BRUSSELS — The United States wants to engage in a meaningful dialogue with Brussels on reducing European tech regulation, its Ambassador to the EU Andrew Puzder told POLITICO. The U.S. administration and its allies have been vocal critics of the EU’s tech rules, saying they unfairly target American companies and hurt freedom of speech. The European Commission has repeatedly denied such allegations, saying it is merely trying to rein in Big Tech and protect the online space from harmful behavior. In an interview Monday, Puzder said he hoped that this week’s vote in the European Parliament to advance last year’s transatlantic trade deal would set the scene for talks to loosen constraints on business. “I’ve had talks with individuals within the EU about moving this discussion forward. I haven’t, as yet, experienced the concrete steps we need to make that happen,” Puzder said. He was referring to the EU’s tech rulebook — and the Digital Services Act and the Digital Markets Act in particular — that Washington sees as barriers to trade. “Hopefully, we’ll continue to talk. Once this trade agreement is approved, in the spirit of moving forward with these non-tariff trade barriers, we’ll be able to break down some of these walls,” he added.  Discussions are still in their very early stages and “there’s nothing formal,” Puzder clarified. The next steps between Brussels and Washington should be “diplomatic engagement followed by political engagement,” he added.  RECALIBRATION NEGOTIATION The envoy’s comments follow a heated series of exchanges between senior American and European officials over whether the EU’s tech rules should even be part of the transatlantic trade discussion. In November 2025, Commerce Secretary Howard Lutnick tied a potential easing of U.S. steel and aluminum tariffs to a “recalibration” by the EU of the bloc’s digital regulations. European Commission Executive Vice President Teresa Ribera responded that tying tariff relief to European tech rules amounted to “blackmail.” Ribera, the EU’s top competition official, told POLITICO at the time that the EU would not accept such attempts to strong-arm it on a topic that it considers to be a matter of sovereignty. She is currently visiting the U.S. and is due to meet tech industry bosses in San Francisco this week. Transatlantic ties took another turn for the worse when the Donald Trump administration in December barred former Industry Commissioner Thierry Breton from traveling to the U.S. over his role in creating and implementing the EU’s tech rules.  Puzder explained that Washington doesn’t think “that Europe shouldn’t have regulation,” but that it shouldn’t be “regulating in such an extreme manner that companies feel they can’t innovate — which is why … most of the tech startups in Europe end up moving to Silicon Valley.” European Commission Vice President Teresa Ribera attends a press conference in Brussels on Feb. 25, 2026. | Dursun Aydemir/Anadolu via Getty Images Responding, the European Commission stressed there is “continued engagement” between the EU and the U.S.  “Executive Vice President [Henna] Virkkunen has held several meetings with U.S. Representatives, both in Europe and in the U.S. At technical level, our teams also engage on a continuous basis with their American counterparts,” spokesperson Thomas Regnier said in a statement to POLITICO.  Virkunnen’s remit covers technology policy. Before Trump’s return to the White House, the two sides held held a structured dialogue under the auspices of the now-defunct EU-U.S. Trade and Technology Council.  The occasional forum, launched by former U.S. President Joe Biden, sought to establish a structured dialogue around regulatory cooperation. Yet in the view of observers it under-delivered, failing for instance to resolve a long-running steel dispute. The TTC has not met since Trump returned to the White House in early 2025. 

Listen on * Spotify * Apple Music * Amazon Music Der EU-Handelsausschuss hat für den Zolldeal mit den USA gestimmt, doch das Tauziehen ist noch nicht vorbei: Zwei Abgeordnete kämpfen als Delegation aus Brüssel in Washington um letzte Garantien. Joana Lehner und Jürgen Klöckner sprechen über das Finale und beleuchten zusammen mit einem US-Kollegen, ob Donald Trump den Deal als politischen Sieg im Inland verkaufen kann oder ob die deutsche Industrie weiterhin Milliarden an Zöllen verliert. Im Policy Talk begrüßen die beiden VDA-Präsidentin Hildegard Müller. Sie spricht über das „weinende und lachende Auge“ der Branche, die aktuelle Milliardenbelastung durch US-Zölle und die schwindende Wettbewerbsfähigkeit des Standorts Deutschland. Müller warnt: Wenn Europa wirtschaftlich schwach wird, verliert es im Spiel der Großmächte an Relevanz. In Berlin tobt derweil ein Ökonomen-Streit: Neue Studien vom ifo-Institut und dem IW Köln werfen der Regierung vor, große Teile des bisher eingesetzten Sondervermögens für Haushaltslöcher statt für neue Investitionen zu nutzen. Rasmus Buchsteiner berichtet Off the Record über das anfängliche Kommunikationsdebakel im Finanzministerium und die Frage, warum die versprochenen Bagger in den Kommunen noch immer nicht rollen. „Power & Policy“ zeigt jede Woche, wo und wie die Entscheidungen in der Wirtschaftspolitik fallen. ⁠Jürgen Klöckner⁠ und ⁠Joana Lehner⁠ von POLITICO sprechen mit Top-Entscheidern und liefern Off-the-Record-Einblicke aus der Redaktion und Machtzentren. Präzise Analysen, lange bevor Gesetze beschlossen sind. Der Podcast für alle in Wirtschaft und Politik, die einen Wissensvorsprung brauchen — immer donnerstags. Für Policy-Profis: Abonnieren und die Pro-Newsletter ⁠Industrie & Handel⁠, ⁠Energie & Klima ⁠und ⁠Gesundheit⁠. Jetzt kostenlos testen. Fragen und Feedback gern an ⁠powerandpolicy@politico.eu⁠ POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 ⁠information@axelspringer.de⁠ Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna

BRUSSELS — The European Union and Australia are expected to conclude talks on a long-awaited trade deal early next week, with Commission President Ursula von der Leyen on Wednesday announcing she would visit from March 23-25.  Von der Leyen will meet Australian Prime Minister Anthony Albanese in Canberra, according to a Commission statement. Trade Commissioner Maroš Šefčovič is also expected to join the trip, although planning might yet change due to flight disruptions in the Middle East. Albanese confirmed the visit, saying in a statement that he would meet both von der Leyen and Šefčovič on March 24. Brussels and Canberra relaunched trade negotiations after Donald Trump’s return to the White House last year. They had collapsed amid acrimony at the end of 2023 amid disagreements over quotas on beef and lamb. The breakthrough comes as the EU looks to get closer to the Pacific-centered CPTPP trade bloc through its deepening bonds with Australia. In a letter to EU leaders shared Monday, von der Leyen said the EU and Australia were in “the final stretch towards concluding” their trade agreement.  “In addition to removing trade barriers, it will also facilitate access to critical raw materials — such as lithium, cobalt, rare earth elements, and hydrogen — and strengthen Europe’s presence in one of the world’s most dynamic economic regions,” she wrote, as part of a list on the Commission’s efforts to boost competitiveness. Negotiators had grappled in the home stretch to close the gap on access for Australian beef and lamb to the European market; EU trade protections on specialty foods; critical minerals; and an Australian tax on luxury cars. Canberra and Brussels are also looking to seal a security and defense partnership, which is finalized.  The EU top diplomat Kaja Kallas, who would be signing the defense deal, known as Security and Defense Partnership, is however not expected to be part of the trip. The pace would come on the heels of similar partnerships signed with the U.K., Canada and most recently India. Speaking last week at at the annual gathering of diplomats with the External Action Service, the EU’s diplomatic body, Kallas said that the deal was coming as she announced that “later this week, I will sign the tenth [SDP] with Australia and subsequent ones with Iceland and Ghana in the coming days.”     James Panichi, Zoya Sheftalovich, Sebastian Starcevic and Nette Nöstlinger contributed reporting.

The EU has failed to hold the U.S. accountable for breaches of international law, its former diplomacy chief has warned, accusing European Commission President Ursula von der Leyen of a power grab and calling for the trade pact she negotiated with Washington to be rejected. In comments to POLITICO’s Brussels Playbook, Josep Borrell — who served as von der Leyen’s vice president and high representative for foreign affairs from 2019-2024 — said the U.S. war against Iran “is illegal under international law [and] not justified by an imminent threat as some claimed.” According to Borrell, von der Leyen has “continued to overstep her functions” by conducting foreign policy, which he insists the EU’s foundational treaty “clearly states” is not within her competence. “She is systematically biased in favor of the U.S. and Israel,” he went on, despite Europe “suffering from the consequences in terms of energy prices, while [U.S. President Donald] Trump gloats that this is good for the U.S. because they are oil exporters.” Trump has given several different rationales for the start of the war with Iran, including removing the country’s repressive regime and preventing it from gaining offensive nuclear capabilities. Borrell, a Spanish socialist who since leaving office has served as the president of the Barcelona Center for International Affairs, praised the approach of Spain’s prime minister, Pedro Sánchez, who has been Europe’s fiercest critic of Trump’s strikes on Iran. Borrell argued that his successor as the EU’s chief diplomat, former Estonian Prime Minister Kaja Kallas, should “be clearer on condemning breaches of international law, whether done by Russia, Israel or the U.S.” because “we lose credibility [when] we use selectively international norms.” Representatives for Kallas did not immediately respond to a request for comment. The former top diplomat, who has long been critical of Israel’s actions in Gaza and has increasingly turned fire on the Commission since finishing his mandate, said the EU should not move ahead with the ratification of the trade agreement von der Leyen and Trump struck in Scotland last summer. “The deal was unfair from the beginning,” Borrell said. “They imposed 15 percent tariffs on us and we reduce our tariffs on them.” The criticism comes as von der Leyen faces a growing rebellion from Spanish socialists from Sánchez’s party, who form an important part of her own dominant coalition in the European Parliament. Senior lawmakers last week condemned comments from the Commission president in which she declared “Europe can no longer be a custodian for the old-world order, for a world that has gone and will not return.” Representatives for von der Leyen declined to comment. Von der Leyen has measured her criticism of the U.S. and Israel, saying that the Iranian regime deserves to fall but urging diplomatic solutions to the conflict. The European Commission President used her State of the Union speech in September to say she would halt bilateral payments to Israel and sanction “extremist ministers.” Spain will hold parliamentary elections by August next year at the latest, and von der Leyen’s center-right European People’s Party is hoping to take control of the government — with its national affiliate, the Partido Popular, polling consistently ahead of Sánchez’s socialists. Borrell also weighed into the EU’s dilemma over how to unblock €90 billion in much-needed funds for Ukraine after Hungary and Slovakia vetoed the plan at the last moment, having called on Kyiv to repair a pipeline carrying Russian oil to their countries via Ukrainian territory. The two governments, he said, “openly breached the principle of sincere cooperation which is part of the Treaties” by reneging on their agreement. “The is an issue for the Court. The other 25 could provide a bridge loan until the EU loan is approved,” Borrell said, dismissing the charm offensive employed by the bloc’s current leadership. Representatives for von der Leyen declined to comment, while representatives for Kallas did not immediately respond.

When U.S., Mexican and Canadian soccer officials fanned out across the globe nearly a decade ago to sell the 2026 World Cup, they traveled in threes — one representative from each country — to underscore a simple message: North America’s three largest countries were in lockstep. “It was so embedded into everything we did that this was a united bid. Our success was tied to the joint nature of the bid. That was the anchor regarding the premise of what we were trying to do,” said John Kristick, former executive director of the 2026 United Bid Committee. The pitch worked. In 2018, FIFA members awarded the tournament to North America, marking the first time three countries would co-host a men’s World Cup. Bid strategists were delighted when The Washington Post editorial page approvingly called it ”the NAFTA World Cup.” The North American Free Trade Agreement is no more, a victim of President Donald Trump’s decision to withdraw during his first term, and the successor U.S.-Mexico-Canada Agreement is now teetering. At almost exactly the midway point of the 39-day tournament, trade ties that link the three countries’ economies will expire. The trilateral relationship is more frayed than it has ever been, tensions reflected in this year’s World Cup itself. Instead of one continental showcase, the 2026 World Cup increasingly resembles three distinct tournaments, with different immigration regimes, security plans and funding models, all a function of different policy choices in each host country. Soccer governing body FIFA “is the only glue that’s holding it together,” said one person intimately involved in the bid who was granted anonymity to speak candidly about the sensitive political dynamics. The “United” in the United Bid, once the anchor of the entire project, now competes with three national agendas, each running on its own track. POLITICO spoke to eight people involved in developing a World Cup whose path from conception to execution reflects the crooked arc of North American integration. “When these events are awarded, they’re concepts. They’re ideas. They feel good,” said Lee Igel, a professor of global sport at NYU who has advised the U.S. Conference of Mayors on sports policy. “But between the award and the event itself, the world changes. Politics change. Leaders change.” THE TRUMP TOURNAMENT At the start of the extravagant December event that formally set the World Cup schedule, Trump stood next to Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney to ceremonially draw the first lottery ball. FIFA officials touted the moment at the Kennedy Center as a milestone: the first time the three leaders had appeared together in person, united by soccer. The trio also met for 90 minutes off stage in a meeting — facilitated by FIFA as part of World Cup planning. That novelty was notable. While each national government has named a “sherpa” to serve as its lead, those officials — including Canadian Secretary of State for Sport Adam van Koeverden and Mexican coordinator Gabriela Cuevas — have met only a handful of times in formal trilateral settings. At a January security summit in Colorado Springs, White House FIFA Task Force director Andrew Giuliani did not mention Canada or Mexico during his remarks. Only when FIFA security officer GB Jones took the stage was the international nature of the tournament acknowledged. “We have been and continue to work very closely with officials from all three host countries on topics including safety, security, logistics, transportation and other topics related to hosting a successful FIFA World Cup,” a FIFA spokesperson wrote via email. “This is one World Cup presented across all three host countries and 16 host cities, while showcasing the uniqueness of each individual location and culture.” The soccer federations behind the United Bid have been largely sidelined, with FIFA — rather than national governments — serving as the link between them. It has brought personnel of local host-city organizing committees for quarterly workshops and other meetings, and situated nearly 1,000 of its own employees across all three countries, according to a FIFA spokesperson who says they are “working seamlessly in a united effort.” (The number will swell to more than 4,000 when the tournament is underway.) But those FIFA staff are forced to navigate wildly varied fiscal conditions depending on where they land. Mexico, which will have matches in three cities, has imposed a tax exemption to stimulate investment in the World Cup and related tourist infrastructure in its three host cities. The Canadian government has dedicated well over $300 million to tournament costs, with more than two-thirds going directly to host-city governments. “The federal government are contributing significantly to both Vancouver and Toronto in terms of funding,” said Sharon Bollenbach, the executive director of the FIFA World Cup Toronto Secretariat, which unlike American host committees is run directly out of city hall. American cities, however, have been left to secure their own funding, largely through the pursuit of commercial sponsorships and donations to local organizing committees. Congress has allocated $625 million for the federal government to reimburse host cities in security costs via a grant program. But the partial government shutdown and an attendant decision by Homeland Security Secretary Kristi Noem to stop approving FEMA grants is exacerbating a logjam for U.S. states and municipalities — including not only those with World Cup matches but hosting team training camps — that rely on federal funds to coordinate counterterrorism and security efforts. That has left American host cities in very different financial situations just months before the tournament starts. Houston and Dallas-area governments can count on receiving a share of state revenue from Texas’ Major Events Reimbursement Program. The small Boston suburb of Foxborough, Massachusetts, however, is refusing to approve an entertainment license for matches at Gillette Stadium because of an unresolved $7.8 million security bill. Because of the budget squeeze, American cities have cut back on “fan festival” gatherings that will run extend during the tournament’s full length in Canadian and Mexican cities. Jersey City has canceled the fan fest planned at Liberty State Park in favor of smaller community events, and Seattle’s fan fest will be scaled down into a “distributed model” spread cross four locations. The tournament has become tightly intertwined with Trump, as FIFA places an outsized emphasis on courting the man who loves to be seen as the consummate host. Public messaging from the White House has focused almost exclusively on the United States’ role, and Trump rarely mentions Canada or Mexico from the Oval Office or on Truth Social. Since returning to office, Trump has had eight in-person meetings with FIFA President Gianni Infantino — besides the lottery draw at the Kennedy Center — whereas Sheinbaum and Carney have only had one each. While taking questions from the media during a November session with Infantino in the Oval office, Trump did not rule out the use of U.S. military force, including potential land actions, within Mexico to combat drug cartels. Guadalajara, which is set to host four World Cup matches, this weekend erupted in violence after Mexican security forces killed the head of a cartel that Trump last year labeled a “foreign terrorist organization.” A White House spokesperson wrote in a social-media post that the United States provided “intelligence support” to the mission. It is part of a more significant set of conflicts than Trump had with the United States’ neighbors during his first term. In January, Trump claimed that Sheinbaum is “not running Mexico,” while Carney rose to office promising Canadians he would “stand up to President Trump.” Since then, Trump has regularly proposed annexing Canada as the 51st state, as his government offers support to an Alberta separatist movement that could split the country through an independence vote on the province’s October ballot. The July 1 renewal deadline for the five-year-old USMCA has injected urgency into relations among the three leaders. Without an extension, the largely tariff-free trade that underpins North America’s economy would come into question, and governments and businesses would begin planning for a rupture. Trump, who recently called the pact “irrelevant,” has signaled he would be content to let it lapse. Suspense around the free trade zone’s future will engulf preparations for the World Cup, potentially granting Trump related in unrelated negotiations. “In the lead-up to mega-events, geopolitical tensions tend to hover in the background,” Igel said. “Once the matches begin, the show can overwhelm everything else, unless something dramatic like a boycott intervenes. But in the months before? That’s when you see the friction.” THE ORIGINS OF THE UNITED BID It was not supposed to be this way. When North American soccer officials first decided, in 2016, to fuse three national campaigns to host the World Cup into one, they saw unity as the strategic advantage that would distinguish their bid from any competitors. Each country had considered pursuing the World Cup on its own. Canada, looking to build on its success as host of the 2015 Women’s World Cup, wanted to host the larger men’s competition. Mexico, the first country to host it twice, wanted another shot. The United States dusted off an earlier bid for the 2022 tournament, which was awarded to Qatar. Sunil Gulati, a Columbia University economist serving as the U.S. Soccer Federation’s president, envisioned an unprecedented compromise: Instead of competing with one another they would work together — with the United States using its economic primacy and geographical centrality to ensure it remained the tournament’s focal point. The three countries’ economies had been deeply intertwined for nearly a quarter-century. Their leaders signed NAFTA in 1992, lowering trade barriers and snaking supply chains across borders that had previous isolated economic activity. But the trade pact triggered a broad backlash in the United States that allied labor unions on the left and isolationists on the right. That political disquiet exploded with the candidacy of Donald Trump, who called NAFTA “the worst trade deal” and immediately moved to renegotiate it upon taking office. Gulati, meanwhile, was pitching Emilio Azcárraga Jean, CEO and chair of Mexican broadcaster Grupo Televisa, and Canada Soccer President Victor Montagliani, on his own plan for regional integration. They agreed to sketch out a tournament that would have 75 percent of the games held in the U.S. with the remainder split between Canada and Mexico. “I’d rather have a 90 percent chance of winning 75 percent of the World Cup than a 75 percent chance of, you know, winning all of it,” Gulati told the U.S. Soccer board, according to two people who heard him say it. Montagliani and Mexico Football Federation President Decio de María joined Gulati to formally announce the so-called United Bid in New York in April 2017. The three federation presidents knew that the thrust of their pitch had to be more emotional and inclusive than “we are big, rich and have tons of ready-built stadiums,” as one of the bid organizers put it. Kristick laced a theme of “community” through the 1,500-page prospectus known to insiders as a bid book. “In 2026, we can create a bold new legacy for players, for fans and for football by hosting a FIFA World Cup that is more inclusive, more universal than ever,” declared a campaign video that the United Bid showed to the organization’s voting members. “Not because of who we are as nations, but because of what we believe in as neighbors. To bid together, countries come together.” It was a sentiment increasingly out of sync with the times. The same month that Gulati had stood with his counterparts in New York announcing the joint bid, Trump was busy demanding that Congress include funding for a wall along the border with Mexico. He told then-Mexico President Enrique Peña Nieto and then-Canadian Prime Minister Justin Trudeau that he wanted to renegotiate NAFTA, using aluminum and steel tariffs as a cudgel. Carlos Cordeiro, who displaced Gulati as U.S. Soccer president during the bid process in 2018, became the driving force of the lobbying effort to sell the idea to 211 national federations that would vote on it. In Cordeiro’s view, according to two Americans intimately involved in the bid at the time, the bid’s biggest challenge was assuring voters that the tournament would be more than a U.S. event dressed up with the flags of its neighbors. Teams fanned out across each of soccer’s six regional confederations to make their pitch, each presentation designed to paint a picture of tri-national cooperation, and returned to a temporary base in London to debrief. “It was very pragmatic. It was like Carlos, or another U.S. representative, would say this and talk about this. The Canada representative will then talk about this. The Mexico representative will talk about this. And it was very much trying to be even across the three in terms of who was speaking,” one person on the traveling team said. When the United Bid finally prevailed in June 2018, defeating a rival bid from Morocco, Trump celebrated it as an equal triumph for the three countries. “The U.S., together with Mexico and Canada, just got the World Cup,” he wrote on Twitter, now known as X. “Congratulations — a great deal of hard work!” THREE DIFFERENT TOURNAMENTS What began with a united bid is turning into parallel tournaments: with different fan bases, security procedures and off-field programs, all a function of different policy choices in each host country. Fans from Iran and Haiti are barred from entering the United States under travel restrictions imposed by Trump, while other World Cup countries are subject to elevated scrutiny that could block travel plans. (Official team delegations are exempt.) Canada and Mexico do not impose the same restrictions, creating uneven access across the tournament: fans traveling from Ivory Coast will likely find it much easier to reach Toronto for a June 20 match against Germany than one in Philadelphia five days later against Curaçao. “FIFA recognizes that immigration policy falls within the jurisdiction of sovereign governments,” read a statement provided by the FIFA spokesperson. “Engagement therefore focuses on dialogue and cooperation with host authorities to support inclusive tournament delivery, while respecting national law.” A fan who does cross borders will encounte a patchwork of security régimes depending on which government is in charge. Mexican authorities draw from deep experience policing soccer matches, with a mix of traditional crowd-control tactics and advanced technology like four-legged robots. The United States is emphasizing novel drone defenses and asked other countries for lists of its most problematic fans. Ongoing immigration enforcement actions in the U.S. have also prompted concern among the international soccer community and calls for a boycott of the tournament. The White House this month issued clarifying talking points to host cities to buttress the “shared commitment to safety, hospitality, and a successful tournament experience for all.” The document confirms that U.S. Customs and Border Protection and Immigration and Customs Enforcement “may have a presence” at the tournament to assist with non-immigration-related functions like aviation security and anti-human trafficking efforts. No where is the fragmentation more glaring among countries than on human rights. After previous World Cups were accused of “sportswashing” autocratic regimes in Qatar and Russia, the United Bid made “human rights and labor standards” a centerpiece of its proposal to FIFA. The bid stipulated that each host city by August 2025 must submit concrete plans for how the city would protect individual rights, including respect for “indigenous peoples, migrant workers and their families, national, ethnic and religious minorities, people with disabilities, women, race, LGBTQI+, journalists, and human rights defenders.” “Human rights were embedded in the bid from the beginning,” said Human Rights Watch director of global initiatives Minky Worden, who worked closely with Mary Harvey, a former U.S. goalkeeper and soccer executive who now leads the Centre for Sport and Human Rights, on the language. Harvey consulted with 70 civil-society groups across the three countries while developing the strategy. That deadline passed without a single U.S. city submitting their plan on time. Now just months before the kickoff, host cities have finally started to release their reports, creating a patchwork of approaches. While Vancouver’s report makes multiple references to respecting LGBTQ+ populations, Houston’s has no mention of sexual orientation and identity at all. The FIFA spokesperson says the organization has embedded inclusion and human rights commitments directly into agreements signed by host countries, cities and stadium operators, and that dedicated FIFA Human Rights, Safeguarding and Anti-Discrimination teams will monitor implementation and hold local organizers to account for violations. “All of these standards were supposed to be uniform across these three countries,” said Worden. “It wasn’t supposed to be the lowest common denominator with the U.S. being really low.”

BRUSSELS — Spain’s business sector isn’t sure Donald Trump will chicken out. While the country’s political class may be steadfast in its defiance against the U.S. and Israel’s war in Iran, its companies and regional leaders are scrambling to figure out what retaliation out of Washington would look like. The fear is that a transatlantic rift between Washington and Madrid, which opened after Prime Minister Pedro Sánchez refused to let U.S. military planes use jointly operated air bases on Spanish soil to attack Iran, could turn into a complete rupture. Earlier this week, the U.S. President and his Treasury Secretary Scott Bessent threatened to cut all trade ties with the EU’s fourth-largest economy in retaliation. It’s not supposed to be easy for the U.S. to bring economic pain to Spain. The EU functions as a barrier-free common market of 27 nations, a collective commercial entity that cannot be divided or fragmented with individual retaliation. But Spanish businesses aren’t taking any chances, given how vulnerable the country would be to a U.S. trade embargo. The U.S. is Spain’s leading supplier of fossil fuels. Over 15 percent of the oil Spain imported last year came from the U.S., which also provided a record 44 percent of the country’s liquefied natural gas imports last January alone. Cutting off the supply of either would be devastating amid surging energy prices from the war in the Gulf. Even though the U.S. accounts for less than 5 percent of Spain’s total global exports, suspending trade relations would have a serious impact on regions like the autonomous Basque Country, a major industrial player. “Around 8 percent of our exports go directly to the States,” Ander Caballero, the Basque government’s head of foreign affairs, told POLITICO during an interview in Brussels. “We need to see how any change in policy would be applied, but anything affecting the energy or automotive sectors, or involving machine tools, steel, and aluminum would be a source of concern.” Caballero noted that the region’s products were also part of larger value chains that involve large German, French, and British companies. “Even though the U.S. is only our fourth laregst trading partner, we could still be talking about a hit that could amount to €1 billion.” Basque Country President Imanol Pradales this week convened an emergency meeting of the region’s “Industrial Defense Group,” made up of government figures, chambers of commerce and key sectoral and business leaders, to coordinate contingency measures against the commercial turmoil stemming from the Middle Eastern conflict. The rapid-response task force was created one year ago with the mission of mitigating the regional impact of Trump’s tariff policies, which Pradales described as a “challenge unlike anything we’ve seen in decades.” This week marked the fourth emergency meeting of the group. “The Basque Country cannot control the global geopolitical landscape, but we can react quickly to protect our industry,” Pradales said. “The time it takes us to react will determine the magnitude of the impact.” The rush to prepare for the worst underscores Spaniards’ fear of the White House’s arsenal of economic weapons. So far, the most popular of these weapons has been trade tariffs. But Trump has also used sanctions to deprive his dissenters from using American credit cards and cut off countries like Iran from the world’s reserve currency. Scott Bessent has no qualms with weaponizing the U.S. dollar | Magnus Lejhall/EPA Bessent has no qualms with weaponizing the U.S. dollar, either. Earlier this year, he told POLITICO that sanctions and limits on access to the greenback enabled Washington to influence other countries’ policies “without firing bullets.” That’s of particular concern to banks, such as Spain’s largest lender, Santander, which last month agreed to acquire the U.S.’s Webster Financial Corporation, a second-tier bank. The $12.2 billion deal could catapult Santander into the top 10 American retail and commercial lenders. At the very least, a breakdown in commercial relations between Madrid and Washington could make it harder to secure necessary regulatory approvals. Santander Executive Chairman Ana Botín sought to calm shareholders on Wednesday, insisting that it was key to “look to the medium term.” While acknowledging that the current situation was “extraordinary,” she downplayed the clash, saying: “trade continues and is very strong.” “Spain and the U.S. have had an amazing relationship, forever, for centuries,” Botín told  Bloomberg TV, alluding to the Spanish crown’s financial support for George Washington in the American War of Independence, the 250th anniversary of which is being observed this year. “The long-term relationship is strong.” YET ANOTHER TACO? Of course, it’s entirely possible that Trump’s vow to cut ties with Spain will never materialize. According to market lore, whenever the risk of self-inflicted economic pain outweighs political rhetoric, “Trump always chickens out” — or TACO . None of the higher tariffs he threatened to impose on Sweden, Norway, Germany, Finland, France, the United Kingdom, and the Netherlands for their participation in military training exercises in Greenland has been implemented. Neither has the 200 percent tariff on French wine and champagne that Trump swore he’d impose on Paris after French President Macron declined to join the Board of Peace scheme to rebuild Gaza. And Madrid is still waiting to hear about the higher tariffs the U.S. president promised to use to punish Sánchez for his refusal to commit 5 percent of Spain’s GDP to military spending. Sánchez this week insisted that, no matter what Trump threatens, Spain will continue to oppose the war in Iran. José Manuel Corrales, a professor of economics and international relations at the European University in Madrid, said the Spanish prime minister’s stance is savvy because the U.S. president tends to back down when countries respond to Washington by remaining firm. “It’s worked out for Canada and México, and obviously for China,” he said. “And, politically, it’s definitely working out for Spain’s government, which is now being hailed for standing up to Trump and firmly saying no to this war.” Regardless of whether Washington cuts trade relations with Madrid, Spain’s economy is already being affected by the instability caused by the U.S. attack on Iran. Corrales said Spain’s booming economy — which grew by 2.8 percent in 2025, and is projected to expand by over 2 percent this year — could be undermined by surging inflation if the war lasts long. “The truth is that we may be facing a crisis with significant repercussions,” he said. “This latest war is already going to have consequences for the American economy, but the Trump administration is also going to have to pay for the damage it’s wrought on the global economy sooner or later.”

BRUSSELS — President Donald Trump’s threat to impose a trade embargo on Spain has delivered yet another jolt to the European Union, forcing European leaders to rally around Madrid. Trump launched his broadside on Tuesday after Madrid declined to allow U.S. warplanes to use its air bases to attack Iran. Prime Minister Pedro Sánchez stood firm on Wednesday, describing the five-day-old war launched by the U.S. and Israel on Iran as illegal. French President Emmanuel Macron rushed to Sánchez’s side, expressing solidarity against “recent threats of economic coercion” made against Spain. European Council President António Costa doubled down and stressed that “the EU will always ensure that the interests of its Member States are fully protected.” Trump’s latest showdown with an EU country comes weeks after he vowed to annex Greenland — a self-governing Danish territory. That bust-up tested the transatlantic relationship to the limit, and led European lawmakers to hit the brakes on implementing the bilateral trade deal struck last summer at Trump’s golf resort in Scotland. German Chancellor Friedrich Merz — who was present in the Oval Office as Trump launched his tirade — said: “There is no way that Spain will be treated particularly badly” on trade as a member of the EU, and insisted that he wanted to avoid correcting Trump in public.  He was more forthright in comments later to the German press. “Here in Washington, they know that we on the European side have reached a limit in terms of what we are willing to accept,” Merz said. “I have gained the impression that the president and his staff see it that way too.” STEADY HAND During the Greenland standoff, the EU avoided rushing into a forceful response, patting itself on the back for remaining united as it succeeded in defusing the crisis.  Now, the bloc is dealing with a Trump riled up by a U.S. Supreme Court decision last month that overturned his core tariff agenda. Importantly, even though the court struck down his broad “reciprocal” tariffs, his aides argue that it reaffirmed his right to impose an economic embargo against another country. Instead of threatening an Arctic island with a population of less than 60,000, Trump is this time venting his ire at a nation of 50 million with a $1.7 trillion economy.  The EU’s fourth-largest economy is a big buyer of U.S. liquefied natural gas, which covered an estimated 30 percent of its gas needs last year. On the export ledger, Spain sells olives, wines and cosmetics to the U.S. German Chancellor Friedrich Merz said: “There is no way that Spain will be treated particularly badly” on trade as a member of the EU, and insisted that he wanted to avoid correcting Trump in public. | Kay Nietfeld/picture alliance via Getty Images Yet the U.S. accounts for only 4 percent of Spain’s total global exports, according to the Ministry of Economy. It also ran a bilateral trade deficit of €16 billion in 2025, meaning that, in principle, that the U.S. would stand to lose more if commercial relations were completely blocked. FIRST CRACKS  Spanish Foreign Minister José Manuel Albares said he had conveyed his “surprise” to his German counterpart Johann Wadephul that Merz didn’t show solidarity in the face of Trump’s attacks. “A few weeks ago Trump aimed his threats against Denmark and Germany and others over Greenland. Today, it is against Spain. Tomorrow it could be Germany again or any other EU member. It’s more important now than ever to remain united,” said a national official, who was granted anonymity to discuss the sensitive matter.  The European Commission also took the threat seriously, vowing on Wednesday to “ensure that the interests of the European Union are fully protected.”  “We stand in full solidarity with all Member States and all its citizens and, through our common trade policy, stand ready to act if necessary to safeguard EU interests,” said Olof Gill, deputy chief spokesperson of the European Commission.  ALL FOR ONE It’s not immediately clear how Trump could, even if he wanted to, impose a watertight embargo on Spain — since the EU functions as a barrier-free common market of 27 nations it would in practice be quite easy to circumvent it. But, even after his sweeping “reciprocal” tariffs were struck down, he would have the legal means at his disposal to inflict serious measures on Spain — as he did when he jacked up tariffs against Brazil over its jailing of former President Jair Bolsonaro. Spanish Foreign Minister José Manuel Albares said he had conveyed his “surprise” to his German counterpart Johann Wadephul that Merz didn’t show solidarity in the face of Trump’s attacks. | Eduardo Parra/Europa Press via Getty Images Trump could order an investigation under Section 301 of the U.S. Trade Act of 1974, which covers trade trade discrimination. An alternative would be a probe under Section 232 under the Trade Expansion Act of 1962, into imports that threaten national security. “From a legal perspective, yes, it is possible,” said Charles Julien, a partner at White & Case’s international trade practice group. “There are of course limitations.”  “Under Section 301, there’s a possibility for the U.S. Trade Representative to impose a number of measures. These include duties and restrictions. These are the most commonly used. Then there’s the possible withdrawal or suspension of trade agreement concessions,” Julien told POLITICO.  The lawyer stressed that the situation was still “very unclear. There may be other provisions in other U.S. statutes that may be used for that purpose.”  The drawback for Trump is that any measures would have to be preceded by an investigation that could last up to a year. In the meantime, confidence in the U.S. among European lawmakers who are still deliberating over whether to approve the Turnberry accord has hit new lows. Top trade lawmakers in the European Parliament decided on Wednesday, again, to defer a vote to advance enabling legislation under which the EU would fulfill its side of the bargain — chiefly to eliminate tariffs on U.S. industrial goods. “A trade threat against an EU country is worsening the mood in the Parliament,” said Anna Cavazzini, a German Green lawmaker who sits on the trade committee. Milena Wälde, Nette Nöstlinger and Max Griera contributed reporting.

BRUSSELS — The European Parliament’s trade lawmakers decided on Wednesday to keep the EU-U.S. trade deal frozen amidst volatile transatlantic relations.  A majority of political groups voted not to move ahead with legislation to implement the EU’s side of the bargain struck at President Donald Trump’s Turnberry golf resort in Scotland last summer. “We want to have clarity that they are sticking to the deal as well,” said Bernd Lange, chair of the Parliament’s International Trade Committee. The lead negotiators will meet again on March 17 and reassess whether to schedule a committee vote that same week, according to three officials. Once the committee green-lights the trade agreement, it could be ratified in a plenary session on March 25-26.  The latest postponement follows Trump’s threat on Tuesday to impose a trade embargo on Spain for refusing to allow U.S. warplanes stationed there to launch air strikes on Iran. “We’re going to cut off all trade with Spain,” Trump said during a sit-down with German Chancellor Friedrich Merz in the Oval Office. “We don’t want anything to do with Spain.” Centre-right and right-wing lawmakers had wanted to fast-track the deal and approve it in a plenary vote next week. That proposal failed to win enough support as the Social Democrats, liberals, and Greens voted against moving forward. “Regrettably, the U.S. files have been postponed,” said Jörgen Warborn, the lead trade lawmaker of the center-right European People’s Party. “It is a shame that an anti-Trump narrative is being pushed more strongly than a pro-European one, risking a transatlantic trade war. Citizens need clarity and predictability.”

Ursula von der Leyen’s decision to provisionally implement the EU-Mercosur trade deal has unleashed a wave of outrage in Paris. It has also shown the European Commission president is increasingly prepared to take decisions without factoring France into the equation, with the end of French President Emmanuel Macron’s term at the Elysée only 14 months away. Von der Leyen announced Friday that the EU would provisionally implement its trade deal with the South American Mercosur bloc, even after the European Parliament voted last month to send the accord for review by the Court of Justice of the European Union, effectively freezing its final ratification for up to two years. The Commission chief said she consulted widely with countries and lawmakers. However, shortly after the announcement, Macron said that “for France, it’s a surprise, and an unpleasant one.” A chorus of French ministers and lawmakers also slammed the decision, accusing officials in Brussels of ignoring the will of EU citizens. Two French officials confirmed to POLITICO that the government in Paris was not informed in advance of von der Leyen’s decision to force through a deal that France has been fighting against for years, amid an overwhelming backlash from the country’s political parties, influential farmers and public opinion. Diplomats and officials from other EU members, who were granted anonymity to speak candidly on a sensitive issue, were quick to draw the conclusion that France’s influence in Brussels is fading and that the European Commission chief now thinks she can deliberately ignore the opposition of a French president who will leave power next year. “I don’t know which of the two is worse for the French: not having been informed or not having been able to block the Commission. I think the former,” said one EU government official. “Macron must have been the only person in Europe to be surprised,” joked one EU diplomat. While von der Leyen had long made clear that she wanted the deal to enter into force soon, uncertainty loomed over whether the Commission was ready to sideline the European Parliament and go for an early implementation of an agreement that would create a free-trade area among between the EU and Argentina, Brazil, Paraguay and Uruguay, spanning 720 million people. “French officials were confident this would not happen,” said a second EU diplomat. TRADE TENSIONS French Trade Minister Nicolas Forissier, in an interview with POLITICO on Thursday, said France was aiming to use the time of the judicial review to obtain reassurances from the Commission on French requests to protect farmers. Forissier vowed “to use the additional time granted by the European Court of Justice to continue discussions with the Commission and arrive at specific answers on all issues, particularly on the question of mirror measures and [sanitary] checks.” But things went differently as von der Leyen decided there was no need to wait for the court verdict. Von der Leyen had already raised tensions with Macron in January, when she signed the Mercosur trade deal in Paraguay after a majority of EU countries backed it against France, Poland, Austria, Ireland and Hungary. Political instability at home and the rise of transatlantic trade tensions hindered French efforts to block or to substantially change the deal during years-long negotiations with the Commission. The EU executive received the go-ahead from EU countries to implement the deal once Mercosur countries complete their own approvals. Both Argentina and Uruguay ratified the agreement Thursday. To become final, after the court review the agreement still needs the final nod of the Parliament, which might now be harder to get after the European Commission skirted EU lawmakers. Von der Leyen didn’t want to waste time. She announced the provisional application the following day, ignoring once again the French call to wait until the end of the judicial review. In return Macron, who cannot run for a third consecutive term and is set to leave the Elysée in spring 2027, slammed von der Leyen’s Commission, saying “European citizens and their representatives [had] not been duly respected.” The dispute marks an unprecedented clash between the two. “I will never defend an agreement that is lax on imports and tough on domestic production, because it is inconsistent for European consumers and criminal for European sovereignty,” Macron said.

PARIS — The European Union should stop raging at Donald Trump and learn its lessons from the U.S. president’s saber-rattling on tariffs, France’s trade minister told POLITICO. “The European Union, the European countries, should not get angry at America’s positions, but should try to better understand America’s logic — which, by the way, began well before Donald Trump,” Nicolas Forissier said in an interview on Thursday.  Forissier, who said riding a Harley-Davidson motorbike down the iconic Chicago-to-California Route 66 highway had given him a feel for American culture, argued Trump’s approach should motivate the EU to fix its own shortcomings.  The U.S. president’s erratic trade policy, along with a glut of Chinese exports, has triggered deeper reflection within the 27-nation bloc about how to regain industrial competitiveness — including by diversifying trade partners, cutting red tape for businesses, and rewriting public procurement rules to include a “Made in Europe” preference.  “It’s also a way of asking us to take responsibility, to step out of our comfort zone. Before criticizing or getting angry at each other, we need to look at what we haven’t done well and where we can improve,” the 65-year-old minister added. The U.S. Supreme Court last week struck down the “reciprocal tariffs” that had underpinned the trade deal Trump struck with the EU at his Turnberry golf resort in Scotland last July. Despite the ruling, the European Commission wants to finalize ratification of the deal, which is now stuck in the European Parliament. Forissier convened G7 trade ministers for a virtual call on Monday, at which U.S. Trade Representative Jamieson Greer made it clear that Washington was aiming to reinstate the tariffs that were struck down via other legal tools. Greer has also said that the U.S. wants to stick to the terms of deals it has already struck. “The European Parliament’s wait-and-see approach and suspension of the vote is quite logical,” Forissier said. “It’s now up to the Americans to clarify things, to calm things down. I don’t think it’s in the United States’ interest to take a stance of high tariffs, toughening measures.” HOLDING THE (15 PERCENT) LINE Forissier, a veteran who hails from the conservative Les Républicains party, said the EU should focus on strengthening its own foundations, also by building a real capital markets union. “That may also enable us to provide concrete answers to the questions raised by Mario Draghi and Enrico Letta. Because we know full well that the European Union really needs to make a huge investment effort, particularly in innovation,” Forissier said, referring to landmark strategy recommendations from the two former Italian PMs.  “Basically, the Americans are doing us a favor by forcing us to take action, make decisions, and step outside our comfort zones or areas of uncertainty that suited us just fine.” Forissier’s comments were a departure from the usually more hawkish French position toward Washington. As recently as January, President Emmanuel Macron called for the EU to use its strongest trade weapon in response to Trump’s threats to annex Greenland.  France has been the fiercest supporter of making the EU economically less dependent on the rest of the world, with Macron for years pushing for more public investment in the EU economy and for more trade defense and “Made in Europe” measures to ensure European firms can compete with their Asian and U.S. rivals.  The trade minister stressed that the deal with Washington — which foresees an “all-inclusive” tariff of 15 percent on most EU exports and exempts aircraft and pharmaceuticals — should remain the baseline of the EU’s relationship to Washington.  He urged, however, that Brussels keep negotiating further exemptions — something the U.S. has so far been reluctant to do given the EU still hasn’t completed its side of the bargain on the deal struck last July at Trump’s Turnberry golf resort in Scotland. Legislation to scrap duties on imports of U.S. industrial goods remains stuck in the European Parliament. “I would like us not simply to revert to the Turnberry agreement. We must also continue the process, ensure that the conversation is constructive, and move forward,” he said.  “Frankly, is it in the interest of American consumers to have a 15 percent tariff on French spirits?”