Faced with an ageing population and rising chronic disease rates, Europe wants to make its citizens healthier. It also needs to keep its most powerful industries happy. In the basket of health policies that EU lawmakers rushed to get across the line before Christmas, industry was the big winner: The pharmaceutical, food and drink sectors walked away with a set of major policy wins — and (potentially) healthier profits. While the pharma industry previously feared losing some of its monopoly rights on new drugs, the Commission this month offered it an extra year of patent protection for novel biotech drugs — among the most expensive treatments in the world. The food and drink sectors, meanwhile, successfully pushed back against proposals to tax ultra-processed foods and alcopops, for now. On Dec. 16 the Commission published its Biotech Act and Safe Hearts Plan, which landed just days after a long-awaited update of the pharmaceutical legislation. Taken together, they seek to incentivize industries to innovate and do business in Europe, improve access to medicines, and tackle the burden of cardiovascular disease. The pharma industry broadly celebrated the biotech proposal. The Biotech Act “reflects priorities we’ve intensively advocated to keep Europe globally competitive in life sciences,” Ognjenka Manojlovic, head of policy at European pharmaceutical company Sanofi, told POLITICO. That includes accelerating clinical trials, boosting intellectual property, and strengthening financing for Europe’s biotech ecosystem, Manojlovic said. The pharmaceutical sector had pushed for longer monopoly rights in the pharma legislation. In the end they were kept at the current standard eight years — instead of being cut by two years as the European Commission had initially proposed. For Europe’s public health insurers, who pay for drugs, the decisions taken to maintain and then extend market protections for medicines are hard to square. “We are puzzled by the Commission’s intentions,” said Yannis Natsis, director of the European Social Insurance Platform, a network of Europe’s social insurance organizations, warning that taxpayers will have to pick up the bill. Meanwhile, health campaigners are also unhappy at the Commission’s “missed opportunity” to tackle obesity and heart disease with junk food taxes — as proposed in an earlier draft of the Safe Hearts Plan. Samuele Tonello, at consumer organization BEUC, said the Safe Hearts Plan “lacks teeth” to better protect consumers from unhealthy foods, and flagged the “urgency of [cardiovascular diseases].”  A MAN ON A MISSION Health Commissioner Olivér Várhelyi has made no secret of his support for industry, and has championed the Commission’s competitiveness mantra since taking office in late 2024. Health Commissioner Olivér Várhelyi has made no secret of his support for industry, and has championed the Commission’s competitiveness mantra since taking office in late 2024. | Thierry Monasse/Getty Images The standout feature of his end-of-year bonanza was the 12-month patent extension in the Biotech Act I — legislation that was split in two late in the day, allowing Várhelyi to meet his end-of-year deadline for the pharma component. The proposal came just a week after the Commission, countries and MEPs clinched a deal to reform Europe’s pharmaceutical laws, in which IP rights were among the last issues to be settled. Updates to the pharma laws were a legacy of the last Commission, whereas the Biotech Act became something of a personal mission for Várhelyi. He repeatedly stressed that there was “no time to lose” in delivering a targeted policy aimed at revitalizing Europe’s flagging biotech industry, which risks being overtaken by competition from China and the U.S. Few commissioners are more vocal than Várhelyi about the premium they place on the competitiveness of European industry.  Industry insiders had heard whispers of his plans to expand IP incentives for the biotech sector, even if Council representatives were dismayed not to have been informed in advance — especially with the ink barely dry on the Pharma Package. That’s not to say pharma is happy with its lot. Industry lobby group the European Federation of Pharmaceutical Industries and Associations (EFPIA) tempered its praise of the Biotech Act, lamenting that the extra year of monopoly rights would only apply to a “limited subset of products.”  The extra year of protection is tied to the Commission’s efforts to locate more pharma research and manufacturing in Europe. It would apply only to new products, tested and at least partially made in Europe.  But the generics sector, which makes cheaper, off-patent drugs to compete with branded medicines, sees the Biotech Act as a further sweetening of what is already one of the world’s most generous IP systems. Lobby group Medicines for Europe claims each year of delayed competition for the top three biologic drugs would cost countries €7.7 billion. Longer IP “will have a dramatic impact on healthcare budgets and delayed patients’ access to essential medicines,” said Adrian van den Hoven, head of the lobby. These kinds of estimates would normally be included in an impact assessment published alongside the proposal, but in its haste to get the Biotech Act out the Commission didn’t do one. POLITICO asked the Commission for an estimate of what the extra year of patent protection would cost. A Commission spokesperson would not give a figure but said they had used the impact assessment for the pharma legislation as a reference. “It is also important to stress that the number of products eligible for an additional year of SPC will be limited to only those that are truly innovative and tested and manufactured in the EU. The approach is deliberately targeted to incentivise genuinely innovative therapies that deliver a clear added value for patients and support European innovation,” the spokesperson said. LUCKY ESCAPE FOR UPFS The big food and drink sectors are on shakier ground with Várhelyi. The commissioner has repeatedly made known his distaste for ultra-processed food, and an early leaked version of the Safe Hearts Plan included new taxes on unhealthy highly processed foods and alcopops. But the final proposal showed the Commission had undertaken a significant climbdown. Concrete targets to tax unhealthy food and drink in 2026 were gone, replaced with a much woollier commitment to “work towards” such a levy. Alcopops were excluded altogether.  Industry lobby FoodDrinkEurope took a far more measured tone on the final plan than its explosive reactions to the earlier leaks, but that may well ramp up again if and when health tax proposals emerge. The text suggests the soft drinks industry may be the Commission’s first target if it does decide to pursue new levies, while UPFs remain in Várhelyi’s sights. “In the next couple of years, we will need to tackle the issue of ultra-processed food much more,” he told MEPs in December. For now, though, the plan seems to have let industry off easy. Health NGOs saw it as a disappointment, given its lack of hard-hitting policies to reduce consumption of UPFs and other unhealthy products. While the pharma legislation is all wrapped up, the Biotech Act still needs to win the approval of EU countries and the European Parliament. For the food and pharma sectors, the proposals set out this month are confirmation they have allies in the Berlaymont.

After more than three decades in the pharmaceutical industry, I know one thing: science transforms lives, but policy determines whether innovation thrives or stalls. That reality shapes outcomes for patients — and for Europe’s competitiveness. Today, Europeans stand at a defining moment. The choices we make now will determine whether Europe remains a global leader in life sciences or we watch that leadership slip away. It’s worth reminding ourselves of the true value of Europe’s life sciences industry and the power we have as a united bloc to protect it as a European good. Europe has an illustrious track record in medical discovery, from the first antibiotics to the discovery of DNA and today’s advanced biologics. Still today, our region remains an engine of medical breakthroughs, powered by an extraordinary ecosystem of innovators in the form of start-ups, small and medium-sized enterprises, academic labs, and university hospitals. This strength benefits patients through access to clinical trials and cutting-edge treatments. It also makes life sciences a strategic pillar of Europe’s economy. The economic stakes Life sciences is not just another industry for Europe. It’s a growth engine, a source of resilience and a driver of scientific sovereignty. The EU is already home to some of the world’s most talented scientists, thriving academic institutions and research clusters, and a social model built on universal access to healthcare. These assets are powerful, yet they only translate into future success if supported by a legislative environment that rewards innovation. > Life sciences is not just another industry for Europe. It’s a growth engine, a > source of resilience and a driver of scientific sovereignty. This is also an industry that supports 2.3 million jobs and contributes over €200 billion to the EU economy each year — more than any other sector. EU pharmaceutical research and development spending grew from €27.8 billion in 2010 to €46.2 billion in 2022, an average annual increase of 4.4 percent. A success story, yes — but one under pressure. While Europe debates, others act Over the past two decades, Europe has lost a quarter of its share of global investment to other regions. This year — for the first time — China overtook both the United States and Europe in the number of new molecules discovered. China has doubled its share of industry sponsored clinical trials, while Europe’s share has halved, leaving 60,000 European patients without the opportunity to participate in trials of the next generation of treatments. Why does this matter? Because every clinical trial site that moves elsewhere means a patient in Europe waits longer for the next treatment — and an ecosystem slowly loses competitiveness. Policy determines whether innovation can take root. The United States and Asia are streamlining regulation, accelerating approvals and attracting capital at unprecedented scale. While Europe debates these matters, others act. A world moving faster And now, global dynamics are shifting in unprecedented ways. The United States’ administration’s renewed push for a Most Favored Nation drug pricing policy — designed to tie domestic prices to the lowest paid in developed markets — combined with the potential removal of long-standing tariff exemptions for medicines exported from Europe, marks a historic turning point. A fundamental reordering of the pharmaceutical landscape is underway. The message is clear: innovation competitiveness is now a geopolitical priority. Europe must treat it as such. A once-in-a-generation reset The timing couldn’t be better. As we speak, Europe is rewriting the pharmaceutical legislation that will define the next 20 years of innovation. This is a rare opportunity, but only if reforms strengthen, rather than weaken, Europe’s ability to compete in life sciences. To lead globally, Europe must make choices and act decisively. A triple A framework — attract, accelerate, access — makes the priorities clear: * Attract global investment by ensuring strong intellectual property protection, predictable regulation and competitive incentives — the foundations of a world-class innovation ecosystem. * Accelerate the path from science to patients. Europe’s regulatory system must match the speed of scientific progress, ensuring that breakthroughs reach patients sooner. * Ensure equitable and timely access for all European patients. No innovation should remain inaccessible because of administrative delays or fragmented decision-making across 27 systems. These priorities reinforce each other, creating a virtuous cycle that strengthens competitiveness, improves health outcomes and drives sustainable growth. > Europe has everything required to shape the future of medicine: world-class > science, exceptional talent, a 500-million-strong market and one of the most > sophisticated pharmaceutical manufacturing bases in the world. Despite flat or declining public investment in new medicines across most member states over the past 20 years, the research-based pharmaceutical industry has stepped up, doubling its contributions to public pharmaceutical expenditure from 12 percent to 24 percent between 2018 and 2023. In effect, we have financed our own innovation. No other sector has done this at such scale. But this model is not sustainable. Pharmaceutical innovation must be treated not as a cost to contain, but as a strategic investment in Europe’s future. The choice before us Europe has everything required to shape the future of medicine: world-class science, exceptional talent, a 500-million-strong market and one of the most sophisticated pharmaceutical manufacturing bases in the world. What we need now is an ambition equal to those assets. If we choose innovation, we secure Europe’s jobs, research and competitiveness — and ensure European patients benefit first from the next generation of medical breakthroughs. A wrong call will be felt for decades. The next chapter for Europe is being written now. Let us choose the path that keeps Europe leading, competing and innovating: for our economies, our societies and, above all, our patients. Choose Europe. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is European Federation of Pharmaceutical Industries and Associations (EFPIA) * The ultimate controlling entity is European Federation of Pharmaceutical Industries and Associations (EFPIA) * The political advertisement is linked to the Critical Medicines Act. More information here.

The White House is exuding confidence heading into Wednesday’s Supreme Court hearing that the justices will uphold President Donald Trump’s sweeping tariff powers. But just in case, aides have a plan B. Aides have spent weeks strategizing how to reconstitute the president’s global tariff regime if the court rules that he exceeded his authority. They’re ready to fall back on a patchwork of other trade statutes to keep pressure on U.S. trading partners and preserve billions in tariff revenue, according to six current and former White House officials and others familiar with the administration’s thinking, some of whom were granted anonymity to share details of private conversations. “They’re aware there are a number of different statutes they can use to recoup the tariff authority,” said Everett Eissenstat, former deputy director of the White House’s National Economic Council during Trump’s first term. “There’s a lot of tools there that they could go to to make up that tariff revenue.” The contingency planning underscores how much is at stake for Trump, who has used the International Emergency Economic Powers Act, a 1977 law designed for national emergencies, to impose tariffs on nearly every U.S. trading partner — the foundation of his second-term economic agenda. The justices will weigh whether the law gives the president broad power to impose economic restrictions — or whether Trump has stretched it beyond what Congress intended. If the court curtails that power, it could upend not only the White House’s “America First” trade strategy but also the global negotiations Trump has leveraged it to shape. “This is all about foreign policy. This isn’t 1789 where you can clearly delineate between trade policy, economic policy, national security policy and defense policy. These things are all completely interconnected,” said Alex Gray, who served as National Security Council chief of staff and deputy assistant to the president during the first Trump administration. “To diminish the tools he has to do that is really dangerous.” Behind the scenes, trade and legal advisers have modeled what a partial loss might look like — where the court upholds the use of the 1977 law in some circumstances but not others — and what other legal means might be available to achieve similar ends. However, those alternatives are slower, narrower and, in some cases, similarly vulnerable to legal challenge, leaving even White House allies to acknowledge the administration’s tariff strategy is on shakier ground than it is willing to publicly concede. Even a partial loss at the Supreme Court would make it much harder for the president to use tariffs as an all-purpose tool for extracting concessions on a number of issues, from muscling foreign companies to make investments in the U.S. to pressuring countries into reaching peace agreements. “There’s no other legal authority that will work as quickly or give the president the flexibility he wanted,” said one supporter of Trump’s tariff policies, who was part of a group that filed an amicus brief in support of his tariffs. “They seem very confident that they’re going to win. I don’t see why they’re confident at all. Two different courts that have ruled extremely harshly on this.” Still, White House aides are telegraphing confidence, convinced the justices won’t strip Trump of his favorite negotiating tool, and certain that even if they do, he has plenty of backup plans. “Frankly, there’s a little bit of bravado, like, they’re not going to knock these down,” one person close to the White House said. A White House official, granted anonymity to discuss internal deliberations, said the administration sees it as “a pretty clear case.” “We’re using a law that Congress passed, in which they gave the executive branch the authority to use tariffs to address national emergencies,” the official said. Aides concede that other tariff authorities are not a “one-for-one replacement” for the emergency law, though they confirmed they are pursuing them. In fact, the White House has already laid some of the policy groundwork under those authorities, such as the 1970s-vintage Section 301, which the U.S. used against China in Trump’s first term, or the Cold War-era Section 232, which allows tariffs on national-security grounds. The administration has launched more than a dozen 232 investigations into whether the import of goods like lumber, semiconductors, pharmaceuticals and critical minerals from other countries impairs national security. Since January, Trump has used that authority to impose new tariffs on copper, aluminum, steel and autos. It has also opened a 301 investigation into Brazil’s trade practices, including digital services, ethanol tariffs and intellectual property protection. It’s a model officials say could be replicated against other countries if the court curtails IEEPA — and could be used to pressure countries into reaffirming the trade deals that they’ve already negotiated with the United States, or to accept the rates that Trump has unilaterally assigned them. But those tools come with challenges: Section 301 investigations can take months to complete, slowing Trump’s ability to impose tariffs unilaterally or tie them to unrelated goals like ending the war between Russia and Ukraine or stem the flow of fentanyl across the U.S. border. Section 232 offers broad discretion to impose tariffs on national-security grounds, but because the levies are sector-based, they are typically applied across a product category, limiting Trump’s ability to pressure individual countries. And imposing new duties on global industries like semiconductors or pharmaceuticals, as Trump has threatened, could upend recent agreements the administration has reached with trading partners, especially China, which negotiated a trade truce last week. “This detente may have weakened the president’s resolve to go forward with the 232s. We’re worse off than we were,” a second person close to the administration said. The U.S. has already promised to delay fees on Chinese vessels arriving at U.S. ports following the conclusion of a Section 301 investigation on China’s shipbuilding practices as a result of the Thursday meeting between Trump and Chinese leader Xi Jinping. The U.S. also agreed to delay an investigation into China’s adherence to its trade deal from Trump’s first term. Section 122, meanwhile, allows only short-term tariffs of up to 15 percent and for no more than 150 days unless Congress acts to extend them — a narrow clause meant to address trade deficit emergencies. The authority could potentially serve as a bridge between an adverse court ruling and new duties Trump wants to put in place using other authorities. Then there’s Section 338 — a rarely used provision that’s been on the books for nearly a century. In theory, it could let Trump swiftly impose tariffs of up to 50 percent on any country, if he can explain how they are engaging in “unreasonable” or “discriminatory” actions that hurt U.S. commerce. Section 338 does not require a formal investigation before a president can impose tariffs, but would likely face similar legal challenges. Major trading partners are betting that Trump will find a way to reimpose tariffs, somehow. Two European diplomats, granted anonymity to discuss trade strategy, said the countries believe that the Supreme Court won’t strike down the global tariffs and, if it does, it won’t do much to shift the dynamic. “Our working assumption is that the court rulings won’t change anything,” a European official said, adding that they are still hoping the law is overturned. Some are convinced the only way to address the tariffs permanently is for the president to appeal to Congress, arguing that only lawmakers can decide how much unilateral power any White House should permanently wield over global commerce. That would be an uphill battle. At least four Republicans are openly opposed to the global tariffs — bucking Trump in a series of symbolic votes last week. And it’s unclear whether there’s appetite for a vote on Trump’s tariffs in the House, which has been shielded from weighing in on the tariffs until the end of January, after Republican leadership blocked votes on Trump’s national emergencies. “At the end of the day, all this comes back to Congress,” Eissenstat said. “Maybe Congress will step up its role post hearing, post ruling. We’ll see.”

LONDON — British MPs have expressed alarm at the alleged theft of intellectual property at the U.K. arm of chip-making giant Nexperia. The Dutch government decided to take over the Chinese-owned company headquartered in the Netherlands in September. Dutch authorities believe that former Nexperia CEO, Zhang Xuezheng, had transferred trade secrets from the company’s plant in Manchester to a site he owned in China, according to multiple figures granted anonymity to speak about a sensitive matter. Zhang had also planned to lay off staff, paving the way for an effective dismantling of European operations, the figures added. The U.K. government declined to comment on the substance of these allegations, which were first reported by the Dutch newspaper NRC and Reuters.  But officials suggested the government did not recognize the Dutch claims about the theft of trade secrets from the Stockport plant.  However, senior lawmakers told POLITICO that the accusations represented a danger to British industry, which demands closer attention.  Matt Western, a Labour MP who chairs the Joint Committee on the National Security Strategy, said: “I’m deeply concerned by these allegations and will be watching developments closely.”  He warned: “In the U.K., as in Europe, some of our most critical supply chains are highly exposed to malicious actors. It’s vitally important that we ensure businesses have all the tools they need to reinforce resilience.”  The Dutch government decided to take over the Chinese-owned company headquartered in the Netherlands in September. | Marcel Krijgsman/EPA He added that his committee would consider the matter as part of its inquiry on the National Security Strategy.  The accusations deal another blow to the U.K.’s efforts to repair relations with Beijing, after a collapsed spying case sparked a heated political row in Westminster.  ‘THIS IS WHAT CHINA DOES’  Nexperia was at the center of an earlier controversy in the U.K., when the government ordered it to divest its acquisition of semiconductor chip firm Newport Wafer Fab in 2022, over concerns about Chinese ownership.   China hawks argue that the allegations regarding Nexperia in Manchester demonstrate an ongoing threat to Britain’s security.   Iain Duncan Smith, former Conservative Party leader, said: “This is what China does all the time. It poses a threat to the way we live our lives, industry, and the individual freedom of Hong Kong dissidents.”  Luke de Pulford, who leads the Inter-Parliamentary Alliance on China, commented: “One wonders how many bald transgressions have to be seen before the government accepts what every onlooker can plainly see: China presents a serious threat to U.K. security and resilience.”  A U.K. government spokesperson said: “We are monitoring the situation closely and remain in touch with Dutch counterparts regarding actions taken in relation to Nexperia.”  A spokesperson for Nexperia said: “Nexperia Manchester site continues to operate as usual,” and the measures taken by the Dutch government “have restored good governance in the company, ensuring that no undue influence can be exercised by the former CEO on decision making processes.”  Wingtech, which still legally owns Nexperia and is chaired by Zhang, has been approached for comment. At the start of October, Beijing halted the export of Nexperia components from China, following the move by the Netherlands, sending ripples through the Western auto industry, which uses the chips for things like locks, speedometers, and climate control systems.  The impact is being felt at Nissan’s plants in Japan and a Honda site in Canada, which has scaled back production as a result.  The European Automobile Manufacturers’ Association (ACEA) warned Wednesday that production lines are “days away” from closing due to the shortage. 

PARIS — French President Emmanuel Macron has told his ministers that the European Union should consider retaliatory measures against the U.S. digital sector after President Donald Trump threatened additional tariffs over tech regulation and taxes, according to a senior French government official.   At his weekly Cabinet meeting on Wednesday, the French president said Europe “should not exclude taking a look at the digital sector” following Trump’s broadside on Monday, according to the official, who was granted anonymity to discuss a sensitive topic.   “The European Union has a big trade deficit with the United States, we need to focus on this,” Macron was quoted as saying, referring to the EU’s negative trade balance in services with the United States. The bloc has a trade surplus in goods, such as automobiles, pharmaceuticals and food that Trump wants to get down. A person close to Macron confirmed that exploring possible retaliation against U.S. digital players was indeed “his stance.” Trump threatened Monday to impose further tariffs on countries whose digital rules, in his view, discriminate against American companies. This came weeks after Washington and Brussels struck a trade deal that sets a baseline 15 percent tariff on EU exports to the U.S. The two sides only published a joint statement fixing that deal last week, and Trump’s latest diatribe came as a nasty surprise to EU officials. The Trump administration has for months criticized the EU’s digital rulebook — claiming that the Digital Services Act and the Digital Markets Act, respectively, censor American citizens and unfairly target U.S. companies.    France has long been at the forefront of European calls to take a tougher line against Trump on trade. However, a majority of EU countries lacks the appetite to launch a full-scale trade war, leading Brussels so far to refrain from imposing any tariff countermeasures or activating its so-called trade bazooka, the Anti-Coercion Instrument. This could, with the support of most member countries, be used to restrict the intellectual property rights of U.S. tech giants or bar them from investing in the EU.  At the height of recent transatlantic trade tensions, European Commission President Ursula von der Leyen said that “all instruments are on the table.” | Pool Photo by Mahesh Kumar via EPA At the height of recent transatlantic trade tensions, European Commission President Ursula von der Leyen said that “all instruments are on the table” to respond to Trump, but she then shied away from taking a hard line to keep the U.S. president engaged in efforts to end the war in Ukraine.   The French president has expressed veiled dissatisfaction with the trade deal that was struck with Trump, letting it be known that Europe “was not feared enough” to get a good trade deal. According to the first official, Macron is expected to raise this issue with German Chancellor Friedrich Merz later this week during a two-day stay in Macron’s summer retreat Fort Brégançon and the southern city of Toulon.  

Kristen Hopewell is a professor and Canada research chair in global policy at the University of British Columbia. She is the author of “Clash of Powers” and “Breaking the WTO.” With U.S. President Donald Trump threatening to jack up tariffs to massive heights starting July 9 — including 50 percent tariffs on nearly all goods from the EU — the global economy hangs on a cliff edge. Last week, the bloc floated the idea of creating an alternative to the World Trade Organization (WTO), cooperating with like-minded countries to maintain the rule of law in trade. But there is a better option: Keep the WTO, but kick out the U.S. Since his reelection, Trump has essentially launched a full-scale assault on the global trading system, terrorizing countries around the world with a seemingly endless barrage of tariffs and threats. The U.S. leader isn’t even pretending to abide by WTO rules anymore. Moreover, his tariffs threaten to send the world back to the 1930s, when the spread of trade protectionism and beggar-thy-neighbor policies — spurred by America’s Smoot-Hawley Tariff Act — exacerbated the Great Depression. Under these circumstances, allowing the U.S. to remain a member makes a mockery of the institution and its principles. And countries committed to preserving a rules-based trading order need to fight back and defend the system, punishing his blatant violation of WTO rules. Today, the U.S. accounts for only about one-tenth of world trade. The global trade regime can survive without it — but only if the rest of the world continues to follow the rules. | Olivier Hoslet/EFE VIA EPA The international legal order governing trade can only be sustained if countries face penalties for noncompliance. But by disabling the WTO Appellate Body, the U.S. has made it impossible to enforce global trade rules. Now, any country that loses a WTO dispute can block the ruling by simply filing an appeal to the defunct body. And by doing this in repeated disputes challenging its WTO-illegal policies, the U.S. has been able to break the rules with impunity. In addition to the substantial harm caused by Trump’s policies, the broader danger here is that rule violation will spread, leading to the collapse of global trade. If his brazen rule-breaking goes unpunished, why should other countries abide by the rules? Today, the U.S. accounts for only about one-tenth of world trade. The global trade regime can survive without it — but only if the rest of the world continues to follow the rules. It won’t, however, survive other countries imitating Trump’s rule-breaking, tariffs and other protectionist measures. This risk of contagion represents a grave threat to global economic security. This is why WTO members must come together in a clear rejection of Trump’s trade aggression and show that it won’t be tolerated. What once would have been inconceivable has now become a necessity: The only way to preserve the rules-based system is to expel or suspend the U.S. The mechanism to do this exists. Although the WTO has no specific procedures for expelling a member, it is possible under Article X, which sets out procedures for amending the WTO agreement. The U.S. could be expelled from the organization by a two-thirds majority vote to alter the agreement. If it refuses to accept the changes, then a three-fourths majority would be required. The U.S. shouldn’t be allowed to continue enjoying the benefits of membership without any responsibility to uphold its obligations. And denying it the rights of WTO membership could finally create the necessary leverage and force Trump to abandon his destructive tariffs. The U.S. president has repeatedly threatened to withdraw from the WTO — it’s time to call his bluff.  The economic harm would be considerable: The U.S. would lose its access to global markets at favorable WTO tariff rates and could be subject to tariffs without limit. It would also lose market access for its services exports and protections for its intellectual property, which are the foundation of America’s contemporary economic success and its dominance in leading high-tech sectors. It would lose the WTO’s protections against trade discrimination too, which would allow other countries to impose export restrictions that could cut off its supply of vital goods. Trump has made the U.S. a rogue state on trade, showing a total disregard for international law — and even the notion that trade should be governed by the rule of law. Casting the U.S. out would make clear its status as an international pariah. It’s true, no country has been expelled from the WTO before. But the magnitude of Trump’s rule violation is entirely without precedent, and thus demands an unprecedented response. Without a functional Appellate Body, there’s now no other way to enforce WTO rules against the U.S. Supporters of the rules-based trading order should come together and seek broad support for an amendment to suspend or revoke the U.S.’s membership. If the U.S. comes to its senses and abandons Trump’s tariffs, showing that it’s willing to abide by the rules, the rest of the world would happily welcome it back to the rules-based trading system with open arms. Until then, the WTO must take steps to counter and contain the disastrous effects of his misguided policies. To combat Trump, we must be prepared to construct a WTO without the U.S.

The Justice Department on Monday announced the seizure of hundreds of financial accounts, fraudulent websites and laptops linked to a massive scheme by North Korean operatives posing as remote workers to infiltrate top tech companies and funnel money back to Pyongyang’s weapons program. The major government crackdown follows recent findings by cybersecurity experts revealing that several Fortune 500 firms were impacted by the intricate plot, which involves North Korean operatives using stolen identities and sophisticated AI tools to sail through the interview and hiring process. The cyber operation has grown more prolific as remote work in the U.S. has exploded, particularly in response to the Covid-19 pandemic. According to the DOJ, around 100 U.S. companies have unknowingly hired workers tied to the North Korean regime, who have also used their access to company systems to steal U.S. intellectual property and virtual currency. One company targeted was an unnamed California-based defense contractor that worked on artificial intelligence-powered equipment. Some of its technical data and files were compromised and sent abroad. “Any government contracting company utilizing remote work could be a potential victim in the future,” said an FBI official, granted anonymity as a condition of speaking to reporters ahead of the announcement. These North Korean agents are often aided by individuals running so-called laptop farms across the U.S. According to the DOJ, 29 known or suspected laptop farms across 16 states were searched. Around 200 laptops were seized by the FBI, along with dozens of financial accounts and fraudulent websites used to launder money. Individuals from the U.S., China, United Arab Emirates and Taiwan, helped North Korean agents successfully embed themselves inside U.S. companies, the press release states. U.S. national Zhenxing Wang was arrested and indicted for his involvement in a multiyear plot that allowed overseas operatives to obtain remote IT work with U.S. companies, generating more than $5 million in revenue. The scheme involved stealing the identities of around 80 U.S. citizens. “North Korean IT workers defraud American companies and steal the identities of private citizens, all in support of the North Korean regime,” Assistant Director Brett Leatherman of the FBI’s Cyber Division said in a statement. “Let the actions announced today serve as a warning: if you host laptop farms for the benefit of North Korean actors, law enforcement will be waiting for you.” In addition, four North Korean nationals were separately indicted for allegedly stealing $900,000 in virtual currencies from two unnamed companies based in Georgia. The DOJ has previously taken action against these schemes, including arresting multiple U.S. nationals running the laptop farms over the past year. One American woman pleaded guilty in February to hosting a laptop farm from her home, which allowed overseas IT workers to receive more than $17.1 million for their work. The State Department continues to offer a $5 million reward for information that could disrupt North Korean financial and other illicit activities.

President Donald Trump’s trade talks aren’t just about trade. They’re about tech regulation, defense spending, critical minerals — even war and peace. Since slapping sweeping tariffs on nearly every country in April, Trump has turned narrow, trade-focused talks into kitchen-sink diplomatic forums. In closed-door negotiations, the president’s top lieutenants have pressured foreign governments to significantly increase their military budgets, upend their tax systems and scuttle domestic legislation that could hurt U.S. businesses. The president has even leveraged U.S.-brokered ceasefires, such as the one between Israel and Iran, to induce other countries to buy more American goods. It’s part of a broader effort by Trump to use tariffs not only as a tool to boost domestic manufacturing and revenue, but as a lever to extract concessions on a host of unrelated issues. “Access to the American market should cost you. Additional tariffs or additional levies — of course it makes sense to tie it to foreign policy. Why wouldn’t we?” said former Trump adviser Steve Cortes. “I get why countries are like, ‘What the hell? This isn’t the America we’ve been dealing with.’ No, it isn’t,” Cortes added. “You just have to decide, is it worth it? If it is, well, play by our rules.” Trump sees a win-win: If countries refuse to bend to his will, he keeps his “Liberation Day” tariffs in place, protecting domestic businesses and boosting U.S. coffers. Case in point: Trump on Friday ended trade negotiations with Canadain part because of its digital services tax on American tech companies slated to start being collected Monday, which he called a “direct and blatant attack on our Country” in a post on Truth Social. The broad set of issues at play has frustrated other negotiations ahead of the president’s self-imposed July 8 deadline to broker trade deals, as foreign leaders grapple with the fact that everything is on the table when negotiating with the United States. The ongoing uncertainty threatens to upend the global economy, confuse American industry, alienate U.S. allies and drive countries into the arms of China. “It’s unprecedented, if not completely dubious,” said one official from an Asian country, pointing to the Trump administration raising antitrust legislation in talks with South Korea and export controls in talks with China, as an example. The person, granted anonymity to discuss the negotiations, added: “There is no indication it’s working, and Trump will not reverse course.” But White House aides argue that the administration’s kitchen-sink approach matches the scope of the problem. “This whole thing is unprecedented. I mean, we are trying to basically reset what’s a four or five decade-old status quo in which the United States was basically subject to free riding by a lot of our trading partners and other countries in the world, whether it be on trade, on defense and national security,” said a White House official, granted anonymity to share the administration’s thinking. “I push back on the idea that you can silo off trade,” the official added. “They’re all connected here.” At the NATO summit in the Netherlands this week, Trump threatened new tariffs on Spain after the country refused to increase its defense spending in line with other NATO allies — even though Spain is part of the European Union and doesn’t negotiate trade deals independently. It’s also been a hot topic in negotiations with Japan and South Korea, which have balked at the 5 percent across-the-board defense spending target the U.S. has set for its allies in Asia despite their exclusion from NATO. Trump this month said the U.S., which spends roughly 3.4 percent of its GDP on defense, would not abide by the 5 percent pledge. Trump has positioned Canadian investment in his “Golden Dome” missile defense system for the United States as a way for the country to “prove” itself amid ongoing trade negotiations — though the U.S. actually can’t build the system without help from its northern neighbor. At the same time, the U.S. is pressuring South Korea to abandon antitrust legislative proposals aimed at regulating online platforms that are opposed by Google, Apple and Meta. It has also, like Canada, pressured the U.K. and EU countries to eliminate their digital services tax. On Tuesday, Trump added another demand, suggesting that China boost purchases of American oil as a thank you for the Israel-Iran ceasefire — an ask that comes as the president pushes Beijing to increase its imports from the U.S. And he’s implied that he used the cudgel of trade wars to negotiate peace between India and Pakistan this spring, though India has disputed the suggestion. Trump took a similar approach during his first term when he threatened hefty levies to get Mexico to curb the flow of Central American migrants to the U.S., and tariffed China over “unfair practices” in part related to the theft of U.S. intellectual property. In his second term, Trump has built on that strategy. He levied tariffs on Mexico, Canada and China in February aimed at curbing the tide of fentanyl and undocumented immigrants into the U.S. He also in April threatened 25 percent “secondary tariffs” on any country that imports oil from Venezuela, a move he framed as targeting the country’s authoritarian leader Nicolás Maduro and the Tren de Aragua gang. Foreign leaders are confronting the very real possibility that if they slow walk negotiations or abandon talks, Trump would happily slap a tariff large enough to effectively serve as an embargo with the U.S. — cutting off access to the world’s largest economy. “The president feels that tariffs are leverage — leverage for the relationship, of which trade is one component. That’s why each of these negotiations has unique elements to it, which makes matters more unpredictable,” said one former White House official, granted anonymity to speak candidly about the president’s approach. But giving into the president’s demands on non-trade issues isn’t a guarantee of tariff relief. Trump has shown no signs that he will heed French President Emmanuel Macron’s calls for an end to the U.S.’s trade war with the European Union after NATO members agreed to hike defense spending to 5 percent of their gross domestic product. That unwillingness to significantly budge on his array of tariffs has bogged down trade negotiations and hindered the administration from crafting substantial trade deals. As the U.S. has set out to negotiate deals with more than 60 trading partners, world leaders have grown increasingly frustrated with what they say are unbalanced demands from the U.S. Other trading partners, including the European Union, have bristled at the terms of the UK framework and said they would not agree to a similar deal. That arrangement left a 10 percent so-called baseline tariff in place, while laying out a path to slash sector-specific tariffs. The bloc isn’t alone, and Trump’s numerous demands and “do-it-or-else” approach have made it challenging for countries to corral the domestic political support they’ll need in order to sell any deal at home. “If the deal gets too imbalanced, it will get a very bad reception by most of our national public opinions,” said one European official granted anonymity to speak candidly about the state of negotiations with the United States. “I don’t think the EU side and countries can really accept a very imbalanced deal without risk of it backfiring.” But former Trump administration officials doubt the White House is about to change course. “I see no evidence that the administration intends to reverse or scale back its use of this approach,” said Patrick Childress, a former U.S. Trade Representative assistant general counsel.

KANANASKIS, Alberta — European Commission President Ursula von der Leyen on Monday tried to find common ground with Donald Trump by criticizing China’s export restrictions on raw materials used for cars, batteries and wind turbines. During a session on the global economy at the G7 summit in Kananaskis, Canada, von der Leyen slammed Beijing for disrupting global trade by deploying subsidies to boost its own companies, according to an EU readout of the event. The chief of the EU executive accused China of “weaponizing” its leading position in producing and refining critical raw materials, and of ignoring global trade rules to undercut competitors. Since April, Beijing has significantly restricted exports of permanent magnets and the minerals needed to make them. While that move came in response to Trump’s tariffs on China, Beijing has applied the restrictions globally, hurting Europe too. “When we focus our attention on tariffs between partners, it diverts our energy from the real challenge — one that threatens us all,” von der Leyen said in a pointed comment aimed squarely at Trump, who sat near her at the G7 roundtable. “On this point, Donald is right — there is a serious problem,” von der Leyen added, encouraging the U.S. president to join forces with his allies to address China’s trade imbalances, rather than impose tariffs on his allies. Brussels has tried for months to convince Trump not to target the EU in his trade war, arguing that cooperation on China’s industrial policy is the best way to secure an even trade playing field and attempting to flatter and cajole the American president into withdrawing his punishing levies. China has focused on “undercutting intellectual property protections, massive subsidies with the aim to dominate global manufacturing and supply chains. This is not market competition — it is distortion with intent,” von der Leyen said. The Commission chief warned against what she called “a new China shock,” accusing Beijing of flooding global markets with cheap state-subsidized products, and urged G7 countries to tackle its dominance in the raw materials sector. Von der Leyen brought a prop to the meeting: a permanent magnet, which is crucial to Europe’s central industries, such as car and wind turbine production. But while von der Leyen directly slammed China in her comments, the G7 as a whole may not be so bold. In a draft statement to be released from the summit, which POLITICO has seen, the G7 leaders will pledge to implement a “G7 critical minerals action plan.” But the draft doesn’t name-check China, instead obliquely mentioning “non-market policies and practices in the critical minerals sector.” In the days before the summit, the expectation was that the critical raw materials statement would be the easiest to agree among the leaders gathering in Canada, along with partner nations like South Africa, Ukraine, Brazil and India. Von der Leyen also met with Trump separately and said the two sides would “accelerate their work” on getting “a good and fair” trade deal.

Bill Anderson is the CEO of Bayer. Europe was once the epicenter of progress. After centuries of the Dark Ages, a radical new way of acquiring knowledge — the scientific method — cemented the continent’s place at the apex of civilization. Problem is, that was around 400 years ago. Today, Europe is home to strong research universities and prodigious talent, but it has been losing ground, particularly to the U.S. and China. In the 1990s, for example, half of all new medicines originated in Europe — now, the figure’s down to one in five. And the life sciences is just one of many such industries. Europe must reverse this trend, and now is the time to act. We stand on the precipice of a new world order, with increasing trade uncertainty and multipolarity, and it’s not yet clear how things will shake out. In this period of flux, Europe’s leaders rightly want to elevate science and innovation to the heart of its economy. But for this to become a reality, its member countries need to step up their game in terms of simplifying regulation. Starting a business in Italy or Greece, for example, can take months due to needless hurdles like in-person meetings, notary fees and bank account setups. It’s no wonder that advances in AI are almost exclusively happening in the U.S. and China. The biotech revolution attracts 75 percent of its talent in the U.S. and Asia, and Brazil is at the forefront of agricultural innovation. Meanwhile Europe is all too often sitting on the sidelines, asking “what’s allowed?” rather than “what’s possible?” Here’s the thing: Europe can produce world-changing innovation. In fact, some of today’s pioneering startups, like CRISPR Therapeutics, emerged from Europe. But thanks to a more accommodating regulatory environment, proximity to research hubs and access to venture capital, these companies have expanded heavily in the U.S. This isn’t to say the U.S. is without problems, or that Europe should try to refashion itself into Silicon Valley. In fact, Europe publishes about twice as many scientific articles as the U.S., and is home to multiple research hubs that foster international collaboration. However, we need a distinctly European course correction to once again unleash Europe’s innovative spirit. I am confident that with the right mindset and conditions, this can be done — but not if we continue down the path of business — or rather, bureaucracy — as usual. As last year’s Draghi report on EU competitiveness stated: “The only way to become more productive is for Europe to radically change.” I’ve personally had the rare privilege of working and living in five different European countries, including in Germany for the last two years, as the CEO of Bayer — a 160-year-old life sciences company headquartered in Germany. And we’ve now kicked off the most radical transformation since the company’s founding. Upending decades of tradition is not for the faint of heart, but sometimes it’s essential. And here are a few lessons worth bearing in mind, whether modernizing a company or a continent: Firstly, it’s time to simplify regulations and embrace the new technologies required to solve our biggest challenges, just like the U.S., Canada and other countries have already done. The U.K., for example, passed a bill allowing the development and marketing of gene-edited crops in 2023. As last year’s Draghi report on EU competitiveness stated: “The only way to become more productive is for Europe to radically change.” | Teresa Suarez/EFE via EPA On this front, we welcome the EU’s increased openness toward gene editing in agriculture, which carries tremendous potential to help farmers adapt to climate change. For instance, Italy showed courageous leadership last year, breaking with two decades of policy to allow the first field trial of a gene-edited crop, which scientists developed to improve the rice plant’s resistance to a prevalent fungus. The rest of the continent ought to follow this lead. Next, Europe also needs investment. While innovation in Europe has grown, prices for pharmaceuticals have decreased. And why is it that one of the most advanced continents, with a market of 450 million people, is seen less and less as a place to invest for developing the drugs of tomorrow? We need to change that. Everyone deserves reliable and affordable access to medicines, and everyone has a role to play. Investing in research and development (R&D) is the beating heart of the life sciences — and it comes at an enormous financial cost: More than 90 percent of pharmaceutical research ends in failure. But without R&D, our industry would be dead on arrival and have little to offer patients. So, it’s time for Europe to step up and view paying fair prices for new pharmaceutical innovation as an investment in the future — not just another cost to be minimized. At Bayer, we operate in a new model called “dynamic shared ownership,” where employees enjoy the autonomy to make decisions, share resources and direct their focus toward the biggest priorities. And we’re seeing the model pay off already, with rapid growth in our pharmaceuticals business — together, our two biggest launch medicines have grown 80 percent in sales year over year, and one is now a blockbuster. The truth is, the expat scientists who come to Europe won’t have an easy time translating their discoveries into impactful products and therapies without systemic changes. Supporting scientists also requires robust IP protection, a speedier regulatory framework and a better environment for high-risk, high-reward investors. Any innovative life sciences company in Europe would welcome these dramatic changes to the status quo. And as the world’s economic order shifts, it’s Europe’s turn to level the playing field. In 50 years, will we look back on 2025 as the moment our continent rose to the challenge and opened its arms to the future? Will we celebrate the biotech hub of Berlin as we now do Boston, with scientists flocking there to start companies, test cures for diseases and develop tools to help farmers feed the world? Or will we utter a collective sigh, pondering what could have been? It’s time to decide.