The EU has sent assistance to Moldova after a Russian attack on a Ukrainian hydroelectric station, which is suspected of polluting the Dniester River, left hundreds of thousands without safe drinking water. The river, also known as the Nistru river, flows through both countries. The Russian attack took place upstream of Moldova. “Russia’s attack on Ukraine’s Novodnistrovsk hydropower plant has spilled oil into the Nistru River, threatening Moldova’s water supply,” wrote President Maia Sandu. “Russia bears full responsibility,” she added. The city of Bălți and the surrounding areas in northern Moldova have been without running water for several days, according to Prime Minister Alexandru Munteanu.  “Our teams are working around the clock on the ground, using all available resources, and our priority is to restore the water supply. However, this will only be done under conditions that fully ensure people’s safety and health,” wrote Munteanu. Russia’s ambassador to Moldova, Oleg Ozerov, was summoned by the government on Monday to answer for the damage, and was “gifted” a plastic bottle filled with polluted water from the Dniester River. Brussels triggered its Civil Protection mechanism on Tuesday to provide emergency assistance to the affected areas of the Moldova, which is an EU candidate country. Luxembourg and neighboring Romania have sent rescue supplies, it was announced today. Russia has frequently targeted Ukraine’s energy infrastructure since invading the country more than four years ago. Neighboring countries have been affecting previously, too, with Russian drones sometimes violating EU countries’ airspace.

President Donald Trump’s historic tariffs, some of which the Supreme Court struck down Friday, remade trade in 2025 — and no country experienced as big a shift as China. Thanks in large part to U.S. tariffs that at one point reached triple digits, the Asian manufacturing powerhouse’s share of the overall U.S. import market fell to 9 percent in 2025, compared to 13.4 percent in 2024, according to the Commerce Department’s trade report for December released Thursday. That is China’s lowest market share since the early 2000s. Less than a decade ago, China accounted for one-fifth of annual U.S. imports. https://datawrapper.dwcdn.net/Jeo2y/1/ U.S. imports from China fell to $308 billion in 2025, their lowest level since 2009 and a drop of more than 42 percent from the record high of $539 billion in 2018. https://datawrapper.dwcdn.net/VYjTP/1/ Factoring all the tariffs Trump announced last year, as well as the rollbacks he granted, Chinese goods faced an “effective” U.S. tariff rate of 30.9 percent in November, according to Olu Sonola, head of U.S. economic research at Fitch Ratings in New York, and his colleague Sarah Repucci. This included, but was not limited to, Trump’s “reciprocal” tariffs that the Supreme Court struck down. Comparatively, the effective tariff rate was 19.7 percent for India, 12.7 percent for Vietnam, 8.1 percent for the European Union, 4.2 percent for Mexico, 3.7 percent for Canada and 3.5 percent for Taiwan, according to Fitch Ratings’ calculations. “Basically what’s happening is as China is falling across the board, many Asian countries are increasing their share of U.S. imports,” Sonola told POLITICO, adding that Vietnam, Taiwan, Mexico and India were among the biggest beneficiaries. Two categories of imports that include electric machinery, smartphones, computers and other related goods account for nearly half of U.S. imports from China. Below, we analyze the largest changes in those and several other categories of goods where imports from China fell as American companies shifted their supply chains last year. PHONES, GAMES, COMPUTERS AND MORE IMPORTS FROM CHINA FELL SHARPLY IN 2025 Phones: The United States has imported close to $950 billion worth of phones and related equipment from China over the past quarter-century, most of them smartphones in more recent years. Annual phone imports from China peaked in 2017 to a record $72 billion and have slid significantly since then, to $30 billion in 2025. That has coincided with a drop in China’s share of the U.S. import market for phones — which peaked at 65 percent in 2018 but slid to just 21 percent last year. Suppliers from other countries are filling the gap. The U.S. imported a record $142 billion worth of phones and equipment in 2025, with Vietnam grabbing about 22 percent of the market, India 17 percent and Thailand 13 percent. Phone imports from India were especially notable, since they nearly tripled to $25 billion from the previous year, with smartphones driving most of that surge. Smartphones from India captured 42 percent of the U.S. smartphone import market. Fortunately for New Delhi, Trump exempted smartphones from the additional 25 percent tariff that he temporarily imposed on India because of its purchases of Russian oil, as well as from the reciprocal tariffs he imposed on nearly every country in August. U.S. Trade Representative Jamieson Greer, in a Fox Business interview last week, praised India as a manufacturing substitute for China, at least temporarily, as the U.S. tries to increase its own output of key goods. “The American worker is first, but certainly to the extent we’re going to import from other countries, India can be a good source, as long as it’s balanced and it’s fair,” he said. Computers: Although Trump exempted computers, smartphones, semiconductors and certain other electronics from his “reciprocal” tariffs announced in early April, he did not exempt those goods from a separate 20 percent fentanyl-related tariff he imposed on China in early 2025, which the administration reduced to 10 percent in November. That duty was also struck down by the Supreme Court’s ruling on Friday. The higher rates, as well as companies’ longer-term efforts to diversify their operations away from China, resulted in a significant decline in U.S. imports of computers and accessories. The share of those imports coming from China dropped a staggering amount, from 26 percent in 2024 to just 4 percent in 2025. That represented a dollar value of around $11 billion in imports last year, less than a third of what the U.S. imported the year before. In 2021, the U.S. imported a record-high of $61 billion of the same Chinese-made computing equipment. Despite China’s decrease in computer exports to the U.S., the U.S. imported more computing equipment than ever: $251 billion in 2025, up from $140 billion the prior year. Imports from Taiwan went from $26 billion in 2024 to more than $85 billion last year. Mexico also saw its imports of this equipment nearly double to $90 billion, while imports from Vietnam and Thailand also surged. Those sharp increases have raised questions about whether the products are being locally produced or are actually manufactured in China and transhipped through the other countries — a practice the Trump administration is trying to crack down on. “That’s very much an unknown,” Sonola said. Toys, games and sports equipment: China historically dominated the U.S. market for imports of these items, cresting 80 percent a decade ago. The value of these imports fell sharply last year to less than $19 billion, compared to $30 billion in 2024. That dropped the share of U.S. imports from China to 53 percent in 2025. In particular, imports of video game consoles from China saw one of the largest market share drops since Trump’s tariffs took effect – from 86 percent of U.S. imports to about one-quarter last year. Clothing and footwear: Imports of clothing items, footwear and textiles dropped from almost $36 billion in 2024 to $24 billion in 2025, making up only about 20 percent of the U.S. import market for these products last year. A decade ago, these items made up 42 percent import share. Plastics: China’s share of the U.S. import market for plastics continued to slide in 2025, down about 5 percentage points to 21 percent last year. With almost $15 billion worth of imports, China remained the largest player in the U.S. market for plastic products, ahead of Canada, Mexico and Vietnam. Other electronic equipment: Among the consumer electronics and machinery that comprise a notable share of Chinese imports, some of the biggest drops came from video monitors and sound equipment, such as speakers and microphones. Combined, those categories saw a drop from $12 billion to $6 billion of U.S. imports. Other imports from China, like electric heaters and electric storage batteries, also saw reductions in their share of the U.S. market. Furniture and lights: U.S. imports of furniture, lights and bedding from China saw a sharper decline than in previous years, hitting $12.6 billion in 2025 compared to $18.5 billion the prior year. Vietnam has gained the most from China’s declining market share, followed by Mexico. Pharmaceuticals: The U.S. imported about $5.4 billion worth of pharmaceutical products from China in 2025, down from nearly $8 billion the year prior. China accounted for less than 3 percent of all U.S. pharmaceutical imports.

ALDEN BIESEN, Belgium — The European Union should open up more to its trade partners in public procurement and curb Chinese investment in sectors like green tech, according to a new draft of a landmark industry act obtained by POLITICO on Thursday. Free-trade partners like the United Kingdom and Japan will breathe a sigh of relief as the draft Industrial Accelerator Act (IAA) foresees a definition of “Made in EU” that includes “trusted partners.” Brussels wants to throw up a higher barrier to investment from China by imposing a cap on foreign direct investment by countries that dominate a given global industry. The leak of the bill came as EU leaders held a retreat at a Belgian castle to wargame ways to reverse the bloc’s industrial decline in the face of China’s export dominance and America’s tech supremacy. European Commission President Ursula von der Leyen is trying to find a balance between France’s protectionist instincts and calls for more openness led by Germany, Italy and the EU’s Nordic contingent. Leaders played down differences as they gathered at the Alden Biesen estate, with Italian Prime Minister Giorgia Meloni saying her views on industrial strategy converged with those of German Chancellor Friedrich Merz, and brushing off suggestions the duo were trying to isolate French President Emmanuel Macron. “It is not something that we do against someone else, by excluding someone else,” she told reporters. Leaders reached a form of consensus on areas including the concept of a European preference, where there was openness to examining what it may mean and where it may be needed, according to a person briefed on the talks. The meeting kicked off an intense month of politicking on restoring EU competitiveness and its single market project, with the IAA due out on Feb. 25 and leaders to reconvene for a full-blown summit on March 19-20. The draft drew a swift and strong rebuke from Chinese business. “The latest version of the Industrial Accelerator Act is likely to undermine the investment confidence of leading Chinese companies,” the Chinese Chamber of Commerce to the EU said. “Beyond the political signaling, many of the proposed measures raise serious practical concerns, including the feasibility of mandatory local partnership requirements, which in many cases may simply not be commercially or technologically viable.” A big question mark over the industry push, which is being led by Industry Commissioner Stéphane Séjourné, is whether it can be sufficiently decisive to turn the economic tide. “Whatever new FDI rules will be enacted will be ineffective,” said Yanmei Xie, a senior associate fellow at the Mercator Institute for China Studies. Each EU member country has a different agenda and building a united front against Chinese dominance is a near impossibility. “Whoever is the lowest denominator becomes the de facto gatekeeper.” TRUSTED PARTNERS The latest draft of the IAA, which runs to 96 pages, broadens the definition of a European preference as it would apply to public procurement and other taxpayer-funded programs in energy-intensive industries, net-zero technologies and the automotive sector. In so doing it should allay fears among friendly trading nations of a “Fortress Europe” scenario.  The scope of Made in EU should include content originating from the EU and the European Economic Area, which spans Norway, Iceland and Liechtenstein. The draft also leaves the door open to “trusted partners” whose manufacturing “should be deemed equivalent to Union origin content.” Earlier on Thursday, Séjourné dismissed the notion that the Made in EU push would exclude trade partners. His cabinet said there was broad support, both politically and in industry for the work of the Commission, although “opinions diverge on the conditions and modalities of its implementation.” A broader Made in EU concept will be welcome in the U.K. after the country’s finance minister, Rachel Reeves, said on Wednesday that Britain needed to be part of the Made in EU club. “I actually support the idea of some sort of ‘Made in Europe’ or ‘Made in countries that share each other’s values,’” she told an event. Japan, a major auto exporter, will also welcome the shift. The country “very much meets the definition of a Trusted Partner of the EU,” Patrick Keating, Honda Europe’s head of government affairs, told POLITICO.  GETTING TOUGHER The EU executive doubled down on its efforts to curb foreign direct investments from China in its latest draft.  Should the current form hold, the IAA would limit investments by companies based in countries that control more than 40 percent of global manufacturing capacity across four sectors: batteries, electric vehicles, solar technologies, and the processing and recycling of critical raw materials. “The sectors indicated — those in which Beijing is a leader — as well as the reference to the 40 percent manufacturing capacity, highlight how the increasingly clear target of these measures are Chinese foreign direct investments,”said Luca Picotti, a lawyer at Italy’s Osservatorio Golden Power. The Commission’s proposal, which effectively mirrors Beijing’s 1980s forced joint venture policy, remains in the new draft. Chinese automakers that could be forced to give up some of their technology to their European competitors are pushing back on that strategy. BYD CEO Stella Li has called the model “outdated.” “It’s not efficient: We take decisions in a second, a joint venture takes months. It’s a model of the past,” she told Italian daily Corriere della Sera at the Davos World Economic Forum last month. Governments would also be compelled under the IAA to buy more climate-friendly materials, though the scope of the requirement remains elusive in the latest draft of the upcoming industry booster. The act also proposes introducing voluntary green steel labels.  The scale of the Commission’s intervention remains unclear in the draft, which is missing a section devoted to specific materials as well as a set of annexes, though hints are sprinkled throughout the document. “Public procurement is a powerful lever,” von der Leyen told industry representatives at an event in Antwerp on Wednesday, noting it amounts to 15 percent of EU GDP. “This is massive financial firepower controlled by European governments. But too often, we see that our public buyers have to take the subsidized foreign products instead of the high-quality European alternatives. That is homegrown value that we are leaving on the table.”  Aude van den Hove reported from Alden Biesen, Francesca Micheletti, Jordyn Dahl and Sebastian Starcevic from Brussels, and Zia Weise from Antwerp.

TERNEUZEN, the Netherlands — Europe’s huge chemicals sector is campaigning to weaken the European Union’s most important climate policy — and Brussels is listening. At a meeting in Antwerp on Wednesday, industry chiefs will attempt to persuade European Commission President Ursula von der Leyen and national leaders to water down the Emissions Trading System (ETS), a cap-and-trade strategy to cut greenhouse gas emissions. They come with a well-rehearsed pitch: Their sector, one of the biggest in Europe, is in crisis.  Factories are being squeezed by a perfect storm of high energy prices, intense competition from China, weak demand from downstream industries — and the world’s most expensive carbon pricing scheme. Virtually no other jurisdiction in the world faces carbon costs as high as the EU, they argue: If current plans to strengthen the scheme go ahead, Europe’s chemicals industry could be dead within a decade. “Our competitors abroad don’t face comparable ETS regimes,” Markus Steilemann, CEO of German chemicals producer Covestro, told POLITICO, calling for “an urgent reform of the EU ETS to align climate ambition with competitive reality.” For environmental advocates, however, touching the ETS is akin to sacrilege. The 20-year-old scheme — which puts strict limits on the amount of planet-warming gases industry can emit, and covers nearly half of the bloc’s emission — is the bedrock of EU climate policy, forcing industry to find cleaner energy sources. Industries currently pay around €80 for every ton of carbon they emit, and by 2039 will no longer be allowed to emit any carbon at all.  But the ETS legislation is up for review this year, and momentum is growing for it to be significantly weakened. Several member countries and political groups — including von der Leyen’s own center-right European People’s Party — have signaled they want to see reforms. “Becoming greener cannot be our goal; it means becoming poorer,” Austrian Chancellor Christian Stocker said on Tuesday, adding he would push for exemptions to the ETS to “ensure that domestic industry remains competitive and that our companies do not relocate.” If the ETS is substantially weakened, it would be the biggest green policy yet to fall victim to the green backlash that has defined the first 14 months of von der Leyen’s second term. ALARMED? YOU SHOULD BE EU chemicals industry body CEFIC — one of the richest lobby groups in Brussels, according to the Corporate Europe Observatory — has long warned that doomsday is near for Europe’s chemicals sector. It has released report after report outlining the loss of market share to China, the closure of plants and plummeting investment. It has even sponsored an advertising campaign in Brussels metro stations that booms out in bold letters: “Alarmed? You should be. Europe is losing production sites, quality jobs and independence.” It ends with a plea to “save our industry.” Industries currently pay around €80 for every ton of carbon they emit. | Nicolas Tucat/AFP via Getty Images That warning is echoed by industry chiefs. Markus Kamieth, CEO of BASF, Europe’s largest chemicals company, told reporters late last year that Europe “has the theoretical potential” to compete with the U.S. and China. “But [in] real life, I think we shoot ourselves in the foot way too often.” The chemicals lobby has come under fire for its outsized influence in Brussels. “CEFIC already maintains almost unparalleled access to EU decision-makers, registering the third-highest number of lobby meetings with the European Commission of all lobby organisations in the EU,” said Raphaël Kergueno, a senior policy officer at NGO Transparency International. Still, the sector has plenty of facts to back up its apocalyptic warnings. Since 2023 more than 20 major chemical sites have shut across Europe, costing some 30,000 jobs, according to trade union IndustriALL, which warns that a further 200,000 jobs in the sector could be lost over the next five years.  Chemical investments in Europe collapsed by more than 80 percent in 2025 from the year before, according to a recent report from CEFIC, while capacity closures continue to outpace new projects — turning Europe into a place to shut plants, not build them. Analysts say China’s rapid expansion into chemicals production is adding pressure. “European producers are especially hit, largely due to high energy costs and a reliance on uncompetitive liquid feedstocks, with the least competitive assets continuing to post negative margins,” said Andrew Neale, global head of chemicals at S&P Global Energy. As a result, he said, “longer-term investment in decarbonization and circularity have been deprioritized.” Dow’s recent investment decisions illustrate this well. The American chemical giant plans to close three plants in Europe and cut 800 jobs, citing the need to exit “higher-cost, energy-intensive assets” as the continent’s competitiveness erodes.  “It’s very clear that Europe currently suffers from a lack of competitiveness,” Julia Schlenz, president of Dow Europe, told POLITICO, warning that carbon costs and regulation are moving faster than the infrastructure needed to decarbonize. As the bad news keeps coming, the sector has increasingly called for the ETS to be weakened. In July last year CEFIC published its demands, including the issuance of free carbon allowances, a longer timeline for phasing out emissions, and the inclusion of carbon removal credits. BASF’s Kamieth, who is also president of CEFIC, repeated those calls this week in an interview with the Financial Times, calling the ETS in its current form “obsolete.” Member countries and the European Parliament have already agreed to consider these proposed changes in the upcoming review of the ETS. Germany’s environment minister, Carsten Schneider, said at an energy summit in January that it was “not the case that what has been set until 2039 can never be revised,” adding that it is possible “to allow further free allocations and to permit certificates beyond 2039 as well.” Some business groups and member countries have gone further, with Italy’s primary industry body Confindustria as well as the Czech and Slovak governments calling for the ETS to be temporarily suspended altogether. “In a deeply changed geopolitical context, the ETS, in its current configuration, has revealed all of its limitations,” Confindustria President Emanuele Orsini said in a statement Tuesday. “The ETS is an unbalanced system that fails to deliver the decarbonisation benefits it claims to pursue, while in practice undermining the competitiveness of European industry.” The European Commission sees the electrification of industry as not just a climate imperative but an energy security one. | John Thys/AFP via Getty Images Defenders of the ETS insist this is the wrong approach. They argue that the emphasis should be on more rapid decarbonization, which for the chemicals sector hinges on electrifying its industrial processes. But that, too, costs money. ELECTRIFY EVERYTHING The chimneys of Terneuzen chemical plant have been billowing out carbon-laden smoke for more than 60 years, as the Dutch factory sucks in an endless stream of natural gas and pumps out plastic products. But in June last year the industrial buzz subsided as Dow, the plant’s operator, shut down one of its three main “steam-cracker” units because it was too expensive to run — in what has become a common story across Europe’s chemicals sector. Steam-cracking is the crux of the chemicals industry’s reliance on energy. It turns oil or gas into the basic building blocks of plastics and chemicals by heating them to almost 1,000 degrees Celsius. The process uses vast amounts of energy because the furnaces are kept at these temperatures 24 hours a day, seven days a week, making it one of the most energy-intensive processes in Europe.  Electrifying steam-crackers would require huge amounts of clean electricity — which the industry insists is simply not yet available. “One thing we know is if we are going to switch to electric cracking, eventually, when the technology is there, is that we need significant amounts of renewable electricity delivered here,” says Dennis Kredler, Dow’s director for EU affairs in Brussels. Terneuzen is not an outlier. Across Europe’s chemical clusters, decarbonization targets are racing ahead of the power grids meant to support them. “If you can’t get renewable electricity off the grid, we said, okay, we need to do it ourselves and find these leading providers to secure wind and solar energy for our sites in Germany, Italy, the Netherlands, and so on,” LyondellBasell CEO Peter Vanacker told POLITICO. “But we need support from Brussels.” The European Commission sees the electrification of industry as not just a climate imperative but an energy security one. In an interview with POLITICO in December, EU energy chief Dan Jorgensen said the shift would be good for the bloc. “There is not one European country that will not benefit from Europe being more independent on the energy side,” he said. German Greens MEP Jutta Paulus agrees, arguing that Europe’s competitiveness will ultimately depend less on looser rules than on faster access to renewable power and new markets for low-carbon chemicals. “Every chemical industry on this planet will have to transition away from fossil fuels — that’s very clear,” she said. Some right-of-center MEPs also broadly agree. Peter Liese, from the European People’s Party, said the chemicals industry is the reason why the ETS debate is so difficult. “Chemical companies talk about their costs due to the ETS. However, they do not talk about how they intend to decarbonize. The purpose of the ETS is not to torment companies, but to encourage them to decarbonize.” Peter Liese, from the European People’s Party, said the chemicals industry is the reason why the ETS debate is so difficult. | Ian Forsyth/Getty Images However, others in the EPP take a less sympathetic approach, and the group’s overall position has yet to be clarified. Rob Ingram, head of the plastics division at British chemicals giant INEOS, insists the sector is dedicated to decarbonizing — just not as fast as current laws demand. “I’m convinced that all the peers in the industry absolutely know that we need to decarbonize and develop a second economy and want to do that,” Ingram told POLITICO. “The question is, how do we get there?”  He argues that if the EU over-regulates high-emitting sectors, those sectors will just go offshore to countries with weaker or no carbon controls.  “De-industrialization of Europe is actually worse for the planet,” he says. LEAKING CARBON It was this risk — known as “carbon leakage” — that prompted the EU initially to grant free ETS allowances to industries most at risk of moving offshore. But Brussels has now attempted to address that by charging a carbon tax on imports, and is phasing out free allowances.  Chemicals, though, don’t fall under the new Carbon Border Adjustment Mechanism, giving extra force to their call for continued free allowances. And they have evidence that the fear of leakage is being realized: While Europe debates how to keep its chemical plants alive, BASF is pressing ahead with its largest investment ever, a €10 billion fully integrated chemicals mega-plant — in China.  Tatiana Santos, head of chemicals policy at the European Environmental Bureau, says the EU’s response should not be to deregulate, arguing the EU’s selling point is precisely its higher environmental standards. “At the end of the day, we cannot compete with China or the U.S. in lower standards.” But that argument doesn’t persuade Peter Huntsman, CEO of chemicals producer Huntsman. “When is it time to step back and ask, are we accomplishing anything?” he asked, dismissing the argument that if you give the ETS time to work its magic, it will eventually force industry to find affordable, competitive, low-carbon means of production. “The chemical industry does not have 10 years left,” he said. Zia Weise and Francesca Micheletti contributed to this report.

LONDON — British ministers have been laying the ground for Keir Starmer’s handshake with Xi Jinping in Beijing this week ever since Labour came to power. In a series of behind-closed-door speeches in China and London, obtained by POLITICO, ministers have sought to persuade Chinese and British officials, academics and businesses that rebuilding the trade and investment relationship is essential — even as economic security threats loom. After a “Golden Era” in relations trumpeted by Tory Prime Minister David Cameron, Britain’s once-close ties to the Asian superpower began to unravel in the late 2010s. By 2019, Boris Johnson had frozen trade and investment talks after a Beijing-led crackdown on Hong Kong’s democracy movement. At Donald Trump’s insistence, Britain stripped Chinese telecoms giant Huawei from its telecoms infrastructure over security concerns. Starmer — who is expected to meet Xi on a high-stakes trip to Beijing this week — set out to revive an economic relationship that had hit the rocks. The extent of the reset undertaken by the PM’s cabinet is revealed in the series of speeches by ministers instrumental to his China policy over the past year, including Chancellor Rachel Reeves, then-Foreign Secretary David Lammy, Energy Secretary Ed Miliband, and former Indo-Pacific, investment, city and trade ministers. Months before security officials completed an audit of Britain’s exposure to Chinese interference last June, ministers were pushing for closer collaboration between the two nations on energy and financial systems, and the eight sectors of Labour’s industrial strategy. “Six of those eight sectors have national security implications,” said a senior industry representative, granted anonymity to speak freely about their interactions with government. “When you speak to [the trade department] they frame China as an opportunity. When you speak to the Foreign, Commonwealth and Development Office, it’s a national security risk.”  While Starmer’s reset with China isn’t misguided, “I think we’ve got to be much more hard headed about where we permit Chinese investment into the economy in the future,” said Labour MP Liam Byrne, chair of the House of Commons Business and Trade Committee. Lawmakers on his committee are “just not convinced that the investment strategy that is unfolding between the U.K. and China is strong enough for the future and increased coercion risks,” he said. As Trump’s tariffs bite, Beijing’s trade surplus is booming and “we’ve got to be realistic that China is likely to double down on its Made in China approach and target its export surplus at the U.K.,” Byrne said. China is the U.K.’s fifth-largest trade partner, and data to June of last year show U.K. exports to China dropping 10.4 percent year-on-year while imports rose 4.3 percent. “That’s got the real potential to flood our markets with goods that are full of Chinese subsidies, but it’s also got the potential to imperil key sectors of our economy, in particular the energy system,” Byrne warned. A U.K. government spokesperson said: “Since the election, the Government has been consistently transparent about our approach to China – which we are clear will be grounded in strength, clarity and sober realism. “We will cooperate where we can and challenge where we must, never compromising on our national security. We reject the old ‘hot and cold’ diplomacy that failed to protect our interests or support our growth.” While Zheng Zeguang’s speech was released online, the Foreign Office refused to provide Catherine West’s own address when requested at the time. | Jordan Pettitt/PA Images via Getty Images CATHERINE WEST, INDO-PACIFIC MINISTER, SEPTEMBER 2024 Starmer’s ministers began resetting relations in earnest on the evening of Sept. 25, 2024 at the luxury Peninsula Hotel in London’s Belgravia, where rooms go for £800 a night. Some 400 guests, including a combination of businesses, British government and Chinese embassy officials, gathered to celebrate the 75th anniversary of the People’s Republic of China — a milestone for Chinese Communist Party (CCP) rule. “I am honored to be invited to join your celebration this evening,” then Indo-Pacific Minister Catherine West told the room, kicking off her keynote following a speech by China’s ambassador to the U.K., Zheng Zeguang.  “Over the last 75 years, China’s growth has been exponential; in fields like infrastructure, technology and innovation which have reverberated across the globe,” West said, according to a Foreign Office briefing containing the speech obtained through freedom of information law. “Both our countries have seen the benefits of deepening our trade and economic ties.”  While London and Beijing won’t always see eye-to-eye, “the U.K. will cooperate with China where we can. We recognise we will also compete in other areas — and challenge where we need to,” West told the room, including 10 journalists from Chinese media, including Xinhua, CGTN and China Daily. While Zheng’s speech was released online, the Foreign Office refused to provide West’s own address when requested at the time. Freedom of information officers later provided a redacted briefing “to protect information that would be likely to prejudice relations.” DAVID LAMMY, FOREIGN SECRETARY, OCTOBER 2024 As foreign secretary, David Lammy made his first official overseas visit in the job with a two-day trip to Beijing and Shanghai. He met Chinese Foreign Minister Wang Yi in Beijing on Oct. 18, a few weeks before U.S. President Donald Trump’s re-election. Britain and China’s top diplomats discussed climate change, trade and global foreign policy challenges. “I met with Director Wang Yi yesterday and raised market access issues with him directly,” Lammy told a roundtable of British businesses at Shanghai’s Regent On The Bund hotel the following morning, noting that he hoped greater dialogue between the two nations would break down trade barriers. “At the same time, I remain committed to protecting the U.K.’s national security,” Lammy said. “In most sectors of the economy, China brings opportunities through trade and investment, and this is where continued collaboration is of great importance to me,” he told firms. Freedom of information officers redacted portions of Lammy’s speech so it wouldn’t “prejudice relations” with China.  Later that evening, the then-foreign secretary gave a speech at the Jean Nouvel-designed Pudong Museum of Art to 200 business, education, arts and culture representatives. China is “the world’s biggest emitter” of CO2, Lammy told them in his prepared remarks obtained by freedom of information law. “But also the world’s biggest producer of renewable energy. This is a prime example of why I was keen to visit China this week. And why this government is committed to a long-term, strategic approach to relations.” Shanghai continues “to play a key role in trade and investment links with the rest of the world as well,” he said, pointing to the “single biggest” ever British investment in China: INEOS Group’s $800 million plastics plant in Zhejiang. “We welcome Chinese investment for clear mutual benefit the other way too,” Lammy said. “This is particularly the case in clean energy, where we are both already offshore wind powerhouses and the costs of rolling out more clean energy are falling rapidly.” “We welcome Chinese investment for clear mutual benefit the other way too,” David Lammy said. | Adam Vaughan/EPA POPPY GUSTAFSSON, INVESTMENT MINISTER, NOVEMBER 2024 Just days after Starmer and President Xi met for the first time at the G20 that November, Poppy Gustafsson, then the British investment minister, told a U.K.-China trade event at a luxury hotel on Mayfair’s Park Lane that “we want to open the door to more investment in our banking and insurance industries.” The event, co-hosted by the Bank of China UK and attended by Chinese Ambassador Zheng Zeguang and 400 guests, including the U.K. heads of several major China business and financial institutions, is considered the “main forum for U.K.-China business discussion,” according to a briefing package prepared for Gustafsson. “We want to see more green initiatives like Red Rock Renewables who are unlocking hundreds of megawatts in new capacity at wind farms off the coast of Scotland — boosting this Government’s mission to become a clean energy superpower by 2030,” Gustafsson told attendees, pointing to the project owned by China’s State Development and Investment Group. The number one objective for her speech, officials instructed the minister, was to “affirm the importance of engaging with China on trade and investment and cooperating on shared multilateral interests.” And she was told to “welcome Chinese investment which supports U.K. growth and the domestic industry through increased exports and wider investment across the economy and in the Industrial Strategy priority sectors.” The Chinese government published a readout of Gustafsson and Zheng’s remarks. RACHEL REEVES, CHANCELLOR, JANUARY 2025 By Jan. 11 last year, Chancellor Rachel Reeves was in Beijing with British financial and professional services giants like Abrdn, Standard Chartered, KPMG, the London Stock Exchange, Barclays and Bank of England boss Andrew Bailey in tow. She was there to meet with China’s Vice-Premier He Lifeng to reopen one of the key financial and investment talks with Beijing Boris Johnson froze in 2019. Before Reeves and He sat down for the China-U.K. Economic and Financial Dialogue, Britain’s chancellor delivered an address alongside the vice-premier to kick off a parallel summit for British and Chinese financial services firms, according to an agenda for the summit shared with POLITICO. Reeves was also due to attend a dinner the evening of the EFD and then joined a business delegation travelling to Shanghai where she held a series of roundtables. Releasing any of her remarks from these events through freedom of information law “would be likely to prejudice” relations with China, the Treasury said. “It is crucial that HM Treasury does not compromise the U.K.’s interests in China.” Reeves’ visit to China paved the way for the revival of a long-dormant series of high-level talks to line up trade and investment wins, including the China-U.K. Energy Dialogue in March and U.K.-China Joint Economic and Trade Commission (JETCO) last September. EMMA REYNOLDS, CITY MINISTER, MARCH 2025 “Growth is the U.K. government’s number one mission. It is the foundation of everything else we hope to achieve in the years ahead. We recognise that China will play a very important part in this,” Starmer’s then-City Minister Emma Reynolds told the closed-door U.K.-China Business Forum in central London early last March. Reeves’ restart of trade and investment talks “agreed a series of commitments that will deliver £600 million for British businesses,” Reynolds told the gathering, which included Chinese electric vehicle firm BYD, HSBC, Standard Chartered, KPMG and others. This would be achieved by “enhancing links between our financial markets,” she said. “As the world’s most connected international financial center and home to world-leading financial services firms, the City of London is the gateway of choice for Chinese financial institutions looking to expand their global reach,” Reynolds said. Ed Miliband traveled to Beijing in mid-March for the first China-U.K. Energy Dialogue since 2019. | Tolga Akmen/EPA ED MILIBAND, ENERGY AND CLIMATE CHANGE SECRETARY, MARCH 2025 With Starmer’s Chinese reset in full swing, Energy Secretary Ed Miliband traveled to Beijing in mid-March for the first China-U.K. Energy Dialogue since 2019. Britain’s energy chief wouldn’t gloss over reports of human rights violations in China’s solar supply chain — on which the U.K. is deeply reliant for delivering its lofty renewables goals — when he met with China’s Vice Premier Ding Xuexiang, a British government official said at the time. “We maybe agree to disagree on some things,” they said. But the U.K. faces “a clean energy imperative,” Miliband told students and professors during a lecture at Beijing’s elite Tsinghua University, which counts Xi Jinping and former Chinese President Hu Jintao as alumni. “The demands of energy security, affordability and sustainability now all point in the same direction: investing in clean energy at speed and at scale,” Miliband said, stressing the need for deeper U.K.-China collaboration as the U.K. government reaches towards “delivering a clean power system by 2030.”  “In the eight months since our government came to office we have been speeding ahead on offshore wind, onshore wind, solar, nuclear, hydrogen and [Carbon Capture, Usage, and Storage],” Britain’s energy chief said. “Renewables are now the cheapest form of power to build and operate — and of course, much of this reflects technological developments driven by what is happening here in China.”  “The U.K. and China share a recognition of the urgency of acting on the climate crisis in our own countries and accelerating this transition around the world — and we must work together to do so,” Miliband said, in his remarks obtained through freedom of information law. DOUGLAS ALEXANDER, ECONOMIC SECURITY MINISTER, APRIL 2025 During a trip to China in April last year, then-Trade Minister Douglas Alexander met his counterpart to prepare to relaunch key trade and investment talks. The trip wasn’t publicized by the U.K. side. According to a Chinese government readout, the China-UK Joint Economic and Trade Commission would promote “cooperation in trade and investment, and industrial and supply chains” between Britain’s trade secretary and his Chinese equivalent. After meeting Vice Minister and Deputy China International Trade Representative Ling Ji, Minister Alexander gave a speech at China’s largest consumer goods expo near the country’s southernmost point on the island province of Hainan. Alexander extended his “sincere thanks” to China’s Ministry of Commerce and the Hainan Provincial Government “for inviting the U.K. to be the country of honour at this year’s expo.” “We must speak often and candidly about areas of cooperation and, yes, of contention too, where there are issues on which we disagree,” the trade policy and economic security minister said, according to a redacted copy of his speech obtained under freedom of information law. “We are seeing joint ventures and collaboration between Chinese and U.K. firms on a whole host of different areas … in renewable energy, in consumer goods, and in banking and finance,” Alexander later told some of the 27 globally renowned British retailers, including Wedgwood, in another speech during the U.K. pavilion opening ceremony. “We are optimistic about the potential for deeper trade and investment cooperation — about the benefits this will bring to the businesses showcasing here, and those operating throughout China’s expansive market.”

LONDON — Westminster discourse was blessed with a host of new words and phrases during a tumultuous 2025 — and some of them even made sense. Keir Starmer got to fight with tech bro Elon Musk, schmooze Donald Trump, endure frustration from his MPs over Labour’s dreadful polling, reshuffle his government, and preside over a stagnant economy — all while working out a “vision” some 18 months into office. As 2026 screams into view, POLITICO has looked back over the year and picked out all the weird phrases we’d rather forget. 1. Coalition of the willing: The body of nations that sprang up to support Ukraine as U.S. backing looked dicey. Defined by their “vital,” “urgent” and “pivotal” meetings, but often challenged by an unwilling dude across the pond. 2. Smorgasbord: Sweden’s given us IKEA, ABBA — and now the best way to explain an unsatisfying mix of tax rises. Thanks, chancellor! 3. AI Opportunities Action Plan: Never has a government announcement contained so many nouns. 4. AI MP: Why bother with constituency casework when ChatGPT’s around? Labour MP Mark Sewards bagged some help from LLMs … with mixed results. 5. “Beautiful accent”: Trump’s verdict on Starmer’s voice as the unlikely bromance blossomed. 6. Rent license: Everyone pretended to know about housing law as Chancellor Rachel Reeves faced scrutiny for not having one of these when renting out the family home. 7. Rod fishing license: One for the real hardcore license fans. Then-Foreign Secretary David Lammy faced questions for fishing with U.S. Vice President JD Vance without the right paperwork. In a totally unconnected event, he was reshuffled to the justice department shortly after. 8. Board of Peace: Tony Blair was on the list of people to preside over a post-war Gaza … until he very much wasn’t. 9. Golden economic rule: The Conservatives’ shiny and instantly forgettable plan to restore credibility in managing the public finances. Perhaps the No. 1 rule should have been keeping Liz Truss out of No. 10?   10. Lawyer brain: Starmer was frequently accused of acting like a lawyer, not a leader. At least he had a fixed term back when he was chief prosecutor. 11. Liberation Day: Trump’s big old chart slapped global tariffs on allies and sent Whitehall into a tailspin … before a TACO (Trump Always Chickens Out) retreat on some of them. 12. The Andrew formerly known as Prince: Andrew Mountbatten-Windsor had to settle for a hyphenated surname after outrage about his friendship with the late convicted sex offender Jeffrey Epstein. 13. Raise the colors: Politicians spent the summer showing how much they loved flags as Brits — including organized far-right groups — plastered the Union Jack on every lamppost and roundabout in sight. 14. Lucy Listens: Lucy Powell decided the best way to recover from getting sacked from government was to run for Labour deputy leader, win, and hear endlessly from irate Labour members. 15. Joe Marler: Health Secretary Wes Streeting compared himself to a rugby player from the Celebrity Traitors after he was accused of plotting to oust Starmer. Hanging out in a Scottish castle could be quite cushy if the running-for-PM thing doesn’t work out. 16. Driving the DLR: Starmer’s premiership was compared to steering the, er, driverless part of Transport for London. 17. Double Contributions Convention: National insurance became exciting for a brief second amid a row about the India trade deal. Let’s never make that mistake again. 18. Disruptors: What Starmer wants from his ministers. Alas, they slightly misinterpreted the memo and enjoyed disrupting his leadership instead of the Whitehall status quo. 19. Build Baby Build: Housing Secretary Steve Reed not only mimicked Trump’s words but also donned a red baseball cap. The merch was a treat at Labour conference, but it was all a bit cringe.  20. Trigger Me Timbers: Leaks from this imaginatively-named Labour WhatsApp group saw two MPs suspended for vile language. Remember, assume everything in a group is public.  21. Humphrey: Obviously the best-named AI tool ever, the government’s own tech overlord paid tribute to that most conniving of civil servants in the classic BBC sitcom “Yes, Minister.”  21. Humphrey: Obviously, the best-named AI tool ever, the government’s own tech overlord paid tribute to that most conniving of civil servants in classic BBC sitcom “Yes, Minister.”  | David Zorrakino/Europa Press via Getty Images 22. Right to Try: A phrase describing a new guarantee for people entering work — and which might double up as a stirring campaign slogan for the PM. 23. Patriotic renewal: Get those flags out again as No. 10 presses the jargon button to describe what this whole government thing is about. 24. Thatcher Fest: The celebrations marking the centenary of the Iron Lady’s birth knew no bounds. 25. One in, one out: Britain and France struck a treaty for small boat crossings — until one returned migrant recrossed the English Channel to Blighty.   26. Zacktavist: A new generation of Greens got behind “eco-populist” leader Zack Polanksi — and could treat themselves to a mug with his face on for £7 a pop. 27. Yantar: Russia made its meddling against Britain known by deploying a spy ship into territorial waters … although it failed to remain incognito.   28. Two up, two down: Chancellor Rachel Reeves mooted increasing income tax by 2p and cutting national insurance by 2p … before (probably) realizing it would mark the end of her time in the Treasury. 29. Island of strangers: The PM channeled Reform with a speech on migration featuring this phrase. It was compared to former Tory MP Enoch Powell’s infamous “Rivers of Blood” speech … and Starmer later retracted the whole thing. 30. Bob Vylan: A previously obscure rap duo was thrust into the spotlight after calling for “death, death to the IDF” [Israel Defence Forces] at Glastonbury. The BBC came under fire, because of course it did. 31. Persistent knobheadery: That’s one way for a Labour source to justify suspending the whip from four MPs. 32. Sexist boys’ club: Setting up a political party is harder than it looks. Who’d have thought it? Ex-Labour MP Zarah Sultana’s tough words for her fellow independent MPs as the flailing Your Party launched meant some of them left anyway. All’s fair in love and war.   33. F**king suck it up: Running a council is pretty tricky. Reform’s Kent County Council Leader Linden Kemkaran told her fellow councilors they’d have to cope with tough decisions in these colorful terms. Running a council is pretty tricky. Reform’s Kent County Council Leader Linden Kemkaran told her fellow councilors they’d have to cope with tricky decisions in these colorful terms. | Gareth Fuller/PA Images via Getty Images 34. Three Pads Rayner: Angela Rayner’s tenure as deputy PM and, erm, housing secretary came to an abrupt end after she failed to pay the correct amount of property tax — but not before earning this moniker. 35. Further and faster: How did the government react to its local elections shellacking? By vowing to carry on in exactly the same way, albeit more intensely. 36. Phase Two: Starmer’s much-hyped fall reset of his government was followed by one calamity after another. Not too late for Phase Three! 37. Danish model: Ministers decided migration could be solved by copying Copenhagen. Anything for a trip to the continent.   38. The Liz Truss Show: Britain’s shortest-serving former prime minister used extra time on her hands to woo MAGAland with yet another political podcast. Cannot be unseen.   39. I rise to speak: MPs deploying this phrase gave an instant red flag that they may, just may, have used AI to help write their speeches.  40. Judge Plus: Labour MP Kim Leadbeater’s assurance that her assisted dying bill still had plenty of legal safeguards, despite a High Court judge getting dropped from the process.   41. Pride in Place: After Boris Johnson’s “leveling up” (RIP), Labour tries a similar approach in all but name. 42. Waste Files: Elon Musk inspired a host of U.K. DOGE copycats keen to slash complex government budgets from their armchairs. 43. Project Chainsaw: No, Starmer isn’t suddenly a Javier Milei fan, but his government wanted to reshape the state — with some bandying about this subtle, civil service-spooking nickname. 44. Global headwinds: The ultimate euphemism for how the orange-colored elephant in the room changed everything.   45. Pan-Euro-Mediterranean Convention: Want Britain closer to the EU? Choose a trade agreement guaranteed to send even the most ardent Europhile to sleep. President Trump’s trade wars caused global headwinds throughout the year. | Andrew Caballero-Reynolds/AFP via Getty Images 46. Headphone dodgers: A nuisance to everyone, the Lib Dems went full throttle by pledging to fine the public transport irritants £1,000. It’s a wonder the party isn’t leading the polls. 47. StormShroud drones: All wars create an opportunity for futuristic tech that hopefully does what it says on the tin. 48. Return hubs: Ministers insist migration definitely isn’t getting outsourced to other countries by mooting third-party “processing” … something Albania won’t even take part in. See also: Deport Now, Appeal Later.  49. Far-right bandwagon: Starmer’s row with Musk reached a crescendo with the PM’s phrase lobbed at some proponents of an inquiry into grooming gangs operating in the U.K. 50. Impossible trilemma: Ahead of the budget, a top think tank warned that Reeves faced the unenviable task of meeting fiscal targets while sticking to spending promises and not raising taxes. No pressure. 51. Chief Secretary to the Prime Minister: Darren Jones’ prefect vibes were rewarded with a brand spanking new gig in the pre-shuffle right at the start of Phase Two. 52. Growth people feel in their pockets: One No. 10 press officer may have collected their P45 after publishing *that* press release. 53. Mainstream: This totally normal, nothing-to-see-here, soft-left Labour group definitely isn’t a vehicle for Andy Burnham’s return to Westminster.   54. Plastic patriots/plastic progressives: The synthetic material really got a kicking from Labour, who deployed the terms to slam Reform and the Greens respectively. Let’s hope voters have reusable bags. 55. Quint: Five lucky people (Starmer, Reeves, Lammy, Jones and Pat McFadden) who apparently decide how government operates. Great job, guys! 56. Hard bastard: The PM’s best effort to show he was “tough enough,” Ed Miliband-style. We all know how that ended.    57. Global Progress Action Summit: Progressives met in a desperate attempt to figure out how to avoid a trouncing from populists. More updates as we get them. 58. Contribution: Reeves’ framing of higher taxes, carefully sidestepping the fact that taxes aren’t optional. 59. Maintenance department: Deffo-not-future Labour leadership contender Wes Streeting’s description of how the party presents itself publicly. Stirring stuff. 60. Terminator: Home Secretary Shabana Mahmood earned an Arnie-inspired new nickname as she tried to show Labour is really, really tough on migration, honest. 61. Reverse Midas Touch: Anything the PM touches, including ID cards, is hit by this tragic affliction, according to his critics. 62. V levels: The natural successor to A and T level educational qualifications. Just a matter of time before there’s one for each letter of the alphabet. 63. Culturally coherent: Tory rising star Katie Lam’s justification for deporting legal migrants got her into some hot water. 64. 24/7 circus of sh*t: One former Tory aide’s pithy description of the Home Office. Who are the clowns? 65. Six seven: Nobody over the age of 11 understands this meme — yet the PM unleashed havoc in a classroom by joining in. 66. Civilizational erasure: America’s dystopian portrayal of what Europe is facing probably won’t feature in many tourist brochures. 67. Turning renewal into reality: Starmer’s ambition for next year in his final Cabinet meeting of 2025. Bookmark that one.

BRUSSELS — If you ordered Christmas presents from a Chinese web shop, they are likely to be toxic, unsafe or undervalued. Or all of the above. The EU is trying to do something about the flood but is tripping over itself 27 times to get there. “It’s absolutely crazy…” sighs one EU official. The official, granted anonymity to discuss preparations to tackle the problem, said that at some airport freight hubs, an estimated 80 percent of such inbound packages don’t comply with EU safety rules. The numbers are dizzying. In 2024, 4.6 billion small packages with contents worth less than €150 entered the EU. That all-time record was broken in September of this year. Because these individual air-mail packages replace whole containers shipping the same product, the workload for customs officials has increased exponentially over recent years. Non-compliant, cheaply-made products — such as dangerous toys or kitchen items — bring health risks. And a growing pile of garbage. It’s a problem for everyone along the chain. Customs officers can’t keep up; buyers end up with useless products; children are put at risk; and EU makers of similar items are undercut by unfair and untaxed competition. With the situation on the ground becoming unmanageable, the EU agreed this month to charge a €3 fixed fee on all such packages. This will effectively remove a tax-free exemption on packages worth €150 — but only from July of next year. It’s a crude, and temporary, fix because existing customs IT systems can’t yet tax items according to their actual value. ALL I WANT … Which is why all European lawmaker Anna Cavazzini wants for next year’s holiday season is “better rules.” Cavazzini is a key player in a push to harmonize the EU’s 27 national customs regimes. A proposed reform, now being discussed by the EU institutions, would create a central data hub and an EU Customs Agency, or EUCA, with oversight powers. As is so often the case in the EU, though, the customs reform is only progressing slowly. The EUCA will be operational only from late 2026. And the data hub probably won’t be up and running until the next decade. “We need a fundamental discussion on the Europeanization of customs,” Cavazzini told POLITICO. As chair of the European Parliament’s Internal Market and Consumer Protection Committee (IMCO), the lawmaker from the German Greens has been pushing the Council, the EU’s intergovernmental branch, to allow the customs reform to make the bloc’s single market more of a unified reality. European lawmaker Anna Cavazzini. | Martin Bertrand and Hans Lucas/AFP via Getty Images EU capitals worry — as always — about handing over too much power to the eurocrats in Brussels. But the main outstanding issue where negotiators disagree is more prosaic: it’s about whether the law should include an explicit list of offences, such making false declarations to customs officers. While the last round of negotiations in early December brought some progress on other areas, the unsolved penalties question has kicked the reform into 2026. With the millions of boxes, packages and parcels inbound, regardless, individual countries are also considering handling fees, beside the €3 tax that all have agreed on. France has already proposed a solo fee with revenues flowing into its national budget, and Belgium and the Netherlands will probably follow suit. RACE TO THE BOTTOM Customs reform is what’s needed, not another round of fragmented fees and a race to the bottom, said Dirk Gotink, the European Parliament’s lead negotiator on the customs reform. “Right now, the ideas launched by France and others are not meant to stem the flow of packages. They are just meant to earn money,” the Dutch center-right lawmaker told a recent briefing. To inspect the myriad ways in which they are a risk, Gotink’s team bought a few items from dubious-looking web shops. “With this one, the eyes are coming off right away,” he warned before handing a plush toy to a reporter. The reporter almost succeeded in separating the head from the creature’s body without too much effort. And thin, plastic eyes trailed the toy as it was passed around the room. “On the box it says it’s meant for people over 15 years old…” one reporter commented. But the cute creature is clearly targeted at far younger audiences. Adding to the craze, K-pop stars excitedly unbox new characters in online promotional videos. The troubles aren’t limited to toys. A jar of cosmetics showed by Gotink had inscriptions on its label that didn’t resemble any known alphabet. Individual products aside, the deluge of cheap merchandise also creates unfair competition, said Cavazzini: “A lot of European companies of course also fulfill the environmental obligations and the imports don’t,” she said. “This is also creating a huge unlevel playing field.” After the holidays, Gotink and Cavazzini will pick up negotiations on the customs reform with Cyprus, which from Jan. 1 takes over the rotating presidency of the Council of the EU from Denmark. “This file will be a priority during our presidency,” a Cypriot official told POLITICO, adding that Denmark had completed most of the technical work. “We aim to conclude this important file, hoping to reach a deal with the Parliament during the first months of the Cyprus Presidency.” Despite the delays, an EU diplomat working on customs policy told POLITICO that the current speed of the policy process is unprecedented: “This huge ecommerce pressure has really made all the difference. A year ago, this would have been unimaginable.”

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

As trilogue negotiations on the End-of-Life Vehicles Regulation (ELVR) reach their decisive phase, Europe stands at a crossroads, not just for the future of sustainable mobility, but also for the future of its industrial base and competitiveness. The debate over whether recycled plastic content in new vehicles should be 15, 20 or 25 percent is crucial as a key driver for circularity investment in Europe’s plastics and automotive value chains for the next decade and beyond. The ELVR is more than a recycled content target. It is also an important test of whether and how Europe can align its circularity and competitiveness ambitions. Circularity and competitiveness should be complementary  Europe’s plastics industry is at a cliff edge. High energy and feedstock costs, complex regulation and investment flight are eroding production capacity in Europe at an alarming rate. Industrial assets are closing and relocating. Policymakers must recognize the strategic importance of European plastics manufacturing. Plastics are and will remain an essential material that underpins key European industries, including automotive, construction, healthcare, renewables and defense. Without a competitive domestic sector, Europe’s net-zero pathway becomes slower, costlier and more import-dependent. Without urgent action to safeguard plastics manufacturing in Europe, we will continue to undermine our industrial resilience, strategic autonomy and green transition through deindustrialization. The ELVR can help turn the tide and become a cornerstone of the EU’s circular economy and a driver of industrial competitiveness. It can become a flagship regulation containing ambitious recycled content targets that can accelerate reindustrialization in line with the objectives of the Green Industrial Deal. > Policymakers must recognize the strategic importance of > European plastics manufacturing. Without a competitive domestic sector, > Europe’s net-zero pathway becomes slower, costlier and more import-dependent. Enabling circular technologies  The automotive sector recognizes that its ability to decarbonize depends on access to innovative, circular materials made in Europe. The European Commission’s original proposal to drive this increased circularity to 25 percent recycled plastic content in new vehicles within six years, with a quarter of that coming from end-of-life vehicles, is ambitious but achievable with the available technologies and right incentives. To meet these targets, Europe must recognize the essential role of chemical recycling. Mechanical recycling alone cannot deliver the quality, scale and performance required for automotive applications. Without chemical recycling, the EU risks setting targets that look good on paper but fail in practice. However, to scale up chemical recycling we must unlock billions in investment and integrate circular feedstocks into complex value chains. This requires legal clarity, and the explicit recognition that chemical recycling, alongside mechanical and bio-based routes, are eligible pathways to meet recycled content targets. These are not technical details; they will determine whether Europe builds a competitive and scalable circular plastics industry or increasingly depends on imported materials. A broader competitiveness and circularity framework is essential  While a well-designed ELVR is crucial, it cannot succeed in isolation. Europe also needs a wider industrial policy framework that restores the competitiveness of our plastics value chain and creates the conditions for increased investment in circular technologies, and recycling and sorting infrastructure. We need to tackle Europe’s high energy and feedstock costs, which are eroding our competitiveness. The EU must add polymers to the EU Emissions Trading System compensation list and reinvest revenues in circular infrastructure to reduce energy intensity and boost recycling. Europe’s recyclers and manufacturers are competing with materials produced under weaker environmental and social standards abroad. Harmonized customs controls and mandatory third-party certification for imports are essential to prevent carbon leakage and ensure a level playing field with imports, preventing unfair competition. > To accelerate circular plastics production Europe needs a true single market > for circular materials. That means removing internal market barriers, streamlining approvals for new technologies such as chemical recycling, and providing predictable incentives that reward investment in recycled and circular feedstocks. Today, fragmented national rules add unnecessary cost, complexity and delay, especially for the small and medium-sized enterprises that form the backbone of Europe’s recycling network. These issues must be addressed. Establishing a Chemicals and Plastics Trade Observatory to monitor trade flows in real time is essential. This will help ensure a level playing field, enabling EU industry and officials to respond promptly with trade defense measures when necessary. We need policies that enable transformation rather than outsource it, and these must be implemented as a matter of urgency if we are to scale up recycling and circular innovations and investments.  A defining moment for Europe’s competitiveness and circular economy > Circularity and competitiveness should not be in conflict; together, they will > allow us to keep plastics manufacturing in Europe, and safeguard the jobs, > know-how, innovation hubs and materials essential for the EU’s climate > neutrality transition and strategic autonomy. The ELVR is not just another piece of environmental legislation. It is a test of Europe’s ability to turn its green vision into industrial reality. It means that the trilogue negotiators now face a defining choice: design a regulation that simply manages waste or one that unleashes Europe’s industrial renewal. These decisions will shape Europe’s place in the global economy and can provide a positive template for reconciling our climate and competitiveness ambitions. These decisions will echo far beyond the automotive sector. Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Plastics Europe AISBL * The advertisement is linked to policy advocacy on the EU End-of-Life Vehicles Regulation (ELVR), circular plastics, chemical recycling, and industrial competitiveness in Europe. More information here.

BELÉM, Brazil — United Nations climate summits have for years ended with bold promises to stave off global warming. But those commitments often fade when nations go home. Three years ago, in a resort city on the Red Sea, delegates from nearly 200 countries approved what they hailed as a historic fund to help poorer nations pay for climate damages — but it’s at risk of running dry. A year later, negotiations a few miles from Dubai’s gleaming waterfront achieved the first-ever worldwide pledge to turn away from fossil fuels — but production of oil and natural gas is still rising, a trend championed by the new administration in Washington. That legacy is casting a shadow over this year’s conference near the mouth of the Amazon River, which the host, Brazil, has dubbed a summit of truth. Days after the gathering started last week, nations were still sorting out what to do with contentious issues that have typically held up the annual negotiations. As the talks opened, Brazilian President Luiz Inácio Lula da Silva said the world must “fight” efforts to deny the reality of climate change — decades after scientists concluded that people are making the Earth hotter. That led one official to offer a grim assessment of global efforts to tackle climate change, 10 years after an earlier summit produced the sweeping Paris Agreement. “We have miserably failed to accomplish the objective of this convention, which is the stabilization of greenhouse gases in the atmosphere,” said Juan Carlos Monterrey Gómez, Panama’s climate envoy and lead negotiator, during an interview at the conference site in Belém, Brazil. “Additional promises mean nothing if you didn’t achieve or fulfill your previous promises,” he added. It hasn’t helped that the U.S. is skipping the summit for the first time, or that President Donald Trump dismisses climate change as a hoax and urged the world to abandon efforts to fix it. But Trump isn’t the only reason for stalled action. Economic uncertainty, infighting and political backsliding have stymied green measures in both North America and Europe. In other parts of the world, countries are embracing the economic opportunities that the green transition offers. Many officials in Belém point to signs that progress is underway, including the rapid growth of renewables and electric vehicles and a broader understanding of both the world’s challenges and the means to address them. “Now we talk about solar panels, electric cars, regenerative agriculture, stopping deforestation, as if we have always talked about those things,” said Ana Toni, the summit’s executive director. “Just in one decade, the topic changed totally. But we still need to speed up the process.” Still, analysts say it’s become inevitable that the world’s warming will exceed 1.5 degrees Celsius since the dawn of the industrial era, breaching the target at the heart of the Paris Agreement. With that in mind, countries are huddling at this month’s summit, known as COP30, with the hope of finding greater alignment on how to slow rising temperatures. But how credible would any promises reached in Brazil be? Here are five pledges achieved at past climate summits — and where they stand now: MOVING AWAY FROM FOSSIL FUELS The historic 2023 agreement to “transition away” from fossil fuels, made at the COP28 talks in Dubai, was the first time that nearly 200 countries agreed to wind down their use of oil, natural gas and coal. Though nonbinding, that commitment was even more striking because the talks were overseen by the chief executive of the United Arab Emirates’ state-owned oil company. Just two years later, fossil fuel consumption is on the rise, despite rapid growth of wind and solar, and many of the world’s largest oil and gas producers plan to drill even more. The United States — the world’s biggest economy, top oil and gas producer and second-largest climate polluter — is pursuing a fossil fuel renaissance while forsaking plans to shift toward renewables. The president of the Dubai summit, Sultan al-Jaber, said at a recent energy conference that while wind and solar would expand, so too would oil and gas, in part to meet soaring demand for data centers. Liquefied natural gas would grow 65 percent by 2050, and oil will continue to be used as a feedstock for plastic, he said. “The exponential growth of AI is also creating a power surge that no one anticipated 18 months ago,” he said in a press release from the Abu Dhabi National Oil Co., where he remains managing director and group CEO. The developed world is continuing to move in the wrong direction on fossil fuels, climate activists say. “We know that the world’s richest countries are continuing to invest in oil and gas development,” said Bill Hare, a climate scientist who founded Climate Analytics, a policy group. “This simply should not be happening.” The Paris-based International Energy Agency said last week that oil and gas demand could grow for decades to come. That statement marked a reversal from the group’s previous forecast that oil use would peak in 2030 as clean energy takes hold. Trump’s policies are one reason for the pivot. Still, renewables such as wind and solar power are soaring in many countries, leading analysts to believe that nations will continue to shift away from fossil fuels. How quickly that will happen is unknown. “The transition is underway but not yet at the pace or scale required,” said a U.N. report on global climate action released last week. It pointed to large gaps in efforts to reduce fossil fuel subsidies and abate methane pollution. Lula opened this year’s climate conference by calling for a “road map” to cut fossil fuels globally. It has earned support from countries such as Colombia, Germany, Kenya and the United Kingdom. But it’s not part of the official agenda at these talks, and many poorer countries say what they really need is funding and support to make the shift. TRIPLE RENEWABLE ENERGY, DOUBLE ENERGY EFFICIENCY This call also emerged from the 2023 summit, and was considered a tangible measure of countries’ progress toward achieving the Paris Agreement’s temperature targets. Countries are on track to meet the pledge to triple their renewable energy capacity by 2030, thanks largely to a record surge in solar power, according to energy think tank Ember. It estimates that the world is set to add around 793 gigawatts of new renewable capacity in 2025, up from 717 gigawatts in 2024, driven mainly by China. “If this pace continues, annual additions now only need to grow by around 12 percent a year from 2026 to 2030 to reach tripling, compared with 21 percent originally needed,” said Dave Jones, Ember’s chief analyst. “But governments will need to strengthen commitments to lock this in.” The pledge to double the world’s energy efficiency by 2030, by contrast, is a long way behind. While efficiency improvements would need to grow by 4 percent a year to reach that target, they hit only 1 percent in 2024. ‘LOSS AND DAMAGE’ FUND When the landmark fund for victims of climate disasters was established at the 2022 talks in Sharm El-Sheikh, Egypt, it offered promise that billions of dollars would someday flow to nations slammed by hurricanes, droughts or rising seas. Three years later, it has less than $800 million — only a little more than it had in 2023. Mia Mottley, prime minister of Barbados, excoriated leaders this month for not providing more. Her rebuke came little more than a week after Hurricane Melissa, one of the strongest tropical cyclones ever seen in the Atlantic, swept across the Caribbean. “All of us should hold our heads down in shame, because having established this fund a few years ago in Sharm El-Sheikh, its capital base is still under $800 million while Jamaica reels from damage in excess of $7 billion, not to mention Cuba or the Bahamas,” she said. Last week, the fund announced it was allocating $250 million for financial requests to help less-wealthy nations grapple with “damage from slow onset and extreme climate-induced events.” The fund’s executive director, Ibrahima Cheikh Diong, said the call for contributions was significant but also a reminder that the fund needs much more money. Richard Muyungi, chair for the African Group of Negotiators and Tanzania’s climate envoy, said he expects additional funds will come from this summit, though not the billions needed. “There is a chance that the fund will run out of money by next year, year after next, before it even is given a chance to replenish itself,” said Michai Robertson, a senior finance adviser for the Alliance of Small Island States. GLOBAL METHANE PLEDGE Backed by the U.S. and European Union, this pledge to cut global methane emissions 30 percent by 2030 was launched four years ago at COP26 in Glasgow, Scotland, sparking a wave of talk about the benefits of cutting methane, a greenhouse gas with a relatively short shelf life but much greater warming potential than carbon dioxide. “The Global Methane Pledge has been instrumental in catalyzing attention to the issue of methane, because it has moved from a niche issue to one of the critical elements of the climate planning discussions,” said Giulia Ferrini, head of the U.N. Environment Program’s International Methane Emissions Observatory. “All the tools are there,” she added. “It’s just a question of political will.” Methane emissions from the oil and gas sector remain stubbornly high, despite the economic benefits of bringing them down, according to the IEA. The group’s latest methane tracker shows that energy-based methane pollution was around 120 million tons in 2024, roughly the same as a year earlier. Despite more than 150 nations joining the Global Methane Pledge, few countries or companies have devised plans to meet their commitments, “and even fewer have demonstrated verifiable emissions reductions,” the IEA said. The European Union’s methane regulation requires all oil and gas operators to measure, report and verify their emissions, including importers. And countries and companies are becoming more diligent about complying with an international satellite program that notifies companies and countries of methane leaks so they can repair them. Responses went from just 1 percent of alerts last year to 12 percent so far in 2025. More work is needed to achieve the 2030 goal, the U.N. says. Meanwhile, U.S. officials have pressured the EU to rethink its methane curbs. Barbados and several other countries are calling for a binding methane pact similar to the Montreal Protocol, the 1987 agreement that’s widely credited with saving the ozone layer by phasing out the use of harmful pollutants. That’s something Paris Agreement architect Laurence Tubiana hopes could happen. “I’m just in favor of tackling this very seriously, because the pledge doesn’t work [well] enough,” she said. CLIMATE FINANCE In 2009, wealthy countries agreed to provide $100 billion annually until 2025 to help poorer nations deal with rising temperatures. At last year’s climate talks in Azerbaijan, they upped the ante to $300 billion per year by 2035. But those countries delivered the $100 billion two years late, and many nations viewed the new $300 billion commitment with disappointment. India, which expressed particular ire about last year’s outcome, is pushing for new discussions in Brazil to get that money flowing. “Finance really is at the core of everything that we do,” Ali Mohamed, Kenya’s climate envoy, told POLITICO’s E&E News. But he also recognizes that governments alone are not the answer. “We cannot say finance must only come from the public sector.” Last year’s pledge included a call for companies and multilateral development banks to contribute a sum exceeding $1 trillion by 2035, but much of that would be juiced by donor nations — and more countries would need to contribute. That is more important now, said Jake Werksman, the EU’s lead negotiator. “As you know, one of the larger contributors to this process, the U.S., has essentially shut down all development flows from the U.S. budget, and no other party, including the EU, can make up for that gap,” he said during a press conference. Zack Colman and Zia Weise contributed to this report from Belém, Brazil.