LONDON — Britain’s pubs are in distress. The beer-loving Nigel Farage has spied an opening. The Reform UK leader and his chief whip Lee Anderson are set to unveil a raft of new policies Tuesday meant to support struggling publicans — and punch a Labour bruise. It comes days after Chancellor Rachel Reeves — under pressure from a highly-organized pubs industry — was forced to U-turn on plans from her budget and announce a three-year relief package for the U.K.’s ailing hospitality sector. Farage isn’t alone — the government’s other rivals are setting out pub-friendly policies too, and are helping to push the plight of the British boozer up the political agenda.  But it’s the latest populist move by the right-wing outfit, whose leader often posts pictures from the pub on social media and has carefully cultivated an ale-drinking man-of-the people persona, to capture the attention of an electorate increasingly soured on Labour’s domestic efforts. ‘GENUINE PISS ARTIST’ Reform will on Tuesday lift the lid on a five-point plan to “save Britain’s pubs,” promising a slew of tax cuts for the sector — including slashing sales tax VAT to 10 percent, scrapping the employer National Insurance increase for the hospitality sector, cutting beer duty by 10 percent, and phasing out business rates for pubs altogether. The party will also pledge to change “beer orders” regulation, which sees large pub companies lock landlords into contracts that force them to buy beer from approved suppliers at much higher prices than the open market. Reform says the plan would be funded through social security changes — reinstating a two-child cap on universal credit, a move the party claims would save around £3 billion by 2029-30. “Labour has no connection to how real life works,” Farage said earlier this month as he lambasted government plans to lower the drink drive limit. One of the British pub industry’s biggest names thinks Farage could have a genuine opening with voters on this front. The Reform boss has “got the massive advantage in that he’s a genuine piss artist,” Tim Martin, the outspoken owner of the British pub chain JD Wetherspoons, said. “He genuinely likes a sherbet, which, when it comes to pubs, people can tell that, whereas I don’t think [they do] with the other party leaders,” he said. The pub boss recounted watching as Farage “whacked down two pints and had two cigarettes” ahead of an appearance on BBC Question Time in which Martin also featured, as other politicians hovered over their briefing notes. The dangers of upsetting the pub industry have not been lost on Labour’s political opponents. | Ben Stansall/AFP via Getty Images Green MP Siân Berry is less impressed with Farage’s pub shtick, however. She accuses him of “playing into a stereotype of pubs as spaces for older white men to sit and drink.” “Most people who run a pub business these days know that it needs to be a family space,” she said. SHOW US THE POLICY Either way, Farage is exploiting an opening left by Labour, which riled up some pubs with its planned shake-up of business rates. “When the Labour government came in, the pub industry was already weak — and they piled on more costs,” said Wetherspoons’ boss Martin. Since Labour won power in 2024 Reeves has also hiked the minimum wage employers must pay their staff, increased employer national insurance contributions, and raised beer duties. While the industry cautiously welcomed Reeves’ business rate U-turn last month, they say there’s still more to do. “This will make a significant difference, as three quarters of pubs are now going to see their bills staying the same or going down,” Andy Tighe, the British Beer and Pub Association (BBPA)’s strategy and policy director, said of the U-turn — but “it doesn’t solve everything,” he added. “For most operators, it’s those big sorts of taxes around business rates, VAT, duty, employment-related taxes that make the real difference, ultimately, to how they think about the future,” he said.  A U.K. Treasury spokesperson said: “We are backing Britain’s pubs — cutting April’s business rates bills by 15 percent followed by a two year freeze, extending World Cup opening hours and increasing the Hospitality Support Fund to £10 million to help venues. “This comes on top of capping corporation tax, cutting alcohol duty on draught pints and six cuts in interest rates, benefiting businesses in every part of Britain,” they added. ALSO PITCHING The dangers of upsetting the pub industry have not been lost on Labour’s political opponents. Politicians of all stripes are keen to engage with the industry, Tighe says. “Pubs matter to people and that’s why I think political parties increasingly want to ensure that the policies that they’re putting forward are pub-friendly,” he said.  Polling found that nearly half (48 percent) of Farage’s supporters in 2024 think pubs in their local area have deteriorated in recent years. | Henry Nicholls/AFP via Getty Images The Tories say they will abolish business rates for pubs, while the Liberal Democrats have pledged to cut their VAT by 5 percent. The Greens’ Berry also wants to tackle alcohol advertising which she says pushes people to drink at home. “A pub is a different thing in a lot of ways, it is more part of the community — drinking second,” the left-wing party’s representative said. “I think the evidence base for us is not to be anti-pub, but it might be against advertising alcohol.” Industry bigwigs like Martin have consistently argued that pubs are being asked to compete with supermarkets on a playing field tilted against them.  “They must have tax equality with supermarkets, because they can’t compete with supermarkets, which are much stronger financial institutions than pubs,” he said, citing the 20 percent VAT rate on food served in pubs — and the wider tax burden pubs face.  GLOOMY OUTLOOK The plight of the local boozer appears to be occupying British voters too. Polling from the think tank More in Common conducted in August 2025 found almost half of Brits (44 percent) go to the pub at least once a month — and among people who voted Labour in 2024 that rises to 60 percent. The same polling found nearly half (48 percent) of Farage’s supporters in 2024 think pubs in their local area have deteriorated in recent years — compared to 31 percent of Labour voters. “Reform voters are more likely than any other voter group to believe that their local area is neglected,” Louis O’Geran, research associate at More in Common, said. “These tangible signs of decline — like boarded up pubs and shops — often come up in focus groups as evidence of ‘broken Britain’ and drive support for Reform,” he added.  The job now for Farage, and his political rivals, is to convince voters their local watering hole is safe in their hands.

U.S. President Donald Trump’s increasingly overt attempts to bring down the Cuban government are forcing Mexico’s President Claudia Sheinbaum into a delicate diplomatic dance. Mexico is the U.S.’s largest trading partner. It is also the primary supplier of oil to Cuba since the U.S. seized control of Venezuela’s crude. Now, Sheinbaum must manage her relationship with a mercurial Trump, who has at times both praised her leadership and threatened to send the U.S. military into her country to combat drug trafficking — all while appeasing her left-wing party Morena, factions of which have historically aligned themselves with Cuba’s communist regime. That balance became even more difficult for Sheinbaum this week following reports that Mexico’s state-run oil company, Pemex, paused a shipment of oil headed for Cuba, which is grappling with shortages following the U.S. military action earlier this month in Venezuela. Asked about the suspension, the Mexican president said only that oil shipments are a “sovereign” decision and that future action will be taken on a “humanitarian” basis. On Thursday, Trump ramped up the pressure, declared a national emergency over what he couched as threats posed by the Cuban government and authorized the use of new tariffs against any country that sells or provides oil to the island. The order gives the administration broad discretion to impose duties on imports from countries deemed to be supplying Cuba, dramatically raising the stakes for Mexico as it weighs how far it can go without triggering economic retaliation from Washington — or worse. “It’s the proverbial shit hitting the fan in terms of the spillover effects that would have,” said Arturo Sarukhán, former Mexican ambassador to the U.S., referring to the possibility of a Pemex tanker being intercepted. Sheinbaum still refuses to hit back too hard against Trump, preferring to speak publicly in diplomatic platitudes even as she faces new pressure. Her posture stands in marked contrast to Canada’s Mark Carney, whose speech at Davos, urging world leaders to stand up to Trump, went viral and drew a swift rebuke from the White House and threats of new tariffs. But the latest episode is characteristic of Sheinbaum’s approach to Trump over the last year — one that has, so far, helped her avoid the kinds of headline-grabbing public ruptures that have plagued Carney, Ukrainian President Volodymyr Zelenskyy and French President Emmanuel Macron. Still, former Mexican officials say Trump’s threats — though not specific to Mexico — have triggered quiet debate inside the Mexican government over how much risk Sheinbaum can afford to absorb and how hard she should push back. “My sense is that right now, at least because of what’s at stake in the counter-narcotics and law enforcement agenda bilaterally, I think that neither government right now wants to turn this into a casus belli,” Sarukhán added. “But I do think that in the last weeks, the U.S. pressure on Mexico has risen to such a degree where you do have a debate inside the Mexican government as to what the hell do we do with this issue?” A White House official, granted anonymity to speak candidly about the administration’s approach, said that Trump is “addressing the depredations of the communist Cuban regime by taking decisive action to hold the Cuban regime accountable for its support of hostile actors, terrorism, and regional instability that endanger American security and foreign policy.” “As the President stated, Cuba is now failing on its own volition,” the official added. “Cuba’s rulers have had a major setback with the Maduro regime that they are responsible for propping up.” Sheinbaum, meanwhile, responded to Trump’s latest executive order during her Friday press conference by warning that it could “trigger a large-scale humanitarian crisis, directly affecting hospitals, food supplies, and other basic services for the Cuban people.” “Mexico will pursue different alternatives, while clearly defending the country’s interests, to provide humanitarian assistance to the Cuban people, who are going through a difficult moment, in line with our tradition of solidarity and respect for international norms,” Sheinbaum said. The Mexican embassy in Washington declined further comment. Cuba’s Foreign Minister Bruno Rodriguez, in a post on X, accused the U.S. of “resorting to blackmail and coercion in an attempt to make other countries to join its universally condemned blockade policy against Cuba.” The pressure on Sheinbaum to respond has collided with real political constraints at home. Morena has long maintained ideological and historical ties to Cuba, and Sheinbaum faces criticism from within her coalition over any move that could be seen as abandoning Havana. At the same time, she has come under growing domestic scrutiny over why Mexico should continue supplying oil abroad as fuel prices and energy concerns persist at home, making the “humanitarian” framing both a diplomatic shield and a political necessity. Amid the controversy over the oil shipment, Trump and Sheinbaum spoke by phone Thursday morning, with Trump describing the conversation afterward as “very productive” and praising Sheinbaum as a “wonderful and highly intelligent Leader.” Sheinbaum’s remarks after the call point to how she is navigating the issue through ambiguity rather than direct confrontation, noting that the two did not discuss Cuba. She described it as a “productive and cordial conversation” and that the two leaders would “continue to make progress on trade issues and on the bilateral relationship.” With the upcoming review of the U.S.-Mexico-Canada Agreement on trade looming, even the appearance of defying Trump’s push to cut off Cuba’s oil lifelines carries the potential for economic and diplomatic blowback. It also could undo the quiet partnership the U.S. and Mexico have struck on border security and drug trafficking issues. Gerónimo Gutiérrez, who served as Mexican ambassador to the U.S. during the first Trump administration, described Sheinbaum’s approach as “squish and muddle through.” “She obviously is trying to tread carefully with Trump. She doesn’t want to irritate him with this matter,” Gutiérrez said, adding that “she knows that it’s a problem.” Meanwhile, Cuba’s vulnerability has only deepened since the collapse of Venezuela’s oil support following this month’s U.S. operation that ousted President Nicolás Maduro. For years, Venezuelan crude served as a lifeline for the island, a gap Mexico has increasingly helped fill, putting the country squarely in Washington’s crosshairs as Trump squeezes Havana. With fuel shortages in Cuba triggering rolling blackouts and deepening economic distress, former U.S. officials who served in Cuba and regional analysts warn that Trump’s push to choke off remaining oil supplies could hasten a broader collapse — even as there is little clarity about how Washington would manage the political, humanitarian or regional fallout if the island tips over the edge. Trump has openly suggested that outcome is inevitable, telling reporters in Iowa on Tuesday that “Cuba will be failing pretty soon,” even as he pushed back on Thursday that the idea he was trying to “choke off” the country. “The word ‘choke off’ is awfully tough,” Trump said. “It looks like it’s not something that’s going to be able to survive. I think Cuba will not be able to survive.” The administration, however, has offered few details about what would come next, and Latin American analysts warn that the U.S. and Mexico are likely to face an influx of migrants — including to Florida and the Yucatán Peninsula — seeking refuge should Cuba collapse. There is no evidence that the Trump administration has formally asked Mexico to halt oil shipments to Cuba. Trump’s executive order leaves it to the president’s Cabinet to determine whether a country is supplying oil to Cuba and the rate at which it should be tariffed — an unusual deferral of power for a president for whom tariffs are a favorite negotiating tool. But former U.S. officials say that absence of an explicit demand to Mexico does not mean the pressure is theoretical. Lawrence Gumbiner, who served as chargé d’affaires at the U.S. embassy in Havana during the first Trump administration, believes Washington would be far more likely to lean on economic pressure than the kind of military force it has used to seize Venezuelan oil tankers. At the same time, the administration’s push on Venezuela began with a similar executive order last spring. “There’s no doubt that the U.S. is telling Mexico to just stop it,” Gumbiner said. “I think there’s a much slimmer chance that we would engage our military to actually stop Mexican oil from coming through. That would be a last resort. But with this administration you cannot completely discount the possibility of a physical blockade of the island if they decide that it’s the final step in strangling the island.”

BEIJING — U.K. Prime Minister Keir Starmer has hailed “really good progress” on Chinese whisky tariffs and visa-free travel after a lengthy meeting with Chinese President Xi Jinping. Starmer dubbed the one hour and 20 minute sit-down with Xi as “a very good productive session with real, concrete outcomes, [which was] a real strengthening of the relationship.” Speaking to reporters after the meeting, he said: “We made some really good progress on tariffs for whisky, on visa free travel to China and on information exchange.” The news will be welcomed by Scotch whisky exporters, who have been squeezed by U.S. President Donald Trump’s 10 percent baseline tariffs on imported U.K. goods.  Currently, Scotch whisky exports face 10 percent duties in China, after the country doubled its import tariffs on brandy and whisky in February 2025, removing its provisional 5 percent rate. Exports to China fell by 31 percent last year, sliding from China’s fifth-largest export market to its tenth.  “We’ve agreed that on tariffs for whisky, we’re looking at how they’re to be reduced, what the timeframe is,” said Starmer. The two sides also made progress on visa-free travel to China for short stays — which would allow British citizens to visit for tourism, business conferences, family visits, and short exchange activities without requiring a visa. Britain is currently not among the European countries granted visa-free access to China, a list that includes France, Germany, Italy, Spain, and Switzerland. Starmer said the two sides are now looking at “how far, how much, and when that can start.” China issued its own readout via state news agency Xinhua, where it discussed expanded cooperation in “education, healthcare, finance, and services, and conduct joint research and industrial transformation in fields such as artificial intelligence, bioscience, new energy, and low-carbon technologies to achieve common development and prosperity.” The Chinese statement said both sides should “strengthen people-to-people exchanges and further facilitate personnel exchanges,” adding that China “is willing to actively consider implementing unilateral visa-free entry for the U.K.” Starmer and Chinese Premier Li Qiang are due to sign memorandums of understanding covering cooperation in a number of areas at a signing ceremony on Thursday morning U.K. time. Starmer and Li will also sign a border security pact to enlist Beijing’s help in choking off the supply of small boat engines and equipment used by criminal gangs to facilitate Channel crossings POLITICO first reported earlier this month that the U.K. was pushing to secure visa-free travel and lower whisky tariffs. This developing story is being updated.

STRASBOURG — Germany, the chief backer of the European Union’s Mercosur trade deal, called on Brussels to go ahead and implement it even after lawmakers voted on Wednesday to send the accord for judicial review, setting up a major clash between the bloc’s institutions and its two largest economies. The European Parliament voted by a razor-thin margin on Wednesday to pass a motion to seek a legal opinion from the Court of Justice of the EU on whether the Mercosur deal complies with the EU treaties. It was a blow for Commission chief Ursula von der Leyen, who made a last-minute appeal hours earlier to MEPs to advance the deal. The vote widened a rift between France, which has fought an epic rearguard action against the Latin American megadeal to protect its farmers, and a Germany desperate to boost industrial exporters reeling from U.S. President Donald Trump’s trade aggression. “The European Parliament’s decision on the Mercosur Agreement is regrettable,” German Chancellor Friedrich Merz said on X. “It misjudges the geopolitical situation. We are convinced of the agreement’s legality. No more delays. The agreement must now be applied provisionally.” In Paris, Prime Minister Sébastien Lecornu welcomed what he called “an important vote that has to be respected.” Foreign Minister Jean Noël Barrot chimed in: “France takes responsibility for saying no when it is necessary, and history often proves it right. The fight continues to protect our agriculture and ensure our food sovereignty.” Lawmakers will not vote on final consent to the deal until the Court of Justice issues its opinion, which could take 18 to 24 months. The court can “adjust the pace of the proceedings where institutional or political necessity makes a timely response especially important,” its press service said in a statement. DEMOCRACY VS REALPOLITIK In principle, the Commission would be allowed under the EU treaties to temporarily apply the provisions of the Mercosur deal, which would create a free-trade area spanning 700 million people and eliminate duties on more than 90 percent of goods. It’s a finely balanced, yet momentous, tradeoff between democratic accountability and realpolitik as the EU executive seeks ways to stand strong against Washington amidst the ongoing transatlantic rift over President Donald Trump’s threats to annex Greenland. Manfred Weber, the pro-Mercosur leader of the European People’s Party, backed the call by his fellow countryman Merz, for provisional application. “The European Parliament did not take a substantive position on Mercosur today; it voted on a procedural motion instead. This is an attempt to delay a much-needed agreement for ideological reasons,” Weber said in a statement. “In the current geopolitical situation, Europe cannot afford a stalemate. The agreement must now be provisionally applied so that its benefits for our economy can take effect. The European Parliament will have the final say after review by the Court of Justice of the EU.” The Commission, in a strongly worded statement, said it “strongly regretted” the decision by EU lawmakers, calling the concerns raised in the motion “unjustified.” It did not precommit to taking any action, however, saying it would now engage with EU member governments and MEPs before deciding on next steps. Olof Gill, the Commission’s top trade spokesperson, did confirm to reporters last week that the EU treaties did allow for the possibility of provisional implementation.  EU countries withdrew a resolution pledging not to sidestep the legislative process when they backed the deal on Jan. 9, sparking uproar in the corridors of the Parliament.  POWER PLAY Lawmakers argue that the Parliament, as the EU’s only directly elected institution, has the democratic legitimacy to be involved in decisions on trade deals.  A new non-binding framework agreement governing relations between the Commission and the Parliament, still to be green-lit by lawmakers, states that if the Commission intends to pursue provisional application of the deal, it should first seek the Parliament’s consent. The move to bypass Parliament would also mark a departure from established practice. Although it’s possible to provisionally apply the trade deal before the European Parliament’s consent, it hasn’t been the practice for over 10 years.  “Provisional application doesn’t take effect before the consent of the European Parliament or before the European Parliament has had the chance to express its view — and that is standard practice since the EU-South Korea agreement [in 2011],” said David Kleimann, a senior trade expert.  Even if the Commission wants to expedite implementation of the deal, it will need to wait until the Mercosur countries ratify the agreement, Sabine Weyand said in an email sent to trade lawmakers less than two weeks ago, seen by POLITICO. “On the side of the Commission we very much wish the Mercosur agreement to become a reality as quickly as possible, given its importance for the EU’s strategic autonomy and sovereignty,” she said. Asking for the Parliament’s “swift consent” on the deal as a whole, she reminded lawmakers that Mercosur countries “need to have completed their respective ratification procedures, and then notify the other side thereof” before the Commission can implement the deal in Europe.  Max Griera reported from Strasbourg and Camille Gijs from Brussels. Giorgio Leali contributed to this report from Paris and Ferdinand Knapp from Brussels.

STRASBOURG — In a vote that could delay the European Union’s trade deal with Mercosur by up to two years, the European Parliament on Wednesday sent the Latin American accord for a judicial review. By a majority of just 10 votes, MEPs backed a resolution to seek an opinion from the Court of Justice of the EU on whether the texts of the EU-Mercosur agreement comply with the EU treaties. The motion was carried — to applause and cheers from its backers — with 334 votes in favor, 324 against, and 11 abstentions. The Parliament won’t be able to vote on the deal itself until the court has issued its opinion — a process that typically takes between 18 to 24 months.  The delay now raises the question of whether the EU executive will provisionally apply the agreement while waiting for the court to rule — putting the two institutions on a collision course over democratic accountability. The outcome represents a major defeat for the European Commission and countries backing the deal, which want to deepen ties with the Mercosur countries — Argentina, Brazil, Paraguay and Uruguay — and see the accord as the perfect opportunity to stand strong against U.S. President Donald Trump’s erratic tariffs.  “The more trading partners we have world-wide, the more independent we are. And that is exactly what we need now,” the European Commission President Ursula von der Leyen said in a last-minute appeal to lawmakers earlier on Wednesday.  Bernd Lange, the chair of the Parliament’s international trade committee, condemned the outcome of the vote. “Absolutely irresponsible. This is an own goal,” Lange posted on X. “Those against #EU #Mercosur should vote against in consent procedure instead of using delaying tactics under the guise of legal review. Very harmful for our economic interests and standing. Team Europe putting itself offside.” This story has been updated.

KYIV — Without electricity for 12 hours a day, the fridge is no longer any use. But it’s a stable minus 10 degrees Celsius on the balcony, so I store my food there. Outside today you’ll find chicken soup, my favorite vegetable salad and even my birthday cake — all staying fresh in the biting chill. This is the latest terror the Russians have inflicted on our capital — during the cruelest winter since their all-out invasion began in February 2022. They have smashed our energy grids and central heating networks with relentless drone attacks; the frost then does the rest, caking power cables and heating pipes in thick ice that prevents repairs.  At times the temperature drops to minus 20 C and the frost permeates my apartment, its crystals covering the windows and invading the walls. Russia’s latest attack disrupted heating for 5,600 residential buildings in Kyiv, including mine.  My daily routine now includes interspersing work with a lot of walking up and down from the 14th floor of my apartment block, carrying liters of water, most importantly to my grandmother. Granny turned 80 last year. Her apartment at least has a gas stove, meaning we can pour boiling water into rubber hot water bottles and tie them to her body. “Why can’t anyone do anything to make Putin stop?” she cries, complaining that the cold gnaws into every bone of her body. The Kremlin’s attempt to freeze us to death has been declared a national emergency, and millions of Ukrainians have certainly had it harder than I. Many have been forced to move out and stay in other cities, while others practically live in malls or emergency tents where they can work and charge their phones and laptops.  FEELING FORGOTTEN Kyiv is crying out for help, but our plight rarely makes the headlines these days. All the attention now seems focused on a potential U.S. invasion of Greenland. Our president, Volodymyr Zelenskyy, complains he now has to fight tooth-and-nail to secure deliveries of air-defense missiles from allies in Europe and America.  “In these times when so many lives are being lost … you still have to fight for all these missiles for various air defenses. You beg for them, squeeze them out by force,” he said.   His outrage that Ukraine’s allies are losing interest has struck a bitter chord this winter. The West’s reluctance to give us security guarantees makes us feel the Kremlin’s crimes are being normalized. Watching Greenland only makes us more afraid. Many Ukrainians no longer believe international law can do anything to rein in the world’s superpowers. Might is right, once again. We are living through what happens when an unchecked superpower is allowed to kill at will. Russia’s goal is to break our defiance, mentally and physically. Weapons designed to sink warships are being turned against our power plants, government buildings and apartments.  KEEP GOING When you’re forced to shiver in the dark for so long, deprived of sleep by nightly missile barrages, you can quickly slide into despair.   “What can I do to cheer you up, Mom?” I asked via a late-night WhatsApp message. “Do something with Putin,” she replied sarcastically, adding she can handle everything else. That means getting up and working every day, no matter how cold or miserable she feels. Veronika Melkozerova/POLITICO Whenever workers manage to restore the grid after yet another attack, the light brings with it a brief moment of elation, then a huge to-do list. We charge our gadgets, fill bottles and buckets with water, cook our food — and then put it out on our balconies.  What’s inspiring is the genuine sense that people will carry on and keep the country running — even though there’s no end in sight to this sub-zero terror. Just do your job, pay your rent, pay your taxes, keep the country afloat. That’s the mission.  So much of the city functions regardless. I can get my granny an emergency dental surgery appointment the same day. Recently, when I went for my evening Pilates — ’cause what else you gonna do in the dark and cold — I saw a woman defiantly getting a manicure in her coat and hat, from a manicurist who wore a flashlight strapped to her head. Bundled-up couriers still deliver food, but the deal is they won’t climb beyond the fifth floor, so those of us up on the 14th have to go down to meet them. Personally, I have access to any kind of food — from our iconic borscht to sushi. I can charge my gadgets and find warmth and shelter at a mall down the street. The eternally humming generators, many of them gifts from Ukrainian businesses and European allies, rekindle memories of a European unity that now seems faded.  Critically, everything comes back to the resilience of the people. Amid all the despair, you see your fellow Ukrainians — people labeled as weak, or bad managers — pressing on with their duties and chores at temperatures where hypothermia and frostbite are a real danger. That’s not to say cracks aren’t showing. The central and local governments have been passing the buck over who failed to prepare Kyiv for this apocalypse. Some streets are covered with ice, with municipal services having to fight frost and the consequences of Russian bombing at the same time. But there’s a real solidarity, a sense that all of us have to dig in — just like our army, our air defenses, our energy workers and rescue services. I find it impossible not to love our nation as it endures endless murderous onslaughts from a superpower. No matter how hard the Russians try to make our lives unbearable, we’re going to make it.

President Donald Trump backed down from the most extreme “Liberation Day” tariffs after bond traders revolted at the prospect of economic upheaval. Now, his push to coerce Denmark into ceding Greenland has threatened to trigger a similar market rout. Bond yields spiked and stocks sank on Tuesday as investors reckoned with how Trump’s threat to impose new tariffs on Europe could hammer alliances that are critical to the global economy. That reignited fears that the “Sell America” trade that dominated market narratives last spring could reemerge, undercutting Wall Street’s hopes for U.S. assets in 2026. As global leaders and top financial CEOs gathered in Davos for the World Economic Forum, where Trump is scheduled to speak on Wednesday, the blowback from bond traders threatened to undermine the president’s bullish case for both the U.S. economy and its market outlook. “The narrative just won’t go away,” said Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute. Foreign investors flooded back into U.S. assets as tensions eased during the latter half of 2025, but now “they’re hedging because they’re not sure what Trump is going to do with tariffs next.” Trump has historically been highly sensitive to how the bond market responds to his policies, and he regularly cites the stock market’s surge as evidence of how his agenda is working. The latest turmoil has echoes of the volatility that hit global bond markets shortly after he announced eye-popping tariffs last April on dozens of trading partners at a White House press conference. The president later announced a temporary pause on the new import duties after the bond market started “getting a little bit yippy,” in his words. His threat on Saturday to impose more tariffs on Europe sparked a similar response. The Dow Jones Industrial Average fell by more than 870 points on Tuesday. The Nasdaq and S&P 500 both closed down by more than 2 percent — erasing the gains notched through the first three weeks of the year. Yields on the 10-year and 30-year Treasury securities — which are benchmark rates for consumer and corporate lending products — jumped to their highest levels since last September, and the dollar sank. The president warned that he would impose additional 10 percent tariffs on eight European countries that have sought to block his ambitions to acquire Greenland, the sparsely populated Danish territory that’s been a fixation of the president since his first term. French President Emmanuel Macron has said he’s planning to activate the EU’s so-called trade bazooka — the Anti-Coercion Instrument — to respond to Trump’s saber rattling. That would allow the EU to impose restrictions on investment and access to public procurement schemes, as well as limits on intellectual property protection. The White House pushed back on the notion that the markets were rejecting Trump’s policies. “The S&P 500 is up over 10 percent and 10-year Treasury bond yields are down nearly 30 basis points over the past year because the markets have confidence in the Trump administration’s pro-growth, pro-business policies,” White House spokesperson Kush Desai said. “Accelerating GDP growth, cooled inflation, and over a dozen historic trade deals all prove that this Administration continues to deliver for American workers and companies.” Banking leaders — including Bank of America CEO Brian Moynihan, Citi’s Jane Fraser and State Street’s Ron O’Hanley — signaled optimism at the U.S.’s economic outlook in separate media appearances in Davos as they urged government leaders to find a resolution. “Let the people go to work,” Moynihan told CNBC. “They’re here in this beautiful place, and they’ve got a week to a few days to work on it. So, give them 48 hours and see if they can come up with solutions.” Throughout his first year back in the White House, Trump’s costly tariffs and insistence that Europe do more to finance its own defense have caused economic disruption and forced leaders across the continent to reckon with the possibility that the U.S. is no longer as strong a partner as it once was. And while markets have grown increasingly confident that the president’s frequent escalations result in policies that are far less severe than his initial threats, finding an off-ramp in the fight over Greenland’s future could prove challenging. “The market’s very complacent to the idea that this is just a negotiating tool,” said Brij Khurana, a fixed-income portfolio manager at Wellington Management. “I’m more nervous about it because I don’t, I don’t see what the middle ground is here.” In an appearance on Fox Business from Davos on Tuesday, Treasury Secretary Scott Bessent said it’s “very difficult to disaggregate” the market’s reaction to Trump’s Greenland push from a massive sell-off in Japanese bonds that was triggered by mounting concerns about the country’s fiscal trajectory. As European leaders consider taking steps to retaliate against Trump, Bessent urged caution. “Sit back, take a deep breath, do not retaliate,” he said. “The president will be here tomorrow, and he will get his message across.” Aiden Reiter contributed to this report.

China’s Vice Premier He Lifeng positioned his country as a champion of the rules-based international order Tuesday, in a speech at the World Economic Forum that indirectly attacked the Trump administration. “The unilateral acts and trade deals of certain countries clearly violate the fundamental principles and rules of the [World Trade Organization], and severely impact the global economic and trade order,” said He, adding that the world shouldn’t slide back into “the law of the jungle, where the strong bully the weak.” The remarks come amid unprecedented tensions between the European Union and the U.S. over Washington’s threats to annex Greenland by force. The escalation has already led President Donald Trump to threaten a group of European countries with new duties after they sent troops to the North Atlantic island. Another country caught in the middle of U.S. President Trump’s tariff onslaught, Canada, has already moved closer into China’s orbit as a response. Ottawa, a longstanding U.S. ally, signed an agreement last week that would liberalize trade in agricultural goods and electric vehicles. “Tariffs and trade war have no winners,” said He, praising the benefits of “free trade and economic globalization.” He said that the global trade system was facing its biggest challenge in years. He called on countries to not turn their back on globalization and trade liberalization that had been instrumental in helping “many countries, including China” achieve “fast development.” The vice premier did acknowledge that globalization “wasn’t perfect” but said that it would be wrong for nations to retreat into “self-imposed isolation”. He also addressed some common criticisms of China’s economic model, which generated a record trade surplus of nearly $1.2 trillion in 2025. In Europe, that enormous level of exports has stoked worries of China crushing European businesses across a range of industries, including the automotive sector. The vice premier insisted that China wasn’t only seeking to export goods abroad, but also wanted to be the “world’s market.” But, he added: “When China wants to buy, other countries don’t want to sell.” The U.S. has imposed restrictions on the sale to China of cutting-edge microchips used in AI. Beijing is trying to support domestic demand, putting it at the top of its economic agenda, He said. However, household consumption, as a share of GDP, has been on a downward trend for decades and was still less than 40 percent last year, compared to a global average of over 60 percent, according to World Bank data. Many economists arguee that an increase in household income could both help China absorb its own manufacturing surplus, dampening exports, and create more demand for goods produced abroad — for example for European luxury items. “We encourage businesses from around the world to seize the opportunities presented by our expanding domestic demand, provide more and better products and services, and further explore China’s consumer market,” said He. “China will open its door still wider to the world.”

BRUSSELS — The trade war is back. Donald Trump’s threat to impose tariffs on European countries over Greenland has blown up last year’s transatlantic trade truce and forced the EU into a familiar dilemma: hit back hard, or try to buy time.  On paper, Brussels has options. It could target politically sensitive U.S. exports like Republican-state soybeans. Or it could unleash its trade “bazooka,” the Anti-Coercion Instrument. Here are the actions that EU leaders can consider when they gather for an emergency summit on Thursday: HITTING BACK AGAINST U.S. PRODUCTS Retaliatory tariffs on €93 billion worth of U.S. goods are still sitting in the EU’s pantry. These date back to Trump’s first round of tariffs last year and were frozen for six months in August. This package will automatically kick into force on Feb. 7 unless the Commission proposes to extend the freeze and the 27 EU countries agree with that. Such a suspension can happen very quickly, however, as the Commission typically sounds out support from capitals several times a week. Part of the package targets distinctively American products like Levi’s jeans, Harley Davidson motorcycles and Kentucky bourbon. Other goods would be targeted because they originate in states that lean towards the Republican side of the spectrum. A tariff on soy beans, for instance, would target the red state of Louisiana from which House Speaker Mike Johnson hails. DEPLOYING THE TRADE “BAZOOKA” The biggest weapon in the EU’s arsenal is its Anti-Coercion Instrument. This all-purpose tool is meant to deter other countries from using trade tactics to extort concessions in other areas. With it, Brussels can impose or increase customs duties, restrict exports or imports through quotas or licenses, and impose restrictions on trade in services. It also can curb access to public procurement, foreign direct investment, intellectual property rights and access to the bloc’s financial markets.  But in a case like this, it would take a few months to first clear diplomatic hurdles between the Commission and the Trump administration. Because it has never been triggered before, the EU is in uncharted waters. That is especially true for the dynamics between the Commission and national capitals. Brussels needs to propose launching the mechanism, and would only do so if it knows enough capitals will agree. France is keen, but Germany and other countries? Not so much. Thomas Lohnes/Getty Images “It’s one of the cards,” but “it’s really not the first in the line that you use,” Lithuanian Finance Minister Kristupas Vaitiekūnas told POLITICO in an interview. PLAYING THE CHINA CARD Canadian Prime Minister Mark Carney did something unprecedented last Friday. Turning the page on the acrimonious relationship between Canada and China born out of the arrest of a high-profile Huawei executive, the Canadian leader struck a preliminary trade deal with Beijing to liberalize imports of Chinese electric vehicles in exchange for a steep reduction in tariffs on Canadian agricultural goods. Carney didn’t mention Trump by name, but the message was clear: Canada has other partners, and it won’t sit quietly while Washington tries to strong-arm it.   A blueprint for Brussels? It’s not that simple. While the EU has tried to thread the needle on its trade relations with Beijing — the Asian country remains its second-largest trading partner  — policymakers are keenly aware of the competitive threat posed by China, Inc. Germany’s automotive industry is reeling from high energy prices and fierce competition from China (now the world’s top automotive exporter). In general, overcapacity — the term for China’s dizzying output of products that, unable to be absorbed by its domestic market, are sold abroad — keeps EU business leaders up at night. Compared with Canada, for the EU China is a “whole different can of worms,” said trade expert David Kleimann. “The Chinese are outcompeting us on all of our main exports and domestic production,” he said. “We will need more barriers, more managed trade with China.”  AN ASSET FIRESALE America’s enormous debt pile is one Achilles heel. The U.S. loves to spend, and Europeans, in turn, snap up that debt. George Saravelos, head of foreign exchange research at Deutsche Bank, said that European public and private sector entities hold a combined total of $8 trillion of U.S. stocks and debt — “twice as much as the rest of the world combined.”  “In an environment where the geoeconomic stability of the western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part,” the analyst wrote in a note to clients. If European governments order their banks and pension funds to dump their holdings, that would almost certainly spark a financial crisis, sending America’s borrowing costs soaring. The ensuing financial Armageddon would engulf Europe as well, though. The firesale of financial assets would crush prices, and European lenders would book huge losses — the financial equivalent of nuclear mutually assured destruction.  Increasing decoupling from the U.S. financial system looks likely, but a violent wholesale break is extremely unlikely.  PLAYING FOR TIME Restraint is the EU’s weapon of choice for now. “The priority here is to engage, not escalate, and avoid the imposition of tariffs,” Olof Gill, deputy chief spokesperson for the European Commission, said on Monday. Under their trade deal struck last year, the United States has already lowered tariffs on most EU products to 15 percent, while the EU has yet to make good on its pledge to cut its tariffs on U.S. industrial goods to zero. That’s because Trump’s threats have derailed a vote in the European Parliament on lowering tariffs for U.S. products. While this stalemate lasts, EU companies actually benefit from lower costs while the reverse is not true for their American counterparts. “Trade continues to flow, investment continues to flow,” Gill added. “So we need to be very sensible in how we approach the difference between a threat and operational reality.” With Trump trying to drive a wedge between European leaders by threatening tariffs against some countries, including France and Germany, while sparing others, like Italy, maintaining cohesion will be a huge challenge. Any serious retaliation, such as wielding the bloc’s trade “bazooka,” the Anti-Coercion Instrument, would require very broad support. WHAT COMES NEXT The U.S. Supreme Court might rule on some of Trump’s tariffs as soon as Tuesday. If the administration loses the case, Trump would have to deal with the fallout while he’s attending this week’s World Economic Forum in Davos.  “On a purely economic warfare basis, that would play in our favor,” said Kleimann. “But we haven’t considered Trump’s ambitions to actually put boots on the ground.” At Davos, Trump might meet with Commission President Ursula von der Leyen, although no bilateral is yet confirmed. Von der Leyen will speak at Davos on Tuesday; Trump is due to arrive the day after.  Then on Thursday, EU government leaders hold an emergency summit in Brussels to discuss transatlantic relations and the latest tariff threats. The meeting is not expected to create a glitzy attack plan but rather to sound out whether the EU should indeed target the U.S. goods or maybe shoulder its trade bazooka. By Feb. 1, the U.S. tariffs on the European allies would kick in, if Trump follows through on his threats. A week later, the EU’s retaliation package automatically kicks in if no solution is found. If that happens, we really will be in a trade war.

Europe’s biggest ever trade deal finally got the nod Friday after 25 years of negotiating.  It took blood, sweat, tears and tortured discussions to get there, but EU countries at last backed the deal with the Mercosur bloc — paving the way to create a free trade area that covers more than 700 million people across Europe and Latin America.  The agreement, which awaits approval from the European Parliament, will eliminate more than 90 percent of tariffs on EU exports. European shoppers will be able to dine on grass-fed beef from the Argentinian pampas. Brazilian drivers will see import duties on German motors come down.  As for the accord’s economic impact, well, that pales in comparison with the epic battles over it: The European Commission estimates it will add €77.6 billion (or 0.05 percent) to the EU economy by 2040.  Like in any deal, there are winners and losers. POLITICO takes you through who is uncorking their Malbec, and who, on the other hand, is crying into the Bordeaux. WINNERS Giorgia Meloni Italy’s prime minister has done it again. Giorgia Meloni saw which way the political winds were blowing and skillfully extracted last-minute concessions for Italian farmers after threatening to throw her weight behind French opposition to the deal.  The end result? In exchange for its support, Rome was able to secure farm market safeguards and promises of fresh agriculture funding from the European Commission — wins that the government can trumpet in front of voters back home. It also means that Meloni has picked the winning side once more, coming off as the team player despite the last-minute holdup. All in all, yet another laurel in Rome’s crown.  The German car industry  Das Auto hasn’t had much reason to cheer of late, but Mercosur finally gives reason to celebrate. Germany’s famed automotive sector will have easier access to consumers in LatAm. Lower tariffs mean, all things being equal, more sales and a boost to the bottom line for companies like Volkswagen and BMW. There are a few catches. Tariffs, now at 35 percent, aren’t coming down all at once. At the behest of Brazil, which hosts an auto industry of its own, the removal of trade barriers will be staggered. Electric vehicles will be given preferential treatment, an area that Europe’s been lagging behind on.  Ursula von der Leyen Mercosur is a bittersweet triumph for European Commission President Ursula von der Leyen. Since shaking hands on the deal with Mercosur leaders more than a year ago, her team has bent over backwards to accommodate the demands of the skeptics and build the all-important qualified majority that finally materialized Friday. Expect a victory lap next week, when the Berlaymont boss travels to Paraguay to sign the agreement. Giorgia Meloni saw which way the political winds were blowing and skillfully extracted last-minute concessions for Italian farmers after threatening to throw her weight behind French opposition to the deal. | Ettore Ferrari/EPA On the international stage, it also helps burnish Brussels’ standing at a time when the bloc looks like a lumbering dinosaur, consistently outmaneuvered by the U.S. and China. A large-scale trade deal shows that the rules-based international order that the EU so cherishes is still alive, even as the U.S. whisked away a South American leader in chains.  But the deal came at a very high cost. Von der Leyen had to promise EU farmers €45 billion in subsidies to win them over, backtracking on efforts to rein in agricultural support in the EU budget and invest more in innovation and growth.   Europe’s farmers  Speaking of farmers, going by the headlines you could be forgiven for thinking that Mercosur is an unmitigated disaster. Surely innumerable tons of South American produce sold at rock-bottom prices are about to drive the hard-working French or Polish plowman off his land, right?  The reality is a little bit more complicated. The deal comes with strict quotas for categories ranging from beef to poultry. In effect, Latin American farmers will be limited to exporting a couple of chicken breasts per European person per year. Meanwhile, the deal recognizes special protections for European producers for specialty products like Italian parmesan or French wine, who stand to benefit from the expanded market. So much for the agri-pocalpyse now.  Mercosur is a bittersweet triumph for European Commission President Ursula von der Leyen. | Olivier Matthys/EPA Then there’s the matter of the €45 billion of subsidies going into farmers’ pockets, and it’s hard not to conclude that — despite all the tractor protests and manure fights in downtown Brussels — the deal doesn’t smell too bad after all.  LOSERS Emmanuel Macron  There’s been no one high-ranking politician more steadfast in their opposition to the trade agreement than France’s President Emmanuel Macron who, under enormous domestic political pressure, has consistently opposed the deal. It’s no surprise then that France joined Poland, Austria, Ireland and Hungary to unsuccessfully vote against Mercosur.  The former investment banker might be a free-trading capitalist at heart, but he knows well that, domestically, the deal is seen as a knife in the back of long-suffering Gallic growers. Macron, who is burning through prime ministers at rates previously reserved for political basket cases like Italy, has had precious few wins recently. Torpedoing the free trade agreement, or at least delaying it further, would have been proof that the lame-duck French president still had some sway on the European stage.  Surely innumerable tons of South American produce sold at rock-bottom prices are about to drive the hard-working French or Polish plowman off his land, right? | Darek Delmanowicz/EPA Macron made a valiant attempt to rally the troops for a last-minute counterattack, and at one point it looked like he had a good chance to throw a wrench in the works after wooing Italy’s Meloni. That’s all come to nought. After this latest defeat, expect more lambasting of the French president in the national media, as Macron continues his slow-motion tumble down from the Olympian heights of the Élysée Palace.  Donald Trump Coming within days of the U.S. mission to snatch Venezuelan strongman Nicolás Maduro and put him on trial in New York, the Mercosur deal finally shows that Europe has no shortage of soft power to work constructively with like-minded partners — if it actually has the wit to make use of it smartly.  Any trade deal should be seen as a win-win proposition for both sides, and that is just not the way U.S. President Donald Trump and his art of the geopolitical shakedown works. It also has the incidental benefit of strengthening his adversaries — including Brazilian President and Mercosur head honcho Luiz Inácio Lula da Silva — who showed extraordinary patience as he waited on the EU to get their act together (and nurtured a public bromance with Macron even as the trade talks were deadlocked). China  China has been expanding exports to Latin America, particularly Brazil, during the decades when the EU was negotiating the Mercosur trade deal. The EU-Mercosur deal is an opportunity for Europe to claw back some market share, especially in competitive sectors like automotive, machines and aviation. The deal also strengthens the EU’s hand on staying on top when it comes to direct investments, an area where European companies are still outshining their Chinese competitors. Emmanuel Macron made a valiant attempt to rally the troops for a last-minute counterattack, and at one point it looked like he had a good chance to throw a wrench in the works after wooing Italy’s Meloni. | Pool photo by Ludovic Marin/EPA More politically, China has somewhat succeeded in drawing countries like Brazil away from Western points of view, for instance via the BRICS grouping, consisting of Brazil, Russia, India, China and South Africa, and other developing economies. Because the deal is not only about trade but also creates deeper political cooperation, Lula and his Mercosur counterparts become more closely linked to Europe. The Amazon rainforest  Unfortunately, for the world’s ecosystem, Mercosur means one thing: burn, baby, burn. The pastures that feed Brazil’s herds come at the expense of the nation’s once-sprawling, now-shrinking tropical rainforest. Put simply, more beef for Europe means less trees for the world. It’s not all bad news for the climate. The trade deal does include both mandatory safeguards against illegal deforestation, as well as a commitment to the Paris Climate Agreement for its signatories.