President Donald Trump promised that a wave of emergency tariffs on nearly every nation would restore “fair” trade and jump-start the economy. Eight months later, half of U.S. imports are avoiding those tariffs. “To all of the foreign presidents, prime ministers, kings, queens, ambassadors, and everyone else who will soon be calling to ask for exemptions from these tariffs,” Trump said in April when he rolled out global tariffs based on the United States’ trade deficits with other countries, “I say, terminate your own tariffs, drop your barriers, don’t manipulate your currencies.” But in the time since the president gave that Rose Garden speech announcing the highest tariffs in a century, enormous holes have appeared. Carveouts for specific products, trade deals with major allies and conflicting import duties have let more than half of all imports escape his sweeping emergency tariffs. Some $1.6 trillion in annual imports are subject to the tariffs, while at least $1.7 trillion are excluded, either because they are duty-free or subject to another tariff, according to a POLITICO analysis based on last year’s import data. The exemptions on thousands of goods could undercut Trump’s effort to protect American manufacturing, shrink the trade deficit and raise new revenue to fund his domestic agenda. In September, the White House exempted hundreds of goods, including critical minerals and industrial materials, totaling nearly $280 billion worth of annual imports. Then in November, the administration exempted $252 billion worth of mostly agricultural imports like beef, coffee and bananas, some of which are not widely produced in the U.S. — just after cost-of-living issues became a major talking point out of Democratic electoral victories — on top of the hundreds of other carveouts. “The administration, for most of this year, spent a lot of time saying tariffs are a way to offload taxes onto foreigners,” said Ed Gresser, a former assistant U.S. trade representative under Democratic and Republican administrations, including Trump’s first term, who now works at the Progressive Policy Institute, a D.C.-based think tank. “I think that becomes very hard to continue arguing when you then say, ‘But we are going to get rid of tariffs on coffee and beef, and that will bring prices down.’ … It’s a big retreat in principle.” The Trump administration has argued that higher tariffs would rebalance the United States’ trade deficits with many of its major trading partners, which Trump blames for the “hollowing out” of U.S. manufacturing in what he evoked as a “national emergency.” Before the Supreme Court, the administration is defending the president’s use of the 1977 International Emergency Economic Powers Act to enact the tariffs, and Trump has said that a potential court-ordered end to the emergency tariffs would be “country-threatening.” In an interview with POLITICO on Monday, Trump said he was open to adding even more exemptions to tariffs. He downplayed the existing carveouts as “very small” and “not a big deal,” and said he plans to pair them with tariff increases elsewhere. Responding to POLITICO’s analysis, White House spokesperson Kush Desai said, “The Trump administration is implementing a nuanced and nimble tariff agenda to address our historic trade deficit and safeguard our national security. This agenda has already resulted in trillions in investments to make and hire in America along with over a dozen trade deals with some of America’s most important trade partners.” To date, the majority of exemptions to the “reciprocal” tariffs — the minimum 10 percent levies on most countries — have been for reasons other than new trade deals, according to POLITICO’s analysis. The White House also pushed back against the notion that November’s cuts were made in an effort to reduce food prices, saying that the exemptions were first outlined in the September order. The U.S. granted subsequent blanket exemptions, regardless of the status of countries’ trade negotiations with the Trump administration, after announcing several trade deals. Following the exemptions on agricultural tariffs, Trump announced on Monday a $12 billion relief aid package for farmers hurt by tariffs and rising production costs. The money will come from an Agriculture Department fund, though the president said it was paid for by revenue from tariffs (by law, Congress would need to approve spending the money that tariffs bring in). In addition to the exemptions from Trump’s reciprocal tariffs, more than $300 billion of imports are also exempted as part of trade deals the administration has negotiated in recent months, including with the European Union, the United Kingdom, Japan and more recently, Malaysia, Cambodia and Brazil. The deal with Brazil removed a range of products from a cumulative tariff of 50 percent, making two-thirds of imports from the country free from emergency tariffs. For Canadian and Mexican goods, Trump imposed tariffs under a separate emergency justification over fentanyl trafficking and undocumented migrants. But about half of imports from Mexico and nearly 40 percent of those from Canada will not face tariffs because of the U.S.-Mexico-Canada free trade agreement that Trump negotiated in his first term. Last year, importers claimed USMCA exemptions on $405 billion in goods; that value is expected to increase, given that the two countries are facing high tariffs for the first time in several years. The Trump administration has also exempted several products — including autos, steel and aluminum — from the emergency reciprocal tariffs because they already face duties under Section 232 of the U.S. Trade Expansion Act of 1962. The imports covered by those tariffs could total up to $900 billion annually, some of which may also be exempt under USMCA. The White House is considering using the law to justify further tariffs on pharmaceuticals, semiconductors and several other industries. For now, the emergency tariffs remain in place as the Supreme Court weighs whether Trump exceeded his authority in imposing them. In May, the U.S. Court of International Trade ruled that Trump’s use of emergency authority was unlawful — a decision the U.S. Court of Appeals upheld in August. During oral arguments on Nov. 5, several Supreme Court justices expressed skepticism that the emergency statute authorizes a president to levy tariffs, a power constitutionally assigned to Congress. As the rates of tariffs and their subsequent exemptions are quickly added and amended, businesses are struggling to keep pace, said Sabine Altendorf, an economist with the Food and Agriculture Organization of the United Nations. “When there’s uncertainty and rapid changes, it makes operations very difficult,” Altendorf said. “Especially for agricultural products where growing times and planting times are involved, it’s very important for market actors to be able to plan ahead.” ABOUT THE DATA Trump’s trade policy is not a straightforward, one-size-fits-all approach, despite the blanket tariffs on most countries of the world. POLITICO used 2024 import data to estimate the value of goods subject to each tariff, accounting for the stacking rules outlined below. Under Trump’s current system, some tariffs can “stack” — meaning a product can face more than one tariff if multiple trade actions apply to it. Section 232 tariffs cover automobiles, automobile parts, products made of steel and aluminum, copper and lumber — and are applied in that order of priority. Section 232 tariffs as a whole then take priority over other emergency tariffs. We applied this stacking priority order to all imports to ensure no double-counting. To calculate the total exclusions, we did not count the value of products containing steel, aluminum and copper, since the tariff would apply only to the known portion of the import’s metal contentand not the total import value of all products containing them. This makes the $1.7 trillion in exclusions a minimum estimate. Goods from Canada and Mexico imported under USMCA face no tariffs. Some of these products fall under a Section 232 category and may be charged applicable tariffs for the non-USMCA portion of the import. To claim exemptions under USMCA, importers must indicate the percentage of the product made or assembled in Canada or Mexico. Because detailed commodity-level data on which imports qualify for USMCA is not available, POLITICO’s analysis estimated the amount that would be excluded from tariffs on Mexican and Canadian imports by applying each country’s USMCA-exempt share to its non-Section 232 import value. For instance, 38 percent of Canada’s total imports qualified for USMCA. The non-Section 232 imports from Canada totaled around $320 billion, so we used only $121 billion towards our calculation of total goods excluded from Trump’s emergency tariffs. Exemptions from trade deals included those with the European Union, the United Kingdom, Japan, Brazil, Cambodia and Malaysia. They do not include “frameworks” for agreements announced by the administration. Exemptions were calculated in chronological order of when the deals were announced. Imports already exempted in previous orders were not counted again, even if they appeared on subsequent exemption lists.

Photos from the estate of Jeffrey Epstein tie the late, convicted sex offender to President Donald Trump, former President Bill Clinton, tech billionaire Bill Gates and former Treasury Secretary Larry Summers. These men and others are featured in the roughly 95,000 photos the House Oversight and Government Reform Committee has received from the Epstein estate as part of its ongoing investigation. House Democrats publicly released select 19 photos Friday morning. “It is time to end this White House cover-up and bring justice to the survivors of Jeffrey Epstein and his powerful friends,” said the Oversight Committee’s top Democrat, Rep. Robert Garcia of California, in a statement. “These disturbing photos raise even more questions about Epstein and his relationships with some of the most powerful men in the world. We will not rest until the American people get the truth. The Department of Justice must release all the files, NOW.” The White House and other individuals in the photographs beyond Trump did not immediately respond to requests for comment. The Justice Department is required to release the full tranche of Epstein-related documents by Dec. 19, per the terms of legislation Congress passed last month. Of the photos shared Friday, one features Trump alongside someone who appears to be a young woman (her face has been redacted). Another shows Trump standing beside Epstein, chatting with a woman, while a third has Trump grinning among a half dozen women whose faces have also been redacted. In that shot, he appears to have his arm around one women’s waist. There is another photo in the tranche showing pictures of “Trump condoms” being sold for $4.50 each, branded with the words, “I’M HUUUUGE!” There is a signed photo from Clinton depicting him smiling alongside Epstein and Epstein’s associate Ghislaine Maxwell, who is serving 20 years for her part in the sex trafficking scheme. The images underscore Epstein’s long and storied network of connections to powerful men across industries, from filmmaker Woody Allen to conservative strategist Steve Bannon. They were sent to Capitol Hill after a subpoena from the Oversight panel for materials from the late financier’s estate, separate from the documents demanded from the Justice Department by legislation. While Epstein’s connections with these public figures are far from new revelations, they highlight the extent to which Epstein reveled in his relationships with powerful people. Gates, the Microsoft founder, is seen smiling at Andrew Mountbatten-Windsor, formerly known as Prince Andrew, in one photo and grinning beside a pilot in front of a plane in another. That photo has been published previously. Summers, the former Treasury Secretary and president of Harvard University, is the latest public figure to face fallout from his relationship with Epstein. In wake of new materials produced in response to the congressional investigation, Summers was banned from the American Economic Association and stepped back from his roles at Harvard. Summers is seen in one photo on what appears to be a small plane. Bannon, who served as Trump’s chief strategist during his first term, is seen in the photos talking with Epstein at a desk and standing beside Epstein in front of a mirror, posing for a selfie. In another, Bannon appears to be speaking with Allen. Trump has maintained that he ended his relationship with Epstein years ago and called the efforts clamoring for the release of the files a “hoax.” In a pivot last month, he gave congressional Republicans his nod of approval to vote to release the Epstein files and swiftly signed the legislation into law. Those files are due in the coming days, after courts cleared the way for the Justice Department to release grand jury materials and the 30-day clock for Attorney General Pam Bondi to make the contents public is winding down. A Justice Department spokesperson did not immediately respond to a request for comment. Clinton, meanwhile, has been subpoenaed by the Oversight panel, but a date has not yet been scheduled for his testimony to Congressional investigators. Trump has ordered Bondi to investigate Democrats with ties to Epstein, including Clinton and Summers. Bondi asked Jay Clayton, U.S. attorney in the Southern District of New York, to lead the charge.

LONDON — In February Britain’s cash-strapped Labour government cut international development spending — and barely anyone made a noise. The center-left party announced it would slice the country’s spending on aid down to only 0.3 percent of gross domestic income — from 0.5 percent — in order to fund a hike in defense spending. MPs, aid experts and officials have told POLITICO that the scale of the cuts is on a par with — or even exceeding — those of both the previous center-right Conservative government or the United States under Donald Trump. This leaves Britain’s development arm, once globally envied as a vehicle for poverty alleviation, a shadow of its former self. The move — prompted by U.S. demands to up its NATO spending, and mirroring the Trump administration’s move to gut its own USAID development budget — shocked Labour’s progressive MPs, supporters and backers in the aid sector. But unlike attempted cuts to British welfare spending, the real-world backlash was muted, with the resignation of Britain’s development minister prompting little further dissent or change in policy. There was no mutiny in parliament, and only limited domestic and international condemnation outside of an aid sector torn between making their voices heard — and keeping in Whitehall’s good books over slices of the shrinking pie. Some fear a return grab over the aid budget could still be on the cards — but that the government will find that there is little left to cut. Gideon Rabinowitz, director of policy and advocacy at Bond, the U.K. network for NGOs, warned that, instead of “reversing the cuts by the previous Conservative government, Labour has compounded them, and lives will be lost as a result.” “These cuts will further tarnish the U.K.’s reputation as it continues to be known as an unreliable global partner, breaking Labour’s manifesto commitment,” he warned. “The Conservatives started the fire, but instead of putting it out, this Labour government threw petrol on it.” ‘IT WAS THE PERFECT TIME TO DO IT’ When Prime Minister Keir Starmer announced the cut to international aid — a bid to save over £6 billion by 2027 — Labour MPs, including those who worked in the sector before being elected, were notably silent. The move followed a 2021 Conservative cut to aid spending — from 0.7 percent in the Tory brand-rebuilding David Cameron years down to 0.5 percent. At the time, Labour MPs had met that Tory cut with howls of outrage. This time it was different. Some were genuinely shocked, while others feared retribution from a Downing Street that had flexed its muscles at MPs who rebelled on what they saw as points of conscience. “No one was expecting it, so there was no opportunity to campaign around it,” said one Labour MP. “Literally none of us had any idea it was coming.” Remaining spending is largely mandatory contributions to organizations such as the World Bank. | Daniel Slim/AFP via Getty Images The same MP noted that there are around 50 Labour MPs from the new 2024 intake who had some form of development background before coming into parliament. Yet they were put “completely under the cosh” by Downing Street and government whips. “It was the perfect time to do it,” the MP said. A number of MPs who might have been vocal have since been made parliamentary private secretaries — the most junior government role. “They have basically gagged the people who would be most likely to be outspoken on it,” the MP above said. The department’s ministerial team is now more likely to be loyal to the Starmer project. “I just felt hurt, and wounded. We were stunned. None of us saw it coming,” said one MP from the 2024 cohort, adding: “They priced in that backlash wouldn’t come.” But they added: “If we were culpable so were NGOs, too inward-looking and focused on peripheral issues.” The lack of outcry from MPs would, however, seem to put them largely in step with the wider British public. Polling and focus groups from think tank More in Common suggest that despite the majority of voters thinking spending on international aid is the right thing to do in a variety of circumstances, only around 20 percent of the public think the budget was cut too much.  The second new-intake Labour MP quoted above said the policy was therefore an “easy thing to sell on the doorstep,” and “in my area, there’s not going to be shouting from the rooftops to spend more money on aid.” DIMINISHED AND DEMORALIZED The cuts to aid come at a time when Britain’s Foreign Office is undergoing a radical overhaul. While the department describes its plans as “more agile,” staff, programs and entire areas of focus are all ripe for cuts to save money. The department is looking to make redundancies for around 25 percent of staff based in the U.K. MPs have voiced concern that development staff will be among the first to make the jump due to the government’s shift away from aid. The department insists that no final decisions have been taken over the size and shape of the organization. Major cuts are expected across work on education, conflict, and WASH (Water, Sanitation, and Hygiene.) The government’s Integrated Security Fund — which funds key counter-terror programs abroad — is also looking to scale back work abroad which does not have a clear link to Britain’s national security. The British Council — a key soft-power organization viewed as helping combat Chinese and Russian reach across the world — told MPs it is in “real financial peril” and would be cutting its presence in 35 of the 97 countries it operates. The BBC’s World Service is seeing similar cuts to its global reach. The Independent Commission for Aid Impact (ICAI), the watchdog for aid spending, is also not safe from the ax as the government continues its bonfire of regulators. The FCDO did not refute the expected pathway of cuts. Published breakdowns of spending allocations for the next three years are due to be published in the coming months, an official said. A review of Britain’s development and diplomacy policies conducted by economist Minouche Shafik — who has since been moved into Downing Street — sits discarded in the department. The government refuses to publish its findings. Aid spending was spared a repeat visit by Chancellor Rachel Reeves in her government-wide budget last month — but that hasn’t stopped MPs worrying about a second bite. | Pool Photo by Adrian Dennis via Getty Images The second 2024 intake MP quoted earlier in the piece said that following the U.S. decisions on aid and foreign policy “there was an expectation that the U.K., as a responsible international partner, as a leader on a lot of this stuff, would fill the gap to some extent, and then take more of a leadership role on it, and we’ve done the opposite.” NOTHING LEFT TO CUT Aid spending was spared a repeat visit by Chancellor Rachel Reeves in her government-wide budget last month — but that hasn’t stopped MPs worrying about a second bite. While few MPs or those in the aid sector feel Britain will ever return to the lofty heights of its 0.7 percent commitment, they predict there will be harder resistance if the government comes back for more. “I don’t think they’re going to try and do it again, as there’s no money left,” the second 2024 intake MP said. But they pointed out that a large portion of the remaining aid budget is spent on in-country costs such as accommodation for asylum seekers. Savings identified from the asylum budget would be sent back to the Treasury, rather than put back into the aid budget, they noted. Remaining spending is largely mandatory contributions to organizations such as the World Bank or the United Nations and would, they warned, involve “getting rid of international agreements and chopping up longstanding influence at big international institutions that we are one of the leading people in.” The United Nations is already facing its own funding crisis as it struggles to adjust to the global downturn in aid spending. British diplomat Tom Fletcher — who leads the UN’s humanitarian response — said earlier this year that the organization has been “forced into a triage of human survival,” adding: “The math is cruel, and the consequences are heartbreaking.” The government still has a commitment to returning to 0.7 percent of GNI “as soon as the fiscal circumstances allow.” The tests for this ramp back up were set out four years ago. Britain must not be borrowing for day-to-day spending and underlying debt must be falling. The last two budgets have forecast that the government will not meet these tests in this parliament. FARAGE CIRCLES In the meantime, Labour’s opponents feel emboldened to go further. Both the Conservatives and Reform UK have said that they would further cut the aid budget. The Tories have vowed to slice it down to 0.1 percent of GNI, while Nigel Farage’s Reform UK is eyeing fresh cuts of at least by £7-8 billion a year. A third 2024 Labour MP said that there was a degree of pressure among some colleagues to match the Conservatives’ 0.1 percent pledge. Though no country has gone as far as Uganda’s Idi Amin in setting up a “save Britain fund” for its “former colonial masters,” Britain’s departure on international aid gives space for other countries wanting to step up to further their own foreign policy aims. The space vacated by Britain and America has prompted warnings that China will step in, while countries newer to international development such as Gulf states could try and fill the void. Many of these nations are unlikely to ever fund the same projects as the U.K. and the U.S., forcing NGOs to look to alternate donors such as philanthropists to fund their work. “There’ll be a big, big gap, and it won’t be completely filled,” the second new intake MP said. An FCDO spokesperson said the department was undergoing “an unprecedented transformation,” and added: “We remain resolutely committed to international development and have been clear we must modernize our approach to development to reflect the changing global context. We will bring U.K. expertise and investment to where it is needed most, including global health solutions and humanitarian support.”

BRUSSELS — Ursula von der Leyen is separating herself from the corruption allegations engulfing the EU’s diplomatic service, with staffers saying it is a non-issue for the Commission chief. After Belgian authorities conducted dawn raids on Tuesday and detained the EU’s former top diplomat Federica Mogherini and ex-European External Action Service Secretary-General Stefano Sannino, Commission officials dismissed it as an EEAS problem — noting that while Sannino took on a top job at the Commission earlier this year, the probe dates back to his previous role. “It’s not the Commission distancing itself, it’s a different institution that’s being investigated,” an EU official said. Helpfully for von der Leyen, Sannino fell on his sword Wednesday, with the Commission announcing he was gone from the helm of its Middle East, North Africa and the Gulf department (DG MENA). Three Commission officials forcefully argued the investigation launched Tuesday — into allegations the EEAS fraudulently awarded a tender to run a training academy for future EU diplomats to the College of Europe in Bruges — had nothing to do with von der Leyen, given the diplomatic service is a separate institution from the Commission. An EU official characterized attacks on the Commission chief as unfair and unwise, coming at a sensitive time when von der Leyen is attempting to shore up support for Ukraine ahead of a crunch December summit of EU leaders. The events take place against the backdrop of tensions between von der Leyen and the current boss of the EEAS, Kaja Kallas. Kallas, who was not in office at the time of the alleged corruption, has also sought to distance herself from the probe. On Wednesday, the former Estonian prime minister sought to drive home the idea that she had been working to clean up the EEAS since her appointment as the EU’s high representative in December 2024. In a letter to EEAS staff seen by POLITICO, the top EU diplomat wrote that she found the allegations against Mogherini and Sannino “deeply shocking,” but that these had predated her time at the EEAS. In the months since then, her team had launched internal reforms including setting up an “Anti-Fraud Strategy” and building stronger cooperation with the EU’s anti-fraud agency, OLAF, and the EPPO, she said. But at issue is who knew what in relation to the claims against Sannino. According to four EEAS employees, speaking to POLITICO in interviews prior to Tuesday’s raids, wider questions were raised about the way Sannino handled appointments for coveted diplomatic posts during his time at the service, including allegations that he had awarded them to favorites. Officials from OLAF visited the secretary-general’s offices prior to his departure from the EEAS, according to two people familiar with the matter. Kaja Kallas, who was not in office at the time of the alleged corruption, has also sought to distance herself from the probe. | Dursun Aydemir/Getty Images But an EU official said the Commission was not aware of prior complaints about Sannino when he was hired to be the head of a new department covering the Middle East and North Africa. In its statement announcing Tuesday’s raids, the EPPO said it had requested that authorities lift the immunity ― typically given to diplomats, protecting them from legal action ― of “several suspects” prior to the probe, and that this was granted. It did not specify which bodies it had made the requests to. The EU official mentioned above said the EPPO had directed a request to lift Sannino’s immunity to the EEAS in September, and that the Commission had not been made aware of it. An EEAS official did not respond directly to a question about whether such a request had been received. The official said the EEAS would have followed the law in such circumstances. The allegations are not proven and Mogherini, Sannino and the other individual who was detained are presumed innocent until deemed guilty by a court. Sannino did not immediately respond to a request for comment via his European Commission office. Tuesday’s events could also aggravate tensions between EU politicians and Belgian authorities. Two officials questioned the quality of the Belgian justice system, noting that authorities had held flashy press conference and detained suspects but then failed to advance cases in the 2022 “Qatargate” scandal and this year’s bribery probe into Chinese tech giant Huawei’s lobbying activities.

A pair of documents laying out the Trump administration’s global security strategy have been delayed for weeks due in part to changes that Treasury Secretary Scott Bessent insisted on concerning China, according to three people familiar with the discussions on the strategies. The documents — the National Security Strategy and National Defense Strategy — were initially expected to be released earlier this fall. Both are now almost done and will likely be released this month, one of the people said. The second person confirmed the imminent release of the National Security Strategy, and the third confirmed that the National Defense Strategy was coming very soon. All were granted anonymity to discuss internal deliberations. The strategies went through multiple rounds of revisions after Bessent wanted more work done on the language used to discuss China, given sensitivity over ongoing trade negotiations with Beijing and the elevation of the Western Hemisphere as a higher priority than it had been in previous administrations, the people said. The National Security Strategy has been used by successive administrations to outline their overall strategic priorities from the economic sphere to dealing with allies and adversaries and military posture. The drafting goes through a series of readthroughs and comment periods from Cabinet officials in an attempt to capture the breadth of an administrations’ vision and ensure the entire administration is marching in the same direction on the president’s top issues. The administration has been involved in sensitive trade talks with Beijing for months over tariffs and a variety of trade issues, but the Pentagon has maintained its position that China remains the top military rival to the United States. The extent of the changes after Bessent’s requests remains unclear, but two of the people said that Bessent wanted to soften some of the language concerning Chinese activities while declining to provide more details. Any changes to one document would require similar changes to the other, as they must be in sync to express a unified front. It is common for the Treasury secretary and other Cabinet officials to weigh in during the drafting and debate process of crafting a new strategy, as most administrations will only release one National Security Strategy per term. In a statement, the Treasury Department said that Bessent “is 100 percent aligned with President Trump, as is everyone else in this administration, as to how to best manage the relationship with China.” The White House referred to the Treasury Department. Trump administration officials have alternately decried the threat from China and looked for ways to improve relations with Beijing. Defense Secretary Pete Hegseth is expected to deliver a speech on Friday at the Reagan Library in Simi Valley, California, on Pentagon efforts to build weapons more quickly to meet the China challenge. At the same time, Hegseth is working with his Chinese counterpart, Adm. Dong Jun, to set up a U.S.-China military communication system aimed to prevent disagreements or misunderstandings from spiraling into unintended conflict in the Indo-Pacific. Bessent told the New ‍York Times Dealbook summit on Wednesday that China was on schedule to meet the pledges it made under a ‌U.S.-China trade agreement, including purchasing 12 million metric tons of soybeans by February 2026. “China is on track to ‍keep every ⁠part of the deal,” ⁠he said. Those moves by administration officials are set against the massive Chinese military buildup in the Indo-Pacific region and tensions over Beijing’s belligerent attitude toward the Philippines, where Beijing and Manila have been facing off over claims of land masses and reefs in the South China Sea. The U.S. has been supplying the Philippines with more sophisticated weaponry in recent years in part to ward off the Chinese threat. China has also consistently flown fighter planes and bombers and sailed warships close to Taiwan’s shores despite the Taiwan Relations Act, an American law that pledges the U.S. to keep close ties with the independent island. The National Security Strategy, which is put out by every administration, hasn’t been updated since 2022 under the Biden administration. That document highlighted three core themes: strategic competition with China and Russia; renewed investment and focus on domestic industrial policy; and the recognition that climate change is a central challenge that touches all aspects of national security. The strategy is expected to place more emphasis on the Western Hemisphere than previous strategies, which focused on the Middle East, counterterrorism, China and Russia. The new strategy will include those topics but also focus on topics such as migration, drug cartels and relations with Latin America — all under the umbrella of protecting the U.S. homeland. That new National Defense Strategy similarly places more emphasis on protecting the U.S. homeland and the Western Hemisphere, as POLITICO first reported, a choice that has caused some concern among military commanders. Both documents are expected to be followed by the “global posture review,” a look at how U.S. military assets are positioned across the globe, and which is being eagerly anticipated by allies from Germany to South Korea, both of which are home to tens of thousands of U.S. troops who might be moved elsewhere.

BRUSSELS — Stefano Sannino, a director general in the European Commission who was detained by Belgian authorities as part of a fraud probe, is no longer in his job, the Commission said. The confirmation came after Belgian authorities, acting at the request of the European Public Prosecutor’s Office (EPPO), conducted dawn raids on Tuesday and detained Sannino, who led the Commission’s Middle East, North Africa and the Gulf department and was the former secretary-general of the European External Action Service. Sannino “is no longer serving in his function,” a Commission spokesperson said on Wednesday. “In light of allegations brought forward by the EPPO,” Sannino has “taken leave until end of the year, when he will then retire as planned.” Sannino has reached the retirement age. In an email sent to colleagues announcing his imminent retirement, first reported by Euractiv, Sannino said “under these circumstances, I do not consider it appropriate to continue in my present position.” He added that he was “confident in the work of the magistrates and confident that everything will be clarified.” The deputy director general of DG MENA, Michael Karnitschnig, will take over Sannino’s job until a replacement is appointed. The Commission spokesperson said “we must all respect the assumption of innocence until judicial proceedings are completed.” Sannino, as well as the EU’s former top diplomat Federica Mogherini, who was also detained on Tuesday as part of the probe, was released from custody after being held for questioning for several hours. Mogherini, the rector of the College of Europe, Sannino and a staff member of the College of Europe were detained Tuesday in connection to an investigation into whether the public tender awarded by the European External Action Service (EEAS) in 2021-22 to a higher education institution to host the EU Diplomatic Academy was rigged. The allegations are not proven and Mogherini, Sannino and the other individual detained are presumed innocent until deemed guilty by a court. “Yesterday I clarified my position with the investigators acting on behalf of the European Public Prosecutor’s Office,” Mogherini said in a statement on Wednesday. “The College has always applied and will continue to apply the highest standards of integrity and fairness.”

BRUSSELS ― Ursula von der Leyen is facing the starkest challenge to the EU’s accountability in a generation ― with a fraud probe ensnaring two of the biggest names in Brussels and threatening to explode into a full-scale crisis. Exactly a year into her second term as Commission president, von der Leyen, already plagued by questions over her commitment to transparency and amid simmering tension with the bloc’s foreign policy wing, must now find a way to avoid being embroiled in a scandal that dates back to her first years in office. An announcement by the European Public Prosecutor’s Office that the EU’s former foreign affairs chief and a senior diplomat currently working in von der Leyen’s Commission had been detained on Tuesday was seized on by her critics, with renewed calls that she face a fourth vote of no confidence. “The credibility of our institutions is at stake,” said Manon Aubry, co-chair of The Left in the European Parliament. If proven, the allegations would set in motion the biggest scandal to engulf Brussels since the mass resignation of the Jacques Santer Commission in 1999 over allegations of financial mismanagement. Police detained former Commission Vice President Federica Mogherini, a center-left Italian politician who headed the EU’s foreign policy wing, the European External Action Service, from 2014-2019, and Stefano Sannino, an Italian civil servant who was the EEAS secretary-general from 2021 until he was replaced earlier this year. The European Public Prosecutor’s Office said it had “strong suspicions” that a 2021-2022 tendering process to set up a diplomatic academy attached to the College of Europe, where Mogherini is rector, hadn’t been fair and that the facts, if proven, “could constitute procurement fraud, corruption, conflict of interest and violation of professional secrecy.” The saga looks set to inflame already strained relations between von der Leyen and the current boss of the EEAS, EU High Representative Kaja Kallas, four EU officials told POLITICO. Earlier this year Sannino left his secretary-general job and took up a prominent role in von der Leyen’s Commission. An EU official defended von der Leyen, instead blaming the EEAS, an autonomous service under the EU treaties that operates under the bloc’s high representative, Kallas — who is one of the 27 European commissioners. “I know the people who don’t like von der Leyen will use this against her, but they use everything against her,” the official said. Police detained former Commission Vice President Federica Mogherini, a center-left Italian politician who headed the EU’s foreign policy wing, the European External Action Service, from 2014-2019. | Christoph Gollnow/Getty Images “Because President von der Leyen is the most identifiable leader in Brussels, we lay everything at her door,” the official added. “And it’s not fair that she would face a motion of censure for something the External Action Service may have done. She’s not accountable for all of the institutions.” Mogherini, Sannino and a third person have not been charged and their detention does not imply guilt. An investigative judge has 48 hours from the start of their questioning to decide on further action. When contacted about Sannino, the Commission declined to comment. When contacted about Mogherini, the College of Europe declined to answer specific questions. In a statement it said it remained “committed to the highest standards of integrity, fairness, and compliance — both in academic and administrative matters.” ‘CRIME SERIES’ The investigation comes as Euroskeptic, populist and far-right parties ride a wave of voter dissatisfaction and at a time when the EU is pressuring countries both within and outside the bloc over their own corruption scandals. “Funny how Brussels lectures everyone on ‘rule of law’ while its own institutions look more like a crime series than a functioning union,” Zoltan Kovacs, spokesperson for the government of Hungary, which has faced EU criticism, said on X. Romanian MEP Gheorghe Piperea, a member of the right-wing European Conservatives and Reformists group, who was behind a failed no-confidence vote in von der Leyen in July, told POLITICO he was considering trying to trigger a fresh motion. Russian foreign ministry spokesperson Maria Zakharova told state media that EU officials “prefer to ignore their own problems, while constantly lecturing everyone else.” The EU has struggled to shake off a series of corruption scandals since this decade began. Tuesday’s raids come on the back of the 2022 “Qatargate” scandal, when the Gulf state was accused of seeking to influence MEPs through bribes and gifts, as well as this year’s bribery probe into Chinese tech giant Huawei’s lobbying activities in Europe.  Those investigations implicated members of the European Parliament, and at the time Commission officials were quick to point the finger at lawmakers and distance themselves from the scandals. But the Commission hasn’t been immune to allegations of impropriety. In 2012, then-Health Commissioner John Dalli resigned over a tobacco lobbying scandal. Von der Leyen herself was on the receiving end of a slap-down by the EU’s General Court, which ruled earlier this year that she shouldn’t have withheld from the public text messages that she exchanged with the CEO of drug giant Pfizer during the Covid-19 pandemic. Tuesday’s revelations are far more dangerous for the Commission, given the high profile of the suspects and the gravity of the allegations they face. ‘DISASTROUS IMPACT’ After serving as a European Commission vice president and head of the EEAS, Mogherini was appointed rector of the College of Europe in 2020, amid criticism she wasn’t qualified for the post, didn’t meet the criteria, and had entered the race months after the deadline. In 2022 she became the director of the European Union Diplomatic Academy, the project at the heart of Tuesday’s dawn raids. Sannino, a former Italian diplomat, was the EEAS’s top civil servant and is now the director-general for the Middle East, North Africa and the Gulf department in the Commission. Stefano Sannino, a former Italian diplomat, was the EEAS’s top civil servant and is now the director-general for the Middle East, North Africa and the Gulf department in the Commission. | Pool Photo by Johanna Geron via Getty Images Cristiano Sebastiani, the staff representative of one of the EU’s major trade unions, Renouveau & Démocratie, said that if proven, the allegations would have “a disastrous impact on the credibility of the institutions concerned, and more broadly on citizens’ perception of all European institutions.” He said he had received “tens of messages” from EU staff concerned about reputational damage. “This is not good for EU institutions and for the Commission services. It is not good for Europe, it steers attention away from other things,” said a Commission official granted anonymity to speak freely. “It conveys this idea of elitism, of an informal network doing favors. Also, Mogherini was one of the most successful [EU high representatives], it’s not good in terms of public diplomacy.”

BRUSSELS ― Belgian police raided the EU’s foreign service and the College of Europe on Tuesday in a bombshell corruption probe — and detained two of the EU’s most powerful officials. Federica Mogherini, who once served as the EU’s top diplomat, and Stefano Sannino, a director-general in the European Commission, were questioned over allegations of fraud in the establishment of a training academy for diplomats. Mogherini was born in Rome, the daughter of a film set designer. She was elected to the Italian parliament in 2008 as an MP with the center-left Democratic Party and became Italy’s foreign minister in 2014, an appointment that, at the time, took many by surprise. The 52-year-old’s tenure was short-lived, as she was made the EU’s high representative — the foreign policy chief — the same year, a position she held until 2019. Her time in the job is perhaps most notable for her work on the 2015 Iran nuclear deal. At the end of her five-year term, she became the rector of the Bruges-based College of Europe, a position she’s been in ever since. But her appointment was mired in claims of cronyism, as professors and EU officials argued that she was not qualified for the post, did not meet the criteria and applied after the deadline. She has also served as the director of the EU Diplomatic Academy, a program for junior diplomats across EU countries that is run by the College of Europe, since August 2022. It’s the academy that is at the center of the probe. The European Public Prosecutor’s Office (EPPO) said it has “strong suspicions” that rules around “fair competition” were breached when the EEAS awarded the tender to set up the academy. Sannino, a career diplomat from Naples with a packed CV including various roles in Rome and Brussels, has served as director-general of DG Enlargement, permanent representative of Italy to the EU, Italian ambassador to Spain and Andorra and secretary-general of the European External Action Service (EEAS). He has championed LGBTQ+ rights and is married to Catalan political adviser Santiago Mondragón. He started his current role as director-general of DG MENA, the EU’s department for the Middle East, North Africa and the Gulf, in February. He has lectured at the College of Europe and at the diplomatic academy. None of the people questioned has been charged. An investigative judge has 48 hours to decide on further action.

LONDON — The U.K. has agreed to raise how much its National Health Service spends on new drugs, in a concession made under pressure from the Trump administration in return for tariff-free access to the U.S. market. “Today’s agreement is a major win for American workers and our innovation economy,” U.S. Commerce Secretary Howard Lutnick said in a statement on Monday. “This deal doesn’t just deepen our economic partnership with the United Kingdom — it ensures that the breakthroughs of tomorrow will be built, tested, and produced on American soil.”  The deal will see Britain increase the National Institute for Health and Care Excellence (NICE) cost-effectiveness threshold by 25 percent, as POLITICO first reported in October, and slash the cap on revenue the NHS can reclaim from drugmakers to no more than 15 percent.  The new NICE threshold will be £25,000 to £35,000 per quality adjusted life year gained over and above current treatments. The U.S. said the combined changes would increase the net price the NHS pays for new medicines by 25 percent. In exchange, the administration will grant an exemption for U.K.-made pharmaceuticals, ingredients and medical technology from U.S. tariffs for the remainder of President Donald Trump’s term.  U.K. Business and Trade Secretary Peter Kyle said: “This deal guarantees that UK pharmaceutical exports – worth at least £5 billion a year – will enter the US tariff free, protecting jobs, boosting investment and paving the way for the UK to become a global hub for life sciences. “We will continue to build on the UK-US Economic Prosperity Deal, and the record-breaking investments we secured during the US State Visit, to create jobs and raise living standards as part of our Plan for Change.” The breakthrough comes after months of back-and-forth between both sides, with the sector not covered in the Economic Prosperity Deal and Washington demanding a “preferential environment” to lift the threat of steep import duties. The administration had threatened to impose up to 100 percent tariffs on drugs.  In July, the President issued a letter to 17 drugmakers, demanding they offer their drugs to Medicaid at most-favored-nation prices, prices tied to lower prices abroad, and shift manufacturing to U.S. soil.  Update: This story has been updated following confirmation from the U.S. and U.K. governments.

LONDON — Britain’s global diplomatic footprint could be significantly scaled back as it tries to work out which embassies and buildings to sell off from a sprawling £2.5 billion overseas estate. U.K. budget documents released this week show the Foreign Office is “rationalising” its collection of some 6,500 properties to find “assets to release” — while hundreds of its buildings have fallen into serious disrepair. This will include selling off buildings such as embassies and diplomatic accommodation which are deemed no longer necessary as part of the Foreign Commonwealth and Development Office’s “FCDO2030” overhaul of its work, staffing and footprint in the U.K. and beyond. The budget makes specific mention of finding savings in “high-cost locations such as New York” — which could include a £12 million luxury apartment in the city bought for diplomats in 2019 to help negotiate trade deals with the United States following Brexit. The Foreign Office at the time said it secured the “best deal possible” for the seven-bedroom flat, which occupies the whole 38th floor of 50 United Nations Plaza and has a library, six bathrooms and a powder room. Earlier this year U.K. spending watchdogs the National Audit Office (NAO) and parliament’s own Public Accounts Committee (PAC) raised significant concerns over the state of Britain’s creaking overseas diplomatic estate. Around 933 of its properties (around 15 percent of the total) have been assessed as not being sound or operationally safe. FCDO estimates that it would cost £450 million to clear its maintenance backlog. PAC noted that after selling off large assets, such as its embassy compounds in Bangkok and Tokyo, FCDO “has no remaining large assets that are viable to sell.” It is the latest in a series of cutbacks to Britain’s soft power clout. The government has already come under fire for slashing its international aid budget, which also helps fund the BBC World Service. Olivia O’Sullivan, director of the UK in the World program at the Chatham House think tank, said it was “unsurprising” that the government is looking at its overseas estate to meet the “significant cutbacks” at the FCDO. “The government needs to balance the need for cost-savings with the benefits of having some high-impact spaces it can use for hosting and projecting power and presence,” she added. The Foreign Office is meanwhile undergoing major restructuring. Union officials this week told parliament’s International Development Select Committee that the FCDO is in the process of offering redundancy to its U.K.-based staff — which could result in up to 30 percent cuts to its headcount. Overseas, the department is also reviewing the size and location of its global footprint which encompasses over 250 posts in over 150 countries worldwide. The government was contacted for comment.