President Donald Trump said Wednesday that U.S. forces had seized a “very large” oil tanker off the coast of Venezuela, a major move against the South American country. “As you probably know, we have just seized a tanker on the coast of Venezuela, a large tanker, very large, the largest one ever seized actually,” Trump said at an event at the White House. The White House did not provide additional details about the vessel. A person familiar with the matter, granted anonymity to discuss the sensitive seizure, said the ship was en route to Cuba. The oil, the person said, would be sold by state firm Cubametales to Asian energy brokers. The Cuban Embassy in Washington did not immediately respond to a request for comment. It’s a major escalation of the pressure campaign the U.S. has waged against Venezuela. The Trump administration has restored tough sanctions against the South American petrostate and built up military presence in the Caribbean in an effort to pressure Venezuelan leader Nicolás Maduro to cede power to the opposition.

President Donald Trump’s pursuit of an end to the war between Russia and Ukraine is increasingly being driven by his own impatience — with Ukrainian President Volodymyr Zelenskyy and European leaders who Trump believes are standing in the way of both peace and future economic cooperation between Washington and Moscow. Trump, who has called for Russia’s return to the G7 and spoken repeatedly about his eagerness to bring Russia back into the economic fold, laid bare his frustrations Monday at the White House with POLITICO’s Dasha Burns for a special episode of “The Conversation.” He derided European leaders as talkers who “don’t produce” and declared that Zelenskyy has “to play ball” given that, in his view, “Russia has the upper hand.” Zelenskyy, who Trump grumbled hadn’t read the latest peace proposal, spent Monday working with the leaders of France, Germany and Britain on a revision of the Americans’ 28-point proposal that he said has been shaved down to 20 points. “We took out openly anti-Ukrainian points,” Zelenskyy told a group of reporters in Kyiv, emphasizing that Ukraine still needs stronger security guarantees and that he isn’t ready to give Russia more land in the Donbas than its military currently holds. With Russia unlikely to budge from its demands, the White House-driven peace talks appear stalled. And as Trump’s irritation deepens, pressure is mounting on the Europeans backing Zelenskyy to prove Trump wrong. “He says we don’t produce, and I hate to say it, but there’s been some truth to that,” said a European official, one of three interviewed for this report who were granted anonymity because they were not authorized to speak publicly. “We are doing it now, but we have been slow to realize we are the solution to our problem.” The official pointed to NATO’s increased defense spending commitments and the PURL initiative, through which NATO allies are buying U.S. weapons to send to Ukraine, as evidence that things have started to shift. But in the near term, the European Union is struggling to convince Belgium to support a nearly $200 billion loan to Ukraine funded with seized Russian assets. “If we fail on this one, we’re in trouble,” said a second European official. Trump’s mounting pressure on Ukraine makes clear that months of careful management of the president through private texts, public flattery and general deference has gotten Europe very little. But Liana Fix, a senior fellow for Europe at the Council on Foreign Relations, said that the leaders on the other side of the Atlantic “know very well that they can’t just stand up to Trump and tell him courageously that, you know, this is not how you treat Europe, because [of] the existential dependence that is still there between Europe and the United States.” Still, some in Europe continue to express shock and revulsion over Trump’s lopsided diplomacy in favor of Russia, disputing the president’s assessment during his POLITICO interview that Putin’s army has the upper hand despite its slow advance across the Donbas, more than half of which is now in Russian control. “Our view is not that Ukraine is losing. If Russia was so powerful they would have been able to finish the war within 24 hours,” a third European diplomat said. “If you think that Russia is winning, what does that mean — you give them everything? That’s not a sustainable peace. You’ll reward the Russians for their aggression and they will look for more – not only in Ukraine but also in Europe.” Trump has refused to approve additional defense aid to Ukraine, while blasting his predecessor for sending billions in aid — approved by Democrats and many Republicans in Congress — to help the country defend itself following Russia’s Feb. 2022 invasion. Jake Sullivan, President Joe Biden’s national security adviser, said Trump’s brief that Russia is prevailing on the battlefield doesn’t match the reality. “Russia has not achieved its strategic objectives in Ukraine. It has completely failed in its initial objective to take Kyiv and subjugate the country, and it has even failed in its more limited objective in taking all of the Donbas and neutering Ukraine from a security perspective,” Sullivan said, adding that he thinks Ukraine could prevail militarily with stronger U.S. support. “But if the United States throws Ukraine under the bus and essentially takes Russia’s side functionally, then things, of course, are much more difficult for Ukraine, and that seems to be the direction of travel this administration is taking.” The White House did not respond to a request for additional comment. Clearly eager to normalize relations with Moscow, Trump appears to be motivated more by the prospect of cutting deals with Putin than maintaining a transatlantic alliance built on shared democratic principles. Fiona Hill, a Russia expert who served on Trump’s national security council in his first term, noted that the U.S.-Russia diplomacy involves three people with business backgrounds and investment portfolios: special envoy Steve Witkoff and Trump son-in-law Jared Kushner on the U.S. side and Russia’s Kirill Dmitriev, the head of Russia’s sovereign investment fund. “Putin’s always thinking about what’s the angle here? How do I approach somebody? He’s got the number of President Trump,” Hill said Monday on a Brookings Institution podcast. “He knows he wants to make a deal, and he’s emphasizing this, and all the context is business, not really as diplomacy.” Additionally, Trump is eager to end Europe’s decades-long dependence on the U.S., which he believes has been saddled with the burden of its continental security for far too long. Ending the war with a deal that largely favors Putin would not only burnish Trump’s own self-conception as a global peacemaker — it would serve final notice to Europe that many of America’s oldest and most steadfast allies are truly on their own. Trump’s new national security strategy, released last week, made that point explicit, devoting more words to the threat of Europe’s civilizational decline — castigating the entire continent over its immigration and economic policies — than to threats posed by China, Russia or North Korea. Asked by POLITICO if European countries would continue to be U.S. allies, Trump demurred: “It depends,” he said, harshly criticizing immigration policies. “They want to be politically correct, and it makes them weak.” Europe, despite years of warnings from Trump and their own growing awareness about the need for what French President Emanuel Macron has called “strategic autonomy,” has been slow to mobilize its defenses to be able to defend the continent — and Ukraine — on its own. At Trump’s behest, NATO members agreed in June to increase defense spending to 5 percent of GDP over the coming decade. And NATO is now purchasing U.S. weapons to send to Ukraine through a new NATO initiative. But it may be too little, too late as the war grinds into a fourth winter with Ukraine’s military low on ammunition, weapons and morale. “That is why they will continue to engage this administration despite the strategy,” Fix said. And while Trump sees Ukraine and European stubbornness as the primary impediment to peace, many longtime diplomats believe that it’s his own unwillingness to ratchet up pressure on Moscow — Trump imposed new sanctions on Russian oil last month, only to pull some of them back — that is rendering his peacemaking efforts so fruitless. “It’s not enough to want peace. You’ve got to create a context in which the protagonists are willing to compromise either enthusiastically or reluctantly,” said Richard Haass, the former president of the Council on Foreign Relations who served as a senior adviser to Secretary of State Colin Powell in the George W. Bush administration. “The president has totally failed to do that, so it’s not a question of wordsmithing. In order to succeed at the table, you have to succeed away from the table. And they have failed to do that.” Veronika Melkozerova, Ari Hawkins and Daniella Cheslow contributed to this report.

President Donald Trump has changed his position on more than a few things over the years, but in at least one area he’s been consistent: tariffs. The president is a tariff man, as he’s fond of saying. And the man behind the man in this instance is U.S. Trade Representative Jamieson Greer. A longtime trade lawyer who served in the first Trump administration, Greer is now working to help revamp the global trading system at the president’s behest — and he rejects the widespread criticism that Trump’s sweeping tariff regime has been rolled out haphazardly. “Yes, there’s a strategy,” Greer said in a new interview with The Conversation. “First of all, you don’t change 70 years of trade policy overnight. And second of all, when some people say, ‘Oh, well, this is chaos. What’s your strategy?’, what they really want to know is can we go back to how it was before? And that’s not going to happen.” Much of the president’s tariff agenda is currently at risk amid a seemingly skeptical Supreme Court, though Greer professed confidence and said the White House had backup options if need be. Perhaps most worrisome for the administration is the politics of higher prices, and Greer was eager to bat down charges that tariffs were to blame. “People are worried about housing, they’re worried about healthcare — things we don’t import,” he said. This conversation has been edited for length and clarity. You have probably the most important portfolio of this administration given just how big of a priority trade has been for the president. I was at many a Trump rally when he talked about how “tariff” is his favorite word, now his fifth favorite word, “God, love, wife,” something else. Yeah, he had to moderate a little bit on that. You are a veteran trade lawyer. You served in Trump’s first term as chief of staff to then-U.S. Trade Representative Robert Lighthizer. What is different about the approach this time around? In the first Trump administration, we were charting new waters, right? We were coming into the so-called Washington consensus that tariffs were bad and we shouldn’t protect domestic industry and we shouldn’t try to make tough deals with our friends and foe alike. Now having laid the groundwork in the first term, showing we could use tariffs effectively while having a booming economy, the president was able to move to his true vision, which he’s had for many years, which is to protect the American economy with tariffs, use them as leverage where needed to get foreign market access, and otherwise use them for geopolitical issues. So where we were walking in the first term, now we can run and fly, frankly. One of the narratives around the tariffs is that the strategy is chaos, that this has been really unpredictable. I’ve heard from businesses that it’s been a challenge because they’re just not sure where all of this is going to land, plus you have all of the legal cases on top of that. So is the strategy chaos? Is there a strategy? So yes, there’s a strategy. First of all, you don’t change 70 years of trade policy overnight. And second of all, when some people say, “Oh, well, this is chaos. What’s your strategy?”, what they really want to know is can we go back to how it was before? And that’s not going to happen. A lot of people focus on April 2 Liberation Day. We announced potentially very, very high tariffs. But I would focus people more on Aug. 1, and I use that date because that is the date where the president really set the tariff rates, and where we announced a bunch of deals. And from there, the structure that has played out demonstrates the strategy that we have. If you look at the tariff setup in the world that’s come out of the president’s program, the highest tariffs are on China. Again, not because we bear China any ill will, but because we have a giant trade deficit with them and they have a lot of unfair trading practices. The next set of highest tariffs is Southeast Asia, India, these other areas that use a lot of Chinese content, Southeast Asia in particular, and we have giant trade deficits with them, Vietnam, for example. And then the next highest tariff rates, and these are usually about 15 percent, folks who are allies but with whom we have big trade issues: Korea, Japan, Europe, etc. And then the lowest tariff rates are really in the Western Hemisphere, where we want our supply chains to be, where it’s very secure. So you can really see almost like concentric rings going out from China, what the tariff rates are like. We have a couple outliers right now. India has a higher tariff for some geopolitical reasons. They buy Russian oil. Brazil has some higher tariffs. Economy & Education: U.S. trade rep. Greer and teacher’s union head Weingarten | The ConversationSharePlay Video We were close to a deal there over the summer and it got derailed. What happened there? The president wants deals but he only wants good deals. And so whenever you present a deal to the president, the question is, am I better off with just having the tariff? And the assessment of the deal in the summer with India was, well, I think we’re just better off with the tariff than with the potential deal. But that has not stopped us from continuing conversations. It’s still going quite well, I would say, with the Indians. There’s a separate issue where they were buying Russian oil. They’ve stopped doing that largely now. So I think we could see some tariff modification at some point for them. But I’m confident that we’ll get a deal with India at some point in the future, maybe the near future. It’ll be up to the president and Prime Minister Modi. Have you been involved at all in talking about a potential future trading partnership with Russia after the end of the war? Not very much. Even before the war, we didn’t have a huge trading relationship with Russia. We would get oil and steel and some fertilizer from them. We’d ship them cars and some ag products. So it was never a giant trading relationship. If the war ends then obviously there may be opportunity there. But we’re really focused on big export markets. There’s been a ton of debate about the short, medium and long term impact of these tariffs. The Organization for Economic Cooperation and Development just released a report saying the world economy has been surprisingly resilient in the face of Trump’s trade wars, but they added that they expect higher tariffs to gradually result in higher prices and reduce growth in household consumption and business investment. How do you respond to that assessment and are you worried about some economic pain in the short term? I just look at the data, right? They’re saying we think it’ll lead to lower growth in the future or higher prices or something, but they’ve been saying that for a long time. And the data show that last quarter was 3.8 percent [annual] growth. The Atlanta Fed is projecting 4.2 percent growth next year. We’ve seen inflation in check. We’ve seen imported goods remain relatively low-priced. Where we see prices high are things like housing and health care, because Obamacare is a disaster. The Supreme Court is weighing whether to narrow the president’s use of the International Emergency Economic Powers Act — IEEPA — which is the 1970s-era law that the administration has cited for imposing many of these tariffs. How are you preparing for the possibility that one of these main tariff authorities you’ve been using could be constrained? First of all, we believe the law and the facts are on our side. This Supreme Court has talked about how important it is to simply analyze the plain text of the law. And if you look at the plain text, it says the president, if he determines there’s an emergency, he can regulate imports. And he’s determined there’s an emergency and he’s regulating imports, which is the tariff. Now, we’ve been thinking about this plan for five years or longer. Since the first term. So you can be sure that when we came to the president at the beginning of the term, we had a lot of different options. IEEPA is the most appropriate because there is an emergency with the trade deficit and the loss of manufacturing, and it has the flexibility that you need to respond to the type of emergency that there is. My message is tariffs are going to be a part of the policy landscape going forward. Are there other ways to do it? Courts during this process have actually cited those different tools. And while we certainly can use those, IEEPA is the best tool. It fits the situation, and we’re looking forward to hearing back from the Supreme Court soon. But you’re prepared for alternative measures if they do decide to constrain IEEPA? Well, I’m not going to go into too much detail about that, or else I’ll get in trouble with my general counsel. But you’ve got something in your back pocket. Of course. Regardless of how the Supreme Court rules on this, the administration’s reciprocal tariffs could be reversed by a future president. Is there any plan to go to Congress to try to codify any of this stuff? Well, if I were Congress, I would codify it. I have heard from a handful of members of Congress from all over the ideological spectrum, whether left or right or progressive or conservative, free trader or protectionist — however you want to characterize it. I’ve heard a lot of interest in this and for a lot of reasons. People have seen what I just described, which is that you can implement tariffs and have growth at the same time. You can protect your supply chains and have wages increase. You can do all of these things together, especially if you couple it with good energy policy, etc. I’ve also had members of Congress come to me, people who maybe weren’t fans of tariffs two years ago, and they said, “This is actually real money that’s coming in that can be used to pay down the debt or pay for other things or finance our reindustrialization.” Who are those members? Well, I won’t betray their confidences. You said that some members are telling you, “Hey, I’ve changed my mind on tariffs.” There are other members that have spoken privately or publicly, saying “These tariffs are hurting my constituents,” particularly people in farm states. I’m thinking GOP Sens. Chuck Grassley and Rand Paul and a number of folks that have come out and said they’re concerned. What do you say to members of Congress who feel that this is not beneficial for their folks? Well Sen. Paul is a little bit of a man on an island on this issue. Well sure, but Rep. Don Bacon — He [Paul] compared me to a Soviet commissar in some comments. All right, we’ll leave Rand Paul on the side here, but there are others like Bacon and Grassley and other folks that have voiced some concerns. I’ve talked to Sen. Grassley a lot, and he knows a lot about trade. He’s been around a long time and as a general matter, it sounds to me frequently that he is quite aligned with the president in terms of wanting to get foreign market access, particularly for his folks who are trying to sell pork and soybeans overseas. We have made sure, in addition to securing soybean purchases from China, who’s a big customer, to open markets in Southeast Asia in particular for soybeans. Markets that were never open before. Now these countries are taking down their tariff, they’re taking down their non-tariff barriers. And so on that, I think we’re aligned. There’s always concern when you’re changing what’s a 70-year trade policy to something new, and there can be frictions. But we are careful to listen to these folks again, from both sides of the aisle, find out what their concerns are and respond to them. The president did exempt some agricultural imports from tariffs amid ongoing concerns about higher prices. Why didn’t he do that from the beginning? How did that shift come about? First of all, inflation’s been in check. So let’s just clear the air on that. Secondly, in early September, the president signaled, he put out an executive order, and we made a list of all the — whether it’s agricultural goods or minerals or things that physically can’t be grown in the United States or extracted from the United States. The rocks aren’t here, or you can’t grow a banana here, on any scale. So in early September, he put out an executive order. He said, as I do deals with countries, I will release tariffs on these items. Why? Because we get them from those countries. There seems to be a real resistance in the language around tariffs to say that tariffs are causing higher prices. Nobody wants to really say that. But in making the exemptions, aren’t you basically acknowledging that tariffs do lead to higher prices on products? No. Okay. Can you explain? There’s never really a 1-to-1 with a tariff. In the first term, when we put tariffs on China, inflation actually went down. As we were putting tariffs in place, inflation went down. We’ve seen a similar effect here. When the president says, “We’re going to have deals with you folks,” you have to have leverage, right? And so you keep tariffs on folks for all kinds of things and it becomes a carrot. So it’s a lot easier for me to go to Ecuador or Indonesia or Vietnam and say, “Listen, if you do a deal with us and we’ve announced frameworks or full agreements with all these countries I just mentioned, then at a given time, we will release these things because obviously we don’t make them.” When you have a tariff, it doesn’t necessarily go through to the consumer. I don’t want to get too technical here for you, except I’m kind of nerdy about it. But sometimes does it? I mean it can, right? Like on those things that you mentioned, like coffee and bananas and all of that stuff? It depends on what the production economy is like. And when I say production economy, say bananas, if you have a hundred banana producers overseas, they’re all going to compete for market share in the U.S. because we’re the biggest consumer of a lot of these things. And so they will compete to eat the tariff. Do you see what I’m saying? I do, but when voters who don’t understand this are going to the grocery store and seeing that prices haven’t gone down, how do you tackle that with all the leverage that you’re talking about? Well, I can’t control the weather in Brazil with a tariff. Coffee prices, for example, have been going up for two years. Before there was ever a tariff on coffee for six months or whatever we had. And there are secular pricing trends in coffee and cocoa that were going on well before. And beef, these kinds of things. All that being said, we don’t have to have a tariff on these things. We don’t make them here. We can have a tariff on them for leverage, which is how the president used them. It’s how he said he was going to use it. He signaled in September, these are for leverage to finish the deals. So we were well placed two months later once we announced the rest of our deals to take the tariff off. The US-Mexico-Canada agreement — USMCA — that Trump negotiated in his first term is facing a mandatory review next year. What are the top changes that the administration is looking to make? When you think about the U.S., Canada, Mexico agreement, there are a few things we trade among us in a massive way. One of them is automobiles, another’s agriculture, another is energy. With respect to the auto trade, the goal is to make more autos in the United States of America. Mexico has been a huge beneficiary of NAFTA and then of USMCA. And so the president, earlier in his second term, imposed tariffs on autos globally, including on Mexico. So there’s an overlap between those tariffs and our agreement and USMCA. And those tariffs, which are about 25 percent, are layered over USMCA. Now all of that being said, we can look at the underlying rules of USMCA. If something comes in and gets special duty treatment or a lower tariff, there’s usually a rule of origin associated with it that says a certain amount of this widget has to come from the region. Otherwise you have to pay a higher tariff. We can change some of those rules to make them tighter, to have a higher percentage have to come from the United States. Those are the kinds of things we can do. There’s also a bunch of stuff in Mexico and Canada where maybe they discriminate against our companies. It could be telecom companies or it could be our corn exports. There are a variety of little things like that that may seem small and don’t lend themselves to sound bites, but they mean a lot for agricultural producers. Is there still a scenario where the U.S. could walk away from USMCA or is that off the table at this point? I mean that’s always a scenario, right? The president’s view is he only wants deals that are a good deal. The reason why we built a review period into USMCA was in case we needed to revise it, review it or exit it. I have heard from a lot of folks how important USMCA is. Canada and Mexico are huge export markets for us. I was in the White House yesterday, and we were talking about USMCA. What about Mexico? What about Canada? You know, the possibility that we kind of negotiate separately with them, right? Their economies are subject to it. Yeah, where’s his head at right now? Listen, our relationship with the Canadian economy is totally different than our relationship with the Mexican economy. The labor situation’s different, the stuff that’s being made is different, the export and import profile is different. It actually doesn’t make a ton of economic sense why we would marry those three together. The actual trade between Canada and Mexico is much smaller than the trade between the U.S. and Canada and U.S. and Mexico. Sometimes you’ll hear people say, “Oh, well, you know, USMCA, it’s a $31 trillion agreement.” It’s like, well, yeah, but like $29 trillion is us. So I think it makes sense to talk to them separately about that agreement. A lot of the underlying rules are helpful and you know our exporters benefit from them, but we have to make sure that we are getting the benefit of our bargain on USMCA. You were in Brussels recently, talking about deals. Commerce Secretary Howard Lutnick said when he was over there that the U.S. could modify its approach on steel and aluminum tariffs if the EU reconsidered its digital rules. Some European officials were a little irked by that and interpreted it as targeting the EU’s flagship tech regulations, including the Digital Markets Act. Europe’s antitrust chief, Teresa Ribera told POLITICO that Washington is using “blackmail” to strong-arm the EU. What’s your response to that? That’s a totally extreme thing to say. The problem is the Digital Markets Act and other European digital regulations and regulations outside of digital, they actually target U.S. companies. And how do we know that? First of all, when all these laws were being passed, all the European parliamentarians and all the leaders in Europe were saying, “We’re going to implement these laws to get Google, Apple, Facebook, Amazon and Microsoft.” In fact, they have certain taxes over there, and they call them GAFA tax. The acronym is for American companies. And then they have these thresholds built into these laws where if you meet a certain global revenue threshold or you have a certain business model, and just magically they only capture U.S. companies. We reported last month that the European Commission was set to present a list to you of sectors that it wants to be exempted from U.S. tariffs. The list was expected to include medical devices, wine — which is very important to me — spirits, beers and pasta. Where do those deliberations stand? Well, they did not present such a list. Ah! And the reason why is because under our deal from the summer, the United States has already adjusted its tariff levels for Europe, and Europe is still adjusting its tariffs. And I don’t say this to be critical. They have a legal process they have to go through, and they’re proceeding through it as quickly as they can, I think. So it would be weird for them to come and say, “We haven’t finished making our tariff adjustments yet, and we want more from you.” Listen, if they want to come and talk about other tariff adjustments, that’ll be up to the president and that kind of thing. But it’s a sequencing issue. Like why would I give them more tariff relief before they’ve done their part of the bargain, right? That doesn’t make sense. Trump talked about tariffs on the campaign trail, but I don’t think a lot of the world, particularly our allies in Europe, were necessarily prepared for the scale, as you mentioned earlier. When you were in Brussels, for example, can you give me a little bit of a behind-the-scenes on what those conversations are like when you sit across a table? Sure. So we are eleven months into this presidency. And I would say that most of our European partners have frankly become quite pragmatic. In the first term, when we talked about tariffs and changing the global structure, there was a lot of almost religious-sounding sermonizing from the Europeans. For them, international institutions and what they believe is international law, this is like religion. It’s their religion, and they have these high priests and the European Commission, all these places. But the folks we’re dealing with right now in the European Commission, President von der Leyen, the trade commissioner, these are pragmatic folks. They understand the facts on the ground. They understand the U.S. view. They understand we have these huge trade deficits that are not sustainable. And so the conversations are constructive. We’re not fighting about policy, we’re talking about implementation. So that’s all positive. All that being said, there are two or three countries that still like to sermonize a little bit about this. The ambassador from one country came to me and said, “Well, how can you use these tariffs against us? You know, tariffs are bad, blah, blah, blah.” I said, if tariffs are so bad, then how come your tariffs on us are so high still? And he said, “Well, I’m not trying to negotiate.” But I mean, that’s my point. They come and they say, “Well, you shouldn’t have tariffs,” but European tariffs have been higher on the U.S. historically for many years. You said the conversations are productive and pragmatic now. Is that a shift from early this year? Yes. Yes, a hundred percent. So where does the EU deal stand? We had our joint statement in August. We’ve adjusted our tariffs to be a little bit lower for them. They’re in the process of adjusting theirs. We have a lot of non-tariff barriers that we face in Europe, regulatory constraints, certifications, inspection regimes, things that are duplicative, things that gum up trade between the United States and Europe. Did Brussels move that all forward? I would say so. It was less of a negotiating trip and more of taking stock of where we are, where we’re divergent and next steps. We have a small team coming over from the Europeans next week to really talk about how we can better memorialize changes in these non-tariff barriers going forward. Because even though the Europeans are taking down most of their tariffs for us, if you take down the tariff but there’s still non-tariff barriers, it’s not effective market access. So we have to do both the tariffs and the non-tariff barriers. We can’t talk about trade without talking about China. What is the administration’s endgame with China? Is it coexistence? Is it decoupling? Is it selective engagement? What is it? Well, it’s funny because Washington creates these kind of fake categories. They’ll say, “Oh, well, either you’re a China hawk or a China dove.” The way we think about it in the administration is we’re pro-American. We’re not anti-China. We’re not China doves. We’re not China hawks. We are pro-American. I think you meant to say America First. Well, yes, America First. Thank you. And sometimes you hear people saying, “For America to win, China has to lose.” I just don’t think that’s the case. I mean, the reality is we are going to do what’s right for America in terms of trade. And in some cases, it means we have to have a tariff on countries, higher tariffs on some, like China, because they’re a bigger issue with respect to trade. They have more trade cheating, they have more subsidies and that kind of thing. If China still manages to be successful? Fine. We’re not here to try to contain China. We’re here to make sure that America has a strong national security, strong economic security, that our workers have jobs that are good for them in the towns and cities where they live, that they can raise a family. That’s what we’re trying to do. If China rises or falls on that, that’s kind of up to them. We’re happy to work with them. They have their own plans. One thing I will say is people act like American policy drives Chinese reaction, that China’s just always reacting to us. And I think they want us to think that, but they’re agents unto themselves. They publish a new policy every five years. They announced this Made in China 2025 project in 2015, well before President Trump was the president. So they have their own economic plans, which are oftentimes adverse to our interests, and so we will control for that, whether through tariffs or other measures. We just saw voters in this last election in November clearly send a message that affordability, cost of living really, really matters. What can you tell the American people about what they can expect to see going into next year? How will all of this impact not the markets, but their day-to-day? What I would say is trade, it’s not a big factor in the affordability discussion. When you look at affordability, it’s really about the crazy high expenses for health care that were engendered by Obamacare, which was a disaster. It’s about housing expenses that went way up during the Biden years and are still — But some people, as they’re shopping for Christmas, are connecting prices at Walmart and at the grocery store to the affordability conversation. I’ve talked to Walmart officials, I’ve talked to all kinds of officials, and they have said that they’re not raising prices. At back-to-school time in September, they say we’re not raising prices. They’re still doing their rollback. I know that’s a press narrative, but it’s actually not a true narrative. When you talk about affordability, people are worried about it. People are worried about housing, they’re worried about healthcare — things we don’t import. But where trade comes into it is when you have a trade system in place that protects U.S. jobs, you get higher incomes. So the blue collar wages are up this year. That’s what matters. In the first term, we had real income increase, up until the pandemic, which was like this black swan event. That’s what we’re trying to do with trade. Trade is not, “Let’s manage affordability through trade.” Trade is, “Let’s make sure we have good paying jobs here, especially for that working class whose jobs went away to Mexico or Vietnam or China. And so if you have blue-collar wages going up, whatever price effects are going on from all kinds of things in the economy — as long as the real income is outpacing whatever price effects there are — that’s what we’re looking for. That’s what we’re seeing. What about those tariff dividends that the president has floated? Well, you can talk to Scott Bessent. I don’t control the money. I just put the tariffs on to make the deals.

The soldiers separated the villagers by gender and stripped them of their money and phones. Around 180 people, mostly men, were crammed into two shipping containers. A woman gave birth beside the doors. No one was given food or water. Then, over three months, the soldiers took most of the men away and executed them. These scenes — detailed in a human rights report commissioned by the Netherlands — lay out further evidence that Mozambican government soldiers in the pay of TotalEnergies were responsible for a 2021 massacre first revealed by POLITICO. They are based on the testimony of four witnesses to a July-September 2021 massacre in the makeshift gatehouse of a vast gas plant being built by the French energy giant in northern Mozambique. Only 26 of the imprisoned men would survive.  Released this week as the British and Dutch governments announced they were pulling some $2.2 billion in support for the gas plant, the collected accounts closely match those from a 2024 investigation by POLITICO. They pile further pressure on a project already plagued by a local insurgency and two criminal cases.  On Tuesday, after the release of the report, TotalEnergies said its stance on the massacre remained unaltered. It has previously claimed its own “extensive research” into the allegations has “not identified any information nor evidence that would corroborate the allegations of severe abuses and torture.” The four accounts — from a survivor, a person who knew one of those detained, and two eyewitnesses — were collected independently of each other and from POLITICO, which was not informed that the government-funded think tank Clingendael was reinvestigating the atrocity.  Total’s project in Mozambique has an estimated cost of $20.5 billion. | Gallo Images/Getty Images They will provide further ammunition for a criminal complaint alleging that TotalEnergies was complicit in war crimes because it “directly financed and materially supported” Mozambican soldiers protecting its compound from an ISIS-linked insurgency.  The company has said it “firmly rejects all such accusations.” In March, a French state prosecutor also announced the opening of a formal criminal investigation into TotalEnergies over allegations of involuntary manslaughter at its Mozambican operation.  At the center of that inquiry is an accusation that, three months before the container killings, the company abandoned contractors who were building its gas plant to a devastating ISIS attack in March 2021 on the adjacent town of Palma. A house-to-house survey carried out by POLITICO found 1,354 civilians were killed in that attack, 330 of them beheaded. Other reporting established that 55 of those dead were from TotalEnergies’ workforce. The company, which has claimed it lost none of its workforce during the attack, denies the accusations. WIDESPREAD ABUSE The Dutch report indicates the container massacre was part of a systematic pattern of mass rape and execution in reprisal for the ISIS attack carried out by the army against villagers living around TotalEnergies’ plant.  With ISIS militants roaming the area for weeks after their attack on Palma, 25,000 to 30,000 people sought shelter outside Total’s gates, which “exacerbated the already dire humanitarian situation,” the report reads.  “By June 2021, the situation had become catastrophic, with people (including many children) reported to be dying on a daily basis due to starvation, disease or a lack of medical treatment,” the report reads. The army’s response was to steal aid, and sell looted food at inflated prices. It was also at this point that an army “unable to distinguish ‘villagers’ from ‘terrorists,’” took its revenge on the civilian population.  “Villagers reported discovering bodies in surrounding farmland, widely believed to be victims of [army] violence,” reads the report.  “Eyewitnesses also reported cases of sexual violence. In [one village], locals described drunk soldiers entering homes without permission and raping women.”  In another village, a random survey of 60 households found that 57 percent of them had at least one member who had been killed.  Those crammed by the soldiers into the containers endured three months of physical abuse, according to the report. According to the survivor, one day a large group was taken away. “Others were removed in smaller groups, never to return. The survivor believes that they were interrogated and executed.”  Human rights and environmental campaigners called on TotalEnergies to reconsider its project in the light of the loss of life and abuse. | Luisa Nhantumbo/EPA Upon their release, a survivor said that a soldier told them never to talk about the killings. “Those who died, died — it was war,” the soldier said. “If anyone asks, say the others were in different containers and are still coming.” In May, an investigation by U.K. Export Finance, which had pledged to lend Total’s project $1.15 billion, heard directly from two of the 26 survivors of the atrocity via video calls from Mozambique. The British state lender has not yet made its findings public. Total’s project in Mozambique has an estimated cost of $20.5 billion. It is part of a wider natural gas development that, at $50 billion, was once hailed as the largest private investment ever made in Africa. PROCEEDING AS PLANNED In the wake of the Dutch report, human rights and environmental campaigners called on TotalEnergies to reconsider its project in the light of the loss of life and abuse. “It has been blatantly clear for years that this project is a disaster for local communities and for the climate,” said Antoine Bouhey of Reclaim Finance. Adam McGibbon of Oil Change International called on other lenders to “pull out too and put an end to this nightmare project forever.” On Tuesday, TotalEnergies said its gas project was proceeding as planned and that its other lenders had “unanimously agreed to provide additional equity” to fill the shortfall created by the British and Dutch withdrawal. 

BRUSSELS — The EU will begin to ban all Russian gas imports to the bloc early next year after lawmakers, officials and diplomatic negotiators struck a last-minute deal over a key piece of legislation set to reshape Europe’s energy sector. Put forward over the summer, the bill is designed to kill off the EU’s lingering Russian energy dependency at a critical juncture in the Ukraine war, with Russia advancing steadily and Kyiv fast running out of cash. While Europe’s imports of Russian gas have fallen sharply since 2022, the country still accounts for around 19 percent of its total intake. The EU is already set to sanction Russian gas imports, but those measures are temporary and subject to renewal every six months. The new legislation is designed to make that rupture permanent and put member countries that still operate contracts with Russia on a surer footing in the event of legal action. “We were paying to Russia €12 billion per month at the beginning of the war for fossil fuels. Now we’re down to €1.5 billion per month … We aim to bring it down to zero,” European Commission President Ursula von der Leyen told reporters on Wednesday. “This is a good day for Europe and for our independence from Russian fossil fuels — this is how we make Europe resilient.” “We wanted to show that Europe will never go back to Russian fossil fuels again — and the only ones who lost today are Russia and Mr Putin,” Green MEP Ville Niinistö, one of the Parliament’s two lead negotiators on the file, told POLITICO. The law will enter into force on Jan. 1 next year and then apply to different kinds of gas in phases. Spot market purchases of gas will be banned almost immediately, while existing short- and long-term contracts will be banned in 2026 and 2027. A prohibition on pipeline gas will come into effect in September 2027, owing to concerns from landlocked countries reliant on Russian gas, such as Slovakia and Hungary. Finalized in barely six months, the law was the subject of fierce disagreements in recent weeks as the European Parliament’s more ambitious stance irked member countries concerned about the legal risks and technical difficulties of the ban. But despite fears that talks would be prolonged and even spill over into the new year, negotiators reached a compromise on key aspects of the law at the last minute. Now both sides can claim victory. Lawmakers, for instance, repeatedly pushed for an earlier timeline and ultimately ensured that none of the bans would enter into force later than 2027. The Parliament also secured commitments from national capitals to impose one of three penalties on companies that breach the rule: a lump sum penalty of €40 million, 3.5 percent of a company’s annual turnover, or 300 percent of the value of the offending transaction. Where the Council included its demands, the Parliament was able to water them down. For instance, lawmakers convinced member countries to tighten a controversial clause allowing countries facing energy crises to lift the ban — suspensions will only last four weeks at a time and will need to be reviewed by Parliament and the Commission. The Parliament also backed down from a push for a parallel ban on Russian crude imports in the same file after the Commission promised a separate bill early next year, as first reported by POLITICO. The Council did push through its controversial list of “safe” countries from which the EU can still import gas without rigorous vetting. Lawmakers complained that the list includes Qatar, Algeria and Nigeria, but have now accepted it, so long as countries can be excised from the list if they offend. MEPs gushed that they got far more than they expected and weren’t trampled by seasoned diplomats, as some had feared. “We have strengthened the European Commission’s initial proposal by introducing a pathway towards a ban on oil and its products, ending long-term contracts sooner than originally proposed, and secured harmonized EU penalties for non-compliance,” European People’s Party MEP Inese Vaidere, who also led the file, told POLITICO. “We achieved more than my realistic landing scenario — earlier phase-outs, tougher penalties, and closing the loopholes that let Russian gas sneak in,” said Niinistö. “This was about proving European unity — Parliament, Council and Commission on the same side — and showing citizens that we can cut Russia’s revenues faster and more decisively than ever proposed before.”

When the Franco-German summit concluded in Berlin, Europe’s leaders issued a declaration with a clear ambition: strengthen Europe’s digital sovereignty in an open, collaborative way. European Commission President Ursula von der Leyen’s call for “Europe’s Independence Moment” captures the urgency, but independence isn’t declared — it’s designed. The pandemic exposed this truth. When Covid-19 struck, Europe initially scrambled for vaccines and facemasks, hampered by fragmented responses and overreliance on a few external suppliers. That vulnerability must never be repeated. True sovereignty rests on three pillars: diversity, resilience and autonomy. > True sovereignty rests on three pillars: diversity, resilience and autonomy. Diversity doesn’t mean pulling every factory back to Europe or building walls around markets. Many industries depend on expertise and resources beyond our borders. The answer is optionality, never putting all our eggs in one basket. Europe must enable choice and work with trusted partners to build capabilities. This risk-based approach ensures we’re not hostage to single suppliers or overexposed to nations that don’t share our values. Look at the energy crisis after Russia’s illegal invasion of Ukraine. Europe’s heavy reliance on Russian oil and gas left economies vulnerable. The solution wasn’t isolation, it was diversification: boosting domestic production from alternative energy sources while sourcing from multiple markets. Optionality is power. It lets Europe pivot when shocks hit, whether in energy, technology, or raw materials. Resilience is the art of prediction. Every system inevitably has vulnerabilities. The key is pre-empting, planning, testing and knowing how to recover quickly. Just as banks undergo stress tests, Europe needs similar rigor across physical and digital infrastructure. That also means promoting interoperability between networks, redundant connectivity links (including space and subsea cables), stockpiling critical components, and contingency plans. Resilience isn’t theoretical. It’s operational readiness. Finally, Europe must exercise authority through robust frameworks, such as authorization schemes, local licensing and governance rooted in EU law. The question is how and where to apply this control. On sensitive data, for example, sovereignty means ensuring it’s held in Europe under European jurisdiction, without replacing every underlying technology component. Sovereign solutions shouldn’t shut out global players. Instead, they should guarantee that critical decisions and compliance remain under European authority. Autonomy is empowerment, limiting external interference or denial of service while keeping systems secure and accountable. But let’s be clear: Europe cannot replicate world-leading technologies, platforms or critical components overnight. While we have the talent, innovation and leading industries, Europe has fallen significantly behind in a range of key emerging technologies. > While we have the talent, innovation and leading industries, Europe has fallen > significantly behind in a range of key emerging technologies. For example, building fully European alternatives in cloud and AI would take decades and billions of euros, and even then, we’d struggle to match Silicon Valley or Shenzhen. Worse, turning inward with protectionist policies would only weaken the foundations that we now seek to strengthen. “Old wines in new bottles” — import substitution, isolationism, picking winners — won’t deliver competitiveness or security. Contrast that with the much-debated US Inflation Reduction Act. Its incentives and subsidies were open to EU companies, provided they invest locally, develop local talent and build within the US market. It’s not about flags, it’s about pragmatism: attracting global investments, creating jobs and driving innovation-led growth. So what’s the practical path? Europe must embrace ‘sovereignty done right’, weaving diversity, resilience and autonomy into the fabric of its policies. That means risk-based safeguards, strategic partnerships and investment in European capabilities while staying open to global innovation. Trusted European operators can play a key role: managing encryption, access control and critical operations within EU jurisdiction, while enabling managed access to global technologies. To avoid ‘sovereignty washing’, eligibility should be based on rigorous, transparent assessments, not blanket bans. The Berlin summit’s new working group should start with a common EU-wide framework defining levels of data, operational and technological sovereignty. Providers claiming sovereign services can use this framework to transparently demonstrate which levels they meet. Europe’s sovereignty will not come from closing doors. Sovereignty done right will come from opening the right ones, on Europe’s terms. Independence should be dynamic, not defensive — empowering innovation, securing prosperity and protecting freedoms. > Europe’s sovereignty will not come from closing doors. Sovereignty done right > will come from opening the right ones, on Europe’s terms. That’s how Europe can build resilience, competitiveness and true strategic autonomy in a vibrant global digital ecosystem.

BRUSSELS — The European Commission has unveiled a new plan to end the dominance of planet-heating fossil fuels in Europe’s economy — and replace them with trees. The so-called Bioeconomy Strategy, released Thursday, aims to replace fossil fuels in products like plastics, building materials, chemicals and fibers with organic materials that regrow, such as trees and crops. “The bioeconomy holds enormous opportunities for our society, economy and industry, for our farmers and foresters and small businesses and for our ecosystem,” EU environment chief Jessika Roswall said on Thursday, in front of a staged backdrop of bio-based products, including a bathtub made of wood composite and clothing from the H&M “Conscious” range. At the center of the strategy is carbon, the fundamental building block of a wide range of manufactured products, not just energy. Almost all plastic, for example, is made from carbon, and currently most of that carbon comes from oil and natural gas. But fossil fuels have two major drawbacks: they pollute the atmosphere with planet-warming CO2, and they are mostly imported from outside the EU, compromising the bloc’s strategic autonomy. The bioeconomy strategy aims to address both drawbacks by using locally produced or recycled carbon-rich biomass rather than imported fossil fuels. It proposes doing this by setting targets in relevant legislation, such as the EU’s packaging waste laws, helping bioeconomy startups access finance, harmonizing the regulatory regime and encouraging new biomass supply. The 23-page strategy is light on legislative or funding promises, mostly piggybacking on existing laws and funds. Still, it was hailed by industries that stand to gain from a bigger market for biological materials. “The forest industry welcomes the Commission’s growth-oriented approach for bioeconomy,” said Viveka Beckeman, director general of the Swedish Forest Industries Federation, stressing the need to “boost the use of biomass as a strategic resource that benefits not only green transition and our joint climate goals but the overall economic security.” HOW RENEWABLE IS IT? But environmentalists worry Brussels may be getting too chainsaw-happy. Trees don’t grow back at the drop of a hat and pressure on natural ecosystems is already unsustainably high. Scientific reports show that the amount of carbon stored in the EU’s forests and soils is decreasing, the bloc’s natural habitats are in poor condition and biodiversity is being lost at unprecedented rates. Protecting the bloc’s forests has also fallen out of fashion among EU lawmakers. The EU’s landmark anti-deforestation law is currently facing a second, year-long delay after a vote in the European Parliament this week. In October, the Parliament also voted to scrap a law to monitor the health of Europe’s forests to reduce paperwork. Environmentalists warn the bloc may simply not have enough biomass to meet the increasing demand. “Instead of setting a strategy that confronts Europe’s excessive demand for resources, the Commission clings to the illusion that we can simply replace our current consumption with bio-based inputs, overlooking the serious and immediate harm this will inflict on people and nature,” said Eva Bille, the European Environmental Bureau’s (EEB) circular economy head, in a statement. TOO WOOD TO BE TRUE Environmental groups want the Commission to prioritize the use of its biological resources in long-lasting products — like construction — rather than lower-value or short-lived uses, like single-use packaging or fuel. A first leak of the proposal, obtained by POLITICO, gave environmental groups hope. It celebrated new opportunities for sustainable bio-based materials while also warning that the “sources of primary biomass must be sustainable and the pressure on ecosystems must be considerably reduced” — to ensure those opportunities are taken up in the longer term. It also said the Commission would work on “disincentivising inefficient biomass combustion” and substituting it with other types of renewable energy. That rankled industry lobbies. Craig Winneker, communications director of ethanol lobby ePURE, complained that the document’s language “continues an unfortunate tradition in some quarters of the Commission of completely ignoring how sustainable biofuels are produced in Europe,” arguing that the energy is “actually a co-product along with food, feed, and biogenic CO2.” Now, those lines pledging to reduce environmental pressures and to disincentivize inefficient biomass combustion are gone. “Bioenergy continues to play a role in energy security, particularly where it uses residues, does not increase water and air pollution, and complements other renewables,” the final text reads. “This is a crucial omission, given that the EU’s unsustainable production and consumption are already massively overshooting ecological boundaries and putting people, nature and businesses at risk,” said the EEB. Delara Burkhardt, a member of the European Parliament with the center-left Socialists and Democrats, said it was “good that the strategy recognizes the need to source biomass sustainably,” but added the proposal did not address sufficiency. “Simply replacing fossil materials with bio-based ones at today’s levels of consumption risks increasing pressure on ecosystems. That shifts problems rather than solving them. We need to reduce overall resource use, not just switch inputs,” she said. Roswall declined to comment on the previous draft at Thursday’s press conference. “I think that we need to increase the resources that we have, and that is what this strategy is trying to do,” she said.

LONDON — The wait is finally over. After weeks of briefings, speculation, and U-turns, Chancellor Rachel Reeves has set out her final tax and spending plans for the year ahead. As expected, there is plenty for policy wonks to chew over. To make your lives easier, we’ve digested the headline budget announcements on energy, financial services, tech, and trade, and dug deep into the documents for things you might have missed.  ENERGY  The government really wants to bring down bills: Rachel Reeves promised it would be a cost-of-living budget, and surprised no one with a big pledge on families’ sky-high energy bills. She unveiled reforms which, the Treasury claims, will cut bills by £150 a year — by scrapping one green scheme currently paid for through bills (the Energy Company Obligation) and moving most of another into general taxation (the Renewables Obligation). The problem is, the changes will kick in next year at the same time bills are set to rise anyway. So will voters actually notice? The North Sea hasn’t escaped its taxes: Fossil fuel lobbyists were desperate to see a cut in the so-called Windfall Tax, which, oil and gas firms say, limits investment and jobs in the North Sea. But Rachel Reeves ultimately decided to keep the tax in place until 2030 (even if North Sea firms did get a sop through rules announced today, which will allow them to explore for new oil and gas in areas linked to existing, licensed sites.) Fossil fuel lobbyists, Offshore Energies UK, were very unimpressed. “The government was warned of the dangers of inaction. They must now own the consequences and reconsider,” it said. FINANCIAL SERVICES Pension tax changes won’t arrive for some time: The widely expected cut in tax breaks for pension salary sacrifice is set to go ahead, but it will be implemented far later than thought. The thresholds for exemption from national insurance taxes on salary sacrifice contributions will be lowered from £60,000 to £2,000 in April 2029, likely to improve forecasts for deficit cuts in the later years of the OBR’s forecasts. The OBR has a markets warning: The U.K.’s fiscal watchdog warned that the price-to-earnings ratio among U.S. equities is reminiscent of the dotcom bubble and post-pandemic rally in 2021, which were both followed by significant market crashes. The OBR estimated a global stock market collapse could cause a £121 billion hike in U.K. government debt by 2030 and slash U.K. growth by 0.6 percent in 2027-28. Even if the U.K. managed to stay isolated from the equity collapse, the OBR reckons the government would still incur £61 billion in Public Sector Net Financial Liabilities. Banks back British investments: British banks and investment houses have signed an agreement with the Treasury to create “invest in Britain” hubs to boost retail investment in U.K. stocks, a plan revealed by POLITICO last week. Reeves also finally tabled a cut to the tax-free cash ISA allowance: £12,000 from spring 2027 (the amount and timings also revealed by POLITICO last week), down from £20,000, with £8,000 slated for investments only. Over-65s will keep the full tax-free subscription amount. Also hidden in the documents was an upcoming consultation to replace the lifetime ISA with a “new, simpler ISA product to support first-time buyers to buy a home.” No bank tax: Banks managed to dodge a hike in their taxes this time, despite calls from the IPPR for a windfall-style tax that could have raised £8 billion. The suggestions (which also came from inside the Labour Party) were met with an intense lobbying effort from the banks, both publicly and privately. By the eve of the budget, City figures told POLITICO they were confident taxes wouldn’t be raised, citing the high rate of tax they already pay and Reeves’ commitment to pushing for growth through the financial services industry. TECH ‘Start, scale, stay’ is the new mantra:  Startup founders and investors were in panic mode ahead of the budget over rumored plans for an “exit tax” on wealthy individuals moving abroad, but instead were handed several wins on Wednesday, with Reeves saying her aim was to “make Britain the best place in the world to start up, to scale up and to stay.” She announced an increase in limits for the Enterprise Manage Scheme, which incentivizes granting employees share options, and an increase to Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) thresholds to facilitate investment in growing startups. A further call for evidence will also consider “how our tax system can better back entrepreneurs,” Reeves announced. The government will also consider banning non-compete clauses — another long-standing request from startups. Big Tech will still have to cough up: A long-standing commitment to review a Digital Services Tax on tech giants was quietly published alongside the budget, confirming it will remain in place despite pressure from the Trump administration. The government will ‘Buy British’ on AI: Most of the government’s AI announcements came ahead of the budget — including plans for two new “AI Growth Zones” in Wales, an expansion of publicly owned compute infrastructure — meaning the only new announcements on the day were a relatively minor “digital adoption package” and a commitment to overhaul procurement processes to benefit innovative tech firms. But the real point of interest on AI came in the OBR’s productivity forecasts, which said that despite the furor over AI, the technology’s impacts on productivity would be smaller than previous waves of technology, providing just a 0.2 percentage point boost by 2030. The government insists digital ID will ultimately lead to cost savings. | Andrea Domeniconi/Getty Images OBR delivers a blow to digital ID: The OBR threw up another curveball, estimating the cost of the government’s digital ID scheme at a whopping £1.8 billion over the next three years and calling out the government for making “no explicit provision” for the expense. The government insists digital ID will ultimately lead to cost savings — but “no specific savings have yet been identified,” the OBR added. TRADE  Shein and Temu face new fees: In a move targeted at online retailers like Shein and Temu, the government launched a consultation on scrapping the de minimis customs loophole, which exempts shipments worth less than £135 from import duties. These changes will take effect from March 2029 “at the latest,” according to a consultation document. Businesses are being consulted on how the tariff should be applied, what data to collect, whether to apply an additional administration fee, as well as potential changes to VAT collection. Reeves said the plans would “support a level-playing field in retail” by stopping online firms from “undercutting our High Street businesses.”  Northern Irish traders get extra support: Also confirmed in the budget is £16.6 million over three years to create a “one-stop shop” support service to help firms in Northern Ireland navigate post-Brexit trading rules. The government said the funding would “unlock opportunities” for trading across the U.K. internal market and encourage Northern Ireland to take advantage of access to EU markets.  There’s a big question mark over drug spending: Conspicuously absent was any mention of NHS drug spending, despite U.K. proposals to raise the cost-effectiveness threshold for new drugs by 25 percent as part of trade negotiations with the U.S., suggesting a deal has not yet been finalized. The lack of funding was noted as a potential risk to health spending in the Office for Budget Responsibility’s Economic and Fiscal Outlook, which was leaked ahead of the budget. 

LONDON — Ministers must act now to address an “emerging risk to gas supply security,” the government’s official independent energy advisers have warned.  The government must make plans to avert a threat to future gas supplies, the National Energy System Operator (NESO) said.  While the advisers say the conditions creating a gas supply crisis are unlikely, any shortage would have a severe impact on the country. In its first annual assessment of Britain’s gas security, expected to be released later today but seen by POLITICO, the NESO said diminishing reserves of gas in the North Sea and competition for imports are creating new energy security risks, even as the country’s decarbonization push reduces overall demand for the fossil fuel.  Britain is projected to have sufficient gas supplies for normal weather scenarios by winter 2030/31, but in the event of severe cold weather and an outage affecting key infrastructure, supply would fall well short of demand, NESO projects.   The scenario in the report involves what the NESO calls the “unlikely event” of a one-in-20-year cold spell lasting 11 days alongside the loss of vital infrastructure.   If this were to occur, the consequences of a shortfall in gas supply could be dire.   It could trigger emergency measures including cutting off gas from factories, power stations, and — in extreme scenarios — homes as well. It could take weeks or months to return the country to normal.   The vast majority of homes still use gas boilers for heating.   VULNERABILITY Informed by the NESO’s findings, ministers have published a consultation setting out a range of options for shoring up gas security.  It comes amid growing concern in Whitehall about the U.K.’s vulnerability to gas supply disruptions. Russia is actively mapping key offshore infrastructure like gas pipelines and ministers have warned it has the capability to “damage or destroy infrastructure in deepwater,” in the event that tensions over Ukraine spill over into a wider European conflict.  While Britain has long enjoyed a secure flow of domestically-produced gas from the North Sea — which still supplies more than a third of the fuel — NESO’s report says gas fields are experiencing “rapid decline.” The amount available to meet demand in Britain falls to “12 to 13 percent winter-on-winter until 2035,” it says.  That will leave the U.K. ever more dependent on imports, via pipeline from Norway and increasingly via ship-borne liquefied natural gas (LNG) from the U.S. — and Britain will be competing with other countries for the supply of both.  The report projects that during peak demand periods in the 2030s, the Britain’s import dependency will be as high as 90 percent or more.  Overall, gas demand will be lower in the 2030s because of the shift to renewable electricity and electric heating, but demand will remain relatively high on very cold days, and when there is little wind to power offshore turbines, requiring gas power stations to be deployed, the report says.  “This presents emerging risks that we will need to understand to ensure reliable supplies are maintained for consumers,” it adds.  Reducing demand for gas by decarbonizing will be key, the report says, and risks are higher in scenarios where the country slows down its shift away from gas.   But decarbonization alone will not be enough to ensure the U.K. would meet the so-called “N-1 test” — a sufficient supply of gas even if the “single largest piece” of gas infrastructure fails — during a prolonged cold spell in winter 2030/31. In that scenario, “peak day demand” is projected to reach 461 million cubic meters (mcm), but supply would fall to 385 mcm, resulting in a supply deficit of 76 mcm, a shortfall of around 16 percent of what is needed to power the country on that day.  That means ministers should start considering alternative options now, including the construction of new infrastructure like storage facilities, liquefied natural gas (LNG) import terminals, or new onshore pipelines to ensure more gas can get from LNG import sites to the rest of the country. The government consultation will look at these and other options.   The critical piece of gas infrastructure considered under the N-1 test is not identified for security reasons, but is likely to be a major import pipeline from Norway or an LNG terminal. The report says that even “smaller losses … elsewhere in the gas supply system” could threaten gas security in extreme cold weather.  GAS SECURITY ‘PARAMOUNT’  The findings will likely be seized on by the oil and gas industry to argue for a more liberal licensing and tax regime in the North Sea, on a day when the government announced its backing for more fossil fuel production in areas already licensed for exploration.  But such measures are unlikely to be a silver bullet. The report says: “Exploration of new fields is unlikely to deliver material new capacity within the required period.”  Deborah Petterson, NESO’s director of resilience and emergency management, said that gas supply would be “sufficient to meet demand under normal weather conditions.”  “We have, however, identified an emerging risk to gas supply security where decarbonization is slowest or in the unlikely event of the loss of the single largest piece of gas infrastructure on the system.  “By conducting this analysis, we are able to identify emerging risks early and, crucially, in time for mitigations to be put in place,” she added.  A spokesperson for the Department of Energy Security and Net Zero said ministers were “working with industry to ensure the gas system is fit for the future, including maintaining security of supply — which is paramount.”   “Gas will continue to play a key role in our energy system as we transition to clean, more secure, homegrown energy,” they added. “This report sets out clearly that decarbonization is the best route to energy security — helping us reduce demand for gas while getting us off the rollercoaster of volatile fossil fuel markets.”  Glenn Bryn-Jacobsen, director of energy resilience and systems at gas network operator National Gas Transmission, said in the short-term, Britain’s gas supply outlook was “robust” but that “looking ahead, we recognise the potential longer-term challenges.” “Gas remains a critical component of Britain’s energy security — keeping homes warm, powering industry, and supporting electricity generation during periods of peak demand and low renewable output,” he added. “In considering potential solutions, it is essential to look at both the gas supply landscape and the investment required in network infrastructure,” he said. 

Elisabeth Braw is a senior fellow at the Atlantic Council, the author of the award-winning “Goodbye Globalization” and a regular columnist for POLITICO. Russia’s shadow fleet just won’t go away. Countries in the Baltic Sea region have tried virtually every legal means of stopping this gnawing headache for every country whose waters have been traversed by these mostly dilapidated vessels — and yes, sinking them would be illegal. Now, these rust buckets are starting to cause an additional headache. Because they’re usually past retirement age, these vessels don’t last long before they need to be scrapped. This has opened a whole shadow trade that’s bound to cause serious harm to both humans and the environment. Earlier this month, the globally infamous Eagle S ship met its end in the Turkish port of Aliağa. The bow of the 229-meter oil tanker was on shore, its stern afloat, with cranes disassembling and moving its parts into a sealed area. The negative environmental impact of this landing method “is no doubt higher than recycling in a fully contained area,” noted the NGO Shipbreaking Platform on its website. But in the grand scheme of things, the Eagle S’s end was a relatively clean one. The 19-year-old Cook Islands-flagged oil tanker is a shadow vessel that had been transporting sanctioned Russian oil since early 2023. It then savaged an astonishing five undersea cables in the Gulf of Finland on Christmas Day last year, before being detained by the Finnish authorities. People are willing to own shadow vessels because they can make a lot of money transporting sanctioned cargo. However, as the tiny, elusive outfits that own them would struggle to buy shiny new vessels even if they wanted to, these ships are often on their last legs — different surveys estimate that shadow vessels have an average age of 20 years or more. Over the last few years, Russia’s embrace of the shadow fleet for its oil export has caused the fleet to grow dramatically, as tanker owners concluded they can make good money by selling their aging ships into the fleet. (They’d make less selling the vessels to shipbreakers.) Today, the shadow fleet encompasses the vast majority of retirement-age oil tankers. But after a few years, these tankers and ships are simply too old to sail, especially since shadow vessels undergo only the most cursory maintenance. To get around safely rules, less-than-scrupulous owners often sell their nearly dead ships to “final journey” firms, which have the sole purpose of disposing of them. | Ole Berg-Rusten/EPA For aged ships, the world of official shipping has what one might call a funeral process: a scrapping market. In 2024, 409 ships were scrapped through this official market, though calling it “official” makes it sound clean and safe, which, for the most part, it isn’t. A few of the ships scrapped last year were disassembled in countries like Denmark, Norway and the Netherlands, which follow strict rules regarding human and environmental safety. A handful of others were scrapped in Turkey, which has an OK record. But two-thirds were scrapped in Southeast Asia, where the shipbreaking industry is notoriously unsafe. To get around safely rules, less-than-scrupulous owners often sell their nearly dead ships to “final journey” firms, which have the sole purpose of disposing of them. These companies and their middlemen then make money by selling the ships’ considerable amount of steel to metal companies. But in India, Pakistan and Bangladesh — the latter is the world’s most popular shipbreaking country — vessels are disassembled on beaches rather than sealed facilities, and by workers using little more than their hands. Of course, this makes the process cheap, but it also makes it dangerous. According to the NGO Shipbreaking Platform, last year, 15 South Asian shipbreaking workers lost their lives on the job and 45 were injured. Just one accident involving an oil tanker claimed the lives of six workers and injured another six. This brings us to the shadow fleet and its old vessels, as they, too, need to be scrapped. But many of them are under Western sanctions, which presents a challenge to their owners since international financial transactions are typically conducted in U.S. dollars. Initially, I had suspected that coastal nations would start finding all manner of shadow vessels abandoned in their waters and would be left having to arrange the scrapping. But as owners want to make money from the ships’ metal, this frightening scenario hasn’t come to pass. Instead, a shadow shipbreaking market is emerging. Open-source intelligence research shows that shadow vessel owners are now selling their sanctioned vessels to final-journey firms or middlemen in a process that mirror the official one. Given that these are mostly sanctioned vessels, the buyers naturally get a discount, which the sellers are more than willing to provide. After all, selling a larger shadow tanker for scrap value and making something to the tune of $10 to $15 million is more profitable than abandoning it. And how are the payments made? We don’t know for sure, but they’re likely in crypto or a non-U.S. dollar currency. These shady processes make the situation even more perilous for the workers doing the scrapping, not to mention for the environment. “Thanks to a string of new rules and regulations over the past five decades, shipping has become much safer, and that has reduced the number of accidents significantly in recent decades,” explained Mats Saether, a lawyer at the Nordisk legal services association in Oslo. “It’s regrettable that the shadow fleet is reversing this trend.” It certainly is. Indeed, the scrapping of shadow vessels is a practice that demands serious scrutiny. Greenpeace, Human Rights Watch and other NGOs could do a good deed for the environment and unfortunate shipbreaking workers by conducting investigations. And surely the Bangladeshi government wouldn’t want to see Bangladeshi lives lost because Russia needs oil for war? Greenpeace, Human Rights Watch and other NGOs could do a good deed for the environment and unfortunate shipbreaking workers by conducting investigations. | Ole Berg-Rusten/EPA There’s an opportunity here for Western governments to help too. They could offer shadow vessel owners legal leniency and a way to sell their ships back into the official fleet — if the owners provide the authorities with details about the fleet’s inner workings and vow to leave the business. Does that sound unlikely to succeed? Possibly. But that’s what people said about Italy’s pentiti system, and they were proven wrong. Besides, the shadow fleet is such a tumor on the shipping industry and the world’s waterways that almost any measure is worth a try.