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.

Businesses from Wall Street to main street are struggling to comply with President Donald Trump’s byzantine tariff regime, driving up costs and counteracting, for some, the benefits of the corporate tax cuts Republicans passed earlier this year. Trump has ripped up the U.S. tariff code over the past year, replacing a decades-old system that imposed the same tariffs on imports from all but a few countries with a vastly more complicated system of many different tariff rates depending on the origin of imported goods. To give an example, an industrial product that faced a mostly uniform 5 percent tariff rate in the past could now be taxed at 15 percent if it comes from the EU or Japan, 20 percent from Norway and many African countries, 24 to 25 percent from countries in Southeast Asia and upwards of 50 percent from India, Brazil or China. “This has been an exhausting year, I’d say, for most CEOs in the country,” said Gary Shapiro, CEO and vice chair of the Consumer Technology Association, an industry group whose 1,300 member companies include major brands like Amazon, Walmart and AMD, as well as many small businesses and startups. “The level of executive time that’s been put in this has been enormous. So instead of focusing on innovation, they’re focusing on how they deal with the tariffs.” Upping the pressure, the Justice Department has announced that it intends to make the prosecution of customs fraud one of its top priorities. The proliferation of trade regulations and threat of intensified enforcement has driven many companies to beef up their staff and spend what could add up to tens of millions of dollars to ensure they are not running afoul of Trump’s requirements. The time and expense involved, combined with the tens of billions of dollars in higher tariffs that companies are paying each month to import goods, amount to a massive burden that is weighing down industries traditionally reliant on imported products. And it’s denting, for some, the impact of the hundreds of billions of dollars of tax cuts that companies will receive over the next decade via the One Big Beautiful Bill Act championed by the White House. “Every CEO survey says this is their biggest issue,” said Shapiro. A recent survey by KPMG, a professional services firm, found 89 percent of CEOs said they expect tariffs to significantly impact their business’ performance and operations over the next three years, with 86 percent saying they expect to respond by increasing prices for their goods and services as needed. Maytee Pereira, managing director for customs and international trade at PriceWaterhouseCoopers, another professional services firm, has seen a similar trend. “Many of our clients have been spending easily 30 to 60 percent of their time having tariff conversations across the organization,” Pereira said. That’s forced CEOs to get involved in import-sourcing decisions to an unprecedented degree and intensified competition for personnel trained in customs matters. “There’s a real dearth of trade professionals,” Pereira said. “There isn’t a day that I don’t speak to a client who has lost people from their trade teams, because there is this renewed need for individuals with those resources, with those skill sets.” But the impact goes far beyond a strain on personnel into reducing the amount of money that companies are willing to spend on purchasing new capital equipment or making other investments to boost their long-term growth. “People are saying they can’t put money into R&D,” said one industry official, who was granted anonymity because of the risk of antagonizing the Trump administration. “They can’t put money into siting new factories in the United States. They don’t have the certainty they need to make decisions.” A White House spokesperson did not respond to a request for comment. However, the administration has previously defended tariffs as key to boosting domestic manufacturing, along with their overall economic agenda of tax cuts and reduced regulation. They’ve also touted commitments from companies and other countries for massive new investments in the U.S. in order to avoid tariffs, although they’ve acknowledged it will take time for the benefits to reach workers and consumers. “Look, I would have loved to be able to snap my fingers, have these facilities going. It takes time,” Treasury Secretary Scott Bessent said in an interview this week on Fox News. “I think 2026 is going to be a blockbuster year.” For some companies, however, any benefit they’ve received from Trump’s push to lower taxes and reduce regulations has been substantially eroded by the new burden of complying with his complicated tariff system, said a second industry official, who was also granted anonymity for the same reason. “It is incredibly complex,” that second industry official said. “And it keeps changing, too.” Matthew Aleshire, director of the Milken Institute’s Geo-Economics Initiative, said he did not know of any studies yet that estimate the overall cost, both in time and money, for American businesses to comply with Trump’s new trade regulations. But it appears substantial. “I think for some firms and investors, it may be on par with the challenges experienced in the early days of Covid. For others, maybe a little less so. And for others, it may be even more complex. But it’s absolutely eating up or taking a lot of time and bandwidth,” Aleshire said. The nonpartisan think tank’s new report, “Unintended Consequences: Trade and Supply Chain Leaders Respond to Recent Turmoil,” is the first in a new series exploring how companies are navigating the evolving trade landscape, he said. One of the main findings is that it has become very difficult for companies to make decisions, “given the high degree of uncertainty” around tariff policy, Aleshire said. Trump’s “reciprocal” tariffs — imposed on most countries under a 1977 emergency powers act that is now being challenged in court — start at a baseline level of 10 percent that applies to roughly 100 trading partners. He’s set higher rates, ranging from 15 to 41 percent, on nearly 100 others, including the 27-member European Union. Those duties stack on top of the longstanding U.S. “most-favored nation” tariffs. Two notable exceptions are the EU and Japan, which received special treatment in their deals with Trump. Companies also could get hit with a 40 percent penalty tariff if the Trump administration determines an item from a high-tariffed country has been illegally shipped through a third country — or assembled there — to obtain a lower tariff rate. However, businesses are still waiting for more details on how that so-called transshipment provision, which the Trump administration outlined in a summer executive order, will work. The president also has hit China, Canada and Mexico with a separate set of tariffs under the 1977 emergency law to pressure those countries to do more to stop shipments of fentanyl and precursor chemicals from entering the United States. Imports from Canada and Mexico are exempt from the fentanyl duties, however, if they comply with the terms of the U.S.-Mexico-Canada Agreement, a trade pact Trump brokered in his first term. That has spared most goods the U.S. imports from its North American neighbors, but also has forced many more companies to spend time filling out paperwork to document their compliance. Trump’s increasingly baroque tariff regime also includes the “national security” duties he has imposed on steel, aluminum, autos, auto parts, copper, lumber, furniture and heavy trucks under a separate trade law. But the administration has provided a partial exemption for the 25 percent tariffs he has imposed on autos and auto parts, and has struck deals with the EU, Japan and South Korea reducing the tariff on their autos to 15 percent. In contrast, Trump has taken a hard line against exemptions from his 50 percent tariffs on steel and aluminum, and recently expanded the duties to cover more than 400 “derivative” products, such as chemicals, plastics and furniture, that contain some amount of steel and aluminum or are shipped in steel and aluminum containers. And the administration is not stopping there, putting out a request in September for further items it can add to the steel and aluminum tariffs. “This is requiring companies that do not even produce steel and aluminum products to keep track of and report what might be in the products that they’re importing, and it’s just gotten incredibly complicated,” one of the industry officials granted anonymity said. That’s because companies need to precisely document the amount of steel or aluminum used in a product to qualify for a tariff rate below 50 percent. “Any wrong step, like any incorrect information, or even delay in providing the information, risks the 50 percent tariff value on the entire product, not just on the metal. So the consequence is really high if you don’t get it right,” the industry official said. The administration has also signaled plans to similarly expand tariffs for other products, such as copper. And the still unknown outcomes of ongoing trade investigations that could lead to additional tariffs on pharmaceuticals, semiconductors, critical minerals, commercial aircraft, polysilicon, unmanned aircraft systems, wind turbines, medical products and robotics and industrial machinery continue to make it difficult for many companies to plan for the future. Small business owners say they feel particularly overwhelmed trying to keep up with all the various tariff rules and rates. “We are no longer investing into product innovation, we’re not investing into new hires, we’re not investing into growth. We’re just spending our money trying to stay afloat through this,” said Cassie Abel, founder and CEO of Wild Rye, an Idaho company which sells outdoor clothing for women, during a virtual press conference with a coalition of other small business owners critical of the tariffs. Company employees have also “spent hundreds and hundreds and hundreds of hours counter-sourcing product, pausing production, restarting production, rushing production, running price analysis, cost analysis, shipping analysis,” Abel said. “I spent zero minutes on tariffs before this administration.” In one sign of the duress small businesses are facing, they have led the charge in the Supreme Court case challenging Trump’s use of the 1977 International Emergency Economic Powers Act to impose both the reciprocal and the fentanyl-related tariffs. Crutchfield Corp., a family-owned electronics retailer based in Charlottesville, Virginia, filed a “friend of the court” brief supporting the litigants in the case, in which the owners detailed its difficulties in coping with Trump’s erratic tariff actions. “If tariffs can be imposed, increased, decreased, suspended or altered … through the changing whim of a single person, then Crutchfield cannot plan for the short term, let alone the long run,” the company wrote in its brief, asking “the Court to quell the chaos.”

BELÉM, Brazil — Gavin Newsom can’t get out of a meeting or a talk at the international climate talks here without being swarmed by reporters and diplomats eager for a quote, a handshake, a photo. On a tour Tuesday of a cultural center with Gov. Helder Barbalho, the leader of the Brazilian state hosting the talks, a passerby recognized them both. “There’s the governor,” he exclaimed. “And there’s the California governor.” Later in the day, as Newsom rode up an escalator packed with reporters and international officials on his way to deliver a speech, a bystander shouted: “The escalator’s not broken for you!” — a dig at President Donald Trump, who once had an escalator malfunction on him at the United Nations. Newsom grinned wide: “Oh, I like that.” The adulation was gold for a governor with presidential aspirations as he steps into a power vacuum. The Trump administration is trying to dismantle climate policies both at home and abroad, and other likely Democratic presidential contenders are absent from the United Nations climate talks. Seeing a chance to plant his green flag on an international stage, Newsom is embracing the role of climate champion as his own party backs away at home and the politics of the issue shift rightward. It’s a role fitting Newsom’s instincts: anti-Trump, pro-environment and pro-technology, and with a political antenna for the upside of picking fights, finding opportunity in defiance. “We’re at peak influence because of the flatness of the surrounding terrain with the Trump administration and all the anxiety,” he told POLITICO from the sidelines of a green investor conference in Brazil on Monday. Newsom’s profile has never been higher. Just days before traveling to Brazil, he celebrated a decisive win in his redistricting campaign to boost Democrats in the midterms. He is polling at or near the top of presidential primary shortlists, and is amassing an army of small-dollar donors across the states. The governor couldn’t walk down the hallway at the conference without getting swarmed, undeniably the star of the talks on their second formal day. At one point, security officials had to physically shove away one man repeatedly. Conference attendees yelled out “Keep up the social media!” and “Go Gavin!” (and the occasional “Who is that?”). The first question by the Brazilian press: Are you running for president? And from business people: Are you coming back? Yet in touching down here — and in emphasizing his climate advocacy more broadly — Newsom is assuming a significant risk to his post-gubernatorial ambitions. The rest of the world may wish America were more like California, but the country itself — even Democrats who will decide the 2028 primary — are far more skeptical. What looks like courage abroad can read as out-of-touch back home, in a country where voters, including Democrats, routinely rank any number of issues, including the economy, health care, and cost-of-living, as more pressing than global warming. THE STAGE IS SET Other blue states were already backing away from Newsom’s gas-powered vehicle phase-out even before Congress and Trump ended it this summer, and another possible Democratic contender for president, Pennsylvania Gov. Josh Shapiro, may pull his state out of a regional emissions trading market as part of a budget deal, a move seen as tempering attacks from the right on climate. Even in California, where a new Carnegie Endowment for International Peace poll finds that Californians increasingly want their state government to play a bigger role on the international stage, trade trumped climate change as voters’ top priority for international talks for the first time this year. “There’s not a poll or a pundit that suggests that Democrats should be talking about this,” Newsom acknowledged in an interview. “I’m not naive to that either, but I think it’s the way we talk about it that’s the bigger issue, and I think all of us, including myself, need to improve on that and that’s what I aim to do.” In his 2020 presidential campaign, Joe Biden prevailed not after embracing — but rather, distancing himself from — the “Green New Deal,” which Newsom acknowledged this month had become a “pejorative” on the right. Four years later, Trump pilloried Kamala Harris in the general election for her past positions on climate change. Newsom is already facing relentless attacks from the right on energy: two years ago, in what was seen at the time as a shadow presidential debate, Florida Gov. Ron DeSantis was skewering Newsom for his phase-out of gas-powered vehicles: “He is walking his people into a big-time disaster,” DeSantis said. And that was before Republicans began combing Newsom’s social media posts for material to weaponize in future ads. Even Newsom’s predecessor, former Gov. Jerry Brown, who made climate change his signature issue, acknowledged “climate is not the big issue in South Carolina or in Maine or in Iowa.” “Climate is important,” Brown said in an interview. “But it’s not like immigration, it’s not like homelessness, it’s not like taxes, it’s not like inflation, not like the price of a house.” Still, Brown cast climate as an existential issue. “It’s way beyond presidential politics. It is about our survival and your well being for the rest of your life,” he said. “I think he’s doing it because he thinks it’s profoundly important, and certainly politics is not divorced entirely from reality.” Newsom’s inner circle senses a political upside, too. His first-ever visit to the climate talks comes not just from his own or California’s ambitions, but from the vacuum left by Trump. “The more that Trump recedes, like a tide going out, the more coral is exposed. And that’s where Newsom can really flourish,” said Jason Elliott, a former deputy chief of staff and an adviser since Newsom’s early days in elected office. Newsom is “going against the grain,” he continued. “It’s easier to be some of these purple or red state governors in other places in the United States that just wash their hands of EVs the minute that the going gets tough. But that’s just not Newsom.” On climate, Newsom’s attempts to stand alone sit well within the California tradition. Brown and Arnold Schwarzenegger — the Democrat and the Republican who preceded him — both made international climate diplomacy central to their legacies. “We have been at this for decades and decades, through Republican and Democratic administrations,” Newsom said. “That’s an important message at this time as well, because we’re so unreliable as a nation, and we’re destroying alliances and relationships.” Also in Brazil for part of the talks were Govs. Tony Evers of Wisconsin and Michelle Lujan Grisham of New Mexico, both Democrats, and mayors of several major U.S. cities, like Kate Gallego of Phoenix. But their pitch didn’t land with quite the same heft as California’s, a state filled with billion-dollar tech companies that, as Newsom frequently boasts, recently overtook Japan as the world’s fourth-largest economy. He attributed his environmental streak to his family, citing his father, William Newsom, a judge and longtime conservationist. As mayor of San Francisco, Newsom signed a first-in-the-nation composting mandate and plastic bag ban. As lieutenant governor to Brown, Newsom called himself “a solution in search of a problem” because Brown had embraced climate so prominently. But Brown said Newsom has made the issue his own. “I think Newsom comes to this naturally,” he said. Newsom pulls from a wide range of influences; prolific texting buddies include former Washington Gov. Jay Inslee, who ran for president largely on a climate platform, and former Secretary of State John Kerry. He frequently cites the example of President Ronald Reagan, the Republican — and former California governor — who embraced an environmental agenda. “I talk to everybody,” Newsom said. He spoke in almost spiritual terms about his upcoming trip deeper into the Amazon, where he’s scheduled to meet with community stewards and walk through the forest. “When we were all opening up those first books, learning geography, one of the first places we all learn about is the Amazon,” he said. “It’s so iconic, so evocative, so it informs so much of what inspires us as children to care about the Earth and Mother Nature. It connects us to our creator.” THE MID-TRANSITION HURT As governor, Newsom hasn’t had the luxury his predecessors enjoyed of setting ambitious emissions targets, but instead is working in a period beset by natural disasters and tensions with both the left and moderate wings of his party. His aides have dubbed it the remarkably un-sexy “mid-transition”: The deadlines to show results are here, they’re out of reach — and in the interim, voters are mad about energy prices. As a result, he’s pushed to ban the sale of new gas-powered cars by 2035 and directed billions toward wildfire prevention and clean-energy manufacturing — but also reversed past positions against nuclear and Big Oil, including extending the life of California’s last nuclear power plant, pausing a profit cap on refineries and expanding oil drilling in Kern County. Inside the administration, those moves are seen as not a tempering of environmental ambition but a pragmatic recalibration. “We’re transitioning to the other side, and there’s a lot of white water in that. And that’s reality. You’ve got to deal with cards that are dealt,” Newsom said in an interview in São Paulo. But it also exposes him to criticism from both the left and moderate wings of his own party. Newsom’s 2023 speech excoriating oil companies to the United Nations in New York City was one of his proudest moments of his career. This year, he faced banners attacking him: “If you can’t take on Big Oil, can you take on Trump?” At the same time, former Los Angeles Mayor Antonio Villaraigosa, a Democrat, has seized on high gas prices in his campaign to succeed Newsom as governor in 2026 — and is partly blaming past governors’ climate policies. Adding to the crunch are the record-setting wildfires that have beset Newsom’s tenure as governor. They’ve not only devastated communities from Paradise in Northern California to Altadena in Los Angeles County but buoyed both electricity prices as utilities spend billions on fire-proofing their grid and property insurance prices as insurers flee the state. It’s this duality that informs Newsom’s approach. “We’ve got to address costs or we’ll lose the debate,” Newsom said. “This is the hard part.” A business moderate known to hand out personal phones programmed with his number to tech CEOs, Newsom is now pitching his climate fight as one focused on economic competitiveness and jobs. Lauren Sanchez, the chair of the state’s powerful air and climate agency, the California Air Resources Board, called the state’s international leadership the governor’s “north star” on climate change. “He is in the business of ensuring that California is relevant in the future economy,” she said. In Brazil, Newsom made the time to stop by a global investors summit in São Paulo, where he held an hour-long roundtable with green bankers, philanthropists and energy execs. They told him they wanted his climate pacts with Brazilian governments to do more on economic ties. So, Newsom said, he started drafting a new agreement there and then, throwing a paper napkin on the table in reference to the cocktail napkin deal that formed Southwest. “Let’s get this done before I leave,” Newsom said he told his Brazilian counterparts. “We move quickly.” If the moment reflected California’s swagger, it also laid bare its limitations. The Constitution limits states from contributing money to international funds, like the tropical rainforest preservation fund that is the Brazilians’ signature proposal at the talks. And even at home, Trump is still making Newsom’s balancing act hard: Newsom floated backfilling the Trump administration’s removal of electric vehicle incentives with state rebates, then backtracked, conceding the state doesn’t have enough funds. And on Tuesday, reports came out that the Trump administration was planning to offer offshore oil and gas leases for the first time in decades off the coast of California — putting Newsom on the defensive. Newsom called those plans “dead on arrival.” “I also think it remarkable that he didn’t promote it in his backyard at Mar-a-Lago; he didn’t promote it off the coast of Florida,” Newsom added.

LONDON — Keir Starmer’s gone all-in on digital identification for Brits. But while many MPs in the prime minister’s governing Labour Party back the idea in theory, there are plenty despairing at a botched communications strategy which they believe has set the wide-ranging policy up for a fall. Under Starmer’s plans, digital ID will be required for right-to-work checks by 2029. Ministers insist the ID — a second attempt to land ID cards for Brits after a botched first go under Tony Blair — won’t track people’s location, spending habits or online activity.  Yet Labour MPs feel a more sellable emphasis on improving people’s experience of public services has gotten lost. Instead, Starmer’s government — with populist right-winger Nigel Farage breathing down its neck — has attempted to link the plan to a migration crackdown. “It’s a no-brainer,” said Labour MP Allison Gardner, chair of the All Party Parliamentary Group (APPG) for digital identity. “It absolutely will make people’s lives easier, more secure [and] give them more control over their data. We need to explain it better to people, so that they understand that this is for them, and it’s not being done to them.” HARD SELL  A consultation on the plans will be launched by the end of 2025, before legislation next year. The government’s huge majority means it’s highly likely to become law — but there’s a potentially bumpy road ahead. Two decades after Blair’s New Labour first proposed plastic identity cards, Starmer wants to finish the job, pitching a plan to make digital ID mandatory for right-to-work checks as a way to deter irregular migration. Yet the sweeping change, announced on the eve of Labour conference, didn’t get a mention in Starmer’s setpiece speech — and notably didn’t appear in the party’s election manifesto. “The announcement hasn’t been handled well,” admitted a pro-digital ID Labour MP granted anonymity to speak candidly. “Our argument for it keeps changing but none of it is full-throated enough.” The messaging has shifted since the initial push, too. Technology Secretary Liz Kendall later stressed giving “people power and control over their lives,” saying the public is too often “at the mercy of a system that does not work for us as well as it should.” That was only after a drop in poll ratings for the idea. A petition against it has meanwhile racked up close to three million signatures. The shapeshifting rhetoric — painting digital ID first as a necessary inconvenience before calling it vital for state efficiency — caused some heads to spin. Technology Secretary Liz Kendall later stressed giving “people power and control over their lives,” saying the public is too often “at the mercy of a system that does not work for us as well as it should.” | Andy Rain/EPA “The government communication … has not learned from the mistakes made when digital ID was proposed 20 years ago,” said a second Labour MP, who thought the focus on immigration meant ministers weren’t “talking about the benefits it brings ordinary British citizens.”  Red flags have also been also waved over compulsory right-to-work checks, given only the very wealthiest Brits never need to work — making it de facto mandatory. “There’s been a kneejerk reaction, particularly to the word mandatory, which I think British people have naturally reacted against,” admitted Gardner, who argues voters should have a choice about using the scheme. “It’s a little bit of a bandwagon people have latched on to, to actually derail the entire concept.”  Farage, eager to paint himself as a champion of civil liberties, has warned digital ID won’t stop “illegal immigration”  but will “be used to control and penalise the rest of us.” Analysis by the New Britain Project think tank, shared with POLITICO, shows that Google searches for digital ID were elevated for around three weeks after the announcement compared to the typical one day spike for most policies. Interest dwarfed other decisions too, with peak search traffic for digital ID 20 to 50 times higher than any other flagship policy terms in the last year. Nigel Farage, eager to paint himself as a champion of civil liberties, has warned digital ID won’t stop “illegal immigration” but will “be used to control and penalise the rest of us.” | Neil Hall/EPA Longstanding Labour MP Fabian Hamilton highlights the dilemma of digital ID: “Nobody likes compulsion, and it will only work if everybody has to have it.” Despite Kendall expressing optimism about a digital key unlocking “better, more joined-up and effective public services,” Hamilton argues that prioritizing migration in the messaging is too simplistic. “I’m sorry to say that the legal migration is tilting the head at a certain part of the electorate that are very concerned about illegal migration and the tabloids,” he argues. NO SILVER BULLET  Whether digital ID works on its own terms — reducing irregular migration — is also hotly contested. Right-to-work checks already exist in the U.K., with employees required to show documentation like a letter with their national insurance number. “It may be helpful, but obviously it won’t affect fundamental factors [driving people to the U.K.] of family links or English language,” warns former Home Office Permanent Secretary Philip Rutnam. He believes the most challenging part of the scheme will be “establishing the status of many people beyond doubt” given some residents may not have formal ID. “There are millions of people whose status it may bring into question,” Rutnam says. “Their status may not be what they have understood it to be.” Whether digital ID works on its own terms — reducing irregular migration — is also hotly contested. | Tolga Akmen/EPA That’s sparked fears among some in Westminster of another Windrush scandal. That debacle saw some people who emigrated to Britain as part of a post-Second World War rebuilding effort later denied rights and, in the most extreme cases, deported under a scattershot Home Office clampdown.  “We need to be very, very careful,” warns former U.K. Border Force Director-General Tony Smith. Smith says digital ID is “not a panacea,” and warns illegal working is likely to remain because unscrupulous employers won’t suddenly become law-abiding. TECH TROUBLES The British government’s ability to handle such a vast amount of sensitive data securely is also far from certain. Kendall has stressed that the data behind digital ID won’t be centralized and says individuals will be able to see who has accessed their information. That’s not enough for skeptics.  A catastrophic Ministry of Defence breach, which leaked details of Afghans applying to resettle in Britain after the Taliban’s return to power, shows the danger of sensitive details reaching the wrong hands. “The track record’s not been great,” Smith warns. “You are trying to turn round a huge tanker in the ocean here, and I do worry that we haven’t perhaps got the necessary gear.”  Rutnam agrees digital ID will be a “very demanding administrative exercise” that politicians need to understand is “complex and inherently risky.”  A catastrophic Ministry of Defence breach, which leaked details of Afghans applying to resettle in Britain after the Taliban’s return to power, shows the danger of sensitive details reaching the wrong hands. | Andy Rain/EPA Perhaps more damning for digital ID’s support among the Labour faithful is anxiety about future governments using the information malevolently. “Faith in our institutions of government and of the state is at an all-time low,” says Hamilton, citing a “bizarre situation” where some Brits lump digital ID in with Covid-19 vaccines as a government conspiracy. One Labour MP vehemently opposed to digital ID says ministers are so far failing to consider “what happens when we’re gone” and warns any safeguards “can be unpicked” by subsequent administrations. Starmer has spoken about digital ID as a positive alternative to rifling through drawers looking for “three bills when you want to get your kids into school or apply for this or apply for that.” “F*ck you,” the anonymous Labour MP above said in response. “I can’t believe that. Is that the best you’ve got for giving away fundamental rights?” Still, Gardner is pleading for colleagues not to block this modern innovation: “We are at risk of throwing a very, very good baby out with the bathwater if we resist this and just keep ourselves in the dark ages.” Emilio Casalicchio and Dan Bloom contributed to this report.

Treasury Secretary Scott Bessent on Monday said the United States is in talks with China about how to de-escalate a trade war that reignited last week after Beijing announced plans to impose export controls on rare earth magnets used in a variety of high-tech products. “There has been substantial communications over the weekend,” Bessent said in an interview on Fox Business, adding that more “staff level” talks are expected this week in Washington when Chinese officials are in town for the annual fall meetings of the World Bank and the International Monetary Fund. Bessent also said he expects President Donald Trump will still meet with Chinese President Xi Jinping in South Korea in late October, just before that country hosts the annual meeting of leaders from the 21 economies in the Asia-Pacific Economic Cooperation. Trump threatened last week to impose 100 percent tariffs on Chinese goods beginning Nov.1 and cancel the meeting with Xi after China announced the rare earth export restrictions. That caused financial markets to sell off Friday in the face of renewed concern about an escalating trade war between the world’s two largest economies. Bessent said he expected to hold talks in Asia with his Chinese counterpart, Vice Premier He Lifeng, before the Trump-Xi meeting in South Korea. While sending the message the overall U.S.-China relationship is in “good” shape and Trump’s “100 percent tariff does not have to happen,” Bessent insisted Beijing must back off its plan to restrict rare earth magnets. He also suggested a “lower level official” may have made the Chinese decision to restrict exports, rather than Xi himself. “This is China versus the world. They have pointed a bazooka at the supply chains and the industrial base of the entire free world, and we’re not going to have it,” Bessent said. “A group of bureaucrats in China cannot tell us and our allies how to run our supply system.” The U.S. also expects to get substantial support for its stance from Europe, India and democracies in Asia, Bessent said. “I believe that China is open to discussion on this. And if they’re not, we have substantial levers on our own … side that we can pull,” he added. In the midst of tensions earlier this year, the United States imposed 12 countermeasures on China that were “highly” effective, ranging from natural resources used in plastic production to jet engines and parts, Bessent said. The Treasury chief also hinted at the possible expulsion of the hundreds of thousands of Chinese students now in the United States and other possible actions in areas of software, minerals and financial services if China does not back down. “We have plenty of straight, brute-force countermeasures that we can pull,” Bessent said.