BRUSSELS — Europeans should eat less meat and farms must be taxed for their planet-warming pollution if the bloc is to reach its climate goals, the EU’s scientific advisers argue in a set of far-reaching recommendations that are unlikely to get a warm welcome from farmers.  In a 350-page report published Wednesday, the European Scientific Advisory Board on Climate Change also calls on the EU to scrap farm subsidies for climate-damaging practices, arguing sweeping measures are necessary to reduce agriculture’s contribution to global warming. To aid farmers, they propose scaling up financial support to help them transition toward greener alternatives as well as aid to cope with increasing droughts and climate disasters.  Yet environmental policies that so much as touch on agriculture have become politically toxic in recent years, with Brussels and EU capitals reluctant to address farm emissions in the face of large-scale tractor protests and intense lobbying campaigns.  Still, sticking with business as usual isn’t an option, said the board’s chair Ottmar Edenhofer.  “In order to achieve carbon neutrality by 2050 within the EU, the sector has to contribute to emissions reduction,” he said.  “And if we do this in a smart way during the transition process, in a gradual way, pricing the emissions but also using the revenues to support the transition … I think this is a beneficial pathway for the whole sector and for the whole of society.”  While politically sensitive, the board’s recommendations are not revolutionary.  Plenty of scientists and even the World Bank have in recent years urged governments to ensure their citizens eat less meat and to cut environmentally harmful subsidies in order to rein in greenhouse gas emissions from food, which account for about a third of all planet-warming pollution.  And Denmark is on track to become the first country to tax agricultural pollution after Copenhagen and farmers’ associations agreed in 2024 to impose a carbon price on livestock emissions from 2030.  Yet the board’s reports carry weight. The independent consortium of scientists is tasked by EU law with providing guidance on climate policy; past recommendations have proven influential, with the board’s 2023 advice on setting a 2040 emissions-slashing target of at least 90 percent playing a major role in leading the EU to enshrine this goal in law last week.  The entire food system, from farming to consumption to waste management, produces 31 percent of the bloc’s emissions. | Quentin Top / Hans Lucas / AFP via Getty Images The recommendations on agriculture also come just as the EU drafts new policies that could incorporate some of the board’s advice — from the bloc’s next long-term budget and an upcoming revision of the EU farm subsidy program, to a slate of new green legislation designed to meet the new 2040 target, and a plan to increase resilience to climate disasters. CAPPING CAP PAYMENTS The Common Agriculture Policy (CAP), a behemoth that absorbs around a third of the EU’s budget, is a key target of the report. The current framework contains provisions around climate and biodiversity, but has failed to sufficiently slash greenhouse gas emissions. The entire food system, from farming to consumption to waste management, produces 31 percent of the bloc’s emissions. More than half of that occurs during food production — think super-polluting methane released by cows as well as fertilizer use, tractor fuel and more.  The CAP, the scientists warn, still incentivizes climate-harming practices through its vast subsidy system. The EU should therefore gradually phase out payments that are tied to livestock production, a type of income support for farmers that consumes 5 percent of the current CAP budget, they say.  In fact, they add, the EU should reconsider the entire idea of subsidies based on farmland size, worth 39 percent of the CAP budget or more than €100 billion, as they “incentivize agricultural production over other land use” such as forestry, and thus drive up emissions. On top of reforming the CAP, the EU should introduce a carbon pricing mechanism covering agriculture, building on the Emissions Trading System architecture that has successfully halved industry and power plant pollution, the scientists say.  But they argue that agricultural carbon pricing should consist of three separate systems — one each for energy-related farm emissions, non-CO2 pollution such as methane, and agricultural emissions and carbon dioxide removals from land.  The EU also needs to address consumer demand to tackle food emissions, the board says. In particular, Europeans eat too much red meat, driving up methane pollution.  The scientists recommend the EU set up national guidelines for climate-friendly diets and set mandatory standards for marketing and sustainability labeling of food to push consumers toward greener choices.  CLIMATE-PROOFING FARMS To sweeten the deal for farmers, the board suggests that with the money saved from a reformed CAP and generated through carbon pricing, the EU should support them in the transition toward climate-friendly practices and in adapting to a warmer world.  Whether the promise of funding would be enough to placate farming lobbies that have launched massive tractor protests across Europe at any hint of additional burdens for farmers is uncertain. Political appetite for green legislation has also declined in both Brussels and capitals amid a shift toward industry- and security-focused policies.  As part of its Green Deal, the European Commission in 2020 launched a Farm to Fork Strategy designed to make the bloc’s food system more environmentally friendly. The plan, however, was effectively abandoned following a backlash from lobby groups and conservative politicians.  Political appetite for green legislation has also declined amid a shift toward industry- and security-focused policies. | Marijan Murat/picture alliance via Getty Images Only last week, EU institutions struck a deal to ban vegetarian products from using certain meat-related terms.  But Edenhofer believes that there is political space to enact the board’s recommendations, pointing to Denmark’s tripartite deal establishing a carbon tax — an agreement between the government, farmers and environmental groups — as a hopeful example.  “We acknowledge that this is very complicated, but … we need a regulatory system which incentivizes emission reductions in the agri-food system,” Edenhofer insisted.

“Veggie burgers” and “vegan sausages” can remain on European supermarket shelves, EU negotiators agreed Thursday. However, only products made of animal flesh can use terms like “steak” or “bacon.” Unless that flesh was grown in a lab, in which case, those terms are also off-limits. Those are the broad contours of the compromise reached by EU institutions after an MEP’s sleeper initiative to block vegetarian alternatives from using terms associated with meat — the so-called veggie burger ban — fueled political tensions over an otherwise technical farm file. After months of debate, institutional negotiators agreed on new rules that would ban vegetarian products from using dozens of terms that are typically associated with meat, including “chicken,” “ribs,” “bacon,” “tenderloin,” “liver” and “steak.” The deal still needs to be formally signed off by the Parliament and EU member capitals. The fight exposed a deeper divide in Brussels food politics. Consumer groups attacked the lengthy list of banned words as doing little to help people trying to make choices at the store. “Consumers want to eat healthier and need convenient and affordable options,” said BEUC chief Agustín Reyna. Meat-related names “make it easy for those who want to integrate these options in their diets, and the new rules will increase confusion and are simply not necessary.” For pro-farmer lawmakers on the center-right and right, protecting meaty terminology became a symbolic show of support for livestock producers reeling from sinking profits and regulatory fatigue. They cast themselves as bulwarks against a cosmopolitan push toward alternative proteins. Greens and liberals, meanwhile, dismissed the debate as political theater aimed at farm constituencies, arguing it distracts from structural challenges in the food chain and clashes with Brussels’ competitiveness rhetoric. Negotiators ultimately agreed that veggie sausages and burgers can continue to be sold. The French MEP behind the terminology ban, Céline Imart, hailed the outcome as an “indisputable victory for our farmers.” The agreement, she added, “recognizes the value of farmers’ work and protects their products, which are the result of unique expertise, against a form of unfair competition.” Imart, a grain farmer, also pushed for protections to extend to “cell-cultured products” — i.e. meat grown in labs — which she has previously described as a threat to traditional agriculture. For frustrated lawmakers, the move takes Europe in the wrong direction, essentially knee-capping a nascent sector. “It is absurd that we are attempting to regulate the naming of products that aren’t even on the European market yet,” the Greens Parliamentary negotiator on the file, Anna Strolenberg, told POLITICO ahead of Thursday’s talks on cellular meat. “Our signal to biotech pioneers is: ‘Don’t build it in Europe, move abroad.’” The compromise comes after months of negotiations between the European Parliament, the Council and the Commission over targeted changes to the bloc’s Common Market Organisation law. The original intent was to update detailed laws on contracts, in the hopes of improving the position of farmers in the agri-food chain, following waves of protests. However, when the proposal reached the Parliament, Imart, the European People’s Party MEP leading negotiations on the file, pushed for the inclusion of a list of meaty terms that would be off-limits to veggie copycats. That quickly became the most hotly debated element, as capitals scrambled to agree on common red lines. In the end, a similar list proposed by the Commission for a future change to the CMO from 2028 onward was used as the basis of negotiations. The terms on this list were more narrow references to cuts and types of meat rather than catch-all terms like burger and sausage.

Presented as an instrument aimed at strengthening farmers’ position in the food supply chain, the targeted revision of the Regulation on the Common Market Organisation was intended to address structural challenges within the sector. Yet, as the trilogue approaches, the debate has gradually crystallized around a different issue: restricting certain denominations used for plant-based products. This shift deserves careful scrutiny. How would limiting widely understood terms concretely improve farmers’ position in the food chain? The connection between the original objective of the proposal and the measure currently under discussion remains insufficiently substantiated. If the stated ambition is to reinforce resilience and fairness within the agricultural chain, it is legitimate to question whether terminology restrictions meaningfully contribute to that goal. > How would limiting widely understood terms concretely improve farmers’ > position in the food chain? In a letter addressed to Members of the European Parliament, GAIA calls for maintaining the current regulatory framework and rejecting the proposed restrictions, whether concerning existing plant-based products or future products derived from cellular agriculture. The objective is clear: to preserve coherent and proportionate regulation that protects consumers without weakening an innovative and strategic sector. Behind a word: a market and jobs Europe holds a leading position in several innovative segments of plant-based alternatives. The European market was estimated at €2.7 billion in 2024 and continues to structure a dynamic industrial ecosystem across member states. Companies operating in this field invest significantly in research and development, expand production capacities, create qualified jobs and actively contribute to the industrial dynamism of the single market. This ecosystem extends well beyond food production. It supports technological innovation, specialised logistics, supply chain transformation and new forms of industrial cooperation. It contributes to the modernization of the European agri-food sector and strengthens the competitiveness of the internal market. In a period where industrial policy and strategic autonomy are central to the European agenda, introducing regulatory uncertainty risks undermining a competitive advantage built on sustained investment and innovation. > The issue therefore goes beyond semantics: it concerns the stability and > predictability of the European regulatory framework. “Behind denominations lies a real European economy: jobs, innovation and competitiveness.” Restricting widely understood terms would entail compliance costs, packaging adjustments, potential litigation and a risk of divergent interpretations across member states. The issue therefore goes beyond semantics: it concerns the stability and predictability of the European regulatory framework — factors that are essential for long-term investment decisions and business planning. Cellular agriculture: anticipate without destabilizing The same reasoning applies to products derived from cellular agriculture. Although not yet present on European shelves, these technologies hold significant potential for future development. Estimates suggest that the cultivated protein value chain could represent between €15 billion and €80 billion in new markets, with the potential to create between 25,000 and 90,000 jobs in Europe. The European Union already counts 47 companies active in cultivated meat out of 174 worldwide, as well as 61 out of 158 companies operating in precision fermentation and biomass technologies. This demonstrates that Europe is not a passive observer but an active participant in emerging food technologies. Yet European investment in novel foods currently represents less than 1 percent of total agri-food innovation funding. In this context, regulatory stability becomes a decisive factor in consolidating emerging technological leadership and retaining investment within the EU. Introducing additional denomination restrictions at such an early stage may send an unintended signal of unpredictability. For innovative sectors that depend on long development cycles and significant capital expenditure, clarity and proportionality in regulation are structural conditions for growth. “Europe can be demanding. It cannot afford to be unpredictable in sectors where it seeks to innovate.” Consumer protection: a framework already validated Consumer protection is a legitimate objective and a cornerstone of EU law. However, it operates within an already established and functional legal framework. The Food Information to Consumers Regulation requires clear, accurate and non-misleading labeling. Annex VI explicitly provides that the absence or substitution of animal-derived ingredients must be indicated. In case C-438/23, the Court of Justice of the European Union confirmed that this framework provides sufficient safeguards against misleading practices. “The Court of Justice of the European Union has confirmed it: EU law already protects consumers.” > A plant-based product clearly identified as such does not constitute > linguistic ambiguity for the vast majority of consumers. The central argument in favor of additional restrictions rests on an assumption of consumer confusion. Yet available evidence indicates that consumers clearly distinguish animal-based products from plant-based alternatives when origin and composition are explicitly stated. Labeling transparency, rather than categorical prohibitions, remains the key instrument for ensuring informed choice. A plant-based product clearly identified as such does not constitute linguistic ambiguity for the vast majority of consumers. The debate should not be trivialized, but one principle deserves emphasis: regulation must protect without infantilizing. Suggesting that a single word, taken in isolation, would systematically mislead consumers underestimates their ability to read labels, understand context and make informed decisions. “Protecting consumers does not mean presuming a lack of discernment.” More than 600 companies and organizations from 22 member states have called for maintaining the current framework, underlining the importance of preserving single market coherence and avoiding regulatory fragmentation detrimental to innovation and competitiveness. Europe can reconcile consumer protection, legal certainty and competitiveness. It can do so by fully enforcing existing rules and targeting actual abuses rather than introducing general prohibitions that generate costs, legal uncertainty and unintended economic consequences. Ultimately, the question is not whether a word is liked or disliked. It is whether, in a context marked by major challenges related to industrial competitiveness, climate transition, economic security and geopolitical tension, this is where the union should concentrate its political and regulatory capital.

BRUSSELS — As the EU dithered over its Latin American trade pact, Donald Trump slipped past and moved the cheese.  A bilateral deal between the U.S. president and populist fellow traveler Javier Milei of Argentina is calling into question hard-won protections for signature European products in the EU’s trade agreement with the Mercosur bloc. At a moment when Brussels is hoping to show its promise of free trade flows can be a counterweight to Trump’s threats and aggression, the EU’s internal divisions are once again hobbling its bid to wield influence in the Western hemisphere. Making the situation all the stinkier: Trump’s pact with Milei would let American versions of prized European cheeses flow freely into Argentina. The only way to fight back, say frustrated supporters of the EU-Mercosur agreement, is to race to lock in protections for so-called geographical indications before it’s too late. “If Europe wants to be a geopolitical giant, it must be able to decide without wasting time,” said Stefano Bonaccini, an Italian MEP.  Under the EU-Mercosur agreement, more than 300 EU food and drink products would be protected in Argentina — along with Brazil, Paraguay and Uruguay — from copycats entering those markets.  Yet Trump’s team managed to obtain guarantees that American lookalikes of some European heritage products would be allowed into Argentina, including Gorgonzola, Fontina and Roquefort. As prices spike for Greek Feta, there would be nothing to stop salty sheep-milk cheese from Wisconsin from being sold as a cheaper alternative under the same name.  “We can no longer postpone the EU-Mercosur agreement: Approving it first would make the Trump-Milei agreement inapplicable,” thus defending delicacies such as Parmigiano Reggiano and Mortadella di Bologna, said Bonaccini, a socialist on the Parliament’s agriculture committee, who has expressed support for the deal as long as it protects farmers.   For opponents, Milei’s link-up with Trump is a betrayal that proves the Mercosur deal was rotten all along. “This situation is extremely revealing of the rip-off that is the Mercosur agreement,” stressed Céline Imart, a French center-right lawmaker and farmer who also opposes the Mercosur deal, calling into question how farmers can trust the other special protections they have been promised. FIRST COME, FIRST SERVED?  Whichever agreement is ratified first could give the EU or the U.S. a first-mover advantage, with the runner-up possibly being told that Argentina has already made a commitment on the matter.  “It is hard to see how Argentina will be able to comply with both agreements,” said Geraldo Vidigal, a Brazilian professor in international trade law at the University of Amsterdam. The protection of EU specialty cheese and meat terms was one of the “big wins” for European agriculture in the EU-Mercosur agreement, he added.  Argentina’s move is evidence of “how stupid the EU has been in delaying and delaying and delaying the Mercosur agreement,” argued John Clarke, the EU’s former agricultural trade negotiator. In his view, the ball is now in Argentina’s court, with pressure on the EU and U.S. to get their agreements ratified first.  Although Ursula von der Leyen signed the accord at the start of the year, European lawmakers have thrown another wrench in the works. | Mauro Pimentel/AFP via Getty Images Alternatively, the Argentinians could wait for a court case to settle any looming disputes, Clarke suggested. The EU, meanwhile, is stranded by its internal divisions on the Mercosur deal, which has been over a generation in the making. During that time the bloc has lost its standing as the Latin American bloc’s largest trade partner to a rising China. Although European Commission President Ursula von der Leyen finally signed the accord at the start of the year, and EU member countries have supported its ratification, European lawmakers threw another wrench in the works by referring the accord for a review by the EU’s top court, which could stall its final approval by up to two years. To avoid waiting for years before it can reap the benefits of the deal, the Commission is expected to provisionally apply the agreement as soon as one of the Mercosur countries ratifies the deal on its side. This is expected in a matter of weeks, with Argentina itself, along with Uruguay, leading the Mercosur pack in putting the deal to a vote in their national legislatures. FULL RESPECT The European Commission is assessing the impact of the U.S.-Argentina agreement on the bloc’s trade interests, said Deputy Chief Spokesperson Olof Gill.  The comprehensive protection of geographical indications must “be respected in full” under the Mercosur deal, he added in a statement to POLITICO, adding that the EU executive would continue to engage with Argentina on the issue. The agreement hasn’t only raised concerns on the EU side. Reuters reports that Brazil is looking into whether the Milei-Trump deal conflicts with rules of the Mercosur trade bloc.  The U.S. has included similar clauses in trade agreements with other countries, but EU dairy producers shrug off these attempts to undermine the EU’s system for protecting geographical indications.  “Our partners in the U.S. waste their time and energy,” argued European Dairy Association Secretary General Alexander Anton, adding the Americans are chasing the EU’s heels trying to undermine protections that have already been agreed. Italian MEP Herbert Dorfmann, of the center-right European People’s Party, argued that any contradiction between the agreements on protected names “would be a serious problem” and would provide opponents of the EU-Mercosur deal with further ammunition to oppose it.   Copa-Cogeca, the influential European farmers’ lobby, has already raised concerns on the matter, saying that “such a move by Argentina would only further strengthen our opposition to the agreement.” Imart, a French skeptic of the deal, called on the Commission to take a stand against U.S. attempts to undermine the EU’s geographical indications system. “Our agriculture is excellent; it should not be sold off cheaply,” she said.  Argentinian authorities didn’t comment by the time of publication.  Bartosz Brzeziński and Giorgio Leali contributed to this report. 

BRUSSELS — Next up on Ursula von der Leyen’s trade to-do list: Australia. The EU’s ally Down Under is ready to tango again as Donald Trump’s tariffs push the rest of the world closer together. Both Brussels and Canberra worry about China. And they already see eye-to-eye on issues, ranging from research funding to defense cooperation. The EU and Australia came close to a deal in October 2023, on the sidelines of a G7 meeting in Osaka, Japan. But Aussie Trade Minister Don Farrell pulled out at the last minute under pressure from the beef lobby back home. Sticking points remain: access for Australian beef and lamb to the European market; EU trade protections on specialty foods; critical minerals; and an Australian tax on luxury cars. Farrell visits Brussels on Thursday to meet the EU’s trade and agriculture commissioners, Maroš Šefčovič and Christoph Hansen. Only if they resolve those differences would the Commission chief get to fly to Australia to finally conclude a formal agreement. “I don’t do bad deals,” Farrell said before heading to Brussels. Here are five issues that need to be sorted out for a good deal to happen: ANGRY FARMERS The biggest obstacle is whether the EU will grant more access to Australian farm produce, chiefly beef and lamb. Farrell needs a deal he can sell to vocal farmers back home who effectively blocked the deal just over two years ago. It’s not only meat but also sugar, rice and dairy — even though quotas for those are less sensitive. The Australian National Farmers’ Federation said this week that it’s still looking for “significantly increased access” on all of those fields. The crux here: Australia might want more, but if the EU gives more it risks the ire of European farmers ready to protest on the doorstep of the Berlaymont. The European Parliament’s referral of the EU’s agri-heavy deal with the Latin American Mercosur bloc for judicial review adds to the uncertainty. PROTECTING PARMIGIANO While the matter of protected European products on the market down under was all but solved in 2023, it’s likely this chapter will return to haunt negotiators. Australia knows very well how to use anything the EU says against it: Nothing is agreed until everything is agreed, after all. Canberra signaled it was ready to set up its own version of Europe’s system of geographical indications. These, for instance, denote that Champagne can only be called that when it’s made in the eponymous region of France. They are also some non-Greek supermarkets that have to resort to calling their feta imitations “white cheese.” Australia might want more, but if the EU gives more it risks the ire of European farmers ready to protest on the doorstep of the Berlaymont. | Geoffroy van der Hasselt/AFP via Getty Images Australia is a peculiar case because, for example, Italian-heritage farmers have made parmesan cheese for generations in the same way as around Parma. They could now face limits on what they can call their product — but probably not Parmigiano Reggiano. A likely solution would allow established brands to continue to use product names for a grace period. This is why prosecco, pecorino, parmesan and feta are still under discussion, the Australian Associated Press reports. On the flip side, the EU usually offers to protect some of the other side’s products on its own market. Let’s hope they don’t come after our flat whites. RAW MATERIALS (AND THEIR PRICE) Australia holds the world’s largest lithium reserves but lacks the refining capacity to monetize them. As a result, China processes virtually all of the raw lithium that Australia produces, enabling Beijing to dominate global supply. Brussels and Canberra continued talking on this topic after the Osaka debacle, concluding a memorandum of understanding in early 2024. Australia is also a partner in Europe’s RESourceEU program to reduce dependencies on a subset of critical raw materials. And the European Investment Bank is teaming up with Australia. Ideally, a trade deal would unlock exports from Australia to Europe and also boost the confidence of European companies to invest in local refining capacity. This is true not only for lithium, but also uranium, silver, bauxite used for aluminum, and a host of others. It cuts both ways: One example of an existing project getting a boost is the Australian-owned lithium producer Vulcan Energy in Germany. So is this really a hurdle? There’s a technical one: Europe wants to avoid a dual pricing system for critical raw materials (and energy sources like natural gas) that favors domestic customers. Australia hasn’t signaled it’s ready to end the practice, however. TAXING LUXURY CARS Australia still taxes luxury vehicle imports — a relic of a bygone era when it still had a car industry of its own. The tax is a 33 percent charge on models above a certain price threshold. There’s also a 5 percent import duty on all foreign cars. Trading partners that have deals with Canberra — like Korea and Japan — saw that removed but are still charged the luxury car tax. The potential is there: Japan sold $8 billion worth of vehicles to Australia in 2024, with German only in fifth position at $2 billion. While the EU would love to pave the way for more high-end German autos to be sold Down Under, the tax is domestic legislation and not formally part of the talks. Australia was rumored in 2023 to be willing to get rid of the tax, and Albanese hinted at it again late last year. That could be a sweetener for the EU to stomach a slightly higher beef quota. THE POLITICS OF IT ALL The EU is on a roll with new trade agreements: it has signed the Mercosur deal, closed talks with India and an Australian win is close. The streak serves von der Leyen’s geopolitical agenda for Europe to stand on its own two feet economically. On the other side of the world, Albanese is in more dire need of a win. He’s under pressure over his response to the Bondi Beach terror attack in December. And even though Trump only hit Australia with a 10 percent tariff, the country needs strong alliances if it wants to weather both Chinese and American pressure. The same is true for Europe, which sees the deal as underlining its cultural and historic ties with Australia, lifting an already-strong working relationship to the next level, as with Canada. And Australia is a key member of “the West” in the Indo-Pacific where Europe needs and wants to expand its attraction and influence. Zoya Sheftalovich contributed to this report.

LONDON — Reza Pahlavi was in the United States as a student in 1979 when his father, the last shah of Iran, was toppled in a revolution. He has not set foot inside Iran since, though his monarchist supporters have never stopped believing that one day their “crown prince” will return.  As anti-regime demonstrations fill the streets of more than 100 towns and cities across the country of 90 million people, despite an internet blackout and an increasingly brutal crackdown, that day may just be nearing.   Pahlavi’s name is on the lips of many protesters, who chant that they want the “shah” back. Even his critics — and there are plenty who oppose a return of the monarchy — now concede that Pahlavi may prove to be the only figure with the profile required to oversee a transition.  The global implications of the end of the Islamic Republic and its replacement with a pro-Western democratic government would be profound, touching everything from the Gaza crisis to the wars in Ukraine and Yemen, to the oil market.  Over the course of three interviews in the past 12 months in London, Paris and online, Pahlavi told POLITICO how Iran’s Supreme Leader Ayatollah Ali Khamenei could be overthrown. He set out the steps needed to end half a century of religious dictatorship and outlined his own proposal to lead a transition to secular democracy. Nothing is guaranteed, and even Pahlavi’s team cannot be sure that this current wave of protests will take down the regime, never mind bring him to power. But if it does, the following is an account of Pahlavi’s roadmap for revolution and his blueprint for a democratic future.  POPULAR UPRISING  Pahlavi argues that change needs to be driven from inside Iran, and in his interview with POLITICO last February he made it clear he wanted foreign powers to focus on supporting Iranians to move against their rulers rather than intervening militarily from the outside.  “People are already on the streets with no help. The economic situation is to a point where our currency devaluation, salaries can’t be paid, people can’t even afford a kilo of potatoes, never mind meat,” he said. “We need more and more sustained protests.” Over the past two weeks, the spiraling cost of living and economic mismanagement have indeed helped fuel the protest wave. The biggest rallies in years have filled the streets, despite attempts by the authorities to intimidate opponents through violence and by cutting off communications. Pahlavi has sought to encourage foreign financial support for workers who will disrupt the state by going on strike. He also called for more Starlink internet terminals to be shipped into Iran, in defiance of a ban, to make it harder for the regime to stop dissidents from communicating and coordinating their opposition. Amid the latest internet shutdowns, Starlink has provided the opposition movements with a vital lifeline. As the protests gathered pace last week, Pahlavi stepped up his own stream of social media posts and videos, which gain many millions of views, encouraging people onto the streets. He started by calling for demonstrations to begin at 8 p.m. local time, then urged protesters to start earlier and occupy city centers for longer. His supporters say these appeals are helping steer the protest movement. Reza Pahlavi argues that change needs to be driven from inside Iran. | Salvatore Di Nolfi/EPA The security forces have brutally crushed many of these gatherings. The Norway-based Iranian Human Rights group puts the number of dead at 648, while estimating that more than 10,000 people have been arrested. It’s almost impossible to know how widely Pahlavi’s message is permeating nationwide, but footage inside Iran suggests the exiled prince’s words are gaining some traction with demonstrators, with increasing images of the pre-revolutionary Lion and Sun flag appearing at protests, and crowds chanting “javid shah” — the eternal shah. DEFECTORS Understandably, given his family history, Pahlavi has made a study of revolutions and draws on the collapse of the Soviet Union to understand how the Islamic Republic can be overthrown. In Romania and Czechoslovakia, he said, what was required to end Communism was ultimately “maximum defections” among people inside the ruling elites, military and security services who did not want to “go down with the sinking ship.”  “I don’t think there will ever be a successful civil disobedience movement without the tacit collaboration or non-intervention of the military,” he said during an interview last February.  There are multiple layers to Iran’s machinery of repression, including the hated Basij militia, but the most powerful and feared part of its security apparatus is the Islamic Revolutionary Guard Corps. Pahlavi argued that top IRGC commanders who are “lining their pockets” — and would remain loyal to Khamenei — did not represent the bulk of the organization’s operatives, many of whom “can’t pay rent and have to take a second job at the end of their shift.”  “They’re ultimately at some point contemplating their children are in the streets protesting … and resisting the regime. And it’s their children they’re called on to shoot. How long is that tenable?” Pahlavi’s offer to those defecting is that they will be granted an amnesty once the regime has fallen. He argues that most of the people currently working in the government and military will need to remain in their roles to provide stability once Khamenei has been thrown out, in order to avoid hollowing out the administration and creating a vacuum — as happened after the 2003 U.S.-led invasion of Iraq.  Only the hardline officials at the top of the regime in Tehran should expect to face punishment.  In June, Pahlavi announced he and his team were setting up a secure portal for defectors to register their support for overthrowing the regime, offering an amnesty to those who sign up and help support a popular uprising. By July, he told POLITICO, 50,000 apparent regime defectors had used the system.  His team are now wary of making claims regarding the total number of defectors, beyond saying “tens of thousands” have registered. These have to be verified, and any regime trolls or spies rooted out. But Pahlavi’s allies say a large number of new defectors made contact via the portal as the protests gathered pace in recent days.  REGIME CHANGE In his conversations with POLITICO last year, Pahlavi insisted he didn’t want the United States or Israel to get involved directly and drive out the supreme leader and his lieutenants. He always said the regime would be destroyed by a combination of fracturing from within and pressure from popular unrest.  He’s also been critical of the reluctance of European governments to challenge the regime and of their preference to continue diplomatic efforts, which he has described as appeasement. European powers, especially France, Germany and the U.K., have historically had a significant role in managing the West’s relations with Iran, notably in designing the 2015 nuclear deal that sought to limit Tehran’s uranium enrichment program.  But Pahlavi’s allies want more support and vocal condemnation from Europe. U.S. President Donald Trump pulled out of the nuclear deal in his first term and wasted little time on diplomacy in his second. He ordered American military strikes on Iran’s nuclear facilities last year, as part of Israel’s 12-day war, action that many analysts and Pahlavi’s team agree leaves the clerical elite and its vast security apparatus weaker than ever.  U.S. President Donald Trump pulled out of the nuclear deal in his first term and wasted little time on diplomacy in his second. | Pool photo by Bonnie Cash via EPA Pahlavi remains in close contact with members of the Trump administration, as well as other governments including in Germany, France and the U.K. He has met U.S. Secretary of State Marco Rubio several times and said he regards him as “the most astute and understanding” holder of that office when it comes to Iran since the 1979 revolution.  In recent days Trump has escalated his threats to intervene, including potentially through more military action if Iran’s rulers continue their crackdown and kill large numbers of protesters.  On the weekend Pahlavi urged Trump to follow through. “Mr President,” he posted on X Sunday. “Your words of solidarity have given Iranians the strength to fight for freedom,” he said. “Help them liberate themselves and Make Iran Great Again!” THE CARETAKER KING  In June Pahlavi announced he was ready to replace Khamenei’s administration to lead the transition from authoritarianism to democracy.   “Once the regime collapses, we have to have a transitional government as quickly as possible,” he told POLITICO last year. He proposed that a constitutional conference should be held among Iranian representatives to devise a new settlement, to be ratified by the people in a referendum.  The day after that referendum is held, he told POLITICO in February, “that’s the end of my mission in life.”  Asked if he wanted to see a monarchy restored, he said in June: “Democratic options should be on the table. I’m not going to be the one to decide that. My role however is to make sure that no voice is left behind. That all opinions should have the chance to argue their case — it doesn’t matter if they are republicans or monarchists, it doesn’t matter if they’re on the left of center or the right.”  One option he hasn’t apparently excluded might be to restore a permanent monarchy, with a democratically elected government serving in his name.  Pahlavi says he has three clear principles for establishing a new democracy: protecting Iran’s territorial integrity; a secular democratic system that separates religion from the government; and “every principle of human rights incorporated into our laws.” He confirmed to POLITICO that this would include equality and protection against discrimination for all citizens, regardless of their sexual or religious orientation.  COME-BACK CAPITALISM  Over the past year, Pahlavi has been touring Western capitals meeting politicians as well as senior business figures and investors from the world of banking and finance. Iran is a major OPEC oil producer and has the second biggest reserves of natural gas in the world, “which could supply Europe for a long time to come,” he said.  “Iran is the most untapped reserve for foreign investment,” Pahlavi said in February. “If Silicon Valley was to commit for a $100 billion investment, you could imagine what sort of impact that could have. The sky is the limit.”  What he wants to bring about, he says, is a “democratic culture” — even more than any specific laws that stipulate forms of democratic government. He pointed to Iran’s past under the Pahlavi monarchy, saying his grandfather remains a respected figure as a modernizer.  “If it becomes an issue of the family, my grandfather today is the most revered political figure in the architect of modern Iran,” he said in February. “Every chant of the streets of ‘god bless his soul.’ These are the actual slogans people chant on the street as they enter or exit a soccer stadium. Why? Because the intent was patriotic, helping Iran come out of the dark ages. There was no aspect of secular modern institutions from a postal system to a modern army to education which was in the hands of the clerics.”   Pahlavi’s father, the shah, brought in an era of industrialization and economic improvement alongside greater freedom for women, he said. “This is where the Gen Z of Iran is,” he said. “Regardless of whether I play a direct role or not, Iranians are coming out of the tunnel.”  Conversely, many Iranians still associate his father’s regime with out-of-touch elites and the notorious Savak secret police, whose brutality helped fuel the 1979 revolution. NOT SO FAST  Nobody can be sure what happens next in Iran. It may still come down to Trump and perhaps Israel.  Anti-regime demonstrations fill the streets of more than 100 towns and cities across the country of 90 million people. | Neil Hall/EPA Plenty of experts don’t believe the regime is finished, though it is clearly weakened. Even if the protests do result in change, many say it seems more likely that the regime will use a mixture of fear tactics and adaptation to protect itself rather than collapse or be toppled completely.  While reports suggest young people have led the protests and appear to have grown in confidence, recent days have seen a more ferocious regime response, with accounts of hospitals being overwhelmed with shooting victims. The demonstrations could still be snuffed out by a regime with a capacity for violence.  The Iranian opposition remains hugely fragmented, with many leading activists in prison. The substantial diaspora has struggled to find a unity of voice, though Pahlavi tried last year to bring more people on board with his own movement.  Sanam Vakil, an Iran specialist at the Chatham House think tank in London, said Iran should do better than reviving a “failed” monarchy. She added she was unsure how wide Pahlavi’s support really was inside the country. Independent, reliable polling is hard to find and memories of the darker side of the shah’s era run deep. But the exiled prince’s advantage now may be that there is no better option to oversee the collapse of the clerics and map out what comes next. “Pahlavi has name recognition and there is no other clear individual to turn to,” Vakil said. “People are willing to listen to his comments calling on them to go out in the streets.”

Officially, the EU’s Mercosur trade deal is a defeat for Europe’s farmers. In reality, farm lobbies just can’t stop winning. EU countries endorsed the bloc’s long-delayed agreement with South American nations on Friday, clearing the way for European Commission President Ursula von der Leyen to fly to Paraguay later this week and close a deal that has haunted Brussels for more than two decades. The agreement is going through despite tractor protests, border blockades and fierce opposition from farm groups and capitals including Paris and Warsaw. But the price of getting Mercosur over the line was steep. In the run-up to the endorsement, Brussels quietly stacked the deck in farmers’ favor. Import safeguards were hardened. Controls tightened. And last week, the Commission unveiled a €45 billion budget maneuver allowing governments to shift more money to farmers under the EU’s next long-term budget. Taken together, the concessions mean Mercosur will enter into force wrapped in protections and paired with a farm budget settlement that leaves the sector stronger than before. “Other sectors complain,” said one Commission official involved in agricultural policy. “Farmers block roads.” The official, like others in this story, was granted anonymity to speak freely. The blunt assessment captures a familiar reality inside the EU institutions. Farmers may represent a shrinking share of Europe’s economy, but they remain one of its most powerful political constituencies, capable of reshaping trade deals, budgets and reform agendas even when they fail to block them outright. Ultimately, to get Mercosur over the line, Brussels had to back away from plans to loosen farmers’ grip on the EU budget and shift money to other priorities. PRESSURE THAT WORKS The leverage farm leaders wield rests on more than theatrics. Few officials in Brussels dispute that large parts of the sector are under real strain. Farm incomes are volatile. Costs for fuel, fertilizer and feed have surged. Weather has become harder to predict. Working days are long and isolation is common in hollowing rural communities. “I understand the anger,” Agriculture Commissioner Christophe Hansen told POLITICO in an interview last month, as Brussels prepared for tractors to roll into the EU quarter. Christophe Hansen said the Commission had “heard the concerns of farmers” and responded with “strong and unprecedented support measures.” | Photo by Omar Havana/Getty Images Sympathy for farmers runs high across much of Europe, tied not just to economics but to culture, place and identity. That has always made farm subsidies one of the most politically sensitive lines in the EU budget — and one the Commission knew would be hardest to touch. That sensitivity was on display again last week, when agriculture ministers traveled to Brussels for a hastily convened meeting outside the formal calendar, called in response to farmer protests only weeks earlier. Inside, the language was ritualistic. Praise for farmers. Assurances they were being listened to. Repeated references to unprecedented safeguards and financial backing. Hansen summed it up afterward, saying the Commission had “heard the concerns of farmers” and responded with “strong and unprecedented support measures.” REFORM MEETS REALITY This outcome marks a sharp reversal of earlier ambitions inside the Commission. It’s also a reminder of just how high the stakes are when farm subsidies are in play. The Common Agricultural Policy remains the single largest line in the EU budget, absorbing roughly a third of total spending and anchoring a political contract that dates back to the bloc’s postwar foundations. Public money, in exchange for food security and rural stability, has long been one of Europe’s core bargains. That bargain has survived decades of reform. The CAP has been trimmed, greened and made more market-oriented. But its central promise — that farming would be protected — has never disappeared. After von der Leyen’s re-election in 2024, officials quietly explored loosening how tightly farm spending is locked into the EU budget. Draft ideas for the post-2027 budget would have made farm funds more flexible and easier to redirect to priorities such as defense, climate transition or industrial policy. It was a technocrat’s answer to a crowded budget. It did not survive contact with politics. The proposal landed as farm incomes came under pressure from rising costs, climate volatility and disease outbreaks. Tractors returned to Europe’s streets. Agriculture ministers closed ranks, warning of political fallout in rural heartlands. Farm lobbies mobilized in force. Hansen spent much of his first year in office traveling to farms and meeting unions, describing agriculture as a strategic asset and warning of a “convergence of pressures” hitting the sector. Behind closed doors, he fought to keep large chunks of farm funding protected. Tractors park in front of the Arc de Triomphe during a demonstration of the French agricultural union Coordination Rurale (CR) in Paris, France, on January 8, 2026. | Jerome Gilles/NurPhoto via Getty Images Those efforts didn’t calm farmers’ anger. Instead, pressure became constant, feeding into a series of concessions that steadily narrowed the scope for reform. First came assurances that most farm spending would remain ring-fenced in the post-2027 budget. Then came a new rural spending target, designed to funnel more money back into countryside projects. Last week, to get the Mercosur deal over the line, the Commission went further, proposing that farmers get early access to up to €45 billion from a broader cash pot the EU would have been saving for a rainy day. In effect, much of the post-2027 EU farm budget is on track to be sealed at levels approaching today’s, before negotiations have even begun in earnest. LOSING THE TRADE FIGHT, WINNING THE POLITICS The €45 billion now being front-loaded was originally conceived as crisis insurance. After the Covid-19 pandemic and Russia’s invasion of Ukraine, Brussels concluded that future EU budgets needed more flexibility to respond quickly to shocks. Money reserved for incremental spending reviews was meant to be the first line of defense in the next crisis. If national capitals embrace the Commission’s proposal, much of that money would be locked in for farmers before the cycle even starts, leaving less for other priority areas. Mercosur became the perfect vehicle for that pressure. Long championed by industrial exporters, the deal turned into shorthand for everything farmers fear about global competition and loss of control. The reality is more uneven. Some EU farmers, particularly in high-end food, wine and dairy, stand to gain from better access to Mercosur markets. Others, especially in beef and poultry, face tougher competition. Yet even there, trade analysts have long dismissed fears of South American goods flooding the EU as exaggerated. But nuance rarely survives a protest banner, and even the unprecedented concessions haven’t stopped farmers from protesting. The EU’s largest farm lobby, Copa-Cogeca, said Friday that the process of getting the Mercosur deal across the line “erodes trust in European governance, democratic processes and parliamentary scrutiny at a time when institutional credibility is already under strain.” The group said it would continue mobilizing farmers. Privately, Commission officials express frustration about the farm lobbies’ hardening demands.  One said that even though Brussels bends over backwards to meet farmers’ demands, every concession still falls short for farm leaders. Another pointed to Commissioner Hansen’s efforts to engage in direct dialogue with farmers across the EU. “And still, they talk as if we had done nothing,” the official said, referring directly to Copa-Cogeca. For now, farm leaders are winning.  Von der Leyen might be boarding that plane to South America. But when she returns to Brussels, they will already be gearing up for the next fight, confident they can lose the trade battle and still bend Europe’s policy in their favor.

U.S. President Donald Trump’s aggressive move to block states from regulating artificial intelligence is splitting the tech lobby — and steering its frustration squarely toward David Sacks, the president’s top AI adviser. Sacks, a San Francisco-based investor, largely wrote the executive order Trump signed last week that throws the legal and financial power of the federal government against state AI laws. A controversial move even within the GOP, it was a major win for Sacks, who also acted as its biggest promoter within the White House. Standing next to Trump last Thursday as the president signed the order, Sacks touted its importance. “You’ve got 50 states running in 50 different directions — it just doesn’t make sense,” he said. “We’re creating a confusing patchwork of regulation, and what we need is a single federal standard.” Tech companies largely agree with that view. But they and their lobbyists worry the order — and Sacks’ bulldozing style — have set their interests back by creating new friction in Congress, and derailing a national strategy that recently notched a big win in California. More than half a dozen people closely involved with the issue in Washington told POLITICO that Sacks undercut the tech industry’s effort on Capitol Hill to craft a more permanent federal solution on state AI rules, instead ramming through unilateral action that could turn AI law into a national political fight. “He’s made it a lot harder,” said Brad Carson, president of Americans for Responsible Innovation, an organization pressing Washington for new rules on AI. “Thanks to the preemption fights, you have kids’ safety groups, you have Republican governors, Republican [attorneys general], you have Marjorie Taylor Greene denouncing it. It’s become a thing,” said Carson. “And that’s all because of, really, their efforts just to jam everyone.” Carson’s organization, funded by progressive groups like the Omidyar Foundation, is generally seen as opposed to the tech lobby. But in interviews for this article, numerous people in and around the AI industry said they agree with his claim that Sacks’ order undercuts the congressional effort to preempt state AI rules — and given its tenuous legal status, may not even protect them from state rules in the meantime. “Businesses don’t like uncertainty, OK?” said Bilal Zuberi, founder and managing partner at venture capitalist firm Red Glass Ventures. “And this is an uncertain future for any EO.” The escalating concern about Sacks’ strategy — especially his approach to Congress — shows how the hard-charging, maximalist ethos of the tech billionaires surrounding Trump continues to clash with the cautious give-and-take that has historically led to major legislative wins in Washington. In a statement to POLITICO, a senior White House official framed the executive order as a strategic play to spur Capitol Hill into action. “As the President said, if Congress didn’t act, he would,” said the official, granted anonymity to discuss the administration’s strategy candidly. The official called the order “a big step forward for AI in the United States from facing a patchwork of regulations” — but also said that the administration still wants to work with Congress and that it “incorporated significant feedback in the last few weeks” on the order. TWO WINS, AND A QUICK BACKLASH Sacks is an Elon Musk confidant who had spent little time in Washington before snagging a top White House job overseeing AI and crypto policy. His work as a Silicon Valley investor has also raised concerns about potential conflicts of interest. He serves as a special government employee, a distinction that caps his work at 130 days over a year-long period. He has previously notched two major wins in Washington, helping push through a pro-crypto law and weakening restrictions on microchip sales to China, which benefited the California chipmaking giant Nvidia. But on state AI laws, Sacks’ push for an executive order interrupted the political momentum that industry had been building for a compromise approach. Most notably, Big Tech had hashed out a victory in California, where Gov. Gavin Newsom signed an AI safety law largely supported by the industry, its Democratic critics and pro-business Republicans. Many in the AI lobby had hoped to ride that current into Washington with a new strategy to cut a deal for a federal law that both Democrats and Republicans could support. But that era of good feelings ended when Trump signed the order last week, threatening to deploy the Department of Justice directly against California and other states moving to regulate AI, some of them Republican-led. Within minutes of the order’s signing, Newsom shot back: “President Trump and Davis [sic] Sacks aren’t making policy — they’re running a con.” Other Democrats also piled on, with some on Capitol Hill pledging to introduce bills that would repeal the order. Florida Gov. Ron DeSantis, a Republican, said Monday that his state “has a right” to regulate AI and predicted Florida “would be well positioned to be able to prevail” in any legal challenge. Carson said the order is “only going to embolden a lot of people more on the other side of this question, Republicans included, to do something.” “Do you think Gavin Newsom is going to say, ‘I’m not going to push AI?’ Carson asked. “He may be more eager to do it now than ever.” WHAT WENT WRONG The political breakdown threatens to further undermine the tech lobby’s preferred approach to blocking state AI laws — a deal, passed by Congress, that could bring skeptical lawmakers on board by preempting state regulations in exchange for new federal rules on kids’ safety and frontier AI models. An effort to craft such a deal and insert it into a must-pass defense bill fizzled earlier this month. In looking at what went wrong, six people familiar with the negotiations — industry representatives, AI experts and others involved in talks on Capitol Hill — identified the White House’s aggressive and uncompromising posture. And they pinned that approach largely on Sacks, who the Trump administration has entrusted with the AI acceleration portfolio in Washington. Like many others in this report, these people were granted anonymity to speak candidly about sensitive discussions on a top industry priority. “This was the best opportunity, possibly in the entire Trump administration, to get [state AI] preemption done,” said one person familiar with the defense-bill negotiations. “Most people thought a compromise on policy would be necessary to make it happen. David was unwilling to make that compromise, so we are where we are — and for now, preemption is on life support.” A Trump administration official also told POLITICO that there is “frustration” at multiple agencies over Sacks’ effort to “rush” state AI preemption. Sacks “was very successful in the private sector, [but] he doesn’t understand how government works,” said another person familiar with talks around the AI preemption push. “He doesn’t understand how to build coalitions. He doesn’t understand how to concede on minor things in order to get a win, and he just tries to bulldoze everybody.” A WINDOW OPENS — AND SLAMS SHUT Since AI began its meteoric recent growth, Congress has done little either to rein in the technology or promote it. States, however, have stepped into that gap: Legislators in both parties have introduced AI bills in all 50 states, and this year adopted dozens of new laws in states as diverse as California, Texas, New York and Utah. The industry has been pushing for a moratorium on state laws until a streamlined national regime can be put in place. This summer, a Republican attempt in Washington to insert such a provision into the One Big Beautiful Bill Act crashed and burned in a 99-to-1 Senate vote. In the wake of that failure, tech lobbyists began pulling together the contours of a deal on preemption that they believed could attract Democrats and some concerned Republicans on Capitol Hill. The tech lobby would get its ban on most state AI laws, while Democrats and tech-skeptical Republicans would receive new child safety protections as well as rules on frontier AI models. The defense bill eventually emerged as the most likely vehicle for that compromise. “Right before Thanksgiving, there really was, in an odd way, an aperture for negotiation,” said one top representative for the AI industry. But that representative, as well as other people familiar with the preemption talks, said Sacks’ reluctance to pressure House Majority Leader Steve Scalise (R-La.) or other lawmakers to compromise helped sink a major opportunity for the AI sector. In fast-moving legislative maneuvers like this one, the White House often plays a key role by pressing Congress to compromise. But people familiar with the talks said Sacks had little interest in granting concessions to Democrats or skeptical Republicans — preferring instead to jam Congress by unilaterally preempting state rules with an executive order. The industry representative said the message Sacks delivered to Congress — that Republicans shouldn’t negotiate, but instead just ram preemption through — caused the effort to fizzle out. “He has been probably more intransigent, with people saying to him, ‘No, David, we actually have a chance here,’” the representative said. “‘It’s so hard to pass bills in Washington. We actually have a moment. Let’s just go and figure this out.’” Several people stressed that the failure to preempt state AI laws via the defense bill wasn’t Sacks’ alone. They said Scalise was already wary of a compromise on state AI preemption, as were influential AI safety groups and some Democratic lawmakers. A senior official in Scalise’s office said the House majority leader was open to some kind of a defense-bill compromise on preemption, but that key Democrats failed to engage. Washington Sen. Maria Cantwell, the top Democrat on the Senate Commerce Committee, disputed that characterization, telling POLITICO that her office “had talks all summer” about preemption and “even met with David Sacks.” “We were like, here’s what we need to do,” Cantwell said in early December. “And then all of a sudden, out of nowhere, comes this push to put it in the [defense bill].” One person familiar with the defense-bill negotiations said Sacks and the White House could have pressed both sides to make a deal — but chose instead to pull away from Congress and pursue an executive order. “Everyone was looking for leadership here,” the person said. “We’re in one of those situations where we’re asking, ‘Who’s in charge?’” AN UNWELCOME ORDER If Sacks’ reluctance to compromise weakened the congressional effort to find common ground on preemption, his drafting of a new executive order — one that mostly circumvents Congress and promises to turn state preemption into a court battle — finished it off earlier this month. Multiple people said they believed Sacks saw the order as leverage over Congress, and expected it would force the hand of AI-skeptical lawmakers to approve state preemption. “I think his calculus was, ‘We should show that we’re going to take action unless Congress does,’” said one AI policy expert familiar with the negotiations. But the plan backfired. In late November, a draft of the order leaked — and its brute-force approach sparked a flood of public pushback from Democratic legislators and state governors, including Republicans. The AI expert said the draft order caused both sides to “dig in their corners, double down on the positions they were holding.” It was a predictable outcome for Washington veterans, who had believed that any White House attempt to strongarm Congress would sabotage a compromise. The executive order signed by Trump last Thursday is meant to help industry by limiting states’ ability to regulate AI. But most tech lobbyists believe the order is on shaky legal ground, providing scant relief from state rules even as it puts a congressional compromise further out of reach. “I welcome the consistency of having one single rulebook,” said Dorna Moini, CEO of Gavel, an AI and automation suite for lawyers. “But the reality is that the uncertainty isn’t reduced. It’s whiplash, and now there is this chaos as to whether the preemption is going to be valid.” “This needs to be done by Congress,” said one tech lobbyist last Thursday, predicting legal challenges to actions taken under the executive order. After POLITICO contacted the White House for this report, two tech firms reached out to praise one aspect of the order, its call for Congress to preempt state AI laws. “The EO helps underscore the urgency of getting this done correctly,” said Luther Lowe, head of public policy at San Francisco-based venture capitalist firm Y Combinator. Lowe expressed a desire to “work with Congress to make sure this is done correctly.” In a statement, Chris Lehane, head of global affairs at OpenAI, said his company is “aligned with the Executive Order’s clear language about the need for federal legislation to establish a national framework as an important step towards helping to set up the much needed federal legislation in 2026.” Neither Lowe nor Lehane addressed the meat of the executive order, which directs federal agencies to target states that pass AI laws. CAN THE WHITE HOUSE GET TO ‘YES’? A handful of lobbyists and industry-friendly experts defended Sacks for this report. “I’m not worried about Sacks’ chops in terms of his ability to navigate Congress and get things done,” said Collin McCune, head of government affairs at venture capitalist firm Andreessen Horowitz, which has close ties to the Trump White House. McCune noted that Sacks “pushed through an incredibly complicated, historic crypto bill — that was his first thing out of the gate.” But others are now wondering if Sacks has become a liability in the AI industry’s quest to preempt state AI rules. And if Sacks refuses to bless a viable legislative deal on preemption, some say he should be sidelined. “He either does have to go, or he has to do the world’s biggest PR campaign,” said one person familiar with the preemption talks in Washington. “He will have to do a real tour across town, and really change his attitude in a way that would surprise me if he were able to pull it off.” There are some early signs that Sacks may moderate his take-no-prisoners approach to a state AI moratorium. Sacks recently convened a special meeting with GOP governors and staff where he sought to assuage their concerns that the executive order would undermine states’ ability to protect kids online, according to one person familiar with the conversation. The final order was slightly softened from its earlier draft, including a carveout that lets states regulate AI’s impact on kids. And at the signing ceremony for the order, Sacks pledged to “work with Congress” to “define [a] framework” for AI. Still, many in industry remain unconvinced that Sacks — or Trump — are ready to compromise. At a White House holiday party earlier this week, the president indicated that he hopes Congress will codify his executive order on state AI laws. “But even if we can’t, it’s good for three years and two months,” Trump added. As the new year approaches, the AI industry is watching the White House closely. “Can they reach a deal on a legislative framework, and can they keep the aperture for a deal open?” the top industry representative asked. “Or does the administration continue to do things that poison the well?” Cheyenne Haslett contributed to this report.

Brussels is about to get another reminder that tractors don’t run on promises. Despite a flood of legislative goodies and concessions, some 10,000 farmers from all 27 EU countries are expected to descend on the EU quarter for what the bloc’s main farm lobby Copa-Cogeca says will be the biggest farm protests Brussels has seen this century. Tractors are expected. Speeches are planned. As for manure or burning hay? That, apparently, depends on who shows up. “We’ve told everyone to behave,” said Peter Meedendorp, the head of Europe’s young farmers group CEJA. “But maybe the group from northern France — they are more radical — we can’t say what they’ll do.” Even the EU’s agriculture commissioner admits the protest defies a single explanation. Some farmers are coming over trade. Others over the next EU budget. Others over animal diseases or green rules.  “It’s difficult to say they are coming for one or the other reason,” Christophe Hansen told POLITICO. “There are several reasons — and they are not the same depending on where the farmers are coming from.” That helps explain why farmers are back in Brussels — again — even as the European Commission insists it has bent over backward to meet their demands. From shielding farm payments in the next EU budget, to rewriting pesticide rules and slowing down trade deals, Brussels says it’s trying. Farmers say it’s still not enough. Below, we break down the main grievances driving Thursday’s march — and rate both the EU’s response and the farmers’ level of anger using our highly scientific pen-and-poop scale: Five pens for a robust policy response; a five-manure rating for peak anger.  BUDGET ANXIETY The complaint: Farmers fear their slice of the EU budget will be trimmed to fund other priorities. EU answer: Keeping roughly €300 billion in EU payments flowing to farmers after 2027. Policy response rating: Tough manure rating: As Brussels braces for a brutal fight over the next EU budget, agriculture has — for the most part — escaped the axe. While other policy areas are being told to expect trade-offs, farming has won rare protections. Hansen has locked in long-term guarantees for direct payments to farmers and added new targets aimed at keeping rural areas economically viable, just months after the proposal was unveiled. Officials note no other sector enjoys that kind of treatment. It didn’t come easily. The Commission’s budget officials had eyed agriculture as one of the few pots big enough to help bankroll other, more strategic priorities. Hansen drew the line. Farmers, however, say that after decades of the Common Agricultural Policy being a given, guarantees on paper don’t settle what their share of the EU budget will look like once negotiations begin in earnest. TRADE TENSIONS The complaint: Free-trade deals flooding the EU market with unfair foreign competition.  EU answer: Refusing to adopt the Mercosur trade agreement until backstops are inked into law — potentially delaying the whole deal. Policy response rating: Tough manure rating: The Commission is determined to sign a deal with the Mercosur countries by the end of the year that would make it easier for a limited amount of beef, poultry and other agricultural goods to enter the bloc. That’s sparking outrage among farmers in major producing countries like France and Poland. The EU is in the process of finalizing “safeguard” measures to protect these sectors that could be activated if prices or import volumes change drastically as a result of the agreement — but farmers aren’t convinced.  “It’s the cumulative effect,” said Francie Gorman, president of the Irish Farmers’ Association who is driving his tractor to Brussels all the way from Dublin. “Every time a trade deal is done, it seems to us like farming becomes a bargaining chip and that farmers are sold out.” Sure enough, the farmers’ trade demands go beyond stopping the Mercosur agreement. They want other trading partners to be forced to meet EU production standards to export their products to the bloc, and are calling for “balanced” imports from Ukraine to avoid undercutting producers within the bloc. ENVIRONMENTAL RULES The complaint: EU regulations make life more difficult for Europeans farmers, especially compared with the competition abroad. EU answer: Environment tape-cutting and new rules making it easier to access pesticides in Europe and harder to use them abroad. Policy response rating: Tough manure rating: No one can say the Commission isn’t trying to win over farmers on pesticides. Over the past week, they’ve announced bills that would introduce unlimited approvals for many pesticides and give farmers an extra year to phase out toxic substances. “I appreciate they are making necessary steps,” said Meedendorp, conceding that yes, on some issues, the Commission is doubling over backward to appease farm groups. But “being happy on one file … doesn’t mean we don’t have other problems.” A slew of proposals on trade, particularly a plan that would essentially force farmers in third countries to stop using pesticides banned in the EU, are also a play to even the field for European farmers.  Those too are welcome, though farmers are skeptical that border checks will actually stop imports of, say, Brazilian sugar beets grown with neonicotinoids.  And they argue the Carbon Border Adjustment Mechanism for fertilizers, set to go into force on Jan. 1, should be postponed because of its “drastic impact” on fertilizer prices.  Other Commission efforts have fallen flat. The farm lobby Copa-Cogeca dismissed a recent environmental simplification bill as only “cosmetic changes.” NATIONAL GRIEVANCES  The complaint: In France, par exemple, they’re culling the cows to fight the spread of disease.  EU answer: Paris is responding to lumpy skin disease by taking an even harder line against Mercosur. Policy response rating: Tough manure rating: French farmers are among the fiercest opponents of Mercosur. But like most in the tractor convoy, they’ve got plenty of ire for their own capital.  Paris is fighting the spread of lumpy skin disease, a cattle plague that spreads rapidly and causes major production losses, by mandating the systematic culling of infected herds. In opposition to that protocol, several French farmers — who argue that only infected animals, not entire herds, should be culled — have once again begun blocking highways with their tractors to draw public attention. The movement has been driven by the hard-line Coordination Rurale, the country’s second-largest farmers’ union, which is often associated with the far right. The largest union, the FNSEA, has also warned that protests would become “much more significant” if the Mercosur trade deal is signed. Wary of a prolonged standoff with a profession that enjoys broad public sympathy, the government has sought to show it is working around the clock to bring the situation under control. In addition to pushing to postpone Mercosur, Prime Minister Sébastien Lecornu is holding daily meetings to address the lumpy skin disease outbreak and has made the rapid delivery of vaccines to farms across France a top priority. GENERAL DISCONTENT  The complaint: It’s a hard life for farmers and EU is making it worse EU answer: Sympathy, simplification pledges and tweaks around the edges. Policy response rating: Tough manure rating: For many farmers, Thursday’s protest isn’t really about one regulation or one trade deal. It’s about everything. It’s about 14-hour days, seven days a week. About animals that don’t care if it’s a weekend or a holiday. About paperwork done late at night, after the milking is finished, written in a language that can feel like it comes from another planet. About being told to “diversify” or “innovate” while barely breaking even. It’s about isolation. Rural communities emptying out. Neighbors retiring with no one to take over. Mental health strains that Brussels rarely talks about — and struggles farmers say few outsiders understand. It’s also about money. Farmers are price-takers in global markets they don’t control, squeezed between supermarket buying power, volatile commodity prices and rising costs for fuel, fertilizer and feed. When prices spike, the gains rarely reach the farm. When they crash, farmers absorb the hit. Then come the animal diseases. The forced culls. The climate blame. And the feeling that decisions shaping livelihoods are taken far away, by people who have never set foot in a barn. That anger hardens into resentment. This is the one grievance Brussels can’t legislate away. And it’s why, even when the Commission bends, farmers keep coming back.

Brussels’ battle over whether plant-based foods can be sold as “veggie burgers” and “vegan sausages” ended the year in stalemate on Wednesday, after talks between EU countries and the European Parliament collapsed without a deal. French centre-right lawmaker Céline Imart, a grain farmer from southern France and the architect of the naming ban, arrived determined to lock in tough restrictions on plant-based labels, according to three people involved. Her proposal, dismissed as “unnecessary” inside her own political family, was tucked inside a largely unrelated reform of the EU’s farm-market rulebook. It slipped through weeks of talks untouched and unmentioned, only reemerging in the final stretch — by which point even Paul McCartney had asked Brussels to let veggie burgers be. The Wednesday meeting quickly veered off course. Officials said Imart moved to reopen elements of the text that negotiators believed had already wrapped up, including sensitive rules for powerful farm cooperatives. She then sketched out several possible fallbacks on dairy contracts — a politically charged issue for many countries — but without settling on a clear line the rest of the Parliament team could rally behind. “And then she introduced new terms out of nowhere,” one Parliament official said, after Imart proposed adding “liver” and “ham” to the list of protected meat names for the first time. “It was very messy,” another Parliament official said. EU countries, led in the talks by Denmark, said they simply had no mandate to move — not on the naming rules and not on dairy contracts. With neither side giving ground, the discussions ground to a halt. “We did not succeed in reaching an agreement,” Danish Agriculture Minister Jacob Jensen said. Imart insisted that the gap could still be bridged. Dairy contracts and meat-related names “still call for further clarification,” she said in a written statement, arguing that “tangible progress” had been made and that “the prospect of an agreement remains close,” with negotiations due to resume under Cyprus in January. “We did not succeed in reaching an agreement,” Danish Agriculture Minister Jacob Jensen said. | Thierry Monasse/Getty Images) Dutch Green lawmaker Anna Strolenberg, who was in the room, said she was relieved: “It’s frustrating that we keep losing time on a veggie burger ban — but at least it wasn’t traded for weaker contracts [for dairy farmers].” For now, that means veggie burgers, vegan nuggets and other alternative-protein products will keep their familiar names — at least until Cyprus picks up the file in the New Year and Brussels’ oddest food fight resumes.