BRUSSELS — The EU has struck a political agreement to overhaul the bloc’s foreign direct investment screening rules, the Council of the EU announced on Thursday, in a move to prevent strategic technology and critical infrastructure from falling into the hands of hostile powers. The updated rules — the first major plank of European Commission President’s Ursula von der Leyen’s economic security strategy — would require all EU countries to systematically monitor investments and further harmonize the way those are screened within the bloc. The agreement comes just over a week after Brussels unveiled a new economic security package. Under the new rules, EU countries would be required to screen investments in dual-use items and military equipment; technologies like artificial intelligence, quantum technologies and semiconductors; raw materials; energy, transport and digital infrastructure; and election infrastructure, such as voting systems and databases. As previously reported by POLITICO, foreign entities investing into specific financial services must also be subject to screening by EU capitals. “We achieved a balanced and proportionate framework, focused on the most sensitive technologies and infrastructures, respectful of national prerogatives and efficient for authorities and businesses alike,” said Morten Bødskov, Denmark’s minister for industry, business and financial affairs. It took three round of political talks between the three institutions to seal the update, which was a key priority for the Danish Presidency of the Council of the EU. One contentious question was which technologies and sectors should be subject to mandatory screening. Another was how capitals and the European Commission should coordinate — and who gets the final say — when a deal raises red flags. Despite a request from the European Parliament, the Commission will not get the authority to arbitrate disputes between EU countries on specific investment cases. Screening decisions will remain firmly in the purview of national governments. “We’re making progress. The result of our negotiations clearly strengthens the EU’s security while also making life easier for investors by harmonising the Member States’ screening mechanism,” said the lead lawmaker on the file, French S&D Raphaël Glucksmann. “Yet more remains to be done to ensure that investments bring real added value to the EU, so that our market does not become a playground for foreign companies exploiting our dependence on their technology. The Commission has committed to take an initiative; it must now act quickly,” he said in a statement to POLITICO. This story has been updated.

Iris Ferguson is a global adviser to Loom and a former U.S. deputy assistant secretary of defense for Arctic and global resilience. Ann Mettler is a distinguished visiting fellow at Columbia University’s Center on Global Energy Policy and a former director general of the European Commission. After much pressure, European leaders delayed a decision this week amid division on whether to tighten market access through a “Made in Europe” mandate and redouble efforts to reduce the bloc’s strategic dependencies — particularly on China. This decision may appear technocratic, but the hold-up signals its importance and reflects a larger strategic reality shared across the Atlantic. Security, industry and energy have all fused into a single race to control the systems that power modern economies and militaries. And increasingly, success will hinge on whether the U.S. and Europe can confront this reality together, starting with the one domain that’s shaping every other: energy. While traditional defense spending still grabs headlines, today’s battlefield is being reshaped just as profoundly by energy flows and critical inputs. Advanced batteries for drones, portable power for forward-deployed units and mineral supply chains for next-generation platforms — these all point to the simple truth that technological and operational superiority increasingly depends on who controls the next generation of energy systems. But as Europe and the U.S. look to maintain their edge, they must rethink not just how they produce and move energy, but how to secure the industrial base behind it. Energy sovereignty now sits at the center of our shared security, and in a world where adversaries can weaponize supply chains just as easily as airspace or sea lanes, the future will belong to those who build energy systems that are resilient and interoperable by design. The Pentagon already understands this. It has tested distributed power to shorten vulnerable fuel lines in war games across the Indo-Pacific; it has watched closely how mobile generation units keep the grid alive under Russian attack in Ukraine; and it is exploring ways to deliver energy without relying on exposed logistics via new research on solar power beaming. Each of these cases clearly demonstrates that strategic endurance now depends on energy agility and security. But currently, many of these systems depend on materials and manufacturing chains that are dominated by a strategic rival: From batteries and magnets to rare earth processing, China controls our critical inputs. This isn’t just an economic liability, it’s a national security vulnerability for both Europe and the U.S. We’re essentially building the infrastructure of the future with components that could be withheld, surveilled or compromised. That risk isn’t theoretical. China’s recent export controls on key minerals are already disrupting defense and energy manufacturers — a sharp reminder of how supply chain leverage can be a form of coercion, and of our reliance on a fragile ecosystem for the very technologies meant to make us more independent. So, how do we modernize our energy systems without deepening these unnecessary dependencies and build trusted interdependence among allies instead? The solution starts with a shift in mindset that must then translate into decisive policy action. Simply put, as a matter of urgency, energy and tech resilience must be treated as shared infrastructure, cutting across agencies, sectors and alliances. Defense procurement can be a catalyst here. For example, investing in dual-use technologies like advanced batteries, hardened micro-grids and distributed generation would serve both military needs and broader resilience. These aren’t just “green” tools — they’re strategic assets that improve mission effectiveness, while also insulating us from coercion. And done right, such investment can strengthen defense, accelerate innovation and also help drive down costs. Next, we need to build new coalitions for critical minerals, batteries, trusted manufacturing and cyber-secure infrastructure. Just as NATO was built for collective defense, we now need economic and technological alliances that ensure shared strategic autonomy. Both the upcoming White House initiative to strengthen the supply chain for artificial intelligence technology and the recently announced RESourceEU initiative to secure raw materials illustrate how partners are already beginning to rewire systems for resilience. Germany gave the bloc one such example by moving to reduce its reliance on Chinese-made wind components in favor of European suppliers. | Tan Kexing/Getty Images Finally, we must also address existing dependencies strategically and head-on. This means rethinking how and where we source key materials, including building out domestic and allied capacity in areas long neglected. Germany recently gave the bloc one such example by moving to reduce its reliance on Chinese-made wind components in favor of European suppliers. Moving forward, measures like this need EU-wide adoption. By contrast, in the U.S., strong bipartisan support for reducing reliance on China sits alongside proposals to halt domestic battery and renewable incentives, undercutting the very industries that enhance resilience and competitiveness. This is the crux of the matter. Ultimately, if Europe and the U.S. move in parallel rather than together, none of these efforts will succeed — and both will be strategically weaker as a result. The EU’s High Representative for Foreign Affairs and Security Policy Kaja Kallas recently warned that we must “act united” or risk being affected by Beijing’s actions — and she’s right. With a laser focus on interoperability and cost sharing, we could build systems that operate together in a shared market of close to 800 million people. The real challenge isn’t technological, it’s organizational. Whether it be Bretton Woods, NATO or the Marshall Plan, the West has strategically built together before, anchoring economic resilience with national defense. The difference today is that the lines between economic security, energy access and defense capability are fully blurred. Sustainable, agile energy is now part of deterrence, and long-term security depends on whether the U.S. and Europe can build energy systems that reinforce and secure one another. This is a generational opportunity for transatlantic alignment; a mutually reinforcing way to safeguard economic interests in the face of systemic competition. And to lead in this new era, we must design for it — together and intentionally. Or we risk forfeiting the very advantages our alliance was built to protect.

BRUSSELS — The head of Wall Street’s top watchdog is “absolutely not” concerned about the body’s independence from the White House. Securities and Exchange Commission Chair Paul Atkins told POLITICO in an interview that President Donald Trump has the power to oust the head of the body and its commissioners. “It’s clear from the law and Supreme Court rulings that we’re part of the executive branch and the president can fire me and the other commissioners,” he said. “He’s [Trump] the head of the executive branch. So I think that goes without saying.” His comments come amid Trump’s repeated attacks on the head of the Federal Reserve, Jerome Powell, as well as his attempts to fire Lisa Cook, a member of the board. Asked whether he has concerns about the SEC’s independence, Atkins said: “No. Absolutely not.” But, he added: “As far as the SEC goes,” he is “confident we could do our job as we have been doing it now for 90 years.” Atkins declined to provide an opinion on Trump’s attacks on Powell — the president has described the Fed chair as a “moron” and a “numbskull” — saying: “That’s another agency altogether. They can — Jay Powell and the president — work out those sorts of things.” CRYPTO RESERVE Atkins praised Trump for his plans to set up a strategic Bitcoin reserve and digital assets stockpile following a presidential executive order. “The U.S. government has seized a lot of Bitcoin and other things. … I think it’s smart not to dump it on the market, frankly, and so I salute the efforts of the president and the Treasury Secretary [Scott Bessent] and others to address that issue.” The SEC chair has unveiled an ambitious agenda for stablecoin regulation known as “Project Crypto,” which he described as a move away from a “head-in-the-sand” approach from the regulator toward the digital technology. “The SEC needs to embrace change. And if you do the opposite … if you are not embracing it, then it goes offshore,” he said, citing the example of FTX, the crypto exchange which was headquartered in the Bahamas and collapsed in 2022. GREEN STANDARDS Atkins has made his dislike of EU rules for corporate sustainability reporting clear, criticizing them in a speech in Paris earlier this week. He has also threatened to withdraw U.S. recognition of international accounting standards over the inclusion of sustainability in their methodology. Asked whether he disagrees with the European Central Bank’s approach of factoring the risks posed by climate change into their policymaking, Atkins said: “Yes, in a word.” “We’re not here to be environmental police or social police or whatever. That’s not our job. And if others want to do that, then that’s up to them,” he said. Atkins said “it doesn’t matter what I believe” regarding his personal views on climate change, adding that the SEC’s position “long before me” was that climate change does not pose a risk to the orderly functioning of financial markets. “I’m just continuing with that. I agree with that position,” he said. ENFORCEMENT AGENDA Separately, Atkins defended the appointment of Meg Ryan, a judge, to the role of head of the SEC’s enforcement division. Her hire broke with a precedent of appointing someone with long experience in securities law. But Atkins said critics are “people who are ignorant, frankly, of how things work.” “Judges don’t come ready-made with knowledge of the securities world,” he said, adding that Ryan is “eminently qualified to take this position.” Judges “learn it on the job, they apply their experience and their knowledge to the case at hand, and they study up and they’re smart people and that’s their job,” Atkins said.

Robert Benson is the associate director for National Security and International Policy at the Center for American Progress. History will likely remember the U.S.–EU Turnberry trade deal less for its technicalities than for what it symbolizes: the moment Washington openly rewrote the transatlantic bargain. Far from a victory for Brussels, this terse 19-point deal merely codified the structural disadvantages the bloc faced in earlier trade talks. Building on the understanding reached at U.S. President Trump’s Turnberry golf resort in July — which European leaders had called “a dark day” — the agreement imposed a 15 percent tariff on most European exports to the U.S. and formalizes a commitment to bring auto tariffs to the same level, while leaving the levies on Europe’s car industry punishingly high. Yet, somehow, the release of the deal’s framework text was met with grudging acceptance — and even relief — on the grounds that it was the best bargain Europe could hope for. Essentially, what began as a trade standoff ended in a lopsided pact formalizing America’s leverage over Europe. Then, before the ink had even dried, Washington drew a new battle line, threatening fresh tariffs that would strike at the core of the bloc’s digital sovereignty. This broadside exposes a deeper truth: Europe is adrift in a world where it no longer shapes the norm and stands increasingly vulnerable to American revisionism. This realization may be frightening, but it shouldn’t come as a surprise. U.S. Treasury Secretary Scott Bessent had already laid out this vision last fall — that the U.S. must leverage Europe’s security dependence to rewrite the global economic order in its favor. Turnberry is simply the first full implementation of this strategy, and pressure will only mount from here. The deal itself is structurally skewed, front-loading a 15-percent asymmetric tariff in favor of U.S. industries and shielding American sectors from reciprocal obligations. Its bold promises — including $750 billion in U.S. energy exports and $600 billion in EU investment — are also unrealistic and deliberately designed to collapse under their own weight. So, when the EU inevitably falls short, the U.S. can then seize the opportunity to press for greater concessions on tech regulation and digital services. The real purpose isn’t compliance, it’s coercion. And while the fact that we’ve so far managed to avoid a full-blown trade war may appear to some as evidence of successful diplomacy, this reading overlooks the real cost of Brussels’s concessions: sharp economic contraction, political backlash and the normalization of bullying in international diplomacy. Europe is navigating a maze of interdependencies, and Washington knows exactly how to exploit that. As evidenced by Congressman Jim Jordan’s August visits to Brussels, London and Dublin, MAGA will now frame the EU’s digital regulation — on content moderation, data privacy and platform accountability — as violations of “free speech” and anti-American bias. This is more than a rhetorical ploy, it’s a calculated effort to destabilize Europe’s liberal democracies by amplifying fringe political actors, sowing division and undermining trust in centrist institutions. Beyond pushing back against tech standards, Washington is positioning itself to challenge Europe on the ideological legitimacy of its entire regulatory model. Thus, the battle over digital sovereignty will be cast in civilizational terms — free markets versus bureaucratic overreach, expression versus censorship, sovereignty versus globalism. And Europe’s far-right narrative of elite censorship will have the imprimatur of U.S. policy. These grievances will then likely merge with U.S. demands for greater burden-sharing on defense or security concessions on Ukraine. It’s also entirely possible the Trump administration will exploit divisions among member countries on digital sovereignty, tying reviews of America’s force posture to regulatory rollbacks, a retreat on digital taxes or alignment with its own tech standards.  Brussels needs to be prepared for the battles ahead. Thankfully, some of the consequences are already coming into focus: First, driven by anemic growth forecasts of 0.5 to 0.9 percent — particularly in export-heavy economies like Germany — the risk of a far-right surge across Europe is growing. This economic pain will translate into political volatility. Populist parties will frame Brussels as complicit in Washington’s coercion and incapable of defending national interests. And despite its ideological affinities with the U.S., Europe’s far right won’t have any qualms with turning on its ideological bedfellows in the White House. Germany’s Alternative for Germany and France’s National Rally are already exploiting anger over the deal and are calling for a loosening of transatlantic ties.   Brussels needs to be prepared for the battles ahead. | Brendan Smialowski/AFP via Getty Images Next, when it comes to security, the U.S.–EU decoupling that’s already in motion will only accelerate. France and Germany are currently reviving proposals for a European Security Council, accelerating cooperation under Permanent Structured Cooperation and weighing investment in a European Defense Fund. Public opinion is shifting too. Majorities in Germany and France now support greater autonomy in defense planning and procurement, with pluralities favoring a European army. Even staunchly Atlanticist Poland is moving away from reflexive alignment with Washington. Finally, there’s the fact that, sooner or later, markets will wake up to the implications of this global reordering. So far, they’ve largely shrugged it off, treating Turnberry as theater, and investors have priced in volatility without grasping the deeper structural shift underway. But if capital flows start reflecting the risk of permanent transatlantic divergence — on currency regimes, regulatory frameworks and trade access — the spiral could be swift. And unlike the 2008 financial crisis, the shock wouldn’t be easily sutured. Europe isn’t powerless here. It retains economic scale, regulatory clout and unused tools — but it must be prepared to use them. This means treating economic security like national security, and embedding defense autonomy, energy resilience and technological sovereignty into a unified strategic doctrine. It also means strengthening Europe’s defenses against asymmetric coercion. Brussels’s Anti-Coercion Instrument, a trade tool meant to counter economic blackmail by imposing targeted measures on U.S. service providers, was a step in the right direction — even if it ultimately wasn’t deployed. Now, the EU must also build legal firewalls against extraterritorial enforcement and deploy its regulatory power to actively shape global norms. Europe’s challenge isn’t to restore the old transatlantic bargain but to build a new one before the next crisis hits and Trump dictates the terms once more. If the bloc hesitates, it won’t get to choose at all.