BRUSSELS — The European Commission is cracking down on two Chinese companies, airport scanner maker Nuctech and e-commerce giant Temu, that are suspected of unfairly penetrating the EU market with the help of state subsidies. The EU executive opened an in-depth probe into Nuctech under its Foreign Subsidies Regulation on Thursday, a year and a half after initial inspections at the company’s premises in Poland and the Netherlands. “The Commission has preliminary concerns that Nuctech may have been granted foreign subsidies that could distort the EU internal market,” the EU executive said in a press release.  Nuctech is a provider of threat detection systems including security and inspection scanners for airports, ports, or customs points in railways or roads located at borders, as well as the provision of related services.  EU officials worry that Nuctech may have received unfair support from China in tender contracts, prices and conditions that can’t be reasonably matched by other market players in the EU.  “We want a level playing field on the market for such [threat detection] systems, keeping fair opportunities for competitors, customers such as border authorities,” Executive Vice President Teresa Ribera said in a statement, noting that this is the first in-depth investigation launched by the Commission on its own initiative under the FSR regime.  Nuctech may need to offer commitments to address the Commission’s concerns at the end of the in-depth probe, which can also end in “redressive measures” or with a non-objection decision.   The FSR is aimed at making sure that companies operating in the EU market do so without receiving unfair support from foreign governments. In its first two years of enforcement, it has come under criticism for being cumbersome on companies and not delivering fast results.  In a statement, Nuctech acknowledged the Commission’s decision to open an in-depth investigation. “We respect the Commission’s role in ensuring fair and transparent market conditions within the European Union,” the company said. It said it would cooperate with the investigation: “We trust in the integrity and impartiality of the process and hope our actions will be evaluated on their merits.” TEMU RAIDED In a separate FSR probe, the Commission also made an unannounced inspection of Chinese e-commerce platform Temu.  “We can confirm that the Commission has carried out an unannounced inspection at the premises of a company active in the e-commerce sector in the EU, under the Foreign Subsidies Regulation,” an EU executive spokesperson said in an emailed statement on Thursday.   Temu’s Europe headquarters in Ireland were dawn-raided last week, a person familiar with Chinese business told POLITICO. Mlex first reported on the raids on Wednesday.  The platform has faced increased scrutiny in Brussels and across the EU. Most recently, it was accused of breaching the EU’s Digital Services Act by selling unsafe products, such as toys. The platform has also faced scrutiny around how it protects minors and uses age verification.  Temu did not respond to a request for comment.

Brussels and Beijing got 99 problems — but an upcoming high-level summit ain’t gonna solve a single one. When EU leaders Ursula von der Leyen and António Costa travel to China in two weeks, they will have several concerns in their travel bags — from market access to China’s chokehold over strategic raw materials. America’s lurch into protectionism under President Donald Trump is disturbing trade flows, meanwhile, making it harder to resolve those thorny issues. Von der Leyen reeled off a litany of political and economic complaints on Tuesday — from China’s state-subsidized overproduction to price gouging, “systematic” discrimination against foreign companies, export restrictions and more — setting the tone for a contentious summit.  “China has an entirely different system,” she said in an address to European lawmakers. The country has “unique instruments at its disposal to play outside the rules,” allowing it “to flood global markets with subsidized overcapacity — not just to boost its own industries, but to choke international competition.” And the pain points are multiplying: The latest is a move by Beijing to restrict government purchases of EU medical devices, in retaliation for a similar ban on Chinese medical equipment imposed by Brussels last month. Those come on top of a lingering dispute over the EU’s imposition of duties on Chinese-made electric vehicles last year and retaliatory duties slapped by Beijing on European liquor. Despite the milestone it’s supposed to celebrate — the 50th anniversary of EU-China diplomatic ties — the summit is shaping up to be more symbolic than substantive. With both sides entangled in trade spats, expectations are at a new low. Officials are bracing for a summit that’s going to be more about saving face than achieving concrete results. While Brussels and Beijing usually alternate as summit hosts, Chinese President Xi Jinping snubbed EU leaders earlier this year by declining an invitation to come to Brussels. The summit — originally planned to run for two days — will now only take place on July 24 in Beijing. It’s still unlikely that Xi will attend the gathering, which will be chaired by Premier Li Qiang, China’s second-ranked leader. Xi might yet meet bilaterally with von der Leyen and Costa, but that is TBC. “Not only doesn’t he [Xi] show up in Brussels, he doesn’t even attend in Beijing … it’s so embarrassing, I would not take it over my dead body, I swear,” said Alicia García-Herrero, chief economist for Asia-Pacific at French investment bank Natixis and a senior fellow at Bruegel, a think tank. “As a European I would say: Do not go, do not accept this shit.” MOOD SHIFT What’s more, the EU and the U.S. are scrambling to seal a provisional trade deal ahead of Trump’s (newly postponed) deadline to reimpose sweeping tariffs on Aug. 1. Should that happen before the EU-China summit, it’s bound to spell further trouble for the meeting. “If the EU and the U.S. are going to seal a similar deal to [the deal the U.S. sealed with the U.K.], other trading partners will be put at a disadvantage and China will retaliate,” said a person from the Chinese business sector who was granted anonymity to speak candidly. In an attempt to find common ground with Trump, von der Leyen has hardened her tone toward Beijing, accusing China at a G7 summit in Canada last month of “weaponizing” its leading position in producing and refining critical raw materials.  Unsurprisingly, those comments didn’t land well. Guo Jiakun, spokesperson for China’s Ministry of Foreign Affairs, hit back at von der Leyen’s remarks on raw materials. Beijing “fully considered the reasonable needs and concerns of various countries, and reviewed export license applications in accordance with laws and regulations,” Guo said. Von der Leyen’s remarks were “quite hawkish and unsettling,” said the person from the Chinese business sector quoted above. “If [von der Leyen] was trying to charm Trump, she may have done so at the cost of credibility — reminding China that the EU can talk cooperation with China one day and posture like a Cold Warrior the next,” they added. In short: The mood is sour — at a time when neither side, and especially the EU, can afford it. In a sign of its concerns over trade imbalances with China, Brussels launched a tool in April to monitor the diversion of trade flows toward the bloc after Trump imposed tariffs of up to 145 percent on Chinese goods (later lowered to 30 percent). While it’s too early to identify a clear trend, Chinese exports to Europe are sharply up in sectors including chemicals, textiles and machinery. HUGE UNCERTAINTY When the summit was announced — days before Trump’s inauguration in January — the EU struck an amicable tone, broadcasting its willingness to rekindle its relationship with China amid uneasy transatlantic relations. Nearly six months on, however, there has been scant progress toward resolving bilateral disputes. And the Chinese commerce ministry has warned “any country” against sealing trade deals with the U.S. that “undermine Chinese interests.” “The situation is not good. The European Union has 70 percent of its exports to the United States aimed at new tariffs. We are facing trade diversion because of some of the actions being taken, and there’s a huge uncertainty in the trade world,” Maria Martin-Prat De Abreu, a senior official at the Commission’s trade department who is in charge of the EU’s China policy, told an event last month. On top of rifts over electric vehicles, medical devices, spirits and pork, China has imposed — as part of its retaliation against Washington — additional controls on exports of rare earths. Those are inevitably hitting EU countries as well. Although EU trade chief Maroš Šefčovič has managed to negotiate faster permitting procedures for European companies, industry continues to sound the alarm over threats to supply chains for the manufacture of everything from smartphones to car engines. China provides almost 99 percent of the EU’s supply of the 17 rare earths. In a reflection of the frosty relations between Brussels and Beijing, the two sides don’t plan to issue a joint statement summing up their mutual commitments, departing from the usual practice in international diplomacy. The EU and China are instead looking at publishing a mere press release, two EU officials said, just like they did in 2023. “There’s a huge amount of work that needs to be done between now and the summit,” said Martin-Prat De Abreu, adding that Brussels and Beijing were focusing on both “general, structural issues” and more specific issues such as market access for agricultural goods and cosmetics. “It is very difficult,” she added. What’s more, the usual high-level trade dialogue that typically precedes the summit won’t be held due to the lack of progress on trade issues, according to a person from the Chinese business sector and a European official. And Brussels is refusing to sign a joint declaration on climate action unless China pledges greater efforts to slash its greenhouse gas emissions, Climate Commissioner Wopke Hoekstra told the Financial Times. “It’s not that we shut the door,” a third EU official said. “It’s more that we never opened it. We’re sending a signal to both China and the United States.” This story has been updated.

BRUSSELS — President-elect Donald Trump’s return to the White House on Monday and his threatened trade wars against America’s neighbors could put a massive strain on European automakers caught in the crossfire. Trump has pledged to slap a 25 percent tariff on all imports from Mexico and Canada to pressure the two countries — America’s closest trade partners — to curb illegal immigration and stop cross-border fentanyl shipments. Should Trump make good on his promises, European automakers will face yet another high-cost problem as they will be forced to shift production to the United States. The brands are already struggling with lower sales and declining revenue from China and potential fines in Europe should they fail to meet new emission targets this year. “We believe the financial impact of the tariff alone will be manageable for most [European] automakers, but the tariffs add to what is an already challenging market environment for 2025,” said Lukas Paul, auto director at S&P Global Ratings. A long-standing trade agreement among the U.S., Mexico and Canada created permeable borders that has integrated the North American auto industry. Many companies use Mexico as a low-cost production site thanks to its proximity to the U.S. Close to 90 percent of vehicles produced in Mexico are exported, with three-quarters directed to the U.S., according to data from the U.S. Department of Commerce. During his last term, Trump set his sights on Mexico over concerns that Chinese automakers would use the country as a back door to sell their vehicles in the U.S. In response, he negotiated a new trade agreement, called the USMCA, that went into effect in July 2020 with updated rules of origin for cars. Under the pact, 75 percent of a vehicle’s content has to be produced in North America, with core parts originating from the U.S., Canada or Mexico. The agreement is set for a review in mid-2026, but on the campaign trail, Trump indicated he would take action before then. CARMAKERS MOST AT RISK Today, Audi, BMW, Mercedes-Benz, Stellantis and Volkswagen all have operations in Mexico. German automotive suppliers have more than 330 locations in the country, according to German car lobby VDA, with manufacturers hitting “a new production record” of 716,000 cars in 2023. If the 25 percent tariff goes into effect, Audi — a subsidiary of Volkswagen — would be hard hit, said Matthias Schmidt, a European auto analyst. The brand has no U.S. production sites, instead relying on its Mexico facilities, including for manufacturing the Q5 SUV, its top-selling U.S. model. Last year, 29 percent of Audis registered in the U.S. were shipped from Mexico, according to Schmidt. Premium carmakers BMW and Mercedes also have extensive manufacturing hubs in the U.S., making them more insulated from Trump’s tariffs than their mass-market peers. Volkswagen’s most popular model for American consumers is the Tiguan, an SUV that is entirely manufactured in Mexico. The German automaker sold over 30,000 of the vehicles in the final quarter of last year, a nearly 50 percent year-over-year increase. S&P believes that French-Italian-American automaker Stellantis is the most exposed of Europe’s automakers as it makes several Jeep and RAM models in Mexico — all of which are mainstays on American roads. “The worst-case impact of a 25 percent tariff on finished cars from Mexico could be up to 15 percent operating profit,” Paul said. Even without the tariffs, Stellantis is under pressure in the U.S., struggling with overcapacity and a potential legal battle with striking workers. A COMPLICATED SUPPLY CHAIN The tariffs will make European automakers’ Mexican factories largely redundant, forcing them to shift production to the U.S. That is theoretically feasible but the brands will “need time to adapt,” said Pedro Pacheco, an auto expert at consulting firm Gartner. “They won’t be completely exposed … but it makes things harder,” he said, especially when coupled with the various headwinds already buffeting the sector. Another big problem is that most parts come from Mexican factories. The country is the world’s fourth-largest automotive parts producer, most of which are sent north to U.S. assembly plants. In an attempt to shield automakers from some of Trump’s threats, European Union policymakers on Jan. 17 overhauled a trade agreement with Mexico that gives European car manufacturers favorable export rates into the country. German car lobby VDA hailed the deal as an “important political signal, especially in times of increasing protectionism,” while citing the importance of the Mexican market to its members. The agreement could help Volkswagen. Looking to reduce high domestic labor costs, VW announced in December that it will move production of its Golf model from Germany to Mexico beginning in 2027. The bulk of those vehicles will be exported back to Europe, giving some insulation to VW but not completely protecting it from the impact of any U.S.-Mexico trade war.

BRUSSELS — Donald Trump trashing United States climate efforts will empower rivals to control the industries of tomorrow, Europe’s top competition and climate official said Thursday. “It is not good news that a big player such as the United States decides to go in a different direction,” Teresa Ribera said in an interview in her office in Brussels. “It is not good news for anyone. But … whenever there is a big player that decides to abandon a room, there will be other players entering.” Ribera is in her third week as a European Commission executive vice president, one of just six helping run the European Union’s executive branch. Her portfolio only makes her more powerful.  A veteran climate official, Ribera is in charge of delivering a “clean, just and competitive transition” away from the EU’s fossil fuel economy. She is also steering the EU’s mighty division that controls state aid and antitrust policy. On paper, that makes Ribera one of the most influential EU executives ever to sit in the Berlaymont. With the high-profile role comes a momentous task: Crafting a response to China and America’s subsidy-fueled clean tech advances, which risk leaving Europe in the dust. Ribera and her boss, Commission President Ursula von der Leyen, say the clean economy is Europe’s best chance to avoid permanent industrial decline. Trump’s vision for America is the opposite. He has pledged to unleash fossil fuel production to lower energy costs and to walk away from President Joe Biden’s clean energy subsidy regime, which was designed to stimulate a clean industrial boom.  Ribera warned that Europe should not go down the same route, pointing to lessons from the recent past where delaying the auto sector’s green transition allowed Chinese carmakers to swoop in and dominate the electric vehicle market. “[For] a very long time, we heard the Western car industry thinking that they were so good in the internal combustion engine that they were always to be at the front row,” she said. “There were others that understood things differently. So we missed the train. And I think that this is what we need to avoid.” Ribera welcomed competition from foreign companies who were providing cheap, clean goods and services — so long as there was a “level playing field.” “I have no problems at all with great companies succeeding — wherever they come from — in producing things that help to decarbonize. I think that it is great. We need that to happen everywhere,” she said. “Even if there are others that have performed better than us.” But the EU is already targeting what it views as unfair subsidies for Chinese electric cars and seeking to tax high-carbon imports from countries that do not price their greenhouse gas pollution. Teresa Ribera welcomed competition from foreign companies who were providing cheap, clean goods and services — so long as there was a “level playing field.” | Olivier Matthys/EPA-EFE Ribera also has a powerful new weapon to protect European companies: the Foreign Subsidies Regulation. The mechanism enables Ribera to block mergers or bar foreign companies from European public contracts — if the EU decides an overseas government is providing unfair help.  Thus far, the EU has used the regulation to go after Gulf companies and Chinese firms.  “In principle,” the regulation is a “great thing,” Ribera said, but it faces “practical difficulties” — primarily finding “sound evidence” that subsidies are actually market-distorting.  Ribera wants to share intelligence with competition authorities in the U.S. and the United Kingdom to ensure that EU action is hitting the right targets. Ribera only recently moved into her new office and met POLITICO in a room with a green midcentury sofa and chairs. Above the seats was a 1977 photograph of Margaret Thatcher, then Britain’s conservative opposition leader, sitting on those exact chairs.  Entering the room, Ribera sat opposite the seat Thatcher took almost a half-century ago. Ideologically, Ribera, a Spanish socialist, also sits opposite the free market-espousing, government-slashing Thatcher. Her last role was managing Spain’s clean energy transition for Prime Minister Pedro Sánchez, where she brokered a deal with unions and companies to shut down Spain’s coal mining industry.  Teresa Ribera’s last role was managing Spain’s clean energy transition for Prime Minister Pedro Sánchez, where she brokered a deal with unions and companies to shut down Spain’s coal mining industry. | Khaled Elfiqi/EPA-EFE Ribera said she was acutely aware of the social upheaval linked to the EU’s climate strategy. The EU must ensure Europeans are on board with the “speed of change” and “do not feel this is a threat,” she insisted. “How we can provide the means that they can come along with this change is going to be very, very important,” Ribera said. “And I think that is one of the aspects that was not sufficiently taken into consideration in the past and that we need to reinforce.”  Asked how she’d respond to EU politicians using Trump’s climate policy reversal as an excuse to slow down the green transition at home, Ribera argued that sticking with settled targets is in the European economy’s best interest.  “Our businesses need stability,” she said. “I don’t think it is going to be appealing for anyone willing to invest their money if one day we say ‘yes,’ the other day we say ‘no,’ that we change the time frames or parameters … That doesn’t work for anyone.”  That also involves setting a new, EU-wide 2040 climate goal so companies have certainty, she added. The Commission plans to propose legislation targeting a 90 percent cut in planet-warming emissions by that year.  “If we understand that in order to create and update a new golden age for the industry in Europe, there are two main drivers, which are the green revolution and the digital revolution, we need to create the conditions for these revolutions to happen,” Ribera said. “This means identifying where we want to be.”  The Commission plans to propose legislation targeting a 90 percent cut in planet-warming emissions by 2040. | Nikolay Doychinov/AFP via Getty Images That target, however, will come too late for the EU to meet the United Nations’ February deadline for submitting a new climate plan under the Paris Agreement, Ribera acknowledged — the first time a Commission official confirmed POLITICO’s reporting that the bloc would file its plan late. Last month, White House officials told POLITICO that the U.S. would likely release its plan before Trump takes office. The EU needs to show it’s “complying with our own duties” by filing a plan, which will include a 2035 target, by the next global climate summit in November, Ribera said, but added that the bloc’s “complicated governance structure” stands in the way of a February submission.  “I’m optimistic on the possibility to come up with this in due time,” she said, “even if it is not February.” As for the Thatcher photo, she quipped that now that the U.K. Labour Party was renationalizing the railways that the Conservatives once privatized, perhaps she would also hang a photo of the current British prime minister. “We’ll get Keir Starmer over there,” she said.

BRUSSELS — Convincing European Union lawmakers to back her as the bloc’s new climate and competition chief will be the easy part for Spain’s Teresa Ribera.  If confirmed in her post, though, climate expert Ribera will quickly discover that the competition leg of her vast portfolio is a major head-scratcher, in a world where the EU is trying to boost its productivity and relevance in the face of an increasingly tense geopolitical scene.  As the chief enforcer of state aid rules, Ribera will have the last word on how EU countries subsidize companies to ensure large, deep-pocketed nations don’t outspend their smaller neighbors. At the same time, she’ll oversee the Clean Industrial Deal, a major legislative initiative to seed the climate-friendly sectors of the future while helping existing companies cut carbon emissions and compete. Competition is a weak spot for the Spanish socialist, whose entire career has revolved around energy and environmental issues. It is also the policy area the EU is betting on to help unleash economic growth and subsidize the right investments. “It’s not clear to us how she’ll do it. There is a risk that there won’t be this independent watchdog, that the combination of competition with other policy issues jeopardizes the watchdog component of that role,” said an EU government official granted anonymity to speak freely.  Vincent Hurkens of the E3G think tank said she faces a “very complex” task to enable government aid as the economy emerges from the shocks of the pandemic and the Ukraine war while dealing with concerns that some countries can outspend others. “She has, on the one hand, to answer how she can guarantee that level playing field, but at the same time provide sufficient investment in a time where there doesn’t seem to be that much of an appetite to go for very ambitious new plans to secure additional public funding in the EU,” he said. “So that’s really for her to provide a vision on — how will you square that circle,” he said.  Damian Boeselager, a German Volt lawmaker, worries that the current European Commission emphasis on spending is wrong-headed. He said the EU should “start focusing on startups and scale-ups — and not [on] large state aid to large players in large EU member states such as Germany.” BIG TECH TENSIONS Donald Trump’s reelection as president of the United States has turned up the temperature for EU efforts to police (largely U.S.-based) Big Tech and multinational corporations’ megadeals. Trump vowed last month not to let the EU “take advantage of our companies,” saying Apple CEO Tim Cook had called him to complain about an EU antitrust fine and back-tax order. Apple may now be set to get the EU’s first fine for not complying with digital competition rules, Bloomberg reported. The European Commission has also raised the prospect of forcing Google to divest part of its advertising service as part of a probe likely to finish next year. “The victory of Donald Trump is closely linked to the support of Elon Musk and other Tech tycoons who explicitly said they want to avoid any kind of regulation,” German Green lawmaker Alexandra Geese told POLITICO in an email. This puts pressure on the Commission “to stand tall by our rules,” she said. It isn’t clear how Ribera will handle potential U.S. retaliation over decisions she might have to take to enforce EU rules against U.S. tech firms. Tech doesn’t seem to be a top priority for her, at least not the way it was for her predecessor, Margrethe Vestager. Geese and others previously highlighted how Ribera’s marching orders didn’t target how digital power has concentrated in the hands of a few companies, mostly from the U.S. This marks a stark contrast from 10 years of high-powered antitrust enforcement by Vestager, who made Silicon Valley take notice of Brussels bureaucrats with hefty fines, back-tax bills and deal vetos. “We are coming out of two mandates with Margrethe Vestager, who was really a driving force,” French Renew lawmaker Stéphanie Yon-Courtin told POLITICO. “And now I’m afraid it’s going to be an empty shell,” she said of the competition portfolio, pointing to the low prominence given so far to antitrust in what Ribera has been told to do and what she herself is committing to. POLICING DEALS AND FOREIGN GOVERNMENT AID Mergers feature prominently in the instructions Ribera got. She will be under pressure to reform how the EU checks and blocks deals, with Germany and France calling for rules to allow bigger airlines and telecom companies. Two high-level reports recently backed more telecom consolidation and scaled-up firms to make the European economy more efficient and resilient. But changing merger rules is easier said than done. Allowing bigger national champions could come to the detriment of smaller companies and consumers. “With a big push coming from telecom incumbents and major airlines to get bigger in European markets, can creating ‘European champions’ not end up in fact reducing innovation in the European market and therefore harming consumers?” asked Agustín Reyna of the consumer advocacy group BEUC. A specific call to police “killer acquisitions,” where big companies snap up innovative potential rivals, could also lead to friction with U.S. tech or pharma companies, which have attracted most recent EU enforcement efforts. Ribera could end up having to defend against accusations that the EU is taking a harsher line with U.S. deals to protect its own industry. Another legal weapon, the Foreign Subsidies Regulation, could also put her on a collision course with U.S. businesses. Although the tool was largely aimed at creating more checks for Chinese state subsidies, its broad scope has also netted many firms from friendly states. “U.S. companies and financial investors are required to go through a complex process to notify acquisitions, and this could get drawn into transatlantic trade spats,” warned Philippe Radinger, a consultant at FGS Global.  A crosscutting challenge for Ribera will be managing her time among so many priorities. “I’m just wondering when she’s supposed to sleep. It’s not clear to me yet how she’ll do it,” said German Green lawmaker Jutta Paulus. Aude van den Hove contributed reporting.

BORITI, Georgia — Two neighbors, Murman and Natela, sit together sipping coffee as the early autumn sun sets over the village of Boriti, in Georgia. Just a few kilometers away, the newly built East-West Highway roars with traffic. The question — whether the new highway is European or Chinese — is met with confusion. “The road is built by those who pay, so it’s European,” argues Murman, 47, who has been working on the construction of the road since day one. “But it’s built by the Chinese, so it’s Chinese,” replies Natela, 52. The debate may be a local one, but it has international implications.  As Brussels gears up to challenge Beijing in the funding and construction of global infrastructure, it’s running up against an uncomfortable truth: Not only do its efforts sometimes overlap with its rival’s; many of the projects it is funding are being built by Chinese state-owned companies. Since the beginning of 2019, Chinese companies have been awarded more than €1 billion worth of contracts for EIB-funded projects in countries outside the EU, such as Georgia, Senegal, and Tunisia. This represents roughly 13.1 percent of the total value of third-country contracts attributed to the EIB on the EU’s Tenders Electronic Daily (TED) portal. By comparison, companies from the EU have won 15.7 percent of the total value of contracts, including tenders won by consortiums that involve EU companies.  In some years, such as 2019 and 2024, Chinese firms won a greater share of EIB-funded contract value than EU companies. Chinese firms win around a third as many contracts as EU companies, but these contracts are typically high-value. Take the road outside Boriti, part of the E60 European Transit Road which links Europe with Asia. The stretch near the village, known as the Rikoti Road, navigates steep, mountainous terrain and is one of the most challenging sections of the highway.  Funding for its construction came from the Asian Development Bank, the World Bank and the EIB, which contributed €399 million. But the contracts went to five construction firms — all of them Chinese state-owned enterprises. In 2018, for example, the China Road and Bridge Corporation (CRBC) signed a €300 million contract to build the Ubisa-Shorapani section near Boriti, which is almost entirely funded by an EIB loan. The numbers above do not reflect the full scope of EIB-funded contracts. For instance, a €154 million contract secured by CRBC earlier this year for an EIB-funded rail bypass in Serbia is listed on the TED portal, but not included in TED’s aggregated data for EIB-funded contracts.  “There’s a tension between the rhetoric that this is a European offer and the fact that Chinese companies are building some of these projects,” said Chloe Teevan, the head of digital economy and governance at the European Centre for Development Policy Management, a think tank. The CRBC did not respond to a request for comment. GLOBAL GATEWAY VS. BELT AND ROAD INITIATIVE When European Commission President Ursula von der Leyen unveiled Global Gateway in September 2021, it was a direct response to China’s international infrastructure ambitions. Beijing’s effort, the Belt and Road Initiative, had set off alarm bells in the West, where it was seen as locking in Chinese strategic interests and creating debt dependence in the countries where the infrastructure was being built. “We want to create links and not dependencies!” von der Leyen announced during her 2021 State of the Union address. “We are good at financing roads,” she added. “But it does not make sense for Europe to build a perfect road between a Chinese-owned copper mine and a Chinese-owned harbor.” Today, the bigger challenge is that it’s very often Chinese firms that are building the roads the EU is paying for. In addition to the EIB, the EU funds infrastructure through the bloc’s national governments, as well as the European Bank for Reconstruction and Development (EBRD). While the EBRD isn’t technically a part of the EU, 54 percent of its shares are held by the EU, the EIB and EU national governments. The rest is divided among 44 other countries. The U.S., the U.K., Japan, and Switzerland combined hold 33 percent. Russia holds 4 percent, and China less than 0.1 percent. Over the last five years, however, Chinese firms have won 13 percent of the total value of public-sector projects funded by the EBRD. EU contractors were awarded 35 percent of total value across the 38 countries in which the EBRD operates, 13 of which are EU member states.  In addition to this, Chinese firms have been awarded contracts for private-sector development projects funded by the EBRD.  In Uzbekistan, for example, the EBRD is providing at least €500 million in financing for seven wind and solar projects being developed by Saudi ACWA Power or Emirati firm Masdar, but which have been contracted to Chinese state-owned enterprises. Though the majority of EBRD’s operations are geared toward the private sector, the development bank does not publish the results for these tenders. “The EBRD permits participants from all countries to provide on equal terms goods, works, services or consultancy services for an EBRD-financed public sector project regardless of whether such country is a member,” the EBRD’s Balkan office said in a statement to POLITICO.  UNLEVEL PLAYING FIELD  China’s involvement in EU-funded projects hasn’t gone unnoticed by the European construction industry.  In 2020, the European Chamber of Commerce in China highlighted a “profound lack of European involvement” in Chinese-financed Belt and Road projects, which are often contracted to Chinese firms without tender. The EIB, on the other hand, requires its promoters to award contracts through a competitive procurement process.  “We are not afraid of competition on a level playing field,” said Frank Kehlenbach, director of European International Contractors, an industry group. “But we will never be able to compete with these huge state-owned enterprises that work under the control and with the funds of the Chinese Communist government.” In a statement, the EIB said “all companies, irrespective of their geography and without discrimination, are eligible and free to participate in EIB-led tender processes, which award contracts on the basis of a number of criteria, such as price offer and quality for end users.” The EU has developed several instruments to address unfair competition in procurement. One of these is the Foreign Subsidies Regulation (FSR), which empowers the European Commission to investigate public procurement bids by foreign companies suspected of benefiting from state aid. Since the regulation entered into force at the beginning of 2023, it has been used four times, all but one targeting Chinese companies. One of the major catalysts for the development of the FSR was the awarding of a contract in 2018 to CRBC for the construction of the EU-funded Pelješac bridge in Croatia. “The Pelješac Bridge scenario was one of the key moments for evolving the EU’s thinking about its competitiveness and economic security vis-à-vis China,” says Matej Šimalčík, executive director of the Central European Institute of Asian Studies. The Austrian firm Strabag, which also bid for the contract, accused CRBC of price dumping and filed a complaint, but courts found no proof of illegal subsidies.  However, experts argue that state-owned firms like CRBC benefit from indirect state subsidies. CRBC, for example, has established a large portfolio of projects in Europe that are tied to loans from the Export-Import Bank of China. The introduction of the FSR makes a repeat of the Pelješac case unlikely within the EU, but the regulation does not extend to EU-funded projects outside of the EU, including those that might be built as part of the Global Gateway. A Commission spokesperson said there was a recognition of the issue. “The EU is a firm supporter of equal opportunities and open competition,” the spokesperson said in a statement. “However there is a need to ensure a level playing field.” “The European Commission is discussing these issues with the EIB and is working actively — also in the context of the Global Gateway initiative — to increase the engagement of European companies,” the spokesperson said. They added that the Commission was “exploring” options that would “ensure best price/quality ratio instead of a lowest price as an award criterion.” However, Teevan cautioned that simply raising the bar may not be enough to deter Chinese companies. “There’s an effort to make it more complicated for Chinese companies to comply, but Chinese companies are getting better and they are investing a lot in ESG,” she said.  Meanwhile, said Teevan, the visible involvement of Chinese companies in the construction of its infrastructure project is undermining the bloc’s ability to take credit for the project it funds. The Pelješac Bridge is once again a good example. While Brussels saw the bridge as an EU-driven development, Beijing advertised it as a “key strategic project” of the Belt and Road Initiative.  Chinese Premier Li Keqiang, attended the project’s opening ceremony virtually to describe it as “a new bridge to promote friendship between [China and Croatia].” The confusion, as to whether the bridge was built thanks to Brussels or Beijing, would be instantly recognizable to villagers of Boriti in Georgia.  “How is this road European?” asks Omar, 67, who is being paid €11 per day to control traffic on the soon-to-be-finished East-West highway.  “Everything here is Chinese,” he adds. “The Europeans are paying, but the Chinese are building it.” Reporting for this article was supported by a grant from Investigative Journalism for Europe (IJ4EU).

Call it the evaluation before the job interview. Ahead of the aspiring commissioners facing a grilling from the European Parliament in early November, they must respond to lawmakers’ written questions. And the answers are in. Many of the incoming top brass are new to the Brussels’ policymaking machine. The written answers, in theory at least, are an opportunity to share their vision of their upcoming roles. Don’t get too excited though.  The majority of commissioner nominees rehashed previous statements from various Brussels institutions, whether from the political guidelines of European Commission President Ursula von der Leyen or the so-called mission letters that she sent to her future commissioners. The answers were also partly written by the Commission’s civil servants, who have crafted and executed EU policies for decades.  The real test will be facing unexpected questions from European lawmakers when commissioner nominees can no longer rely on advisers to whisper the answers.  Still, the written answers give some indications to how the newcomers want to set the tone or change direction — which makes them worth combing through.  And POLITICO got stuck into more than 400 pages of written answers so you don’t have to. Here are our key takeaways.  MARIA LUÍS ALBUQUERQUE Portugal’s Maria Luís Albuquerque, the commissioner candidate for financial services and the Savings and Investments Union, said the bloc must “not roll back” global bank capital standards — the so-called Basel III accords, which aimed to make the financial system safer following the 2008 global financial crisis — and “must implement the rules,” pushing back against calls from EU countries to scrap some elements of existing regulation. Albuquerque, who will answer questions from European Parliament lawmakers at her confirmation hearing on Nov. 6, said in written responses to MEPs’ questions that the EU is “giving banks ample time to adapt to the new rules.” VALDIS DOMBROVSKIS Latvia’s Valdis Dombrovskis, the commissioner candidate for economy, productivity, implementation and simplification, gave his strongest support yet for conditions to be attached to European Union funding in the next budget, saying the bloc may draw inspiration from the successful linking of investment and reform within its pandemic recovery fund. His remarks formed part of his written answers to European lawmakers ahead of his Nov. 7 confirmation hearing in the European Parliament, and follow a similar push from von der Leyen. The remarks of Valdis Dombrovskis formed part of his written answers to European lawmakers ahead of his Nov. 7 confirmation hearing in the European Parliament, and follow a similar push from von der Leyen. | Sajjad Hussain/AFP via Getty Images CHRISTOPHE HANSEN Luxembourg’s Christophe Hansen, the commissioner candidate for agriculture and food, said the European Commission won’t publish a flagship framework law on sustainable food systems, in written answers ahead of his grilling by lawmakers on Nov. 4. “Rather than new legislative proposals, we can achieve our objectives by better implementing and enforcing existing legislation while using incentives and new market-based tools to promote change,” Hansen said in reply to a question on whether the EU’s executive would propose the framework next year. COSTAS KADIS Cyprus’ Costas Kadis, the commissioner candidate for fisheries and oceans, made it clear he won’t compromise on environmental protection ahead of his Nov. 6 confirmation hearing. In his role, Kadis will have the delicate task of balancing the interests of the EU’s fishing industry with those of imperiled ocean biodiversity — which are often diametrically opposed. Kadis, who has a background in biology, said his “top priority” was to “ensure that the fishing and aquaculture sectors remain sustainable, competitive and resilient.” HADJA LAHBIB Belgium’s Hadja Lahbib, the commissioner candidate for preparedness, crisis management and equality, dodged MEPs’ questions over the future of the Health Emergency and Response Authority (HERA) and hinted funding for health crisis planning could be hard to come by, ahead of her hearing on Nov. 6. MEPs asked whether she foresaw an expansion of HERA’s capacity and how she would manage financing issues that have already affected its work. In her statement Lahbib didn’t answer directly but said she would draw on HERA’s expertise for the EU preparedness strategy and for the Critical Medicines Act. TERESA RIBERA Spain’s Teresa Ribera, the executive vice president candidate for the clean, just and competitive transition, promised “swift and effective state aid” to back the EU’s Clean Industrial Deal, pitching public funds as a way to unlock private sector investments in “considerable” decarbonization costs, she told the European Parliament ahead of her Nov. 12 confirmation hearing. The Clean Industrial Deal — a bill to help companies meet the EU’s ambitious carbon-cutting targets and boost climate-friendly technologies — is one of Ribera’s top agenda items. The EU has vowed to release the legislation within 100 days of Ribera taking office. Spain’s Teresa Ribera, the executive vice president candidate for the clean, just and competitive transition, promised “swift and effective state aid” to back the EU’s Clean Industrial Deal. | Javier Soriano/AFP via Getty Images JESSIKA ROSWALL Sweden’s Jessika Roswall, the commissioner candidate for environment, water resilience and a competitive circular economy, stressed her commitment to the farming, forestry and bioeconomy industries ahead of her hearing on Nov. 5. In doing so, the lawyer-by-trade and former European affairs minister made it clear the European Commission’s green agenda will no longer take priority over support for the agricultural sector — addressing what became one of the biggest controversies of the last mandate. STÉPHANE SÉJOURNÉ France’s Stéphane Séjourné, the executive vice president candidate for prosperity and industrial strategy, said that the European Commission will thoroughly assess the way it scrutinizes foreign subsidies impacting takeover deals and public procurement in the EU. He commits to a review of the implementation of the rules in responses submitted ahead of his confirmation hearing on Nov. 12 and highlights the “appropriateness of the level of the notification thresholds.” He also says that Brussels will come up with a possible legislative proposal depending on the outcome of this review, as planned in the text of the regulation. OLIVÉR VÁRHELYI Hungary’s Olivér Várhelyi, the commissioner candidate for health and animal welfare, was opaque on pushing ahead with front-of-pack labels in written answers to MEPs on how to tackle ever-rising rates of noncommunicable diseases such as diabetes, cancer and cardiovascular disease, ahead of his hearing on Nov. 6. While he acknowledged that mandatory food information “can help consumers to make healthier consumer choices,” he nonetheless favors a “comprehensive approach” (EU-speak for nonlegislative measures). This could signal a line in the sand over stalled European Commission proposals to introduce front-of-pack health labels for all foods in Europe, as well as for alcoholic drinks. Hungary’s Olivér Várhelyi, the commissioner candidate for health and animal welfare, was opaque on pushing ahead with front-of-pack labels in written answers to MEPs. | Joe Klamar/AFP via Getty Images EKATERINA ZAHARIEVA Bulgaria’s Ekaterina Zaharieva, the commissioner candidate for startups, research and innovation — who is also tasked with leading the EU life sciences strategy — only briefly mentioned the hotly anticipated proposal ahead of her hearing on Nov. 5. But in her nine-page replies to the questions posed by MEPs, published Tuesday night, Zaharieva only said she will “engage with the relevant players to develop a Strategy for European Life Sciences, which will cover also biotechnology … (to) support a faster green and digital transition.” Helen Collis, Rory O’Neill, Claudia Chiappa, Aude van den Hove, Francesca Micheletti, Camille Gijs, Leonie Cater, Marianne Gros and Louise Guillot contributed to this report.

The Hungarian government late Monday denied having any role in major bank loans to Spain’s far-right Vox party. Santiago Abascal’s party received loans from Hungary’s MBH Bank for €9.2 million to finance campaigns for the 2023 local and general elections, according to a Vox party official.  The bank’s largest shareholder, with almost half of the shares, is Prime Minister Viktor Orbán’s childhood friend and Hungary’s richest person Lőrinc Mészáros, but the Hungarian state is also a partner with a stake of about 30 percent.  Opposition lawmaker Ágnes Vadai asked Orbán in a written question whether he had any role in the loan that Spain’s Vox received, but the question was answered by the prime minister’s State Secretary János Fónagy.  “The possible loan by a commercial bank to Spain referred to in the question, as in any other case, could only have been decided on a purely business basis, in which the Hungarian government has no role and no information,” Fónagy replied.  Vox previously denied knowledge of the bank’s ties to Orbán and said that the entire loan had already been repaid. It wasn’t the first political loan from a Hungarian bank to fund the European right wing. Earlier, MBH’s predecessor MKB funded Marine Le Pen’s 2022 French presidential campaign with a €10.6 million loan. Le Pen’s party said that other banks were reluctant to “finance the democratic life” of France. In July, Vox joined Orbán’s new far-right group in the European Parliament, the Patriots for Europe. Vox’s move from the right-wing European Conservatives and Reformists (ECR) to the new far-right Patriots formation raised eyebrows in Spain, as the party had already been granted a vice presidency in the ECR. Party leader Abascal had also previously clashed with other Patriots member parties that support Catalonia’s independence, such as the Italian League or the Flemish far-right nationalists of Vlaams Belang.

Teresa Ribera is in line to pick up a hefty European Commission role in charge of the Green Deal, an area she knows well as Spain’s climate minister and as an international climate negotiator. But she’s also got another job policing competition, one of the most powerful Commission policy areas. POLITICO laid out what she’ll need to watch out for. 1. RETURN ON INVESTMENT Commission President Ursula von der Leyen told Ribera to overhaul competition policy to make Europe a more attractive place for companies. That aimed at two things: doing more to take account of the economy’s “acute needs” for mergers — by allowing more deals in strategic industries — and easing state aid to help governments funnel cash to industry. Ribera may have to walk a tight line between these political demands and what competition law requires her to do in checking — or even blocking — deals and subsidies. 2. KEEPING BIG TECH IN LINE Outgoing competition chief Margrethe Vestager brought in strict rules that aim to set limits on Big Tech power, the Digital Markets Act (DMA). The Commission is now under pressure to show that it can enforce these rules. Ribera is tasked with ensuring “rapid and effective enforcement actions” under the DMA, for which she’ll share responsibility with Henna Virkkunen, set to be in charge of tech sovereignty. An immediate priority will be policing Big Tech firms where the Commission thinks companies may not be in line with their DMA requirements. That sees the EU threatening fines for some of the world’s richest companies. Google and Apple have two probes each and Meta has one; all are due to wrap up by March. Another Apple investigation has a June deadline. Commission President Ursula von der Leyen told Ribera to overhaul competition policy to make Europe a more attractive place for companies. | John Thys/Getty Images 3. FINING TIMES Vestager was a whirlwind of antitrust action, fining Google more than €8 billion. Ribera may get her chance too. Probes into Facebook’s marketplace and Google’s advertising technology are at an advanced stage — potentially still allowing Vestager to sneak out one more big penalty before she goes. The Google investigation comes after more than a decade of EU frustration over a search giant whose market share was barely dinted by three antitrust probes. The Commission waved the threat of breaking up the company’s ad business to resolve the problems it sees. Ribera will be in charge of resolving a probe into Microsoft, which the Commission charged in June for linking its Teams service with its must-have office software. 4. CATCHING KILLER ACQUISITIONS Merger officials are worried about Big Tech or Big Pharma firms that scoop up small innovative rivals in deals that don’t get reviewed by regulators because the smaller firm’s revenue is too low. The Commission thought it had found a solution only for the EU’s top court to tell it to think again earlier this month. Von der Leyen has now told Ribera to “address risks of killer acquisitions from foreign companies seeking to eliminate them as a possible source of future competition.” How to do that is the tough part. Lowering the existing thresholds for a review via a legal change risks catching too many deals and exposing merger law to potential amendments from EU governments and the European Parliament. 5. UNDERSTANDING ARTIFICIAL INTELLIGENCE Competition enforcers around the world have been sniffing around Big Tech partnerships with AI startups to make sure the old guard isn’t using its power to keep smaller players from becoming fierce rivals. It’s also looking at Nvidia, the main supplier of chips used to power AI. | Stringer via Getty Images The Commission is looking at Microsoft’s exclusivity deals with ChatGPT developer OpenAI and is warning that it is watching the rest of the industry. It’s also looking at Nvidia, the main supplier of chips used to power AI. 6. FIGHTING FOREIGN SUBSIDIES The Commission has a new law to clamp down on help that non-EU governments give their favorite companies that has largely been aimed at Chinese business. So far it’s been used to probe aid for wind turbines and security scanners. Von der Leyen seems keen for Ribera to “vigorously enforce” these rules, telling her to proactively map “the most problematic practices.” What’s less clear is if she’ll give Ribera the staff she needs to do so.

India’s trade chief Piyush Goyal wore a fresh white shirt and a cheeky smile on a sunny morning in Abu Dhabi in early March. He was surrounded by the world’s top trade diplomats, who feared he was about to undo months of work to restore order to the global trade system. “I need protection. What should I do?” Goyal joked to a couple of reporters the night before, speaking across a barricade covered with fake plants and greenery separating diplomats from reporters at the World Trade Organization’s (WTO) 13th Ministerial Conference. “They’re all complaining against me,” he quipped after whipping the world’s top negotiators at the international trade body into a panic behind closed doors. Goyal’s showmanship and negotiating savvy have made him a weapon for India as it tries to shrug off the shadow of its colonial past and take up its mantle as a global superpower alongside the U.S. and China. POLITICO spoke to current Indian officials and trade advisers, as well as negotiators who have sat across the table from him, to get inside New Delhi’s aggressive negotiating style on the world stage. This week Goyal, who declined to be interviewed for this piece, will turn his attention to bilateral talks with the European Union after they were put on ice for spring elections in India and on the continent. The trade chief, who serves as India’s commerce minister, will also restart negotiations with the U.K. — now under a Labour government — later this fall. But India’s aggressive approach could backfire if New Delhi doesn’t take a more conciliatory stance in talks with its Western partners and at the WTO, some argue. “India is very tough,” Donald Trump said at a campaign event last week, labeling the nation a “very big abuser” in trade.  INFLECTION POINT In the years since Trump derailed its dispute settlement mechanism, and the pandemic ushered in an era of fragmenting supply chains and mounting protectionism, the WTO has struggled to preserve the post-Cold War system that for decades sought to liberalize trade and drive down consumer prices. Indian Prime Minister Modi and Goyal have played no small part in chipping away at the system’s foundations. New Delhi is flexing its economic and geopolitical muscles as the West focuses on the Indo-Pacific and India progresses toward becoming the world’s third-largest economy, forecast to occur by the end of the decade. “The biggest issue at stake is the system itself,” WTO Director General Ngozi Okonjo-Iweala warned in a speech to business leaders ahead of the organization’s March ministerial. “We are at an inflection point. Will we continue to have a reasonably open, integrated and global economy, or will we move toward an increasingly fragmented and divided one?” India is “desperate” for the WTO — which has long operated on the principle of consensus among its 160-odd members — not to become a forum for willing allies to cobble together smaller deals, said Keith Rockwell, a global fellow at the Wilson Center and former chief spokesperson for the WTO. “But that’s the direction it’s heading, and it’s because of them.” India’s aggressive approach could backfire if New Delhi doesn’t take a more conciliatory stance in talks with its Western partners and at the WTO, some argue. | Giuseppe Cacace/Getty Images In Abu Dhabi, Goyal arrived at the cavernous, overly air-conditioned conference center like a rockstar — days late and surrounded by an entourage of aides and Indian media snapping photos of his thousand-watt smile. In the days that followed, he leveraged the WTO’s need for consensus on various issues to New Delhi’s political and economic advantage. For most negotiators, merely preserving the body’s status quo would have been viewed as a success. India’s trade chief wouldn’t let them. SHADOW OF THE PAST For decades, India had been opposed to striking trade deals, reticent to expose its fledgling industry to foreign competitors. That began to change gradually after Modi came to power in 2014, as India secured deals with Australia, the UAE and a small European group. It also started talks with G7 economies, including Canada and former colonial and imperial powers in the U.K. and EU, all desperate to tap into India’s booming economy and young, dynamic population. “India is at an inflection point in its growth,” B.V.R. Subrahmanyam, Modi’s former commerce secretary and now CEO of the state-backed public policy think tank NITI Aayog, told investors in London earlier this month. “We have reached a point where we’ve licked the problems of the past,” Subrahmanyam said. India aims to become a developed nation by 2047, 100 years since its independence from centuries of British colonial rule, he said. To get there, Indians have to “liberate ourselves from the slavery mindset,” Modi told the nation in a speech on its 76th Independence Day in 2022 from the ramparts of New Delhi’s Red Fort. He and his Bharatiya Janata Party (BJP) won a historic third term in June campaigning on the promise to shed this “colonial mindset.” Goyal has returned as Modi’s trade chief to make it happen. Like other members of the PM’s Cabinet, Goyal “is much more vocal about the way that India wants to put itself forward,” said a trade adviser to the Indian government, who, like others in this piece, was granted anonymity to speak frankly. Even so, India needs investment from the West to fulfill its vision, Modi ally Subrahmanyam told investors in London. Increasing global protectionism poses “a challenge” to India’s continued growth, he said. Like other members of the PM’s Cabinet, Piyush Goyal “is much more vocal about the way that India wants to put itself forward,” said a trade adviser to the Indian government. | Indranil Mukherjee/Getty Images But India is “not big on open trade,” explained Rockwell. From London to Geneva complaints resound about India’s protectionism — its high tariffs on electric vehicles and alcohol, arcane and complex regulations, loose protection for intellectual property, tight restrictions on the data flows that power financial services, limited access for foreign legal firms and a host of other barriers. “People are now starting to specifically call India out,” Rockwell said. “But will [India] change their views? I have not seen any indication that they will.” TOUGHER THAN TRUMP? Goyal has ignored the pressure. Like Trump, he “is a showbiz personality, and deliberately provocative,” said a former EU official who negotiated with the Indian trade chief for years. “He loves cliffhanging negotiations where he can sabotage and then come to the rescue on a white horse at the last minute,” they said, adding: “He’s done that several times.” Even Trump’s trade chief Robert Lighthizer was stumped when negotiations with Goyal went nowhere, concluding in his 2023 book “No Trade is Free” that “India was just protectionist” and that’s “part of its political DNA.” Goyal is “the toughest negotiator” and “doesn’t like to beat around the bush,” said an Indian official who has worked with him since he first became Modi’s minister of commerce in 2019. “He’s the one who delivers things.” Under his tenure, India achieved a record $778 billion in exports in 2023-24, a small increase on the previous record year. In trade negotiations “there’s a personal bit for Goyal to be seen to succeed,” said a senior U.K. business representative who travels widely in India and has friends in Modi’s party, though “his star within the BJP has been fading somewhat.” Goyal was removed as party treasurer and later had the key railway portfolio taken away from him in 2021. Until June, he was also Modi’s representative in India’s upper legislative body. There was “talk about him becoming the finance minister” in Modi’s new government, the Indian trade adviser said. “But it didn’t happen.” All this has helped make him a driven negotiator who “doesn’t shy away from giving it to the industry, giving it to his officials, giving it to negotiators on the other side,” they said. MODI’S TRADE BULLDOG Goyal’s approach has put Western powers on the back foot. A meeting during trade talks last year opened with him “railing” against colonialism, a senior official from a Western negotiating partner said, noting they weren’t sure if it was part of his strategy. India has sought large concessions in negotiations with the U.K. and EU while offering too little in return, say ministers, officials and business lobbies. “They negotiate for being able to say ‘we negotiate’ but don’t intend to land anywhere, anytime,” Sabine Weyand, the EU’s top civil servant on trade, told a private meeting with the European Parliament this month ahead of the upcoming round of talks, according to a person present. India has instead been using ongoing talks with the EU and the U.K. to apply pressure against plans to tax carbon-intensive commodities at the border — though neither has given in yet. The so-called carbon border adjustment mechanisms (CBAM) will tax steel, aluminum and cement imports made to lower carbon emissions standards than domestic producers from 2026 in the EU and 2027 in the U.K. India is “very concerned” about CBAM, said the Indian trade adviser, noting this has been “communicated in the FTA talks and outside of it.” CBAM and environmental issues “are sensitive things in India,” the senior Indian official who has worked with Goyal said. U.K. Trade Secretary Jonathan Reynolds announced plans to restart trade negotiations with India in the fall. | Leon Neal/Getty Images India’s trade chief has warned the carbon tax “is going to cause the death knell of manufacturing in Europe,” and threatened to challenge the policies at the WTO, even as forecasts indicate India’s production of coal-powered steel will rise by 51 percent by 2030. On India’s red lines Goyal “speaks his mind very clearly,” said the senior Indian official. “That gives him that image of a tough one.” In July, U.K. Trade Secretary Jonathan Reynolds announced plans to restart trade negotiations with India in the fall. But if the newly elected Labour government wants to reopen non-binding labor and environment chapters the deal will become “stuck,” the senior Indian official said. Shortly after U.K.-India talks began in early 2022 New Delhi has been “trying to make the U.K. side look like it’s the one that’s holding things up,” said the senior British business representative quoted above. After Labour won Britain’s election in July, Goyal upped pressure on the new government, saying a deal negotiated with the previous Conservative administration “is ready to be closed very quickly.” WHAT NEXT? India and Goyal’s shtick is wearing thin with some, and its increasingly muscular approach has had missteps. Trade talks with Canada broke down a year ago after Prime Minister Justin Trudeau accused New Delhi of plotting a political assassination in Vancouver, later corroborated by a U.S. Department of Justice indictment. “The international trading community has seen through [Goyal], they’ve seen through his bragging,” said the former EU trade official. “I think that’s not in India’s long-term interest, being extremist and holding up negotiations and priding himself on being an obstacle.” Early this year G7 trade ministers recommitted to efforts to get the WTO’s highest trade dispute court — its Appellate Body — up and running again by the end of this year. Although a long shot, it would be a short in the arm for the rules-based global trading system. While India says it supports this work, Goyal has played the spoiler when it suits, nearly tanking the WTO’s ministerial conference in March. There, he scuttled a long-term ban on taxing digital cross-border trade, and blocked moves to curb India and other states’ farming subsidies, perceived by many as unfair. India also refused to get behind an initiative to facilitate investment in developing countries, a decision the U.K.’s ambassador to the WTO Simon Manley later described to POLITICO as “a real shame.” Manley similarly called India’s opposition to a permanent prohibition on digital tariffs “self-defeating,” branding the idea that they might one day be used to raise meaningful revenues for New Delhi’s coffers “an illusion.” But others wondered whether India’s resistance was part of a broader negotiating ploy. FRUSTRATED By 10 p.m. on Friday, March 1, beleaguered diplomats inside the cavernous exhibition hall in Abu Dhabi thought they had cobbled together a deal to keep the global trade system limping along that India could accept. As WTO Director General Okonjo-Iweala was about to whack her gavel to close the plenary session, Fiji’s deputy prime minister called out Goyal for blocking an effort to curb harmful fishing subsidies, threatening food security. Trade talks with Canada broke down a year ago after Prime Minister Justin Trudeau accused New Delhi of plotting a political assassination in Vancouver. | Kent Nishimura/Getty Images India’s trade chief “was so frustrated” with the criticism, the trade adviser to the Indian government said, “that he picked up his paper and walked straight to the dais to Director General [Okonjo-Iweala] and told her it’s unacceptable.” “Goyal accused Ngozi of trying to bring this issue to the floor for some kind of decision at the last minute after they’d agreed to disagree,” confirmed Rockwell, the former WTO chief spokesperson who, despite retiring in 2022, was briefed on what happened. If Okonjo-Iweala let Fiji’s comments stand, Goyal threatened to sacrifice the consensus and “pull the plug” on a two-year extension to the ban on digital taxes, itself a stopgap measure ironed out by WTO officials after a week of fraught discussions, Rockwell said. The argument wasn’t resolved until 2 a.m. When it was over, former European Trade Commissioner Valdis Dombrovskis told reporters “there was basically just one country that was blocking the deal.” He wouldn’t say who. “Everyone knows who it was,” Rockwell said. Caroline Hug contributed reporting.