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

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

BRUSSELS — After close to a decade of talks, the European Union is closing in on signing a trade deal with Mexico. U.S. President Donald Trump could yet sink it.  The deal updates a previous free trade agreement from 2000, and was concluded in January 2025. Trade specialists on both sides have since been casting it in bullet-proof legal language and translating it into all of the EU’s 24 official languages. That would pave the way for a signing ceremony: a plum photo op for Commission President Ursula von der Leyen, Council President António Costa and Mexican President Claudia Sheinbaum.   The EU-Mexico Modernized Global Agreement, as it is called, should be an easy win for both sides. It largely excludes the thorny issue of agriculture, and cements an alliance between wealthy European economies and a populous Latin American democracy with an enviable geography, straddling both the Atlantic and Pacific, and sitting just south of the U.S. border.  But the U.S. president remains a wild card. Mexico is the U.S.’s number one trade partner. Annual trade in goods between the two countries amounts to $840 billion, 10 times Mexico’s trade with the EU. And while Trump has turned his wrath of late on northern neighbor Canada, he first rode to power on a promise to build a wall on the Mexican border. He has, since returning to the White House, imposed extra tariffs and even threatened military strikes against Mexican drug cartels. The timing of the revision of the United States-Mexico-Canada Agreement (USMCA) — the successor of NAFTA — adds another wrinkle. The free-trade deal between the three North American countries, is up for a review at the start of July. The Trump administration has made noises that it wants major revisions — or even to sink it altogether. Signing a deal with the EU, with all the pomp and fanfare that entails, risks antagonizing a White House that has made dominating the Western hemisphere under the “Donroe Doctrine” a strategic priority. One EU diplomat who asked to remain anonymous said that the Mexican side was slow-walking negotiations precisely for fear of U.S. retaliation. More broadly, Trump’s trade agenda is in disarray after the U.S. Supreme Court last week struck down the sweeping tariffs he imposed last year. Trump has announced a new, temporary global tariff of 15 percent, under Section 122 of the Trade Act of 1974. For Mexico, the effective rate would be lower, at 5.2 percent, thanks in large part to the USMCA. BAD TIMING  The updated EU-Mexico agreement has had a difficult birth. The two sides first announced that they had reached an agreement in 2018. But the change of the government in Mexico with the election of the left-nationalist Morena party, led by Andrés Manuel López Obrador, reset talks. Obrador had made state control of energy utilities a key plank of his program, requiring a new round of negotiations. But in January last year, the EU announced once again that the two sides had reached a deal. The revised agreement clears the way for more integration of Mexico’s manufacturing-heavy economy with European industry, particularly in the automotive sector. It also paves the way for more European investment in Mexico.  For Mexico, it would be one way to lessen its overwhelming dependency on the U.S. economy. But it’s that same dependency makes the revised deal delicate. “The U.S. is an important variable for trade for every country, but for Mexico it’s a crucial partner,” said Renata Zilli, a researcher at think tank  European Centre for International Political Economy who is based in Mexico City. Zilli explained that, over the past three decades, Mexico had deepened its integration in the U.S. supply chain. American businesses had taken advantage of lower salaries to open up factories south of the border which then shipped everything from car and airplane parts, to toasters and refrigerators, back to the U.S. The end result had been respectable growth and a more industrialized economy compared with commodity-heavy South American economies. But it’s also left Mexico increasingly dependent on the U.S. Trump has in his second term, meanwhile, amped up the hostile rhetoric, with threats of military action against drug cartels south of the border, something that would precipitate a political crisis. The capture of Venezuelan leader Nicolás Maduro by U.S. special forces has further escalated tension in the region.       “There’s a mixed agenda on security issues, on fentanyl. This complicates a lot the trade agenda,” said Zilli. “Our priority is trying to manage the relationship with the U.S.”  The exact timing of a signature remains unclear. One person familiar with the negotiations, and who asked to remain anonymous, says that the two sides are aiming to get a deal done by the end of June. Meanwhile, the USMCA agreement is up for revision in July.    Juan Carlos Baker, former Mexican vice minister of trade who is now an academic specializing in international trade at the Panamerican University, said signing the modernized agreement sooner rather than later could benefit Mexico, precisely by showing the Trump administration that the country has other friends.  “What we need to do is expand our options,” said Baker, who helped negotiate the agreement before the election of Morena. He said that he believed that there in the end, the U.S. would ratify an updated USMCA.  “It’s just posturing,” added Baker. “We buy the most and sell them the most. If you take Mexico out of the supply chain, you take the wheel off the car.”

Listen on * Spotify * Apple Music * Amazon Music Während Friedrich Merz in Riad und Katar wieder in die Rolle des „Außenkanzlers“ schlüpft, herrscht in Berlin politische Windstille. Doch hinter dem „Winteridyll“ an der Spree brodelt es: Landtagswahlkämpfe und aufgeschobene Reformen setzen die Koalition unter Druck. Rasmus Buchsteiner analysiert, ob die Regierung gerade wirklich arbeitet oder nur eine riskante Pause einlegt, bevor das „Reformfenster“ im Sommer endgültig zuschlägt. Im 200-Sekunden-Interview geht Juso-Chef Philipp Türmer zum Angriff auf die CDU über und warnt vor einem „Großangriff auf das soziale Sicherungssystem“. Er stellt klar, warum die SPD keinen „dänischen Weg“ einschlagen sollte, während die eigene Partei am Wochenende den Prozess zum neuen Grundsatzprogramm starten wird. ⁠Neue Recherchen von Frederik Schindler von WELT⁠ decken eine für die AfD-Chefin Alice Weidel sehr unliebsame Personalie in Bayern auf: Der Bundessprecher der Identitären Bewegung ist Mitglied der AfD. Ein direkter Bruch der Unvereinbarkeitsliste, die Weidel in Erklärungsnot bringt und die interne Machtfrage zwischen Berlin und den Landesverbänden neu entfacht. Und: ein kurzes Gespräch mit Cathrin Wilhelm von ⁠Avilus⁠ über die Anwendung von Drohnen, die vielen Deutschen so bisher unbekannt sein dürfte. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. ⁠Jetzt kostenlos abonnieren.⁠ Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: ⁠@gordon.repinski⁠ | X: ⁠@GordonRepinski⁠. POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 information@axelspringer.de⁠ Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna

Danish Prime Minister Mette Frederiksen hailed the support Denmark and Greenland are getting from European countries over U.S. President Donald Trump’s threats to impose new tariffs in his bid to gain control of the Arctic island. “I am pleased with the consistent messages from the rest of the continent: Europe will not be blackmailed,” Frederiksen wrote in a statement on Sunday reported by the BBC and other media. “The Kingdom of Denmark is receiving great support,” she wrote, describing how she has been in “intensive dialogue” with allies including the U.K., France and Germany. “We’re not the ones looking for conflict,” Frederiksen stated. “At the same time, it is now even clearer that this is an issue that reaches far beyond our own borders,” she added. Swedish Prime Minister Ulf Kristersson was one of Frederiksen’s colleagues stressing that European countries “will not let ourselves be blackmailed.” “This is an EU issue that affects many more countries than those now being singled out,” Kristersson said in a post on X on Saturday. Frederiksen’s comments on Sunday came after Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, and the U.K. — the eights countries targeted by Trump’s tariff threat — banded together to defend the “pre-coordinated Danish exercise” in Greenland that was cited by Trump in his Truth Social post about the new tariffs. “It poses no threat to anyone,” the capitals argued, reaffirming that they “stand in full solidarity with the Kingdom of Denmark and the people of Greenland.” The U.S. threats of tariffs “risk a dangerous downward spiral,” the countries added.

BRUSSELS — Senior EU lawmakers want the European Parliament to freeze the EU-U.S. trade deal in response to Donald Trump’s threats to take over Greenland. The deal was deeply unpopular across party lines as it was seen as overwhelmingly favoring Washington, but European Commission President Ursula von der Leyen sold it as the price of keeping Trump onside. However, Trump ratcheted up his rhetoric this week, saying “we need Greenland from the standpoint of national security,” and has repeatedly refused to rule out military intervention. As a result, MEPs from the center-left, liberal, green, and left-wing groups say the deal should be blocked. “I cannot imagine that in the current situation MEPs would vote for any trade measures benefiting the U.S.,” the Greens’ top trade lawmaker and chair of the Internal Market Committee Anna Cavazzini told POLITICO.  “We should have such a discussion, it’s inevitable,” added Brando Benifei, the Socialist lawmaker who chairs Parliament’s delegation for relations with the U.S. Under the deal, most EU exports are subject to a 15 percent U.S. tariff. To complete its side of the bargain, the EU also needs to pass legislation to abolish all tariffs on U.S. industrial goods, including the 10 percent it currently slaps on U.S. cars, and ease market access for some farm produce and seafood. “If we are to give it the green light, we need guarantees that the U.S. will stop its tariffs and its security-related threats,” said Renew’s trade heavyweight Karin Karlsbro. “The United States cannot take the EU’s support for the trade agreement for granted.”  Danish MEP Per Clausen, of The Left group, has circulated a letter among all MEPs asking them to support his call for Parliament President Roberta Metsola to freeze parliamentary work on the deal. The deadline for adding signatures is Tuesday. “If we accept this agreement while Trump is threatening the international order and making direct territorial claims against Denmark, it will be seen as rewarding his actions — and will only add fuel to the fire,” Clausen said.  The biggest political group in the Parliament, the European People’s Party (EPP), remains noncommittal. “These are separate matters,” said Željana Zovko, the group’s negotiator on the U.S. file, when asked whether the Parliament should freeze the trade deal over Greenland. The EPP’s top trade MEP, Jörgen Warborn, left the door to blocking the trade deal ajar. While the EU “must preserve” the deal as a basis for stable transatlantic trade, he said, “we are ready to act if necessary.” But the EPP lacks the numbers to pass the deal with right-wing and far-right allies alone. A united front by the Socialists, Renew and the Greens would be enough to put the agreement on ice.  The Parliament’s U.S. deal negotiators will meet on Wednesday to discuss next steps.

OTTAWA — Canada’s ambassador to the United States and its chief trade negotiator with the Trump administration said she is stepping down in the new year. “I have advised Prime Minister [Mark] Carney that I will be ending my tenure in the United States in the New Year. It has been the greatest privilege of my professional life to have served and represented Canada and Canadians during this critical period in Canada-U.S. relations,” Kirsten Hillman said in her resignation letter posted on X on Tuesday afternoon. Hillman’s departure comes after eight years in Washington, as the Carney government navigates President Donald Trump’s abrupt cancellation of bilateral trade talks in October and prepares for next year’s review of the United States-Mexico-Canada Agreement. Hillman, a trade lawyer and career diplomat, was a key member of the Canadian negotiating team that faced off against Trump’s first administration during the talks that led to the creation of the USMCA. “While there will never be a perfect time to leave, this is the right time to put a team in place that will see the CUSMA Review through to its conclusion,” she wrote, using the Canadian acronym for the new North American trade pact. Despite the current trade disruptions and the aftermath of navigating the Covid-19 pandemic, Hillman said her greatest accomplishment was working to secure the release of two Canadian men who spent more than 1,000 days arbitrarily imprisoned in China from 2018 to 2021. “In a relationship as deep and complex as ours, pressing and consequential issues arise almost daily,” she wrote. “Yet none was more personal to me than the hundreds of hours I spent with U.S. and Chinese counterparts working for the release of Michael Kovrig and Michael Spavor.”

BELÉM, Brazil — Gov. Gavin Newsom may be a climate president in waiting, but as a governor, he has one glaring weakness: He can’t sign treaties with other countries. Newsom is returning to a time-tested technique to exercise soft power at COP 30 this week: signing voluntary agreements, joint statements and other pointedly non-binding memorandums of understanding. Newsom and his administration inked new pacts with a bevy of governments both national and local, including Nigeria, the German state of Baden-Württemberg and the host Brazilian state of Pará. They join a long roster of agreements stretching back decades, including a program former Gov. Arnold Schwarzenegger set up to promote collaboration on forests and climate with governors from places like Mexico, Côte d’Ivoire and Indonesia and former Gov. Jerry Brown’s Under 2 Coalition, launched with Baden-Württemberg, to promote subnational climate action. “It’s a part of a building,” Newsom told POLITICO while in Brazil. “It’s about continuity. It’s about calling cards. It’s about relationships.” There are limits to the pacts that draw sniffs from some longtime climate diplomacy observers. Many of them focus on research, but California’s public universities, under pressure from Trump, haven’t necessarily rushed to defend international researchers. They also often mention trade, but nothing has emerged in terms of deals circumventing Trump’s tariffs. But the agreements represent some of the only leverage California really has in the international arena. Brown sometimes required MOUs as a condition of meeting with the foreign officials clamoring for his time. And Newsom likes them: He’s been a driving force behind an increase in bilateral pacts, aides said, this year alone with Denmark, Kenya and individual states in Brazil and Mexico. When he looked earlier this year at a map of agreements California had signed, he remarked on the number of jurisdictions that weren’t colored in, one said. While in Brazil, he fielded on-the-fly pitches from business and NGO leaders for agreements on strengthening economic ties between Brazil and California and incorporating Indigenous perspectives into forest policy. “Let’s get it done,” he told Natural Resources Secretary Wade Crowfoot on Tuesday before slipping into an at-capacity room to excoriate Trump and promise California as a “stable and reliable partner” through changing administrations. Some of the pacts do lead to policy and technical exchanges. California policy experts have hosted foreign counterparts or traveled abroad to influence policies such as the creation of new carbon markets; conversely, they’ve learned about wildfire fighting from places like Australia, and groundwater mapping from Denmark. Some serve as symbolic markers: In Monday’s joint statement with Baden-Württemberg, the two states don’t promise any particular result, but rather to “encourage each other to be more ambitious.” Perhaps the most substantive agreement Newsom’s administration signed in Brazil was with Chile, whose environmental representatives he met in Belém on Wednesday. In the meeting, they talked about sharing data captured by methane-detecting satellites that California launched with the nonprofit Carbon Mapper and several universities and philanthropies. “The utilization of that open data in Chile, with the resources that we’re providing in the absence of federal resources, is just a tangible example of those opportunities to highlight, promote and partner,” Newsom said in Brazil on Wednesday. Notably absent from his agenda during his fly-by visit of the climate talks: any new joint major announcements or agreements with the U.S.-based climate alliances he’s formally chairing. Gov. Michelle Lujan Grisham of New Mexico was in Belém too, but Newsom left Wednesday for a trip deeper in the Amazon without issuing any joint statements.

President Donald Trump touches down in Malaysia Sunday seeking to bolster economic ties with the region amid a high-stakes trade war with China. Missing from the agenda: finalizing the splashy trade deals he announced this summer with three of Southeast Asia’s biggest economies. The president in July touted agreements with Vietnam, Indonesia and the Philippines as the White House raced to secure as many trade deals as possible before a self-imposed deadline to raise tariffs. But beyond the celebratory social media posts, the White House provided little detail on the terms to lower U.S. duties. The three countries openly disputed some of the things Trump claimed they’d agreed to. And aside from a fact sheet on the Indonesian agreement, the administration has not released further updates in the ensuing months. Trump is not expected to announce any new progress on the negotiations in Kuala Lumpur, as talks with the three governments drag on, according to three people with knowledge of the talks, although he is poised to unveil new preliminary deals with neighboring Cambodia and Malaysia. The struggle to finalize terms with Vietnam, Indonesia and the Philippines highlights the fragile nature of the handshake agreements the White House rolled out en masse this summer, which didn’t address thorny areas of dispute. That’s particularly true when it comes to the issues that involve China, including Beijing’s use of Southeast Asian countries as a transit point to duck U.S. tariffs. The failure to resolve those issues puts Trump in a weaker position going into a make-or-break meeting with Chinese leader Xi Jinping, currently planned for Oct. 30. “These are very complex issues,” said Daniel Kritenbrink, who served as U.S. ambassador to Vietnam in the first Trump administration. “I’m not surprised it’s taken as much time as it has, because it’s really hard to wave a magic wand and solve these issues.” “You can agree in principle on a top line tariff rate pretty quickly, but then to actually come up with an implementation plan… that’s a much more complex piece of business,” Kritenbrink added. Chief among those issues are U.S. demands to prevent China from skirting tariffs by sending goods through other countries. Trump has already imposed a 40 percent tariff on these so-called transshipped goods — items shipped through another country in order to avoid high duties. But it’s also looking to impose new “rules of origin,” in an attempt to limit China’s practice of dodging tariffs by moving Chinese-made parts to a second country for assembly. Southeast Asian countries “have said over and over and over again, they don’t want to choose between the U.S. and China,” said Barbara Weisel, a former U.S. trade negotiator now with the Carnegie Endowment for International Peace. “But they understand that through these reciprocal trade agreements, they could well find themselves having to choose, and directly in the crossfire of the U.S.-China trade war and at the mercy of both.” That’s particularly the case for Vietnam, which has seen explosive growth in its exports to the United States since 2017, partly as a result of the tariffs that Trump imposed on China during his first term. In response, importers shifted large amount of production to Vietnam, and, the U.S. government alleges, so did China. Still, the administration may be able to come away with some trade victories on the trip, which starts with the ASEAN Summit, a biannual meeting of the regional group’s 10 nations. A senior administration official told reporters Friday that Trump will sign a “series of economic agreements” that “will further reshape the global economic order and secure more investments that will create high paying jobs and advance the reindustrialization of America.” “This will include forward-looking and tough trade deals that will benefit American workers, exporters, farmers, small businesses and digital innovators. He will also enter into critical mineral agreements that will rapidly unlock the region’s resources to create reliable industrial supply chains to support a resilient and prosperous world economy,” said the official, who was granted anonymity per the terms of the call. U.S. Trade Representative Jamieson Greer has been actively negotiating with Cambodia and said earlier this month that the two had made significant progress in achieving a more fair and reciprocal trade relationship and securing commitments that break down longstanding trade barriers and tariffs.” Cambodia is a relatively small trading partner with a lopsided trading relationship with the United States. Last year, U.S. companies exported just $319 million worth of goods to the country, while Cambodian suppliers exported $12.3 billion worth of textiles, agricultural goods and other products to the United States. But Trump is also expected to announce a more significant breakthrough with Malaysia, one of the United States’ largest trading partners in the region, according to two people familiar. Kritenbrink said those talks have also made progress, and the two countries could be poised to announce a trade agreement while Trump is in Kuala Lumpur. U.S. two-way trade with all the ASEAN countries totaled about $475 billion last year, compared to $582 billion with China. Vietnam, Thailand, Malaysia and Singapore accounted for about 80 percent of that commerce, followed by Indonesia and the Philippines. Still, China is the biggest trading partner for ASEAN as a whole, highlighting the difficult choice the Trump administration is forcing the countries to make. Two-way trade totaled $984 billion in 2024, according to the Chinese state-run Xinhua News Agency. For months, the White House implied that there would be a first mover advantage for any country that struck a trade agreement ahead of Trump’s shifting deadline for the imposing global “reciprocal” tariffs he unveiled in April. But despite being among the first to strike a framework deal with the administration this summer, the Philippines, Indonesia and Vietnam were stunned to see Trump issue virtually the same 19 to 20 percent tariff on most of Southeast Asia in August, including countries that did not offer nearly the same concessions. For Vietnam, the trouble started almost immediately after news of the trade deal hit Trump’s Truth Social page. Blindsided by both a tariff and transshipment rate that Vietnamese officials said was higher than expected, the government never formally accepted the agreement. That’s left both sides stuck in talks that are still centered on the baseline tariff rates both countries plan to impose. Negotiators haven’t yet begun discussions on transshipment — a complicated topic for Vietnam, which has become a growing manufacturing hub in the wake of Trump’s first term trade war with China. The administration has taken a two-pronged approach to transshipment. The first involves pushing countries to crack down on illegal efforts to dodge tariffs by moving products through third countries before they arrive in the U.S. But they also want to step up scrutiny of the origins of component parts used in countries’ exports — what’s known as “rules of origin” — to determine how high a tariff those goods should face. “When the President says ‘transshipment,’ I think he’s also focused, maybe primarily on foreign content, especially Chinese content,” Kritenbrink said. “That’s a much harder, trickier piece of business, both to control and to actually monitor and measure as well.” It remains unclear how restrictive the United States intends to be in either negotiating, or unilaterally imposing, new rules of origin, or how expansive its definition of transhipment will be, Weisel said. Countries in the region are also resisting U.S. requests to include “economic security” provisions in the trade agreements, which could require them to restrict exports of certain high-tech goods to the world’s second-largest economy and to limit Chinese investment in certain sectors of their economy. The ASEAN nations are “concerned about the reaction from China if they implement measures,” Weisel said, particularly after Xi warned Southeast Asian countries this year not to cooperate with the U.S. against China. A third big stumbling block as the United States pushes to wrap up individual negotiations with ASEAN countries is the rising number of U.S. national security trade investigations under Section 232 of the 1962 Trade Expansion Act, any of which could lead to new tariffs on ASEAN goods after they have finalized a reciprocal trade deal with the United States. “It would be politically very difficult for them to have accepted a bilateral deal now, only to face in coming months a new 232 that significantly impacts their exports,” Weisel said. The multiple hangups — coupled with the sheer amount of trade deals U.S. negotiators are attempting to balance — leaves it unlikely that any formalized deals will happen this trip, let alone this year. “Unfortunately, the reality continues to reflect that reaching “final” reciprocal tariff deals with most ASEAN nations is not likely to happen in 2025,” said one industry official, who was granted anonymity to discuss the sensitive negotiations. Phelim Kine and Ari Hawkins contributed to this report.

Hungarian Prime Minister Viktor Orbán said Friday that Budapest was working on how to “circumvent” American sanctions on Russian oil and gas companies.  U.S. President Donald Trump announced Wednesday he was imposing “tremendous” new sanctions on Russia’s multinational Lukoil and its state-owned Rosneft, in the first such measures since he took office.   While the details are still being firmed up, the sanctions could force Moscow to shut off its remaining oil pipelines to Europe — and that’s bad news for Hungary, which gets the majority of its supplies from Russia.   Orbán — a longtime Trump ally — was defiant, however, claiming the “battle is not over yet,” and insisting Budapest will find ways to get around Washington’s sanctions.   “There are indeed sanctions in place against certain Russian oil companies,” he told the radio program “Good Morning Hungary.” “I started the week by consulting with MOL executives several times, and we are working on how to circumvent these sanctions,” Orbán said, referring to Hungary’s MOL energy company.   “Anyone who wants utility price reductions must defend Hungary’s right to buy oil and gas from Russia,” he added.   The Hungarian leader has previously argued that Budapest has no choice but to rely on Russia for cheap oil and gas due to its landlocked geography, insisting prices would explode for consumers otherwise.  Even as the rest of the EU has weaned off Moscow’s exports since Russian President Vladimir Putin’s full-scale invasion of Ukraine in the winter of 2022, Hungary and neighboring Slovakia have remained deeply dependent on the Kremlin to keep the lights on, claiming they have no real alternatives.  That’s despite the insistence of Croatia that Zagreb could meet both Hungary and Slovakia’s energy needs with its own capabilities, including the Adria oil pipeline.