotiations with the European Parliament and the Council of the EU. In the talks, the scope of the sectors required to be screened as well as the role of the European Commission in screening the investments are expected to be the most prickly issues. While capitals removed a list of critical technologies such as AI and semiconductors that would be subject to mandatory screening, the Parliament has added more areas of screening in its draft report. Neither the Council of the EU nor the Parliament has yet finalized their positions ahead of the negotiations. The Parliament is expected to do so during a vote on April 7 or 8.

The European Union’s Competitiveness Compass has been postponed by another week to Jan. 29, according to an agenda obtained by POLITICO. The delay was confirmed by a European Commission official and an EU diplomat, who both spoke on condition of anonymity because planning details aren’t yet public. The proposal, which aims to set the economic strategy for the Commission’s work until 2029, was initially due to be unveiled on Wednesday, but was postponed after Commission President Ursula von der Leyen became ill with pneumonia. How sick she was only became clearer last week when the Commission confirmed that she had been hospitalized and is now recovering at her home in Germany. An earlier agenda showed the proposal would be presented next week but the latest planning document, dated Jan. 13, shows another week of delay. “I hope the date will remain Jan. 29,” the Commission official told POLITICO. The Competitiveness Compass is the keystone for a series of initiatives the Commission has scheduled for the next few months, including the Clean Industrial Deal due in February. Drawing from reports from Mario Draghi and Enrico Letta on how to boost the EU’s economy, the initiative aims to tackle the EU’s innovation gap with global rivals, ensure the bloc’s economic security and make progress on decarbonizing EU industry.

Elisabeth Braw is a senior fellow at the Atlantic Council, the author of the award-winning “Goodbye Globalization” and a regular columnist for POLITICO. Finland is trending. This year, the country was named the happiest in the world — for the seventh time in a row. It managed to join NATO without Russian punishment. And its all-encompassing national security efforts have gained global media attention, with The New York Times pronouncing Finland the world’s “prepper nation.” But being known as a country facing geopolitical threats also has its drawbacks — particularly when it comes to the economy. What company would want to do business where there’s a risk of attack? Of course, in today’s world, it’s not just Finland facing such risks. There are many other countries that must also try to square that circle, and how Finland chooses to respond and reassure the business community will likely be a leading example. Those googling “Finland” these days are likely to receive a lot of hits about Russian threats, the Finnish government’s response to Russia’s threats, stories about Finland’s comprehensive national security — the list goes on in a similar fashion. Even ChatGPT says: “While Finland is geographically and politically stable, its strategic security concerns remain in flux due to the changing geopolitical landscape, particularly with Russia’s more aggressive stance and broader European security dynamics.” (ChatGPT has definitely been trained on think tank reports.) Finland does indeed have admirable comprehensive defense. It’s even more impressive when one considers that it was perfected during the Cold War, when the Soviets banned the country from operating auxiliary military organizations — the kind of volunteer-staffed organizations that support the armed forces and formed a formidable pillar of Sweden’s Cold War era “total defense.” And while Finland’s comprehensive approach may not feature auxiliary defense organizations, it does include the armed forces, four government ministries, various government agencies, government-owned companies and all manner of boards and consultative bodies. But it’s the preparedness part of this comprehensive approach that most impresses other countries and journalists because it involves every part of society and, unlike the military, it doesn’t rely on strict command and control. Governments have to engage the private sector and civil society; they need to educate, cajole, meet and plan. “The biggest challenge is always command and control,” said Pekka Toveri, a retired major general in the Finnish Defence Forces who is now a member of the European Parliament. “The Finnish model is that you have ministries that take care of issues in their respective areas, but the problem is that threats rarely affect just one area.” Still, Finland does preparedness well. Getting the country’s much-lauded strategic reserves to work, for example, involves legislation, the National Emergency Supply Agency, consultative meetings, as well as companies with products stockpiled in the reserves. Preparedness is so difficult, though, that even a leading nation like Finland can’t execute it perfectly: When the government ordered the stockpiles be opened during Covid-19, it found, among other things, face masks with 2012 use-by dates. “There’s no silver bullet,” Toveri said. “Everyone has to participate, and it takes decades to build such a system perfectly.” Finland has successfully ensured the world doesn’t forget about the menace next door. | Jarno Artika/Getty Images And trying to execute total defense brings another challenge too: Being primarily known as the subject of national security threats isn’t exactly good for business. Of course, the Nordic nation has little choice but to highlight the Russian threat: Russia isn’t hiding its combative nature. And Finland has successfully ensured the world doesn’t forget about the menace next door. It has done well in marshaling its national resources to counter it. Even Finnish companies that used to depend on exports to Russia have managed to shift their exports to other countries. But how the nation eventually manages (or not) to balance calling attention to Russia’s threats and convincing the business community is yet to be seen. Paradoxically, the answer here lies in resilience and preparedness as well. No country can change its location, but every country has agency over how it counters threats. Indeed, a country can signal that its society can keep going, even in the face of extremely serious harm. The key is being able to show the capacity for resilience before the harm occurs, as such demonstrations signal to prospective attackers that their attempts aren’t worth the effort. The master of this métier is Cold War-era Sweden, where total defense truly involved the totality of the country — including some 11,000 companies designated as “crucial” to the economy. The government maintained special arrangements with these companies, allowing them to continue operating even in case of an invasion. The message was clear: “You may have a vast military, but our society and economy will keep going no matter what.” And it was a convincing message too. Despite the massive Soviet threat, Sweden’s economy chugged along, even flourished. This is the tightrope Finland must now walk. Indeed, every Western country now needs to convince investors and money markets that it can keep going, even if Russia or another country tries to harm it. Such harm is already happening — think bombs on cargo planes, breaking into water plants and murder plots against executives — and in recent weeks, intelligence chiefs in Britain, Germany and Sweden have all warned of worse to come. Business types follow such news and they’ll be following the news about countries’ efforts to thwart aggressors just as closely. The countries that do best will win business.

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.