The Trump administration’s renewed focus on securing critical minerals highlights an urgent truth, reinforced in “China Aims to Keep U.S. Military From Obtaining Its Rare Earths” (U.S. News, Nov. 12): America’s energy future depends on what we build and where we build it.
For too long, we have relied on foreign sources for the rare-earth elements and advanced materials that power everything from electric grids and defense systems to the data centers fueling artificial intelligence. Even with the rare-earths deal Mr. Trump struck with China last month, more action is required to diversify supplies and strengthen domestic production as an essential step toward energy security.
A trio of new trials — a devastating hurricane, expanding conflict in the Mideast and a dockworkers strike that threatens the U.S. economy — are looming over the final weeks of the presidential campaign and could help shape the public mood as voters decide between Democrat Kamala Harris and Republican Donald Trump.How events shake out — and how the candidates respond — could be decisive as they claw for votes in battleground states.Related video above: Election 2024: What are the key swing states to watch?The sitting president, Joe Biden, is still the steward of a U.S. economy and foreign policy at this tumultuous moment and may well bear ultimate responsibility for how they play out. But how Harris and Trump approach the three disparate issues could have rippling impact on how Americans perceive their two choices this November.”Unfortunately, there are going to be events like this, and this is where you see the leadership of a president show up,” White House press secretary Karine Jean-Pierre told reporters on Tuesday. “I think this should send a message to Americans: It matters. It matters who sits behind the Resolute Desk.”Harris, with Biden’s help, is trying to display steady calm as a flurry of difficult problems arise all at once. She and Biden on Tuesday toggled between directing Hurricane Helene recovery and rescue response work and huddling with aides in the White House Situation Room to watch as the U.S. helped Israel defend against a massive attack by Iran in retaliation for the killing of Tehran-backed leaders of Lebanese Hezbollah.All the while, they were keeping close contact with economic advisers as dockworkers took to the picket line Tuesday, a walkout stretching from ports in Maine to Texas that threatens to snarl supply chains and cause shortages and higher prices if it stretches on for more than a few weeks.Trump, for his part, lashed out at Harris as in over her head, while claiming that this sort of crush of problems never would have happened under his watch.”We have been talking about World War III, and I don’t want to make predictions,” Trump said at a campaign event in Wisconsin. “The whole world is laughing at us. That’s why Israel was under attack just a little while ago. Because they don’t respect our country anymore.”Yet voters cast Trump aside four years ago in large part because of how they viewed his handling of the swirling economic, social and public health challenges that emerged from the COVID-19 pandemic. Biden, in comments to reporters before meeting with aides Tuesday to discuss the ongoing hurricane response, seemed to acknowledge the growing frustration with the federal response to the massive storm.”I’ve been in frequent contact with the governors and other leaders in the impacted areas, and we have to jumpstart this recovery process,” Biden said. He will travel to the Carolinas on Wednesday to get a closer look at the hurricane devastation. He is also expected to visit hurricane-impacted areas in Georgia and Florida later this week. “People are scared to death. People wonder whether they’re going to make it.” Video below: Biden pledges federal aid after touring devastation from HeleneHarris, meanwhile, headed to Georgia on Wednesday and North Carolina in the coming days to do the same. Tuesday’s vice presidential debate offered a sampling of how the two campaigns were reacting to new developments to bolster their own messages and sharpen their attacks on their rivals. Minnesota Gov. Tim Walz promised “steady leadership” under Harris while Ohio Sen. JD Vance pledged a return to “peace through strength” if Trump is returned to the White House.Biden has stayed off the campaign trail since announcing in July that he was ending his reelection effort amid sliding public approval ratings. His conspicuous absence underscores that Democrats see him as more of a liability than an asset in making the case for Harris, said Christopher Borick, director of the Muhlenberg College Institute of Public Opinion in Pennsylvania.But how well Biden deals with the three latest emergency situations could have a big impact in how undecided voters perceive Harris in these final days.”President Biden can’t help Kamala Harris on the stump,” Borick said. “But in a campaign where you are turning over every rock in a few states to get that undecided voter, how he manages these crises over the next several weeks could have an impact.” The Harris campaign understands the risks it faces with multiple crises converging all at once, especially given their varied and unpredictable nature. A prolonged strike, a bungled disaster response or a further expansion of Middle East conflict could raise doubts about Biden’s leadership, and by extension that of his second-in-command.At the same time, Harris campaign aides believe the perilous moment presents an opportunity to demonstrate to voters the stakes of who’s in the job and the seriousness with which they approach it, according to campaign officials who spoke on the condition of anonymity to discuss internal thinking.The former president, in a speech in Waunakee, Wisconsin, and in social media postings Tuesday, offered a mixture of prayer and concern for those impacted by Helene, jabs at Harris for the dockworkers strike, and an aside about the casting of Stanley Kubrick’s film “Full Metal Jacket.””The situation should have never come to this and, had I been president, it would not have,” Trump said in a statement about the strike.Harris aides made a point of having the vice president deliver brief remarks on the Iranian attack Tuesday in between taping interviews for her campaign, aiming to portray her as ready to take command.Late-term tumult has been fixture in American presidential politics, sometimes in the form of scandal and other times with an incumbent hoping to demonstrate that he or his preferred successor would be a steady head at an uncertain time. George W. Bush pushed a rescue package through Congress to stabilize a reeling financial system by creating the Troubled Asset Relief Program amid fears that the economy was on the verge of collapse. The broader economic conditions didn’t help Republican John McCain in the race he lost to Barack Obama. Jimmy Carter’s reelection campaign in 1980 was paralyzed by the Iran hostage crisis. Fifty-two hostages were released on January 20, 1981, soon after his successor, Ronald Reagan, was inaugurated.Lyndon Johnson announced a halting of bombings in North Vietnam days before the 1968 election, a step he hoped would bring the conflict toward a peace settlement. But the South Vietnamese indicated they would not negotiate and Johnson’s vice president, Hubert Humphrey, lost narrowly to Republican Richard Nixon.”The efforts by incumbents to help themselves or their party’s nominee with ‘October surprises’ go back quite a ways,” said Edward Frantz, a University of Indianapolis historian. “In this current climate, I’m not sure how many voters can be persuaded by a candidate this late in the game trying to show competency.”___AP writer Josh Boak contributed to this report.
WASHINGTON —
A trio of new trials — a devastating hurricane, expanding conflict in the Mideast and a dockworkers strike that threatens the U.S. economy — are looming over the final weeks of the presidential campaign and could help shape the public mood as voters decide between Democrat Kamala Harris and Republican Donald Trump.
How events shake out — and how the candidates respond — could be decisive as they claw for votes in battleground states.
Related video above: Election 2024: What are the key swing states to watch?
The sitting president, Joe Biden, is still the steward of a U.S. economy and foreign policy at this tumultuous moment and may well bear ultimate responsibility for how they play out. But how Harris and Trump approach the three disparate issues could have rippling impact on how Americans perceive their two choices this November.
“Unfortunately, there are going to be events like this, and this is where you see the leadership of a president show up,” White House press secretary Karine Jean-Pierre told reporters on Tuesday. “I think this should send a message to Americans: It matters. It matters who sits behind the Resolute Desk.”
Harris, with Biden’s help, is trying to display steady calm as a flurry of difficult problems arise all at once.
She and Biden on Tuesday toggled between directing Hurricane Helene recovery and rescue response work and huddling with aides in the White House Situation Room to watch as the U.S. helped Israel defend against a massive attack by Iran in retaliation for the killing of Tehran-backed leaders of Lebanese Hezbollah.
All the while, they were keeping close contact with economic advisers as dockworkers took to the picket line Tuesday, a walkout stretching from ports in Maine to Texas that threatens to snarl supply chains and cause shortages and higher prices if it stretches on for more than a few weeks.
Trump, for his part, lashed out at Harris as in over her head, while claiming that this sort of crush of problems never would have happened under his watch.
“We have been talking about World War III, and I don’t want to make predictions,” Trump said at a campaign event in Wisconsin. “The whole world is laughing at us. That’s why Israel was under attack just a little while ago. Because they don’t respect our country anymore.”
Yet voters cast Trump aside four years ago in large part because of how they viewed his handling of the swirling economic, social and public health challenges that emerged from the COVID-19 pandemic.
Biden, in comments to reporters before meeting with aides Tuesday to discuss the ongoing hurricane response, seemed to acknowledge the growing frustration with the federal response to the massive storm.
“I’ve been in frequent contact with the governors and other leaders in the impacted areas, and we have to jumpstart this recovery process,” Biden said. He will travel to the Carolinas on Wednesday to get a closer look at the hurricane devastation. He is also expected to visit hurricane-impacted areas in Georgia and Florida later this week. “People are scared to death. People wonder whether they’re going to make it.”
Video below: Biden pledges federal aid after touring devastation from Helene
Harris, meanwhile, headed to Georgia on Wednesday and North Carolina in the coming days to do the same.
Tuesday’s vice presidential debate offered a sampling of how the two campaigns were reacting to new developments to bolster their own messages and sharpen their attacks on their rivals. Minnesota Gov. Tim Walz promised “steady leadership” under Harris while Ohio Sen. JD Vance pledged a return to “peace through strength” if Trump is returned to the White House.
Biden has stayed off the campaign trail since announcing in July that he was ending his reelection effort amid sliding public approval ratings.
His conspicuous absence underscores that Democrats see him as more of a liability than an asset in making the case for Harris, said Christopher Borick, director of the Muhlenberg College Institute of Public Opinion in Pennsylvania.
But how well Biden deals with the three latest emergency situations could have a big impact in how undecided voters perceive Harris in these final days.
“President Biden can’t help Kamala Harris on the stump,” Borick said. “But in a campaign where you are turning over every rock in a few states to get that undecided voter, how he manages these crises over the next several weeks could have an impact.”
The Harris campaign understands the risks it faces with multiple crises converging all at once, especially given their varied and unpredictable nature. A prolonged strike, a bungled disaster response or a further expansion of Middle East conflict could raise doubts about Biden’s leadership, and by extension that of his second-in-command.
At the same time, Harris campaign aides believe the perilous moment presents an opportunity to demonstrate to voters the stakes of who’s in the job and the seriousness with which they approach it, according to campaign officials who spoke on the condition of anonymity to discuss internal thinking.
The former president, in a speech in Waunakee, Wisconsin, and in social media postings Tuesday, offered a mixture of prayer and concern for those impacted by Helene, jabs at Harris for the dockworkers strike, and an aside about the casting of Stanley Kubrick’s film “Full Metal Jacket.”
“The situation should have never come to this and, had I been president, it would not have,” Trump said in a statement about the strike.
Harris aides made a point of having the vice president deliver brief remarks on the Iranian attack Tuesday in between taping interviews for her campaign, aiming to portray her as ready to take command.
Late-term tumult has been fixture in American presidential politics, sometimes in the form of scandal and other times with an incumbent hoping to demonstrate that he or his preferred successor would be a steady head at an uncertain time.
George W. Bush pushed a rescue package through Congress to stabilize a reeling financial system by creating the Troubled Asset Relief Program amid fears that the economy was on the verge of collapse. The broader economic conditions didn’t help Republican John McCain in the race he lost to Barack Obama.
Jimmy Carter’s reelection campaign in 1980 was paralyzed by the Iran hostage crisis. Fifty-two hostages were released on January 20, 1981, soon after his successor, Ronald Reagan, was inaugurated.
Lyndon Johnson announced a halting of bombings in North Vietnam days before the 1968 election, a step he hoped would bring the conflict toward a peace settlement. But the South Vietnamese indicated they would not negotiate and Johnson’s vice president, Hubert Humphrey, lost narrowly to Republican Richard Nixon.
“The efforts by incumbents to help themselves or their party’s nominee with ‘October surprises’ go back quite a ways,” said Edward Frantz, a University of Indianapolis historian. “In this current climate, I’m not sure how many voters can be persuaded by a candidate this late in the game trying to show competency.”
There is renewed attention on the sustainability of semiconductors. Chorus has been building in recent years to improve the sustainability of chip manufacturing and usage. In 2022, COP27 saw the creation of a Semiconductor Climate Consortium with 60 founding members pledging to reduce emissions to 0% by 2050.
It is understandable why chips would be a target. They are ubiquitous and their number and usage will just keep increasing. Most stages of their complex supply chain–from the extraction of raw materials to transportation of finished goods to the processing, heating, and cooling required in production, to recycling–produce significant emissions.
Despite this, governments and semiconductor companies must be careful about how they approach chip sustainability at this time. We just went through a chip shortage that brought the economies to their knees. The shortage also brought to the fore the potential economic and national security benefits of increasing and localizing chip production. The CHIPS and Science Act passed earlier this year in the U.S. has generated momentum behind chip manufacturing–and sustainability issues must be addressed in a way that does not slow this momentum.
This won’t have as much cost as one may imagine. Most of the current focus is on emissions–and the chip industry produces only 0.1 to 0.2% of global carbon dioxide equivalent emissions. This is small when considering the outsized economic impact they produce.
Chips serve as key enablers for smart grids, the transition to renewables, intelligent and electric transportation, low carbon footprint logistics and supply chains, video conferencing, smart agriculture, drug discovery, and energy-efficient manufacturing, each helping make progress toward global sustainability goals. The economic impact of chips also helps greater adoption of sustainable technologies. One could argue that the end-to-end sustainability impact of chips is likely positive–despite their emissions and large energy and water needs.
What does a careful approach to chip sustainability mean today?
A conventional regulatory approach may lead to a National Environmental Policy Act (NEPA)-triggered environmental review for each new chip production project before CHIPS Act funds can be disbursed. It may also allow litigation by private citizens at each step of the process. However, this may introduce multi-year delays in a cost-conscious and fast-moving industry. These delays (environmental reviews take more than four years, on average) and the corresponding increase in project costs may defeat the key purpose of the act–outpacing economic and geopolitical competitors and securing chip supplies. Instead, one-time exceptions should be made that will allow fab constructions and upgrades to start with little delay.
One could argue that this “free pass” may both be dangerous and set a bad precedent. However, the chip industry has done well with goal setting and self-regulation. TSMC now invests 2% of its annual revenue in green initiatives and recycles over 85% of the water it uses. Intel uses renewable energy for over 80% of its operations and produces more fresh water than it consumes in the US, India, and Costa Rica. Samsung reuses over half of its water. Both the energy and water intensity of chip production have been decreasing fast. The use of renewable energy has been on the upswing. New equipment and processes are considerably more energy efficient.
One key reason why the chip industry has done so much is that improved sustainability aligns with their economic objectives. Reducing energy, gas, and water requirements reduces their costs and provides them flexibility in terms of location. Chipmakers have enough margins to absorb short-term costs. And their customers often require meeting sustainability targets.
In addition to one-time NEPA exceptions, regulators should be flexible when considering metrics on which the industry has not done well. Chip production processes have been developed and perfected over decades. Replacing parts of the process with their more sustainable counterparts would require large investments into research and development with no guarantees of success.
Similarly, today’s semiconductor supply chains are extremely optimized for efficiency and cost. A careless relocation of supply chain components simply to meet sustainability metrics can impact cost and competitiveness. Special flexibility should be shown with brownfield chip production. The cost of retrofitting older fabs (or replacing their tools, facilities, and processes) that mostly produce low-margin chips may render these fabs uncompetitive. Chip security concerns are causing a restructuring of existing supply chains. Care must be taken that the compliance burden does not produce unreliable or uncompetitive supply chains.
The chip industry must grow–economic and national security demands it. It is also necessary for this growth to be sustainable. Since the industry is at an inflection point, it will be important to be flexible and pragmatic.
Rakesh Kumar is a professor in the Electrical and Computer Engineering department at the University of Illinois and the author of Reluctant Technophiles: India’s Complicated Relationship with Technology.
More must-read commentary published by Fortune:
Economic pessimists’ bet on a 2023 recession failed. Why are they doubling down in 2024?
COVID-19 v. Flu: A ‘much more serious threat,’ new study into long-term risks concludes
‘Parroting Putin’s propaganda’: The business exodus over Ukraine was no Russian bonanza
The U.S.-led digital trade world order is under attack–by the U.S.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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BERLIN — At its summit this week, the European Union is threatening to name and shame more than a dozen Chinese companies that, it claims, are supplying critical technology to equip Russia’s war machine.
But what about the Western companies that make dual-use and other advanced gear that is subject to sanctions and yet, according to an analysis of wreckage found on the Ukrainian battlefield, is used in Russian Kalibr missiles, Orlan drones and Ka-52 “Alligator” helicopters?
Radio silence.
So here’s a trivia question for you: Which company is the leading maker of the so-called “high-priority battlefield items” trafficked to Russia that the Western coalition wants to interdict?
If you said Intel, then go to the top of the class: According to the sanctions team at the Kyiv School of Economics, the U.S. semiconductor giant again leads the pack this year. It’s followed by Huawei of China. Then come Analog Devices, AMD, Texas Instruments and IBM — all of which are American.
Russian imports of microelectronics, wireless and satellite navigation systems and other critical parts subject to sanctions have recovered to near pre-war levels with a monthly run rate of $900 million in the first nine months of this year, according to a forthcoming report from the Kyiv School’s analytical center, the KSE Institute.
All of this indicates that, while Western sanctions imposed over Russia’s full-scale invasion on February 24, 2022, had a temporary impact, Moscow and its helpers have largely succeeded in reconfiguring supply chains — with the help of China, Hong Kong and countries in Russia’s backyard like Kazakhstan and NATO member Turkey.
That in turn begs the question as to whether, as the EU strives to deliver a 12th package of sanctions against Russia in time for a leaders’ summit on Thursday, the bloc is serving up yet another case study for the definition of insanity often attributed to Albert Einstein: doing the same thing over and over again and expecting a different result.
For Elina Ribakova, director of the international program at the KSE Institute, the Western private sector must also be held to account. It should, she argues, be required to track its products along the entire value chain to their final destination — just as banks were forced to tighten anti-money laundering controls and customer checks after the 2008 crash.
“We have a policy in a void. We have put it on paper but we don’t have any infrastructure for the private sector to comply — or for us to check,” Ribakova told POLITICO. “We need to have the private sector enforce and implement this.”
Intel, responding to a request for comment, said it had suspended all shipments to Russia and Belarus, its ally, and that it was compliant with sanctions and export controls against both countries issued by the U.S. and its allies.
“While we do not always know nor can we control what products our customers create or the applications end-users may develop, Intel does not support or tolerate our products being used to violate human rights,” the company said in a statement. “Where we become aware of a concern that Intel products are being used by a business partner in connection with abuses of human rights, we will restrict or cease business with the third party until and unless we have high confidence that Intel’s products are not being used to violate human rights.”
As for Europe, while its companies may not feature among the top makers of critical technology sold to Russia, its industrial businesses are facing growing scrutiny over the supply of machinery and spare parts — often via third countries like Kazakhstan that have seen suspicious surges in imports.
It’s here, also, that Europe has fallen down.
In imposing sanctions, it’s a case of “all for one” — the bloc has jointly agreed on and implemented measures affecting everything from energy to banking.
But enforcement is a matter for individual member countries. Some are on board with the program. Others, like Hungarian Prime Minister Viktor Orbán, overtly sympathize with Russia. And others, still, are conflicted — as when it emerged that the husband of hawkish Estonian premier Kaja Kallas owned a stake in a freight firm that still did business in Russia.
Then there are countries like neutral Austria, with historical ties to the Soviet military-industrial complex that have left politicians and law enforcement with a huge blind spot.
That’s important because, as independent researcher Kamil Galeev put it to POLITICO, Russia today still upholds an organizing principle dating back to the early Soviet era that civilian industry should “be able to switch 100 percent to military production should the need arise.”
Justice delayed
Despite evidence of widespread breaches, only a handful of sanctions cases are being pursued by European law enforcement. Among them, German prosecutors have secured the arrest of a businessman suspected of supplying precision lathes to two Russian companies that make sniper rifles.
But the wheels of justice turn slowly: The arrest in August of Ulli S. — prosecutors, following German tradition, have not published his full name — relates to the initial imposition of Western sanctions over Russia’s occupation of Crimea and eastern Ukraine in 2014.
The press had already cracked the case by the time the suspect appeared in court, naming DMG Mori — a Japanese-German joint venture — as the supplier. One customer was Kalashnikov, maker of the famed AK-47 rifle. The other was Promtekhnologia, which has been sanctioned by the U.S. and featured in POLITICO’s sniper bullets investigation. Promtekhnologia makes the Orsis sniper rifle promoted by action movie actor Steven Seagal — now a Russian citizen — and used by President Vladimir Putin’s men in Ukraine.
DMG Mori, formerly called Gildemeister, suspended sales to Russia after the full-scale invasion. But, because it has closed down its operations in the country, it says it is no longer able to keep control over its machines made there (although an internal probe did find that they were being used for civilian purposes). The German Federal Prosecutor did not respond to a request for comment.
The real bad actors
It’s not just in stopping imports to Russia that sanctions are falling short of their stated intention.
Vladimir Putin’s former wife, Lyudmila (left), and her new partner have splashed the cash on luxury property investments in Spain, Switzerland and France a POLITICO investigation found | Yuri Kochetkov/EPA
Russians with close ties to Putin — and their money — continue to be more than welcome in Europe despite the death and destruction his regime has unleashed. His former wife, Lyudmila, and her new partner have splashed the cash on luxury property investments in Spain, Switzerland and France, as a POLITICO investigation found at the start of the year.
And when the European Council — the intergovernmental branch of the EU — does sanction Russian business leaders suspected of aiding and abetting the Putin regime, it has often relied on slipshod evidence that makes the decisions easy to challenge in court, POLITICO has also found.
Nearly 1,600 Western multinationals continue, meanwhile, to do business in Russia. Many that announced they would pull out have struggled to do so, as POLITICO discovered when it investigated Western liquor companies that said they had quit Russia — only to find that their booze was still freely available. And some companies that did stay, like Danone and Carlsberg, have been shaken down by Putin and his cronies — a case of Russian roulette, if ever there was one.
With the EU apparently lacking the means, or the political will, to do more to economically isolate Russia, the bloc is sending its sanctions envoy, David O’Sullivan, on a mission to apply moral suasion to countries that are, as he diplomatically puts it, “not aligned” on sanctions.
On the high-priority battlefield technology, Sullivan told POLITICO’s EU Confidential podcast last month that the EU has had “a limited success — but in an area which is absolutely critical to the defense of Ukraine.”
More broadly, he said: “The sanctions are a sort of slow puncture of the Russian economy. Perhaps not the blowout that some people initially predicted, but … the air is escaping from the tire and sooner or later the vehicle is going to become impossible to drive.”
To be fair, O’Sullivan isn’t overselling the efficacy of sanctions. And he may ultimately be proven right.
But he only will be vindicated if Western governments do a better job of holding their own businesses to account in stemming the flows of technology, equipment and spare parts that sustain Putin and his war of aggression.
That will come down to whether they have the will to enforce their decisions. And the evidence so far is that they don’t.
This article is part of the Road to COP special report, presented by SQM.
Last week’s surprise deal between China and the United States may provide a boost to the climate talks in Dubai — but the two powers remain at odds on tough questions such as how quickly to shut down coal and who should provide climate aid to developing nations.
The world’s top two drivers of climate change are also divided by a thicket of disagreements on trade, security, human rights and economic competition.
The good news is that Washington and Beijing are talking to each other again and restarting some of their technical cooperation on climate issues, after a yearlong freeze. That may still not be enough to get nearly 200 nations to commit to far greater climate action at the talks that begin Nov. 30.
The two superpowers’ latest detente creates the right “mood music” for the summit, said Alden Meyer, a senior associate at climate think tank E3G. “But it still is not saying that the world’s two largest economies and two largest emitters are fully committed to the scale and pace of reductions that are needed.”
The deal, announced after a meeting this month between U.S. climate envoy John Kerry and his Chinese counterpart Xie Zhenhua, produced an agreement to commit to a series of actions to limit climate pollution. Those include accelerating the shift to renewable energy and widening the variety of heat-trapping gases they will address in their next round of climate targets.
U.S. President Joe Biden and Chinese leader Xi Jinping endorsed that type of cooperation after a meeting in California on Wednesday, saying they “welcomed” positive discussions on actions to reduce greenhouse gas emissions during this decade, as well as “common approaches” toward a successful climate summit. Biden said he would work with China to address climate finance in developing countries, a major source of friction for the U.S.
“Planet Earth is big enough for the two countries to succeed,” said Xi ahead of his bilateral with Biden.
But the deal leaves some big issues unaddressed, including specific measures for ending their reliance on fossil fuels, the main contributor to global warming. Andthe two countries are a long way from the days when a surprise U.S.-Chinese agreement to cooperate on climate change had the power to land a landmark global pact.
That puts the nations in a dramatically different place than in 2014, when Xi and then-President Barack Obama made a historic pledge to jointly cut their planet-warming pollution, paving the way for the landmark Paris Agreement to land in 2015.
Even a surprise joint deal between the two nations in 2021 failed to ease friction, with China emerging at the last minute to oppose language calling for a phase-out of coal power. The summit ended with a less ambitious “phase-down.”
House Speaker Nancy Pelosi speaks after receiving the Order of Propitious Clouds with Special Grand Cordon, Taiwan’s highest civilian honour | Handout/Getty Image
The two countries’ struggles to find comity have come at the worst possible moment — at a time when rapid action is crucial to preventing climate catastrophe. A growing number of factors has threatened to widen the U.S.-Chinese wedge further, including their competition for supremacy in the market for clean energy.
Two nations at odds
While the U.S. has contributed more greenhouse gases to the atmosphere than any other nation during the past 150 years, China is now the world’s largest climate polluter — though not on a per capita basis — and it will need to stop building new coal-fired power for the world to stand a chance of limiting rising temperatures.
The recent agreement hints at that possibility by stating that more renewables would enable reductions in the generation of oil, gas and coal, helping China peak its emissions ahead of its current targets.
The challenge will be bridging the countries’ diverging approaches to climate issues.
The Biden administration is urging a rapid end to coal-fired power, which is waning in the U.S., even as it permits more oil drilling and ramps up exports of natural gas — much of it destined for Asia.
At the same time, it wants the United States to claim a larger role in the clean energy manufacturing industry that China now dominates, and is seeking to loosen China’s stranglehold on supply chains for products such as solar panels, electric cars and the minerals that go into them. It’s also pressuring Beijing to contribute to U.N. climate funds, saying China’s historic status as a developing country no longer shields it from its responsibility to pay.
China sees the U.S. position as a direct challenge to its economic growth and energy security.
Beijing wants to protect the use of coal and defend developing countries’ access to fossil fuels. It has also backed emerging economies’ demands that rich countries pay more to help them deploy clean energy and adapt to the effects of a warmer world. China says it already helps developing countries through South-South cooperation and points to a clause in the 2015 Paris Agreement that says developed countries should lead on climate finance.
Hanging over the talks is also the prospect of a change of administration in the U.S., and continued efforts by Republicans to vilify Beijing and accuse the Biden administration of supporting Chinese companies through its climate policies and investments. And as China’s response to Pelosi’s trip underscored, climate cooperation remains hostage to other tensions in the two countries’ relationship, a dynamic likely to heighten in the coming year as both Taiwan and the U.S. hold presidential elections.
One challenge is that China doesn’t seem to see much to gain from offering more ambitious climate actions amid worsening relations with other countries, said Kevin Tu, a non-resident fellow at the Center on Global Energy Policy at Columbia University and an adjunct professor at the School of Environment at Beijing Normal University.
“In the past several years, China has voluntarily upgraded its climate ambitions a few times amid rising geopolitical tensions,” Tu said, pointing to its 2020 pledge to peak and then zero out its emissions. “So China does not necessarily have very strong incentive to further upgrade its climate ambition.”
The divide between the two nations has created a dilemma for some small island nations that often walk a fine line between negotiating alongside China at climate talks while pushing for more action to scale back fossil fuels.
The U.S. and China remain at odds on how quickly to shut down coal and who should provide climate aid to developing nations | Brendan Smialowski/AFP via Getty Images
“The U.S. is trying to drag everyone to talk about an immediate coal phase-out,” Ralph Regenvanu, climate minister for the Pacific island nation of Vanuatu, said during a recent call with reporters, calling the effort a “U.S.-versus-China thing.”
“But we also need to talk about no more oil or gas as well,” he added.
Operating on its own terms
The dynamic between China and the U.S. will either drag down or bolster the ambitions of countries updating their national climate pledges, a process that begins at the close of COP28. Nations are already woefully behind cuts needed to hit the goals they laid out in Paris.
China’s new 10-year targets will be crucial for meeting those marks, given that China accounts for close to 30 percent of global greenhouse gas emissions and that it plans to build dozens of coal-fired power plants in the coming years. The U.S., and many other countries, will be looking for greater commitments from China — whether that’s modifying what it means by phasing down coal or setting more stringent targets.
China has pledged to peak its carbon emissions before 2030 and zero them out before 2060,a decadelater than the United States has promised to reach net-zero. Beijing is unlikely to accelerate that timeline, in part because — analysts say — its philosophy is fundamentally different from that of the U.S.: underpromise and overdeliver.
Even without committing to more action, China’s massive investments in low-carbon energy installations — twice that of the United States — may inadvertently help the country achieve its peaking target early, some analysts say.
A complicated picture
If the Trump years drove China further from America, the global pandemic and resulting economic slowdown that started during his final year didn’t bring it closer. And the energy crunch stemming from Russia’s war with Ukraine cemented China’s drive for reliable energy to meet the rising needs of its 1.4 billion people. That created a coal boom.
Meanwhile, China heavily subsidized the expansion of wind, solar and electric vehicle production. Its clean energy supply chain dominance has lowered the global costs for those technologies but drawn scorn from the U.S. as it tries to rebuild its own domestic manufacturing base.
China has turned more combative in response. Rather than work with the U.S. to make joint announcements on climate action, Xi has made clear that China’s climate policy won’t be dictated by others. At G20 meetings, China has aligned with Saudi Arabia and Russia in opposing language aimed at phasing out fossil fuels.
“At the end of the day, it’s harder to make a claim that China needs the U.S. and it’s harder to make the claim that the U.S. can rely on China,” said Cory Combs, a senior analyst at policy consulting firm Trivium China.
Wealthy countries’ inability to deliver promised climate aid to vulnerable countries hasn’t helped. While China remains among the bloc of developing nations in calling for more action on climate finance, it also points to the investments it’s making in the Global South through its Belt and Road infrastructure initiative and bilateral aid.
A foreign diplomat who asked for anonymity to speak openly said China has resisted pressure to contribute money to a climate fund that would help developing countries rebuild after climate disasters and would likely push back against a focus on its continued build out of coal-fired power plants.
US climate envoy John Kerry sits next to China’s special climate envoy Xie Zhenhua | Fabrice Coffrini/AFP via Getty Images
“Anything that would signal that they would need to do more is something that gets blocked,” the person said.
China did release a plan earlier this month to cut emissions of the potent greenhouse methane, delivering on a promise it had made in a joint declaration with the U.S. at climate talks in 2021. But it has still not signed onto a global methane pledge led by the U.S. and the European Union.
All that amounts to a complicated picture for the U.S.-Chinese relationship and its broader impact on global climate outcomes.
“The U.S.-China talks will help stabilize the politics when countries meet in the UAE, but critical issues such as a fossil fuel phase-out still require much [further] political efforts,” said Li Shuo, incoming director of the China climate hub at the Asia Society Policy Institute.
“It’s very much about setting a floor,” and the talks in Dubai still need to build out from there, Shuo added.
He argues in a recent paper that China will subscribe to targets it sees as achievable and will continue toside with developing countries on climate finance. Chinese government officials are cautious about what they’re willing to commit to internationally, which sometimes serves as a disincentive for them to be more ambitious, he said.
The calculation is likely to be different for Biden’s team, who “want a headline that the world agrees to push China,” said David Waskow, who leads the World Resources Institute’s international climate initiative.
Not impossible
The power of engagement can’t be completely written off, and in the past it has proven to have a positive effect on the U.S.-China relationship.
“[Climate] sort of was a positive pillar in the relationship,” said Todd Stern, Obama’s former chief climate negotiator. “And it came to be a thing where when the two sides have come to get together, it was like, ‘What can we get done on climate?’”
Engagement with Chinaat the state and local level and among academics and research institutes has potential — in large part because it’s less political, said Joanna Lewis, a professor at Georgetown University who closely tracks China’s climate change approach.
There could also be opportunities to separate climate from broader bilateral tensions.
“I do feel like there’s that willingness to say, ‘We recognize our roles, we recognize our ability to have that catalytic effect on the international community’s actions,’” said Nate Hultman, director of the University of Maryland’s Center for Global Sustainability and a former senior adviser to Kerry. “It doesn’t solve all the world’s issues going into the COP, but it gives a really strong boost to international discussions around what we know we need to do.”
Sara Schonhardt and Zack Colman reported, and Phelim Kine contributed reporting, from Washington, D.C.
This article is part of the Road to COP special report, presented by SQM.The article is produced with full editorial independence by POLITICO reporters and editors. Learn more about editorial content presented by outside advertisers.
BRUSSELS — The Netherlands on Friday started enforcing new export controls restrictions on advanced microchips production machines to China, siding with Washington in the geopolitical tussle over who controls the critical technology.
The Dutch rules come in support of a U.S.-led strategy to choke off China from critical parts of the supply chain needed to manufacture high-end microchips used in consumer electronics, computing and other domains — including military applications. “It’s necessary to check in advance who’s the end user and what the end use is of the production equipment,” the Dutch advocate in the regulation.
But the measures also put a target on the back of Dutch semiconductor champion ASML — Europe’s highest-valued tech company with a market value of around €240 billion — and have caused critics in Europe to accuse the Dutch government of bowing to U.S. pressure too easily.
ASML already faced restrictions on the export of its most advanced machines, which use extreme ultraviolet light (EUV). The new rules require the company to apply for a permit for at least three types of its machines that use less advanced deep ultraviolet (DUV). The government expects about 20 annual applications in total for a permit because of the additional DUV restrictions.
Decoupling will be ‘extremely expensive’
The Dutch decision to align export controls policy with Washington and Tokyo has sidelined other European Union member countries and Europe’s own chips industry in past months.
The rules don’t seem to bite in the short term: ASML didn’t change its financial outlook for this year, nor its “longer-term scenarios.” Part of the explanation there is that ASML was still granted the necessary licenses it needed until the end of the year, an ASML spokesperson said Thursday, allowing the company to “fulfill contractual obligations.” The company added though that it was “unlikely” to receive export licences for Chinese customers from January onward.
But the company is fully aware that restrictions to the Chinese market out of security concerns could become a slippery slope, threatening its unique position in a global — and highly efficient — supply chain.
Decoupling between the West and China will be “extremely difficult and extremely expensive,” Christophe Fouquet, the company’s executive vice president, said in June. Earlier, ASML CEO Peter Wennink said that putting “locks” on the global chips ecosystem would have “far-reaching consequences.”
It could also incite China to accelerate its own production ecosystem for advanced chips — something that has not been sufficiently taken into consideration, according to critics of the export restrictions.
ASML CEO Peter Wennink said that putting “locks” on the global chips ecosystem would have “far-reaching consequences” | Bas Czerwinski/EFE via EPA
“We’re giving a clear signal to the world: The export of our products can stop if a country bothers the U.S., because the Netherlands immediately succumbs under the pressure,” Laurens Dassen, a Dutch lawmaker for the pan-European Volt party, said in a statement.
“You already see that China is starting to produce these chips itself instead of buying them from us,” Dassen said.
Seeking security
The Dutch decision has prompted the rest of the European Union to speed up their work to coordinate export controls and manage risks emanating from trading with China.
Before the summer, the European Commission presented its economic security package — including a promise to review the bloc’s export control regime. The Commission has said that it wants to come up with a “list of technologies which are critical to economic security” as part of the package.
Behind the scenes, diplomats and officials are squabbling over how to balance Europe’s need for trade defenses for security purposes with its strategy to promote free trade and keep its industries competitive with other regions.
It’s something that Dutch politicians welcome, if only to avoid being the only ones in Europe pioneering ways to regulate sensitive tech.
“In the previous decades, technology has become determinate for geopolitical relations. If that’s the case, you will need a policy in the area of technology,” Bart Groothuis, a liberal lawmaker who co-negotiated the bloc’s Chips Act, said. The Chips Act already has some provisions that allow for more European cooperation on export controls.
The Netherlands and Europe shouldn’t follow the U.S. “blindly” in that area, Volt’s Dassen added: “It’s about time that Europe determines its own fate. We have to make our own strategic choices and not be dependent” — on China, nor on the U.S.
Under pressure from the EU to rein in deforestation or face trade restrictions, Amazon countries must figure out how to bring prosperity to the region without destroying the forest. And that’s proving difficult.
At a two-day summit starting Tuesday, Brazilian President Luiz Inácio Lula da Silva is looking to corral countries to speed up efforts to stop deforestation and decide on a common strategy to save the rainforest.
But it’s likely to be an uphill climb, with countries disagreeing on whether they should commit to a zero deforestation goal and on whether oil and gas drilling should be banned in the region.
The summit comes as the EU is rolling out new rules to ban commodities’ imports driving deforestation abroad and is asking countries to police their supply chains against environmental and human rights violations.
That’s increasing pressure on the Amazon region — and particularly on Brazil, one of the largest exporters of agri-food products to the EU and home to 60 percent of the rainforest — to commit to ambitious action at this week’s meet-up.
Colombian President Gustavo Petro has argued that phasing out fossil fuels is essential for the forest’s protection. “Even if we get deforestation under control, the Amazon faces dire threats if global heating continues to climb,” he wrote in an op-ed last month, adding that “to avoid the point of no return, we need an ambitious transnational policy to phase out fossil fuels.”
But Lula isn’t pushing to phase out fossil fuels domestically, highlighting a tension between conservation efforts and ensuring economies stay on track.
The Brazilian leader told local media ahead of the summit he wants to “keep dreaming” about drilling in the region. His comments come as Brazilian oil major Petrobras is looking to open new fields near the mouth of the Amazon River despite receiving a negative opinion from the national institute for the environment.
If fossil fuels are kept underground, Amazon countries will need alternative activities to keep their economies afloat. Observers have suggested using this week’s summit as a way to promote greener farming and sustainable forest management,as well as discuss potential schemes to pay farmers and indigenous people to help protect the forest.
“The bioeconomy is the key to unlocking the region’s economic potential while preserving its ecological heritage and, as such, needs to be at the center of any sustainable and inclusive development plan for the Amazon,” said Vanessa Pérez, global economics director at the World Resources Institute.
Indigenous groups are also watching the summit closely, and want their contribution to climate protection, as well as their rights and territorial claims recognized by country leaders.
“It is not possible to plan the future of the Amazon without indigenous peoples, without guaranteeing our territorial rights,” said Ângela Kaxuyana, political adviser at the Coordination of Indigenous Organizations of the Brazilian Amazon.
High stakes
The outcome of the summit is a major political and diplomatic test for Lula, who has pledged to achieve zero deforestation in the Amazon.
Colombian President Gustavo Petro has argued that phasing out fossil fuels is essential for the forest’s protection | Guillermo Legaria/Getty Images
Since taking office last year, Lula has stepped up efforts to crack down on illegal miners, protect indigenous groups and boost conservation efforts in the Amazon, with the government reporting a 66 percent drop in the rate of deforestation in July compared to the same month last year.
But not all Amazon countries are ready to commit to a similarly ambitious goal; Bolivia and Venezuela failed to sign a pledge made at the COP26 climate talks to end global deforestation by 2030.
Scientists have warned that the continued deterioration of the Amazon, a major carbon sink, is likely to have a profound impact on global climate efforts.
“If [Lula] doesn’t come out of this summit with agreement from other countries that they also see this goal as important, it really undermines Brazil’s efforts to reach this [zero deforestation] goal,” said Diego Casaes, campaign director at the NGO Avaaz.
The regional meet-up is also a key opportunity for Lula to assert his credibility as a climate leader both domestically and internationally as Brazil prepares to host the COP30 summit in 2025, Casaes added.
The outcome is “a test of how far Lula can go given the constraint that he has from the congress,” he said, given the Brazilian legislative body has pushed back against measures to boost policing and protection of the rainforest.
Scientists have warned that the continued deterioration of the Amazon, a major carbon sink, is likely to have a profound impact on global climate efforts | Victor Moriyama/Getty Images
European lawmakers will be looking for signals for how the region is preparing to adapt to new rules to police imports driving deforestation, tackle human rights abuses and green trade.
Under the EU Deforestation Regulation, imports of commodities like soy and beef produced on deforested land will be forbidden from 2024, while under the new corporate sustainability due diligence rules companies will be forced to scrutinize their supply chains for environmental damage and human rights abuses.
And although the trade deal between the EU and the Mercosur countries isn’t officially on the agenda, it will certainly come up.
That’s because the EU is currently negotiating a sustainability addendum to the trade deal with his Latin American counterparts, which should give reassurances — notably to France — the agreement will not have negative consequences on the environment and worsen deforestation.
The summit is an opportunity to see whether Amazon countries “are able to coordinate efforts” and to ensure policies related to the forest “are aligned with [global] climate goals,” said Caseas.
BRUSSELS — The chips industry faces a different kind of summer heat: Chinese and Western governments meddling with its supply chains.
From Tuesday, China is putting the brakes on the export of two critical metals for making chips — gallium and germanium — in retaliation for the United States, the Netherlands and Japan curbing exports of some advanced chip printers. The Dutch restrictions, published before summer, will apply from September 1.
This tit-for-tat trade war is unfolding against the backdrop of a global subsidies race to re-shore and secure microchip production. What began in a time of pandemic-era shortages is now a race to avoid supply chokepoints in case conflict breaks out in Taiwan, a major chips hub.
Despite China’s stranglehold on raw materials — with, for example, 95 percent of the world’s supply of primary gallium — chips companies have stayed relatively quiet about the incoming restrictions in their recent quarterly earnings reports.
Europe’s leading chip makers, like NXP Semiconductors, rarely mention China’s upcoming raw materials restrictions in their earnings releases or follow-up calls with analysts.
There was equal indifference to the Western restrictions that provoked the Chinese counter-move. ASML, the Dutch chip equipment supplier that is the main target of the Dutch export controls, said the measures would not have a “material impact” on the firm’s 2023 outlook, nor on longer-term scenarios.
But that doesn’t mean there won’t be any consequences.
Because Chinese gallium and germanium producers will have to seek export permits, much will depend on how rigorous the permitting procedure is, analysts from research firm Wood Mackenzie wrote in a report in early July with the ominous title, “Chips wars: a sign of things to come?”
“If the permitting process restricts the supply of raw materials to chip manufacturers outside China, this will impact downstream end-use markets, including electric vehicles,” the report reads. That brings back memories of the chips shortages in 2020 and 2021, which increased waiting times for car deliveries.
Particularly vulnerable countries in Europe: Germany — the second-largest importer of gallium after Japan — and the Netherlands.
Ramping up
A bigger concern, however, is that the current restrictions are only the start of a larger escalating trade war. “The concern is that this protectionism could escalate to other critical materials end sectors,” according to the Wood Mackenzie report.
ASML CEO Peter Wennink was already forced to comment during the company’s quarterly earnings presentation on media reports that more chip export controls out of the U.S. are coming: “Of course, we will and cannot respond to speculation.” But more in general, he had to admit during the same earnings call that there’s “significant uncertainty” in the market, citing “the geopolitical environment, including export controls” as one of the reasons.
The message: The industry is waking up to the fact that governments consider semiconductors to be strategically important and no longer hesitate to intervene to secure their national security interests.
Both the U.S. and the EU have rolled out multibillions’ worth of subsidy programs — the EU’s Chips Act (€43 billion) and the U.S.’s CHIPS and Science Act ($52 billion) — to lure private investments from U.S.-based Intel, South Korea’s Samsung or Taiwan’s TSMC.
If that’s the carrot tack, some experts point out that governments are also increasingly using the stick approach of export controls — and the current pace of restrictions between the West and China would have been unthinkable a few years ago.
Chris Miller, an associate professor of international history at Tufts University and author of the book “Chip War,” said last week at an event in Washington that he was “surprised by the success” of the U.S.-led effort to build a coalition on export controls.
“Zoom back five years ago, in 2018, ask anyone in this room: Would it have been possible to have established an export control regime bringing together countries from Europe and Asia? Most people would have bet against it,” Miller said.
It’s a new reality for the companies involved — and one that could have unintended consequences.
Intel CEO Pat Gelsinger summed it up at the Aspen Security Forum earlier in July: “Right now, China represents 25 to 30 percent of semiconductor exports. If I have 25 or 30 percent less market, I need to build [fewer] factories.”
That comment got a rebuke from U.S. Commerce Secretary Gina Raimondo, who said that she didn’t see “any inconsistency” between the export controls to China and the U.S.’s multibillion-dollar plan to re-shore chips capacity.
Brendan Bordelon contributed reporting from Washington.
HIROSHIMA, Japan — China on Saturday faced a strong pushback from the Group of Seven countries over its stances on Russia, Taiwan, trade bullying, economic monopoly and domestic interference, with the G7 leaders’ statement reflecting a broad convergence of the U.S., Europe and Japan on a need to change tack.
Issued around the time of Ukrainian President Volodymyr Zelenskyy’s arrival in Hiroshima, where the summit is taking place, the statement by leaders of the G7 wealthy democracies asked Beijing to do more to stop Russia’s war on Ukraine.
“We call on China to press Russia to stop its military aggression, and immediately, completely and unconditionally withdraw its troops from Ukraine,” the leaders said in the statement. “We encourage China to support a comprehensive, just and lasting peace based on territorial integrity and the principles and purposes of the U.N. Charter, including through its direct dialogue with Ukraine.”
Crucially, the U.S. and Europe — the two main constituents of the G7 — came round to a common set of language on China. For France and Germany, in particular, their focus on a conciliatory attitude to China was reflected in the final statement, which began the China section by stating “We stand prepared to build constructive and stable relations with China.”
The G7’s repeated emphasis of “de-risking, not decoupling” is a nod to the EU approach to China, as European member countries are wary of completely cutting off business ties with Beijing.
The language on Taiwan remained the same compared with recent statements. “We reaffirm the importance of peace and stability across the Taiwan Strait as indispensable to security and prosperity in the international community,” the statement said, adding there’s “no change in the basic positions” in terms of the one China policies.
Domestic interference
Apart from Russia, another new element this year is the mention of domestic interference — which human rights groups say is a reflection of the growing concern about China’s “overseas police stations” in other countries. “We call on China … not to conduct interference activities aimed at undermining the security and safety of our communities, the integrity of our democratic institutions and our economic prosperity,” the leaders said in their statement, citing the Vienna Convention which regulates diplomatic affairs.
On global economics, both sides of the Atlantic and Japan now see the need to fundamentally change the overall dynamic of economic globalization, placing security at the front of policy considerations.
“Our policy approaches are not designed to harm China nor do we seek to thwart China’s economic progress and development. A growing China that plays by international rules would be of global interest,” the G7 leaders said in the statement.
“We are not decoupling or turning inwards. At the same time, we recognize that economic resilience requires de-risking and diversifying. We will take steps, individually and collectively, to invest in our own economic vibrancy. We will reduce excessive dependencies in our critical supply chains,” they said.
One central theme is economic coercion, where China has punished a wide range of countries — from Japan and Australia to Lithuania and South Korea — over the decade when political disagreements arose.
The G7 countries launched a new “coordination platform on economic coercion” to “increase our collective assessment, preparedness, deterrence and response to economic coercion,” according to the statement. They also plan to coordinate with other partners to further the work on this.
For France, the focus on a conciliatory attitude to China was reflected in the final statement, which began by stating “We stand prepared to build constructive and stable relations with China” | Pool phot by Stefan Rousseau/Getty Images
The joint call for diverse sources of critical minerals, while stopping short of naming China, is widely seen as targeted against the Asian superpower that controls, for instance, 70 percent of global rare earths output. The G7 countries “support open, fair, transparent, secure, diverse, sustainable, traceable, rules and market-based trade in critical minerals” and “oppose market-distorting practices and monopolistic policies on critical minerals,” according to the statement.
They also vow to deliver the goal of mobilizing up to $600 billion in financing for quality infrastructure through the Partnership for Global Infrastructure Investment, a rival to China’s Belt and Road initiative. “We will mobilize the private sector for accelerated action to this end,” they said.
In a bilateral in Hiroshima, British Prime Minister Rishi Sunak and French President Emmanuel Macron “welcomed the strong unity of purpose at the G7 on … our collective approach to the economic threat posed by China,” a spokesperson for Sunak’s office said.
LUXEMBOURG — Ukrainian Foreign Minister Dmytro Kuleba on Monday implored EU foreign affairs ministers to move faster on their promises to supply Kyiv with ammunition. But his plea came as officials were given new details showing the EU still has a long way to go to meet its lofty pledges.
According to several diplomats, Kuleba — who addressed a meeting of foreign ministers in Luxembourg via video link — was critical of the slow pace of the EU in delivering ammunition and missiles as part of a plan to provide 1 million shells in the next 12 months as Ukraine fights off Russia’s invasion.
The plan has already been endorsed by EU leaders but, when it comes to the technical details, has only been partially agreed upon by member states, which are still discussing the so-called track two of the scheme, which involves the joint purchase of ammunition.
The bone of contention is a legal one about exemptions for companies based outside the EU in the supply chain of the defense companies involved in the plan, but in the background doubts also remain as to whether the EU defense industry can really deliver all of these shells.
Kuleba on Monday “repeated that Ukraine needs desperately the ammunition to stand against the Russian attacks, and also to organize the counterattack,” Margus Tsahkna, the foreign minister of Estonia, which put forward the ammo plan, told POLITICO. “And ammunition is crucial.”
The problem is not only the speed of the EU in delivering the ammo, but also the quantity. The plan is being funded by a pot of money called the European Peace Fund, which partially reimburses the member states for ammo and missiles. That cash, meant to help provide ammunition quickly, comes from the so-called track one of the plan — worth a total of €1 billion — which has already been fully agreed upon. EU top diplomat Josep Borrell, speaking to journalists Monday, said that “we have received requests for reimbursement for €600 million.”
Yet according to three diplomats, not all the material that member states want reimbursing for has actually been delivered. Of the €600 million that Borrell mentioned, €180 million was for the provision of 1,080 missiles (six of which have not yet been reported as delivered) and the rest of the money was for 41,000 pieces of ammunition, of which 28,000 have not been reported as delivered, the diplomats said.
Those numbers are well short of 1 million.
Kuleba stressed “that if there is one priority, and if it’s a single burning issue, this is weapons delivery, in particular ammunition … he also asked for not being hesitant on delivering the aircraft and other modern pieces of military technology,” Slovakia’s foreign minister, Rastislav Káčer, told POLITICO. “He was pushy, politely,” Káčer added.
Borrell tried to offer reassurance on the speed of the EU decision-making process, saying: “There has been some disagreement but the work continues. We are not waiting for the legal document to be finished to start working. The work continues and everything is being prepared,” he said at a press conference after the meeting.
Diplomats reckon it’s a matter of days, likely Wednesday, before track two of the plan will be finalized.
“The truth is that there is not satisfaction about how we’re delivering on track one, in the quantity and the speed,” Káčer said. “We can do more, we can scratch more. Slovakia is trying. We are putting everything we have in the stockpiles.”
LONDON — Britain must engage with China rather than isolate Beijing in a “new Cold War,” the U.K. foreign secretary will say Tuesday in a warning shot to Tory China hawks.
James Cleverly will set out the U.K.’s approach toward China in a long-awaited speech on Tuesday, weeks after the government’s updated Integrated Review of defense and foreign policy described relations with the emerging superpower as an “epoch-defining and systemic challenge.”
Cleverly is expected to set out a three-pronged approach for relations with Beijing — limiting Chinese involvement in sectors deemed critical for national security; strengthening ties with Indo-Pacific allies; and — most controversially — engaging with China directly to promote stable relations.
And in a message to the increasingly outspoken China hawks within his Conservative Party, the foreign secretary will warn against an era of open confrontation with Beijing that might harm the U.K.’s economic interests and limit the West’s ability to engage on shared challenges, including climate change and nuclear proliferation.
“It would be clear and easy — perhaps even satisfying — for me to declare a new Cold War and say that our goal is to isolate China,” Cleverly is expected to say, according to words shared by his department ahead of the speech.
“Clear, easy, satisfying — and wrong. Because it would be a betrayal of our national interest and a wilful misunderstanding of the modern world.”
Under pressure from Tory MPs, Rishi Sunak has toughened his approach toward China since becoming prime minister, ordering the sale last November of a Chinese-owned semiconductor plant in Wales under new national security legislation.
Cleverly has focused on building alliances with countries close to China, returning at the weekend from a tour of the Pacific — the first visit to some areas by a British foreign secretary since the 1970s. Britain recently signed deals to join a Pacific-focused defense pact with Australia and the U.S., and a large free-trade agreement with 11 Pacific rim nations including Japan, Vietnam, Malaysia and Singapore.
But Britain is yet to join the group of large European countries sending their leaders on official visits to Beijing. French President Emmanuel Macron and European Commission President Ursula von der Leyen both visited China earlier this month.
Cleverly himself is expected to visit China later in 2023, but Downing Street has not floated any travel plans for the prime minister.
Cleverly’s remarks come as some British firms cut their ties with China and move their activity to other countries in preparation for a worsening in relations. The U.K. says it wants to continue helping British companies do business with China — but without entering strategic dependencies.
In his speech to the Lord Mayor’s Easter Banquet, Cleverly will call on China to be more open about the intent behind its vast military expansion in order to prevent a “tragic miscalculation,” and say the U.K. and its allies “are prepared to be open about our presence in the Indo-Pacific.”
He will also send a strongly worded message on the need for the Chinese government to respect human rights within its borders, describing China’s repression of the Uyghur minority in Xinjiang as an attempt to build “a 21st century version of the gulag archipelago.”
LONDON — A new system of border checks on goods arriving from Europe is expected to force rocketing U.K. food prices even higher as businesses grapple with hundreds of millions of pounds in extra fees.
British business groups last week got sight of the U.K. government’s long-awaited post-Brexit border plans, via a series of consultations. One person in attendance said the proposals will “substantially increase food costs” for consumers from January.
That could spell trouble in a country which imports nearly 30 percent of all its food from the EU, according to 2020 figures from the British Retail Consortium, and where the annual rate of food and drink inflation just hit 19.2 percent — its highest level in 45 years.
Government officials told business reps at one consultation that firms will be hit with £400 million in extra costs as a result of long-deferred new checks at the U.K. border for goods entering from the EU.
Ministers have argued that the full implementation of the new post-Brexit procedures — which will eventually include full digitization of paperwork and a “trusted trader scheme” for major importers in order to reduce border checks — will more than offset these costs in the long-run as they will also be rolled out for imports coming from non-EU countries as well.
Supply-chain disruption caused by the Ukraine war, poor weather and new trade barriers due to Brexit have all been blamed for the U.K.’s surge in food prices.
A member of a major British business group, speaking on the condition of anonymity, said that incoming post-Brexit red tape will mean “some producers on the EU side will find it is no longer possible to trade with the U.K.” and that “some small businesses will find themselves shut out.”
“It will add to the costs, and probably inflation, but I think we need to go through this so we can work with the EU to find advantageous improvements,” they said.
“We can’t keep running away from the fact we need to implement our own border checks.”
‘Not business as usual’
Britain has delayed the implementation of full post-Brexit border checks multiple times, while the EU began its own more than two years ago.
The government’s new “target operating model,” published last month, will see the phased implementation of new border and customs checks for EU imports from October.
This will include a new fee that must be paid from January for all goods that are eligible for border checks, including items like chilled meat, dairy products and vegetables.
A new fee will be applied from January for all goods that are eligible for border checks, including items like chilled meat, dairy products and vegetables | Paul Faith/AFP via Getty Images
Each batch of goods that could be subject to checks, even if they are ultimately not chosen by border staff for inspection, will be hit with a fee of between £23 to £43 at inland ports.
The first business figure quoted above said the scale of the new fees came as a surprise, after firms had been previously assured by the government that these costs would be dependent on whether goods had actually been checked.
“[Former minister] Jacob Rees-Mogg said there would be minimal costs. Initially we thought it was business as usual, but it’s not,” they said.
“There were people at this [consultation] saying that this is not a massive increase, but it will substantially increase food costs.”
William Bain, trade expert at the British Chambers of Commerce, said there is a “strong prospect” of higher inflation due to the new Brexit checks.
“EU suppliers may be less willing to trade with British based companies, because of increased costs and paperwork. The costs of imported goods would almost certainly increase,” he said.
But he added: “We knew this day was coming and that inbound controls on goods would be applied. It’s a part of having a functional border and complying with the U.K.’s international commitments.”
Reality check
The U.K. has seen trade flows with the EU disrupted since leaving the bloc’s single market and customs union.
Recent analysis by the Financial Times found that Britain’s goods exports are dropping at a faster rate than in any other G7 country.
Recent figures from the Office for National Statistics meanwhile show that U.K. trade in goods with EU countries fell at a much faster rate than from non-EU countries in January.
Conservative MP Tobias Ellwood told POLITICO that he fears his party will pay a price at the next general election, due to be held by January 2025, if the government does not seek better trading arrangements with the EU.
“There’s certainly a revision across the nation when it comes to Brexit — people are realising that what we have today isn’t what they imagined, whether you voted for Remain or for Brexit,” he said.
“The reality check is that it has become tougher economically to do business with the Continent and quite rightly there’s an expectation that we fix this.”
A government spokesperson said: “The target operating model implements important border controls which will help protect consumers and our environment and assure our trade partners about the quality of our exports.
“It implements these important controls in a way which minimises costs for businesses and prevents delays at the border.”
Germany and Japan agreed on Saturday to strengthen cooperation on economic security in the aftermath of tensions over global supply chains and the economic impact of the war in Ukraine.
In the first high-ministerial government consultations held between the two countries, German Chancellor Olaf Scholz reached out to Tokyo to seek to reduce Germany’s dependence on China for imports of raw materials.
“The current challenges of our time make it clear: It is important to expand cooperation with close partners and acquire new partners. We want to reduce dependencies and increase the resilience of our economies.” the German chancellor said in a tweet.
Scholz and Japanese Prime Minister Fumio Kishida said they believe the agreement will allow both countries to diversify value chains in order to be able to reduce economic risks.
In a joint statement, the two countries said they will work on establishing “a legal framework for bilateral defense and security cooperation activities,” including ways to protect critical infrastructures, trade routes and to secure future supply of sustainable energy.
Germany’s decision to prioritize consultations with Japan came after the Asian country put forward an economic security bill last year aimed at securing the uptake of technology and bolstering critical supply chains.
Japan is Germany’s second-largest trading partner in Asia after China, with a bilateral trade volume of €45.7 billion mainly based on the import and export of machinery, vehicles, electronics and chemical products.
The two leaders also exchanged views on the situation in Ukraine, cooperation in the Indo-Pacific region and the G7 meeting in Hiroshima scheduled for May.
LONDON — Britain was rebuffed by the Biden administration after multiple requests to develop an advanced trade and technology dialogue similar to structures the U.S. set up with the European Union.
On visits to Washington as a Cabinet minister over the past two years, Liz Truss urged U.S. Commerce Secretary Gina Raimondo and senior Biden administration officials to intensify talks with the U.K. to build clean technology supply chains and boost collaboration on artificial intelligence (AI) and semiconductors.
After Truss became prime minister in fall 2022, the idea was floated again when Raimondo visited London last October, people familiar with the conversations told POLITICO. But fear of angering the U.S.’s European partners and the U.K.’s diminished status outside the EU post-Brexit have posed barriers to influencing Washington.
Businesses, lawmakers and experts worry the U.K. is being left on the sidelines.
“We tried many times,” said a former senior Downing Street official, of the British government’s efforts to set up a U.K. equivalent to the U.S.-E.U. Trade and Technology Council (TTC), noting Truss’ overtures began as trade chief in July 2021. They requested anonymity to speak on sensitive issues.
“We did speak to Gina Raimondo about that, saying ‘we think it would be a good opportunity,’” said the former official — not necessarily to join the EU-U.S. talks directly, “but to increase trilateral cooperation.”
Set up in June 2021, the TTC forum co-chaired by Raimondo, Secretary of State Antony Blinken and U.S. trade chief Katherine Tai gives their EU counterparts, Margrethe Vestager and Valdis Dombrovskis, a direct line to shape tech and trade policy.
The U.S. is pushing forward with export controls on advanced semiconductors to China; forging new secure tech supply chains away from Beijing; and spurring innovation through subsidies for cutting-edge green technology and microprocessors.
The TTC’s 10 working groups with the EU, Raimondo said in an interview late last year, “set the standards,” though Brussels has rebuffed Washington’s efforts to use the transatlantic body to go directly after Beijing.
But the U.K. “is missing the boat on not being completely engaged in that dialogue,” said a U.S.-based representative of a major business group. “There has been some discussion about the U.K. perhaps joining the TTC,” they confirmed, and “it was kind of mooted, at least in private” with Raimondo by the Truss administration on her visit to London last October.
The response from the U.S. had been ‘’let’s work with what we’ve got at the moment,’” said the former Downing Street official.
Even if the U.S. does want to talk, “they don’t want to irritate the Europeans,” the same former official added. Right now the U.K.’s conversations with the U.S. on these issues are “ad hoc” under the new Atlantic Charter Boris Johnson and Joe Biden signed around the G7 summit in 2021, they said, and “nothing institutional.”
Last October, Washington and London held the first meeting of the data and tech forum Johnson and Biden set up | Pool photo by Olivier Matthys/AFP via Getty Images
Securing British access to the U.S.-EU tech forum or an equivalent was also discussed when CBI chief Tony Danker was in Washington last July, said people familiar with conversations during his visit.
The U.K.’s science and tech secretary, Michelle Donelan, confirmed the British government had discussed establishing a more regular channel for tech and trade discussions with the U.S., both last October and more recently. “My officials have just been out [to the U.S.],” she told POLITICO. “They’ve had very productive conversations.”
A U.K. government spokesperson said: “The U.K. remains committed to working closely with the U.S. and EU to further our shared trade and technology objectives, through the EU-UK Trade and Cooperation Agreement, the U.S.-U.K. Future of Atlantic Trade dialogues, and the U.K.-U.S. technology partnership.
“We will continue to advance U.K. interests in trade and technology and explore further areas of cooperation with partners where it is mutually beneficial.”
Britain the rule-taker?
Last October, Washington and London held the first meeting of the data and tech forum Johnson and Biden set up. Senior officials hoped to get a deal securing the free flow of data between the U.S. and U.K. across the line and addressed similar issues as the TTC.
They couldn’t secure the data deal. The U.K. is expected to join a U.S.-led effort to expand data transfer rules baked into the Asia-Pacific Economic Cooperation trading agreement as soon as this year, according to a former and a current British official, who spoke on the condition of anonymity to discuss internal deliberations. The next formal meeting between the U.K. and U.S. is penciled in for January 2024.
Ongoing dialogue “is vital to secure an overarching agreement on U.K.-U.S. data flows, without which modern day business cannot function,” said William Bain, head of trade policy at the British Chambers of Commerce (BCC). “It would also provide an opportunity to set the ground rules around a host of other technological developments.”
In contrast, the U.S. and EU are always at work, with TTC officials in constant contact with the operation — though questions have been raised about how long-term the transatlantic cooperation is likely to prove, ahead of next year’s U.S. presidential election.
“Unless you have a structured system or set up, often overseen by ministers, you don’t really get the drive to actually get things done,” said the former Downing Street official.
Right now cooperation with the U.S. on tech issues is not as intense or structured as desired, the same former official said, and is “not really brought together” in one central forum.
Britain has yet to publish a formal semiconductor strategy | Thomas Coex/AFP via Getty Images
“This initiative [the TTC] between the world’s two regulatory powerhouses risks sidelining the U.K.,” warned lawmakers on the UK Parliament’s Foreign Affairs Committee in a report last October. Britain may become “a rule-taker rather than a rule-maker,” MPs noted, citing the government’s “ambiguous” position on technology standards. Britain has yet to publish a formal semiconductor strategy, and others on critical minerals — like those used in EV batteries — or AI are also missing.
Over the last two years, U.S. trade chief Tai has “spoken regularly to her three successive U.K. counterparts to identify and tackle shared economic and trade priorities,” said a spokesperson for the U.S. Trade Representative, adding “we intend to continue strengthening this partnership in the years to come.”
All eyes on Europe
For its part, the EU has to date shown little interest in closer cooperation with the U.K.
Three European Commission officials disregarded the likelihood of Britain joining the club, though one of those officials said that London may be asked to join — alongside other like-minded countries — for specific discussions related to ongoing export bans against Russia.
Even with last week’s breakthrough over the Northern Ireland protocol calming friction between London and Brussels, the U.K. was not a priority country for involvement in the TTC, added another of the EU officials.
“The U.K. was extremely keen to be part of a dialogue of some sort of equivalent of TTC,” said a senior business representative in London, who requested anonymity to speak about sensitive issues.
U.K. firms see “the Holy Grail” as Britain, the U.S. and EU working together on this, they said. “We’re very keen to see a triangular dialogue at some point.”
The U.K.’s haggling with the EU over the details of the Northern Ireland protocol governing trade in the region has posed “a political obstacle” to realizing that vision, they suggested.
Yet with a solution to the dispute announced in late February, the same business figure said, “there will be a more prominent push to work together with the U.K.”
TTC+
Some trade experts think the UK would increase its chances of accession to the TTC if it submitted a joint request with other nations.
But prior to that happening, “I think the EU-U.S. TTC will need to first deliver bilaterally,” said Sabina Ciofu, an international tech policy expert at the trade body techUK.
Representatives speak to the media following the Trade and Technology Council Meeting in Maryland | Saul Loeb/AFP via Getty Images
When there is momentum, Ciofu said, the U.K. should join forces with Japan, South Korea and other advanced economies to ask for a TTC+ that could include the G7 or other partners. At the last TTC meeting in December, U.S. and EU officials said they were open to such an expansion around specific topics that had global significance.
But not all trade experts think this is essential. Andy Burwell, director of international trade at the CBI, said he doesn’t “think it necessarily matters” whether the U.K. has a structured conversation with the U.S. like the TTC forum.
Off the back of a soon-to-be-published refresh of the Integrated Review — the U.K.’s national security and foreign policy strategy — Prime Minister Rishi Sunak should instead seize the opportunity, Burwell said, to pinpoint where Britain is “going to own, collaborate and have access to various aspects of the supply chains.”
The G7, Burwell said, “could be the right platform for having some of those conversations.”
Yet the “danger with the ad hoc approach with lots of different people is incoherence,” said the former Downing Street official quoted above.
Too many countries involved in setting the standards can, the former official said, “create difficulty in leveraging what you want — which is all of the countries agreeing together on a certain way forward … especially when you’re dealing with issues that relate to, for example, China.”
Additional reporting by Mark Scott, Annabelle Dickson and Tom Bristow
LONDON — Joe Biden’s “protectionist” Inflation Reduction Act won’t help the U.S. counter the rise of China and could create a “single point of failure” in key supply chains, Britain’s trade chief Kemi Badenoch warned.
Speaking at a POLITICO event Tuesday night, Badenoch — recently promoted to head up the U.K.’s new Department for Business and Trade — predicted the flagship law would not achieve its key aims, and insisted the U.K. is not sitting on the sidelines in the transatlantic tussle over the plan.
The comments came just minutes after the U.S. ambassador to the U.K. mounted a spirited defense of the IRA at the same event.
The Inflation Reduction Act offers billions in subsidies and tax credits to try and incentivize take-up of electric vehicles and build up green infrastructure. But European and British carmakers are particularly concerned about the impact on their own industries of massive help for U.S. firms.
Speaking on Tuesday night, Badenoch said Britain — which has been lobbying against the plan but is not prepping its own subsidies — is “working very well with a group of like-minded countries who are worried about the Inflation Reduction Act.”
“The EU is very worried and we’re working jointly with them on it,” she said. “It’s not just the EU doing stuff and we’re not in the room. Japan is worried. South Korea is worried. Switzerland is worried.”
Many countries, Badenoch contended, are now “looking at what the U.S. is doing” with concern.
“It is onshoring in a way that could actually create problems with the supply chain for everybody else,” she said.
“And that will not have the impact that it wants to have when it’s looking at the economic challenge that China presents. So no, I don’t think it’s a good idea, not just because it’s protectionist. But it also creates a single point of failure in a different place, when actually what we want is diversification and strengthening of supply chains across the board.”
Speaking earlier Tuesday night, U.S. Ambassador to the U.K. Jane Hartley argued that the plan could have major positive implications for countries beyond the U.S.
“One of the things I would say is there’s going to be a huge amount of money, R&D — the technology is going to improve, the technology is going to be cheaper,” she said. “The technology is going to be used by everyone in the world — not just the U.S.”
Hartley stressed that U.S. Treasury Secretary Janet Yellen is “looking pretty hard” at the act during its so-called comment period, when U.S. agencies take feedback on a plan. Both President Biden and U.S. Trade Secretary Katherine Tai had, she said, stressed that their country “didn’t do this to hurt our allies — we want to protect our allies.”
CORRECTION: A previous version of this article misstated Janet Yellen’s job title. She is the treasury secretary.
KYIV — As the distant howl of air raid sirens echoes around them, a dozen Ukrainian soldiers clamber out of camouflaged tents perched on a hill off a road just outside Kyiv, hidden from view by a thick clump of trees. The soldiers, pupils of a drone academy, gather around a white Starlink antenna, puffing at cigarettes and doomscrolling on their phones — taking a break between classes, much like students around the world do.
But this isn’t your average university.
The soldiers have come here to study air reconnaissance techniques and to learn how to use drones — most of them commercial ones — in a war zone. Their training, as well as the supply chains that facilitate the delivery of drones to Ukraine, are kept on the down low. The Ukrainians need to keep their methods secret not only from the Russian invaders, but also from the tech firms that manufacture the drones and provide the high-speed satellite internet they rely on, who have chafed at their machines being used for lethal purposes.
Drones are essential for the Ukrainians: The flying machines piloted from afar can spot the invaders approaching, reduce the need for soldiers to get behind enemy lines to gather intelligence, and allow for more precise strikes, keeping civilian casualties down. In places like Bakhmut, a key Donetsk battleground, the two sides engage in aerial skirmishes; flocks of drones buzz ominously overhead, spying, tracking, directing artillery.
So, to keep their flying machines in the air, the Ukrainians have adapted, adjusting their software, diversifying their supply chains, utilizing the more readily available commercial drones on the battlefield and learning to work around the limitations and bans foreign corporations have imposed or threatened to impose.
Private drone schools and nongovernmental organizations around Ukraine are training thousands of unmanned aerial vehicle (UAV) pilots for the army. Dronarium, which before Russia’s invasion last year used to shoot glossy commercial drone footage and gonzo political protests, now provides five-day training sessions to soldiers in the Kyiv Oblast. In the past year, around 4,500 pilots, most of them now in the Ukrainian armed forces, have taken Dronarium’s course.
What’s on the curriculum
On the hill outside Kyiv, behind the thicket of trees, break time’s over and school’s back in session. After the air raid siren stops,some soldiers grab their flying machines and head to a nearby field; others return to their tents to study theory.
A key lesson: How to make civilian drones go the distance on the battlefield.
“In the five days we spend teaching them how to fly drones, one and a half days are spent on training for the flight itself,” a Dronarium instructor who declined to give his name over security concerns but uses the call sign “Prometheus” told POLITICO. “Everything else is movement tactics, camouflage, preparatory process, studying maps.”
Drone reconnaissance teams work in pairs, like snipers, Prometheus said. One soldier flies a drone using a keypad; their colleague looks at the map, comparing it with the video stream from the drone and calculating coordinates. The drone teams “work directly with artillery,” Prometheus continued. “We transfer the picture from the battlefield to the servers and to the General Staff. Thanks to us, they see what they are doing and it helps them hit the target.”
Private drone schools and nongovernmental organizations around Ukraine are training thousands of unmanned aerial vehicle (UAV) pilots for the army | John Moore/Getty Images
Before Russia launched its full-scale invasion of Ukraine, many of these drone school students were civilians. One, who used to be a blogger and videogame streamer but is now an intelligence pilot in Ukraine’s eastern region of Donbas, goes by the call sign “Public.” When he’s on the front line, he must fly his commercial drones in any weather — it’s the only way to spot enemy tanks moving toward his unit’s position.
“Without them,” Public said, “it is almost impossible to notice the equipment, firing positions and personnel in advance. Without them, it becomes very difficult to coordinate during attack or defense. One drone can sometimes save dozens of lives in one flight.”
The stakes couldn’t be higher: “If you don’t fly, these tanks will kill your comrades. So, you fly. The drone freezes, falls and you pick up the next one. Because the lives of those targeted by a tank are more expensive than any drone.”
Army of drones
The war has made the Bayraktar military drone a household name, immortalized in song by the Ukrainians. Kyiv’s UAV pilots also use Shark, RQ-35 Heidrun, FLIRT Cetus and other military-grade machines.
“It is difficult to have an advantage over Russia in the number of manpower and weapons. Russia uses its soldiers as meat,” Ukraine’s Digital Transformation Minister Mykhailo Fedorov said earlier this month. But every Ukrainian life, he continued, “is important to us. Therefore, the only way is to create a technological advantage over the enemy.”
Until recently, the Ukrainian army didn’t officially recognize the position of drone operator. It was only in January that Commander-in-Chief of the Armed Forces of Ukraine Valerii Zaluzhnyi ordered the army to create 60 companies made up of UAV pilots, indicating also that Kyiv planned to scale up its own production of drones. Currently, Ukrainian firms make only 10 percent of the drones the country needs for the war, according to military volunteer and founder of the Air Intelligence Support Center Maria Berlinska.
In the meantime, many of Ukraine’s drone pilots prefer civilian drones made by Chinese manufacturer DJI — Mavics and Matrices — which are small, relatively cheap at around €2,500 a pop, with decent zoom lenses and user-friendly operations.
Choosing between a military drone and a civilian one “depends on the goal of the pilot,” said Prometheus, the Dronarium instructor. “Larger drones with wings fly farther and can do reconnaissance far behind enemy lines. But at some point, you lose the connection with it and just have to wait until it comes back. Mavics have great zoom and can hang in the air for a long time, collecting data without much risk for the drone.”
But civilian machines, made for hobbyists not soldiers, last two, maybe three weeks in a war zone. And DJI last year said it would halt sales to both Kyiv and Moscow, making it difficult to replace the machines that are lost on the battlefield.
In response, Kyiv has loosened export controls for commercial drones, and is buying up as many as it can, often using funds donated by NGOs such as United24 “Army of Drones” initiative. Ukraine’s digital transformation ministry said that in the three months since the initiative launched, it has purchased 1,400 military and commercial drones and facilitated training for pilots, often via volunteers. Meanwhile, Ukraine’s Serhiy Prytula Charitable Foundation said it has purchased more than 4,100 drones since Russia’s full-scale invasion began last year — most were DJI’s Mavic 3s, along with the company’s Martice 30s and Matrice 300s.
But should Ukraine be concerned about the fact many of its favorite drones are manufactured by a Chinese company, given Beijing’s “no limits” partnership with Moscow?
Choosing between a military drone and a civilian one “depends on the goal of the pilot,” said Prometheus, the Dronarium instructor | Sameer Al-Doumy/AFP via Getty Images
DJI, the largest drone-maker in the world, has publicly claimed it can’t obtain user data and flight information unless the user submits it to the company. But its alleged ties to the Chinese state, as well as the fact the U.S. has blacklisted its technology (over claims it was used to surveil ethnic Uyghurs in Xinjiang), have raised eyebrows. DJI has denied both allegations.
Asked if DJI’s China links worried him, Prometheus seemed unperturbed.
“We understand who we are dealing with — we use their technology in our interests,” he said. “Indeed, potentially our footage can be stored somewhere on Chinese servers. However, they store terabytes of footage from all over the world every day, so I doubt anyone could trace ours.”
Dealing with Elon
Earlier this month, Elon Musk’s SpaceX announced it had moved to restrict the Ukrainian military’s use of its Starlink satellite internet service because it was using it to control drones. The U.S. space company has been providing internet to Ukraine since last February — losing access would be a big problem.
“It is not that our army goes blind if Starlink is off,” said Prometheus, the drone instructor. “However, we do need to have high-speed internet to correct artillery fire in real-time. Without it, we will have to waste more shells in times of ongoing shell shortages.”
But while the SpaceX announcement sparked outcry from some of Kyiv’s backers, as yet, Ukraine’s operations haven’t been affected by the move, Digital Transformation Minister Fedorov told POLITICO.
Prometheus had a theory as to why: “I think Starlink will stay with us. It is impossible to switch it off only for drones. If Musk completely turns it off, he will also have to turn it off for hospitals that use the same internet to order equipment and even perform online consultations during surgeries at the war front. Will he switch them off too?”
And if Starlink does go down, the Ukrainians will manage, Prometheus said with a wry smile: “We have our tools to fix things.”
LONDON — As nations around the world scramble to secure crucial semiconductor supply chains over fears about relations with China, the U.K. is falling behind.
The COVID-19 pandemic exposed the world’s heavy reliance on Taiwan and China for the most advanced chips, which power everything from iPhones to advanced weapons. For the past two years, and amid mounting fears China could kick off a new global security crisis by invading Taiwan, Britain’s government has been readying a plan to diversify supply chains for key components and boost domestic production.
Yet according to people close to the strategy, the U.K.’s still-unseen plan — which missed its publication deadline last fall — has suffered from internal disconnect and government disarray, setting the country behind its global allies in a crucial race to become more self-reliant.
A lack of experience and joined-up policy-making in Whitehall, a period of intense political upheaval in Downing Street, and new U.S. controls on the export of advanced chips to China, have collectively stymied the U.K.’s efforts to develop its own coherent plan.
The way the strategy has been developed so far “is a mistake,” said a former senior Downing Street official.
Falling behind
During the pandemic, demand for semiconductors outstripped supply as consumers flocked to sort their home working setups. That led to major chip shortages — soon compounded by China’s tough “zero-COVID” policy.
Since a semiconductor fabrication plant is so technologically complex — a single laser in a chip lithography system of German firm Trumpf has 457,000 component parts — concentrating manufacturing in a few companies helped the industry innovate in the past.
But everything changed when COVID-19 struck.
“Governments suddenly woke up to the fact that — ‘hang on a second, these semiconductor things are quite important, and they all seem to be concentrated in a small number of places,’” said a senior British semiconductor industry executive.
Beijing’s launch of a hypersonic missile in 2021 also sent shivers through the Pentagon over China’s increasing ability to develop advanced AI-powered weapons. And Russia’s invasion of Ukraine added to geopolitical uncertainty, upping the pressure on governments to onshore manufacturers and reduce reliance on potential conflict hotspots like Taiwan.
Against this backdrop, many of the U.K.’s allies are investing billions in domestic manufacturing.
The Biden administration’s CHIPS Act, passed last summer, offers $52 billion in subsidies for semiconductor manufacturing in the U.S. The EU has its own €43 billion plan to subsidize production — although its own stance is not without critics. Emerging producers like India, Vietnam, Singapore and Japan are also making headway in their own multi-billion-dollar efforts to foster domestic manufacturing.
US President Joe Biden | Samuel Corum/Getty Images
Now the U.K. government is under mounting pressure to show its own hand. In a letter to Prime Minister Rishi Sunak first reported by the Times and also obtained by POLITICO, Britain’s semiconductor sector said its “confidence in the government’s ability to address the vital importance of the industry is steadily declining with each month of inaction.”
That followed the leak of an early copy of the U.K.’s semiconductor strategy, reported on by Bloomberg, warning that Britain’s over-dependence on Taiwan for its semiconductor foundries makes it vulnerable to any invasion of the island nation by China.
Taiwan, which Beijing considers part of its territory, makes more than 90 percent of the world’s advanced chips, with its Taiwan Semiconductor Manufacturing Company (TSMC) vital to the manufacture of British-designed semiconductors.
U.S. and EU action has already tempted TSMC to begin building new plants and foundries in Arizona and Germany.
“We critically depend on companies like TSMC,” said the industry executive quoted above. “It would be catastrophic for Western economies if they couldn’t get access to the leading-edge semiconductors any more.”
Whitehall at war
Yet there are concerns both inside and outside the British government that key Whitehall departments whose input on the strategy could be crucial are being left out in the cold.
The Department for Digital, Culture, Media and Sport (DCMS) is preparing the U.K.’s plan and, according to observers, has fiercely maintained ownership of the project. DCMS is one of the smallest departments in Whitehall, and is nicknamed the ‘Ministry of Fun’ due to its oversight of sports and leisure, as well as issues related to tech.
“In other countries, semiconductor policies are the product of multiple players,” said Paul Triolo, a senior vice president at U.S.-based strategy firm ASG. This includes “legislative support for funding major subsidies packages, commercial and trade departments, R&D agencies, and high-level strategic policy bodies tasked with things like improving supply chain resilience,” he said.
“You need all elements of the U.K.’s capabilities. You need the diplomatic services, the security services. You need everyone working together on this,” said the former Downing Street official quoted above. “There are huge national security aspects to this.”
The same person said that relying on “a few [lower] grade officials in DCMS — officials that don’t see the wider picture, or who don’t have either capability or knowledge,” is a mistake.
For its part, DCMS rejected the suggestion it is too closely guarding the plan, with a spokesperson saying the ministry is “working closely with industry experts and other government departments … so we can protect and grow our domestic sector and ensure greater supply chain resilience.”
The spokesperson said the strategy “will be published as soon as possible.”
But businesses keen for sight of the plan remain unconvinced the U.K. has the right team in place for the job.
Key Whitehall personnel who had been involved in project have now changed, the executive cited earlier said, and few of those writing the strategy “have much of a background in the industry, or much first-hand experience.”
Progress was also sidetracked last year by lengthy deliberations over whether the U.K. should block the sale of Newport Wafer Fab, Britain’s biggest semiconductor plant, to Chinese-owned Nexperia on national security grounds, according to two people directly involved in the strategy. The government eventually announced it would block the sale in November.
And while a draft of the plan existed last year, it never progressed to the all-important ministerial “write-around” process — which gives departments across Whitehall the chance to scrutinize and comment upon proposals.
Waiting for budget day
Two people familiar with current discussions about the strategy said ministers are now aiming to make their plan public in the run-up to, or around, Chancellor Jeremy Hunt’s March 15 budget statement, although they stressed that timing could still change.
Leaked details of the strategy indicate the government will set aside £1 billion to support chip makers. Further leaks indicate this will be used as seed money for startups, and for boosting existing firms and delivering new incentives for investors.
U.K. Chancellor Jeremy Hunt | Leon Neal/Getty Images
There is wrangling with the Treasury and other departments over the size of these subsidies. Experts also say it is unlikely to be ‘new’ money but diverted from other departments’ budgets.
“We’ll just have to wait for something more substantial,” said a spokesperson from one semiconductor firm commenting on the pre-strategy leaks.
But as the U.K. procrastinates, key British-linked firms are already being hit by the United States’ own fast-evolving semiconductor strategy. U.S. rules brought in last October — and beefed up in recent days by an agreement with the Netherlands — are preventing some firms from selling the most advanced chip designs and manufacturing equipment to China.
British-headquartered, Japanese-owned firm ARM — the crown jewel of Britain’s semiconductor industry, which sells some designs to smartphone manufacturers in China — is already seeing limits on what it can export. Other British firms like Graphcore, which develops chips for AI and machine learning, are feeling the pinch too.
“The U.K. needs to — at pace — understand what it wants its role to be in the industries that will define the future economy,” said Andy Burwell, director for international trade at business lobbying group the CBI.
Where do we go from here?
There are serious doubts both inside and outside government about whether Britain’s long-awaited plan can really get to the heart of what is a complex global challenge — and opinion is divided on whether aping the U.S. and EU’s subsidy packages is either possible or even desirable for the U.K.
A former senior government figure who worked on semiconductor policy said that while the U.K. definitely needs a “more coherent worked-out plan,” publishing a formal strategy may actually just reveal how “complicated, messy and beyond our control” the issue really is.
“It’s not that it is problematic that we don’t have a strategy,” they said. “It’s problematic that whatever strategy we have is not going to be revolutionary.” They described the idea of a “boosterish” multi-billion-pound investment in Britain’s own fabricator industry as “pie in the sky.”
The former Downing Street official said Britain should instead be seeking to work “in collaboration” with EU and U.S. partners, and must be “careful to avoid” a subsidy war with allies.
The opposition Labour Party, hot favorites to form the next government after an expected 2024 election, takes a similar view. “It’s not the case that the U.K. can do this on its own,” Shadow Foreign Secretary David Lammy said recently, urging ministers to team up with the EU to secure its supply of semiconductors.
One area where some experts believe the U.K. may be able to carve out a competitive advantage, however, is in the design of advanced semiconductors.
“The U.K. would probably be best placed to pursue support for start-up semiconductor design firms such as Graphcore,” said ASG’s Triolo, “and provide support for expansion of capacity at the existing small number of companies manufacturing at more mature nodes” such as Nexperia’s Newport Wafer Fab.
Ministers launched a research project in December aimed at tapping into the U.K. semiconductor sector’s existing strength in design. The government has so far poured £800 million into compound semiconductor research through universities, according to a recent report by the House of Commons business committee.
But the same group of MPs wants more action to support advanced chip design. Burwell at the CBI business group said the U.K. government must start “working alongside industry, rather than the government basically developing a strategy and then coming to industry afterwards.”
Right now the government is “out there a bit struggling to see what levers they have to pull,” said the senior semiconductor executive quoted earlier.
Under World Trade Organization rules, governments are allowed to subsidize their semiconductor manufacturing capabilities, the executive pointed out. “The U.S. is doing it. Europe’s doing it. Taiwan does it. We should do it too.”
This story has been updated. Cristina Gallardo contributed reporting.
Thierry Breton is winning the war of ideas in Brussels.
The ex-CEO is a political whirlwind with a gigantic portfolio as internal market chief, the backing of French President Emmanuel Macron and lots of proposals. He’s been touring European Union capitals to win support for plans to shield Europe’s industry from crippling energy prices, American subsidies and “naive” EU free traders.
France’s decades-long push for more state intervention is finally findingsome echo in Berlin and the 13th floor of the Berlaymont building, occupied by European Commission President Ursula von der Leyen, who largely owes her job to Macron.
Omnipresent and ebullient, Breton is playing a key role in marshaling industry and political support for sweeping but so far vague plans to boost clean tech, secure key raw materials and overhaul EU checks on government support that he blasts as too slow to help companies.
“Of course there is resistance; my job is precisely to manage and align everyone,” he told French TV this week of his January meetings with Spanish, Polish and Belgian leaders to flog a forthcoming industrial policy push that could be a turning point in how far European governments will finance companies.
Time is short. Von der Leyen wants to line up proposals for a February summit. European industry is complaining that it can’t swallow far higher energy prices and tighter regulation for much longer, with at least one announcing a European shutdown and an Asian expansion.
Breton said governments don’t need convincing on the need for rapid action. But he’s running up against one of Europe’s sacred cows — EU state aid rules run by Executive Vice President Margrethe Vestager that curb government support with lengthy checks to make sure companies don’t get unfair help. She’s also under intense pressure to preserve a “level playing field” as smaller countries worry about German and French financial firepower.
The French internal market commissioner’s bullish style often sees him act as if he’s got a role in subsidies. In the fall, he sent a letter to EU countries asking them to send views on emergency state aid rules to the internal market department, which is under his supervision, two EU officials recalled.
In a meeting with European diplomats, a Commission representative had to correct it, the EU officials said, asking capitals to make sure the input goes instead to the competition department overseen by Vestager.
Europe First
While Breton doesn’t like to be called a protectionist, his latest mission has been to protect Europe from its transatlantic friend.
As early as September, one Commission official said, the Frenchman was mandated by Europe’s industry to speak out against U.S. President Joe Biden’s Inflation Reduction Act, which provides tax credits for U.S.-made electric cars and support to American battery supply chains.
U.S President Joe Biden gives remarks during an event celebrating the passage of the Inflation Reduction Act on September 13, 2022 | Anna Moneymaker/Getty Images
His Paris-backed campaign charged ahead while EU officials and diplomats tiptoed around the subject. Some within the Commission headquarters found his bad cop routine helpful in keeping pressure on the U.S.
“He’s been constructive, though clearly disruptive,” said Tyson Barker, head of the technology and global affairs program at the German Council of Foreign Relations.
The Frenchmanhas even pitched himself as the bloc’s “sheriff” against Silicon Valleygiants, warning billionaire Elon Musk that an overhaul of the Twitter social network can only go so far since “in Europe, the bird will fly by our rules.”
“Big Tech companies only understand balances of power,” said Cédric O, a former French digital minister who worked with Breton during the French EU Council presidency. “When [Breton and Musk] see each other, it necessarily remains cordial, but Breton shows his teeth and rightly so. It’s his job.”
Breton can even surprise his own services, according to two EU officials. In May, the Commission’s department responsible for digital policy — DG CONNECT — was caught off guard when Breton announced in the press that he would unveil plans by year-end to make sure that technology giants forked out for telecoms networks.
In so doing, Breton — who was CEO of France Télécom in the early 2000s — resurrected a long-dormant and fractious policy debate that had been put to rest almost a decade ago, when erstwhile Digital Commissioner Neelie Kroes ordered Europe’s telecoms operators to “adapt or die” rather than seek money from content providers.
After Breton’s commitments, the Commission’s services were soon scrambling to develop some sort of a coherent policy program to deliver on the Frenchman’s comments. A consultation is scheduled for early this year.
Carte blanche
Breton is a rare creature in the halls of the Berlaymont, where policy is hatched slowly after extensive consultation. To a former CEO with a broad remit — his portfolio runs from the expanse of space to the tiniest of microchips — rapid reaction matters more than treading on toes or singing from the hymn sheet. This often sees him floating ideas and then pulling back.
Last year he alarmed environmentalists by raising the prospect of a U-turn on the EU’s polluting car ban. He wagged his finger at German Chancellor Olaf Scholz for a solo trip to China. He called for nuclear energy to be considered green. He has pushed out grand projects — such as industrial alliances on batteries and cloud, or a cyber shield — that he doesn’t always follow up on.
He’s even pushed forward a multibillion-euro EU communication satellite program dubbed Iris², a favorite of French aerospace companies, that will see the bloc build a rival to Musk’s space-based Starlink broadband constellation.
“It’s clear that he’s been given more free rein than others,” said one EU official. “He has von der Leyen’s ear,” the official added, noting that Breton enjoys “privileged access” to the Commission president — who may be mindful that she’ll need French support for a second term.
According to an official, Breton “has von der Leyen’s ear” and enjoys “privileged access” to the Commission president | Valeria Mongeli/AFP via Getty Images
Indeed, Breton’s massive role was partly designed as a counterweight to a German president.
“There is a criticism of von der Leyen for being too German,” explained Sébastien Maillard, director of the Jacques Delors Institute think tank. “There may inevitably be a division of roles between them — [where Breton is] a counterbalance.”
He’s been called an “unguided missile,” but more often than not, the Frenchman has Paris’ backing when going off script. His October op-ed with Italian colleague Paolo Gentiloni, which called for greater European financial solidarity, was part of France’s agenda, according to one high-ranking Commission official.
“When he went out in the press with Gentiloni against Scholz’s €200 billion, he was clearly doing the job for Macron,” the official said.
His November call for a rethink on the 2035 car engine ban came just after a week after critical green legislation had been finalized by Commission Executive Vice President Frans Timmermans and jarred with the EU’s own position at the COP 27 climate summit in Indonesia. But it aped the position of French auto industry captains, such as Stellantis CEO Carlos Tavares and Renault’s Luca de Meo, who wanted Brussels to slam the brakes on the climate drive.
Breton had not coordinated his car comments with colleagues in advance, according to two Commission officials.
Less than 10 days later, French Prime Minister Elisabeth Borne echoed caution about the “extremely ambitious” engine ban and warned that pivoting to electric car manufacturing was daunting.
Going A-list
Breton acknowledged himself that he wasn’t Macron’s first choice for the critical EU post, telling POLITICO at a live event that he was a “plan B commissioner.”
Asked if he was targeting an A-list job for the new Commission mandate in 2024, he said he “may be able to consider a new plan B assignment — if it is a plan B.”
“He is thinking about the future,” said one EU official. “Look at his LinkedIn posts. He is thinking past the next European elections. He definitely wants to convince Macron to get an expanded portfolio.”
Grabbing the Commission’s top job may be tricky, relying on how EU leaders will line up, according to multiple EU and French officials.
There are other jobs, including overturning the unwritten law that no French or German candidate can hold the economically powerful competition portfolio. Another option could be becoming Europe’s official digital czar, combining the enforcement powers of the Digital Services Act and the Digital Markets Act into a supranational digital enforcement agency, one EU official said.
Breton has shrugged off speculation on his long-term plans.
“All my life, I have been informed of my next potential job 15 minutes before,” he said last month.
Jakob Hanke Vela, Stuart Lau, Barbara Moens, Camille Gijs and Mark Scott contributed reporting.
The EU’s green ambitions are, for its trading partners, turning into a case of the road to hell being paved with good intentions.
Developing nations, especially, worry that Brussels is throwing up trade barriers in its pursuit of climate neutrality and sustainable food production. To them, it looks like all the EU can export is rules that will hold back their own economic progress.
Indonesia, for example, has warned the EU should not attempt to dictate its green standards to countries in Southeast Asia. “There must be no coercion, no more parties who always dictate and assume that my standards are better than yours,” Indonesian President Joko Widodo told European leaders at the EU-ASEAN summit last month.
In another striking example of the anger provoked by the EU’s green agenda, Malaysia has threatened to stop exports of palm oil to the bloc over new rules aimed at fighting deforestation.
The EU’s ambitions to become climate neutral by 2050 — its so-called Green Deal — herald a huge economic transformation for the world’s largest trading bloc.
Now that the Green Deal is being translated into actual legislation, developing nations are waking up with a hangover of its effects.
One diplomat from a third country said Brussels is mishandling the power of the EU’s single market instead of respecting the sovereignty of its trading partners.
“We see a regulatory imperialism by the EU whereby Brussels sees itself as an exporter of rules to third countries — as the legislators of the world,” said Philippe De Baere, managing partner at law firm Van Bael & Bellis.
The Green Deal goes beyond the so-called Brussels effect, in which multinational companies use EU rules as global standards. De Baere said Brussels had gotten “drunk on its success” and started exporting environmental objectives to developing nations, “which are unable to comply economically, or if they comply, it is with an enormous economic cost.”
Imposing new taxes
The EU’s carbon border levy is the latest, and most symbolic, measure to upset the EU’s trade partners. The idea is that producers importing carbon-intensive products into the bloc will have to buy permits to account for the difference between their domestic carbon price and the price paid by EU producers.
“There must be no coercion, no more parties who always dictate and assume that my standards are better than yours,” Indonesian President Joko Widodo told European leaders | Lauren DeCicca/Getty Images
The goal of the levy, called the Carbon Border Adjustment Mechanism (CBAM), was to level the playing field for EU producers and avoid companies moving their production over lower climate standards — so-called carbon leakage. For Brussels, the sense of climate urgency is too high to wait for others to follow suit, or to reach a deal at the multilateral or global level.
But there is a difference between the intent and real-word outcomes, said Milan Elkerbout of the Centre for European Policy Studies: “If you’re not in the internal logic of the European debate, this will just look like the perfect example of the EU having a protectionist intent.”
Brazil, South Africa, India and China have jointly expressed their “grave concern regarding the proposal for introducing trade barriers, such as unilateral carbon border adjustment, that are discriminatory.” The measure is likely to be challenged at the World Trade Organization.
Mohammed Chahim, a Dutch MEP who helped craft the CBAM, said the measure should be offset by the delivery of tens of billions in annual public financing promised for climate projects in the developing world.
“I think they are absolutely right in their complaints about the EU (and other developed countries) not fulfilling their pledges,” he said of these emerging economies. But it would be impossible for the EU to end protections for heavy industry at home while granting exemptions to other countries.
Even for the poorest countries, Chahim said, an exemption “would be the wrong signal, they also have to decarbonize their industry to make it futureproof.” But under the newly minted regulation, those countries were eligible for support to comply, he added.
Making imports harder
The carbon border levy is far from the only measure to make exporting to the world’s biggest trading bloc harder.
Brussels’ Farm to Fork strategy seeks to prioritize sustainability in agriculture by slashing pesticide risk and use in half by 2030. A plan announced last September to ban imports of products containing residues of harmful neonicotinoid insecticides from 2026 has drawn “unprecedented” criticism from other countries, according to a senior European Commission official.
As the Green Deal tightens rules on pesticide use in the EU, new trade barriers are going up, said Koen Dekeyser of the European Centre for Development Policy Management (ECDPM). “Certain farmers can make those investments. Other, more small-scale farmers are likely to seek other markets, for example in Asia,” said Dekeyser.
The EU’s effort to stop deforestation is likely to have similar results.
Under new rules, it will be illegal to sell or export certain commodities if they’ve been produced on deforested land.
Brussels’ Farm to Fork strategy seeks to prioritize sustainability in agriculture by slashing pesticide risk and use in half by 2030 | Jean-François Monier/AFP via Getty Images
One third-country diplomat said it was easy for the EU to take a stand on deforestation in the developing world, having already deforested its own land in the past.
Countries in Latin America, Africa and Southeast Asia have lobbied hard against the proposal, calling it “discriminatory and punitive in nature” and arguing in a letter to Commission President Ursula von der Leyen that it will result in “trade distortion and diplomatic tensions, without benefits to the environment.”
In technology, where the 27-country bloc has passed a series of rules to promote its standards on privacy, online competition and social media to the wider world, other countries, too, have chafed at what they see as overly bureaucratic rules that favor well-resourced regulators within the EU. These can be difficult to implement in developing countries with less expertise and money at their disposal.
More far-reaching legislation is still underway. The EU is also preparing a sustainable production law for companies to police their supply chains against forced labor and environmental damage. Brussels wants to hold companies responsible for abuses throughout their supply chains.
Same goal, different roads
In their deforestation letter, the group of developing countries touch on a sensitive point. While they agree with the EU’s climate goals, they regret that Brussels is imposing its own measures instead of forging an international deal.
The Paris climate agreement is based on the logic of common, but differentiated, responsibilities. At least, that allows countries to move at their own speed and determine their policies toward the same goal.
“Now, not only is the EU telling them what to do, but a lot of developing countries also feel they are now prohibited to do what Western countries have done for decades: industrialize without thinking about pollution and subsidizing infant industries,” said Ferdi De Ville, a professor in European political economy at the University of Ghent.
The unilateral character of a lot of these measures is creating resentment, argues De Ville, especially given the bloc’s huge market power.
“In Brussels, everyone looks at these measures separately,” said another diplomat from a third country. “But who looks at it together and thinks about what it means to us? CBAM, deforestation, the Farm to Fork strategy. These are all unilateral measures which are making things harder for our exporters.”
European officials stress, however, that Brussels is not inflicting its Green Deal on the rest of the world.
But Brussels is also being pushed by NGOs to lead by example. “Europe is one of the major contributors to the current crises related to climate, biodiversity, energy and human rights violations around the world. Therefore we consider it the responsibility of the European Union and other countries in the Global North to urgently start tackling these crises through lawmaking,” said Jill McArdle from the NGO Friends of the Earth.
Agreeing on new rules on the multilateral front remains the EU’s first best option. But, in the absence of a well-functioning World Trade Organization, Brussels has little choice but to go at it alone, EU officials and diplomats argue. “If we want to achieve the Paris targets, there is no time to wait,” one EU official said.
Mark Scott contributed reporting. This story has been updated.
