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Only additional pressure can push Putin toward peace

Kira Rudik — Thu, 26 Mar 2026 21:19:03 +0000

After more than a year of US-led talks to end the Russian invasion of Ukraine, there is little sign of progress toward peace. Instead, Moscow is now reportedly aiding Tehran as Iranian drones target United States bases and American allies across the Gulf region. New approaches are clearly needed in order to prevent a further descent into international insecurity.

When US President Donald Trump returned to the White House in January 2025 and began efforts to end Russia’s war against Ukraine via diplomacy, many Ukrainians were not overly optimistic. This skepticism was rooted in their own bitter personal experience of broken Russian promises over the past few decades.

Since Ukraine regained independence in 1991, Russia signed a long list of treaties and agreements obliging Moscow to respect Ukraine’s territorial integrity and refrain from acts of international aggression. These commitments did not prevent Russian President Vladimir Putin from invading Ukraine in 2014 or launching a full-scale invasion eight years later. Understandably, few in Kyiv now believe Putin can be trusted to respect future deals.

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Over the past year, it has become evident that Russia is using US-led negotiations to stall for time and divide the transatlantic alliance. Putin has refused to join Ukraine in accepting an unconditional ceasefire and continues to insist on maximalist goals that would mean the end of an independent Ukrainian state. Meanwhile, the Kremlin underlines its lack of commitment to peace by sending low-level delegations led by figures such as presidential aide Vladimir Medinsky, who is best known for penning radically anti-Ukrainian history textbooks.

On the battlefield, Russia’s intentions are equally clear. Despite suffering catastrophic losses over the past four years, the Russian army remains on the offensive and continues to recruit tens of thousands of new troops each month to fill the depleted ranks of Putin’s invasion force.

In parallel, Russia is escalating attacks on Ukraine’s civilian population. During the recent winter months, millions of Ukrainians found themselves without access to heating and electricity amid Arctic temperatures due to a strategic bombing campaign targeting critical civilian infrastructure that aimed to freeze the country into submission. According to UN data, 2025 was the deadliest period of the war for Ukrainian civilians since the first months of the invasion, with the number of civilian deaths rising by 31 percent compared to the previous year.

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With the Kremlin ignoring calls for a compromise peace, the only way to advance negotiations is by putting more pressure on Putin. Failure to do so could have disastrous consequences that would be felt far beyond the borders of a subjugated Ukraine.

The current Russian plan is to drag out negotiations indefinitely while grinding down Ukraine’s resistance and sowing division among Kyiv’s international allies. Moscow seeks to entice the United States with promises of lucrative economic cooperation, while supporting populist political forces across the EU in a bid to weaken European support for Ukraine. If this strategy succeeds, Ukraine may at some point become unable to defend itself.

The collapse of Ukrainian resistance would not bring peace to Europe. Instead, a victorious Russia would take control of Ukraine’s formidable military and the country’s rapidly expanding domestic defense industry. Putin would then command the two most powerful armies in Europe, with unrivaled combat experience and knowledge of drone warfare. In such circumstances, it is dangerously delusional to think that Russia would not seek to go further. At the very least, European governments would be forced to increase defense budgets to levels that would dwarf the current cost of supporting Ukraine.

The steps necessary to secure peace through strength are no secret. First and foremost, this means adequately arming Ukraine. Trump suggested in 2025 that if Russia continues to reject peace efforts, he may provide Ukraine with Tomahawk missiles. This would be a welcome and meaningful step. Other partners including Germany have also spoken of increasing Ukraine’s long-range strike capabilities. Now is the time to do so.

In parallel, sanctions measures targeting Putin’s war economy must be expanded and tightened. This should include steps to increase the costs for international customers who continue to purchase Russian oil and gas exports, thereby funding the Kremlin war machine.

Western leaders have always had the tools at their disposal to counter the Russian threat. Unfortunately, however, they have so far failed to demonstrate the political will necessary to deploy these tools effectively. This excessive caution is counter-productive and only serves to embolden the Kremlin. Moscow believes it is already at war with the West and treats calls for compromise as signs of weakness. If Kyiv’s partners are serious about stopping Russia, they must abandon appeasement and increase the pressure on Putin.

Kira Rudik is leader of the Golos party and a member of the Ukrainian parliament.

DHS seeks enhanced border security partnerships

DHS operates an international biometric information-sharing program to assist in “assessing the eligibility or public security risk of individuals seeking an immigration benefit or encountered in the context of a border encounter or law enforcement investigation related to immigration or border security issues,” according to the department’s privacy impact assessment (PIA). The program entails “automatic comparison of the fingerprints collected by DHS or a foreign partner on international travelers, suspected criminals, asylum seekers, irregular migrants, refugees, [and] applicants for visa and/or immigration benefits,” the PIA states. Biometric identifiers potentially include facial and iris scans and DNA, as well as traditional fingerprints.

In 2022, DHS decided that all forty-three countries that benefit from visa-free entry to the United States through the Visa Waiver Program (VWP) must conclude agreements, dubbed enhanced border security partnerships (EBSP), enabling DHS to screen their biometric records for immigration or border security purposes. When DHS queries a name against a foreign state’s identity records and it yields a match, DHS automatically receives the responsive biometric data. Other identity information also could be conveyed by the foreign state. In the absence of a match in the foreign database, no fingerprints or other biometric information would be supplied to DHS.

Shared competence: EU and member-state roles

Twenty-four of the EU’s twenty-seven member states (all but Bulgaria, Cyprus, and Romania) participate in the VWP; they comprise more than half of all VWP members globally. Each EU state maintains its own national biometric information records for border purposes. Thus, DHS could take an important step toward fulfilling the overall EBSP goal by reaching biometric information-sharing agreements with these EU countries.

The EU, for its part, also has two relevant responsibilities: setting rules protecting personal data transferred outside its territory, per Article 16(2) of the Treaty on the Functioning of the European Union (TFEU); and setting common policy on visas and external border checks, per Article 77(2) TFEU.

As popular sentiment for stricter border controls has swelled across Europe in recent years, the EU’s policymaking role in this area has become more prominent. In the past year, it has finalized a Pact on Migration and Asylum, a new set of rules on managing migration and asylum applications. In addition, new systems for tracking the entry and exit of foreign travelers and collecting the personal data of those entering EU territory on a visa-free basis are being put in place. These new systems show the EU moving in a similar direction as the United States in collecting information on foreign visitors.

DHS’s demand for biometric information-sharing agreements with EU member states thus touches on an area of “mixed” competence, i.e., one shared between the EU and its member states. In such a situation, the EU and its member states had to decide who would be responsible for negotiating with the United States.

The question took time to resolve. Only in 2024 did the Council of the European Union—which comprises the member states’ national ministers—invite the European Commission to develop a mandate for an international agreement at the EU level. Member states reportedly were eager to bring the collective negotiating strength of the EU to the table with the United States, rather than facing Washington individually.

A year passed before the Commission presented its draft negotiating mandate. It did so based on the understanding that the agreement sought by the United States related to the VWP and thus fell within the EU’s visa policy competence. Negotiations between the Council and Commission on the final contours of the mandate ensued during the second half of 2025.

Finally, in December 2025, the Council adopted a decision authoring the negotiation of an EU-level “framework” agreement with the United States. The framework would provide an overall legal structure for EU member states to conduct bilateral information exchange with DHS, setting the general conditions under which EU member states could provide biometric information to the US border agency. Each eligible member state subsequently would conclude an implementing agreement or arrangement with DHS identifying its relevant databases and operationalizing the data transfers.

Other relevant EU-US agreements

Over the past two decades, the EU has entered into a series of law enforcement and security information-sharing agreements with the United States—ranging from airline passenger name records (PNR) data to financial messaging data (via SWIFT) to mutual legal assistance in criminal matters. DHS is the principal beneficiary of PNR data sharing; the US Department of the Treasury receives SWIFT data used in tracking terrorist finance; and the Department of Justice manages information exchanged for criminal investigations and prosecutions. The United States and the EU also have concluded an agreement elaborating the data protection safeguards that must accompany transfers for law enforcement purposes, the so-called Umbrella Agreement.

In addition, DHS already enjoys access to foreign biometric and biographic data for purposes of preventing and combating serious crime (referred to as PCSC agreements), under a separate negotiating program that commenced in 2009. This earlier generation of agreements assists DHS in border encounters with persons suspected of terrorism and other serious offenses, but they do not apply to all foreign persons seeking to enter the United States.

The EU at that time had also sought to negotiate a PCSC agreement collectively on behalf of its member states, but DHS rebuffed Brussels and instead chose to negotiate individually with each EU member, believing the agency would have better leverage that way. The first two PCSC accords were concluded with Greece and Italy, and eventually all the European participants in the VWP program reached agreements as well.

An EU-level agreement on broad-scale border security information-sharing cooperation with the United States would represent a novel departure for Brussels. “It would be the first agreement concluded by the EU implying large-scale sharing of personal data, including biometric data, for the purpose of border and immigration control by a third country,” the European Data Protection supervisor has observed.

This time, DHS appears to have appreciated the relative speed and efficiency that comes from negotiating one uniform set of access conditions that will apply to all EU VWP participants. The EU and its member states, meanwhile, seem to have reached a sensible division of labor that respects member states’ prerogatives for controlling their own biometric information databases and for managing technical interactions with DHS.

EU negotiating goals

One major EU ambition in setting the rules and procedures governing DHS queries is to preclude generalized processing of all travelers’ data. A Commission press spokesman emphasized the “non-systematic nature of the information exchange and that the exchange is limited to what is strictly necessary to achieve the objectives of this cooperation.”

The EU mandate further stresses that the EU seeks an agreement that would be reciprocal in nature, enabling member states’ border authorities to query corresponding DHS databases. A leaked Council presidency working paper suggested that a monitoring mechanism should ensure reciprocity in implementation: “Information on member states’ citizens should be exchanged under the framework only if the U.S. exchanges information on American citizens.”

It is not clear that the United States and the EU are entering into these negotiations with entirely congruent views on the scope of the framework agreement. DHS envisages checking the biometric databases of travelers from VWP countries on a routine basis. However, the European Commission, as noted above, views the information exchange as “non-systematic.”

In addition, the US international biometric information-sharing program envisages access to foreign databases “in the context of a border encounter or law enforcement investigation related to immigration or border security issues,” according to the DHS Privacy Impact Assessment (italics added). The EU mandate, by contrast, concentrates on security screening and identity verification at the border, with subsequent law enforcement data access to be exclusively governed by other bilateral agreements.

The EU’s data protection rules are its main tool in ensuring that information conveyed to DHS pursuant to the EBSP agreement remains targeted. For example, the negotiating directive insists that processing of personal data be limited to what is “necessary and proportionate in individual cases.” Necessity and proportionality is a key concept in EU data protection law, including in the Schrems jurisprudence of the European Court of Justice, albeit one that is hard to define a priori.

The EU also seeks to include other traditional data protection safeguards in the EBSP agreement with the United States, according to press reports. One reported provision would require human involvement in decisions having significant adverse effects on individuals, rather than permitting entirely automated decision-making. Another would allow for the transfer of “special categories” of personal data—such as sensitive data regarding political opinions, religion, and sexual orientation—only when necessary and proportionate to prevent criminal or terrorist offenses, and with additional protections that limit the universe of individuals who may access it and the duration of retention. Onward transfers of foreign-supplied biometric data to third countries would require the explicit consent of the country from which the data originated.

According to the European Commission version of the negotiating mandate, the EU also seeks to limit DHS retention of transferred personal data to cases of “travelers in respect of whom there is objective evidence from which it may be inferred that there is a continuing risk to public security or public order.” In other words, DHS would not be permitted to store fingerprint data supplied by EU VWP countries on a generalized basis; it could do so only if it has reason to believe that the person would continue to be a threat—a difficult prediction for a security agency to make at the time of the initial border encounter.

The European Data Protection supervisor stated in his opinion that he “largely supports” the proposed approach with the United States. At the same time, he pointed to certain information-sharing constraints the EU would face. Two important EU data repositories prohibit sharing of information with third countries: Eurodac, which contains biometric information on persons who have applied for refugee status in an EU member state or otherwise have migrated irregularly, and ECRIS, which links together member-state records of third country nationals with criminal convictions within the EU. However, the member states themselves regard the exclusive focus of negotiations with the United States on national databases as “without prejudice to any further reflections on the possibility for information exchange with selected third countries from EU databases,” the leaked Council presidency document suggested.

Finally, the EU mandate also seeks the right to an “effective remedy” for persons whose information has been transferred to DHS. This principle, enshrined in the EU Charter of Fundamental Rights, consistently has proven very difficult to resolve in past EU information-sharing agreements with the United States.

Major issues and possible solutions

The existing web of EU-US information-sharing agreements offer valuable precedents for the latest negotiation on access to biometric data for border security purposes. The PCSC agreements, for example, can provide a template for structuring technical interaction between DHS and EU member-state databases. Equally, the types of data protection provisions contained in the law enforcement Umbrella Agreement could be mirrored in the EBSP agreement, even if the former cannot directly be applied to the border security context.

Remedies for misuse of information likely will prove more difficult to resolve. The Data Privacy Framework (DPF), which offers safeguards against illegal US intelligence agency access to personal data transferred from Europe in the commercial context, provides redress in the form of a special tribunal established within the US Department of Justice. Europeans may not petition an ordinary US court if they believe a US intelligence agency has improperly used their data, however. The Court of Justice of the European Union has yet to decide if this specialized form of recourse meets EU fundamental rights standards.

By contrast, the EU did secure US judicial redress for EU citizens whose information is exchanged for law enforcement purposes, under the terms of the EU-US Umbrella Agreement. It took a US statutory change, through the adoption of the Judicial Redress Act, to extend such a right to foreign persons. (The US Privacy Act otherwise limits the right of judicial redress only to US individuals.) Extending this right to Europeans’ whose biometric data is transferred to DHS for the purposes of border security—as opposed to law enforcement—likely would require a further US statutory amendment. Persuading Congress of the necessity of such a change would be challenging.

The necessity and proportionality concept in EU fundamental rights law serves as a legal technique for balancing data protection rights with legitimate public order and public security interests. In the DPF, the United States accepted explicit reference to the EU’s necessity and proportionality standard—in a sensitive context dealing with potential intelligence agency access to personal data. Incorporating this concept in the border biometric information-sharing setting could similarly assure the EU and its member states that DHS is not engaged in mass data collection.

Legal and political dynamics

DHS faces a complex legal situation in pursuing negotiations involving both the EU and its member states. It is consistently difficult for a US government negotiator to be certain where a particular responsibility lies within the EU’s confederal system. In this case, the task is complicated by the cumbersome division of competences for visa and border policy.

In addition, since DHS seeks information for not just border security but also related law enforcement purposes, it must engage with two separate and varying sources of EU data protection law. Data protection rules for immigration control and visa policy are governed by the General Data Protection Regulation, while the rules for protecting law enforcement data fall under a separate directive.

Political factors in Europe also could slow completion of the agreements with the United States. Some members of the European Parliament who belong to the liberal Renew parliamentary group wrote to the European Commission in January, stating: “Looking at the current geopolitical context, we consider it undesirable for the European Commission to start or continue such negotiations.” Although the European Parliament does not have the power to stop the negotiations, it must approve any international agreement that the EU reaches with the United States.

The Trump administration’s removal of Democratic members serving on the Privacy and Civil Liberties Oversight Board (PLCOB) and on the Federal Trade Commission (FTC) have undermined confidence in European privacy circles in US institutions charged with privacy protection. Moreover, DHS’s proposed rule requiring visitors to the United States to supply five years of details on their social media activity has generated widespread outrage abroad. Although this initiative is formally separate from the VWP program, the European public might well conflate the social media and biometric information demands of the United States.

DHS’s goal of wrapping up both the EU framework agreement and, subsequently, the twenty-four implementing agreements with EU member states by the end of 2026, as has been reported, will likely prove overly ambitious. A more achievable ambition would be to complete the EU framework by that date, with the necessary member states implementing agreements afterward. (The leaked Council presidency document sternly states that it considers “Member States’ commitment to refrain from bilateral negotiations with the US while material discussions on the framework are ongoing to be of critical strategic importance.”)

Nevertheless, there is reason for optimism that the US-EU engagement on border security biometric information sharing will yield success. Both sides appear to have entered talks pragmatically, the EU and its member states by agreeing on a sensible division of labor between themselves, and the United States by accepting the practical benefits of negotiating with both Brussels and member-state capitals. Each is impelled by a desire to have greater control of its borders and sees reciprocal information sharing as a promising approach. However, flexibility on both sides will be indispensable to overcoming divergent positions on issues such as remedies.

Further, by winning support in principle for the framework agreement from the EU’s data protection supervisor, the EU already has shown its commitment to achieving a broadly acceptable agreement. Europe’s collective approach to these negotiations also reflects a sober appreciation of power realities. EU citizens value the ease of visa-free travel to the United States, so member states ultimately will do what is necessary to retain VWP status, within the confines of fundamental rights.

Finally, the EU’s decision to take a leading role in the EBSP negotiations reflects its increased institutional maturity and importance in the field of border security. DHS’s willingness to pursue a framework agreement with the EU may show a corresponding recognition of Brussels’ growing role in this area. As popular sentiment has converged in Europe and America on more tightly controlling borders, there is now an opportunity to achieve a balanced transatlantic agreement on sharing information to that end.

about the author

Kenneth Propp is a nonresident senior fellow with the Atlantic Council’s Europe Center, an adjunct professor of European Union law at the Georgetown University Law Center, and a senior fellow with the Cross-Border Data Forum. His prior experience includes serving as legal counselor at the US Mission to the European Union in Brussels and in the Office of the Legal Adviser at the US Department of State.

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Temnycky in Forbes: Georgian Dream drifts from NATO and EU as opposition seeks integration

Atlantic Council — Fri, 20 Mar 2026 15:15:16 +0000

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Putin is counting on Western disunity to hand him victory in Ukraine

Mykola Bielieskov — Thu, 19 Mar 2026 20:14:13 +0000

The full-scale Russian invasion of Ukraine recently entered a fifth year and has now been underway for longer than the entire cataclysmic conflict between the Soviet Union and Nazi Germany during World War II.

This historical comparison does not flatter Russian President Vladimir Putin, who has turned veneration of the fight against Hitler into an unofficial state religion. While Red Army troops played a key role in the Nazi defeat and managed to advance thousands of kilometers from Stalingrad to Berlin, today’s Russian army is in many cases still stuck within walking distance of their positions when the invasion first began in February 2022.

Despite this lack of progress on the battlefield, Putin has so far demonstrated zero interest a compromise peace. Instead, he continues to insist on maximalist demands during negotiations that would destroy Ukraine as an independent state and as a separate nation.

This uncompromising stance makes perfect sense when viewed from Putin’s perspective. After all, the invasion he unleashed in 2022 has cost countless Russian lives and plunged the country into a new Cold War. Putin knows that only total victory can justify these sacrifices.

If Putin accepted the peace terms currently on offer, this would leave around 80 percent of Ukraine free and beyond Kremlin control. Most Russians would regard that as a disastrous defeat. Putin’s dreams of entering Russian history alongside Peter the Great, Catherine the Great, and Stalin would be shattered. Instead, he would be condemned as the man who lost Ukraine.

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In a very real sense, Putin is caught in a trap of his own making and has no real choice but to fight on. At the same time, however, it would be wrong to suggest that the Kremlin dictator is merely seeking to postpone the inevitable. On the contrary, he remains convinced that the goals of the invasion are still achievable and is now counting on Western disunity to hand him victory in Ukraine.

Putin’s low opinion of the democratic world is based on personal experience. Time and again throughout his reign, Russia’s aggressive actions have sparked vocal condemnation from Western capitals followed with indecent haste by calls for a return to dialogue and “business as usual.”

Western leaders loudly condemned Russia’s 2008 invasion of Georgia, but were soon queuing up to reset relations with the Kremlin. The same lack of resolve was on display following Russia’s 2014 seizure of Crimea and invasion of eastern Ukraine’s Donbas region, with minimal costs imposed on Moscow and multiple European countries actually increasing their dependence on Russian energy exports.

It is hardly surprising, therefore, that Putin treats the proclamations of his Western counterparts with thinly veiled contempt. While he has been unpleasantly surprised since 2022 by the scale of support for Ukraine, the Russian leader’s own dealings with his Western counterparts have encouraged him to conclude that this unity will prove temporary. As the war grinds into a fifth year with no end in sight, Putin believes he can ultimately outlast the West.

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Shifts within the Western alliance over the past year are fueling confidence in Moscow that current levels of support for Ukraine will not last forever. Since returning to the White House in January 2025, US President Donald Trump has cut military aid to Ukraine and sought to reposition the United States as an intermediary in peace negotiations between Russia and Ukraine.

This has placed the burden of supporting the Ukrainian war effort firmly on Europe. According to recent Kiel Institute data, Ukraine’s European partners have done a good job of filling this gap. However, the majority of aid is now coming from a relatively small group of nations including Norway, Sweden, Denmark, Germany, the Netherlands, and Britain. This places Ukraine’s war effort on fragile foundations.

Meanwhile, a ninety billion euro financing package agreed by EU leaders remains blocked by Hungary. This is part of long-term pattern that has seen Hungary’s pro-Kremlin Prime Minister Viktor Orban repeatedly obstruct or delay efforts by the European Union to strengthen Ukraine or increase pressure on Putin.

With far-right populist parties currently riding high in the polls throughout Europe, Putin also has good cause for optimism over the possible imminent appearance of more Orban-style allies. This could help the Kremlin in its efforts to divide and weaken Europe from within.

Broader geopolitical developments are also placing new strains on Western unity and threatening to undermine backing for Ukraine. The US-Israeli joint operation against Iran is currently causing unprecedented tension among NATO allies, with European countries reluctant to participate in efforts to safeguard the Strait of Hormuz. This has highlighted a growing transatlantic divide that could seriously weaken Ukraine’s position.

Putin cannot risk a compromise peace in Ukraine, but he remains confident that time is on his side. While the Russian army has been unable to defeat Ukraine on the battlefield, Putin is prepared to wait until Western disunity leaves the Ukrainians stripped of support and at his mercy. While this would not mean an immediate end to the carnage, Putin believes a dramatic decline in Western support would finally allow Russia to pummel an exposed and abandoned Ukraine into submission.

Mykola Bielieskov is a research fellow at the National Institute for Strategic Studies and a senior analyst at Ukrainian NGO “Come Back Alive.” The views expressed in this article are the author’s personal position and do not reflect the opinions or views of NISS or Come Back Alive.

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Air defense in the age of saturation: Europe after the post-Cold War peace dividend illusion and Turkey’s Steel Dome

Can Kasapoğlu — Wed, 11 Mar 2026 13:00:00 +0000

By the end of the Cold War, European NATO nations considered air and missile defense to be a secondary military priority rather than an essential tool of intrawar deterrence, which refers to controlling escalatory patterns within an ongoing conflict.

Russia’s invasion of Ukraine disproved this view, revealing how mass missile and drone salvos can quickly overwhelm limited interceptor supplies and unready command structures. The threat is not about somebody else’s war. When as many as two dozen Russian unmanned aerial vehicles entered Polish airspace on September 10, 2025, NATO allies responded by scrambling one of the most sophisticated tactical defensive contingents in the world. Italian airborne early warning and control aircraft, German Patriot air and missile defense systems, Polish F-16s, fifth-generation Dutch F-35s, and a Belgian A330 Multi Role Tanker Transport aircraft were all brought forth to track and engage the drones. The imbalance between the overall price tags of the offensive and defensive packages clashing in the aerial engagement was gargantuan. More importantly, Russia could pursue similar concepts of operations in a NATO showdown—whereas Europe’s air defenses would experience wear and tear quickly in a high-operational-tempo scenario.

While Europe debates between urgent gap filling and long-term industrial autonomy amid the drone wall talks, Turkey has taken a different path. The Steel Dome initiative demonstrates Ankara’s early understanding that air defense requires integrated, scalable, and mass-produced systems on rapid timelines.

Air defense as a strategic imperative after Europe’s post-Cold War illusion

During the Cold War, NATO treated air defense as a foundational mission. This paradigm eroded after 1991 as threat perceptions faded. For more than three decades after the Cold War, Europe operated under the egregiously naive assumption that peer-level air and missile threats had receded into history. That illusion collapsed with Russia’s full-scale invasion of Ukraine, which reintroduced ballistic missiles, cruise missiles, combat aviation, and mass drone attacks as central tools of interstate warfare. Moreover, the Twelve-Day War between Iran and Israel in June 2025 cemented the new air threat picture. The new conflict trends have forced Europe to confront a long-neglected reality: without a coherent, layered air and missile defense, control of the air cannot be assumed and nations cannot stay safe.

Russia fields two missile types that matter most to European defense: the 500-kilometer range, ground-launched 9M723 Iskander and the air-launched, medium-range Kh-47M2 Kinzhal. Ukrainian intelligence assesses combined annual production at roughly 840 to 1,020 missiles, higher than earlier

estimates. The ballistic and aeroballistic missiles are backed by large salvos of cruise missiles and Shahed drones—the latter marks more than five thousand kamikaze assets raining overwhelming damage onto Ukraine in a given month.

Europe’s defense relies mainly on the US Patriot and the Franco-Italian SAMP/T antimissile systems, both dependent on costly interceptors priced at around $2 million to $4 million each—often far more expensive than the missiles they are meant to defeat. Production is the choke point. Patriot interceptor output across the United States, Japan, and Germany might rise from about 850 today to 1,130 by 2027, and possibly to 1,470 by 2029. Even then, global demand means Europe might receive only a fraction of the output, and combat experience shows two or three interceptors are often needed per incoming missile. Output of the alternative, Aster 30 interceptors for SAMP/T, is projected at only 230 to 270 annually for ballistic missile defense, and their performance in Ukraine has lagged that of Patriots, implying higher interceptor consumption. Compounding the problem, Russia and Iran have been producing large numbers of long-range drones that can saturate defenses, increasing the odds that ballistic missiles penetrate targets. Cheaper, mass-produced systems might eventually counter drones, and lasers could one day address ballistic threats—but neither solution will arrive in time to close the imminent missile defense gap.

Europe’s current air defense posture remains uneven. High-end fighter fleets and a mix of European, US, and Israeli missile systems exist, but warfighting prowess lags behind capability. Interceptor stockpiles are insufficient for sustained high-intensity conflict, production timelines are slow, and short-range air defense gaps leave European forces exposed to the kind of kamikaze drone warfare now routine in Ukraine. These weaknesses are as much industrial as military. The response has revealed a strategic divide between two conceptual camps: the “gap fillers” and the “autonomists.” Gap fillers, as defined in this paper, favor rapid procurement of proven, off-the-shelf systems, primarily from the United States and Israel—predominantly the Arrow-3, Patriot, NASAMS, and Barak systems—to close urgent gaps. In contrast, autonomists, led by France, argue for long-term European autonomy through indigenous systems, even at the cost of slower fielding. This tension defines current debates over air defense initiatives and reinforces Europe’s continued reliance on US-made systems at the upper tier. Meanwhile, Turkey, a sui generis European NATO nation with its national defense technological and industrial base, has an alternative path: the Steel Dome.

Europe’s strategic air defense gaps and Turkey’s Steel Dome architecture

Turkey’s Steel Dome represents a critical leap in framing air defense as a national, system-of-systems architecture rather than a collection of stand-alone platforms. The Russian S-400, therefore, will need to be left out in the cold as a stand-alone weapon in Turkish military capabilities.

Designed as an integrated and layered air and missile defense construct, the Steel Dome aims to address threats across short-, medium-, and long-range engagement envelopes and all endoatmospheric altitude segments, while preserving operational sovereignty through indigenous development. The system-of-defensive system has been endorsed at the highest levels of defense decision-making and support for it continues rising as additional components reach operational status. In late August 2025, Turkey crossed a critical threshold in its pursuit of strategic autonomy in air defense with the first operational delivery of the components for the indigenous Steel Dome air defense system. The delivery coincided with the expansion of military electronics company Aselsan’s industrial base, reflecting Ankara’s view of defense production as a pillar of sovereignty. In November 2025, Turkey’s defense industrial base took a significant step forward with the signing of contracts valued at approximately $6.5 billion to procure a broad range of systems for the Steel Dome.

At the force-employment level, the Steel Dome integrates point and area air defense assets with longer-range interceptors into a unified command-and-control framework. Close-in defense is provided by antiaircraft artillery and very short-range systems optimized for counter-UAS (unmanned aircraft system) and low-altitude cruise missile threats. The Hisar family forms the short- and medium-range surface-to-air missile layer, while the Siper system anchors the long-range air and missile defense mission, extending coverage against high-performance aircraft and missile threats. An artificial intelligence (AI)-assisted command-and-control architecture fuses sensors, shooters, and electronic warfare elements into a unified air picture, compressing decision timelines and enabling commanders to operate in a dynamic, contested airspace. In an era defined by unmanned systems and saturation salvos, this coherence is as decisive as kinetic action. The strategic significance of Steel Dome lies less in individual interceptors than in its integration logic. By fusing sensors, effectors, and command elements into a single air picture and prioritizing serial production under national control, Turkey is building an air defense posture designed for sustained competition rather than episodic procurement. In other words, Steel Dome epitomizes the Turkish leadership’s strategic autonomy agenda. The most critical lesson of Ukraine is not merely about the quantities of missiles or radars, but about strategic coherence. Air defense is no longer a procurement problem to be managed in peacetime cycles. Turkey has already grasped the bitter truth and made its choice to act rapidly and decisively through the Steel Dome initiative—a response Turkey’s European allies should study. The Steel Dome initiative also serves industrial and geopolitical purposes. It is intended to reduce dependence on foreign air defense systems while positioning Turkey as a supplier to states facing similar threat environments. The emphasis on modularity and scalability suggests an export-oriented mindset, enabling partners to buy into the architecture incrementally rather than commit to a single, rigid system.

Conclusion

Europe’s current air defense dilemma is defined by scarcity and sequencing. Interceptors are expensive, production is slow, and operational experience shows that quantity alone does not translate into resilience. The deeper vulnerability lies in fragmentation: multiple systems, limited stockpiles, and insufficient integration across sensors, shooters, and command layers. As long as air defense remains divided between national stopgaps and Alliance bottlenecks, Europe will struggle to convert capability into credible deterrence.

Turkey’s Steel Dome offers a contrasting defense industrial policy. By building a layered, integrated architecture under national coordination from the outset, Ankara has prioritized coherence over perfection and sustainability over symbolic capability or overpriced foreign sales. The emphasis on systems integration, domestic production, and serial scalability is key to the Turkish government. In an era in which airspace is increasingly contested by mass and speed, the strategic advantage revolves around a defense that can endure, adapt, and sustain in highly attritional and prolonged wars.

Dr. Can Kasapoglu is a non-resident senior fellow at Hudson Institute. Dr. Kasapoglu holds a Ph.D. from the Turkish War College and an M.Sci. degree from the Turkish Military Academy. Previously he was an Eisenhower Fellow at the NATO Defense College in Rome and held a visiting research post at the NATO Cyber Center of Excellence in Tallinn.

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Foe or friend? US-Turkey bilateral relations seem set to improve as interests align

Rich Outzen — Wed, 11 Mar 2026 13:00:00 +0000

Few alliance relationships generate as much public drama as US-Turkish ties. In the roughly seventy-five years since Turkish accession to NATO there have been ups and downs between Washington and Ankara, with the past twenty years marked by particularly sharp differences over regional policy and frequent bouts of public criticism and recriminations. President Trump’s second term has brought a positive turn in tone and optics—but there are still widespread perceptions in both capitals that the “other” ally is at best unreliable and perhaps more foe than friend.

Mutually antagonistic narratives have served domestic political purposes in both countries and have become something of a staple in the age of populist democracy of the twenty-first century. Yet the two countries rely on each other extensively in matters of trade, diplomacy, and security. State-to-state relationships are sometimes smoothed over in public but fractious in practice; the US-Turkish dyad is the rarer obverse: disagreeable in public for domestic audiences while resting on a high degree of alignment and collaboration.

Where do bilateral relations go when trust is low, mutual perception negative, but operational collaboration frequent? The answer depends less on rhetoric or polemical discourse and more on alignment of practical interests: We therefore must clear away the smoke of domestically motivated rhetoric to instead focus on mutual benefit. If two states pursue compatible goals and interests, room remains to balance internal political benefits with geopolitical cooperation in a form of complex interdependence. Whether that is the case for the United States and Turkey is a matter of substantial interest, given the weight that both have in the international system and the substantial number of crises and international matters that affect them.

Rorschach test

Articulating interests is more of a political than an academic exercise. It also presents something of a Rorschach test: If you ascribe ideological frames as determinative of status for Ankara (e.g., neo-Ottomanism, Muslim Brotherhood Islamism, reckless aggression) it brings you to one implied set of Turkish interests. If you accept declarative policy as the whole story you get another implied set. It is similarly the case for the United States: If you assume hegemonic interests are the primary driver, it takes you down a certain path; however, that road shifts significantly between and sometimes within presidential administrations. American interests as viewed by Trump differ significantly from those of his predecessor. Yet pattern analysis over time—observed behaviors and statements toward particular goals—tell us how specific a US president and his Turkish counterpart actually perceive the degree to which their interests overlap.

As an imperfect but useful generality, we can ascribe the following traits to Turkish foreign policy: multiaxial engagement and balance-seeking, nationalistic, hard power/realpolitik, traditionally but conditionally attached to the status quo. For decades, Ankara has sought to maximize autonomy while pressing for positive coalitions, where possible. For most of the current century, the United States has focused on maintaining a privileged or primary position in the international system, leavened increasingly with a dose of parsimony and pragmatism, but resting on what might be called enduring counter-revisionism (still in the tradition of US naval strategist and historian Alfred Thayer Mahan).

Ankara and Washington have demonstrated a generally cooperative approach across numerous regional and global issues in recent decades because their top-line approaches are compatible: one a retrenching-but-potent leading power, the other a rising middle power, both disinclined to establish imperial arrangements or to allow others to do so. A brief review of these issues illustrates this general (if imperfect) alignment by assigning numeric values reflecting relative alignment of strategic and diplomatic approaches between the two. Any such numbers game comes with attendant risk of overgeneralizing and missing some context, but statecraft and policy analysis at the higher levels of abstraction unavoidably entail some risk in this regard. So the numbers below are presented as suggestive rather than determinative.

In the table below, full interest alignment equals 1, partial interest alignment 0.5, neither alignment nor friction 0, friction -0.5, counteralignment -1. Descriptions of the cases follow the table.

Table 1: Sizing up US-Turkish alignment and friction on sixteen issues

Regional matter	Turkish position	US position	Assessment	Score
Ukraine/Black Sea	Ukraine survives	Ukraine survives	Full alignment	+1
Caucasus	Peace/prosperity deals	Iran, Russia lose influence	Full alignment	+1
Central Asia	Middle Corridor/ Organization of Turkic States	Russia, China influence limited	Full alignment	+1
Africa	Greater engagement	Russia, China influence limited	Full alignment	+1
Syria	Stable, unified	Stable, unified	Full alignment	+1
Iraq	Stable, unified, not under Iranian control	Stable, unified, not under Iranian control	Full alignment	+1
Gaza	Peace/Israel out	Peace/Hamas out	Partial alignment	+0.5
Energy	Diversify supply	Diversify supply/ marginalize Iran and Russia	Partial alignment	+0.5
US global leadership	US leadership conditional	US leadership but with counterbalances	Partial alignment	+0.5
Trade/defense trade	Autonomous Turkey, sales both ways	Turkey buys more/ doesn’t compete with US firms	Partial alignment	+0.5
European Union	Key trade partner, accession woes	Key trade partner, perceived as exploitative	Alignment but not cooperation	0
Eastern Mediterranean	Greater role for Turkey	Protect Greece	Friction	-0.5
Iran	Deterred but engaged, stable	Regime replaced or weakened	Friction	-0.5
Sanctions	Only multilateral	Multilateral and Minilateral	Friction	-0.5
Israel	Constrain Israel	Fully support Israel	Friction	-1
Venezuela	Engaged	Deterred/punished	Unalignment	-1

Black Sea/Ukraine: Both sides wish to see the war end with Ukrainian independence intact; neither recognizes Russian claims over Crimea or Donbass, though Washington has signaled willingness to negotiate the status of territories Russia partially or fully occupies at present. Some differences exist regarding Black Sea access: The United States might like to have access for its own ships and more broadly for a NATO presence and routine access, while Turkey has preferred littoral NATO states do the lifting and a strict interpretation of the Montreux Convention; but neither wants a Russian conquest of Ukraine’s coastline. For a Trump administration interested in some compromise deal with Moscow, the Turkish position is complementary.

Caucasus/Russia: While the Trump Route for International Peace and Prosperity (TRIPP) offers wins for the region and the United States, the Armenian position is a wildcard with elections approaching. Should Armenian Prime Minister Nikol Pashinyan get the boot in parliamentary elections (to be held no later than mid-June 2026), the United States may tack back to a position that pressures Azerbaijan and marginalizes Ankara. Russian and Iranian pushback on a deal that opens the region to trade on US-friendly terms can be expected. Interest alignment here between Ankara and Washington is solid, though the prospects for realized gain uncertain.

Central Asia: The TRIPP shows US interest in opening up more trade to Central Asia and balancing against outright domination of the region by Russia or China. The Middle Corridor and the Organization of Turkic States both have value in this regard—and have generated more interest from the Trump administration than its predecessor. Central Asia has not traditionally been an area of high investment for the US government; however, energy companies are interested, so having an ally be more engaged is an advantage.

Africa: US investment and engagement in Africa has lagged, but Washington has concerns about Chinese or Russian influence on the continent. Meanwhile, Turkey has dramatically increased its diplomatic, military, and economic presence in Africa over the past two decades. In countries like Somalia and Libya, Turkish presence has lent heft to US diplomatic and counterterror initiatives. Africa demonstrates the complementarity of having compatible goals but varying levels of commitment.

Syria: Trump has made clear his policy that Syria will be stabilized and maintained as a unitary state and that Ahmed al-Sharaa is an acceptable figure to lead. This comports with Turkish policy, despite Israel’s objections. The assignment of Trump confidant Thomas J. Barrack Jr. as special envoy and positive statements from the US-Turkish working group on Syria have shown close convergence on Syria policy, a remarkable turnaround from the previous decade. The January 2026 agreement to reintegrate northeast Syria with the Syrian Transitional Government was a sign that this alignment was proving determinative on the ground.

Iraq: Washington wants a stable Iraq that is: not dominated by Iran; oriented to Western energy markets more than Iranian or Chinese; and working amicably with the Kurdistan Regional Government. Iraq may not fulfill all those interests, but Ankara shares them, and the Development Road project to foster Eastern trade with Europe provides a vehicle for all three countries to earn profits while tightening Baghdad’s ties to Western economies. The presence of PKK fighters in northern Iraq remains a point of friction, but ongoing negotiations to disarm the PKK – and US support for those talks – has taken helped reduce that friction.

Gaza: Washington and Ankara both pressed Israel and Hamas, respectively, to accept a ceasefire deal, return of hostages, and military withdrawal from Gaza in return for disarmament. While the truce remains shaky as of late 2025 and the end state Trump and Erdoğan have in mind may differ somewhat, the coordination on diplomatic efforts has been unambiguous.

Iran: There is divergence here between the hard line taken in Washington toward the Islamic Republic and the modus vivendi approach in Ankara. While Ankara may not want regime change in Tehran, and wants to protect trade with its neighbor, the Turkish government has no illusions about Tehran’s destabilizing regional behavior and shares an interest in deterring it. Ankara has tightened enforcement of multilateral sanctions on the Iranian nuclear program—partially redressing a long-standing US grievance with Ankara. The launch of Israel-U.S. Operation Epic Fury to destroy Iran’s power projection and nuclear capabilities has driven fears of instability and chaos along the Turkish border, turning this from an area of some overlap into an area of friction.

Energy: Ankara’s energy diplomacy has sought to position the country as a hub for multidirectional energy transit and major new gas, oil, and nuclear deals have been signed with Washington. US pressure to decrease oil purchases from Russia has created some strain, as Ankara cannot shift to alternate suppliers as quickly as it can with gas.

US global leadership: American leadership that cooperates with Ankara on key strategic objectives, praising in public and transacting in private, plays like music to the ears of Turks. This contrasts greatly with the constraining approach Turkish leaders called for regarding perceived American overreach in Iraq, Syria, and other regions over the past two decades, including demands to reform the United Nations to lessen the power of the five permanent members. Still, this middle power and the great power have imperfect but positive alignment at present.

Trade/defense trade: The relatively light 15 percent tariff levied on Turkish goods and the $100 billion shared goal for bilateral trade are clear indicators of positive intentions. But defense trade is thorny, with a congressional role and some competition between rising Turkish defense players and US prime defense contractors.

European Union: Ankara and Washington remain at odds with Brussels ideologically and stylistically, while maintaining strong strategic and trade ties with numerous members states. Yet the tensions stem from different sources: Turkish desire to enter the bloc and the American administration’s desire to end what it perceives as the EU’s exploitative trade and security practices.

Eastern Mediterranean: The continuing friction between Greece and Turkey redounds against US-Turkish bilateral relations—a problem that continues to play out in the region and in Congress.

Sanctions: The divergences are clear regarding imposition: Ankara supports multilateral but generally not unilateral sanctions and enforcement, whereas the Turkish track record looks spotty from Washington’s perspective.

Israel: Ankara and Jerusalem pursued a rapprochement in the months before October 7, 2023; since then, rancor, acrimony, and mutual suspicion have become the norm. While regional competition over Syria, the Palestinians, and other issues can be managed, related tensions spill over into US-Turkish bilateral relations in a major way—and that seems likely to persist.

Venezuela: Erdoğan’s quixotic friendship with President Maduro had its roots in terms of oil sales and multipolarity theory, but was a clear point of policy divergence as Trump upped the pressure level on Caracas. With the early 2026 arrest of Maduro and muted response from Ankara, this seems likely to be a decreasing source of tension in U.S.-Turkish relations.

A clear trend and policy takeaway

In conclusion, this assessment sketch of sixteen complicated cases of regional and global policy matters yields eleven that demonstrate substantial bilateral alignment, four with significant unalignment, and one somewhere in between. The aggregate score by the simple rubric of “words and deeds reflect alignment” was positive (+4.5 – with the caveat that these numbers are illustrative but rooted more in subjective alignment rather than formal quantitative criteria). An honest critic might quibble with individual ratings and the framing of the cases or argue for the salience of other matters. Yet sixteen is a reasonable sample size, the thought exercise is revealing, and the trend clear: more alignment than friction overall.

The policy takeaway is equally clear: maintaining a working relationship is vital for both countries. Those arguing for punitive approaches (by the United States) or hedging (by Turkey) disregard potential mutual benefits as well as both opportunity costs and implementation costs. Managing differences and satisfying domestic sentiment require an adaptive response from policy elites in both countries, but the record of cooperation in 2025 indicates that the pragmatism of both presidents fits the moment—and the alignment.

Rich Outzen is a geopolitical consultant and nonresident senior fellow at the Atlantic Council in Turkey with thirty-two years of government service both in uniform and as a civilian. Follow him on X @RichOutzen.

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Western leaders must abandon false hopes of negotiated peace with Putin

Oleksandr Merezhko — Tue, 10 Mar 2026 21:35:07 +0000

For more than twelve years, Ukraine has been defending itself against an escalating Russian invasion that seeks to erase the Ukrainian state from the map of Europe and overturn the existing world order. So far, Russian dictator Vladimir Putin has been unable to defeat Ukraine on the battlefield or break the Ukrainian nation’s resistance. Despite this lack of progress, however, he shows no sign of compromising on his maximalist goals.

Many in the West are still in denial over the scale of the threat posed by Putin’s Russia and continue to believe a negotiated settlement is the only realistic option to end the war. This is dangerously delusional. In reality, attempting to make deals with Putin today is as shortsighted as seeking to bargain with Adolf Hitler at the height of World War II. In the 1940s, the allies rejected that idea because they recognized Hitler would never stop and had to be defeated. There is a desperate need for such clarity today.

For the past year, Putin has sabotaged US-led peace talks with endless stalling tactics and diplomatic distractions. It should now be obvious that the Russian ruler is only engaging in negotiations for cynical reasons. First, he seeks to avoid further pressure from the United States. Second, he wishes to buy time to continue destroying Ukraine’s critical civilian infrastructure. Third, he intends to divide the West and deter further support for Kyiv.

Putin signals his lack of interest in peace by making absurd demands that no Ukrainian government could possibly accept. He calls for Ukraine to surrender the country’s most heavily fortified region without a fight, despite the fact that the Russian army has been unable to capture this territory for more than a decade. He demands a Russian veto over security guarantees for postwar Ukraine, while insisting on the right to interfere in Ukrainian domestic affairs. He questions the legitimacy of the Ukrainian government and calls for wartime elections, despite having systematically dismantled Russia’s own fledgling democracy during his twenty-six year reign.

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Putin’s uncompromising position makes perfect sense when viewed through the prism of Russian imperialism. The peace terms being offered by Trump, which would allow Moscow to retain the approximately 20 percent of Ukraine currently under Russian occupation, may seem generous, but the Kremlin dictator knows he cannot accept anything less than Kyiv’s complete capitulation. For Putin, the survival of a sovereign, democratic Ukraine would be a political death sentence. Russian audiences would view such a deal as a defeat of historic proportions. Rather than securing his legacy as one of Russia’s greatest rulers, Putin would be condemned as the man who lost Ukraine.

In practical terms, Putin has also come to depend on the war. Over the past four years, it has become the main source of his legitimacy and power. The Russian economy now relies heavily on war-related spending. Russian society as a whole has undergone a radicalization, making it possible to impose new levels of censorship, repression, and propaganda. Without the war, this entire edifice could collapse.

Then there is the issue of Russia’s military veterans. Almost a million men are currently serving in Ukraine. Most have been brutalized by a daily ration of war crimes amid staggering casualties. The vast majority are also now accustomed to receiving salaries far in excess of anything they could hope to earn in Russia. Putin is no doubt painfully aware that if he demobilizes these damaged and dangerous men, he would be unleashing a destabilizing force that could cause chaos across Russia. The only way to prevent this is by extending the invasion indefinitely.

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None of this means that peace is impossible. In order to secure a sustainable settlement, however, current efforts to appease Putin must end. It is a grave mistake to treat the aggressor and the victim as equals, and an even bigger blunder to pressure the victim into further concessions. Bringing Putin out of international isolation only emboldens him. In Putin’s zero-sum world, goodwill gestures are signs of weakness. It is no coincidence that as calls for a compromise deal have grown louder over the past year, Russia’s bombardment of Ukraine’s civilian population has intensified.

Western leaders must instead send an unambiguous message to Moscow that they are not prepared to reward Russian aggression. The objective should be to raise the costs of the invasion for the Kremlin until continuing the war poses risks to Putin’s grip on power inside Russia. This goal is realistic. With Putin’s army struggling to achieve any major breakthroughs in Ukraine despite suffering catastrophic casualties, rumblings of discontent are growing. Meanwhile, on the domestic front, the Russian economy is beginning to show signs of serious strain. Now is the time to increase the pressure on Putin.

Tightening economic sanctions is critical. This means tougher measures against Russia’s energy exports along with Putin’s shadow fleet of tankers. It also means implementing secondary sanctions against those who fund the war by purchasing Russian oil and gas. Recent decisions to relax sanctions temporarily in response to the US war in Iran and spiraling global energy prices are a step in the wrong direction that threatens to rescue the Russian economy and fuel international instability. Putin will not stop the invasion until he runs out of money.

Kyiv’s partners must also provide Ukraine with the military backing to defeat and deter Russia. This should include credible long-term commitments that dash any Russian hopes of outlasting the West in Ukraine. Western countries must overcome their crippling fear of escalation and provide Ukraine with the long-range weapons that will make it possible to strike deep inside Russia. This will allow Ukraine to target Putin’s war machine and create the kind of deterrence that could prevent future repeats of the current invasion.

If Putin is unable to advance in Ukraine while facing mounting economic costs and escalating destruction on the home front, he may finally have to accept that continuing the war poses very real dangers for the stability of his regime. At that point, genuine peace talks could prove possible.

Subsequent negotiations must focus on protecting Ukraine against further Russian aggression. It is vital that any security guarantees transcend political cycles in Western capitals and leave Putin in no doubt that a renewed attack on Ukraine could spark the collapse of the Russian Federation.

The best security guarantees of all remain NATO membership or nuclear status. If these options are currently not feasible, Ukraine needs to receive clear commitments from its major partners that spell out the responses Russia can expect.

Above all, Ukraine’s own armed forces must receive the necessary support to serve as the country’s ultimate security guarantee. European countries have an obvious self-interest in maintaining Ukraine’s military strength. After all, a strong Ukraine is now indispensable for Europe’s broader defense strategy as the continent confronts resurgent Russian imperialism.

Current Western efforts to broker a compromise peace with Putin are based on false assumptions and wishful thinking. This misguided approach only encourages Russia and other authoritarian regimes including Iran, China, and North Korea to pursue aggressive foreign policies. If the West wants a sustainable peace in Europe, it must work to ensure Putin’s defeat in Ukraine.

Oleksandr Merezhko is a member of the Ukrainian Parliament for the Servant of the People Party and Chair of the Ukrainian Parliament’s Foreign Affairs Committee.

More generally across the EU, however, Russia’s full-scale invasion of Ukraine in 2022 softened resistance to enlargement, with EU leaders reframing the addition of new members as a security imperative. That year, the candidate pool expanded rapidly beyond the six Western Balkans countries and Turkey to also include Ukraine, Moldova, and Georgia. This year, Trump’s claim on Greenland has drawn renewed EU membership interest in other parts of Europe, such as Iceland, which will hold a referendum on pursuing membership in the coming months.

Riding this momentum, the EU’s executive wing is pushing ahead with talks with Albania and Montenegro, the two candidates facing the least resistance to accession, as they are both NATO allies without major bilateral disputes with any current member states. Montenegro may now be on the cusp of drafting an accession treaty. Last year, Montenegrin Prime Minister Milojko Spajić announced that it was his goal for Montenegro to join the EU by 2028, while Albanian Prime Minister Edi Rama has set the goal of his country joining by 2030.

Sandwiched between the geopolitical imperative of enlargement and domestic pressures from Euroskeptic parties, the European Commission is now considering solutions that would allow enlargement to move forward without weakening the EU’s decision-making capacity. The solutions reportedly being discussed in Brussels would effectively offer new member states a kind of second-class status in the bloc, effectively creating a two-tier EU.

The proposal for a two-tier EU: Pragmatic or indecisive?

In the proposals reportedly under discussion, new member states would waive their veto rights for an indefinite transition period. During this period, each new member state would have full access to EU funds, institutions, and membership in the single market, but it would not be allowed to block decisions requiring unanimity. This idea does have some precedent, as transition periods on the rights of new members have been used in previous enlargement waves. In 2004, for example, new members had limits on the free movement of workers for up to seven years. But these earlier conditions were policy-specific and clearly time-bound; they did not relate to the new members’ institutional rights.

At the same time, Brussels has emphasized the need to strengthen post-accession safeguards on the rule of law. These safeguards would embed into the accession treaties provisions that would allow the EU to retain oversight and correction mechanisms over the new members’ performance, thereby preserving some of the leverage that the EU has during the accession process. Last month, European Commission officials touted Montenegro’s upcoming accession treaty as the first of a “new generation” of treaties that give the bloc enforcement tools it can use if new members backtrack on the rule of law.

While these ideas have some benefits, they are also incurring immediate costs to the credibility of the accession process. In effect, the EU is publicly hollowing out the meaning of membership and moving the goalposts midway through accession, all while failing to make a clear political commitment on the timeline of enlargement. Thus, the EU is once again signaling indecisiveness at a critical moment, undermining accession candidates’ momentum for reforms.

The EU’s policy of conditioning accession on reforms can help candidate countries’ political transformations if there is a clear and credible offer for membership. This drives political accountability and empowers candidate countries’ civil societies to push for reforms. Ukraine, for example, has been taking steps to fight corruption, and there have been large anti-corruption protests there even as Kyiv fights a war for survival. This is largely because Ukrainians understand that the fight against corruption is tied to Ukraine’s case for EU membership.

Western Balkan leaders are exploiting the decision-making vacuum

The prolonged indecision by EU member states on the timing, scope, and structure of its enlargement policy risks further derailing the process. It is also providing leaders in the Western Balkans with opportunities to come up with distractions under the guise of strategic leadership and pragmatic solutions.

On February 28, Rama and Serbian President Aleksandar Vučić published a joint op-ed in which they called for the Western Balkans to be granted quick access to the EU single market and the Schengen area while forfeiting representation in EU institutions. This would mean even fewer institutional rights than the second-class membership proposal the EU is discussing. It would effectively make the countries of the Western Balkans members of the European Economic Area, like Norway and Iceland, without giving them the institutional rights of EU member states.

It is not a new idea. It has been circulating for almost a decade, promoted primarily by think tanks such as the Berlin-based European Stability Initiative. The argument goes that absent a clear political commitment to enlargement, the EU should offer the accession states something credible and politically feasible in the interim that would anchor them in the EU’s economic orbit and generate tangible benefits until it is ready to bring in countries as full members.

Yet there are reasons to believe that the enthusiastic endorsement of such ideas by Rama and Vučić—at a moment when both Montenegro and Albania appear to have an open path to membership—may be motivated by reasons other than pragmatism.

For one, Brussels is reportedly discussing the suspension of some or all of the EU’s conditional funding for Serbia due to its backsliding on the rule of law, at a time when the country has been roiled by an ongoing wave of anti-corruption protests that began in November 2024. Rama, for his part, has been intensifying his attacks against an empowered judiciary that is going after his party’s top brass. Rama is also facing pushback from the EU for his attack on the judiciary, a troubling sign for Albania’s accession process, since rule-of-law reform is seen as a litmus test of its membership bid.

Regional leaders who are used to governing in conditions of widespread corruption might be hoping that by voluntarily agreeing to second-rate membership, the EU might in turn tolerate second-rate governance and anti-corruption standards. The prospect of receiving EU funds without the accountability and responsibilities required of full member states—including alignment on foreign policy—may sound appealing to those who would like to be EU members while doing business as usual. But in doing so, Western Balkan leaders may in fact be strengthening the arguments of those who believe that the EU should not import new problematic members.

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Experts react: How the world is responding to the US-Israeli war with Iran

Atlantic Council experts — Tue, 03 Mar 2026 18:11:08 +0000

The US-Israeli war against Iran has now escalated into a regional conflict, and consequences are already extending far beyond the Middle East. After asking our Mideast experts to assess the impacts of the war for nearby countries, we’ve turned to our global network to send us dispatches on how leaders in Europe, Asia, North America, and Latin America are reacting to the spreading conflict. Here’s what they reported back to us.

Click to jump to an expert analysis:

China: A restrained response borne of a bind

Russia: Not riding to the rescue—again

United Kingdom: Trying to stay out of it

European Union: Caught between defending the rules-based order and aligning with Washington

Ukraine: A sense of schadenfreude—but also new risks

Canada: Calibrated, cautious, and aligned with allies

Argentina: A supportive response colored by a history of terror

Spain: Defiance against the US driven by domestic politics

China: A restrained response borne of a bind

While the war with Iran is not all about China, any analysis that neglects Beijing’s role in the war, or dismisses the great-power competition underlying it, is either incomplete or a deliberate red herring.

China’s own decisions have tied it to Middle Eastern geopolitics. In 2018, it proposed a new regional security architecture. In 2023, it brokered the Iran–Saudi rapprochement and hosted Hamas for mediation talks with its rival Palestinian faction Fatah. Chinese President Xi Jinping’s Global Security Initiative is presented explicitly as an alternative to the US-led order. Iran has received an economic lifeline from Beijing, secured a berth in the bloc of emerging economies knows as BRICS, and had the Islamic Revolutionary Guard Corps operate within the framework of the Shanghai Cooperation Organization. Today China is the largest trading partner, the largest importer, and one of the largest foreign investors across much of the Middle East and North Africa. There are over 400,000 Chinese nationals in the United Arab Emirates alone. Now that population is subjected to attacks from Iranian drones and missiles that are most likely made with China-sourced precursor chemicals and components.

Yet China’s public response to the war has been characteristically limp: evacuation advisories for citizens near conflict zones and formulaic condemnations of Israel and the United States.

Beneath that restraint lies an impossible bind. Iran is at its weakest, detested by its population at home and an exporter of radicalism abroad, yet it is also Beijing’s most reliable anti-Western bulwark and a source of deeply discounted oil. Meanwhile, China lacks the means to counterbalance US and Israeli military dominance. Oil prices rose by more than 5 percent on Monday and could spike toward one hundred dollars a barrel with the closure of the Strait of Hormuz. The Gulf states, which absorb much of China’s Belt and Road Initiative investment and supply roughly a third of China’s crude, are now coming under attack from Iranian missiles and drones.

The irony is acute. It was US military supremacy in the Iraq war and the shockwaves of the Arab Spring that first pushed Beijing toward a more proactive Middle East policy. Now it has gotten a possible regime change and another war in the region, and it is none the wiser.

The pivot point lies with the Gulf monarchies. If they enter the fight, China would face a situation it cannot finesse. But it would also present an opportunity that neither the United States nor Israel could generate alone: to make China a credible offer to stop propping up Tehran and allow for the development of a more stable and prosperous region in which to do business. Whether China is too blinkered by great-power ideology to recognize that opportunity remains the defining question.

—Tuvia Gering is a nonresident fellow at the Atlantic Council’s Global China Hub and a researcher at the Diane & Guilford Glazer Foundation Israel-China Policy Center at the Institute for National Security Studies (INSS).

Russia: Not riding to the rescue—again

WASHINGTON, DC—One of the knock-on effects of the US and Israeli strikes on Iran is that they have exposed—yet again—that Russia is an unreliable ally.

Iran’s rulers are now absorbing the same bitter lesson learned by the autocrats of Syria and Venezuela before them. For all its talk of establishing a multipolar world, for all of its bluster about leading an anti-Western bloc of states, Moscow lacks the will and the capacity to come to the aid of its alleged partners.

Supreme Leader Ayatollah Ali Khamenei is the third Kremlin-backed autocrat to fall in the past fifteen months. When Syrian rebels ousted Kremlin ally Bashar al-Assad from power in 2024, the Kremlin could only grant the deposed dictator asylum in Russia. Likewise, Moscow was helpless to aid Venezuela’s Nicolás Maduro when the United States apprehended him in January.

And as Politico reports, when US and Israeli bombs were pounding Iran on Saturday, Russian Foreign Minister Sergei Lavrov “offered his Iranian counterpart sympathy and promised his—verbal—support.” And after Khamenei was killed, Russian President Vladimir Putin offered Tehran little more than condolences.

Beyond Latin America and the Middle East, the trend of the Kremlin abandoning allies and partners is also evident in the former Soviet space. When Azerbaijan, backed by Turkey, launched a military campaign to take Nagorno-Karabakh in 2020 and 2023, Moscow failed to support its erstwhile ally Armenia.

The cold, hard reality is that the Putin regime is so consumed by its war of aggression against Ukraine that it lacks the bandwidth to defend its geopolitical interests elsewhere.

But while the Kremlin has yet again suffered reputational damage, Moscow still hopes to salvage some benefits from the war in Iran. The resulting higher oil prices will benefit Russia’s depleted war chest. Unrest in the Middle East will distract attention and media oxygen from Ukraine. And should the US-Israeli war against Iran turn into a quagmire, Moscow certainly hopes to be a beneficiary of the chaos. As Chatham House’s Grégoire Roos notes: “Until the situation in Iran is clarified, the keywords for Moscow will be ‘strategic hedging.’”

—Brian Whitmore is a nonresident senior fellow at the Atlantic Council’s Eurasia Center, an assistant professor of practice at the University of Texas-Arlington, and host of The Power Vertical Podcast.

United Kingdom: Trying to stay out of it

LONDON—The overwhelming view here is that military action taken by the United States and Israel on Saturday was not the right thing to do while negotiations were edging forward toward a deal. Comparisons are being made to US President George W. Bush’s catastrophic Iraq invasion and the lasting consequences for the region and interests of the United States and its closest ally, the United Kingdom.

In the United Kingdom, the stock of the Trump and Netanyahu administrations’ foreign policy in the Middle East is not high. The apparently premature abandonment of diplomacy for the military option will not have surprised many and has likely reinforced the view that both leaders are acting more for domestic political reasons and their own narrow interests. Military action does not—at least to British eyes—seem to have followed sufficient careful analysis of the US national interest and the broader interests of US allies.

The British political establishment, media, and public are highly critical and unsympathetic to the Islamic Republic of Iran. There was widespread outrage following the massacre of protesters in January. Nevertheless, what is likely to dominate public discourse in the coming days is the United States’ lack of clear, realizable objectives, a legal basis under international law, or new evidence to justify the rush to war and immediate regional destabilization. Those themes will overwhelm any attempt to justify action as a response to what happened in January and the despotic and brutal Islamic regime.

Some commentators, including former Conservative members of parliament and Reform leader Nigel Farage, have argued that the United Kingdom should prioritize supporting its closest ally, the United States, over debate on the legality of military action or how things reached this point. So far, that argument does not seem to have resonated widely.

Prime Minister Keir Starmer and the Labour government are between a rock and a hard place given their championing of the primacy of international law. The lack of clarity from them on what the United Kingdom should do next adds to the general sense that this is not the United Kingdom’s conflict, and that the country would be wise to stay out of it. Of course, events on the ground (for example, Iran striking UK military assets defending allies in the region) may rapidly overtake this position. How Starmer and his government align over the coming days is likely to be highly significant for UK domestic politics.

—Nicholas Hopton is a nonresident senior fellow with the Scowcroft Middle East Security Initiative and a former British ambassador to Iran.

European Union: Caught between defending the rules-based order and aligning with Washington

BRUSSELS—Europe finds itself in a structurally uncomfortable position, partly because of events and partly because of its own past choices. For years, European Union (EU) policy toward Iran was centered on Tehran’s nuclear program and anchored in diplomacy backed by incremental pressure. The priority was containment through negotiation and de-escalation. That approach has long run its course. A coherent new strategy has yet to emerge.

The current crisis exposes both this strategic vacuum and the EU’s internal divisions. Competing logics are at play throughout the bloc.

Some leaders are prioritizing international law, condemning the US-Israeli strikes as a war of choice. Failing to mention international law risks eroding Europe’s credibility as a defender of the rules-based order, particularly in the Global South where accusations of double standards resonate.

Another logic prioritizes transatlantic cohesion. Openly confronting Washington could carry risks at a moment of geopolitical volatility. Europe was just able to avoid US President Donald Trump’s grab for Greenland. Restraint on the Iran issue therefore seems prudent for some.

A third logic concerns Iran itself. Many quietly hope that the strikes weaken a repressive regime, reduce nuclear-proliferation risks, and curb proxy warfare. At the same time, there is concern that escalation or spillover could produce something worse.

Europe is trying hard to reconcile these three concerns, but finding common ground is difficult. Some, such as German Chancellor Friedrich Merz, have attempted to bridge the divide by shifting the debate toward the “day after,” urging coordination with Washington and European partners on what follows. This forward-looking framing may paper over intra-European tensions. But it also risks bypassing the unresolved question of principle at the heart of the debate.

—Roderick Kefferpütz is a nonresident senior fellow at the Atlantic Council’s Europe Center. The views expressed in this article are his own.

Ukraine: A sense of schadenfreude—but also new risks

KYIV—Iran’s Shahed drones have menaced Ukrainians for more than four years, striking our homes and murdering civilians far from the battlefield. So there was a certain amount of schadenfreude across Ukraine as the United States and Israel hobbled the Iranian regime with airstrikes of their own over the weekend. The display of decisive US force against a key Russian ally may have also applied some psychological pressure on Russian President Vladimir Putin, who was once again reminded how devastating US military power can be and may be reflecting on potential scenarios for how that could play out if his own regime came under direct attack. Iran’s response—drone and missile attacks across the Middle East—may also provide an opportunity to showcase Ukrainian anti-drone technology, which may be even more effective than some air defenses currently in the region.

The Iran strikes do pose some risks to Ukraine, too. Russian propagandists will likely have no problem warping the attacks on Iran into a justification for Moscow’s so-called “special military operation” against Ukraine. And retaliatory strikes by Iran place a premium on air-defense interceptors, which are already in short supply and which Ukraine desperately needs for its own defense. Finally, any increase in global oil prices means more revenue for the Kremlin to use to continue its war on Ukraine.

—Major General (ret.) Volodymyr Havrylov is a nonresident senior fellow at the Atlantic Council’s Eurasia Center and a former Ukrainian deputy minister of defense.

Canada: Calibrated, cautious, and aligned with allies

CALGARY—Ottawa’s response to the US–Israeli strikes on Iran and escalating regional tensions has been cautious, calibrated, and aligned with allies.

Speaking to media from a trade mission to India over the weekend, Prime Minister Mark Carney stated that “Canada supports the United States acting to prevent Iran from obtaining a nuclear weapon and to prevent its regime from further threatening international peace and security,” while emphasizing that Canada is not militarily engaged. He coupled that support with a call for civilian protection and renewed diplomacy, signaling continuity in Canada’s position that Iran’s nuclear ambitions are destabilizing.

The Canadian Armed Forces are not participating in combat operations but maintain a regional footprint through liaison and intelligence roles under Operation FOUNDATION in Qatar, Bahrain, and Jordan. The Canadian Security Intelligence Service has heightened vigilance amid concerns about potential Iranian cyber or proxy activity, though no specific domestic threat has been identified.

Domestically, the conflict resonates deeply. Canada is home to approximately 280,000 Iranian-Canadians, ranking fifth globally among Iranian diaspora populations after the United States, Kuwait, the United Arab Emirates, and Germany. The community’s response reflects both fear for relatives abroad and apprehension about regional spillover. For Ottawa, the challenge is strategic balance: uphold alliance commitments, safeguard domestic cohesion, and preserve diplomatic space in a volatile Middle East.

—Marcy Grossman is a nonresident senior fellow with the Atlantic Council’s Rafik Hariri Center and Middle East Programs, and a former Canadian ambassador to the United Arab Emirates.

Argentina: A supportive response colored by a history of terror

WASHINGTON, DC—It’s no surprise that Argentinian President Javier Milei has been the most vocal supporter in Latin America of the US and Israeli strikes on Iran. Since the attacks began, his foreign ministry has voiced strong support for the actions, calling Iran a “threat” to “long-term international stability and security.” After the killing of Khamenei, Milei put out a presidential statement commending the operation, calling the ruthless Iranian leader “one of the most evil, violent, and cruel individuals that human history has ever seen.”

Much of the rest of the region called for restraint or respect for international law (Brazil and Mexico, for example) or outright condemned the US and Israeli airstrikes (Colombia). Paraguay (whose foreign minister spoke with his Israeli counterpart on Sunday) stands out for joining Argentina in explicitly being supportive of this past weekend’s actions. There has been wider agreement, however, on condemning Iran’s retaliatory attacks on Gulf countries, from Argentina and Brazil to Ecuador, Guatemala, and Panama.

Argentina’s firm stance in support of the US and Israeli actions is due not only to Milei’s strong support of Israel but also to the fact that Argentina has experienced the scourge of the Iranian regime firsthand. In the early 1990s, Argentina fell victim to two Iran-linked terror attacks that shook the country. In 1992, Hezbollah detonated a truck packed with explosives at the Israeli embassy in Buenos Aires, killing twenty-nine people and wounding more than two hundred others. Two years later, a car bomb detonated at the Argentine Israelite Mutual Association Jewish Community Center building in Buenos Aires. That day marked the deadliest terrorist attack in Argentine history, with eighty-five people killed and over three hundred wounded.

Thirty years later, Argentina’s highest criminal court found Iran responsible for this latter bombing. For Argentina, these heinous attacks will never be forgotten and are a constant reminder of the need to prevent Iran from continuing to pose threats to the world. Many of the people accused by the Argentine justice system of serving as the architects of the attacks have since risen through the ranks of Iran’s security and military services with impunity.

Since taking office, Milei has also made a point of aligning his foreign policy with Israel and the United States, marking them as Argentina’s twin examples to follow. Given Argentina’s increasing economic alignment with the United States, and the sentiments of many in Argentina when it comes to Iran, expect Milei to continue to lead the region in supporting actions to dismantle the Iranian regime.

—Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

Spain: Defiance against the US driven by domestic politics

After the US-Israeli strikes on Iran began, Spanish Prime Minister Pedro Sánchez denied the United States the use of jointly operated Spanish airbases and Trump responded by threatening to cut trade ties with Madrid. Sánchez’s decision to pick another fight with the Trump administration should be seen through the lens of Spain’s domestic politics and the prime minister’s attempt to placate the extreme left of his base. As his popularity wanes, Sánchez knows well that standing up to the United States and Israel will resonate with certain sectors of the electorate, as did his decision last year to make Spain the sole NATO member not to commit to increase defense spending to 5 percent of gross domestic product. This all plays well with Sánchez’s base as his Spanish Socialist Worker’s Party looks ahead to regional parliamentary elections this year and the 2027 national elections. By citing international law and the legacy of the 2003 Iraq war, Sánchez can prey on lingering passions of the Spanish left to solidify his own weak position.

But Sánchez will also open himself up to political attacks that question the coherence of these actions. Alberto Feijoó, leader of the center-right Popular Party, has already accused Sánchez of sacrificing Spain’s foreign policy credibility to partisan politics. The European Commission released a statement expressing its solidarity with Spain over Trump’s trade threat. But this issue will nevertheless add to a growing suspicion in European capitals about Spain’s reliability as a strategic partner as Europe prepares to act more independently. As calls for a “two-speed” Europe become louder, Sánchez’s decision to self-isolate Spain may give ammunition to those who prefer to leave Madrid in the second tier of any future multi-tier EU architecture.

—Andrew Bernard is a nonresident senior fellow with the Atlantic Council’s Europe Center.

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Europe must not seek Putin’s approval before sending troops to Ukraine

Stephen Blank — Mon, 02 Mar 2026 22:49:46 +0000

European leaders will not send troops to monitor a ceasefire in Ukraine without first securing permission from Russian leader Vladimir Putin, Britain’s Telegraph reports. The news represents a significant political victory for Russia and comes following a coordinated Kremlin campaign of intimidation designed to deter any European military deployment to Ukraine.

This informal Russian veto over European troops in Ukraine places a key element of the current peace process in jeopardy. Ever since the so-called Coalition of the Willing began to take shape in early 2025, participating countries led by Britain and France have been developing plans to send a significant number of troops to Ukraine following a ceasefire in order to monitor adherence and serve as a reassurance force. However, Putin has consistently signaled that he will not agree to a European military presence, with Kremlin officials stating that any European soldiers sent to Ukraine would be “legitimate targets.”

These threats appear to have worked. With the Coalition of the Willing reportedly unwilling to act unless Putin gives them the green light, the entire concept of a reassurance force is now in doubt. This means that a viable and independently monitored ceasefire in Ukraine looks to be unattainable. All Putin need do to block the process is withhold his approval indefinitely.

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Europe’s reluctance to sanction a military mission to Ukraine without Russia’s prior agreement is the latest setback to a faltering peace process. After more than a year of false starts and fruitless talks, many now believe that Russia has no intention of agreeing to a ceasefire and does not genuinely seek peace.

Critics argue that Putin is using the current US-led negotiations to buy time and as an opportunity win over the Trump administration. The Kremlin dictator remains adamant that despite the slow progress of his invasion, Russia will still ultimately achieve its goals in Ukraine. It came as no surprise when reports emerged recently claiming that Russian officials are privately mocking Trump for his naivety about Putin’s true intentions.

With little prospect of progress toward a negotiated peace settlement, Western leaders should be focusing their energies on steps to secure Russia’s defeat in Ukraine. Unfortunately, however, there currently appears to be little chance of this happening. Since 2022, the West has largely wasted Ukraine’s sacrifices while failing to arm Kyiv for victory or impose sufficiently stiff sanctions on Moscow. As the invasion enters a fifth year, there are now some signs of growing European resolve, but much more needs to be done in order to stop Russia.

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Putin’s ability to intimidate European leaders on the issue of troop deployments to Ukraine underlines Europe’s continued lack of credibility in the international security arena. While there has been plenty of talk in European capitals over the past year about the need for greater strategic autonomy, this has yet to translate into concrete action. European governments are still not ready to provide credible deterrence against Russia and suffer from an absence of overall leadership that makes decisive action in the security sphere particularly challenging.

The Trump administration’s efforts to step back from transatlantic security commitments have highlighted the need for increased European defense spending, but Europe remains reliant on the US and has no practical alternative to NATO. It is therefore important to reinvigorate rather than undermine the alliance. Instead, the opposite is happening, with faith in NATO’s collective security commitment presently at all-time lows. This only emboldens Putin. Meanwhile, US President Donald Trump is actually validating European fears by demanding that Ukraine and not Russia make concessions to end the war.

Intelligence agencies and Western government officials increasingly acknowledge that Russia is preparing for a wider European war. This makes it all the more vital to increase backing for Ukraine and integrate the country deeper into Europe’s defense architecture. There are signs this is well understood, with encouraging recent developments including the co-production of weapons in a number of European countries for use in Ukraine.

Putin has long since made clear that he will only negotiate under duress. The Kremlin dictator remains committed to erasing Ukrainian statehood and will not enter into serious talks to end the war until the alternative is defeat. In order to reach that point, Europe must continue to rearm while incorporating the lessons learned on the battlefields of Ukraine and developing the drone capabilities that will define the wars of the future.

Crucially, European leaders must also recover their political nerve and demonstrate to Putin that he cannot hope to intimidate them indefinitely. They can begin by declaring that Russia does not get to decide whether European troops are deployed to a sovereign and independent Ukraine.

Stephen Blank is a senior fellow at the Foreign Policy Research Institute.

—Brian Janovitz is a nonresident senior fellow with the Atlantic Council GeoEconomics Center and a national security and global trade partner at DLA Piper, where he advises on geostrategic risk, supply chain planning, US trade policy, and trade litigation.

2. Will US consumers get refunds, and if so how?

Refunds would be owed to the importer of record. In the absence of de minimis treatment for low-value goods, it is very rare that a consumer would ever be the importer of record. It is unlikely that consumers that absorbed the tariffs through increased prices, but did not pay the tariffs, would ever be reimbursed at any real scale.

—Brian Janovitz

3. Which countries gain from the tariff changes?

Right now, Brazil, India, and, believe it or not, China, are the biggest winners from the change. That’s because those countries—along with a range of Asian nations including Vietnam, Malaysia, and Thailand—were facing IEEPA tariffs above 15 percent. Brazil was a particularly complex case, with the stacked IEEPA tariffs reaching 50 percent. But now, with the global rate down to 10 percent—though the White House says it is working on increasing it to 15 percent soon—these countries have at least a temporary reprieve. For China especially, this might mean a surge in exports to get ahead of potential future section 301 tariffs, which are certainly coming based on the new trade investigations the Trump administration opened this weekend. 

—Josh Lipsky is the chair of international economics at the Atlantic Council and the senior director of the GeoEconomics Center. He previously served as an advisor at the International Monetary Fund.

4. Which countries are harmed by the tariff changes?

On the other end of the stick is the United Kingdom and the European Union (EU). Because the Section 122 tariffs stack on top of most favored nation (MFN) tariffs, the EU countries could soon be paying above the 15 percent rate they agreed to in the Turnberry deal last year. For the United Kingdom, it’s not even close. The United Kingdom was proud to be the first one out of the gate with the 10 percent deal and said as much to most other nations. But now they are in the same 15 percent boat and must be asking what the value is of a deal that can change so quickly.

The administration is likely arguing behind closed doors that while its hands are tied temporarily, once it finishes the 301 investigations, it can resume a more country-by-country approach and ensure that the United Kingdom gets better treatment. But whether that kind of arrangement can work for British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen has as much to do with domestic politics across Europe and the United Kingdom as it does with trade law. 

—Josh Lipsky

5. How is the EU responding?

The EU is responding to the announcement of new tariffs under section 122 by suspending the process of implementing its obligations under the US-EU bilateral agreement. It is seeking clarity about whether the new tariffs are contrary to the United States’ commitment to a 15 percent cap on reciprocal tariffs, since if MFN tariffs are added to the 10 percent levy, then rates for some EU products will exceed 15 percent.

Look for the United States to clarify how these new tariffs will work, as well as a likely resumption of the EU’s implementation process. There has been a pattern of blanket and ambiguous announcements from the United States followed by more precise clarifications; there is little indication that this time will be different since both sides have an interest in maintaining the agreement.  

—L. Daniel Mullaney is a nonresident senior fellow with the Atlantic Council’s Europe Center and GeoEconomics Center. He previously served as assistant US trade representative for Europe and the Middle East in the Office of the United States Trade Representative. 

6. Which countries will try to negotiate new deals?

Countries that have not finalized deals with the United States, such as India, may want to consider delaying finalizing agreements until there’s more clarity from the United States. Already, we saw an Indian delegation temporarily postpone a trip, but they are now planning to reengage. So, much will depend on how clear the administration is on the new tariff rates and what its plans are for future tariffs.

—Josh Lipsky

7. What is happening with the de minimus exemption for goods under $800?

The Trump administration had suspended the de minimis rule (under which duties are not collected on shipments valued at under $800) under IEEPA. After the Supreme Court invalidated the IEEPA tariffs, the administration continued suspending the de minimis rule under a separate executive order on February 20; the administration’s authority to do so is unclear and will likely be subject to further litigation.  

—L. Daniel Mullaney

8. How will the midterm elections play into Trump’s tariff calculations?

The midterms won’t be as much of a factor as some think. It’s unlikely that Congress will be asked to vote on tariffs during the summer going into the elections. But regardless, Trump has made clear that he believes he has all the authorities he needs and has had little interest in asking Congress for more, despite Supreme Court Justice Neil Gorsuch’s opinion in the case, which made it clear that Congress was the answer the president is looking for. The bottom line is that the president believes in tariffs as economic policy. He will continue to wield that tool not just for the next year, but for the next three years. His ability to wield tariffs is more constrained now without IEEPA, but it is still a powerful economic lever. Those expecting certainty and stability on tariff rates will be looking in vain. 

—Josh Lipsky

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In Munich, a reminder that economic security is national security

Kimberly Donovan, Lize de Kruijf — Tue, 24 Feb 2026 22:14:20 +0000

MUNICH—A palpable shift took place at this year’s Munich Security Conference (MSC). While policymakers primarily focused on hard security challenges, as they have for more than sixty years here, they consistently raised economic security as an issue that they cannot cordon off separately from traditional defense and security issues.

On the main stage, NATO Secretary General Mark Rutte underscored that bringing an end to the war in Ukraine will require sending more arms support to Ukraine and also placing sustained economic pressure on Russia. He highlighted the need to address China’s evasion of Western sanctions and its role in sustaining Russia’s wartime economy. The message was clear: Military resilience and economic pressure are two sides of the same coin.

The leaders gathering at MSC also discussed trade, highlighting how trade deals and tariffs have become geopolitical instruments. US Senator Thom Tillis (R-NC) argued that trade policy and national security are deeply intertwined, warning that if the United States creates an untenable trade environment for smaller economies, it risks driving them toward malign actors such as China and Russia. Economic policy, in other words, can either reinforce alliances or fracture them.

German Chancellor Friedrich Merz echoed this concern, pointing to the erosion of multilateralism. He warned that the world has entered an era defined by great-power politics above all else, and that in such an environment, some countries are increasingly deploying natural resources, technologies, and supply chains as bargaining tools. Smaller economies, he argued, must coordinate more closely to avoid being squeezed in the crossfire. In a world in which some weaponize economic interdependence, economic unity becomes a form of defense.

This convergence of economics and security was on display not only in Munich but also weeks earlier in Davos. The World Economic Forum has traditionally been a platform to discuss markets, business, and the state of the global economy, and while this continues to be the case, these conversations now require more consideration for geopolitical issues, which increasingly play a role in shaping markets. For example, US President Donald Trump’s remarks about Greenland, and the tariffs he placed on Europe, stole much of the spotlight, as did Canadian Prime Minister Mark Carney when he called on middle powers to band together in the face of coercive economic practices.

Geopolitical challenges are increasingly being tackled in the economic domain. Governments are deploying instruments of economic power and coercion such as sanctions, export controls, investment screening, tariffs, and control over critical mineral supply chains to confront adversaries. Governments are also using economic tools on allies and partners to create leverage in negotiating favorable trade agreements. The use of these tools has required governments to reflect on their longstanding geopolitical relationships and consider how and with whom they will need to work to defend their economic sovereignty and security.

In this moment, smaller trade-dependent economies will need to build coalitions among like-minded partners to preserve the multilateral institutions that maximize their agency. To avoid any vulnerability to coercion by larger powers, these smaller trade-dependent economies will need to invest in their collective resilience by diversifying their supply chains, coordinating sanctions, codifying shared standards, and forming trusted technology partnerships.

Additionally, countries will need to address persistent trade imbalances and perceived inequities in burden-sharing within alliances. If left unaddressed, these imbalances and inequities will continue to drive decision-making that prioritizes short-term economic leverage instead of long-term economic security strategies. Such strategies require sustained alignment between economic and security objectives, not episodic reactions to crisis.

Governments cannot meet the challenge of building economic resilience alone, since it is built in markets, supply chains, capital flows, and innovation ecosystems. As economic tools become central to foreign policy, the private sector increasingly sits at the tip of the spear of national security, implementing export controls, monitoring sanctions compliance, reconfiguring supply chains, and making investment decisions.

Our team at the Atlantic Council’s Economic Statecraft Initiative, in partnership with the United Kingdom House of Commons’ Business and Trade Committee, convened policymakers and business leaders in Munich in a discussion that illuminated the need to redesign globalization in this age of strategic competition, where the line between boardroom decisions and national security outcomes is increasingly blurring.

Economic security will depend on the private sector’s ability to implement governments’ foreign policy decisions, making a new level of public-private partnership essential. Governments must clearly communicate the rationale behind deploying economic tools and provide the private sector with consistent, clear, and sustainable guidance and signals through enhanced public-private partnerships and dialogue. Information sharing related to national security risks will also be vital. Furthermore, governments should seek out and incorporate private sector feedback into their foreign policy decisions to mitigate against unintended consequences in the economic domain.

The MSC has long been the premier forum for confronting hard security questions. This year’s convening made clear that economic security belongs squarely in that category. Thus, at future MSCs, expect to see more and more finance ministers, trade negotiators, sanctions envoys, and business leaders roaming the streets of Munich.

Kimberly Donovan is director of the Economic Statecraft Initiative within the Atlantic Council’s GeoEconomics Center. She is a former senior Treasury official and National Security Council director.

Lize de Kruijf is a program assistant at the Atlantic Council’s Economic Statecraft Initiative within the GeoEconomics Center.

Housed within the GeoEconomics Center, the Economic Statecraft Initiative (ESI) publishes leading-edge research and analysis on sanctions and the use of economic power to achieve foreign policy objectives and protect national security interests.

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To bridge the transatlantic productivity divide, Europe needs structural reforms—and AI

Hung Tran — Fri, 20 Feb 2026 14:29:45 +0000

Comparisons between Europe’s sluggish economy and the dynamism of the United States have become a recurring theme in economic debate. Among the large and growing body of work on this topic are David Marsh’s book Can Europe Survive? and policy reports such as Mario Draghi’s “The future of European competitiveness,” which analyze the factors contributing to slower economic growth in the European Union (EU) since the turn of the millennium.

In particular, the analyses focus on the widening gap between strong productivity growth in the United States and near stagnation in the EU. Their policy recommendations emphasize structural reforms to make Europe’s economy more flexible and dynamic, foster a risk-taking culture similar to that in the United States, and encourage innovation and its commercial applications, thereby boosting productivity and economic growth.

While such recommendations are reasonable, it is important to recognize that structural reforms are difficult to implement and tend to face resistance from vested interests. Moreover, reforms take time to yield results and usually produce near-term pain, fueling popular backlash. These factors explain why the EU has made limited progress in implementing Draghi’s recommendations since September 2024. Nonetheless, if Europe wants to preserve its strategic autonomy or sovereignty, especially amid heightened geopolitical contention, it must seriously undertake such reforms.

In the foreseeable future, Europe should also aim to facilitate the diffusion of highly productive business practices already demonstrated by many high-tech firms, particularly in the United States, to domestic businesses. Such an effort could produce tangible results, helping improve economic performance. This challenge mirrors that facing the rest of the US economy, which lags behind the information technology (IT) and artificial intelligence (AI) sector in productivity performance.

Europe struggles to keep pace with US productivity

Since 2000, real GDP annual growth has averaged 1.3 percent in the EU, less than half that of the United States. Factors explaining this underperformance include rigid and burdensome regulations, fragmented markets for services and capital, high energy costs, slow labor-force growth amid population aging, and inadequate investment, including in research and development, particularly in IT and AI sectors. Against that backdrop, EU labor productivity has slowed—falling from 1.5 percent per year between 1999 and 2008 to 1.0 percent between 2010 and 2019 and 0.4 percent since then. By comparison, US labor productivity has averaged 1.5 percent per year over most of the post-2000 period, rising to 2.4 percent in the past two years.

Overall, the productivity gap favoring the United States over the Eurozone has grown to 41 percentage points—more than making up for the period from the end of World War II to the 1980s, when many European countries grew faster than the United States.

The tech sectors behind US success

The better productivity performance of the United States compared with the EU has been driven mainly by the IT sector and later reinforced by AI activities. Indeed, between 1988 and 2023, the cumulative total factor productivity growth in the IT sector exceeded 178 percent while remaining only 12 percent for non-IT sectors. As investment in the IT and AI sectors has outpaced overall capital expenditure, these activities have contributed increasingly to US economic growth.

In 2025, IT- and AI-related expenditures, adjusted for imported equipment, accounted for up to 25 percent of US GDP growth (estimated at 2.2 percent), despite comprising only 4.5 percent of the economy. Excluding the IT and AI sectors, the rest of the US economy would have grown by 1.65 percent in 2025—no different from the EU, estimated at 1.6 percent.

Why high-tech gains don’t reach the broader economy

It is not only in the United States that the IT and AI sectors—and, more broadly, the high-tech sector—enjoy stronger productivity growth than the rest of the economy. In fact, this phenomenon holds true across the member states of the Organization for Economic Co-operation and Development (OECD). According to OECD data, high-tech firms that have embraced technological advances in IT and AI are at the frontier of productivity, growing at an annual rate of 3.5 percent. By comparison, non-frontier firms have recorded a meagre 0.5 percent productivity growth, dragging down aggregate productivity figures.

Recent examples of non-frontier firms include those that have failed to embrace technological innovations, such as digital transformation and electric mobility trends. This includes many German automobile companies, which are now under intense pressure in their home market from Chinese competitors and have lost market share in China from 25 percent to 14 percent in recent years. Similarly, about 70 percent of US firms have failed in their digital transformation efforts due to a lack of a clear strategy, poor change management, and employee resistance—thus joining the ranks of laggards. More generally, non-frontier firms tend to be small and medium-sized enterprises, forming the backbone of the US and EU economies, employing the largest share of workers in sectors such as retail, construction, and traditional manufacturing.

The lack or slow pace of technology diffusion from high-tech frontier firms has left much of the US and EU economies populated by laggard firms in terms of adopting technologically enabled productivity improvements. This kind of slow diffusion of new technology isn’t new. For example, it took sixty years for the steam engine, thirty-two years for electricity, and fifteen years for personal computers and the internet to be widely adopted.

Several factors contribute to this phenomenon, including high fixed costs of investing in new technology, workforce training, and organizational restructuring to reap the benefits of innovation. Investment in intangible assets such as workforce training often produces a technology J-curve effect: productivity may dip initially as firms and employees adapt, before accelerating once the new methods are mastered. There is hope that AI technology diffusion might occur faster than in the case of the aforementioned examples, though adoption remains demanding, particularly in terms of the high costs of implementation hurting short-term profitability.

Learning from frontier firms

Instead of waiting for AI technology to naturally diffuse to the rest of the economy, policymakers, business leaders, and investors should actively facilitate, incentivize, and reward laggard firms to adopt productivity-enhancing practices demonstrated by frontier firms. Specifically, these measures should address barriers to technology diffusion. By doing so, laggard firms would improve their productivity, thereby boosting aggregate productivity and supporting stronger economic growth.

For the EU, encouraging laggards to catch up with frontier firms, both domestically and in the United States, could produce measurable results in the near term. But meanwhile, the EU and United States should continue to implement long-term structural reforms to develop the whole innovation ecosystem—including fostering a risk-taking culture to promote innovation and commercialization.

Importantly, for both the EU and the rest of the US economy, shortening the technology diffusion lag carries high stakes—failure would entrench the already dominant frontier firms, weaken market competition, and make it harder for other companies to catch up. This would keep large parts of the US and European economies in slow-growth lanes, exacerbate economic inequality, and fuel social divisiveness.

Hung Tran is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center, a senior fellow at the Policy Center for the New South, a former executive managing director at the Institute of International Finance, and a former deputy director at the International Monetary Fund.

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

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Can Europe finally deliver on competitiveness?

Charles Lichfield — Thu, 19 Feb 2026 20:11:11 +0000

BRUSSELS—You’ve heard the joke: Heaven is where the police are British, the cooks are French, the mechanics are German, the Italians . . . are in charge of romance, and it’s all organized by the Swiss. The punchline makes hell a place where these roles are redistributed in a less ideal way, where the mechanics are French and the romantics Swiss. Outdated as the joke may be, it does offer some slight reassurance. Europe is a continent of many talents and can stay ahead if everyone plays their part.

Last week, in a Flemish castle that gives the best châteaux a run for their money, the European Union’s (EU’s) heads of state and government gathered in Limburg, Belgium, for an informal summit on competitiveness. Sluggish growth and Europe’s dwindling share of export markets have imposed a sense of urgency. The summit didn’t end with a joint statement given its informal nature, but the message carried by most leaders on their way in was that tinkering with the single market and new trade deals will not be enough to jumpstart European competitiveness.

Europe’s problems are clear. In April 2024, former Italian Prime Minister Enrico Letta’s report for the European Commission outlined what afflicted the single market. In September of that year came former European Central Bank President Mario Draghi’s report on European competitiveness. Both reports point to needed reforms, but these will take time. More immediately, action is needed to protect Europe’s industrial capacity, which has fallen by 9 percent in the important chemicals sector since 2022. Shoring up what remains of this capacity demands lower energy prices, with targeted subsidies by national capitals and an EU-wide loosening of the Emissions Trading System. Even protective measures might be necessary.

It is commonplace to assume Europe isn’t up to the challenge. Europe currently appears weak because the geopolitical and economic certainties that it has relied on have been disrupted by Russia, China, and lately the United States. On occasions when it hasn’t remained a spectator, it has managed to shift things: on Greenland, with modest deployments of soldiers and the threat of tariffs, and on Ukraine, with money and intelligence-sharing to backfill the United States’ contributions. But addressing the EU’s economic weakness is more challenging; the results are measured in euros and jobs. The need for “quick wins” smashes against the big dichotomies that define the bloc, where economic sovereignty can be pooled but not national security, and talk of a “fiscal union” remains a red flag to the electorates of the less-indebted member states.

Nonetheless, European leaders now appear to be moving with a welcome sense of urgency. The situation is not without its irony: Predominantly French ideas—strategic autonomy engineered by a degree of industrial policy—have been vindicated by events, but now France itself appears paralyzed by political dysfunction.

French President Emmanuel Macron’s main message ahead of the Limburg summit was a call for €1.2 trillion annually in new debt taken on by the whole EU, in addition to member-state borrowing. The projects this debt would fund might indeed be valuable, such as boosting infrastructure resilience and preparing Europe for quantum computing. But there’s a lingering sense that this plan will allow Paris to delay its efforts to raise the retirement age in France and, more broadly, to avoid addressing the sustainability of its social model. When the embattled French Prime Minister Sébastien Lecornu undid some of Macron’s pension reforms to secure a parliamentary majority for the 2026 budget, the spread between French and German debt went down, not up, as a reward for short-term stability. The early resignation of Banque de France Governor François Villeroy de Galhau, who plans to step down in June—allowing Macron to appoint his successor before the 2027 French elections—adds to a sense that the French elites feel the political extremes are ever more likely to win power. Few mainstream French politicians will want to increase the extreme parties’ odds by forcing through unpopular reforms before the next election.

If even the markets can’t be expected to discipline France, then Paris will remain a poor advocate for joint debt issuance. After the Munich Security Conference, for instance, German Foreign Minister Johann Wadephul said that France would have to make more of an effort on updating its social model to have a credible path to meet the new NATO defense and defense-related spending goals of 5 percent of gross domestic product by 2030.

This means that the push for joint debt issuance will have to come from unusual voices, starting with Germany. Joachim Nagel, president of the Bundesbank, said recently that common European debt instruments deserve serious discussion—a signal that would have been unthinkable from Frankfurt even three years ago. Berlin is also engaging more constructively than in the past with the French Group of Seven (G7) presidency’s ambitious agenda to create a roadmap toward moderating macroeconomic imbalances that stem from uneven trade flows. A cynic would say this is because China has surpassed Germany as the main current account surplus powerhouse. The more charitable view is that—through its push for military spending—Berlin is now behaving the way imbalances experts would have wanted ten years ago.

All the issues at hand are complex, yet the demand for “quick wins” by smaller member states is not misplaced given the very real prospect of more industrial capacity disappearing. Seeking one such win, several Central European states have focused on lowering energy prices. The recently returned Czech prime minister, Andrej Babiš, even said that all other measures would be futile if this isn’t addressed. The loosening of the Emissions Trading Scheme, which Germany and Italy had put forward earlier in the year (before Berlin played this down), is proving popular, although it won’t allow member states to match France’s low electricity prices for heavy industry, the result of (you guessed it) coordinated infrastructure spending and subsidies over decades.

Beyond energy prices, the EU needs a larger push toward simpler regulation. To achieve this, EU policymakers will need to determine which regulations are genuinely strangling industry and which can be actively wielded to protect the single market from competition that is over-subsidized, dirty, or both. The Carbon Border Adjustment Mechanism and the Emissions Trading System are cases in point. Both have come under fire from industries looking for relief, but they will actually prove useful in the coming months as Europe uses their frameworks to justify barriers against Chinese overcapacity.

The ball is now back in the European Commission’s court ahead of the European Council meeting in March. On my recent tour of European capitals, even the most adamant supporters of the European project grumbled that European Commission President Ursula von der Leyen failed to seize an opportunity this past April, when uncertainty in the United States gave European assets a new appeal and a sense of a “European moment.” Facing a similar set of circumstances, several officials told me, her predecessor Jacques Delors would have found a unifying banner and a deadline under which to ram more awkward compromises through, just like the single market, which was launched on January 1, 1993.

It isn’t too late for von der Leyen to push for a similarly large move. Call it “Sovereign Europe 2028.”

Europe has grown since 1993, and member states will need the option to not take part in some new policies. It shouldn’t be a surprise that “enhanced cooperation” between member states is being talked up as an alternative to taking every step as a bloc. Overall, one must hope that every member state can bring its own unique contribution to the competitiveness drive. From Czech pragmatism on energy prices to the Belgian prime minister’s consistently good jokes, Europe is showing it is capable of taking a hard look at its contradictions and overcoming them. The clear political dysfunction in France and even Germany can be slightly offset by stability where it used not to exist, such as Greece and even Italy (though Prime Minister Giorgia Meloni’s domestic reforms have been somewhat lacking).

A new “Sovereign Europe” banner might also make the more existential compromises seem less outlandish. Headlines this week are focusing on Berlin’s frustrations with the Franco-German-Spanish Future Combat Air System (FCAS). There is enough blame to go around. France is trying to pool the cost of developing a new fighter jet which responds to its strategic priorities, including on nuclear warheads. Germany is pretending to be discovering this only now. A sense of direction is needed to help lift Europe out of long-standing skirmishes.

There is some excitement ahead of Macron’s upcoming speech on the role of France’s nuclear deterrent in Europe. This may include commitments to the whole of the EU. In return, could German acceptance of a modest common safe asset become more palatable? If, for example, the United States wound down its commitment to Europe, France’s nuclear umbrella might be the only credible European deterrent on offer, and the contours of a deal might then emerge that could oil the machine and deliver results.

Wait—now you want the French mechanics?

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Temnycky in Forbes on Europe’s move to phase out Russian LNG in 2026

Mark Temnycky — Thu, 19 Feb 2026 17:00:12 +0000

ORIGINAL SOURCE

On January 7, Mark Temnycky, nonresident fellow at the Atlantic Council’s Eurasia Center, was published in Forbes on Europe’s plan to strengthen its energy markets and phase out Russian LNG in 2026.

By distancing themselves from the Russian Federation, EU leaders argue they can gain greater energy independence and strengthen European energy security across the continent.

Mark Temnycky

Fellow

Mark Temnycky

Nonresident Fellow

Eurasia Center

Ukraine Geopolitics & Energy Security

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A bad Ukraine peace could ignite new wars in Russia’s former empire

Joseph Epstein — Tue, 17 Feb 2026 21:38:40 +0000

A fresh round of US-brokered peace talks between Russia and Ukraine is taking place this week as the Trump administration seeks to reach a deal by early summer. While pro-Ukrainian voices warn that any agreement lacking ironclad security guarantees for Kyiv could embolden Moscow to go further into Moldova or test NATO in the Baltics, the biggest threat may be to countries elsewhere in the former Soviet space.

There are already signs that Russia is turning its imperial appetite toward the South Caucasus and Central Asia, where the groundwork for destabilization appears to be well underway. Any negotiated settlement in Ukraine that ignores these regions will not end the current war; it will merely relocate it.

Russian nationalist ideologue Alexander Dugin, who is often called “Putin’s brain,” declared last month that no post-Soviet state should possess sovereignty. Instead, he argued, Moscow “has no choice but to restore the Russian Empire.” Days earlier, leading Kremlin propagandist Vladimir Solovyov called for Russia to conduct “special military operations” similar to the invasion of Ukraine in Central Asia and the Caucasus.

The Russian Foreign Ministry sought to distance itself from these comments by dismissing Solovyov as a “private journalist,” but few were convinced. In a country where the Kremlin controls news coverage and individuals can face prison for holding up blank signs, any talk of private journalism lacks credibility. Instead, this rhetoric is a further indication that even while bogged down in Ukraine, Russia is already waging shadow wars against other neighbors.

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Evidence of Russia’s intentions goes beyond mere revisionist rhetoric. In early February, Azerbaijani security services released recordings of Ramiz Mehdiyev, the former head of the country’s presidential administration, allegedly coordinating coup plans with Russian FSB agents. This echoed events in Armenia last summer, when the authorities arrested Samuel Karapetyan, a Russian-Armenian oligarch on the US Treasury Department’s Kremlin List, for allegedly plotting to overthrow Prime Minister Nikol Pashinyan’s government in cooperation with Gazprom and Russian Railways.

Two alleged Russian-backed coup attempts in the South Caucasus in a single year should be enough to alarm every policymaker in Washington and across Europe. Meanwhile, in Central Asia, leaked Russian military intelligence documents claim to reveal plans for active operations to destabilize Kazakhstan. The initial focus was set to be the country’s northern regions, where Kazakhstan’s ethnic Russian population is concentrated. The plans included bribing elites, weaponizing accusations of “Russophobia,” and funneling propaganda through front organizations; tactics that echo earlier destabilization efforts in Ukraine.

The Kremlin has particular cause for concern due to the growing American presence in regions that Moscow regards as its own backyard. Over the past year, the United States has displaced Russia as the principal mediator between Armenia and Azerbaijan, and has brokered a peace deal including US oversight of a corridor that could become a key trade route connecting Europe to Asia while bypassing Russia entirely.

US Vice President JD Vance’s recent visit to Yerevan and Baku underlined the changing geopolitical balance in the South Caucasus. This was the highest level American engagement in the region for nearly two decades. It represented a statement of strategic intent that the Kremlin cannot ignore.

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US President Donald Trump has made ending wars a signature promise, but his team must know that some peace deals could end up accelerating hostilities elsewhere. If a settlement in Ukraine frees up Russian military resources without establishing credible deterrents against further Kremlin aggression, Moscow will have the means and the motive to reassert dominance elsewhere in its former empire.

History warns us to take this seriously. The tragedy of the war in Ukraine is not only the scale of the killing but its repetition. In his book “War and Punishment,” Russian journalist Mikhail Zygar chronicles how Russia systematically repressed Ukrainians for centuries to extinguish statehood aspirations. Zygar traced this process from the abolition of Cossack autonomy in the eighteenth century to the prohibition of Ukrainian language and literature in the nineteenth century, and on to the artificially engineered 1930s famine, known as the Holodomor, that killed around four million Ukrainians.

Strikingly similar templates exist throughout the former Soviet domains. “Perished Civilization,” a volume published under the nom de guerre “Kuzari” and drawing on leaked Russian archival files, has gained attention in the Kazakh, Kyrgyz, Uzbek, Tajik, and Ukrainian media since Dugin and Solovyov’s provocations. The book documents how Moscow justified its conquest of Muslim Central Asia as a sacred duty to defend Orthodoxy, a civilizational framing that lent permanence to what began as territorial opportunism. Following the Russian Revolution, the Bolsheviks retained every inch of this conquered land, swapping religious justification for ideological mandate.

The human cost was staggering. Kazakhstan experienced its own artificially engineered famine during the Soviet era, known in the country as the Asharshylyk. This mirrored Ukraine’s Holodomor and annihilated around 38 percent of the Kazakh population. Today’s concerns are not ancient grievances; they are unhealed wounds in societies that understand what Russian imperial restoration could mean.

With painful memories of Russian rule still widespread in Central Asia and the South Caucasus, few residents will accept the argument that Russia’s poor military performance in Ukraine makes further aggression unlikely. Instead, they will point to Moscow’s record of learning from its failures.

Russia’s 2008 invasion of Georgia was tactically successful but operationally embarrassing. The invasion was mired by aircraft losses, poor coordination, and drunk soldiers wandering through villages and reportedly wobbling at roll calls. Six years later, Russia seized Crimea with “little green men” in an operation that was both remarkably swift and highly professional. A hasty Ukraine peace could once again enable Russia to learn from its mistakes and implement key lessons against new targets.

A number of steps are required to prevent a settlement in Ukraine from serving as the spark for further Russian aggression in Central Asia or the South Caucasus. First, any security guarantees for Ukraine should also cover other at-risk post-Soviet states through bilateral defense pacts or a multilateral framework.

Second, the United States should seek to amplify its economic footprint throughout the region by committing to infrastructure and resource development projects. This will help counter Russian influence while creating incentives for stability. Third, sanctions relief should be dependent on concrete criteria such as halting Kremlin destabilization efforts in Azerbaijan, Armenia, Kazakhstan, and beyond.

By embedding regional safeguards into a Ukraine peace deal, President Trump can deliver on his promise to end wars without igniting new conflicts. The Kremlin’s propagandists are telling us exactly where they plan to go next. This time, we should listen.

Joseph Epstein is director of the Turan Research Center.

Over its sixty-three-year history, the MSC has provided a thermostat for transatlantic relations. By that measure, Trump’s return to the White House produced a bracing chill last year, when US Vice President JD Vance delivered his “bad cop” broadside against Europe. US Secretary of State Marco Rubio provided some countervailing warmth this past weekend, but his underlying message was no less tough on Europe’s need to change. “We want Europe to be strong,” he said, “because the two great wars of the last century serve for us as history’s constant reminder that ultimately, our destiny is and will always be intertwined with yours, because we know that the fate of Europe will never be irrelevant to our own.”

What was most important about this year’s MSC, however, wasn’t what it said about US-European relations, but rather what it demonstrated about Europe itself. Last year’s European emotional shock has evolved into a steely determination among the continent’s leaders to address their enduring vulnerabilities. These vulnerabilities include insufficient political unity, inadequate economic vibrancy, and—most immediately perilous—inadequate defense capabilities.

French politician Benjamin Haddad, minister delegate for Europe, invoked Roman emperor Marcus Aurelius’s thoughts on stoicism to describe the shift from European hand wringing to more resolute action. “You have power over your mind—not outside events,” the Roman emperor wrote in his Meditations. “Realize this, and you will have strength.”

Haddad’s point was that Europe cannot control US elections or presidential mood swings, but it can control its defense spending, its industrial capacity, its political cohesion, and its resilience. Marcus Aurelius ruled an empire beset by plague, invasion, and political instability, so his writings weren’t abstract philosophy. Europe’s existential test is whether its political experiment of pooled sovereignty can be leveraged and expanded in a world where Russia threatens its security, China threatens its economy, and the United States has become a more uncertain partner.

While Europe might have the luxury of time to address many aspects of this combined challenge, the most immediate danger is its race against the clock in Ukraine, where Russia’s full-scale war will soon enter its fifth year. Meanwhile, Moscow’s hybrid threats to Europe are growing, in particular against countries nearest to its border. Beyond that, The Financial Times reported over the weekend on a growing Russian sabotage network in Europe.

The “European awakening”

The EU’s existential problem is that it was created to integrate Europe peacefully after World War II but was not designed to defend it. At the MSC, one European leader after another addressed this challenge from the main stage as a high priority, while down the street, the inspiring SPARTA conference, a new MSC feature to meet the demands of the times, brought together dozens of European defense startups and prime contractors with private capital and government decision makers who have the authority to deploy, fund, or integrate next-generation defense technologies.

“We must grow a European backbone of strategic enablers: in space, intelligence, and deep strike capabilities,” said Ursula von der Leyen, the European Commission president and a former German defense minister. “Mutual defense is not optional for the EU,” she noted. It is an obligation in the little-invoked Article 42(7) of the Treaty on European Union, a clause, she said, that now needed to be brought to life.

She speaks as no EU leader before her about the urgency of building up Europe’s military muscle. “As they say in Ukraine, you change or die,” she said. “We must adopt this mantra too.” She urged Europe to “tear down the rigid wall between the civilian and defense sectors,” seeking ways for its formidable automobile, aerospace, and heavy-machinery industries to urgently contribute to the “defense value chain.”

Some progress is already being made. European defense spending in 2025, von der Leyen said, was up some 80 percent since before Russia’s war in Ukraine. By 2028, she added, European defense investment is projected to be even higher than what the United States spent in 2025. Beyond that, European countries are buying US arms for Ukraine worth billions through NATO’s Prioritised Ukraine Requirements List initiative. Europe also recently approved a ninety-billion-euro loan for Ukraine’s budgetary needs, which Kyiv would only be required to pay back if Russia eventually pays it war reparations. At the same time, the EU’s new Defense Innovation Office in Kyiv is merging European scale with Ukraine’s war-time speed and ingenuity.

“This is a true European awakening,” von der Leyen said, laying out a goal of independence. “We need a new doctrine for this—with a simple goal: to ensure that Europe can defend its own territory, economy, democracy, and way of life at all times. Because this is ultimately the true meaning of independence.”

The ticking clock

The question for Ukraine is whether the awakening has come soon enough. The clock is ticking as Russia continues to hammer away at civilian targets, energy infrastructure, and national morale, while the Trump administration continues to pressure Kyiv to make concessions to strike a peace deal that many Europeans feel would only be an interlude before further threats on Ukraine and beyond.

What’s little recognized, one European foreign minister shared with me, is that Vance’s jarring speech last year was followed the next day by European leader-level meetings that set in motion the Coalition of the Willing, led by British Prime Minister Keir Starmer and French President Emmanuel Macron. This group has since grown to embrace thirty-five countries, including Australia, Japan, and New Zealand.

The group has played two roles in the past year: It has stepped up European support for Ukraine as an existential imperative, including deep and continuing discussions over how best to provide Ukraine security guarantees. And it has done so while ensuring that Washington doesn’t abandon Kyiv. What concerned its leading members in Munich this past weekend was that Rubio didn’t meet with them—and also that he didn’t speak at all about continued US support for Ukraine in his otherwise encouraging speech.

In his speech at the MSC, German Chancellor Friedrich Merz noted that the EU’s gross domestic product (GDP), which was over $22 trillion in 2025, is about ten times as big as Russia’s. “Our military, political, and technological potential is huge,” he said, “but we haven’t tapped it to the necessary extent for a very long time.” Add to that the United States’ GDP in 2025 of more than $31 trillion, and the potential of the transatlantic community to shape the global future remains unequaled.

“Dear friends, being part of NATO is not only Europe’s competitive advantage,” said Merz almost wistfully, hoping the Trump administration was listening. “It’s also the United States’ competitive advantage. So, let’s repair and revive transatlantic trust together.” He poignantly reminded his audience that after 1945 it was “our American friends in particular who whetted us Germans’ appetite” for partnerships, alliances, and organizations that fought for freedom based on the rule of law. “We will not forget what you did for us. On this foundation, NATO became the strongest political alliance of all time.”

As for the Trump administration, Washington’s critics here focused on Rubio’s comments on Europe’s “climate cult” and the civilizational threat of mass migration. Alongside that, Rubio’s conciliatory message on shared values and history provided hope that’s worth building upon. “We belong together,” he said.

This year’s MSC made clear what Europe needs to do, irrespective of what happens next in US politics. To paraphrase another of Marcus Aurelius’s axioms, then: Waste no time arguing what should be done. Do it.

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on X @FredKempe.

This edition is part of Frederick Kempe’s Inflection Points newsletter, a column of dispatches from a world in transition. To receive this newsletter throughout the week, sign up here.

Note: The Atlantic Council has a strategic partnership with the MSC and convenes several sessions in Munich each year.

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Vladimir Putin is trapped in a war he cannot win but dare not end

Peter Dickinson — Thu, 12 Feb 2026 22:50:16 +0000

More than a year since he returned to the White House vowing to end the Russia-Ukraine War within 24 hours, US President Donald Trump remains upbeat about the prospects for peace. “Very, very good talks today,” Trump stated on February 6 following the latest round of negotiations in Abu Dhabi. “Something could be happening.”

Few in Kyiv share this optimism. While Ukrainian officials are loathe to dismiss Trump’s peace efforts for fear incurring his displeasure, a majority of Ukrainians remain utterly unconvinced that Russian President Vladimir Putin has any interest whatsoever in ending hostilities. A poll conducted by Kyiv’s International Institute of Sociology in late January found that only 20 percent of Ukrainians think the war will end by July, while 43 percent expect fighting to continue into 2027 or beyond.

Such skepticism is easy to understand. Ukraine agreed to an unconditional ceasefire way back in March 2025, but Putin has so far refused to follow suit. Instead, he has spent much of the past year engaging in blatant stalling tactics while constantly moving the diplomatic goalposts in a transparent bid to prevent any progress toward a lasting settlement. This has resulted in what most Ukrainians and many others regard as a phony peace process.

As fruitless US-led negotiations rumble on, Putin has underlined his true intentions by dramatically increasing Russian attacks on the Ukrainian population, leading to a 31 percent surge in civilian casualties during 2025. The most recent escalation saw Russia attempt to freeze millions of Ukrainians in their own homes by systematically bombing critical heating and power infrastructure amid Arctic conditions. Some believe this ruthless winter bombing campaign qualifies as an act of genocide; it is most certainly not the act of a man seeking a compromise peace.

Trump has difficulty reading Putin’s true intentions because he fundamentally misunderstands the motivations behind the Russian invasion of Ukraine. To Trump, the current negotiations are a geopolitical real estate deal, with the Russians playing hardball to secure better terms. In reality, Putin is operating on a completely different wavelength altogether.

The Kremlin dictator is not looking to make deals, acquire additional land, or push the Russian border a few hundred kilometers to the west. Instead, he wants to secure his place in history. Putin genuinely believes he is on an historic mission to reverse the injustice of the Soviet collapse and revive the Russian Empire. In order to achieve this, he has convinced himself that he must erase Ukraine as a state and as a nation.

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For more than two decades, Putin’s Ukraine obsession has shaped his reign and defined Russian foreign policy. His relationship with the West first became openly hostile in the aftermath of Ukraine’s 2004 Orange Revolution, which Putin bitterly denounced as a Western plot to destabilize Russia.

Since that watershed moment, Ukraine has been at the heart of virtually every single new crisis in relations between Moscow and the democratic world, from the 2014 seizure of Crimea to the full-scale invasion of 2022. Throughout this period, Putin has repeatedly demonstrated his readiness to sacrifice Russia’s other national interests in pursuit of his anti-Ukrainian crusade.

Meanwhile, he has used the full weight of the formidable Kremlin propaganda machine to poison Russian society against all things Ukrainian and prepare the ground for a war of national extermination. Putin has become notorious for insisting that Ukrainians are actually Russians (“one people”), and has repeatedly dismissed independent Ukraine as an illegitimate state and an artificial “anti-Russia.”

Anyone in Ukraine who dares to disagree with Putin’s claims has been dehumanized and branded a Nazi or a stooge of the West. This hate campaign has proved remarkably successful and has contributed to the almost complete absence of visible anti-war sentiment in today’s Russia, despite widespread public knowledge of the atrocities taking place in Ukraine.

Ukraine’s importance to Putin is twofold. As the largest non-Russian former Soviet republic by population and the closest to Russia in terms of shared heritage, Putin sees Ukraine as the key to undoing the verdict of 1991. If he can end what he regards as the aberration of Ukrainian statehood, this will redeem Russia and reestablish the country’s credentials as a great power.

Likewise, Ukraine’s perceived closeness means that the further consolidation of an independent and democratic Ukrainian state represents an existential threat to authoritarian Russia. As a KGB officer in East Germany during the late 1980s, Putin witnessed firsthand how grassroots movements can topple empires. If Ukraine’s transition from Kremlin vassal to European democracy continues, he fears this could serve as a catalyst for the next stage in a Russian imperial retreat that began in 1989 with the fall of the Berlin Wall.

This helps to explain why Putin has shown so little interest in the seemingly generous peace terms proposed by Trump. The US leader has indicated that Russia would be allowed to keep the territories it has captured in Ukraine while facing no meaningful consequences for launching the largest European invasion since World War II. At first glance, these terms might appear to represent a major Russian victory, but Putin himself obviously does not think so.

Putin’s reluctance to accept Trump’s offer makes perfect sense when viewed from the perspective of the Russian ruler’s revisionist worldview and imperial ambitions. Crucially, Putin is well aware that any peace deal based on the current front lines of the war would leave 80 percent of Ukraine beyond Kremlin control and free to integrate into the democratic world. That is exactly what he is fighting to prevent.

In line with the present proposals, the Kremlin would retain control over the rust belt towns of the Donbas, but would cede iconic Odesa and sacred Kyiv, the mother city of all Russia, to a hostile neighbor. Most Russians would regard this as a defeat of historic proportions. Instead of being remembered as a new Peter the Great, Putin would be doomed to enter Russian history as the man who lost Ukraine.

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With a compromise peace out of the question, Putin has no real choice but to fight on. Doing so offers some obvious advantages. As long as the war continues, Putin can delay a reckoning over the huge Russian losses in Ukraine and the damage done to the country’s international standing. But as the fourth anniversary of the invasion draws near, it is becoming increasingly difficult to disguise the fact that the war is not going according to plan.

Putin’s problems are most immediately apparent on the battlefield. When he launched the full-scale invasion in February 2022, Putin vowed to “demilitarize” Ukraine. Four years on, Ukraine now boasts the largest army in Europe and has emerged as a world leader in drone warfare.

The radically upgraded Ukrainian military has already defeated Russia in multiple major engagements and is now seeking to gain the upper hand in a grueling high-tech war of attrition. Putin’s army suffered hundreds of thousands of casualties in 2025, while seizing less than one percent of Ukraine. At the current glacial pace, it would take the Russian military decades to conquer the country.

In public, at least, Putin continues to project confidence and insist that the goals of Russia’s invasion will be unconditionally met. However, his boasts of battlefield dominance are now starting to ring hollow. With so few actual victories to cheer, he has recently resorted to inventing imaginary advances.

Putin’s habit of exaggerating Russian gains came back to haunt him in late 2025 when he repeatedly claimed to have captured the Ukrainian city of Kupyansk, only for Ukrainian President Volodymyr Zelenskyy to personally visit the city and record a selfie video exposing the Russian ruler’s lies. This embarrassing episode underlined the growing credibility gap between Putin’s bold talk of inevitable Russian victory and the far less impressive battlefield reality of his faltering invasion.

Putin’s other stated war aim was the “denazification” of Ukraine. This is Kremlin code for the erasure of a separate Ukrainian national identity and the imposition of Russian imperial doctrine in every sphere of public life, from education and culture to politics and religion. If this was the intention, it has backfired disastrously.

The war unleashed by Putin in 2022 has fueled an unprecedented consolidation of Ukrainian patriotism alongside a wholesale rejection of all things Russian throughout Ukrainian society. As a result, the entire notion of a pro-Kremlin government in Kyiv is now inconceivable unless propped up indefinitely by Russian bayonets, which would be ruinously expensive for the Kremlin.

This geopolitical divorce is also evident in the international arena. For centuries, Ukraine was widely seen by the outside world as indivisible from Russia itself. Putin still clings to this imperial mythology, but his propaganda slogans of “brotherly nations” now sound absurdly outdated. Instead, today’s Ukraine is widely recognized as an emerging democracy and a member of the wider European community of nations.

It would be extremely reckless to underestimate the Russian military, of course. Russia’s sheer size means that it remains a formidable threat and will likely continue to grind forward in Ukraine. However, after nearly four years of limited progress and staggering losses, it is now difficult to imagine how Putin could achieve the maximalist goals of his invasion on the battlefield.

Many Russians had pinned their hopes on a new Trump presidency, but even the dramatic reduction in US military aid to Ukraine over the past year has failed to produce any significant Russian breakthroughs. Furthermore, US weapons continue to flow to Ukraine via the PURL initiative, with indications that the White House has also relaxed earlier restrictions on strikes inside Russia.

America’s withdrawal from transatlantic commitments also means European leaders are more motivated than ever to maintain their support for Ukraine in the coming years. In a rapidly changing security environment, they are acutely aware that the Ukrainian army is now indispensable for the defense of Europe. With Ukraine’s own revitalized defense industry meeting around half of the country’s military needs domestically, Kyiv looks well positioned to continue defending itself despite the decline in support from the United States.

As the war enters a fifth year, Putin finds himself in an unenviable predicament. He has no obvious pathway to victory but cannot agree to a compromise peace without acknowledging what would amount to an historic defeat and placing his own political survival in question.

Faced with a bloody quagmire on the front lines, Putin will likely seek to break Ukrainian resistance in the coming months by expanding Russian attacks on the general population and making as much of the country as possible unlivable. In parallel, he will continue to play for time on the diplomatic stage, while attempting to bribe the United States with wild proposals and bully Europe into inaction with thinly-veiled threats of escalation.

If President Trump is serious about ending the war, he needs to recognize that his Russian counterpart currently dare not risk any peace that safeguards Ukrainian independence. Putin knows that if Ukraine survives, he loses. A sustainable settlement will therefore only be possible if he comes under significantly more pressure and is confronted with the prospect of a fate far worse than failure in Ukraine.

Putin will abandon his invasion when he begins to fear that continuing the war could threaten the future of his regime and the stability of Russia itself. The current occupant of the Kremlin still dreams of emulating Stalin and Katherine the Great, but he has no desire to become the next Tsar Nicholas II.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

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The current ban on Russian football teams competing in international competitions was one of many similar measures imposed in response to the full-scale invasion of Ukraine in February 2022. The International Olympic Committee and International Paralympic Committee placed restrictions on Russian athletes, as did the World Athletics Council. Other sports that imposed a full ban on Russian athletes included archery, badminton, baseball, basketball, biathlon, canoeing, ice hockey, rowing, sailing, softball, skating, skiing, taekwondo, and volleyball.

As the war has progressed, some international sports organizations and governing bodies have begun to soften their stance toward Russia. The country’s tennis stars have returned to the sport’s most prestigious tournaments, while Russian athletes in a range of disciplines have been permitted to participate in international events under a neutral flag.

Some sports have opted to lift restrictions entirely. In September 2025, the International Paralympic Committee announced that it would end its ban on Russian athletes, allowing them to participate fully in the 2026 Winter Paralympics. Similarly, in November 2025, the International Judo Federation, the International Sambo Federation, and the European Gymnastics General Assembly all removed bans on Russian athletes.

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Many of those advocating for or justifying the relaxation of restrictions on Russian athletes have done so by insisting on the separation of sport from politics. Others have noted that with the Russian invasion of Ukraine soon set to enter a fifth year, there is no indication that the bans have had any impact on Kremlin policymaking. Instead, they claim, these restrictions have merely imposed unjustified costs on individual Russian athletes and hindered their development.

These arguments conveniently overlook Russia’s long record of routinely exploiting sports for propaganda purposes. Throughout the Cold War, the Kremlin pioneered the practice of generating political capital from sporting success. While the USSR did not permit the development of professional sport, the Soviet authorities invested heavily in sophisticated training programs in a wide range of sports.

This trend has continued into the twenty-first century. Russian President Vladimir Putin spent tens of billions of dollars hosting the 2014 Winter Olympics and the 2018 FIFA World Cup. Both events provided the Kremlin with an opportunity to whitewash modern Russia’s image among international audiences.

Russian sporting successes abroad are also frequently celebrated in Moscow as victories for the country as a whole and brandished as proof of Russia’s standing on the world stage. When Russian hockey player Alex Ovechkin made history in spring 2025 by beating Wayne Gretzky’s record as the US National Hockey League’s all-time goal scorer, the Kremlin propaganda machine was quick to toast a national triumph.

On numerous occasions, Russian athletes have directly participated in Putin regime propaganda, including appearing alongside the Kremlin dictator at public events. The BBC reports that some prominent Russian athletes have direct ties to the Russian military, while others have shared pro-Putin and pro-war content on social media in support of the Russian military.

Efforts to ease restrictions on Russia’s participation in international sports are particularly painful for Ukraine. Russia has killed hundreds of Ukrainian athletes during the current invasion, while preventing countless thousands of young Ukrainian talents from continuing with their training and fulfilling their potential. To many Ukrainians, the entire notion of allowing Russians to return to the international sporting arena amid the ongoing war seems exceptionally unethical.

Any further moves to lift existing international bans on Russian athletes may have consequences far beyond the sporting arena. Welcoming Russia back would risk normalizing the invasion of Ukraine and sending a message that the international community ultimately lacks the resolve to hold major nations to account for acts of aggression. This would be potentially disastrous not only for Ukraine, but for countries across the globe.

Mark Temnycky is a nonresident fellow at the Atlantic Council and a freelance journalist covering Eurasian affairs.

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If European leaders wish to participate as equal partners in discussions to determine the future security of their own continent, they cannot afford to rule out the deployment of troops to Ukraine. The Coalition of the Willing initiative, which is being led by the UK and France, was conceived in early 2025 as a way of keeping Trump engaged in European security; it is now the most realistic route to securing a European role in the peace process.

European troops could have a meaningful impact in Ukraine without engaging in combat operations. They could perform a range of support and training roles far from the front lines. For example, European contingents could take on much of the burden for monitoring the Ukrainian border with Belarus and the unrecognized Transnistrian Republic in Moldova, thereby allowing Ukrainian units to be used elsewhere. The deployment of European soldiers could also free up Ukrainian forces currently involved in the protection of critical infrastructure such as power plants and logistics hubs.

Boots on the ground in Ukraine could enhance existing training programs undertaken by Kyiv’s NATO partners. From a practical standpoint, it would certainly make military and economic sense to conduct training inside Ukraine rather than requiring large numbers of Ukrainian troops to travel internationally. The presence of European colleagues would boost morale within the Ukrainian army and demonstrate solidarity.

Crucially, a European military presence in Ukraine would undermine Russian efforts to prevent progress toward the implementation of credible security guarantees. While US officials have endorsed the concept of an assurance force to safeguard any peace deal, this is currently recognized as being conditional on Russian permission. However, Putin will not agree to any measures that rule out the possibility of further Russian gains. Deploying troops would send a signal that Moscow cannot define the debate over security guarantees.

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Critics will argue that any decision to deploy European troops to Ukraine would provoke Russia and lead to escalation. Kremlin officials are well aware of these concerns and have frequently warned that any Western military contingent in Ukraine would be legitimate targets. At the same time, the price of continued inaction may be Russian victory in Ukraine or a Kremlin-friendly peace that would leave European security in jeopardy for years to come.

Past experience strongly suggests that calling Putin’s bluff is the right strategy to adopt. Since launching the full-scale invasion of Ukraine almost four years ago, the Kremlin dictator has repeatedly announced red lines and warned of serious consequences, only to subsequently back down when confronted with a resolute response. Previous Russian red lines have included the supply of various categories of military aid to Ukraine, along with the use of long-range Western weapons inside Russia. On each occasion, Putin’s threats have proved to be empty.

Any move to place European forces in Ukraine would involve significant risks, but failure to act would risk leaving Europe sidelined and irrelevant. If European leaders want to secure a place at the negotiating table and avoid finding themselves on the menu, they must assert their agency. This can be achieved by demonstrating to the Kremlin that Russia does not have a veto over security guarantees for Ukraine.

Dr. Iulian Romanyshyn is a senior fellow and lecturer at the Center for Advanced Security, Strategic and Integration Studies (CASSIS) at the University of Bonn.

The United States “is imposing tariffs on Europe, threatening our territorial interests, and making clear for the first time that it sees European political fragmentation in its interests,” he said. “We face a China that controls critical nodes in global supply chains and is willing to exploit that leverage, flooding markets, withholding critical inputs, forcing others to bear the cost of its own imbalances. This is a future in which Europe risks becoming subordinated, divided, and de-industrialized at once. And a Europe that cannot defend its interests will not preserve its values for long.”

Draghi’s speech, delivered on Monday at the Belgian university KU Leuven, builds upon Canadian Prime Minister Mark Carney’s address to the World Economic Forum in Davos last month. Carney called upon “middle powers” to unite in confronting a “rupture” in the international rules-based order, which he argued is being replaced by great power rivalry where the United States and China wield economic leverage as a tool for coercion.

The contrast with Canada, Draghi seemed to be saying, is that Europe has the wherewithal to become a great power. “Of all those now caught between the United States and China,” Draghi said, “Europeans alone have the option to become a genuine power themselves. So, we must decide. Do we remain merely a large market, subject to the priorities of others? Or do we take the steps necessary to become one power?”

Saving the euro

The role of European oracle is familiar for Draghi. The last time Europe faced an existential threat, he also stepped forward with a megaphone—though in that case it was to take on an economic threat rather than a geopolitical one.

In July 2012, the eurozone debt crisis threatened to unravel the European currency union that had come into being in 1999. Borrowing costs soared for Spain and Italy, amid growing fears that a disorderly Greek exit from the currency union would undermine market confidence in the euro’s survival. Then ECB President Draghi delivered a landmark speech on July 26 in London, pledging that he was ready to do “whatever it takes to preserve the euro.” It was a historic declaration from Europe’s central banker that the European Union was ready to rise to the economic challenge it was confronting as a sovereign monetary power, even if its political and security structures were far less advanced. Markets believed him, and the euro survived.

Fourteen years later, and no longer in a leadership role, Draghi again delivered a clarion call only a former leader of his stature can muster. His warning: Europe lacks the institutional wiring to rise to the geopolitical and geoeconomic challenges posed by the United States and China. It must either federalize itself or bear the consequences of not doing so. The US-led, post-Cold War order that sheltered Europe—with American security guarantees and relatively open trade—is eroding. Russia is threatening European security, and China is undermining Europe’s manufacturing base. The United States, for the moment, has grown more transactional.

Draghi provided his audience with plenty of evidence of European potential. As of 2023 the European Union was the world’s largest exporter and importer of goods and services, and the largest trading partner for more than seventy countries. It makes half the world’s commercial aircraft and 100 percent of the ultraviolet lithography required to produce advanced semiconductor chips.

Wielding Europe’s power

That said, added Draghi, “Power requires Europe to move from confederation to federation.” Where Europe has come together on trade, competition, the single market, and monetary policy, it negotiates and is respected as a power. Its newest trade deals with South America and India underscore its global heft. Where Europe hasn’t come together—on defense, foreign policy, and industrial policy—it is “treated as a loose assembly of middle-sized states to be divided and dealt with accordingly,” Draghi observed.

As an example of this power in action, Draghi referenced the recent showdown over Greenland, in which US President Donald Trump backed down from his threats to take the island. “The decision to resist rather than accommodate required Europe to carry out a genuine strategic assessment, to map our leverage, identify our tools, and think through the consequences of escalation,” Draghi said. “And by standing together in the face of a direct threat, Europeans discovered a solidarity that had previously seemed out of reach.”

The stated mission of the Atlantic Council, which I lead, is to “shape the global future together” alongside partners and allies. It’s a role I still believe most Americans embrace—even if it is now accompanied by a tougher cost-benefit analysis. Leading the global order has involved costs for the United States but also shared gains and benefits, not least of which have included, as Draghi argued, the dollar as a reserve currency and “unquestioned influence in all domains.”

At the same time, Draghi joins a growing chorus of European intellectuals who are not willing to bet their future on nostalgia about the country whose security embrace over the last eighty years allowed them to develop as an economic union, even as Europe has remained politically fragmented. “The old divisions that paralyzed us have been overtaken by a common threat,” he said. “As we act together, we will rediscover something that has long been dormant: our pride, our self-confidence, our belief in our future.”

Draghi must know that his speech, given as he received an honorary doctorate, won’t have the historic impact of his euro intervention of 2012. Still, he hopes for what he calls a “pragmatic federalism”—one where, as was the case with the euro, states opt in to combine forces on issues such as energy, technology, external policy, and defense. “Some may delude themselves that the world hasn’t really changed,” he said. “We are all in the position of vulnerability, whether we see it yet or not.”

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on X @FredKempe.

This edition is part of Frederick Kempe’s Inflection Points newsletter, a column of dispatches from a world in transition. To receive this newsletter throughout the week, sign up here

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To increase its autonomy, Europe must look to its strengths

Piotr Arak — Mon, 02 Feb 2026 13:44:07 +0000

WARSAW—Speaking at the World Economic Forum in Davos, Switzerland, this past week, European Central Bank President Christine Lagarde said that Europe must “decide what we need to do to be strong by ourselves.” Against the backdrop of renewed transatlantic tensions over trade and the Trump administration’s desire for Greenland, this is a timely and necessary challenge for European leaders. But as the European Union (EU) looks to bolster its self-sufficiency, it is also worth asking: Where does Europe already outperform the United States and China? The answer is neither military power, where fragmentation remains a constraint, nor capital markets, which remain comparatively underdeveloped. But to stop there would be premature.

Too often, Europe is assessed through a narrow macroeconomic lens: economic growth rates, fiscal fragmentation, or the perceived slowness of political decision-making. On these metrics, Europe tends to fare worse than the United States or China. Europe is not built for speed or brute scale. Rather, it is built on a dense export base, technological depth, institutional stability, and economic diversity. As French President Emmanuel Macron put it in Davos: “Having a place like Europe, which sometimes is too slow, for sure, and needs to be reformed, for sure, but which is predictable, loyal, and where you know that the rule of the game is the rule of law, is a good place.”

Whereas the United States dominates frontier technologies and China excels in industrial mass production, Europe leads in the exports of luxury goods, processed agri-foods, and high-end services. Combined with its high levels of wealth and savings, human capital, and the advantages of the European single market, the EU has a solid foundation to build on as it seeks to reduce its dependence on Washington and Beijing.

The world’s largest trading power

Even focusing solely on the EU’s external trade, the bloc remains the largest global trading entity. In 2024, EU exports to nonmember countries reached roughly $4.5 trillion, exceeding both China ($3.6 trillion) and the United States ($3.23 trillion). This includes a surplus of roughly $370 billion, split between goods and services. And preliminary research indicates that over the long run, Europe’s economic output increased even amid the trade tensions with Washington over the past year.

Financial services, engineering, digital solutions, logistics, legal arbitration, and tourism form the backbone of Europe’s “intangible economy.” The United States remains the EU’s top partner in this domain.

In comparison, the United States runs a trade surplus in services and a deficit in goods; China runs a goods surplus and a deficit in services. Europe runs surpluses in both. This balance is not accidental. Rather, it reflects an economic model built around specialization and quality rather than volume. At the same time, Europe’s trade surplus is sure to be affected if Chinese overcapacity is permitted to flood European markets; a possibility Brussels is increasingly vigilant against.

Wealth and savings

Europe’s most underestimated asset is its wealth. European households hold approximately $18.9 trillion in bank deposits, against about $7.9 trillion in household debt. In the United States, household deposits amount to roughly $18.7 trillion, but household debt is far higher than Europe’s, at around $18.6 trillion. A larger share of US household wealth is also heavily exposed to equity markets. In China, wealth is concentrated in real estate and is less liquid due to capital controls. Europe’s savings-heavy model strengthens the bloc’s financial resilience in times of crisis and represents an enormous pool of latent investment potential.

Corporate Europe mirrors this financial conservatism. Leading firms from luxury brands to software companies have accumulated substantial cash buffers. This wealth remains underutilized, largely because Europe still lacks a fully integrated capital markets union. With such a capital markets union in place, Europe’s savings surplus could translate rapidly into higher investment, especially given that euro-area interest rates have historically been lower than in the United States.

Human capital

In higher education, Europe’s strength lies not in a handful of superstar institutions, but in depth and density. While the United States dominates the very top of global rankings and China is rapidly upgrading a small number of elite universities, Europe consistently places more institutions in the global top two hundred and top five hundred than either country. World-class universities are spread across Germany, France, Italy, the Netherlands, the Nordic countries, and Switzerland, forming a continent-wide talent base supported by free movement, public funding, and shared research programs.

This system produces a structural advantage. Europe excels at generating high-skill human capital at scale, with 4.4 million graduates in 2023, comparable to the United States, across engineering, life sciences, economics, and law. These are precisely the fields that underpin its strengths in advanced manufacturing, pharmaceuticals, high-end services, and regulation-intensive industries. Europe’s university network is therefore a quiet but critical pillar of its long-term economic power.

The single market

In terms of nominal gross domestic product (GDP), the EU roughly matches China and trails the United States. But this comparison understates the importance of Europe’s single market, the world’s largest integrated economic space. The EU’s free movement of goods, services, capital, and people across its twenty-seven countries add an estimated 9 percent to the EU’s yearly GDP.

To be sure, the United States is the leader in market capitalization. But while Europe may not produce tech giants like Google, it also produces fewer economic bubbles. And in several critical sectors, Europe is not merely competitive, it is dominant. These sectors include:

Agri-food exports. The EU accounts for 35 percent of processed global agri-food exports (excluding intra-EU trade), leading not in raw commodities but in high-value, branded products protected by geographical indications, such as wine and cheese.
Luxury goods. Roughly 70 percent of the global luxury market is controlled by European firms, forming an economic “fortress” around culture, heritage, and scarcity.
High-end services. Europe exports complex machinery used worldwide and anchors global value chains that depend on trust, expertise, and legal certainty. Companies from the United States, China, and elsewhere use European arbitration institutions (like those in London, Paris, and Geneva) to settle cross-border commercial disputes.

Global supply chains, regulatory frameworks, luxury markets, financial services, and food systems all depend on Europe functioning smoothly. In a world of geopolitical fragmentation, this form of power is not obsolete. Europe does not need to outgrow the United States or outproduce China to matter. It already shapes how the global economy works.

The challenge for Europe in the coming decade is not to imitate the United States’ and China’s turns to protectionist policies, but to mobilize its own strengths. This means translating its savings into investments, deploying “dry powder” in private equity, and increasing corporate investment rates. This also means defending the single market from protectionist threats and the excessive use of state aid. And Europe must continue to sell goods and services globally, including through new agreements with Mercosur and India. If it does, Europe’s quiet power may prove more durable than the louder models of its rivals.

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Drone superpower Ukraine can teach Europe how to defend itself

Lesia Orobets — Fri, 30 Jan 2026 22:54:12 +0000

Ever since US President Donald Trump returned to the White House just over a year ago, it has become increasingly apparent that the world is now entering a new and unpredictable era of international relations. For Europe, this has meant coming to terms with the idea that continued US military support can no longer be taken for granted. After decades of outsourcing their security to the Americans, Europeans must once again learn to defend themselves.

Throughout the past twelve months, there has been much talk in European capitals of wake-up calls but relatively little actual action. While many European countries have vowed to dramatically increase defense spending, the debate over a new European security architecture still lacks a sense of urgency and remains hampered by competing national interests.

One of the few things that a majority of European policymakers appear to agree on is the importance of Ukraine in the continent’s emerging security strategy. This recognition of Ukraine’s role underlines the scale of the changes that have taken place over the past four years.

When Russia’s full-scale invasion first began in February 2022, Ukraine was heavily reliant on Western military aid as the country fought for survival. Since those early days, the Ukrainian army has expanded dramatically and evolved into the largest and most experienced fighting force in Europe. As a result of this transformation, a country that many had previously dismissed as a minor military player is now widely regarded as indispensable for the future defense of Europe.

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Ukraine’s potential to shape Europe’s new security architecture is most immediately obvious in the field of drone warfare. The Russian invasion of Ukraine is widely acknowledged as the world’s first full-scale drone war, with huge quantities of drones dominating the battlefield and operating deep inside enemy territory. Over the past four years, Ukraine has established itself as a “drone superpower” with an annual output of around four million drones, Bloomberg reported in November 2025.

Western security experts are no doubt acutely aware that alongside Ukraine, the two other nations currently driving the international development of drone warfare are Russia and China. This underlines Kyiv’s strategic importance as the democratic world adjusts to the challenges posed by an emerging alliance of authoritarian powers centered on Moscow and Beijing.

A growing number of US and EU defense companies have already sought to establish a presence in Ukraine in order to capitalize on the country’s technological expertize. This approach is understandable but may be shortsighted. In reality, Ukraine’s value extends far beyond access to existing military drone technologies.

Since 2022, Ukrainian drone developers and military units specializing in unmanned operations have learned to solve problems and adapt to new battlefield realities at lightning speed. Out of necessity, they have become accustomed to upgrading individual drone models and counter-drone systems within ever-decreasing innovation cycles that can now be measured in weeks.

Ukrainian forces have pioneered the use of combat drones on the front lines of the war. The country has also led the way at sea, with Ukrainian naval drones sinking multiple Russian warships and forcing Putin to withdraw the bulk of his remaining fleet from occupied Crimea to the relative safety of Russia itself. Meanwhile, long-range Ukrainian drones now routinely strike targets deep inside Russia. This Ukrainian success can serve as the foundation for a wider European security strategy as the world moves into a new era of drone-based warfare.

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Ukraine’s most immediate contribution to European security is likely to be in terms of helping countries defend against the mounting threat posed by Russian drones. The Kremlin’s current harassing activities around airports and other strategic sites across Europe are essentially an annoyance, but even such small-scale drone operations have exposed an alarming lack of readiness. At present, it seems safe to say that the continent as a whole is utterly unprepared for the kind of large-scale Russian drone attacks that have become a routine feature of the war in Ukraine.

Europe has responded to escalating Russian drone activity by developing plans to establish a “drone wall” along the continent’s exposed eastern flank. So far, however, this initiative remains somewhat fragmented with no unified concept or central coordination. While a collective response could eventually prove effective, pursuing this goal without learning from Ukraine’s unique experience makes little sense. Only Kyiv has the data and insights necessary to build layered defensive networks capable of combating waves of Russian drones.

In recent months, a growing number of European countries have taken the practical step of seeking to tap into Ukraine’s drone warfare prowess by working with Ukrainian trainers or establishing joint production initiatives. “Ukraine’s experience is the most relevant in Europe right now. Our specialists and technologies can become a key element of the future European drone wall, a large-scale project that will ensure safety in the skies,” Ukrainian President Volodymyr Zelenskyy commented in September 2025.

In addition to drone tactics and technologies, Ukraine can also offer its European partners an unrivaled environment for drone operator training and weapons development. The whole of Ukraine is now a vast drone warfare laboratory where novel threats are identified and addressed on a daily basis. As a result, new drone models and upgraded designs can move from the drawing board to the battlefield at a pace that is unheard of in peacetime Europe.

Drone warfare is just one of the many areas where Europe can learn from Ukraine. As European leaders explore new security strategies in a rapidly shifting geopolitical environment, it should be abundantly clear that Kyiv has a crucial role to play. No other European country has such a battle-hardened army or intimate knowledge of modern warfare. In an increasingly unpredictable world, that makes Ukraine a vital partner.

Lesia Orobets is the founder of the Price of Freedom air defense initiative and a former member of the Ukrainian parliament.

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Ukraine changes tone on Belarus and engages exiled opposition

Hanna Liubakova — Thu, 29 Jan 2026 22:05:12 +0000

Ukrainian President Volodymyr Zelenskyy held his first official meeting with exiled Belarusian opposition leader Sviatlana Tsikhanouskaya last weekend during a visit to Vilnius. Their meeting was the latest indication of a significant policy shift underway in Ukraine toward the country’s northern neighbor that could have implications for the wider region.

For years, Zelenskyy had kept the Belarusian democratic opposition at arm’s length as part of Ukrainian efforts to avoid angering Belarusian dictator Alyaksandr Lukashenka and pushing him further toward the Kremlin. That approach has brought few benefits. Ukraine now appears to have recognized that a new strategy to bilateral relations may be more appropriate.

Sunday’s meeting did not come as a complete surprise. Days earlier in Davos, Zelenskyy had identified Belarus’s 2020 pro-democracy protests as a turning point for the region and a missed opportunity for Europe. The Ukrainian leader argued that the democratic world made a mistake by failing to support nationwide protests in Belarus. As a result, the country now poses a threat to all Europe and serves as a forward base for Russia’s hybrid war against the West.

During his recent visit to Lithuania, Zelenskyy addressed the Belarusian population directly and expressed his support for their European future. He also met with recently released Belarusian political prisoners and paid tribute to Belarusian volunteers serving alongside Ukrainian forces in the fight against Russia’s invasion.

Ukrainian officials have recently made clear that Lukashenka and his regime must be held accountable for complicity in Russia’s aggression. Meanwhile, in a further indication that Ukraine is moving toward more systemic engagement with the Belarusian democratic opposition, plans have emerged to potentially appoint a special envoy and host Tsikhanouskaya in Kyiv.

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Some analysts believe this recent change in tone toward Belarus may reflect the growing influence of former Ukrainian spymaster Kyrylo Budanov, who was recently appointed as President Zelenskyy’s new chief of staff. Budanov has long been involved in contacts with the Belarusian side and helped facilitate the transfer of released political prisoners to Ukraine in December 2025.

Kyiv’s apparent pivot may also reflect the fact that Russia’s military footprint in Belarus continues to grow. Ukrainian officials claim Russia uses Belarus to conduct drone attacks on Ukraine and evade air defenses. Lukashenka recently announced the deployment of nuclear-capable Russian Oreshnik missiles to Belarus, which Zelenskyy described as a threat to both Ukraine and the European Union.

Meanwhile, Russia’s integration of the Belarusian military industrial complex continues, with up to 80 percent of Belarusian enterprises reportedly now engaged in production for Russia’s military needs. Belarus is accused of supplying ammunition, providing repair services for Russian equipment, and channeling sanctioned technology to Russian defense companies.

Lukashenka is understandably eager to distance himself from any direct ties to the Russian invasion of Ukraine. However, the available evidence indicates that his regime is becoming more deeply embedded in the Kremlin war effort. This is the reality confronting the Ukrainian authorities. As long as Belarus remains firmly under Kremlin control, it will continue to pose a serious security threat along Ukraine’s northern border.

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Europe should be paying particular attention to indications of a new Ukrainian approach to Belarus. As US foreign policy priorities shift, responsibility for managing relations between Belarus and the West will increasingly fall on the European Union. EU officials must decide between freezing the Belarus issue or recognizing the country as a strategic challenge that requires European leadership.

Belarus has most recently made headlines due to a series of prisoner releases tied to partial US sanctions relief. The humanitarian impact of these deals should not be underestimated, but it is also important to underline that more than one thousand Belarusian political prisoners remain incarcerated. Some skeptics have argued that without a broader strategy, reducing sanctions pressure on Minsk in exchange for prisoner releases risks strengthening the current regime and reinforcing an oppressive system that imprisons political opponents.

This presents opportunities for Europe to demonstrate its ability to take the lead on the international stage. While the US seeks practical short-term results such as the release of political prisoners, Europe can push for more systemic change and democratic transition in Belarus. In this context, sanctions should be seen as a tool to undermine authoritarian rule rather than locking in the current status quo. This can be achieved by closing existing loopholes while targeting the revenue streams and logistical networks that sustain the Lukashenka regime and support the Russian war machine.

In the current geopolitical climate, any talk of a neutral Belarus is delusional. Lukashenka will not turn away from his patrons in the Kremlin voluntarily. If European policymakers wish to see genuine change in Belarus, they will need to demonstrate a readiness to increase the pressure on Minsk. The enticing prospect of future European integration can play a crucial role in these efforts.

Belarus now occupies a strategic position in Europe’s rapidly shifting security landscape. The country remains deeply involved in Russia’s invasion of Ukraine and also represents a key challenge for European leaders as they seek to prove that the continent is capable of defending itself in an era when US support can no longer be taken for granted. The Ukrainian authorities clearly feel the time is right for a more proactive approach to Belarus. The question now is whether Europe will follow suit.

Hanna Liubakova is a journalist from Belarus and nonresident senior fellow at the Atlantic Council.

Michael Kugelman, senior fellow for South Asia at the Atlantic Council, adds, “With all the strain and uncertainty that characterize India’s ties with Washington, the EU is a logical space to embrace.” Kugelman points to shared EU-Indian interests, including the need to counterbalance China, and the fact that France and Germany are already among India’s leading trade partners.

The deal—covering trade, investment, digital rules, supply chains, climate standards, and technology—also reflects a shared EU-India conclusion: the United States may still be an indispensable economic and political partner for both of them, but it has at the same time become an increasingly unpredictable one. Both sides, for now, have given up on the notion that Washington can anchor the global trading system. It was time to look hard for alternatives.

Together, the EU and India are building something that looks less like old globalization and more like what comes next: large, values-adjacent economies knitting themselves together to hedge against volatility from all sides—China’s product-dumping scale, the United States’ tariff-tinged uncertainties, and, from Europe’s side, Russia’s geopolitical volatility.

What makes this moment an inflection point is that the gravitational center of global trade architecture, once greatly determined by the United States and its democratic allies, is shifting, but where it lands is uncertain. Today, the United States talks more about deal leverage than global leadership. Europe and India are adapting, having learned that excessive dependence invites risk and diversification breeds resilience.

The Atlantic Council’s Mark Linscott, who served as assistant US trade representative for South and Central Asian Affairs, scoffs at talk about the “mother of all trade deals” as hyperbolic. “The results are incomplete and will require follow-up action,” he writes, noting that both sides set aside the most complicated issues to close the deal in time for von der Leyen’s visit on India’s Republic Day this week. His analysis is worth reading.

Still, concludes Linscott, “When two of the biggest economies of the world agree to eliminate a significant proportion of their trade barriers . . . governments and stakeholders around the world should take notice.”

No one should take more notice than Trump, whose tariffs on Europe and India without any doubt have been the accelerator for this deal. It’s time to start tallying up the unintended consequences of Trump’s trade policies, and whether the result will be more or less American influence and revenues globally.

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on X @FredKempe.

This edition is part of Frederick Kempe’s Inflection Points newsletter, a column of dispatches from a world in transition. To receive this newsletter throughout the week, sign up here.

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The India–EU trade deal is worth watching, but not overhyping

Mark Linscott — Tue, 27 Jan 2026 20:51:03 +0000

WASHINGTON—References to the “mother of all deals” are a clear case of political hyperbole, but there should be no doubt that the India–European Union (EU) free trade agreement (FTA) warrants attention. When two of the biggest economies in the world agree to eliminate a significant proportion of their trade barriers, particularly at a time when almost any trade deal captures news headlines, governments and stakeholders around the world should take notice.

The EU and India have been at this negotiation for roughly two decades, although with several long pauses. This negotiating duration is the clearest indicator of how complex and difficult it was to conclude this agreement. The United States and the EU have their own failed experiment in the form of the Transatlantic Trade and Investment Partnership (TTIP), which collapsed after several years of negotiations during the Obama administration.

But observers also shouldn’t rush to conclusions about the deal redirecting global trade, speeding up economic integration, or jump-starting economic growth. In the end, the India–EU FTA may have only a modest impact using all these yardsticks.

More to follow

First things first: The results are incomplete and will require follow-up action. Many of the early press reports breezily skip through this reality. As forecast by both sides in the closing months of negotiations, there will be unfinished business to attend to soon after the signing ink is dry. It’s always the most sensitive issues that take the longest, and India and the EU have conveniently set some of these aside in the rush to conclude an agreement in time for the bilateral summit and European Commission President Ursula von der Leyen’s visit on India’s Republic Day.

For example, there are likely to be follow-up negotiations on agriculture, intellectual property rights, and the EU’s Carbon Border Adjustment Mechanism, among other issues. That said, the fact that there is unfinished business should not diminish the accomplishment of reaching agreement on preferential tariff schedules and a large number of detailed rules chapters, such as Technical Barriers to Trade.

Additionally, each trading partner must jump through domestic approval hoops. In the case of the EU, that involves obtaining a “qualified majority” (essentially, a double majority of member states and the represented population) through the Council of the European Union and separate approval from the European Parliament.

Acknowledging the limits

The India–EU FTA will not significantly alter existing supply chains, although it can make the India–EU ones more resilient. Nor is it likely to result in trade diversion from other major trading partners. Although the FTA will include a number of new disciplines for persistent and difficult non-tariff barriers, the headline numbers from the announcement will be tariff reductions on both sides. In fact, EU tariffs are already low in general, and the benefits to India in those sectors where EU tariffs are high may be offset by the EU’s action earlier this month to eliminate preferential treatment for India under its Generalized System of Preferences (GSP) program. For example, the GSP program kept India competitive with the likes of Bangladesh in the EU market for textiles and apparel. Now, the FTA may simply replace a low GSP tariff with a new bilateral FTA tariff.

For the EU, its benefits from tariff reductions are likely to emerge slowly, and transition periods for tariff reductions suggest that there will not be immediate substantial increases in exports. That said, an FTA provides a degree of certainty, stability, and predictability in market access that is absent with no trade agreement in place. Existing supply chains between the EU and India can be reinforced in the short term and even grow over the longer term.

The view from Washington

While the agreement may be interpreted as a response to the Trump administration’s tariffs and tariff threats, there is no reason it should undermine the US trade relationships with either the EU or India. Indian and EU trade negotiators have been pushed to their limits by the agendas of political leaders and responded impressively, even in orchestrating work-arounds in areas, such as geographical indications and sustainability commitments, that have long been part of the immutable template for EU FTAs with other countries.

No doubt, journalists and many other commentators will pronounce cause and effect between the Trump administration’s tariffs and the India-EU FTA, but the history of the negotiation suggests otherwise. The current push to the finish line actually began during the Biden administration. While the Trump administration’s predictable unpredictability on tariffs has been important context for the accelerated timetable, the EU and India have long understood the economic and strategic value of striking a substantial trade deal between the two of them.

The EU–India deal could even light a fire under efforts to conclude a US–India trade deal and help to move negotiations forward on a comprehensive bilateral trade agreement, as US President Donald Trump and Indian Prime Minister Narendra Modi discussed last year.

Time will tell how consequential this FTA will be. It seems unlikely that it will be as transformational as the US-Mexico-Canada Agreement and its predecessor, the North American Free Trade Agreement. However, that does not mean it won’t eventually be viewed as a game changer as the rules-based order, in the form of the World Trade Organization, continues to decline in relevance and new structures emerge to fill the vacuum.

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The EU and India are creating a free trade area of two billion people. What’s next?

Atlantic Council experts — Tue, 27 Jan 2026 18:37:19 +0000

The superlative description—“the mother of all deals”—is unmistakably Trumpian, but it didn’t involve the United States. On Tuesday, Indian and the European Union (EU) leaders announced the completion of a major trade deal. “We have created a free trade zone of two billion people, with both sides set to benefit,” European Commission President Ursula von der Leyen said in a statement that also included the description above. “It represents 25 percent of the global [gross domestic product] and one-third of global trade,” Indian Prime Minister Narendra Modi added. Below, Atlantic Council experts answer five pressing questions about this big agreement.

Why is this deal happening now?

The EU-India trade deal is part of the European Commission’s diversification strategy, which is a direct response to increasing pressures from the United States and China on the global trading system. The turmoil caused by the Trump administration’s tariff policies and China’s unfair trade practices have clearly sharpened minds, increased flexibility, and accelerated both sides’ push to come to a deal after years of stalled negotiations.

—Jörn Fleck is the senior director of the Atlantic Council’s Europe Center. He previously served as chief of staff for a British member of the European Parliament.

***

This deal has been in negotiations, with pauses, for almost twenty years, and there have been several pushes to complete it. So, the agreement is not entirely a response to the Trump administration’s tariffs and trade threats. But clearly, they provided the immediate impetus to get it done now, so that both countries can diversify their trade relationships in response to uncertainty, if not antagonism, from the United States.

The deal will not be entirely easy sledding, since there remain difficult areas to work out, including agricultural market access, geographical indications, and the EU’s Carbon Border Adjustment Mechanism (CBAM). Each side still also has domestic legal processes to complete. Getting major trade deals through the European Parliament has proven challenging, most recently with respect to the bloc’s trade deal with Mercosur. The full story is not yet over.

Still, free trade agreements (FTAs) are difficult to negotiate, and the parties are to be commended for getting this one done.

—L. Daniel Mullaney is a nonresident senior fellow with the Atlantic Council’s Europe Center and GeoEconomics Center. He previously served as assistant US trade representative for Europe and the Middle East in the Office of the United States Trade Representative.

***

The real question is: Why didn’t it happen earlier? The two sides have been at it for roughly two decades, and they’ve seen trade negotiators come and go during that period. The latest sprint to the finish actually started during the Biden administration. My take is that both sides have been motivated at top levels in recent years for a host of geopolitical and economic reasons, and the politicians pushed their negotiators to get it done, even if it meant cutting some corners. In the end, it’s truly a consequential FTA, even if I wouldn’t describe it as the “mother of all deals!”

—Mark Linscott is an Atlantic Council nonresident senior fellow on India. He previously served as the assistant US trade representative for South and Central Asian Affairs.

What impact will this have on Europe?

The EU-India trade is first and foremost a strategic win for both partners, having come under increased US and Chinese pressure. The European Commission can clock another political win in its trade diversification strategy, while the Modi government can add to leverage against the US president’s 50 percent tariff punishment.

Economically, the deal will have a modest impact at first. India accounted for only 2.4 percent of EU total goods trade in 2024, small change compared to the US share of 17.3 percent or China’s 14.6 percent. But Brussels hopes to double that piece of the trade pie over the next seven years of implementation, and India agreed to greater tariff reductions than many expected.

India is not only seen as an important growth market for European sectors from autos to machinery and chemicals. Europe also sees the potential in building the softer connective tissue between the combined markets of two billion consumers. Brussels and Delhi are expected to agree to a framework affording greater access to Indian labor and expertise from healthcare to information technology services. European universities are keen to ride recent trendlines and attract more Indian students in science, technology, engineering, and mathematics. And intensifying defense tech and broader technology cooperation with India could reap not just economic but geopolitical benefits for Europe.

—Jörn Fleck

What impact will this have on India?

The deal highlights two significant recent trends in Indian foreign policy. The first is New Delhi’s ongoing push for more trade deals, as India looks to shed its image as an overly protectionist economy. India has signed a series of trade accords in recent years, including with some non-EU European states.

Second, the deal reflects an Indian inclination—at least for now—to pull back from the United States and push more toward Europe. With all the strain and uncertainty that characterize India’s ties with Washington, the EU is a logical space to embrace. They have a wealth of shared interests—from increasing trade to countering China—and the EU includes some of India’s closest partners, including France and Germany. These strong convergences can overcome areas of divergence—from relations with Russia to differences over intellectual property. In effect, this FTA could constitute the opening salvo of an Indian play to broaden its ties with one of its closest commercial and strategic partners, with the United States left on the outside looking in.

—Michael Kugelman is a resident senior fellow for South Asia at the Atlantic Council.

***

India is likely to benefit more concretely in the immediate term, when it starts to see increases in exports, particularly in labor-intensive industries, which were the Indian priority for cementing this deal. However, India just recently lost certain preferential tariff benefits under the EU’s Generalized System of Preferences (GSP) program, which affected important sectors, such as textiles and apparel. The FTA, then, may just substitute new low tariffs to replace the previous GSP ones.

—Mark Linscott

What additional geopolitical implications are there?

The geopolitical consequences of the EU-India free trade deal extend well past economics. During the Cold War, India led an initiative to create a “nonaligned movement” that refused to choose sides between the United States and the Soviet Union. In Davos last week, Canadian Prime Minister Carney sought to revive a similar coalition of “middle powers” that seek to strike pragmatic economic and political alliances with a range of strategic rivals to the United States, starting with China. The EU-India deal fits well within this geopolitical tradition.

It is not clear whether the strategy will succeed. Whether for climate-related reasons (through the CBAM) or for geopolitical responses (through tightening economic sanctions), Europe will likely be just as dedicated as the United States is to weaning India off of Russian oil purchases. The trade deal announced this week suggests that the EU strategy will be to reward climate-friendly initiatives that increase India’s already significant shift to support rooftop solar and electric vehicles, rather than penalize India as the United States has done.

If the positive economic incentives in the trade deal succeed in reducing India’s dependence on Russian oil, it will likely come at a cost: increased dependence on China to supply solar panels and other renewable energy equipment. Thus, over the medium term, the EU trade deal could benefit China and its export-led economy, potentially at the expense of US strategic interests in the Indo-Pacific region.

—Barbara C. Matthews is a nonresident senior fellow at the GeoEconomics Center. She previously served as the first US Treasury attaché to the European Union.

What should the US take away from this deal?

This deal is very consequential, a meaningful destination after a long road, and it will give both Europe and India confidence in their ability to deepen their trade integration outside of the United States.

The United States should similarly take note of the impact of its policies on trading partners’ willingness and ability to deepen their ties with each other. Long term, this will ultimately reduce their reliance on the United States and diminish US leverage in negotiations. But there are also shorter-term consequences for the United States. This is especially true in some areas, like geographical indications, where EU agreements may have a negative impact on the United States’ ability to sell agricultural products abroad using their common names. Additionally, deals that align regulations, such as the EU’s agreement with the United Kingdom, can effectively export EU regulatory barriers to its trading partners.

—L. Daniel Mullaney

***

The United States should not see this agreement as a threat. It’s consequential but not a dramatic game changer—at least not yet. A more important takeaway is that big deals can be done with India as long as there’s some flexibility to accommodate New Delhi’s political sensitivities. India is a democracy, and what voters think about its trade agreements matters. This deal can also provide new momentum to US and Indian negotiators to get their deal done. They really are very close, and the stakes are high.

—Mark Linscott

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Time matters: Why Europe needs Ukrainian defense innovation

Oleksiy Honcharuk — Mon, 26 Jan 2026 18:06:42 +0000

KYIV—In an age of global instability, the most important dimension is time. In Davos and throughout the continent in recent weeks, European leaders have spoken of the need for a common defense strategy. As European nations work to make this a reality, building joint investment processes in defense technology between Ukraine and the European Union (EU) is not merely desirable—it is strategically indispensable.

Europe is undergoing the deepest security reappraisal in the history of the EU. Since 2022, the continent has shed its illusions about a “stable order” and shifted into a phase of rapid rearmament. Over the past year alone, the EU has approved multiyear defense funds worth tens of billions of euros, launched new mechanisms for joint procurement and, for the first time, begun a serious conversation about defense autonomy.

This is hardly surprising: the United States continues to remind Europeans that they must be able to shoulder the burden of their own defense and rely on their own capabilities rather than await salvation from across the Atlantic. The question now is how Europeans can best accomplish this.

Europe is accelerating its defense industry but running into structural problems

Europe continues to be one of the key technological centers of the global defense industry and is actively investing in military innovation. The continent hosts both traditional defense giants and a new generation of defense-tech companies and start-ups. European states are investing in unmanned systems, cybersecurity, air and missile defense, space and sensor technologies, and artificial intelligence (AI)-driven military applications. The European Union also remains one of the world’s largest arms exporters—reaching sixty billion euros in 2024—underscoring the bloc’s industrial capacity and technological depth.

At the same time, several structural problems continue to hinder the development of Europe’s defense industry and its ability to meet new challenges. Three stand out in particular:

Spending gaps. Against the backdrop of constrained credit and fiscal rules, EU member states together spend roughly half as much on defense as the United States does. At the same time, moving toward spending 5 percent of gross domestic product on defense would represent a genuinely revolutionary shift for Europe. A series of statements by European leaders in 2025 have made it increasingly clear that such a change in approach is becoming politically unavoidable. Securing funding is, in effect, Europe’s primary political homework assignment.
Fragmentation of production, technologies, standards, and procurement. In his 2024 report on European competitiveness, former European Central Bank President Mario Draghi highlighted one of the EU’s core strategic weaknesses: fragmentation. By preserving the sovereignty and autonomy of member states, the EU has produced a kaleidoscope of defense approaches. Member states operate under different procurement policies and lack unified standards. This problem can’t be solved by simply increasing spending. Without common policies and standardization, Europe risks achieving lower levels of efficiency compared with other major military powers even with nominally comparable levels of expenditure.
Heavy dependence on foreign suppliers, especially the United States. As Draghi noted in his report, “The choice to procure from the US may be justified in some cases because the EU does not have some products in its catalogue, but in many other cases a European equivalent exists, or could be rapidly made available by the European defence industry.” This dependence constrains Europe’s strategic autonomy, and it slows the development of its own industrial and technological base.

Europe’s rearmament will cost hundreds of billions of euros. Yet the critical question is not only how much money is spent or what is bought today or tomorrow. What matters most is the speed of the defense-industrial system whose development these funds are intended to support.

What is missing? Speed.

Europe still lacks an adequate answer to Russia’s drone technologies, honed through years of war. In September 2025, the intrusion of nineteen Russian drones into NATO airspace forced the scrambling of F-35 fighter jets to shoot them down, an absurdly expensive response. When unidentified drones disrupt air traffic around European capitals, nobody is certain how to react. Inevitably, attention turns east—to Ukraine, which has learned to survive in a modern drone war, repel incursions of more than seven hundred airborne targets in a single night, and strike back. All this has been achieved through military innovation. As Danish Prime Minister Mette Frederiksen said in October 2025, “The only expert right now in the world when it comes to anti-drone capacities is Ukraine, because they are fighting the Russian drones almost every day.”

Many now argue that Ukrainian unmanned technologies are precisely what Europe needs—and could become the continent’s trump card in its hybrid confrontation with Russia. “Ukraine is already helping us and teaching us how to fight the wars of tomorrow. Ukrainian drones destroy 80 percent of targets on the ground,” said Andrius Kubilius, the EU’s defense commissioner, at the Conference on Ukraine’s European Future in November 2025.

Ukraine is often described as a drone superpower: It produces four million drones a year (the United States makes less than one hundred thousand a year), fields hundreds of systems and models, and has logged thousands of confirmed drone strikes on Russian targets. With drones, Ukraine has crippled Russia’s Black Sea Fleet, damaged its strategic aviation, and now threatens one of the foundations of Russia’s power: its oil infrastructure. The low cost of Ukrainian drone technology compared with conventional weaponry greatly impresses political leaders who must approve defense budgets. But the real issue runs deeper.

Defense technologies are constantly evolving: No matter what new weapons appear on the battlefield, none of them remains decisive for long. Within months, adversaries develop countermeasures—new tactics, new technologies. Wars are won not by those with the largest arsenals or the most soldiers but by those who win this race. Europe’s true strategic problem is slowness. The main thing Europe can learn from Ukraine’s defense sector is speed.

At the strategic level, Europe can win any war or technological race—if it buys itself a faster engine.

The Ukrainian precedent: Frontline research and development as a model

This is the first war in which dual-use products—such as agricultural drones and open-source software platforms—are often more lethal than conventional weapons. It has also made one thing clear: Preparation for war must involve not only professional armies, but the entire nation. During the war, millions of civilians joined in the defense of Ukraine, bringing their own approaches and fundamentally transforming the process of developing defense innovations.

Drone production in Ukraine resembles a vast open-source frontline research and development lab. Volunteers, private firms, military units and government agencies all test, iterate, and refine designs on a weekly basis. Strike videos circulate on social media; experts debate performance; thousands of chats buzz with feedback; ideas are exchanged in kitchens, workshops, and smoking areas. This may appear absurd from the perspective of traditional military rules and procedures, but it works.

There are almost no examples of drones built by defense giants remaining effective on the battlefield for long. The reason is the slow pace of adaptation and evolution. Ukrainian drones also do not last long on the battlefield—but the best of them evolve faster than the adversary can adapt to them.

No wonder NATO Secretary General Mark Rutte remarked in October 2025 that Ukraine is “a powerhouse when it comes to innovation, insights, for example, when it comes to anti-drone technology [and] anti-cyber threats.”

European militaries do not operate this way. Yet Europe possesses a strategic advantage of its own—one it can put to powerful use.

Europe’s slow money and Ukraine’s speed

Ukraine and Europe have opposite superpowers.

Europe is slow but has cheap, long-term capital. Slowness is, in fact, a form of trust: Investors know the rules will not change and their rights will be protected. This is precisely what Ukraine has long lacked.
Ukraine is fast and unpredictable, but its capital is always expensive. Speed means risk, which means a high cost of capital.

Combining Europe’s capital with Ukraine’s speed and innovation would create a unique dynamic.

Investment is not merely capital; it is a way to synchronize Europe’s pace with Ukraine’s school of fast-evolving combat systems.

Europe’s future hinges on integrating Ukraine into its defense ecosystem

Europe has entered an era of rapid military evolution. Ukraine is the country of the free world that best understands what modern war looks like. This is why European Commission President Ursula von der Leyen now speaks of a new drone alliance between Ukraine and Europe. “Before the war, Ukraine had no drones. Today, Ukrainian drones are responsible for over 23 percent of Russian equipment losses, highlighting the impact of human ingenuity in open societies,” she said in September 2025.

Europe is already entering a phase of practically implementing Ukrainian defense technologies and more closely cooperating with Ukrainian defense-tech companies. This is reflected both in joint manufacturing projects and in the integration of Ukrainian solutions into European rearmament programs—from cooperation on unmanned systems and counter-drone technologies to the creation of joint research and development teams. Notable examples include initiatives to establish joint ventures with Ukrainian manufacturers, as well as growing interest from European defense-tech players in Ukraine’s combat-tested experience with AI- and network-centric solutions.

The process has already begun. Many announcements have been made about joint investments and co-development of unmanned systems between European and Ukrainian firms. More will follow. It is part of a broader shared strategy.

If Europe and Ukraine carry this strategy through, the continent will at last acquire genuine defense autonomy, making it capable of withstanding any threat.

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At Davos, Trump’s ‘shock therapy’ leaves Europe shaken but healthier

Frederick Kempe — Sun, 25 Jan 2026 12:00:00 +0000

A senior European official, who was in Davos this past week for the World Economic Forum, refers to US President Donald Trump’s approach to Europe as “shock therapy.” After enduring several tough doses in the first year of Trump’s second term—on Ukraine, on tariffs, on Europe’s so-called “civilizational erasure,” and then on Greenland—the patient’s condition is shaken, the official says. But it is stronger.

I asked this European official for further explanation. Shock therapy, after all, is more commonly a description of electrical currents treating mental illness than a theory of international affairs. In the context of European-US relations in 2025 and 2026, he said, shock therapy refers to the “rapid, disruptive, and painful transitions” forced on Europe by Trumpian jolts to the traditional transatlantic security and trade partnership.

Europe isn’t enjoying the treatment, he said, but it is responding to it—more consequentially with every shock. Europeans have long spoken somewhat helplessly about the chronic conditions they suffer: a lack of economic competitiveness, an inability to provide for their own security, and insufficient political unity. Together these conditions have resulted in the continent’s inability to translate the weight of its 450 million people, $22 trillion-plus gross domestic product (GDP), and advanced market into geopolitical heft.

This diagnosis hasn’t changed. But European leaders now recognize that, in the face of Trump’s United States, the continent must fundamentally treat its maladies or further surrender global relevance. What’s also changed for Europe is a growing recognition that it can no longer rely on the post–World War II global order, whose institutions and rules provided the safe context for the creation and growth of the European Union (EU).

Trump’s dramatic climbdown this week from his ultimatum that Europe either give him Greenland or face tariffs had many sources, ranging from market jitters over EU countermeasures and congressional opposition to a lack of popular American support. Most significant in Europe was that it triggered greater unity among the EU’s twenty-seven members against Trump, even among the right-wing parties that usually back him, than at any time previously.

Even after the immediate crisis was defused in Davos on Wednesday, EU leaders still met at an emergency summit in Brussels on Thursday. The Atlantic Council’s Jörn Fleck and James Batchik write about how that meeting signaled “a quiet yet dogged determination . . . to strengthen Europe’s ability to withstand US pressure in any future scenarios.”

If this change is permanent

It took a Canadian in Davos to best describe the abrupt changes unsettling European countries—and other nations that he referred to as middle powers. “We are in the midst of a rupture, not a transition,” said Prime Minister Mark Carney. Great powers, he continued, “have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited.” His conclusion: “You cannot live within the lie of mutual benefit through integration, when integration becomes the source of subordination.”

However, it was European Commission President Ursula von der Leyen who captured the historic moment at Davos for a continent whose current boundaries, ideologies, and collaborative structure have been forged by the previous shocks of World War I, World War II, and the Cold War. Where she agreed with Carney, without mentioning Trump by name, is that his administration is sweeping away the nostalgia of common cause that has helped hold together the transatlantic alliance for eight decades.

“Of course, nostalgia is part of our human story. But nostalgia will not bring back the old order,” she said in a speech less celebrated than Carney’s but just as consequential. “And playing for time, and hoping that things will revert soon, will not fix the structural dependencies we have. So, my point is, if this change is permanent, then Europe must change permanently, too.”

The will to match the ambition

What many in the Trump administration have missed, with their focus on Europe’s weaknesses, is that the EU has been seizing upon the Trump moment for new trade deals. Von der Leyen came to Davos from Paraguay, where she signed the EU-Mercosur trade agreement, through which the EU and Latin American countries have created what she called “the largest free trade zone in the world, a market worth over 20 percent of global GDP; thirty-one countries with over 700 million consumers.”

Her next lines were aimed at Trump, without naming him. “So, this agreement sends a powerful message to the world that we are choosing fair trade over tariffs, partnership over isolation, sustainability over exploitation, and that we are serious about de-risking our economies and diversifying our supply chains.”

For those paying attention, that was something new. De-risking has been a term that Europe has associated with China until now, but in Davos this past week European political and corporate leaders increasingly applied it to the United States. A few US companies complained privately in Davos that European officials cancelled meetings—presumably to send a message. US companies with big business and investments in Europe sound more alarmed than ever that their European partners will look for ways, wherever they can, to operate without them. One US business leader told me that EU regulators are talking openly about more aggressively reducing their reliance on US technology, social media, and payment giants over the next three to five years.

Though misgivings about dealing with China remain substantial, European leaders believe they must hedge, if only to signal to Washington that they have alternatives. As evidence of this, European leaders are lining up to visit Beijing to drum up business. Carney was there just before Davos. British Prime Minister Keir Starmer and German Chancellor Friedrich Merz will each visit in the coming days. French President Emmanuel Macron, who visited China in December, said in Davos that Europe needs to seek more Chinese foreign direct investment.

In her Davos speech, von der Leyen spoke about new trade agreements in the past year alone with Mexico, Indonesia, and Switzerland (while Trump has been slapping tariffs on them) and a new arrangement soon with Australia. The EU is also “advancing,” she said, with the Philippines, Thailand, Malaysia, and the United Arab Emirates. This weekend, she is in India, whose officials prioritized the EU after Trump’s tariff hit on them.

“There’s still work to do, but we are on the cusp of a historic trade agreement” with India, von der Leyen said. Then, channeling Trump-like language that no EU leader would have used previously, she said, “Indeed, some call it the mother of all deals. One that would create a market of two billion people, accounting for almost a quarter of global GDP and, crucially, that would provide a first-mover advantage for Europe with one of the world’s fastest-growing and most dynamic countries.”

At the same time, European Union countries have launched a surge in defense spending of some €800 billion through 2030. That pledged surge, von der Leyen said, had helped triple the market value of European defense companies since January 2022, making them one of the best global investments anywhere in that time.

“All of this would have been unthinkable even a few years ago,” she said. “This now only shows how economy and national security are more linked than ever, but also what we can do when Europeans have the will to match the ambition.”

Interrupting the equilibrium

One of the other quiet takeaways from Davos was just how serious European policymakers are about economic integration. “The long-debated savings and investment union is now on a fast track, and Trump is a major factor,” says Josh Lipsky, chair of international economics at the Atlantic Council, who was in Davos this past week. “The stark realization that the US can’t always be relied on as an economic partner put new urgency in the minds of every finance official. I expect this is finally going to get done.”

NATO Secretary General Mark Rutte, the European who negotiated the deal that defused what might have been the worst transatlantic crisis in decades, gave Trump credit in Davos for a more determined Europe. “I’m not popular with you now because I’m defending Donald Trump,” he said, “but I really believe you can be happy that he is there. He has forced us in Europe to step up.” He added, “Without Donald Trump, this would never have happened.”

Whether Europe’s new steeliness endures beyond Davos remains to be seen. As a life-long Atlanticist, one who runs an institution dedicated to shaping the global future alongside US partners and allies, I regret the nature of the therapy but hope the eventual outcome will be a stronger and more confident Europe within a restored and resurgent transatlantic community, one up to the challenges of the coming century.

One can only hope that it won’t require an ever more severe shock to get there, more than likely administered by autocratic powers such as Russia and China, sensing a moment of opportunity provided by weaknesses among democratic allies.

Shock therapy succeeds in medicine not because it heals but because it interrupts a potentially fatal equilibrium and creates a window for recovery. Applied to Europe, Trump’s shock has broken decades of strategic complacency and forced long-postponed decisions on defense, trade, and autonomy. Both in medicine and politics, a jolt can restart the system, but only sustained care determines whether it survives.

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on X @FredKempe.

This edition is part of Frederick Kempe’s Inflection Points newsletter, a column of dispatches from a world in transition. To receive this newsletter throughout the week, sign up here.

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The future of Greenland and NATO after Trump’s Davos deal

Atlantic Council — Thu, 22 Jan 2026 00:51:42 +0000

GET UP TO SPEED

Today started with ice and ended with a thaw. Shortly after a speech at the World Economic Forum in Davos, Switzerland—in which he made his case for why the United States should own the “big, beautiful piece of ice” that is Greenland—Donald Trump announced that he had reached a “framework of a future deal” on the issue. The breakthrough came after Trump met with NATO Secretary General Mark Rutte, and led to the US president dropping his tariff threats against European nations that had opposed the US acquisition of the semiautonomous Danish territory. According to Trump, the deal will concern potential US rights over Greenland’s minerals, as well as the island’s involvement in his administration’s proposed “Golden Dome” missile defense system. Below, our experts shed light on all the transatlantic tumult.

TODAY’S EXPERT REACTION BROUGHT TO YOU BY

Josh Lipsky (@joshualipsky): Chair of international economics at the Atlantic Council, senior director of the GeoEconomics Center, and former International Monetary Fund advisor
Matthew Kroenig (@MatthewKroenig): Vice president and senior director of the Scowcroft Center for Strategy and Security
Tressa Guenov: Director for programs and operations and senior fellow at the Scowcroft Center for Strategy and Security, and former US principal deputy assistant secretary of defense for international security affairs
Jörn Fleck (@JornFleck): Senior director of the Europe Center and former European Parliament staffer

Tariff troubles

Now that Trump appears to have backed down from both his military and economic threats, “Europe is breathing a sigh of relief,” Josh reports from the World Economic Forum, but it’s one that “will be short-lived.”
Don’t expect Europe to jump back in to last year’s US-EU trade deal, which Brussels paused in recent days. European leaders “feel like they’ve been burned by the volatility, paid a political price at home, and want commitments that next weekend they don’t wake up to new tariff threats,” Josh tells us. “Businesses, many of which said as much privately to the Trump administration this week in Davos, want the same” sort of commitments.
“Markets had their say” as well, Josh writes, noting that fears of a US-EU trade war drove up bond yields in recent days. That’s “the exact kind of pressure point that made Trump relent” in April 2025 when he paused his “Liberation Day” tariffs. “With mortgage rates shooting up” in response to the volatility, says Josh, “Trump showed that he can be especially sensitive to the bond markets.”

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NATO’s next steps

“The idea that Trump would attack a NATO ally was always hard to imagine,” says Matt, who argues that “Trump’s threats were clearly part of his now-trademark style of building leverage to force a negotiation.”
Matt now expects a future deal to include “increased military presence in Greenland from Denmark and other NATO allies and increased access and basing for the United States.”
The “hard work” ahead for negotiators, he explains, will be “hammering out an agreement that addresses Trump’s legitimate security concerns while also respecting the sovereignty of NATO allies.”
Matt identifies several cases that could provide “creative solutions,” including “the United Kingdom’s ‘sovereign base area’ in Cyprus, the bishop of Urgell and the president of France’s ‘shared sovereignty’ over Andorra, and the United States’ possession of a perpetual lease in Guantanamo Bay, Cuba.”

The bigger picture

But even if a deal gets done, says Tressa, Trump’s pressure campaign against Europe over Greenland could have consequences for security issues that must be solved on both sides of the Atlantic: “A sustained atmosphere of crisis has the potential to detract from Trump’s own success in getting NATO countries to spend 5 percent of gross domestic product on defense and, he hopes, buy American products.” She points out that “many of the countries that he threatened with tariffs are the ones who have stepped up defense spending the most.”
Jörn agrees on the lasting impact of “Trump’s willingness to engage in brinkmanship with the Alliance, Europe’s economy, and personal relationships with key leaders.” The approach “has destroyed much of the domestic political space in Europe for those arguing that Europe has a weak hand and therefore few options but to engage, assuage, and accommodate” the US president, “even if few European leaders will say this out loud for now.”
Still, while “Davos is sometimes criticized for a lot of talk but little action, this year no one can doubt the forum mattered,” Josh adds. “Having Trump meet in person with leaders—privately—is where the US-European alliance was, at least temporarily, put back on track.”

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At Davos, Trump’s 19th-century instincts will collide with 21st-century uncertainty

Frederick Kempe — Tue, 20 Jan 2026 05:00:00 +0000

It’s hard to imagine a more discordant way for Donald Trump to mark the first anniversary of his second inauguration than by attending the World Economic Forum’s annual gathering of global leaders in Davos. When he speaks in the Swiss Alps on Wednesday, the US president will be contesting—whether intentionally or not—the very notions of global common cause Davos was designed to advance.

Klaus Schwab founded the World Economic Forum in 1971, a decade after the Atlantic Council’s own birth, with a post-World War II premise that held until recently: that greater security cooperation, economic interdependence, institutional cooperation, and shared rules could prevent another global catastrophe and advance more lasting peace and prosperity in a manner that also served US interests.

Trump travels to Switzerland this week as perhaps the most forceful skeptic of that internationalist assumption ever to occupy the Oval Office. He set the stage on Saturday by threatening new 10 percent tariffs on European nations that stood in the way of his heightened efforts to acquire the Danish territory of Greenland.

Trump has pledged to slap those tariffs on NATO allies Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland on February 1. If those countries don’t yield, Trump wrote on his Truth Social platform, he will jack up the tariffs to 25 percent—presumably atop the tariffs he has already put on Europe—on June 1 “until such time as a Deal is reached for the Complete and Total purchase of Greenland.”

For their part, European leaders are considering a number of possible economic counterstrikes. The Financial Times reports that the European Union (EU) is considering €93 billion of new tariffs, while the French are reportedly pushing for the first-ever use of Brussels’s “Anti-Coercion Instrument.” Known as ACI, it is regarded as the nuclear option in that it could put limits on foreign direct investment, restrict US suppliers’ access to the EU market (excluding them from public tenders), and place export and import restrictions on goods and services.

That turns Davos, whose theme this year is “A Spirit of Dialogue,” into the epicenter of the worst transatlantic economic conflict in memory. European leaders hope they can still reach yet another deal with Trump. That said, one senior allied official told me it is hard to imagine common ground given Trump’s “absolutist” position that the only outcome he will accept is Greenland becoming US property. Another European official described Trump to me as an aberrational bully willing to risk eighty years of accumulated transatlantic trust to achieve territorial ambitions.

A nineteenth-century president in a twenty-first-century world

To better understand who they’re dealing with, a long-time friend of Trump’s suggested to me that European leaders should look less to the past eighty years and more to the time before the world wars. He calls Trump a nineteenth-century US president governing in a twenty-first-century world—a leader who combines the expansionism of US President James Polk, pushing to enlarge the United States’ territorial realm as part of a “Modern Manifest Destiny,” with the twenty-first-century nationalism of current counterparts like Russian President Vladimir Putin (whom the Kremlin claims has just been asked to join Trump’s Gaza peace board), China’s Xi Jinping, India’s Narendra Modi, and Turkey’s Recep Tayyip Erdoğan.

While it was journalist John L. O’Sullivan who coined the term “Manifest Destiny,” it was Polk who popularized and implemented the notion that the United States was divinely ordained to expand its realm and spread democracy, capitalism, and American values across the entire North American continent.

To refresh your history: Polk, the eleventh US president, presided over Texas’s formal entry into the United States on December 29, 1845, though President John Tyler and Congress had initiated the process before Polk took office. That helped trigger the Mexican-American war that resulted in Mexico’s ceding of the entire American southwest to the United States. After a negotiation fraught with the risk of war, Polk acquired the Oregon Territory from Great Britain in 1846, giving the United States land for the future states of Washington, Oregon, and Idaho, along with parts of Montana and Wyoming, while Britain kept Vancouver Island.

That history lesson won’t hearten the leaders of Denmark or its Europeans allies, who presumably believed the nineteenth century was, well, history. Polk’s era was an age not of global governance but of sovereign states, great power competition, mercantilism, and jealously guarded spheres of influence, followed by two world wars. Diplomacy was personal and transactional—just as Trump likes it. Leaders wielded commitments as conditional and trade as an instrument of power, as was the case this week when Trump upended trade deals he had negotiated with European states to open a new fight over Greenland.

What’s further capturing conversation in Davos is Trump’s military-judicial operation that brought Venezuelan leader Nicolás Maduro to New York to face criminal charges, part of a heightened focus on the Western Hemisphere through his “Trump Corollary” to the Monroe Doctrine; his on-again, off-again threats to strike Iranian targets in response to Tehran’s killing of protesters; the US Department of Justice’s criminal investigation into Federal Reserve Chair Jerome Powell; and a series of domestic events that have made global headlines, most significantly the death of Renee Good in Minneapolis at the hands of an Immigration and Customs Enforcement agent.

A world-historic figure—but in what sense?

Many in Trump’s electoral base charge that he’s paying far too much attention to global affairs at the expense of their own economic struggles. However, don’t expect Trump’s focus to shift—not even in a mid-term electoral year when the Republican hold on Congress is in doubt. Trump’s eye is on history, not congressional seats.

“The world, he thinks, is where a political figure makes his mark,” writes Wall Street Journal columnist Peggy Noonan. “He desires a big legacy, still wants to show Manhattan (not to be too reductive, but there’s still something in it) that the outer-borough kid you patronized became a world-historic figure.” If that’s true regarding Manhattan, it is even more so for Davos, given that it symbolizes for Trump the club of first-tier global business leaders to which he never previously belonged.

If Trump’s aim is to be a world-historic figure—and that’s increasingly beyond dispute early in his second term—then what’s most important to ask is: world-historic in what sense? For that reason alone, it will be worth listening closely to how Trump describes himself this week in Davos and comparing that to his previous three appearances.

In 2018, early in his first administration, he declared in Davos, “America first doesn’t mean America alone. When the United States grows, so does the world.” In 2020, ten months before his electoral defeat, he highlighted two trade deals he had just closed, one with China and the other with Mexico and Canada. “These agreements represent a new model of trade for the twenty-first century—agreements that are fair, reciprocal, and that prioritize the needs of workers and families.”

Then in 2025, three days after his second inauguration, he set a far feistier tone. Appearing remotely via video, Trump declared the beginning of “a golden age of America,” speaking of the most significant US election in 129 years, lambasting his predecessor President Joe Biden, and announcing a storm of executive orders to address a “calamity,” particularly regarding immigration, crime, and inflation. He said little about the tariffs that would follow. “They say that there’s a light shining all over the world since the election,” Trump told the Davos crowd.

The big question chasing Trump this week, as I asked earlier this year in this space, is: “What sticks?”

It’s still uncertain whether Trumpism will usher in a new and enduring ideology of some sort. US President Franklin Delano Roosevelt brought the world New Deal liberalism, an ideology that has remained until this day; US President Ronald Reagan ushered in an era of internationalist conservatism that won the Cold War alongside allies, and it still lingers. When American presidents break with the past and usher in new eras, those trends tend to stick.

Many argue that Trump’s emergence underscores and advances a new nationalist era, one of nineteenth-century tenets laced with twenty-first-century technologies and geographies, even though those who know him best say Trump is not a student of history himself.

If it’s a new nationalism that’s emerging, what brand of nationalism might that be? Autocratic or democratic? Isolationist or internationalist? Realist or imperialist? The range of possibilities is immense.

A new vocabulary

What has stuck over the past year—a shift that’s palpable in Davos—is the erosion of old certainties. Trump’s emphasis on tariffs, industrial policy, and economic security has redrawn global trade rules and attitudes. His skepticism about multilateral arrangements has forced allies and partners to question systems they’ve depended upon since World War II. Trump’s blunt focus on borders, energy dominance, and the Western Hemisphere has global partners rethinking their own concepts of geography and leverage.

Davos matters this week not in terms of whether Trump will convert his listeners to his worldview, but rather because the world has already begun to change around those gathering there. The Davos vocabulary of cooperation and convergence coexists now with the new language of fragmentation, national interest, and strategic autonomy.

When he appears at Davos this week, Trump arrives with the ambitions of a nineteenth-century president confronting leaders with a twentieth-century mindset inadequate to the uncertainties of a twenty-first-century world. At this inflection point, all three eras are colliding. There’s no settled script for what comes next.

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on X @FredKempe.

This edition is part of Frederick Kempe’s Inflection Points newsletter, a column of dispatches from a world in transition. To receive this newsletter throughout the week, sign up here.

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Greenland, Davos, and a week that could redefine the transatlantic alliance

Josh Lipsky and Jörn Fleck — Mon, 19 Jan 2026 23:35:30 +0000

DAVOS and WASHINGTON—In Davos, where Josh recently landed, preparations are underway to welcome US President Donald Trump, French President Emmanuel Macron, German Chancellor Friedrich Merz, European Commission President Ursula von der Leyen, and dozens of other global leaders under this year’s theme: “A Spirit of Dialogue.”

But the truth is there is very little spirit—and even less dialogue—between Trump and his European counterparts right now.

Relations between Washington and Brussels were upended this weekend after Trump said on social media Saturday morning that he would impose a 10 percent tariff on France, the Netherlands, Denmark, Norway, Sweden, France, and the United Kingdom—presumably on top of the existing tariffs— “until such time as a Deal is reached for the Complete and Total purchase of Greenland.” In the same post, which targeted countries that recently sent troops to Greenland, Trump threatened to raise these tariffs to 25 percent if such a deal has not been agreed to by June 1. For all the Wall Street analysts who argued that the second year of Trump’s term would bring more stability on the tariff front, Saturday morning should have been a wake-up call. Trump is not abandoning his favorite economic weapon anytime soon—unless, that is, the Supreme Court forces him to, as the court is set to rule on the legality of many of the administration’s tariffs as soon as this week.

This all adds up to an incredibly volatile situation: a US president seemingly willing to seize the territory of a NATO ally or force its sale, a Supreme Court that may dramatically alter the tools the president has to levy tariffs, and a European Union (EU) asking itself whether it made a mistake by agreeing to a lopsided trade deal just six months ago in Scotland—and increasingly questioning the future of the US-European alliance.

Below, we break down each of these dimensions—and how they could escalate or deescalate in the week ahead.

Europe’s scramble for a united response

If Wall Street underestimated the president’s use of tariffs, so did Europe. Fresh off the successful signing of the EU-Mercosur trade deal on Saturday in Paraguay, the new threats brought von der Leyen and European Council President António Costa back to the harsh realities of Trump-era power politics.

Their initial reaction in true Brussels style: coordinate a European response among the twenty-seven EU countries.

Macron went further, declaring the tariffs “unacceptable” and calling for the EU to deploy its so-called “big bazooka” against economic blackmail: the much-touted but never-used Anti-Coercion Instrument (ACI). This stood in contrast with the response from Italian Prime Minister Giorgia Meloni, a Trump ally. She said that the US tariffs would be a mistake but characterized the dispute over Greenland as a misunderstanding and called for dialogue and de-escalation.

To equip European leaders with greater leverage, the Commission is dusting off a €93 billion package of retaliatory tariffs that it prepared during the trade negotiations following Trump’s “Liberation Day” global tariff announcement but suspended after the bloc brokered the Turnberry trade deal with Washington last July. The threat of these tariffs, however, will hardly strike fear into the US president. This White House knows full well that it has the upper hand in pressuring a low-growth EU with a a $236 billion trade surplus with the United States and divergent member state interests.

The ACI also is likely disappearing into back pockets in Brussels, despite bluster from Paris and the European Parliament. Designed to counter economic coercion from China and give the EU more flexibility and leverage in trade talks, its potential use has generated strong reservations from member states that are more dependent on the United States for security and trade. Much depends too on what position Germany will take and whether Berlin and Paris can align on the use of the instrument.

Another missed opportunity for Europe is the absence of a done deal on US-EU trade. While Washington and Brussels agreed the Turnberry deal last July, the EU has yet to fully ratify the framework agreement. Opposition to the deal in the European Parliament has been building for months. But it reached a boiling point on Saturday when the largest political group in the European Parliament, von der Leyen’s center-right European People’s Party, announced that it will not vote to approve the deal in the face of Trump’s threats.

Without the Turnberry deal implemented, the EU will have a harder time countering Trump’s punitive Greenland tariffs and preventing him from reopening a trade dispute that many hoped had been closed.

Many leaders in Europe would still prefer to avoid an open confrontation or rupture with the Trump administration. But the US president’s more brazen approach on Greenland is testing the limits of Europe’s hugging-the-bear strategy–efforts to continue engagement with the US president amid volatility and manifest disagreements while avoiding open confrontation. Trump’s aggressive push risks robbing European leaders of what political space is left at home to maintain their carefully calibrated balancing act vis-à-vis the United States. Geopolitical sparring over Greenland alone will not push Europe into collective opposition to the United States. But with the Trump administration refusing to rule out military options and levying economic threats over the president’s personal ambitions for the Arctic island, that dynamic might just change.

The Supreme Court, tariffs, and Trump’s next move

All of the above assumes that the US Supreme Court does not tell the president—possibly as soon as Tuesday—that he can no longer use the International Emergency Economic Powers Act to impose tariffs. The threat issued against Europe would almost certainly rely on that authority if Trump were to follow through with it.

If the court ends up siding with the president, expect Trump to double down. The last meaningful check on his tariff authority would be gone, and there is little chance Congress would muster the support needed to rein him in.

The more likely scenario, however, is that the court either rejects or sharply limits his powers. In that case, Trump will need a Plan B.

That plan has been contemplated before—with Europe in mind. While Trump has been surprisingly disciplined in dealing with the European Commission rather than individual member states, he has previously threatened specific countries, including Spain, with sector-specific tariffs. If the court rules against him, expect to see a wave of French, Dutch, and Danish agricultural and industrial products being targeted under Section 232 and Section 301 authorities. Regardless of the court’s ruling, those authorities will remain firmly in the president’s power.

Trump also would likely turn to Section 122 authority, which allows tariffs of up to 15 percent for 150 days. But that would merely replace existing EU tariff levels—not add to them—which appears insufficient for the kind of leverage he wants to exert.

The deeper problem: no deal space

The larger issue—to use the favorite buzzword in Davos—is the lack of deal space between Trump and Europe.

On trade, the path to a deal for the two sides has been much clearer. As both the United Kingdom and the EU have shown, an agreement can be reached with Trump if the other side is willing to cut tariffs on US goods and pledge hundreds of billions of dollars in investment in the United States. It’s a model that has been followed around the world.

But Greenland is different. It is unclear what compromises Europe could offer—military, security, economic, or otherwise—that would satisfy Trump. It is even less clear whether he will be satisfied by anything short of Greenland coming into US possession. This is the most troubling dimension of the threat. Among the people Josh has spoken with on the ground in Davos so far, few see an obvious off-ramp. And that is what makes escalation more likely than at any other time since Trump’s return to the White House.

In Davos, the “spirit of dialogue” may quickly give way to a moment of decision. European leaders will try to “engage, not escalate” one more time—an approach that helped stabilize US support for NATO and Ukraine and got them a truce on trade. But political space on their hugging-the-bear strategy is running out fast. Leaders may face difficult strategic and tactical decisions about whether to pursue a deal based on the practical realities of what Trump wants out of Greenland or opt for economic confrontation with the United States and draw a hard line on sovereignty, international law, and, ultimately, Europe’s credibility. The approach they take will, in turn, inform Trump’s response—and the future direction of transatlantic relations.

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Digital sovereignty: Europe’s declaration of independence?

Frances Burwell, Kenneth Propp — Wed, 14 Jan 2026 14:27:11 +0000

Bottom lines up front

In 2025, the Trump administration’s open hostility to the EU and close connections with tech CEOs brought long-simmering transatlantic tensions over how to regulate Big Tech to a boil.
The effect so far has been to accelerate the EU’s quest to break its dependence on Silicon Valley and China.
Washington’s combative posture toward EU tech regulation sets the stage for more conflict that could imperil the $1.5-trillion trading relationship.

download pdf

Defining the terms of the debate
Europe’s missing Silicon Valley
Geopolitics and the rise of tech sovereignty
Trump actions spur renewed calls for greater independence
Key issues:
Looking ahead: Transatlantic tensions will persist
Seven recommendations for Brussels and Washington

Introduction

Over the past several years, the concept of digital sovereignty has become ever more central to European notions of competitiveness and economic resilience. Formerly a niche idea within the digital policy community, it has now gone mainstream with major European leaders, from European Commission President Ursula von der Leyen to former head of the European Central Bank Mario Draghi, calling for the European Union to achieve digital sovereignty.¹ It has also become integral to European debates about technological sovereignty and strategic autonomy, and even to trade policy. And as digital sovereignty has become more prominent in European discussions, it has shifted from being a vague aspiration to a concept that EU policymakers increasingly seek to put into operation—raising the possibility of future EU restrictions on procurement from companies outside Europe, as well as other regulatory measures.

Yet, despite its growing centrality in European digital debates, digital sovereignty still does not have a clear definition.² At times, it seems to have been encompassed by the broader term of tech sovereignty, which reflects the EU’s desire to boost its industrial capabilities—not only in the digital space, but also in renewables and other green and future technologies. European policymakers also regularly refer to data sovereignty and cloud sovereignty, which can be seen as focused on particular aspects of digital sovereignty.

What all these definitions share, however, is the notion that Europe and its economy should be less dependent on others and more capable of protecting its own interests, including its interests in the digital sphere. That leads to the key unresolved questions at the heart of digital sovereignty. Does sovereignty require an economic approach that is exclusively European or, at minimum, favors European companies? Is ownership or effective control over key companies important, or is a risk-based system more appropriate? Is it desirable to limit sovereign requirements to certain sectors of the economy? Can Europe achieve a measure of sovereignty as part of a common enterprise among international partners? And if the partnership model is acceptable, who are the partners?

The transatlantic relationship is, in turn, entangled with Europe’s internal debate about digital sovereignty. Until recently, this has been an evenly divided contest, with some European experts calling for Europe to strategically decouple from the dominance of US companies, while others—including most member-state governments—have noted the lack of local alternatives and hesitated to discriminate against US and other non-EU companies.

But the Trump administration’s initial open hostility to the EU and continuing general unpredictability have caused even the most transatlantic of EU leaders to question the reliability of the United States. The July 2025 US-EU trade deal provided some temporary clarity and predictability in transatlantic commercial relations, although digital issues were addressed in only limited ways. President Donald Trump’s Truth Social post a few weeks later, threatening additional tariffs on countries with “Digital Taxes, Digital Services Legislation, and Digital Markets regulations [that] are all designed to harm, or discriminate against American Technology,” was immediately criticized by the European Commission, France, Germany, and others as a violation of Europe’s sovereignty.³ Nevertheless, during a November 2025 visit to Brussels, Commerce Secretary Howard Lutnick directly linked the removal of EU digital regulation with a potential US-EU agreement on steel and aluminum tariffs.⁴

Given Trump’s close connections with leading tech executives, the US administration’s combative posture toward European tech regulation is likely to continue being a point of transatlantic friction. Whether a continued focus by the Trump administration on Europe’s digital rules will create an even stronger push in Europe for an exclusive form of digital sovereignty is not yet evident. What is clear is that without some guidelines, such as those offered in the conclusions to this report, the European Union and United States might find that their differences regarding digital sovereignty and digital rules make creating and maintaining an open transatlantic digital marketplace much more challenging.

Defining the terms of the debate

One reason why digital sovereignty has become an increasingly inflammatory label across the Atlantic is that the lack of a clear definition allows everyone to define it in ways that support their own arguments. Its rise has also coincided with the European embrace of strategic autonomy in foreign and security policy—a notion that has predictably ruffled some US feathers, especially in the defense community. Further confusion has developed as similar terms (i.e., tech sovereignty, cloud sovereignty) have emerged in related areas. To introduce some clarity into this discussion, it can be useful to categorize these different notions.

Strategic autonomy: First arising in the context of foreign and security policy, strategic autonomy refers primarily to Europe developing defense and foreign policy capabilities that would allow the EU to play a more independent geopolitical role. Aside from a few defense funding efforts, the idea has not yet inspired major legislative initiatives. To indicate that partnership and autonomy were not contradictory, the EU later adopted the related idea of open strategic autonomy in trade policy. More recently, the EU has begun to embrace the concept of regulatory autonomy—the idea that “the Union’s values, interests, and regulatory autonomy underpin EU action, including in the digital sphere.”⁵ In these notions, autonomy is a more ambiguous and flexible concept than sovereignty, which implies a legal order backed by legislative initiatives.
Technological sovereignty: While the first European Commission headed by von der Leyen focused largely on legislation related to the online world, the importance of technologies—and Europe’s reliance on Chinese and US technologies—had come to the fore by the end of that mandate. This was not only about the digital world, but crucially about the European Green Deal. While the commission argued that carbon reduction would be key to the future EU economy, it became woefully clear that Europe remained dependent on others for many essential technologies: solar panels, wind turbines, semiconductors, electric vehicle batteries, etc.

Thus, in the second von der Leyen commission, the position of executive vice president for tech sovereignty, security, and democracy was created to oversee the development of EU capabilities to support the digital agenda. Others in the commission, including Executive Vice Presidents Teresa Ribera and Stéphane Séjourné, were tasked with strengthening EU technological capabilities across the Green Deal and industrial strategy generally. In June 2025, a key European Parliament committee defined tech sovereignty as “the ability to build capacity, resilience and security by reducing strategic dependencies, preventing reliance on foreign actors and single service providers, and safeguarding critical technologies and infrastructure.”⁶ Unlike strategic autonomy, however, tech sovereignty underlies significant legislative initiatives, from the Net Zero Industry Act and the Critical Raw Materials Act to the Public Procurement Directives. It also entails a strong focus on industrial policy, including state aid, competition policy, and other means of boosting key tech-related industries.
Digital sovereignty: While often used interchangeably with tech sovereignty, digital sovereignty focuses primarily on the online world. Legislation such as the General Data Protection Regulation (GDPR), Digital Services Act (DSA), Digital Markets Act (DMA), and Artificial Intelligence Act (AIA) have sought to establish a comprehensive system of governance for the online world, especially by regulating corporate behavior vis-à-vis individual or business users. With the exception of semiconductors and the EU Chips Act, much less attention has been paid to the technologies that enable the online world. However, recent proposals for a Eurostack—a European capacity to provide all elements of digital infrastructure, from cables to cloud—are indications of growing European concern about both governance and technologies.⁷

Data sovereignty: This subset of digital sovereignty—one of the earliest variants—initially focused primarily on protection of personal data under the GDPR. However, with the Data Act and other initiatives, increased attention is now paid to the re-use of industrial data that are either sensitive or commercially valuable, and to safeguarding the capacity of EU businesses and governments to exploit data generated in Europe.
Cloud sovereignty: The proliferation of data requires enhanced storage capabilities and increased focus on cloud storage and the security of data stored in the cloud. An increasingly sharp debate has centered on whether Europeans’ data should be stored exclusively within the EU, or whether they can be stored outside the EU by non-EU providers considered trustworthy and secure. This discussion has accelerated with the growth of artificial intelligence (AI) and its enormous requirements for cloud services and data centers. Cloud sovereignty also poses questions about how Europeans’ data can be accessed by foreign law enforcement and intelligence agencies.
Sovereignty over speech: Users of online services today confront a wide array of illegal or undesirable content, from child sexual abuse material to advertisements for illegal products to political disinformation. EU efforts to regulate platforms’ responsibility for illegal content and systemic risks have recently sparked criticism from the Trump administration, which regards aspects of these efforts as violations of free speech.⁸ Who has the right to determine allowable speech available online in a jurisdiction other than where it was produced?
Cybersecurity: Given the ever-growing number of cyberattacks, both in Europe and globally, the protection of the online world has become a growing element in digital sovereignty. In the past, cybersecurity had not been central to the debate about digital sovereignty, but since the Russian full-scale invasion of Ukraine in 2022 there has been a rapidly growing understanding that resilience against such attacks is an essential part of sovereignty. Europe in particular has faced numerous attacks from Russia and related online actors. The EU effort to establish standards for cybersecurity has already led to US-EU tensions, but there will likely be even more attention paid to cyber-proofing as the EU operationalizes its concept of sovereignty.

An increasingly sharp debate has centered on whether Europeans’ data should be stored exclusively within the EU.

As part of the growing effort to operationalize digital sovereignty, both EU institutions and member states have initiated efforts to elaborate the meaning of this elusive concept. The European Council, in formal conclusions to its October 23 meeting, declared, “It is crucial to advance Europe’s digital transformation, reinforce its sovereignty, and strengthen its own open digital ecosystem,” adding that “this requires reinforced international partnerships and close collaboration with trusted partner countries.”⁹

On November 18, 2025, the French and German governments convened a Summit on European Digital Sovereignty. The summit identified several areas for building digital sovereignty, including AI, data, and public infrastructure, and launched a joint task force on European digital sovereignty to report in 2026.¹⁰ Its final declaration underscored the EU member states’ “shared ambition to strengthen Europe’s digital sovereignty in an open manner as a cornerstone of our economic resilience, social prosperity, competitiveness and security.”¹¹

The European Commission, for its part, issued a Cloud Sovereignty Framework in September 2025 that identifies eight types of sovereignty-related objectives to be considered in the government procurement context. In a stab at precision, the framework encourages contracting authorities to assign each objective a sovereignty effective assurance level (SEAL). The results of that assessment should provide a mathematically derived sovereignty score.¹² But as EU discussions on this topic progress, there are still key differences among the member states about the choice between strict autonomy or international partnerships, and whether the model should be based on exclusive EU control or on risk management.

European officials at the Summit on European Digital Sovereignty in Berlin, November 18, 2025. REUTERS/Nadja Wohlleben.

The EU’S Cloud Security Framework, published in October 2025, lays out eight “sovereignty objectives” for procurement authorities to score as they decide what cloud services and products to buy. Source: Cloud Security Framework, European Commission.

Europe’s missing Silicon Valley

While many non-European observers would say that the EU’s regulatory power already gives it significant influence domestically and externally, the EU’s sovereignty in the European digital arena is vulnerable at best. Despite its role as a regulatory superpower, Europe finds itself reliant on non-EU companies for many essential elements of the digital world. A European Parliament report estimates that “the EU relies on non-EU countries for over 80% of digital products, services, infrastructure, and intellectual property.”¹³ This perception of dependency is at the heart of the EU push for digital sovereignty.

The EU has failed to develop a tech sector with either the vibrancy of Silicon Valley or the growing capabilities of China’s industry. In particular, Europe has not seen the emergence of world-leading new companies based on digital technologies. Indeed, while the US industry has created six companies with a market capitalization of €1 trillion or more, the EU has created none.¹⁴ In 2021, three US cloud companies supplied 65 percent of the EU cloud market, while EU-headquartered companies had less than 16 percent.¹⁵ As a consequence, European consumers and businesses must rely on non-EU companies—mostly US and some Chinese enterprises—for basic digital services. Initially, this largely applied to software, social media, search engines, and a wide array of shopping services. More recently, the importance of cloud, encryption, and AI, along with the prospective emergence of super-fast quantum computing, has made Europeans realize that this dependence on others has significant and potentially long-lasting effects on their own industries and economies, including those far beyond the tech sector.

Despite its role as a regulatory superpower, Europe finds itself reliant on non-EU companies for many essential elements of the digital world.

Of course, a few European companies are exceptions to these trends. Nokia and Ericsson were already leaders in the cables and fiber optics that are key to connectivity. They became even stronger in the market as concerns rose about the security of Chinese components. The Dutch company ASML has been a leader in the machines required to make the semiconductors that guide and manage so much of the digital world. SAP is the world’s largest vendor of enterprise resource planning software. But these European companies are not in the same league as their US equivalents in terms of market capitalization. For example, ASML has a market capitalization of $376 billion, while Nvidia is at $4.3 trillion and Microsoft is at $3.8 trillion.¹⁶

One consequence of Europe’s struggle in the digital marketplace has been the emergence of an EU-wide debate on competitiveness, as represented most prominently by the reports by former Italian Prime Minister Enrico Letta and former head of the European Central Bank Mario Draghi.¹⁷ Draghi specifically underlined the importance of Europe’s failure to develop an innovative tech sector by noting the increasing productivity gap between the EU and the United States, with European labor productivity falling to 80 percent of US productivity. He concluded that this was mainly due to “Europe’s failure to capitalise on the first digital revolution led by the internet—both in terms of generating new tech companies and diffusing digital tech into the economy.”¹⁸

The competitiveness debate has also sought to identify the causes of Europe’s lack of digital champions. Europe has a vibrant startup community, as demonstrated by the growing role of venture capital.¹⁹ But many of these innovative enterprises end up moving to the United States or elsewhere, while others fail to commercialize entirely. The most popular rationale for this failure to scale—cited by US and European analysts, including Draghi—is overregulation.²⁰ Other suggested reasons include a chronic lack of indigenous capital, overly strict bankruptcy laws, and a culture that fears failure.²¹ Whatever the reason, Europe’s inability to provide the resources and capabilities for its innovative companies to become continental champions, let alone world leaders, means it must rely on companies from elsewhere.

US Ambassador to the EU Andrew Puzder discusses disparities between major companies founded in the United States and the EU at the 2025 Transatlantic Forum on GeoEconomics, in Brussels, on September 30, 2025. Nicolas Lobet, PRYZM photography.

European Commission President Ursula von der Leyen holds former head of the European Central Bank Mario Draghi’s report on EU competitiveness at a September 2024 press conference in Brussels. Draghi’s report concluded that Europe failed to capitalize on the emergence of the internet to increase productivity. REUTERS/Yves Herman.

This was already the case in 2018, when the GDPR—the first major piece of EU digital legislation—came into force. During the next five years of von der Leyen’s first term as commission president, the EU passed several other pieces of digital legislation, most notably the DSA, DMA, and AIA. These measures made progress in harmonizing diverse member-state laws, both existing and anticipated. But while EU leaders saw this body of legislation as protecting their citizens from the excesses of data collection and illegal social media content, many outside the EU, especially in the US tech community, viewed these laws as overly burdensome at best and discriminatory at worst. Some EU policymakers, such as Member of the European Parliament (MEP) Andreas Schwab, early on were open about their desire to counter the dominance of US firms.²² Others, however, saw Europe as offering a positive alternative to the lightly regulated environment tech companies faced elsewhere. EU rules inevitably had the most impact on US companies, which provided the overwhelming majority of digital services in the EU market. Chinese companies also came to feel the impact of EU regulations as their market share grew over time, especially in shopping and social media.

Throughout this period of intense legislative activity, there were clear voices calling for greater digital sovereignty in Europe. The body of legislation passed in the first von der Leyen commission can certainly be viewed as an effort to place limits on the US companies that dominate Europe’s digital space—and as a way for Europe to regain some control, or sovereignty, over that market. But as competitiveness emerged as a top EU priority in 2023, the discussion about digital sovereignty became part of a much broader discussion about innovation and economic security.

Geopolitics and the rise of tech sovereignty

The earliest indication of a geopolitical element to EU digital sovereignty came during the first Trump administration, when the United States protested the use of Huawei components in European digital networks. Reluctantly at first, Europeans came to understand the risk of a Chinese capability to disrupt those networks and developed the EU Toolbox for 5G Security, a list of best practices released in January 2020. The toolbox identified states and state-backed actors as the most serious threats. It also set out criteria for identifying trusted versus untrusted vendors, including closeness to a foreign government, lack of democratic accountability in that government, lack of a data protection agreement with the EU, and ability of the third country to exercise pressure on the EU.²³

The toolbox was the first real effort to identify foreign companies and governments that might threaten Europe’s digital sovereignty and those that might not. There was clearly a focus on China and Chinese companies, as demonstrated by the criteria for vendors. But it should be noted that the toolbox is primarily voluntary guidance developed by the member states for themselves, with progress tracked by regular EU Commission reporting.

In 2019, the EU identified China as both an economic competitor and a “systemic rival,” but initially with little consequence, especially in terms of economic relations.²⁴ Over the next few years, the EU would increasingly focus on China and the dangers posed by its investments in the European economy, especially in critical European infrastructure. By March 2023, when von der Leyen called for de-risking Europe from China,²⁵ commission officials had identified a number of EU dependencies on China—including in critical raw materials, solar panels, and batteries—that had the power to disrupt European industry.²⁶ In June 2023, the commission reported that it considered Huawei and ZTE “materially higher risks” than other fifth-generation (5G) suppliers.²⁷

The EU also initiated a few measures to address those vulnerabilities: heightened screening of inward foreign investment, primarily at the member-state level; enactment of the European Chips Act, providing funding for advanced semiconductor manufacturing in Europe; adoption of the Critical Raw Materials Act, which established goals for EU production of key materials; and passage of the Net Zero Industry Act, which sought to build EU manufacturing capacity in clean technologies such as solar, batteries, and hydrogen. While these measures were not aimed only at China, concerns about that country’s ambitious global plans were a main motivation. Moreover, they had the effect of broadening the initially limited discussion of digital sovereignty beyond the realm of digital governance to include both digital and green technologies, resulting in a broader focus on technological sovereignty.

This European debate regarding the geopolitical dimensions of sovereignty—both digital and tech—intensified significantly following the Russian invasion of Ukraine in February 2022. Along with a focus on territorial security, as seen in the increased defense spending of most EU member states, the EU realized that it needed to address other vulnerabilities. Most urgently, the invasion led to a swift and drastic shift in Europe’s energy supply, as Russia went from providing 45 percent of Europe’s oil and gas in 2021 to 19 percent in 2024.²⁸ But the digital arena was also vulnerable: Russian cyberattacks and apparent sabotage against undersea cables demonstrated the dangers facing Europe’s digital infrastructure, while Russian-origin disinformation flooded European social media.

Perhaps the most important consequence of the Russian invasion, however, was the realization that Europe was vulnerable and that preserving its sovereignty—digital and otherwise—would require concrete actions. Many of the green technology initiatives mentioned above were still in the legislative process when the invasion began but moved to enactment by mid-2023 as the commission’s term began to close and as Europeans became even more conscious of those vulnerabilities. Competitiveness, resilience, and sovereignty became linked together in the concept of economic security as the EU sought to reduce its external dependencies, especially on Russia and China.

By the end of 2024, the tech sovereignty impulse in Europe had become a key policy priority, as demonstrated by the appointment of Henna Virkkunen to the new position of European Commission executive vice president for tech sovereignty, security, and democracy. But before the second von der Leyen commission could get its program under way—or make progress in implementing the Draghi report—Trump’s reelection as US president pushed the impulse toward European digital sovereignty into hyperdrive.

Trump actions spur renewed calls for greater independence

European suspicions about US intentions and capabilities in the digital world have existed since 2013, when Edward Snowden revealed the extent of US National Security Agency interception of Europeans’ communications. Nevertheless, the United States and EU enjoyed relatively open trade in digital services. The advent of the second Trump administration, however, has energized the transatlantic debate over digital sovereignty. While Trump’s focus during the 2024 campaign was on the EU’s trade in goods surplus with the United States, once back in office he frequently criticized the EU’s digital regulations as a whole, despite the US surplus in services trade driven by the success of US tech companies.

Only a month after Trump’s January 2025 inauguration, the White House issued a memorandum on “Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties,” calling for tariffs and other responses in cases “where a foreign government, through its tax or regulatory structure, imposes a fine, penalty, tax, or other burden that is discriminatory, disproportionate, or designed to transfer significant funds or intellectual property.”²⁹ The memo specifically highlighted “regulations imposed on United States companies by foreign governments that could inhibit the growth or intended operation of United States companies.”³⁰ It also called for the US trade representative to determine whether to renew Section 301 investigations of several digital service taxes (DSTs), including those adopted in France, Austria, Italy, and Spain. The fact sheet accompanying the memo made clear that the target was the European Union and specifically “regulations that dictate how American companies interact with consumers in the European Union, like the Digital Markets Act and the Digital Services Act, will face scrutiny from the Administration.”³¹

Such an aggressive approach brought the issue of digital sovereignty to the fore, as it seemed to disregard the EU’s right to regulate its own market. As the United States and EU pursued a trade agreement, there were conflicting reports as to whether the DSA and DMA (as well as other EU regulations) were on the negotiating table.³² In the end, the joint statement published on August 21, 2025, did not mention either regulation or the DSTs adopted by several EU member states.

But the joint statement was hardly the last word. On August 25, Trump posted on Truth Social: “As the President of the United States, I will stand up to Countries that attack our incredible American Tech Companies. Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology.”³³ Meanwhile von der Leyen, in her September 2025 State of the Union speech, defended the trade deal but also stated: “Whether on environmental or digital regulation, we set our own standards. We set our own regulations. Europe will always decide for itself.”³⁴

The Trump administration has continued criticizing EU digital regulation. For example, on December 16, US Trade Representative Jamieson Greer posted on X (formerly Twitter) that the EU had “persisted in a continuing course of discriminatory and harassing lawsuits, taxes, fines, and directives against U.S. service providers,” and suggested that the United States would retaliate.³⁵ It would be relatively easy for the administration to renew the Section 301 investigations of DSTs. The US government might also look for a mechanism to counter the impact of the DSA and DMA, especially if US companies are fined significantly under those laws. On April 23, 2025, the European Commission fined Apple and Meta €500 million and €200 million, respectively, for noncompliance with the DMA.³⁶ In September, Google was fined €2.95 billion for “distorting competition in the advertising technology industry,” although this case was pursued under the European Commission’s long-time competition authorities rather than under the DMA.³⁷

The commission is also investigating X as well as Meta’s Facebook and Instagram for alleged violations of the DSA, along with separate probes of the Chinese firms AliExpress, Temu, and Tiktok, and several European-based online pornography platforms. On December 5, 2025, the Commission fined X €120 million under the DSA for issues related to its blue checkmarks and advertising repository.³⁸ Beyond these specific cases, the growing criticism of Europe from the US executive branch and parts of Congress, which claim it is censoring “free speech,” is an indication that an influential segment of the Republican Party in the United States will continue to push for action against European efforts to moderate digital content. The EU has been a key target, as has the United Kingdom with its Online Safety Act.

US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer speak after a meeting with the EU Trade Ministers Council in Brussels on November 24, 2025. Lutnick suggested that the EU “reconsider” some digital regulations if the bloc wanted the United States to reduce tariffs on EU steel and aluminum. REUTERS/Piroschka van de Wouw.

At the same time, the European Commission has embarked on a process of simplifying some regulations as part of an effort to make the EU economy more competitive. A digital omnibus—a legislative package designed to amend several regulations across a sector simultaneously—was presented on November 19, 2025.³⁹ As with other commission proposals for simplifying regulations, the digital omnibus focuses on reducing requirements for small and medium-sized enterprises (SMEs), along with streamlining reporting in cases of cybersecurity incidents. It also proposes delaying implementation of AIA requirements for high-risk systems until relevant guidance has been issued and calls for “targeted amendments” to the GDPR to boost innovation, including that related to AI training.⁴⁰ While simplification is likely to reduce the regulatory burden on tech companies in Europe—including large US companies—it has not yet addressed issues related to digital sovereignty.

Apart from potential revisions to existing legislation, the commission plans to move forward on two tracks. First, the second von der Leyen commission anticipates deploying more financial resources to support research on emerging technologies such as AI and quantum. Early in 2025, von der Leyen announced InvestAI, an initiative to raise €200 billion in investment capital.⁴¹ The EU also plans, through the 2025 EU Startup and ScaleUp Strategy, to support startups in their search for the funding that will allow them to grow.⁴² While these funds should be viewed with some caution—it is unclear whether sufficient private funds will join this public-private effort—they demonstrate the EU’s commitment to building its own capabilities.

Second, the commission has made clear that it will continue to pursue new rules governing activities and companies in the digital arena. The Financial Data Access (FiDA) regulation, now in the final stage of negotiations, is intended to allow greater sharing of financial data among financial institutions in order to develop new digital financial products for consumers. European legacy banks have launched an effort to exclude those companies designated as gatekeepers under the Digital Markets Act from participation in FiDA; this effort will primarily affect US tech companies.⁴³

The EU Cloud and AI Development Act (CADA) will attempt to address the EU’s shortcomings in cloud and AI capacity by encouraging the permitting of new data centers and other infrastructure, and by providing greater computational capacity and resources to startups, especially those focused on AI. But it is also expected to establish EU-wide eligibility requirements for cloud service providers, along with harmonized procurement processes, in ways that could restrict participation by non-EU companies. It is not clear yet whether CADA will address concerns through risk-based assurance models or ownership restrictions. It has reportedly been delayed until the first quarter of 2026 as the commission considers the concept of European effective control as a way of supporting EU digital sovereignty.⁴⁴

The Digital Fairness Act, expected to be introduced in mid-2026, will be the EU’s flagship legislation for business-to-consumer relations and will address protection of minors online, transparent online pricing, the abuses of manipulative and addictive design, and marketing by influencers—all of which are likely to be of significant interest to US platforms. Other initiatives expected to be launched in the next eighteen months include the ICT Supply Chain Toolbox, the Quantum Europe Strategy, and the Digital Networks Act. Finally, the European Data Union Strategy, released on November 19 along with the digital omnibus, establishes the ambition of “safeguarding the EU’s data sovereignty through a strategic international data policy.”⁴⁵ It aims to do this by “making fair conditions for data access and cross-border transfer . . . protecting sensitive EU non-personal data . . . and deepening cooperation with trusted partners.”⁴⁶ While a strategy is not a legislative document, we can expect that it will help guide EU policy on international data flows.

The European Parliament is also active in the digital sovereignty debate. MEP Axel Voss, one of the parliament’s leaders on these issues, wrote in an October 2025 post on LinkedIn: “We need immediate decisions to regain a digitally competitive and sovereign EU. Eurostack, deregulation, venture capital, chips, energy, access to quality data and a flourishing environment for Start Ups and creators are crucial for our sovereignty.⁴⁷ He proposes a number of measures, from digital special economic zones to using only EU programs within EU institutions to integrating “buy and deploy European tech” in public procurement.⁴⁸

These initiatives will undoubtedly continue to have an impact on the transatlantic relationship, as they will affect the major actors in the market, most of them American. Even with the best of intentions—and no ambition to exclude those companies—EU adoption and implementation of such rules will likely raise questions about the openness of its future market and the participation of non-EU firms.

The next section explores how the United States and EU have wrestled with the competing pressures of sovereignty and open markets, as presented by a set of key issues relating to government access to data.

Snowden’s relevations and the ‘kill switch‘

More than a decade has passed since the Snowden revelations, but the topic continues to shadow transatlantic digital relations. Many in Europe hailed Snowden as a hero for revealing Europe’s vulnerability to US signals intelligence, and the European Parliament invited him to appear and speak at a plenary meeting. The Obama administration, which charged Snowden under the Espionage Act, objected vehemently to the invitation and, in the end, Snowden addressed the parliament only by video link.⁴⁹ Now, however, US domestic sentiment regarding Snowden’s actions has begun to shift, at least in Republican circles, as several of Trump’s advisers have called for him to be pardoned.⁵⁰

Snowden’s disclosures started a chain of legal proceedings in Europe that generated substantial uncertainty among companies about the legality of their indispensable transfers of personal data to the United States. The Court of Justice of the European Union (CJEU) twice invalidated EU-US international transfer arrangements, judging them insufficient to protect Europeans’ fundamental rights. In 2015, the court struck down the EU-US Safe Harbor Framework, and a successor arrangement, the Privacy Shield, met the same fate in 2020.⁵¹ Meta, the object of the litigation both times, took the issue seriously enough that it publicly conceded to US securities regulators that it might need to withdraw Facebook and Instagram from Europe if it could not legally transfer data to the United States.⁵²

A third arrangement, the EU-US Data Privacy Framework (DPF), concluded in 2023, put significant additional safeguards in place for Europeans’ personal data when they are transferred to the United States. It has stabilized the situation, at least for the time being. On September 3, 2025, the EU General Court rejected a challenge to the DPF brought by Philippe Latombe, a French parliamentarian.⁵³ The case tested the sufficiency of US legal reforms made to overcome the CJEU’s 2020 judgment on the Privacy Shield. The court rejected claims that a redress mechanism created by the agreement lacked independence within the US legal system. It also validated the sufficiency of US safeguards relating to the collection of bulk data for intelligence purposes. Latombe has appealed the General Court verdict to the Court of Justice, however, so a definitive verdict on the fate of DPF has yet to be issued.⁵⁴

The European privacy advocacy organization None of Your Business (NOYB)—headed by well-known Austrian privacy activist Max Schrems, who brought the 2015 and 2020 CJEU cases—reacted with disbelief to the Latombe ruling. Schrems drew attention to Trump administration actions against the independence of the US Privacy and Civil Liberties Oversight Board (PCLOB) and the Federal Trade Commission (FTC). He also said that he is mulling bringing a second challenge to the DPF in EU courts.⁵⁵

US cloud service providers, including Amazon Web Services and Microsoft, have responded to European unease over data transfers to the United States by introducing service features that allow enterprise customers to store certain types of data exclusively on servers located on the continent.⁵⁶ Offering to localize data in this fashion can reassure European customers concerned about the long arm of US government’s potential access to their data.

However, the Trump administration exacerbated European anxiety over data flows to and from the United States by briefly cutting off Ukraine from US intelligence sharing in early 2025.⁵⁷ The specter of a US government kill switch—in the form of an order to US cloud providers to stop commercial data transfers to Europe—has spurred further efforts by US cloud providers to reassure their European customers. Brad Smith, Microsoft’s vice chair and president, went so far as to issue a public statement in April that, “In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court.”⁵⁸

In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court.
Brad Smith, “Microsoft Announces New European Digital Commitments,” Microsoft, April 30, 2025, https://blogs.microsoft.com/on-the-issues/2025/04/30/european-digital-commitments.

In response, some European companies have spied a business opportunity. For example, the German company Ecosia and its French counterpart Qwant announced their intention to build a European web index called European Search Perspective (ESP) to compete with Google’s search engine.⁵⁹ Ecosia’s chief executive officer (CEO) cited concern about the political winds blowing in the United States: “With the US election turning out as it has, I think there is an increased fear that the future US president will do things that we as Europeans don’t like very much . . . We, as a European community, just need to make sure that nobody can blackmail us.” He also emphasized Europe’s current dependence on Google’s services: “If the US turned off access to search results tomorrow, we would have to go back to phone books.”⁶⁰

The European dream of regaining data sovereignty by generating companies that can compete with the US cloud giants has a long history of failure. Our 2022 report chronicled the ambitious Franco-German effort to develop GAIA-X, a federated data and cloud ecosystem.⁶¹ In the years since, the vision of an interoperable network of trusted European cloud providers has had limited success. Its major output is a series of standards, specifications, and labels for European cloud providers, rather than a transformation of the commercial landscape.⁶²

Draghi’s 2024 report on the single market effectively conceded defeat in this area of endeavor. “It is too late for the EU to . . . develop systematic challengers to the major US cloud providers,” Draghi wrote.⁶³ Nonetheless, European anxiety over the possibility, however small, that dominant US platform services could withdraw from the continent, be blocked from serving it by the US government, or be a mechanism for channeling EU data to the US government, will continue to power a push for European sovereign alternatives.

A second continuing impetus is an awareness in Europe—thanks to Snowden—that the dominance of US digital services in Europe offers US intelligence agencies a strategic advantage. The Biden administration even boasted of this during the 2023 congressional debate to reauthorize Section 702 of the Foreign Intelligence Surveillance Act (FISA), a principal authority for collecting intelligence information on non-Americans. The pervasiveness of US digital service providers worldwide, the administration noted, allows US intelligence agencies to “leverage this national advantage to collect foreign intelligence information . . . in order to protect America from its adversaries.”⁶⁴

US law enforcement access to data on European servers

US intelligence collection in Europe is not the only challenge to data sovereignty that the EU sees emanating from the United States. Another is the Clarifying Lawful Overseas Use of Data Act (CLOUD Act), a 2018 US law. This statute confirmed that US law enforcement can unilaterally order cloud service providers with a presence in the United States to turn over personal data they host on servers in Europe and other foreign locations for criminal investigations and prosecutions. Although several EU countries, including Belgium, give their law enforcement authorities similar extraterritorial criminal evidentiary powers, this part of the CLOUD Act is seen in Europe as singularly intrusive. When EU legislators call for companies to be immune to foreign law, they are often referring to the CLOUD Act.

However, the CLOUD Act also contains a conciliatory dimension. Part II of the act authorizes the US Department of Justice to negotiate binding international agreements under which criminal investigators and prosecutors can obtain foreign-located electronic evidence directly from providers. Because CLOUD Act agreements are consensual, they do not violate a foreign state’s judicial sovereignty by commanding that a legal measure be taken on its territory. Instead, they remove legal obstacles that companies otherwise face in voluntarily assisting foreign law enforcement. This new type of international agreement can substantially reduce reliance on mutual legal assistance treaties (MLATs), which can be too slow and cumbersome for obtaining e-evidence in fast-moving investigations.

The United States has concluded CLOUD Act agreements with the United Kingdom (UK) and Australia, and negotiations are under way with Canada, all of which are members of the Five Eyes intelligence collective.⁶⁵ The UK agreement, the first to be concluded, has had a positive effect for that country’s law enforcement agencies.⁶⁶ According to the US Department of Justice, UK agencies have already made more than twenty thousand direct requests to companies holding electronic evidence in the United States, including many for real-time interception of communications.⁶⁷ The results “provided UK Law Enforcement and Intelligence Agencies with critical data to tackle the most serious crimes facing UK citizens including terrorism; child sexual exploitation; drug trafficking; and organised crime,” a UK government minister said in late 2023.⁶⁸

Prosecutors from EU member states have looked across the channel jealously as their UK counterparts have made use of this powerful new investigative tool. In 2019, the EU authorized negotiation of an e-evidence agreement with the United States.⁶⁹ Talks began in earnest after the EU finalized its controversial counterpart to the CLOUD Act, the 2023 E-Evidence Regulation.⁷⁰ Progress has been slow and painstaking. In June 2024, senior EU and US home affairs and justice officials issued an optimistic joint statement welcoming “further progress” in the negotiations and looking “forward to advancing and completing” them.⁷¹

Source: US Department of Justice

The Trump administration has paused EU-US negotiations without explanation. It might have concluded that CLOUD Act agreements operate overwhelmingly to the advantage of foreign partners—the inevitable consequence of most relevant data being housed on servers located in the United States. As the Trump administration has demonstrated in trade negotiations with foreign countries, it is singularly focused on agreements that it can present as bringing more benefits for the United States. However, such a narrow focus overlooks other benefits of CLOUD Act agreements—sparing cloud providers conflicts of law, deterring data localization measures, and reducing the burden on the mutual legal assistance process.

The EU-US Data Privacy Framework and an e-evidence agreement would neutralize much of the political tension that has prevailed in these realms for more than a decade.

In mid-2025, the UK government added an element of controversy to the use of CLOUD agreements by allegedly serving a request to Apple that it globally disable security features on its products.⁷² If the UK successfully required Apple to remove security from a product (for example, by building in a backdoor to data that would otherwise be end-to-end encrypted), it could then use the CLOUD Act agreement to request the now-vulnerable data directly from the company. Apple challenged the request in a UK administrative court proceeding and issued a public statement warning customers about the measure’s impact.⁷³ In addition, the White House and Congress sharply criticized the reported UK measure.⁷⁴ In August, the UK government withdrew its demand for access to Apple US customers’ encrypted data, effectively conceding to the US objection.⁷⁵ It recently confirmed that the order had been reissued to apply only to UK users.⁷⁶ The US government could well demand that any EU e-evidence agreement include a similar commitment safeguarding US persons’ data from surveillance by member states’ authorities.

A US-EU e-evidence agreement would be an important advance in calming Europe’s sovereign sensitivities about how US law enforcement authorities collect foreign-located evidence, just as the Data Privacy Framework has at least temporarily allayed Europe’s concerns about US national security agencies’ collection practices. Taken together, the two agreements would neutralize much of the political tension that has prevailed in these realms for more than a decade.

The US u-turn on data flows

After decades of the United States propounding unrestricted international commercial data flows—and bemoaning Europe’s privacy impediments to them—the Biden administration made a dramatic course correction in late 2023.⁷⁷ Through parallel legislation (the Protecting Americans from Foreign Adversary Controlled Applications Act) and executive action, it imposed controls on certain categories of data exports to China, Russia, and other “foreign adversaries” citing national security reasons.⁷⁸ Subsequently, the Department of Justice issued a final rule and guidance to companies on compliance and enforcement.⁷⁹ Both the legislation and regulatory actions were spurred by reports that data brokers were collecting publicly available bulk data on US persons and selling them to foreign governments, which could enable them to—among other things—track the location of US military personnel.⁸⁰

In addition to enacting domestic measures to limit certain international commercial data flows, the United States reversed course internationally. In the fall of 2023, the Office of the US Trade Representative withdrew its proposal to include in the Joint Statement Initiative on Electronic Commerce (JSI)—a World Trade Organization negotiation—a guarantee of the free flow of data across borders.⁸¹ The final text of the JSI, announced in July 2024, not only lacks such an obligation but allows parties essentially unlimited scope to restrict data flows for data protection reasons, precisely as the EU had sought.⁸² Even with these changes, the United States declined to join the JSI because it regarded the agreement’s national security exception as insufficiently flexible, a move that some European Commission officials found puzzling.⁸³

In contrast to the United States—and despite its long history of controlling data exports through the GDPR—the EU has moved slowly to evaluate the risks of data transfers to authoritarian states such as China and Russia. In 2021, the European Data Protection Board commissioned an outside report from academics that confirmed both countries’ governments have access to individuals’ personal information without commensurate rule-of-law protections, but it took no further action.⁸⁴ Even Russia’s full-scale invasion of Ukraine has not served to entirely staunch the flow of European data to Russia. The Finnish and Dutch data protection authorities investigated data transfers by Yango, a subsidiary of the Russian search engine Yandex, but have not yet imposed restrictions.⁸⁵

The data dynamics are a microcosm of Europe’s larger dilemma with China—deep commercial dependency, but also a recognition that a degree of sovereign control is needed.

The past year, however, has seen a gradual shift in European regulators’ thinking regarding data transfers to China. In May 2025, the Irish Data Protection Commission (DPC) fined TikTok €530 million after discovering it was transferring data to China without requisite data protection safeguards.⁸⁶ In July, the DPC broadened its TikTok inquiry into whether the Chinese government could access such data when they are stored in China.⁸⁷ The Finnish data protection authority began a separate investigation into possible Chinese government access to health data that a Finnish university had shared with a Chinese genetic analysis company.⁸⁸

Even Schrems, who has long challenged European data transfers to the United States, has turned his attention to China. Early in 2025, he filed complaints with European data protection authorities against six major Chinese consumer companies, including Shein, Temu, and WeChat, alleging government access to Europeans’ personal data by an “authoritarian surveillance state.⁸⁹

Recent moves by European data protection authorities to question whether China’s government has impermissible access to Europeans’ personal information mirror the rise in geopolitical tensions between Brussels and Beijing. Ireland’s inquiry into TikTok data transfers, for example, can be read as asserting European data sovereignty against a geopolitical rival. The data dynamics are, in effect, a microcosm of Europe’s larger dilemma with China—deep commercial dependency, but also a recognition that a degree of sovereign control is needed.

A single European data market

Brussels has recently expanded its laws promoting the secondary use of data for commercial, research, and government purposes, in hopes that these innovative legal measures will give homegrown companies a much-needed advantage in competing with data-rich foreign tech giants. However, the transfer of such data to non-EU companies has raised concerns about potentially protectionist restrictions. The Data Governance Act, the Data Act, and the European Health Data Space regulation—all enacted during the first von der Leyen commission—seek to stimulate a market for the secondary use of European data for commercial purposes.⁹⁰ These measures are based on the recognition that data collected by—and locked within—governmental or commercial organizations can have societal and economic benefits if made available for reuse by other entities.

The 2022 Data Governance Act grew out of a post-pandemic recognition of the potential for reuse of government-held data. It facilitates reuse by the private sector, for both commercial and non-commercial purposes, of government-held data (G2B), including data originally collected by public health, environmental, and transport authorities. Then Commissioner Thierry Breton hailed it as a step toward “an open yet sovereign European Single Market for data.”⁹¹

The Data Governance Act was followed a year later by the even more ambitious Data Act, which concentrated on expanding business-to-business sharing of non-personal data, such as the industrial data generated by connected devices. The Data Act sought to ease legal issues that arise with reuse by third parties, such as intellectual property protection and trade secret rules. Both laws insisted upon additional safeguards for transferring data to companies in third countries, such as the United States, where that data could become subject to governmental access. The European Commission further envisaged a series of sector-specific European data spaces, each requiring separate legislation.⁹² They would cover sectors—from agriculture to energy to transportation—that generate large amounts of industrial data ripe for reuse. The European Health Data Space regulation is the first of this series to be enacted.

At the start of the current commission mandate, von der Leyen’s mission letter to Virkkunen instructed her to deepen focus on the reuse of data. She was asked to “present a European Data Union Strategy drawing on existing data rules to ensure a simplified, clear and coherent legal framework for businesses and administrations to share data seamlessly and at scale, while respecting high privacy and security standards.”⁹³ The commission duly launched a public consultation process, articulating as its aim “expanding the availability and use of data to support AI development.”⁹⁴ Published on November 19, 2025, the Data Union Strategy seeks to safeguard the EU’s data sovereignty by ensuring fair conditions for cross border flows of non-personal data; “linking EU data ecosystems with those of like-minded partners;” and “boosting the EU voice in global data governance.”⁹⁵ This is intended to build a comprehensive legal regime for secondary data access that will enable European industry to catch up with the US tech giants that already enjoy access to vast pools of proprietary data.

EU content moderation and free speech

One of the EU’s proudest recent legislative accomplishments is the 2023 Digital Services Act, a sprawling and complex framework regulating online platforms’ accountability for illegal content, including illegal hate speech.⁹⁶ It imposes the most onerous requirements on very large online platforms, half of which are US companies. The Trump administration and the Republican-led Congress have sharply criticized the DSA, viewing it as a tool for the suppression of right-wing populist political speech.⁹⁷ On the contrary, the EU views certain DSA provisions, such as transparency tools and safeguards against arbitrary content moderation, as intended to protect free speech.

Trump singled out the DSA for criticism in the February 2025 official memorandum on preventing the “Unfair Exploitation of American Innovation,” while the Republican chair of the Federal Communications Commission called it “incompatible with both our free speech tradition in America and the commitments that these technology companies have made to a diversity of opinions.”⁹⁸ The US State Department began a diplomatic campaign, alleging, “In Europe, thousands are being convicted for the crime of criticizing their own governments.”⁹⁹ A leaked August 2025 cable to European posts directed US diplomats to advocate for a narrowing of the DSA’s definition of illegal content, among other ambitions. The European Commission firmly pushed back, describing the censorship allegations as “completely unfounded” and insisting that its digital legislation “will not be changed.”¹⁰⁰

The Republican majority on the House of Representatives Judiciary Committee also weighed in with a strongly worded staff report describing the DSA as an “anti-speech, Big Brother law.”¹⁰¹

The report identified a handful of examples of how the act could function to restrict speech extraterritorially. For example, in an August 2024 letter, then Commissioner Breton warned Elon Musk’s X platform that the effects of a campaign interview it hosted with Trump could spill over into the EU and spur commission retaliatory measures under the DSA.¹⁰² The committee also cited a request to X by the French national police that the platform remove a post originating from a US-based account suggesting France’s immigration and citizenship policies were to blame for a 2023 terrorist attack a Syrian refugee committed in that country.¹⁰³

Reform UK party leader Nigel Farage before a House Judiciary Committee hearing entitled “Europe’s threats to American speech and innovation” in Washington, DC, September 3, 2025. REUTERS/Nathan Howard.

The chairman of the US FTC launched a further salvo in August, warning US companies that their very compliance with the EU’s DSA, or with the UK’s similar Online Services Act or its surveillance authorities, could constitute a violation of the FTC Act, which prohibits unfair or deceptive commercial acts or practices. FTC Chairman Andrew N. Ferguson suggested, “It might be an unfair practice to subject American consumers to censorship by a foreign power by applying foreign legal requirements, demands, or expected demands to consumers outside of that foreign jurisdiction.”¹⁰⁴

This transatlantic dispute over the DSA and similar content moderation laws reflects differing US and European historical traditions on speech regulation.¹⁰⁵ The US Supreme Court has identified only speech creating a “clear and present danger” of inciting violence or other illegal conduct as suitable for restriction. Many European judiciaries, informed by their countries’ twentieth century histories of hate speech, take a more cautious view. For example, Germany bans speech glorifying or denying the Holocaust, while Denmark makes it illegal to burn the Quran. The DSA is the EU’s attempt to ensure that platforms remove content deemed illegal, both offline and online, but the act’s lack of definitions leaves a door open to abuse.

On December 23, 2025, the Trump administration raised the stakes in its free speech campaign against European content moderation laws. Secretary of State Marco Rubio issued determinations under the Immigration and Nationality Act barring from entry into the United States five Europeans associated with content moderation.¹⁰⁶ The headliner was Thierry Breton, an architect of the DSA; the others hail from European non-governmental organizations that track hate speech and disinformation on the internet. The European Commission quickly issued a statement that it “strongly condemns” the US actions, reiterating its “sovereign right to regulate economic activity in line with our democratic values.”¹⁰⁷ As the Trump administration continues its ideological campaign against the DSA, the transatlantic dispute over free speech seems bound to escalate.

Cybersecurity and cloud services

In 2022, the European Union Agency for Cybersecurity (ENISA) began an effort to harmonize member-state cybersecurity requirements for government data processing contracts. The European Commission averred that cloud services were a “strategic dependency” on a handful of large providers headquartered in the United States.¹⁰⁸ Several EU member states, led by France, argued for including sovereignty requirements in the envisaged EU Cybersecurity Scheme (EUCS).

A leaked 2023 ENISA draft proposed that the EU impose sovereignty requirements similar to those in France’s domestic security certification and labeling program, SecNumCloud, for contracts involving the most sensitive government data. SecNumCloud has an announced goal that, in order to obtain a trust certificate, cloud service providers must be “immune to any extra-EU regulation.”¹⁰⁹ ENISA proposed incorporating this requirement into EU law as well, adding restrictions on foreign ownership and insisting on localization of cloud services operations and data within the EU.

EU member states divided over whether to adopt such cybersecurity requirements, which could have the effect of disqualifying large foreign cloud service providers from sensitive government data processing contracts. In addition, some European companies, especially in the financial sector, argued that the foreign providers offered greater cybersecurity as well as a superior technical product.¹¹⁰ The Office of the US Trade Representative formally questioned whether the potential EUCS restrictions were consistent with the EU’s obligations under the World Trade Organization’s Government Procurement Agreement (GPA).¹¹¹

In 2024, the Belgian EU presidency put forward a compromise proposal that discarded the foreign ownership restrictions in favor of data labeling and localization requirements.¹¹² French authorities and technology companies expressed dismay at the prospect of EU-level cybersecurity certification rules weaker than France’s own.¹¹³ ENISA has yet to issue the final implementing measure, and this debate could well reemerge in the context of the anticipated CADA.

Looking ahead: Transatlantic tension will persist

The European debate over digital sovereignty—now firmly linked to the wider debate over technological sovereignty—is likely to be a continuing point of tension in the US-EU relationship. For many years, this has been a rhetorical exercise with few real consequences for non-EU firms, especially US companies. But the shift in geopolitics and the increasing drive to support EU industries to build a more competitive economy have led many European policymakers to conclude that now is the time to act. Moreover, the geopolitics are not just about Russia’s aggression or China’s export domination. They are also about the shifts and inconsistencies in US policy that have made many in Europe believe that it must now begin to fend for itself, in terms of both defense and the economy.

As a result, the debate over digital sovereignty has moved from a discussion of whether there should be limits on non-EU companies to a discussion of how many restrictions there will be, and of what type and in what sectors of the economy. That discussion is likely to be pursued through several key legislative initiatives planned for late 2025 and 2026. CADA is already expected to identify requirements—including sovereign requirements—for cloud services.

The geopolitics are not just about Russia’s aggression or China’s export domination. They are also about the shifts and inconsistencies in US policy that have made many in Europe believe that it must now begin to fend for itself.

Perhaps most relevant, the public procurement directives are already under internal review, with a proposal for revision expected from the commission in 2026.¹¹⁴ Because much of the debate is about who can sell which products and services to whom (including to governments), procurement policy will be a key instrument in imposing sovereign requirements. EU and member-state procurement rules currently privilege price as the key selection criteria but, in the Net Zero Industry Act and other new measures, other considerations have been introduced into the procurement calculation.

As the EU pursues these initiatives, it will face a dilemma: To what degree does sovereignty require autarky? Or does the EU require partnerships, despite the risk of dependencies, because of the current lack of key capabilities? Some in Europe have argued that the right way forward is to develop end-to-end EU capabilities in the form of a Eurostack.¹¹⁵ From fiber-optic networks and computing hardware to software development and cybersecurity capabilities, all would be provided by EU companies.¹¹⁶ Others have pointed to the difficulties with this, asking whether the lack of EU-owned capabilities in cloud, AI, search, and other key functions would doom such an effort to be inferior and thus push Europe farther behind in the race to innovate essential digital technologies for the future. They also fear that European companies will not be able to compete internationally if they are cushioned by sovereign requirements.¹¹⁷ Some see no contradiction between sovereignty and being open to non-EU firms; indeed, they see access to the most innovative global companies as essential, especially given Europe’s competitiveness challenge.¹¹⁸ For others, the key element is timing. The EU tech sector currently lags in innovation but, with proper support and time, it should be fully capable of growing world-leading firms and technologies.¹¹⁹ Indeed, the EU’s International Digital Strategy emphasizes the importance of partners in boosting EU competitiveness and innovation, and the EU’s ambitions in global governance for data can hardly be accomplished without cooperative partners.¹²⁰

But in all these versions of digital sovereignty, as well as in the larger arena of tech sovereignty, there is a central question: who owns the companies involved, and does it matter if they are not EU firms as long as they abide by EU laws and regulations? The recent negotiations over an EU-wide cloud certification system stalled on exactly this point (see the above discussion of EUCS). The Toolbox for 5G Cybersecurity put forward the concept of a “high-risk supplier” to warn against non-EU companies that were insufficiently independent of their home governments. While this was aimed at Chinese companies—especially Huawei—concerns have more recently focused on the United States and its companies.

The EU’s concerns are not only about the dominant position of US platforms in the European digital market, but also the potential actions of the US government—especially the Trump administration. The administration’s inconsistency on Ukraine, highlighted by its threats in July 2025 to cease sending weapons and other military supplies to Ukraine (reversed shortly after), alarmed many in Europe.¹²¹ Reports that the Trump administration threatened to block Ukraine’s access to the vital communications network Starlink during negotiations over critical minerals also raised European concerns.¹²² While these instances were primarily about defense, not the digital arena, they have created a heightened sense of insecurity in Europe. Coupled with the experience of the trade negotiations, they put into question the reliability of the United States as a partner in any undertaking.

In this environment, the EU will need to make choices about how best to ensure it has sufficient sovereignty over its digital market. Will the answer be found in more restrictions on non-EU companies, or with a more open arrangement that also boosts European economic growth and competitiveness?

Seven recommendations for Brussels and Washington

Given the economic stakes involved for both parties, the EU should engage the United States as it moves forward, and should keep the following guidelines in mind.

Competitiveness is key to innovation and economic success.

Throughout the coming debates over sovereign requirements, the EU must balance the need for security and for its own industrial and digital capabilities with the efficiencies and productivity required for a globally competitive economy. Settling for a more expensive and less capable product or service because it is European owned is not the way to grow the economy. There are times when it is necessary, but these instances should be rare and well considered, not routine.¹²³

Heated rhetoric on either side does not help the economy.

As the EU moves forward with legislation, both Washington and Brussels should seek to lower the temperature. While some US executive orders and statements from top officials have seemed to decry any EU regulation that impedes US companies, the reality is that Europe has the right to regulate as it sees fit in its own market, as does the United States. At the same time, European threats of broad sovereign restrictions do not encourage needed investment. It should not be forgotten that the US-EU trade and investment relationship is the largest such partnership in the world, worth around $1.5 trillion in goods and services trade in 2024, and with mutual investment worth several times that.¹²⁴ As both parties establish regulatory or investment requirements intended to boost domestic capabilities and add resilience to their economies, there will inevitably be tensions and misunderstandings. Creating barriers to trade and investment is sometimes necessary in limited circumstances, but careful consultations can ameliorate their impact.

Agreed legal frameworks in key areas can ease the need for sovereign protections.

A proposal that the trusted circle of cybersecurity providers be based on NATO membership might be appropriate.

As the discussion of data policy demonstrates, the transatlantic economy is not just about products and services, but also the data generated by them. Sharing those data—and being able to use them to generate revenues—is key to success in the digital economy. Of course, those transferring and using data must comply with local laws, including the GDPR. But the US and EU regulatory regimes collide at times, offering inconsistent or even conflicting requirements. Negotiated arrangements, such as the US-EU Data Privacy Framework, can overcome those differences and provide a stable context for business. A US–EU agreement on law enforcement access to data likewise could provide the protections and access both parties need. Similarly, an agreement that facilitates transfers of non-personal data might be useful in response to the Data Act and Data Union Strategy. Now is the time to make sure the United States and EU are developing compatible regimes.

Ringfencing can be a valuable strategy, as can trusted vendors.

Not all suppliers and customers are equal. Arrangements among allies and partners can lessen risks while preserving as much of the open, prosperous economy as possible, even in sensitive sectors. It makes no sense for Europeans to focus more on the transfer of data to the United States than to Russia or China. Using criteria such as those in the EU Toolbox for 5G Cybersecurity to identify foreign companies that can partner in key sectors will provide clarity and ease transactions. Similarly, a proposal floated in the EUCS negotiations that the trusted circle of cybersecurity providers be based on NATO membership might be appropriate. The Group of Seven (G7) could also offer a starting point for developing a set of compatible, interacting regulatory regimes in the digital economy, as it has done to some degree through its discussion of data free flow with trust and the AI principles and code of conduct.¹²⁵

Certain sectors of the economy are more sensitive than others.

Digital sovereignty requirements should not be imposed on broad swaths of the economy. There are two main reasons for such requirements: national security and creating an indigenous capability in those areas where national economic resiliency is required. Policymakers should carefully identify the areas of the economy where these two reasons apply. Cybersecurity for essential government operations and protecting critical infrastructure are good examples. Management of more prosaic, but still sensitive government data—including where they are stored and who has access—might not need such stringent requirements. Because digital elements—data, cloud, software, and increasingly AI—exist across the economy, it might be more helpful to think about specific functions and make a risk-based assessment of the consequences of failure. Sovereign requirements should be limited to those areas in which a failure or breach will have consequences across society and the economy.

The type of sovereign requirement can vary with the economic sector and even particular conditions.

Among European policymakers, the sovereign requirements currently under discussion can be divided into two types: those that require a supplier to adhere to specific rules and those that involve restrictions relating to the ownership of the company supplying a particular service or product. The first might involve data localization or restricting access to data or use of a particular technology, such as AI. The second, which has been applied in the French SecNumCloud, is far more restrictive and affects the ability of any US-based company to provide the service in question. In some cases, an ownership restriction might exclude companies with the best capabilities from providing the service, and could even expose those using the service to more risk. Thus, ownership restrictions are unlikely to be worthwhile except in rare cases. In the United States, these exist in areas of defense contracting, in which companies dealing with US classified material must set up a US company with US governance and employees. But most government digital contracts, both in the United States and in Europe, are not defense related and would not require such far-reaching ownership rules.

Instead, for those functions in which a breach or disruption would cause significant harm, creating a category of trusted vendors might be appropriate. This could apply to sensitive government functions, as well as to critical infrastructure provided by private-sector enterprises. A system based on trusted vendors could balance the desire to boost local providers while also securing access to top-quality services from non-EU companies. The EU might consider whether there are lessons to be learned from the US government’s FedRAMP system, which certifies companies (including non-US companies) to provide cloud services to different government customers. Companies need to meet criteria that become more restrictive and complex through the three levels of certification (low, moderate, and high).¹²⁶ While FedRAMP applies across most of the US government, individual agencies have the ability to impose their own requirements, allowing national security and intelligence agencies to impose further restrictions on those involved in classified functions. Despite these exceptions, FedRAMP’s graduated approach—matching certification level to sensitivity of the data—is much more tailored than some European proposals in matching certification requirements to the risk level of the cloud service required.¹²⁷

Sovereign requirements should be implemented in a consistent manner, including at the member-state level.

One of the persistent challenges of EU policy is ensuring that implementation is the same throughout the union. Both the Draghi and Letta reports cited differences in member-state requirements for businesses (or implementation of those requirements) as a key factor slowing EU competitiveness. The US trade representative has cited as trade barriers numerous instances of different requirements among EU member states, meaning that companies must follow multiple sets of rules even within the single market.¹²⁸ The European Commission recognized this problem when it decided that, under the DSA, very large online platforms (VLOPs) should be regulated at the EU level, not by member-state authorities. As the EU develops sovereign requirements in the digital sphere, it should be alert to efforts by member states to toughen criteria in ways that add unwarranted restrictions.

While the EU certainly has the right to decide on its own digital sovereignty requirements, those measures will undoubtedly affect access of non-EU companies to the market as well as the capabilities that are accessible to the EU and its member states. There will be costs for the EU, especially as it tries to build a more competitive economy. For that reason, any restrictions should be focused on those circumstances in which risks are high and security is necessary. This exercise should not be about denying access to non-EU companies, but instead about building a secure digital environment and resilient European capabilities. The EU should engage with its partners—not only the United States, but also Japan, South Korea, the UK, and others—to ensure that the fewest possible frictions arise. This will be a test for the transatlantic relationship, but one that can lead to greater cooperation rather than continued angst.

About the authors

Fellow

Frances Burwell

Distinguished Fellow

Europe Center

Central Europe Digital Policy

Fellow

Kenneth Propp

Nonresident Senior Fellow

Europe Center

European Union Digital Policy

Acknowledgements

The authors would like to thank James Batchik, Emma Nix, and Jack Muldoon for their tireless support on the report’s editing, research, and data visualization.

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1 See, for example: “Von der Leyen Puts Digital Sovereignty at the Heart of EU’s 2025 Agenda,” Council of European Informatics Societies, September 16, 2025, https://cepis.org/von-der-leyen-puts-digital-sovereignty-at-the-heart-of-eus-2025-agenda/.

2 See the earlier work of the authors: Frances G. Burwell and Kenneth Propp, “The European Union and the Search for Digital Sovereignty: Building ‘Fortress Europe’ or Preparing for a New World?”Atlantic Council, June 2020, https://www.atlanticcouncil.org/wp-content/uploads/2020/06/The-European-Union-and-the-Search-for-Digital-Sovereignty-Building-Fortress-Europe-or-Preparing-for-a-New-World.pdf; Frances Burwell and Kenneth Propp, “Digital Sovereignty in Practice: The EU’s Push to Shape the New Global Economy,” Atlantic Council, November 2, 2022, https://www.atlanticcouncil.org/in-depth-research-reports/report/digital-sovereignty-in-practice-the-eus-push-to-shape-the-new-global-economy/.

3 Donald J. Trump, Truth Social post, August 25, 2025, https://truthsocial.com/@realDonaldTrump/posts/115092243259973570; Elena Giordano, “EU Resists Trump: Tech Regulation Is Our ‘Sovereign Right,” Politico,August 26, 2025, https://www.politico.eu/article/eu-resists-trump-tech-regulation-is-our-sovereign-right/.

4 “Lutnick Talks EU Tech Rules, Nvidia H200 Chips, SCOTUS Tariff,” Bloomberg, November 24, 2025, https://www.bloomberg.com/news/videos/2025-11-24/lutnick-talks-eu-tech-rules-nvidia-h200-chips-tariffs-video.

5 “European Council Meeting (23 October 2025) Conclusions,” European Council, October 23, 2025, https://www.consilium.europa.eu/media/d2nhnqso/20251023-european-council-conclusions-en.pdf.

6 Sarah Knafo, “Report on European Technological Sovereignty and Digital Infrastructure,” European Parliament, Committee on Industry, Research and Energy, June 11, 2025, https://www.europarl.europa.eu/doceo/document/A-10-2025-0107_EN.html.

7 Cristina Caffarra, et al., “Deploying the Eurostack: What’s Needed Now,” Eurostack Initiative, May 19, 2025, https://eurostack.eu/wp-content/uploads/2025/08/eurostack-white-paper-final-19-05-25-3.pdf.

8 Kenneth Propp, “Talking Past Each Other: Why the US-EU Dispute over ‘Free Speech’ Is Set to Escalate,” Atlantic Council, August 15, 2025, https://www.atlanticcouncil.org/blogs/new-atlanticist/us-eu-dispute-over-free-speech-is-set-to-escalate/.

9 “European Council Meeting (23 October 2025) Conclusions.”

10 “Summit on European Digital Sovereignty Delivers Landmark Commitments for a More Competitive and Sovereign Europe,” Élysée, November 18, 2025, https://www.elysee.fr/en/emmanuel-macron/2025/11/18/summit-on-european-digital-sovereignty-delivers-landmark-commitments-for-a-more-competitive-and-sovereign-europe.

11 “Declaration for European Digital Sovereignty,” Council of the European Union, December 5, 2025, https://data.consilium.europa.eu/doc/document/ST-15781-2025-INIT/en/pdf.

12 “Cloud Sovereignty Framework,” European Commission, October 2025, https://commission.europa.eu/document/download/09579818-64a6-4dd5-9577-446ab6219113_en?filename=Cloud-Sovereignty-Framework.pdf.

13 Knafo, “Report on European Technological Sovereignty and Digital Infrastructure.”

14 Mario Draghi, “The Future of European Competitiveness,” European Commission, September 9, 2024, https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en.

15 Ibid.

16 “Largest Tech Companies by Market Cap,” CompaniesMarketCap, last visited September 27, 2025, https://companiesmarketcap.com/tech/largest-tech-companies-by-market-cap/.

17 Enrico Letta, “Much More than a Market,” European Council, April 2024, https://www.consilium.europa.eu/media/ny3j24sm/much-more-than-a-market-report-by-enrico-letta.pdf.

18 Draghi, “The Future of European Competitiveness.”

19 Ivan Levingston, “European Start-up Valuations Boom on Investor Frenzy,” Financial Times, September 5, 2025, https://www.ft.com/content/5cd37cea-87e7-4648-b85b-f77091dd4558.

20 Draghi, “The Future of European Competitiveness.”

21 Ramsha Jahangir, “What’s Behind Europe’s Push to ‘Simplify’ Tech Regulation?” Tech Policy Press, April 24, 2025, https://www.techpolicy.press/whats-behind-europes-push-to-simplify-tech-regulation/.

22 Javier Espinosa, “EU Should Focus on Top 5 Tech Companies, Says Leading MEP,” Financial Times, May 31, 2021, https://www.ft.com/content/49f3d7f2-30d5-4336-87ad-eea0ee0ecc7b.

23 “Cybersecurity of 5G Networks: EU Toolbox of Risk Mitigation Measures,” European Commission, January 23, 2020, https://digital-strategy.ec.europa.eu/en/library/cybersecurity-5g-networks-eu-toolbox-risk-mitigating-measures.

24 “EU–China—A Strategic Outlook,” European Commission and European External Action Service, March 12, 2019, https://commission.europa.eu/system/files/2019-03/communication-eu-china-a-strategic-outlook.pdf.

25 “Speech by President von der Leyen on EU-China Relations to the Mercator Institute for China Studies and the European Policy Centre,” European Commission,March 29, 2023, https://ec.europa.eu/commission/presscorner/detail/en/speech_23_2063.

26 “Strategic Dependencies and Capacities,” European Commission, May 5, 2021, https://commission.europa.eu/system/files/2021-05/swd-strategic-dependencies-capacities_en.pdf.

27 “Commission Announces Next Steps on Cybersecurity of 5G Networks in Complement to Latest Progress Report by Member States,” European Commission, press release, June 14, 2023, https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3309.

28 “Roadmap Towards Ending Russian Energy Imports,” European Commission, May 12, 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52025DC0440R(01).

29 “Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties,” White House, February 21, 2025, https://www.whitehouse.gov/presidential-actions/2025/02/defending-american-companies-and-innovators-from-overseas-extortion-and-unfair-fines-and-penalties/.

30 Ibid.

31 “Fact Sheet: President Donald J. Trump Issues Directive to Prevent the Unfair Exploitation of American Innovation,” White House,February 21, 2025, https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-issues-directive-to-prevent-the-unfair-exploitation-of-american-innovation.

32 Alice Hancock, Paola Tamma, and James Politi, “EU Push to Protect Digital Rules Holds Up Trade Statement with US,” Financial Times, August 17, 2025. https://www.ft.com/content/3f67b6ca-7259-4612-8e51-12b497128552.

33 Truth Social, August 25, 2025.

34 “2025 State of the Union Address by President von der Leyen,” European Commission, September 9, 2025, https://ec.europa.eu/commission/presscorner/detail/ov/SPEECH_25_2053.

35 U.S. Trade Representative, X post, December 16, 2025, https://x.com/USTradeRep/status/2000990028835508258.

36 “Commission Finds Apple and Meta in Breach of the Digital Markets Act,” European Commission, press release, April 23, 2025, https://digital-strategy.ec.europa.eu/en/news/commission-finds-apple-and-meta-breach-digital-markets-act.

37 “Commission Fines Google €2.95 Billion over Abusive Practices in Online Advertising Technology,” European Commission, press release, September 4, 2025, https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1992.

38 “Commission fines X €120 million under the Digital Services Act,” European Commission, press release, December 5, 2025, https://digital-strategy.ec.europa.eu/en/news/commission-fines-x-eu120-million-under-digital-services-act.

39 Mark MacCarthy and Kenneth Propp, “The European Union Changes Course on Digital Legislation,” Lawfare, December 15, 2025, https://www.lawfaremedia.org/article/the-european-union-changes-course-on-digital-legislation.

40 “Simpler EU Digital Rules and New Digital Wallets to Save Billions for Businesses and Boost Innovation,” European Commission, press release, November 19, 2025, https://ec.europa.eu/commission/presscorner/detail/en/ip_25_2718.

41 “EU Launches InvestAI Initiative to Mobilise €200 Billion of Investment in Artificial Intelligence,” European Commission, press release, February 10, 2025, https://ec.europa.eu/commission/presscorner/detail/en/ip_25_467.

42 “Commission Launches Ambitious Strategy to Make Europe a Startup and Scaleup Powerhouse,” European Commission, press release, May 27, 2025, https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1350.

43 Barbara Moens and Paola Tamma, “EU to Block Big Tech from New Financial Sharing Data System,” Financial Times, September 21, 2025, https://www.ft.com/content/6596876f-c831-482c-878c-78c1499ef543.

44 Luca Bertuzzi, “‘Effective control’ concept for cloud sovereignty eyed by EU Commission,” MLex, September 4, 2025, https://www.mlex.com/mlex/articles/2384011/-effective-control-concept-for-cloud-sovereignty-eyed-by-eu-commission?trk=public_post_comment-text.

45 “European Data Union Strategy,” European Commission,November 19, 2025, 18–20, https://digital-strategy.ec.europa.eu/en/policies/data-union.

46 Ibid.

47 Axel Voss, “Regaining Europe’s Digital Sovereignty: Ten Immediate Actions for 2025,”EPP Group at the European Parliament, October 7, 2025, https://www.axel-voss-europa.de/wp-content/uploads/2025/10/AVoss-10-Steps-Digital-Sovereignty.pdf.

48 Ibid.

49 Peter Finn and Sari Horwitz, “US Charges Snowden with Espionage,” Washington Post, June 21, 2013, https://www.washingtonpost.com/world/national-security/us-charges-snowden-with-espionage/2013/06/21/507497d8-dab1-11e2-a016-92547bf094cc_story.html; Dave Keating, “European Parliament to Hear Snowden testimony,” Politico, January 9, 2014, https://www.politico.eu/article/european-parliament-to-hear-snowden-testimony/.

50 Michael Scherer, “Trump Advisers Renew Push for Pardon of Edward Snowden,” Washington Post, December 4, 2024, https://www.washingtonpost.com/politics/2024/12/04/trump-pardon-edward-snowden-gaetz/.

51 Schrems v. Data Protection Commissioner, CASE C-362/14 (Court of Justice of the EU 2015), https://curia.europa.eu/juris/document/document.jsf?text=&docid=169195&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=2522200; Data Protection Commissioner v. Facebook Ireland & Schrems, CASE C-311/18 (Court of Justice of the EU 2020), https://curia.europa.eu/juris/document/document.jsf?text=&docid=228677&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=4010715.

52 “Meta Platforms, Inc. Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1933 for the Fiscal Year Ended on December 31, 2022,” US Securities and Exchange Commission, 2022, https://www.sec.gov/Archives/edgar/data/1326801/000132680123000013/meta-20221231.htm.

53 “Data Protection: The General Court Dismisses an Action for Annulment of the New Framework for the Transfer of Personal Data between the European Union and the United States,” Court of Justice of the European Union, press release, September 3, 2025, https://curia.europa.eu/jcms/upload/docs/application/pdf/2025-09/cp250106en.pdf.

54 Claudie Moreau and Théophane Hartmann, “Latombe to Appeal EU-US Data Transfer Court Challenge,” Euractiv, October 29, 2025, https://www.euractiv.com/news/exclusive-latombe-to-appeal-eu-us-data-transfer-court-challenge/.

55 “EU-US Data Transfers: First Reaction on ‘Latombe’ Case,” Noyb, September 3, 2025, https://noyb.eu/en/eu-us-data-transfers-first-reaction-latombe-case.

56 Matt Garman and Max Peterson, “AWS Digital Sovereignty Pledge: Announcing a New, Independent Sovereign Cloud in Europe,” AWS Security Blog, October 24, 2023, https://aws.amazon.com/blogs/security/aws-digital-sovereignty-pledge-announcing-a-new-independent-sovereign-cloud-in-europe/; Julie Brill and Erin Chapple, “Microsoft Announces the Phased Rollout of the EU Data Boundary for the Microsoft Cloud Begins January 1, 2023,” Microsoft EU Policy Blog, December 15, 2022, https://blogs.microsoft.com/eupolicy/2022/12/15/eu-data-boundary-cloud-rollout/.

57 Emily Benson, Max Bergmann, and Federico Steinberg, “The Transatlantic Tech Clash: Will Europe ‘De-Risk’ from the United States?” Center for Strategic and International Studies, May 2, 2025, https://www.csis.org/analysis/transatlantic-tech-clash-will-europe-de-risk-united-states.

58 Brad Smith, “Microsoft Announces New European Digital Commitments,” Microsoft, April 30, 2025, https://blogs.microsoft.com/on-the-issues/2025/04/30/european-digital-commitments.

59 Alex Matthews, “Can Europe Build Itself a Rival to Google?” Deutsche Welle, December 9, 2024, https://www.dw.com/en/european-search-engines-ecosia-and-qwant-to-challenge-google/a-70898027.

60 Ibid.

61 Burwell and Propp, “Digital Sovereignty in Practice.”

62 Mathieu Pollet, “Anatomy of a Franco-German Tech Misfire,” Politico, November 17, 2025, https://www.politico.eu/article/anatomy-franco-german-tech-misfire-american-dependence/.

63 Draghi, “The Future of European Competitiveness,” 34.

64 “President’s Intelligence Advisory Board (PIAB) and Intelligence Oversight Board (IOB) Review of FISA Section 702 and Recommendations for Reauthorization,” White House, July 2023, 3, https://int.nyt.com/data/documenttools/presidents-intelligence-advisory-board-and-intelligence-oversight-board-review-of-fisa-section-702-and-recommendations-for-reauthorization/4d2d3218303fc702/full.pdf.

65 “Landmark U.S.-UK Data Access Agreement Enters into Force,” US Department of Justice, press release, October 3, 2022, https://www.justice.gov/archives/opa/pr/landmark-us-uk-data-access-agreement-enters-force; “United States and Australia Enter CLOUD Act Agreement to Facilitate Investigations of Serious Crime,” US Department of Justice, press release, December 15, 2021, https://www.justice.gov/archives/opa/pr/united-states-and-australia-enter-cloud-act-agreement-facilitate-investigations-serious-crime; “United States and Canada Welcome Negotiations of a CLOUD Act Agreement,” US Department of Justice, press release, March 22, 2022, https://www.justice.gov/archives/opa/pr/united-states-and-canada-welcome-negotiations-cloud-act-agreement.

66 Robert Deedman and Kenneth Propp, “The U.K.-US Data Access Agreement,” Lawfare, June 20, 2025, https://www.lawfaremedia.org/article/the-u.k.-u.s.-data-access-agreement.

67 “Report Concerning the Attorney General’s Renewed Determination that the United Kingdom of Great Britain and Northern Ireland, and the Agreement between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland on Access to Electronic Data for the Purpose of Countering Serious Crime, Satisfy the Requirements of 18 USC. § 2523(B),” US Department of Justice, November 2024, https://www.documentcloud.org/documents/25551978-doj-report-to-congress-on-us-uk-cloud-act-agreement/.

68 Tom Tugendhat, “UK-US Data Access Agreement: First Year of Use,” UK Parliament, December 19, 2023, https://questions-statements.parliament.uk/written-statements/detail/2023-12-19/hcws152?source=email.

69 “Recommendation for a Council Decision Authorizing the Opening of Negotiations in View of an Agreement between the European Union and the United States of America on Cross-Border Access to Electronic Evidence for Judicial Cooperation in Criminal Matters,” European Commission, February 5, 2019, https://eur-lex.europa.eu/resource.html?uri=cellar:b1826bff-2939-11e9-8d04-01aa75ed71a1.0001.02/DOC_1&format=PDF.

70 “Council Adopts EU Laws on Better Access to Electronic Evidence,” Council of the European Union, press release, June 27, 2023, https://www.consilium.europa.eu/en/press/press-releases/2023/06/27/council-adopts-eu-laws-on-better-access-to-electronic-evidence/.

71 “Joint Press Release Following the EU-US Ministerial on Justice and Home Affairs, 21 June 2024 (Brussels),” US Department of Homeland Security, June 28, 2024, https://www.dhs.gov/archive/news/2024/06/28/joint-press-release-following-eu-us-ministerial-justice-and-home-affairs-21-june.

72 Richard Salgado and Kenneth Propp, “Patching the U.K.’s Zero-Day Security Exploit With the US-U.K. CLOUD Act Agreement,” Lawfare, July 31, 2025, https://www.lawfaremedia.org/article/patching-the-u.k.-s-zero-day-security-exploit-with-the-u.s.-u.k.-cloud-act-agreement.

73 Zoe Kleinman, “UK Demands Access to Apple Users’ Encrypted Data,” BBC, February 7, 2025, https://www.bbc.com/news/articles/c20g288yldko; “Apple Can No Longer Offer Advanced Data Protection the United Kingdom to New Users,” Apple, September 23, 2025, https://support.apple.com/en-gb/122234.

74 Deedman and Propp, “The U.K.-US Data Access Agreement.”

75 Annabelle Timsit and Joseph Menn, “U.K. Drops ‘Back Door’ Demand for Apple User Data, US Intel Chief Says,” Washington Post, August 19, 2025, https://www.washingtonpost.com/technology/2025/08/19/uk-apple-backdoor-data-privacy-gabbard.

76 Christophe Domec, “Home Office Orders Apple to Allow Access to UK Users’ Data,” Times, October 2, 2025, https://www.thetimes.com/uk/technology-uk/article/home-office-orders-apple-to-allow-access-to-uk-users-data-tn3wlmhxq?gaa_at=eafs&gaa_n=AWEtsqdsukISl3YWsv-OUFyP7S089T8e9EKaG–AY8onCxlbZei75ihDzjEfC_udtDU%3D&gaa_ts=695c0a2c&gaa_sig=35Ar1Xp304ize5_GRX2Gw4XVlD1VwyhVrWph_ApqbvZ53m8PgSK_1S27vfEYkfYMBS0EYM8CP22z5g-1iGUY4Q%3D%3D.

77 Kenneth Propp, “Transatlantic Digital Trade Protections: From TTIP to ‘Policy Suicide?’” Lawfare, February 16, 2024, https://www.lawfaremedia.org/article/transatlantic-digital-trade-protections-from-ttip-to-policy-suicide.

78 “Protecting Americans from Foreign Adversary Controlled Applications Act,” in emergency supplemental appropriations, Pub. L. No. 118–50, 118th Cong. (2024), https://www.congress.gov/bill/118th-congress/house-bill/7520/text; “Executive Order on Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern,” White House, February 28, 2024, https://bidenwhitehouse.archives.gov/briefing-room/presidential-actions/2024/02/28/executive-order-on-preventing-access-to-americans-bulk-sensitive-personal-data-and-united-states-government-related-data-by-countries-of-concern/.

79 “Fact Sheet: Justice Department Issues Final Rule to Address Urgent National Security Risks Posed by Access to USU.S. Sensitive Personal and Government-Related Data from Countries of Concern and Covered Persons,” US Department of Justice, December 27, 2024, https://www.justice.gov/archives/opa/media/1382526/dl; “Data Security Program: Compliance Guide,” US Department of Justice, April 11, 2025, https://www.justice.gov/opa/media/1396356/dl.

80 Justin Sherman, et al., “Data Brokers and the Sale of Data on US Military Personnel: Risks to Privacy, Safety, and National Security,” Duke Sanford Tech Policy Program, November 2023, https://techpolicy.sanford.duke.edu/data-brokers-and-the-sale-of-data-on-us-military-personnel/.

81 Propp, “Transatlantic Digital Trade Protections.”

82 “Joint Statement Initiative on Electronic Commerce,” World Trade Organization, July 26, 2024, https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/INF/ECOM/87.pdf&Open=True.

83 Kenneth Propp, “Who’s a National Security Risk? The Changing Transatlantic Geopolitics of Data Transfers,” Atlantic Council, May 29, 2024, https://www.atlanticcouncil.org/wp-content/uploads/2024/05/Whos-a-National-Security-Risk-The-Changing-Transatlantic-Geopolitics-of-Data-Transfers_Final.pdf.

84 Government Access to Data in Third Countries: Final Report,” Milieu Consulting, November 2021, https://www.edpb.europa.eu/system/files/2022-01/legalstudy_on_government_access_0.pdf.

85 “The Data Protection Ombudsman’s Decision Does Not Address the Legality of Data Transfers to Russia—the Matter Remains under Investigation,” Office of the Data Protection Ombudsman, September 27, 2023, https://tietosuoja.fi/en/-/the-data-protection-ombudsman-s-decision-does-not-address-the-legality-of-data-transfers-to-russia-the-matter-remains-under-investigation#:~:text=The%20Office%20of%20the%20Data%20Protection%20Ombudsman%27s%20decision,Protection%.

86 “Irish Data Protection Commission Fines TikTok €530 Million and Orders Corrective Measures Following Inquiry into Transfers of EEA User Data to China,” Data Protection Commission of Ireland, May 2, 2025, https://www.dataprotection.ie/en/news-media/latest-news/irish-data-protection-commission-fines-tiktok-eu530-million-and-orders-corrective-measures-following.

87 “DPC Announces Inquiry into TikTok Technology Limited’s Transfers of EEA Users’ Personal Data to Servers Located in China,” Data Protection Commission of Ireland, July 10, 2025, https://www.dataprotection.ie/en/news-media/press-releases/dpc-announces-inquiry-tiktok-technology-limiteds-transfers-eea-users-personal-data-servers-located.

88 Kristof Van Quathem and Anna Sophia Oberschelp de Meneses, “Finnish Supervisory Authority Investigates Health Data Transfers to China,” Covington, March 19, 2025, https://www.insideprivacy.com/cross-border-transfers/finnish-supervisory-authority-investigates-health-data-transfers-to-china/.

89 “TikTok, AliExpress, SHEIN & Co Surrender Europeans’ Data to Authoritarian China,” Noyb, January 16, 2025, https://noyb.eu/en/tiktok-aliexpress-shein-co-surrender-europeans-data-authoritarian-china.

90 “Regulation (EU) 2022/868 of the European Parliament and of the Council of 30 May 2022 on European Data Governance and Amending Regulation (EU) 2018/1724 (Data Governance Act),” Official Journal of the European Union, May 30, 2022, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R0868 ; “Regulation (EU) 2023/2854 of the European Parliament and of the Council of 13 December 2023 on Harmonised Rules on Fair Access to and Use of Data and Amending Regulation (EU) 2017/2394 and Directive (EU) 2020/1828 (Data Act),” Official Journal of the European Union, December 13, 2023, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202302854; “Regulation (EU) 2025/327 of the European Parliament and of the Council of 11 February 2025 on the European Health Data Space and Amending Directive 2011/24/EU and Regulation (EU) 2024/2847,” Official Journal of the European Union, February 11, 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202500327.

91 “Commission Proposes Measures to Boost Data Sharing and Support European Data Spaces,” European Commission, press release, November 24, 2020, https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2102.

92 “Common European Data Spaces,” European Commission, October 27, 2025, https://digital-strategy.ec.europa.eu/en/policies/data-spaces.

93 “Mission Letter: Henna Virkkunen, Executive Vice-President-Designate for Tech Sovereignty, Security and Democracy,” European Commission, September 17, 2024, https://commission.europa.eu/document/download/3b537594-9264-4249-a912-5b102b7b49a3_en?filename=Mission%20letter%20-%20VIRKKUNEN.pdf.

94 “Public Consultation on the Use of Data to Develop the Future of AI: The European Data Union Strategy,” European Data, June 25, 2025, https://data.europa.eu/en/news-events/news/public-consultation-use-data-develop-future-ai-european-data-union-strategy.

95 “Communication from the Commission to the European Parliament and the Council: Data Union Strategy: Unlocking Data for AI,” European Commission, November 19, 2025. https://digital-strategy.ec.europa.eu/en/policies/data-union.

96 “Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market for Digital Services and Amending Directive 2000/31/EC (Digital Services Act),” Official Journal of the European Union, October 27, 2022, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R2065 .

97 Jeanna Smialek and Adam Satariano, “Something Else for Europe and the US to Disagree About: ‘Free Speech,’” New York Times, April 4, 2025, https://www.nytimes.com/2025/04/04/world/europe/european-union-free-speech-x-facebook-elon-musk.html.

98 “Fact Sheet: President Donald J. Trump Issues Directive to Prevent the Unfair Exploitation of American Innovation”; Supantha Mukherjee, “US FCC Chair Says EU Digital Services Act Is Threat to Free Speech,” Reuters, March 3, 2025, https://www.reuters.com/technology/eu-content-law-incompatible-with-us-free-speech-tradition-says-fccs-carr-2025-03-03/.

99 Department of State (@StateDept), “In Europe, thousands are being convicted for the crime of criticizing their own governments. This Orwellian message won’t fool the United States. Censorship is not freedom,” X post, July 22, 2025, https://x.com/statedept/status/1947755665520304253.

100 Humeyra Pamuk, “Rubio Orders US Diplomats to Launch Lobbying Blitz against Europe’s Tech Law,” Reuters, August 7, 2025, https://www.reuters.com/sustainability/society-equity/rubio-orders-us-diplomats-launch-lobbying-blitz-against-europes-tech-law-2025-08-07.

101 “The Foreign Censorship Threat: How the European Union’s Digital Services Act Compels Global Censorship and Infringes on American Free Speech,” Committee on the Judiciary of the US House of Representatives, July 25, 2025, https://judiciary.house.gov/sites/evo-subsites/republicans-judiciary.house.gov/files/2025-07/DSA_Report%26Appendix%2807.25.25%29.pdf.

102 Mark Scott, “EU Takes Shot at Musk over Trump Interview—and Misses,” Politico, August 13, 2024, https://www.politico.eu/article/eu-elon-musk-donald-trump-interview-thierry-breton-letter-social-media/.

103 “The Foreign Censorship Threat.”

104 “Model Letter sent to Tech Companies from Chairman Andrew N. Ferguson,” US Federal Trade Commission, August 21, 2025, https://www.ftc.gov/system/files/ftc_gov/pdf/ftc-unfair-security-letter-ferguson.pdf.

105 Propp, “Talking Past Each Other.”

106 “Announcement of Actions to Combat the Global Censorship-Industrial Complex,” US Department of State, press release, December 23, 2025, https://www.state.gov/releases/office-of-the-spokesperson/2025/12/announcement-of-actions-to-combat-the-global-censorship-industrial-complex/.

107 “Statement by the European Commission on the U.S. Decision to impose travel restrictions on certain EU individuals,” European Commission, press release, December 23, 2025, https://ec.europa.eu/commission/presscorner/detail/en/statement_25_3160.

108 “EU Strategic Dependencies and Capacities: Second Stage of In-Depth Reviews,” European Commission, February 22, 2022, https://www.wec-italia.org/wp-content/uploads/2022/02/STRATEGIC-DEPENDENCIES-2022.pdf.

109 “Doctrine ‘Cloud au Centre’ sur l’Usage de l’Informatique en Nuage au Sein de l’État,” Government of the Republic of France, July 5, 2021, https://www.transformation.gouv.fr/files/presse/Circulaire-n6282-SG-5072021-doctrineuutilisation-informatique-en-nuage-Etat.pdf.

110 Laura Kabelka, “Sovereignty Requirements Remain in Cloud Certification Scheme Despite Backlash,” Euractiv, July 16, 2022, https://www.euractiv.com/news/sovereignty-requirements-remain-in-cloud-certification-scheme-despite-backlash.

111 “2024 National Trade Estimate Report on Foreign Trade Barriers,” Office of the US Trade Representative, March 2024, https://ustr.gov/sites/default/files/2024%20NTE%20Report_1.pdf.

112 Floris Hulshoff Pol, “EU Drops Sovereignty Rules for US Cloud Providers,” Techzine, April 4, 2024, https://www.techzine.eu/news/privacy-compliance/118401/eu-drops-sovereignty-rules-for-u-s-cloud-providers/.

113 Reynald Fléchaux, “EUCS, la Certification Cloud Européenne qui Menace de Désarmer SecNumCloud,” CIO, September 12, 2024, https://www.cio-online.com/actualites/lire-eucs-la-certification-cloud-europeenne-qui-menace-de-desarmer-secnumcloud-15856.html.

114 Francesco Nicoli, “Mapping the Road Ahead for EU Public Procurement Reform,” Bruegel, March 21, 2025, https://www.bruegel.org/first-glance/mapping-road-ahead-eu-public-procurement-reform.

115 Théophane Hartmann, “European Industry Big Win: Germany, France Both Support Sovereign EU-Based Tech Infrastructure,” Euractiv, April 10, 2025, https://www.euractiv.com/news/european-industry-big-win-germany-france-both-support-sovereign-eu-based-tech-infrastructure/.

116 Michal Kobosko, “A European Recipe for Tech Sovereignty,” Parliament, July 30, 2025, https://www.theparliamentmagazine.eu/news/article/oped-a-european-recipe-for-tech-sovereignty.

117 For a detailed discussion of the challenges facing Eurostack and the more exclusionary version of EU digital sovereignty, see: Zach Meyers, “Can the EU Reconcile Digital Sovereignty and Economic Competitiveness?” Centre on Regulation in Europe, September 2025, https://cerre.eu/wp-content/uploads/2025/09/CERRE_Issue-Paper_EU-Competitiveness_Can-the-EU-reconcile-digital-sovereignty-and-economic-competitiveness.pdf.

118 “Clearing the Cloud,” Implement Consulting Group in collaboration with Google,November 2025, https://cms.implementconsultinggroup.com/media/uploads/articles/2025/European-digital-sovereignty/2025-Clearing-the-cloud.pdf.

119 See, for example: “Open Letter: European Industry Calls for Strong Commitment to Sovereign Digital Infrastructure,” Euro-Stack, March 14, 2025, https://euro-stackletter.eu/wp-content/uploads/2025/03/EuroStack_Initiative_Letter_14-March-.pdf. The letter, signed by numerous European companies, argues for increased support to European industry to build a Eurostack, while not restricting access by non-EU companies.

120 “Joint Communication on an International Digital Strategy for the EU,”European Commission and EU High Representative for Foreign and Security Policy, June 5, 2025, https://digital-strategy.ec.europa.eu/en/library/joint-communication-international-digital-strategy-eu.

121 Amy Mackinnon, Jamie Dettmer, and Paul McLeary, “Europe Scrambles to Aid Ukraine after US Intelligence Cutoff,” Politico, March 8, 2025, https://www.politico.com/news/2025/03/08/europe-scrambles-to-aid-ukraine-after-us-intelligence-cutoff-00219678.

122 Andrea Shalal and Joey Roulette, “US Could Cut Ukraine’s Access to Starlink Internet Services over Minerals, Say Sources,” Reuters, February 22, 2025, https://www.reuters.com/business/us-could-cut-ukraines-access-starlink-internet-services-over-minerals-say-2025-02-22/.

123 For a discussion of the relationship between digital sovereignty and competitiveness, see: Christian Klein, “The Boss of SAP on Europe’s Botched Approach to Digital Sovereignty: It’s Time to Prioritise Code over Concrete,” Economist, August 25, 2025, https://www.economist.com/by-invitation/2025/08/25/the-boss-of-sap-on-europes-botched-approach-to-digital-sovereignty

124 “European Union,” Office of the United States Trade Representative, last visited December 11, 2025, https://ustr.gov/countries-regions/europe-middle-east/europe/european-union.

125 “G7 Roadmap for Cooperation on Data Free Flow with Trust,” Group of Seven, 2021, https://assets.publishing.service.gov.uk/media/609cf5e18fa8f56a3c162a43/Annex_2__Roadmap_for_cooperation_on_Data_Free_Flow_with_Trust.pdf;“G7 Leaders’ Statement on the Hiroshima AI Process,” Group of Seven,October 30, 2023, https://digital-strategy.ec.europa.eu/en/library/g7-leaders-statement-hiroshima-ai-process.

126 For details on the FedRAMP program, see: “FedRAMP Provides a Standardized, Reusable Approach to Security Assessment and Authorization for Cloud Service Offerings,” FedRAMP, last visited December 11, 2025, https://www.fedramp.gov.

127 For a discussion of the differences between FedRAMP and EUCS, see: Kenneth Propp, “Oceans Apart: The EU and US Cybersecurity Certification Standards for Cloud Services,” Cross Border Data Forum, June 27, 2023, https://www.crossborderdataforum.org/wp-content/uploads/2023/07/Oceans-Apart-The-EU-and-US-Cybersecurity-Certification-Standards-for-Cloud-Services.pdf.

128 “2025 National Trade Estimate Report on Foreign Trade Barriers,” Office of the US Trade Representative, 2025, https://ustr.gov/sites/default/files/files/Press/Reports/2025NTE.pdf.

The post Digital sovereignty: Europe’s declaration of independence? appeared first on Atlantic Council.

Transatlantic cooperation on protecting minors online

Michèle Ledger — Wed, 14 Jan 2026 05:00:00 +0000

Bottom lines up front

While US and EU policies differ in their approaches to the regulation of the internet, recent policy roundtables made clear that there is agreement on the need to protect children online.
Areas of commonality include the use of primary legislation, an emphasis on platform design rather than censoring content, and the need to balance protection of children with other fundamental rights.
Further dialogue between the United States and the EU on these questions could help facilitate faster and more efficient rollout of services and technologies to protect users.

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Executive summary

While US and European Union (EU) policies differ in their approaches to online safety and the regulation of the internet, there is agreement about the need to protect children online. That is one high-level takeaway from a recent round of US-EU dialogue hosted by the Centre on Regulation in Europe (CERRE) and the Atlantic Council.

Such dialogue helps to identify common policy approaches for the protection of minors and common approaches to enforcing rules. Ultimately, it can also help facilitate faster and more efficient rollout of technologies to protect users. Dialogue will also help global platforms develop services to comply with rules and expectations on both sides of the Atlantic.

At the recent roundtable hosted by CERRE and the Atlantic Council, the synergies and differences in regulatory approaches and philosophies on both sides of the Atlantic centred on four themes. For each theme, some common threads seemed ripe for further discussion and cooperation.

New legislation and approaches to enforcement: In terms of the overall governance landscape, legislation has a key role to play in Europe and in the United States, where long-standing federal rules have been supported by an increasing number of state laws.The bulk of legislation in the EU—such as the Digital Services Act (DSA)—is adopted at the EU level, while some member states are adopting supplementary rules. In the United States, most legislation is now being adopted at the state level. Public enforcement by regulators plays a big role in the EU and the United Kingdom (UK). In the United States, state attorneys general are taking action to enforce rules, with powers similar to those of regulators in Europe. More alignment and cooperation on enforcement would be beneficial. Private enforcement through courts is also possible but, while this is already widespread in the United States, it is just emerging in Europe.
The harms from which children should be protected: On both sides of the Atlantic, there is a large degree of alignment on the harms from which children need to be protected. A strong commonality is that rules in Europe and the US both require compliance by design to avoid particularly harmful conduct, such as unwanted contact by unknown adults. Other common design elements include data minimization, which is a central component of the European Commission’s guidelines on protecting minors under Article 28 of the DSA and in the UK Office of Communication’s (Ofcom) age-appropriate design code and guidance under the Online Safety Act (OSA).
Balancing rights: To balance the protection of fundamental rights (in particular, privacy and freedom of expression) against the need to protect children, there is widespread agreement that everyone—not just children—deserves protections online. The EU, UK, and United States are all cautious about dictating which content is acceptable online and are instead converging on approaches that require platforms to use processes and systems to ensure safety by design. Ensuring the protection of fundamental rights is a common concern and, ultimately, a matter of balance, including at the enforcement level.
Age verification: Current debates about banning access to social media and about age verification are critical in Europe and in the United States, both in general and in relation to certain types of platforms (particularly those that host pornographic content). There is no agreement on a single type of technology that should be used, but there are prototypes and guidance on the high-level principles that the technologies should reflect. There are similar discussions on both sides of the Atlantic about how to attribute responsibility for age assurance across the supply chain—i.e., where in the supply chain age verification should take place—and how the division of responsibilities between players in supply chains could work in practice.

Introduction

The EU has put in place important legal building blocks to protect children online. These include the DSA and the European Commission’s guidelines on Article 28 of the DSA, which require providers of platforms accessible to minors to “put in place appropriate and proportionate measures to ensure a high level of privacy, safety, and security of minors.”¹ They also include the Audiovisual Media Services Directive (AVMSD), which contains rules to safeguard minors’ personal data and to protect children online, and the General Data Protection Regulation (GDPR), which provides rules on collection and processing of minors’ data. Other proposals yet to be finalized include the pending Digital Fairness Act (DFA) proposal and the Regulation on Child Sexual Abuse Material (CSAM).² Member states retain certain powers to enact national laws to protect minors online.³

In the United States, the protection of minors online is an important consideration at both the federal and state levels. At the federal level, the Kids Online Safety Act (KOSA) proposal, the Children’s Online Privacy Protection Act (COPPA) and the COPPA 2.0 proposal all seek to address certain aspects of children’s safety online (in particular, privacy, advertising, and CSAM).⁴ At the state level, California’s Age-Appropriate Design Code (CAADCA) has been challenged in court on First Amendment grounds.⁵ Other states, including Nebraska and Vermont, have recently adopted similar codes that they hope will withstand First Amendment scrutiny.⁶ Utah has also recently enacted a law to protect content-creating minors from financial exploitation and privacy violations.⁷

News headlines focus on apparent differences between US and European policies, which are spiraling into growing transatlantic tension. However, there is a large degree of alignment on the need to protect children online while also safeguarding fundamental rights such as privacy and freedom of expression.

The overall governance landscape

The European and US approaches are fairly aligned on some governance aspects of regulating child protection online. Since the adoption of its rules for video sharing platforms in 2018, the EU has embraced a legislative path to protect minors online.⁸ This legislative framework was strengthened in 2022 with the adoption of the DSA. Both the video sharing platform rules and the DSA are largely principle based and rely on a form of collaboration with the industry,placing the onus on the platforms themselves to decide what constitutes an appropriate and proportionate level of protection for minors. The UK has also adopted a legislative path with the OSA and the detailed guidance produced by Ofcom.⁹ Like the DSA, the OSA adopts a risk-based approach, with the larger and riskier platforms subject to stricter measures. The UK regulator, Ofcom, has supplemented the legislation with detailed guidance.

The European Commission recently adopted guidelines to help online platforms understand and comply with their obligations under Article 28 of the DSA, including setting out a list of recommendations for platforms, but these are nonbinding. Safety by design is at the heart of the guidelines. The EU’s legislative approach focuses on ensuring platforms put in place systems and processes, while steering away from regulating the type of content that should be outlawed.

So far, the EU’s legislative framework has not led to a full harmonization of approaches to protect minors, and some member states have adopted more restrictive approaches. For example, France, Germany, Ireland, and Italy have adopted supplementary legislation to protect minors from harmful content such as online pornography.¹⁰

In the United States, the federal government has adopted legislation such as the COPPA to tackle some problematic areas such as the need to protect minors’ personal data.¹¹ Despite heightened partisanship in Congress, leaders of both the Republican and Democratic Parties have expressed interest in supporting additional bipartisan legislation to protect children online.¹² Although there is less appetite for federal legislation with binding obligations on platforms in terms of platform liability, there is appetite at the state level to embrace the legislative path, and safety by design is the cornerstone of many of these initiatives.¹³ That being said, the Kids Online Safety Act (a federal initiative) received the support of sixty co-sponsors at the federal level, which shows that this is an area with some bipartisan support. The EU and the United States are also converging on some important aspects: more obligations are placed on larger platforms; there is an emphasis on protection and safety by design; and there is no “one size fits all” solution.

There is broad consensus among experts that, irrespective of geopolitical tensions, there has never been so much space for alignment at the policy level between different jurisdictions—and between Europe and the United States in particular. This is partly because Europe (with the DSA at the EU level and the OSA in the UK) takes a systemic risk approach and does not focus on moderating individual pieces of content. That places responsibility on the platforms to have processes and systems in place to design safe spaces at the outset.

There are also similarities in public and private enforcement of norms. In the EU and the UK, regulators play an important role in making sure that industry complies with the DSA, the AVMSD, and the OSA. In the United States, even if new federal laws are adopted, the creation of a dedicated federal regulator to publicly enforce the legislation is unlikely, though existing agencies such as the US Federal Trade Commission already have a remit over some of these issues. At the state level, attorneys general are empowered to enforce COPPA via civil actions despite it being a federal law. State attorneys general have many enforcement tools at their disposal, including the power to undertake industry-wide investigations. These are broadly in line with the enforcement powers of national competent authorities and the European Commission under the DSA (and Ofcom under the OSA). On both sides of the Atlantic, private enforcement through courts is also set to play an important role, though, to date, it has been more common in the United States than in either the EU or UK.

Harms against which children should be protected

In the EU, the harms against which children should be protected are potentially very wide and are not specifically defined in the DSA, which refers only to protecting minors’ “privacy, safety and security.”¹⁴ Furthermore, member states are free to set their own rules provided they are in the line with EU legislation.

Some harms are outlawed at the EU level, such as the sharing of child sexual abuse material, dark patterns (i.e., deceptive techniques used by online platforms to manipulate users’ behavior), the processing of minors’ personal data without the consent of parents, and the sending of targeted advertising to children based on profiling.¹⁵ US policy initiatives at the state and federal levels also identify these harms as targets for regulation. The dissemination of child sexual abuse material, for example, is already a criminal offense.

A strong focus of legislation to protect minors on both sides of the Atlantic is to make sure that children cannot be contacted on platforms by unknown adults. At the state level (Vermont in particular) lawmakers frame these as safety bills to avoid framing them as content regulation, which could bring challenges on First Amendment grounds. These design architecture elements, such as default settings that prevent children being findable, are also central in the European Commission’s guidelines on Article 28 of the DSA in the UK Information Commissioner’s Office’s age-appropriate design code and in Ofcom guidance under the OSA.¹⁶

Data minimization (meaning only a minimum amount of data can be gathered and processed) is seen as critical to mitigating harms in general, because there is a strong correlation between collecting vast amounts of data about children’s behavior online and using the data to target minors with harmful content. Also, data minimization could lead to stronger protection for all users. While enforcing data minimization principles is a challenge, it can be done. In the UK, for example, Ofcom is required to work closely with the data protection authority. Operational coherence and cooperation between regulators are crucial in this area.

Balancing fundamental rights

The debate about balancing the need to protect children against the protection of certain fundamental rights (especially privacy, freedom of expression, and the rights of the child) is critical in the United States and in Europe. Initiatives in Europe and the United States tend to focus on tools and processes to protect minors, but steer away from regulating content on the platforms. Despite this, there is mounting debate regarding whether laws are creating a form of censorship or unlawfully constraining free speech, limiting users’ choices, or infringing on the rights of children. The question is wider than the need to protect children online, in the sense that some content can be inherently dangerous for some individuals whereas that same content might not be harmful for another person (minor or adult). This need to protect users from harmful (but legal) content is the most difficult to reconcile with the need to protect freedom of speech and the need for data minimization.

In the United States, the question is being argued in court. Some federal courts have ruled that laws requiring age verification are unconstitutional because they undermine the US Constitution’s First Amendment and threaten privacy rights.¹⁷ Age verification laws are being challenged by NetChoice (a coalition of tech companies) and by free speech coalitions. The Supreme Court recently ruled that the age verification law in Texas does not violate the First Amendment because it only requires proof of age to access content that is obscene to minors; it does not directly regulate adults’ speech.¹⁸ In both the EU and the United States, a considerable amount of policy work and research is being conducted on how to balance safety and privacy, especially in the context of age assurance requirements.¹⁹

At the EU level, the debate about balancing rights was not prominent while the DSA and the AVMSD were being adopted, probably because the rules were principles based and did not mention bans or age verification per se. Furthermore, the DSA contains safeguards to protect fundamental rights, such as giving users’ the right to challenge content moderation decisions (such as removals of posts, demotions of content, and account suspensions). The central article on the protection of minors in the DSA (Article 28) assumes that there cannot be safety for minors unless other rights, such as privacy, are protected as well.

Now that the DSA is being enforced, the protection of minors has become an enforcement priority for the European Commission, and some member states are calling for bans on children accessing social media platforms, some political parties are questioning the legislation and the push for age verification solutions on free speech grounds. This debate is particularly intense in the context of the regulation on the fight against CSAM, which the European Parliament and the Council of the EU are amending in an attempt to reduce the impacts of CSAM detection mechanisms on privacy, particularly in the context of end-to-end encryption.

The ultimate goal should be to protect everyone online, not just minors. This would avoid the need to put in place age assurance and age verification.

The debates on getting the balance right on the need to protect minors online and the need to protect some fundamental rights are crystallizing on age verification and on proposals for an outright ban on access to social media for children.

To date, there is no outright ban at the EU level on children accessing social media. Commission President Ursula von der Leyen had pledged to examine the questionwith the help of a panel of experts originally scheduled to be set up before the end of 2025.²⁰ Some member states are also discussing the option of a social media ban for children.²¹ There is a strong call in the commission’s recently adopted guidelines under the DSA for certain platforms (such as adult content platforms) to prevent children from accessing them. Also, the Danish presidency of the EU and ministers from twenty-five member states recently adopted the Jutland Declaration, which welcomed “assessments” of a digital majority age.²² This assessment could help to determine the age at which minors should be allowed access to social media and other digital services—“giving them more time to enjoy life without an invasive online presence.”²³ This question is also high on the agenda in the United States, with some states requiring social media to ban minors from accessing them (or requiring parental consent for a minor to have an account).²⁴

On age verification, there is no mandatory technology at the EU level, but the EU guidelines on the protection of minors adopted under the DSA set out principles that age verification technology used by online platforms should meet.²⁵ In particular, the systems should be based on the “double anonymity” principle. According to this principle, the platform knows the age of users without identifying them, whereas an external site—which carries out the age verification by issuing a token—does not know which site the user will visit. The EU is also about to launch an EU mini-wallet as a temporary solution, pending the adoption of national solutions.²⁶ Some member states have also set requirements on age verification that are enforced by national regulators.

In the UK, the OSA has just entered into force, and the biggest and most popular adult platforms such as Pornhub must now deploy age checks for users based in the UK. Other platforms—including Bluesky, Discord, Reddit, and X—have also announced that they will deploy age assurance in the UK as a result of the act. This has led to a surge in virtual private network (VPN) downloads, which shows the importance of global alignment where possible.

In the United States, as noted above, state legislation imposing age verification is subject to frequent court challenges.²⁷ As in Europe, there is little agreement among the states on the methods and tools to use when verifying the age of online users. Also, like in Europe, states seem to recognize that age assurance alone is not the solution.

On both sides of the Atlantic, the debates are similar in practice, including debates regarding how to attribute responsibility for age assurance across the supply chain (i.e., at what level age verification should take place, whether at the app store layer or by individual applications or websites). Questions about where verification happens raise additional questions about the extent to which other players in the chain can rely on this, or whether relying on a single point of verification could undermine safety by discouraging applications and websites from making their own assessments.

About the author

Michèle Ledger is a researcher at the Research Centre in Information, Law and Society (CRIDS) of the University of Namur where she also lectures on the regulatory aspects of online platforms at the postmaster degree course. She has been working for more than twenty years at Cullen International and leads the company’s Media regulatory intelligence service.

This issue brief benefits from the insights of discussants at an online roundtable on EU-US regulatory co-operation hosted jointly by CERRE and the Atlantic Council. However, the contents of this brief are attributable only to the author.

About CERRE

Providing high-quality studies and dissemination activities, the Centre on Regulation in Europe (CERRE) is a not-for-profit think tank. It promotes robust and consistent regulation in Europe’s network, digital industry, and service sectors. CERRE’s members are regulatory authorities and companies operating in these sectors, as well as universities.

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the direct relevance and timeliness of its contributions to the policy and regulatory development process impacting network industry players and the markets for their goods and services.

CERRE’s activities include contributions to the development of norms, standards, and policy recommendations related to the regulation of service providers, to the specification of market rules, and to improvements in the management of infrastructure in a changing political, economic, technological, and social environment. CERRE’s work also aims to clarify the respective roles of market operators, governments, and regulatory authorities, as well as contribute to the enhancement of those organizations’ expertise in addressing regulatory issues of relevance to their activities.

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1 “Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market for Digital Services and Amending Directive 2000/31/EC,” European Union, October 19, 2022, https://eur-lex.europa.eu/eli/reg/2022/2065/oj; “Communication from the Commission—Guidelines on Measures to Ensure a High Level of Privacy, Safety and Security for Minors Online, Pursuant to Article 28(4) of Regulation (EU) 2022/2065,” European Union, 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:C_202505519.

2 “Proposal for a Regulation of the European Parliament and of the Council Laying Down Rules to Prevent and Combat Child Sexual Abuse,” European Union, May 11, 2022, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52022PC0209; “Digital Fairness Act,” European Commission, last visited December 22, 2025, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14622-Digital-Fairness-Act_en.

3 Miriam Buiten, Michèle Ledger, and Christoph Busch, “DSA Implementation Forum: Protection of Minors,” Centre on Regulation in Europe, March 25, 2025, https://cerre.eu/publications/dsa-implementation-forum-protection-of-minors/.

4 A new version of the KOSA has been introduced in Congress with changes in an attempt to clarify that KOSA does not censor, limit, or remove content from the internet. “Blumenthal, Blackburn, Thune & Schumer Introduce the Kids Online Safety Act,” Office of Senator Richard Blumenthal, press release, May 14, 2025, https://www.blumenthal.senate.gov/newsroom/press/release/blumenthal-blackburn-thune-and-schumer-introduce-the-kids-online-safety-act; “Children’s Online Privacy Protection Rule,” Federal Trade Commission, April 22, 2025, https://www.federalregister.gov/documents/2025/04/22/2025-05904/childrens-online-privacy-protection-rule; “S.1418—Children and Teens’ Online Privacy Protection Act,” US Congress, July 27, 2023, https://www.congress.gov/bill/118th-congress/senate-bill/1418/text.

5 “AB-2273: The California Age-Appropriate Design Code Act,” California Legislative Information, November 18, 2022, https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=202120220AB2273&showamends=false; “NetChoice v. Rob Bonta, Attorney General of the State of California, D.C. No. 5:22-cv-08861- BLF,” US Court of Appeals for the Ninth Circuit, August 16, 2024, https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/16/23-2969.pdf.

6 For a comparison between both initiatives see: Bailey Sanchez, “Vermont and Nebraska: Diverging Experiments in State Age-Appropriate Design Codes,” Future of Privacy Forum, June 4, 2025, https://fpf.org/blog/vermont-and-nebraska-diverging-experiments-in-state-age-appropriate-design-codes.

7 “Child Actor Regulation,” State of Utah, 2025, https://le.utah.gov/Session/2025/bills/enrolled/HB0322.pdf.

8 “Directive (EU) 2018/1808 of the European Parliament and of the Council of 14 November 2018 Amending Directive 2010/13/EU on the Coordination of Certain Provisions Laid Down by Law, Regulation or Administrative Action in Member States Concerning the Provision of Audiovisual Media Services (Audiovisual Media Services Directive) in View of Changing Market Realities,” Article 28b, https://eur-lex.europa.eu/eli/dir/2018/1808/oj/eng.

9 “Online Safety Regulatory Documents and Guidance,” Ofcom, last updated December 15, 2025, https://www.ofcom.org.uk/online-safety/online-safety-regulatory-documents.

10 Michèle Ledger, “Protection of Minors: Age Assurance,” Centre on Regulation in Europe, March 2025, https://cerre.eu/wp-content/uploads/2025/03/CERRE-DSA-Forum-Age-Assurance.pdf.

11 “Part 312—Children’s Online Privacy Protection Rule (COPPA Rule),” Code of Federal Regulations, last updated April 22, 2025, https://www.ecfr.gov/current/title-16/chapter-I/subchapter-C/part-312.

12 “Chairmen Guthrie and Bilirakis Announce Legislative Hearing on Protecting Children and Teens Online,” Office of Energy and Commerce Chairman Brett Guthrie, press release, November 25, 2025, https://energycommerce.house.gov/posts/chairmen-guthrie-and-bilirakis-announce-legislative-hearing-on-protections-for-children-and-teens-online.

13 “Public Interest Privacy Center Releases Updated State Law Maps,” Public Interest Privacy Center, press release, May 29, 2025, https://publicinterestprivacy.org/state-law-maps.

14 “Article 71 Commitments—the Digital Services Act,” European Union, last visited January 3, 2025, https://www.eu-digital-services-act.com/Digital_Services_Act_Article_71.html.

15 The European Commission defines dark patterns as unfair commercial practices deployed through the structure, design, or functionalities of digital interfaces or system architecture that can influence consumers to take decisions they would not have taken otherwise. “Questions and Answers on the Digital Fairness Fitness Check,” European Commission, October 2, 2024, https://ec.europa.eu/commission/presscorner/detail/fi/qanda_24_4909.

16 “Age Appropriate Design: A Code of Practice for Online Services,” Information Commissioner’s Office, last visited December 22, 2025, https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/childrens-information/childrens-code-guidance-and-resources/age-appropriate-design-a-code-of-practice-for-online-services/.

17 Ibid.

18 Texas Legislature, Relating to the publication or distribution of sexual material harmful to minors on an Internet website; providing a civil penalty, HB 1181, Passed June 12, 2023, https://capitol.texas.gov/billlookup/History.aspx?LegSess=88R&Bill=HB1181; “Free Speech Coalition, Inc., et al. v. Paxton, Attorney General of Texas,” US Supreme Court, June 17, 2025, https://www.supremecourt.gov/opinions/24pdf/23-1122_3e04.pdf.

19 Stephen Balkam and Andrew Zack, “Balancing Safety and Privacy: A Proportionate Age Assurance Approach,” Family Online Safety Institute, October 10, 2025, https://fosi.org/policy/balancing-safety-and-privacy-a-proportionate-age-assurance-approach/.

20 “2025 State of the Union Address by President von der Leyen,” European Commission, September 9, 2025, https://ec.europa.eu/commission/presscorner/detail/ov/SPEECH_25_2053.

21 In particular, these states include Denmark, Greece, France, Spain, Italy, Ireland, and Poland.

22 “The Jutland Declaration: Shaping a Safe Online World for Minors,” Danish Presidency, Council of the European Union, October 10, 2025, https://www.digmin.dk/Media/638956829775203140/DIGMIN_The%20Jutland%20Declaration%20Shaping%20a%20Safe%20Online%20World%20for%20Minors%20101025.pdf.

23 Ibid., 2.

24 These states include Arkansas, Florida, Georgia, Ohio, and Utah.

25 These principles concern accuracy, reliability, robustness, privacy and data protection safeguards, and non-discrimination.

26 “Communication from the Commission.”

27 “Age Assurance & Age Verification Laws in the United States,” Centre for Information Policy Leadership, September 2024, https://www.informationpolicycentre.com/uploads/5/7/1/0/57104281/cipl_age_assurance_in_the_us_sept24.pdf.

The post Transatlantic cooperation on protecting minors online appeared first on Atlantic Council.

The EU and Mercosur are creating one of the world’s largest free trade areas. What’s next?

Atlantic Council experts — Fri, 09 Jan 2026 21:09:50 +0000

Is free trade making a comeback? European Union (EU) member states voted on Friday to approve a trade deal with South America’s Mercosur trade bloc, which will create one of the world’s largest free trade areas when the two sides formally sign the agreement in the coming days. The deal—which has been under negotiation since 1999—passed over objections from several member states, including France, that raised concerns over how lowering trade barriers with Mercosur nations will affect domestic agriculture.

What impact will this deal have on European competitiveness and South American export markets? And what details remain to be ironed out as the deal moves onto the European Parliament for final approval? Our experts provide their insights into this decades-in-the-making trade pact below.

1. Why is the EU-Mercosur deal happening now?

Those European farmers and others opposed to the EU-Mercosur deal can blame US President Donald Trump for the conclusion of this significant free trade agreement. Negotiations between the EU and Mercosur were essentially on hold after the basic agreement, finalized in 2019, was met with serious opposition by key EU member states. During 2024 and 2025, the European Commission and Mercosur negotiated an “additional instrument” with protections on labor, human rights, and environmental issues. With Trump’s tariffs in effect by summer 2025, pressure mounted for the EU to diversify its trading partners. Last year, the EU finalized a new trade agreement with Indonesia and updated an existing agreement with Mexico. The bloc also made significant progress on an EU-India trade deal.

Nevertheless, the Mercosur deal still faced near-fatal opposition until it received two final pushes: First, the European Commission proposed safeguards to protect agricultural interests from import surges. Second, the new US National Security Strategy made clear for the EU that trade relations with Latin America were a geopolitical imperative. Nevertheless, Italian Prime Minister Giorgia Meloni refused to provide her country’s needed vote until the European Commission promised additional agricultural support in the next EU budget. With Italy’s support today—and in the wake of a US operation in Venezuela that left Europe on edge about Greenland—the EU-Mercosur agreement finally made it over the finish line.

—Frances Burwell is a distinguished fellow at the Atlantic Council’s Europe Center.

***

The EU–Mercosur trade deal comes at a moment of growing pressure to diversify export markets and trade partners amid heightened geopolitical uncertainty, particularly in light of US tensions with China and the imposition of US tariffs. For Mercosur, this urgency has been especially acute for Brazil, the bloc’s largest economy, which has faced an additional 40 percent US tariff on top of baseline duties and whose number one trading partner is China.

—Valentina Sader is a director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Brazil, gender equality and diversity, and manages the Center’s Advisory Council.

***

The European Commission has sought to expand the EU’s network of trade relations to compensate for pressures from US tariffs, aggressive challenges from China, and the need to secure access to critical materials. Whether that diversification strategy is credible hinged in no small part on this trade deal—not just on the substance of market access and comparative advantages but also on the geopolitical feasibility of such a major agreement. The shifts in US trade policy under Trump, the challenges to the global trading system that Europe’s export-oriented economies depend on, and the demonstration of China’s stranglehold on critical resources clearly accelerated the decadeslong negotiations between the EU and Mercosur, which first opened in 1999 and were only finalized in 2024.

Last-minute additions were made by the EU in 2025 to provide more protections for European farmers. European Commission President Ursula von der Leyen hoped to sign the deal in Brasília in December 2025 after the initial safeguards were agreed upon in September, but Italy threw an unexpected wrench in those plans until further guarantees were made to protect domestic producers. Dramatic protests by farmers in Brussels in December solidified the momentum against signing the deal before Christmas.

On Wednesday, the safeguards Italy wanted were agreed upon by the EU’s agricultural minister and Rome lifted its veto. This paved the way for the European Council to vote in favor of the deal today by qualified majority—despite France voting against it, amid fresh farmer protests in Paris and increased political pressure on French President Emmanuel Macron—and for von der Leyen to officially sign the deal with Mercosur leaders in Paraguay as soon as January 12.

—Jörn Fleck is the senior director of the Atlantic Council’s Europe Center.

Tractors are seen parked in front of the Arc de Triomphe during a demonstration of French agricultural union Coordination Rurale in Paris on January 8, 2026. (Adnan Farzat/NurPhoto via Reuters Connect)

2. What impact will this have on Europe?

Europe worked hard to reach consensus on how to assuage doubts from European farmers about any negative impacts on their livelihoods. The additional measures added to the deal include “safeguards” for sensitive agricultural sectors, such as poultry, beef, eggs, citrus, and sugar, which would “suspend tariff preferences” in the case of “serious injury” to EU farmers. Serious injury is defined as an increase in import volume or a decrease in prices by more than 8 percent compared to the three-year average. The European Commission also introduced a slew of regular monitoring instruments, which will have to report to the European Council and European Parliament for increased accountability on enforcement. The Commission will be able to suspend imports from Mercosur in sensitive sectors if it deems this to be necessary. The final concessions agreed this week to bring Italy on board also include a revision to the 2028-2034 EU budget to allow farmers early access to roughly €45 billion in subsidies, as well as lowering import duties on fertilizers, the unaffordability of which was a major sticking point for protesters.

Economically, the agreement will remove approximately four billion euros worth of tariffs between the two trading blocs, which is significant for several key EU sectors that were previously subject to high tariffs when exporting to Mercosur. European exporters will no longer face 35 percent tariffs on car parts, 28 percent tariffs on dairy, and 27 percent tariffs on wine. The Commission estimates that the agreement could increase EU exports to Mercosur by 39 percent each year and support more than 440,000 jobs in Europe. However, not everyone shares this rosy assessment. Macron, in his announcement that France would not support the deal, stated that the economic gains would be minimal and that the agreement is “from another age.”

—Jörn Fleck

***

Despite the very visible and sometimes violent protests by European farmers, the Mercosur pact is likely to make a positive contribution to the European economy. The agreement removes most Mercosur tariffs for industrial goods (currently set at rates ranging from 15-35 percent), opening the market for European machine tools, cars, pharmaceuticals, and other products. Mercosur tariffs on most food and agriculture products (ranging from 20-35 percent) will also be removed.

While EU farmers have expressed concerns about Mercosur agricultural products, especially meat, flooding the EU market, that is very unlikely in reality. The agreement includes limited tariff-free quotas for Mercosur products, and once those quotas are reached, current tariffs are reimposed. For beef, the quota allows in only an additional 1.5 percent of total EU production, and for poultry, only 1.3 percent. Moreover, if there are sudden, sharp rises in imports, the EU can impose measures to limit them. Despite the rhetoric, agriculture remains a well-protected sector under the EU-Mercosur accord. And for European industry, this agreement opens an important new market.

—Frances Burwell

3. What impact will this have on South America?

Covering countries with a combined population of more than 700 million people, the trade deal promises to expand South American access to the European market, boosting exports and attracting greater EU investment. At the same time, it will pressure Mercosur industries to modernize, digitize, and improve efficiency to remain competitive amid increased exposure to European manufactured goods.

Politically, the deal strengthens Mercosur’s credibility and cohesion at a moment of internal fragmentation, signaling that the bloc remains a viable platform for collective trade policy and diplomacy despite ideological differences among its members. As the bloc turns thirty-five this year, it is reasserting its strategic purpose, having finalized a deal with the European Free Trade Association, restarted negotiations with Canada, and now locked in a landmark agreement with the European Union.

—Valentina Sader

4. What should the US take away from this?

The Trump administration is unlikely to provide any public support for this agreement, but it is also unlikely to make it a significant issue in the US-EU relationship, despite its current emphasis on Latin America as its sphere of influence. This is a serious underappreciation of the importance of this accord. The EU will now have free-trade agreements with close to eighty countries, while the United States has free trade agreements with only twenty. While Trump has signed additional “deals” with many countries, they have generally raised trade barriers, rather than opening markets, and US demands for inward investment and other conditions have left many trading partners bruised and resentful.

The EU is certainly a tough negotiator, and the Mercosur accord will make some constituencies on both sides unhappy, but it is likely to raise trade levels between two significant economic blocs. The reduction in high Mercosur tariffs for EU goods will mean more exports for European industries, luxury goods, and other products. EU companies will be able to bid on public tenders in Mercosur countries on an equal basis with local firms. The agreement also safeguards the branding of more than three hundred traditional EU food products, such as champagne and parmesan cheese, meaning that US products with those same names must be rebranded to enter the Mercosur market. This is not only an economic loss for the United States, but a geopolitical one as well. EU and Mercosur businesses will generate more partnerships, and these growing economic ties are likely to lead to more political alignment at a time when many in the Southern Hemisphere are balancing their interests between China and the United States.

For Mercosur leaders and their citizens, the contrast could not be starker: In the same week that the United States conducted a military operation against a neighbor, the EU has finally agreed to a significant trade pact based on the rule of law.

—Frances Burwell

***

As the EU and Mercosur double down on a multilateral, rules-based free trade geopolitical reality, the United States appears to be moving in the opposite direction. Given the current geopolitical context and in the wake of a new US National Security Strategy that places the Western Hemisphere at the center of US foreign policy, this deal is an opportunity for Mercosur member countries to reduce their economic reliance on the United States.

—Valentina Sader

***

On a symbolic level, and perhaps most importantly, the deal demonstrates Europe’s willingness to adapt to an increasingly volatile global economy, the headwinds from US tariffs, and a new China challenge in critical sectors. For those in Brussels who call for the EU to stand more on its own footing economically, this is a strategic win. Moreover, if EU leaders had once again failed to reach internal consensus on the deal, it could very well have closed the door to any future deal with Mercosur and proven correct Washington’s doubts about Europe’s ability to act decisively on the world stage.

—Jörn Fleck

The post The EU and Mercosur are creating one of the world’s largest free trade areas. What’s next? appeared first on Atlantic Council.

Russia’s war on Ukrainian farmers threatens global food security

Oleksandr Tolokonnikov — Thu, 08 Jan 2026 22:10:44 +0000

Ukrainian farmer Oleksandr Hordiienko was a well known figure in southern Ukraine’s Kherson region, where he was widely viewed as a symbol of the local agricultural community’s wartime resilience. During the first three-and-a-half years of Russia’s invasion, Hordiienko was credited with shooting down dozens of Russian drones and helping de-mine thousands of hectares of farmland. On September 5 last year, he was killed in a Russian drone strike.

Hordiienko’s death was part of a broader Kremlin campaign to methodically target and destroy Ukraine’s agricultural industry. Since the beginning of Russia’s full-scale invasion, at least fifteen farmers have been killed in the Kherson region alone.

Meanwhile, vast quantities of farmland remain inaccessible due to mining or have sustained damage as a result of fires caused by Russian military actions. Ukrainian agricultural workers face a daily threat of drone, artillery, or missile strikes. Some farmers have responded to the danger by taking measures to defend themselves, their land, and their livestock, such as investing in drone monitoring equipment and hiring military veterans.

Over the past year, Russian attacks on Ukraine’s agricultural sector have escalated alarmingly. According to research conducted by the University of Strasbourg, the University of Maryland, and NASA’s Harvest program, the number of farmland fires identified in Ukrainian-controlled areas of the Kherson region during 2025 rose by 87.5 percent.

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The Kherson farming community’s wartime experience is mirrored throughout Ukraine, particularly in areas close to the front lines of the invasion. By attacking agricultural infrastructure, Russia seeks to undermine Ukraine’s food security, just as it targets the country’s energy infrastructure to deprive Ukraine’s civilian population of access to electricity and heating.

The implications of Russia’s war on Ukrainian farmers are international in scope. Known historically as the breadbasket of Europe, Ukraine is home to around one quarter of the world’s black soil, the most fertile farmland on the planet. This makes Ukraine a potential agricultural superpower and a key contributor to global food security. Ukrainian farmers are among the leading exporters of foodstuffs to the European Union, with Ukrainian produce also playing a prominent role in aid programs to counter hunger throughout the developing world.

Russia’s invasion has had a devastating impact on Ukrainian agricultural output. In addition to mined fields, burned crops, and bombed facilities, large numbers of Ukrainian farms are currently in Kremlin-controlled regions, leading to seized harvests.

Kherson region farmers received a further blow in summer 2023 when a suspected Russian sabotage operation destroyed the Kakhovka Dam in Russian-occupied southern Ukraine. This act of ecocide undermined one of Europe’s largest irrigation systems, leaving hundreds of thousands of hectares without access to water. The impact on the environment was catastrophic, leading to drought conditions, failed crops, and the loss of farmland.

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Despite the unprecedented challenges posed by Russia’s ongoing invasion, Kherson’s farmers continue to work. In 2025, they managed to harvest a remarkable quantity of the watermelons that serve as the region’s unofficial calling card. Other key Kherson crops include wheat and potatoes.

Since 2022, domestic and international support programs have proved instrumental in bolstering the resilience of the Kherson agricultural industry. Initiatives in recent years have included subsidies for farmers and technical assistance focused on areas such as irrigation, with the goal of helping farmers adapt to the new wartime realities.

Kherson agricultural businesses are also responding to the changing conditions. Due to water scarcity and rising temperatures, some farms have reduced planting areas and turned to cultivating crops that utilize soil moisture more efficiently. Research is also underway to develop additional drought-resistant crops better suited to the current environment.

Further international support for Ukrainian farmers will be critically important during 2026. Ukraine’s agricultural industry is one of the cornerstones of the national economy and a major exporter to global markets. By targeting farmers and their land, Russia aims to make Ukraine unlivable and break the country’s resistance. This strategy poses a significant threat to international food security and must be addressed.

Oleksandr Tolokonnikov is Deputy Head of the Kherson Regional Military Administration.

The NSS seems to take the remarkable step of dividing the world into spheres of interest, a formulation that is reminiscent of the multipolar world of the nineteenth century. In this view of the world order, great powers have a right to a sphere of influence over smaller states, usually in their vicinity. For the United States, as the NSS asserts, this means a return to the Monroe Doctrine with the goal of regaining US preeminence in the Western Hemisphere.

With the United States adopting a spheres-of-influence approach to the global order, Europe needs to rise to the occasion.

In Asia, the United States is seeking strong relations with China based on strength, not force. In a speech on December 6, US Secretary of War Pete Hegseth outlined the Trump administration’s approach to Asia, which he said was based on “flexible realism” and “aimed not at domination, but rather a balance of power.”

The consequences for Europe in a world once again divided into spheres of influence would be severe. It would mean an end to the transatlantic community, which is based on the indivisible link between the security of Europe and that of the United States.

Since the second Trump administration came to office, the United States has repeatedly sent shock waves across Europe. By now, the alarm bells have gone off so many times that the noise has become constant. Europe is now being pushed from both the east and the west.

To the east, Europe neighbors Russia, a revisionist state that wants to expand its political power and territory at Europe’s expense. The primary aim of Russia’s decade-long campaign of hybrid warfare against Europe is to prepare the ground for a fragmented continent that is weak enough to accept an extended Russian sphere of influence. Between its recent proposed Ukraine peace plans and the NSS, the United States has suggested restoring strategic stability, blocking Ukraine and other countries from joining NATO, and deepening economic cooperation with Russia. But this approach will not satisfy Russia—it will only whet its appetite. What the NSS fails to account for is that revisionist states are not satisfied with the status quo.

To its west, Europe is military aligned with a United States that is signaling that it is preparing to hand over responsibility for the conventional defense of the continent to the Europeans, while only maintaining the nuclear umbrella. According to some sources, Europe will need to take on this responsibility as soon as 2027. If Europe is to navigate as a pole of its own in a brave new multipolar world, it will be through the European Union (EU). Only the EU—not Germany or France alone—is big enough to exert the influence needed for a global power posture.

The NSS does not treat Europe like a respected partner. It severely criticizes Europe’s performance on the economy, defense, and democracy, all while threatening the continent with abandonment. At the same time, the strategy underscores the fact that the United States cannot manage the world without Europe. The strategy calls for “cultivating resistance to Europe’s current trajectory within European nations,” which would mean interfering in European countries’ domestic affairs to weaken the EU. If carried out, such an initiative would undermine US ambitions to work with Brussels to make economic gains in Asia and the Global South, which the strategy also proposes. The United States would be better off refraining from interfering in Europe’s domestic affairs and cooperating with the EU on economic issues of mutual interest.

However, as the EU was not designed as a military alliance, it will need to accelerate the ongoing buildup of its defense capabilities to function as a global player. As long as NATO exists, the core of European defense efforts must be anchored in the Alliance. The United States can be helpful in this regard by supporting the European defense industrial base and an orderly shift of capabilities and responsibilities within NATO.

With the United States adopting a spheres-of-influence approach to the global order, Europe needs to rise to the occasion. If Europe is to fend off an aggressive Russia, it will need to urgently invest in innovation, military capabilities and readiness, energy security, and societal resilience. The continent probably didn’t need another wake-up call, but it has arrived.

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Prisoner releases are welcome news but talk of a Belarus thaw is premature

Hanna Liubakova — Thu, 18 Dec 2025 22:02:36 +0000

The freeing of 123 political prisoners in Belarus last week, including Nobel Peace Prize winner Ales Bialiatski and 2020 protest leader Maria Kalesnikava, must be seen as a major humanitarian win. Lives have been saved and families have been reunited. However, this large-scale prisoner release should not be interpreted as an indication of more fundamental change. On the contrary, it is a calculated move by Belarusian dictator Alyaksandr Lukashenka to extract concessions from the West without abandoning his reliance on domestic repression.

Commenting on the releases, US Special Envoy for Belarus John Coale confirmed that Washington planned to lift sanctions on Belarusian fertilizer exports. He also suggested that all remaining Belarusian political prisoners could be freed in the coming months, potentially in a single group. This prompted some talk of a potential thaw, but it is premature to draw such conclusions. In reality, the Lukashenka regime remains as authoritarian as ever and is not reforming. Instead, it is bargaining.

When assessing the significance of the recent prisoner releases, it is important to maintain a sense of perspective. The 123 people freed in early December represent only a relatively small portion of the more than 1100 political prisoners currently being held in Belarus. Meanwhile, more names are regularly added to the list. During November 2025, human rights group Viasna identified 33 new political prisoners in Belarus.

The Lukashenka regime has clearly learned from similar agreements with the United States earlier this year, which also saw prisoners freed in exchange for sanctions relief. This is fueling a transactional approach to what should be primarily a human rights issue.

While this year’s prisoner releases demonstrate that sanctions relief can produce welcome results, any further reduction in sanctions pressure by the United States should be approached with caution. If prisoner releases are rewarded without any expectation of broader shifts away from authoritarian policies, repression itself becomes a bargaining tool. In such a scenario, there is a very real danger that political prisoners could become virtually inexhaustible bargaining chips for Lukashenka.

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In one if his first interviews following his release, Ales Bialiatski warned about the dangers of negotiating with Lukashenka without demanding wholesale change. He noted that releasing individual prisoners will not be enough to end repression in Belarus. The regime could easily exchange prisoners on a regular basis, he cautioned, freeing some and imprisoning others while asking for new concessions. Bialiatski’s insights should help inform international engagement with Belarus.

Looking ahead, the United States and European Union can play complementary roles in relations between Belarus and the democratic world. Washington’s sanctions tend to be intentionally more flexible. This makes it possible to offer targeted relief based on concrete humanitarian progress, while also allowing for an increase in pressure if Minsk backslides.

In contrast, European sanctions are more focused on systemic change. They are tied to ending policies of political persecution, embracing elements of democratic transition, and addressing Belarusian participation in Russia’s invasion of Ukraine. Any steps to weaken EU sanctions would reduce Europe’s ability to influence Minsk and rob Brussels of the tools to bring about more meaningful change.

Recent events have highlighted the lack of genuine progress toward constructive engagement between Belarus and the country’s European neighbors. Despite a number of goodwill gestures toward Belarus such as the reopening of EU border crossings, Minsk has continued to engage in provocative actions such as launching weather balloons into Lithuanian airspace.

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Lukashenka may have economic motives for seeking to secure sanctions relief in exchange for limited concessions. The Belarusian economy has benefited in recent years from a spike in wartime demand linked to Russia’s invasion of Ukraine, but this growth is now cooling. With less room to maneuver. the Belarusian dictator has good reason to engage in deals that can relieve the financial pressure.

He may also believe the time is right to reestablish his credentials on the geopolitical stage. As US-led negotiations to end Russia’s war against Ukraine continue, Lukashenka might see opportunities for a return to the mediator role he occupied during the initial stages of Russian aggression just over a decade ago. Many observers noted that during the latest prisoner releases, most of the freed detainees were sent to Ukraine rather than Lithuania, which has previously served as the main destination. This may have been an attempt to highlight ongoing cooperation between Kyiv and Minsk.

Greater engagement between the Lukashenka regime and the West could potentially be beneficial but a measured approach is essential. Future sanctions relief must be conditional and tied to verifiable steps such as the release of all political prisoners, an end to new politically motivated arrests, and the restoration of basic civic liberties. The rights of released prisoners must also be respected. This includes allowing them the option to remain in Belarus and providing them with full documentation.

Further steps to improve dialogue with Belarus should also be based on a realistic assessment of achievable goals. For example, it is wishful thinking to suggest that limited sanctions relief could somehow pull Minsk out of the Kremlin orbit. On the contrary, Lukashenka is now more dependent than ever on the Kremlin and will almost certainly never dare to distance himself from Russia, regardless of how skillfully sanctions are applied and relaxed.

What sanctions can do is constrain Lukashenka’s options and secure specific concessions. The ultimate objective should be an end to all human rights abuses and oppressive policies, rather than the targeted release of high-profile prisoners. Until that goal is within reach, the European Union in particular has a key part to play in maintaining pressure on Lukashenka.

Hanna Liubakova is a journalist from Belarus and nonresident senior fellow at the Atlantic Council.

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Kupyansk is a strategically important city located close to the Russian border in northeastern Ukraine’s Kharkiv region. It was occupied by Russian troops in the initial stages of the full-scale invasion before being liberated during Ukraine’s September 2022 counteroffensive. In recent months, the city has once again become a key target for the advancing Russian army, with Putin and his generals announcing the capture of Kupyansk on multiple occasions.

Putin’s proclamations of victory in Kupyansk began in late October, when he issued an invitation to international journalists and promised to provide them with safe passage to witness the encirclement of Ukrainian units trapped in the city. Days later, he told a meeting of Russia’s National Security Council that Kupyansk was “practically in the hands of Russian forces,” with victorious troops engaged in mopping up operations. “The city’s future has already been determined,” Putin stated.

On November 20, Russia’s top general Valery Gerasimov informed Putin that Russian forces had established full control over Kupyansk. The following day, Putin invoked the alleged fall of the city in an attempt to project Russian strength and intimidate Ukraine. “If Kyiv does not want to discuss President Trump’s proposals and refuses it, then both they and the European warmongers should understand the events that took place in Kupyansk will inevitably be repeated in other key areas of the front,” he warned.

Similarly bold Russian statements continued into the current month. On December 2, Putin remarked that Kupyansk had been under Russian occupation “for several weeks now,” and accused the Ukrainian authorities of being completely detached from reality. In fact, it is now apparent that Ukrainian assessments of the battle were broadly accurate, while Putin was guilty of spinning fantasies about the imaginary conquest of Kupyansk. Speaking on the outskirts of the evidently unconquered city, Zelenskyy openly mocked the Kremlin dictator’s dishonesty. “The Russians have had a lot to say about Kupyansk,” he commented. “The reality speaks for itself.”

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Zelenskyy’s latest front line appearance was much more than a high stakes photo opportunity or a chance to troll the Kremlin. In his selfie video, the Ukrainian leader acknowledged the importance of challenging false Russian narratives and stressed the need to shape international perceptions of the war in order to strengthen Ukraine’s negotiating position. “Today, achieving results on the front line is crucial so that Ukraine can achieve results in diplomacy,” he noted. “This is exactly how it works: All our strong positions within the country translate into strong positions in the negotiations to end the war.”

Ukraine’s recent gains in the Battle of Kupyansk do not alter the country’s precarious position at various other points along the vast front lines of Europe’s largest armed conflict since World War II. Nevertheless, Zelenskyy was right to shine a spotlight on the city. His headline-grabbing selfie video served as a timely reminder that Putin is a proven liar whose word cannot be trusted. It also confirmed that contrary to Kremlin propaganda, the Ukrainian army is far from collapse and remains a formidable fighting force.

These are exactly the messages Ukraine needs to convey to the current US administration. Donald Trump seems remarkably susceptible to Putin’s portrayal of Russia as an irresistible military force, and has repeatedly suggested that Ukraine should accept a Kremlin-friendly peace or risk destruction. The facts on the ground simply do not support this defeatist assessment.

While the Russian military holds the overall initiative and is currently advancing, it is grinding forward at glacial pace while suffering catastrophic losses. Nobody understands this better than Putin himself, who must be acutely aware that he would not need to exaggerate Russian gains and invent new triumphs if his invasion had not yielded such underwhelming results at so high a cost.

Last week’s front line visit by the Ukrainian leader underscored the fact that Russian victory is anything but inevitable. The military outlook for 2026 is actually far more nuanced. With enough international support, there is good reason to conclude that the Ukrainian army could replicate its recent Kupyansk success elsewhere and eventually stem the tide of Russia’s invasion. This is a realistic recipe for peace. Indeed, it may be the only way to pressure Moscow into serious negotiations. Putin wants the world to believe he cannot be beaten on the battlefield, but the Russian troops retreating from Kupyansk would likely tell a different story.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

Now, as Ukraine looks likely to run out of money this coming spring, the European Commission is trying, with the support of key member states including France and Germany, to switch to a “reparations loan,” which mobilizes the principal now. If EU leaders agree to the plan this week, the scheme will not confiscate sovereign assets. Russia’s central bank and its National Welfare Fund will still be able to log into their proverbial online banking portals, and their claim on money stored in the EU will still be valid. And, importantly, they will still be unable to move the money.

What will change is that the international central securities depository Euroclear, along with other institutions holding smaller piles of immobilized Russian cash than Euroclear does, will be able to swap this for zero-interest loans. Liberating the accumulated cash avoids the need to borrow money on the markets in the coming months for Ukraine’s needs. According to a document the European Commission produced to coax EU member states to support its preferred plan, if the bloc does not pass the “reparations loan” scheme, then the interest payments on new borrowing to support Ukraine would cost EU member states at least five billion euros per year. And finding a consensus on more joint borrowing may prove even more difficult.

This Thursday and Friday, EU heads of state and government will meet to discuss and vote on this plan. The meeting might not settle every question to do with the complex scheme, but it will reveal whether the plan has the necessary support to move forward. With another vote scheduled on the controversial EU-Mercosur free trade agreement for the same meeting, there are so many moving parts that it is reminiscent of some of the truly memorable summits during the Greek sovereign debt crisis, Brexit, and the COVID-19 pandemic. The Council Conclusions—which may only be published late at night on Friday or even Saturday—will be pored over down to the last comma.

What’s in the plan

The details are important. This vote follows the important EU decision last week to use Article 122, the “emergency” provision of the EU’s treaty, to make the release to Moscow of Russia’s immobilized assets conditional on a peace plan and Russia paying reparations. While this move lifted a key hurdle to the reparations loan, it doesn’t mean the plan is a done deal. Belgium, where most of the assets are held, has objected to the plan, and Italy, Czechia, Bulgaria, and Malta have called on the EU to use alternative funding arrangements for Ukraine instead.

One possible reason for this objection can be found in rumors that the Trump administration has told European capitals that it does not want the scheme to go ahead. One of the points in the Trump administration’s recently leaked twenty-eight-point peace plan noted that $100 billion of the immobilized assets should be returned to Russia with another $100 billion for “US-led efforts to rebuild and invest in Ukraine,” with the United States receiving “50% of the profits from this venture.”

The European leaders signaling skepticism about the plan may earn themselves some brownie points in Washington, but they must also understand that the Trump administration’s alternative plan was buried by the decision they supported last week to invoke Article 122. Henceforth, the immobilization cannot be lifted until Russia pays Ukraine reparations.

What Belgium is thinking

The list of capitals expressing skepticism isn’t yet long enough to block the plans. But the arithmetic of qualified majority voting—which requires 55 percent of member states representing 65 percent of the EU’s population—isn’t the full story either. A “no” vote by Belgium could imply that member states can be forced to take steps that they perceive to be against their interests. So the main goal of the additional guarantees that are reportedly being prepared for Belgium is to convince its prime minister, Bart De Wever, at least to abstain from the vote.

At the same time, De Wever’s objections to the scheme should not be dismissed out of hand. Much was made of his comments earlier this month suggesting that Ukrainian victory was a “a fairy tale, a complete illusion.” There are indeed few examples of reparations being paid by a country that has not lost a war to a country that has not won it. The scheme being discussed relies on there being some chance that Moscow will pay reparations, so it is not unreasonable to raise how likely this is—even if the initial draft offered to mutualize the risk so that the principal would be repaid by all EU member states and not Ukraine if Russia doesn’t pay.

Russia is already wielding the threat of asymmetric retaliation against Belgium. Some of these risks also deserve to be mutualized, such as if Russia confiscates assets under Euroclear’s custodianship that have been immobilized inside Russia. While Euroclear has already built up a partial buffer against this, a stronger commitment by all EU member states would be fair. However, Belgium should not expect to be compensated for any asymmetric attack it may face, such as drone incursions. The EU should face the risks together but should not sponsor Belgium for doing its part against this collective threat.

European Commission President Ursula von der Leyen, Prime Minister Bart De Wever, and German Chancellor Friedrich Merz meet in Brussels on December 5, 2025. (BELGA via Reuters Connect)

On December 5, German Chancellor Friedrich Merz, who has invested a lot of political capital in this scheme, and European Commission President Ursula Von der Leyen met with De Wever to discuss these issues over dinner. The outcome appears constructive. The technical work to provide Belgium with assurances on some of its concerns has reportedly continued apace. Germany has even signaled that it is willing to cover more of the risk than its share of EU gross national product normally dictates, but there is still quite a way to go.

De Wever’s steeliness has fed a wave of Belgian pluckiness, and the derogatory press speculation on his motives has made reaching a deal more difficult. The unlikely prime minister’s entire career has been built on Flemish nationalism and yet even Francophones trust he is standing up for Belgium’s national interest. And so, it is vital to provide him with enough legal and financial assurances. The institutions in Luxembourg, France, and the United Kingdom that hold smaller amounts of the immobilized assets should also be required to make the same move to make a U-turn palatable for Belgium. There are, moreover, solid arguments available to them. Even in friendly jurisdictions, Russia will struggle to prove its assets have been seized thanks to the reparations loan’s design, which does not constitute confiscation.

Where the money will go

What the cash is used for is an important and underdiscussed question, and it is bound to come up during the summit this week. The figure that would be made available to Ukraine next year has varied because of the number of parameters at play. Of the €95 billion allocated to macro financial assistance, €45 billion will actually have to be used to repay the G7’s ERA loans, which were meant to be repaid using interest revenue generated by the cash now being put to work in a different way. The remaining €155 billion allocated to supporting Ukraine’s defense industrial capacities should remain the plan even if there is a peace deal, as the money will provide Ukraine with the resources to rebuild and maintain a credible defense. Within this portion of the budget, it is very reasonable for there to be a quota devoted to supporting Europe’s defense industrial base. The arguments this week will likely focus on the level of the threshold.

So how will this week play out? European Council meetings featuring heads of state and government from all twenty-seven member states are described as historic a little too often. But what’s decided in the coming days will say a lot about how the EU deals with a world in which it must fend for itself.

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How Europe can strengthen its own defenses and rebalance transatlantic relations

jcookson — Mon, 15 Dec 2025 19:24:22 +0000

WASHINGTON—US President Donald Trump’s new US National Security Strategy (NSS) makes clear that the United States does not maintain a shared perception of threats with its NATO allies. In an incredible reversal of priorities from the first Trump administration’s NSS, the latest document spends more time describing an internal threat to Europe from European Union (EU) overregulation, censorship, and “civilizational erasure” than it does the threat of Russian aggression, which is largely absent from the document. While calling for an end of the war in Ukraine, Trump’s NSS clarifies the United States’ position as a neutral arbiter. In response, the Russian government lauded the NSS for being “largely consistent” with its worldview, even as Russia’s own strategic documents consider Moscow to be in an existential conflict with the West.

Rather than lament the United States’ noncommittal approach to the transatlantic relationship, European leaders should instead lean into the NSS directive for greater “burden sharing and burden shifting.” Specifically, European countries should work to develop a new security architecture that allows for bold and decisive European action. This architecture should be based on coalition and consortium models for decision-making, action, and capability development. Europe must also continue to plan a central role for Ukraine in Europe’s long-term security architecture, irrespective of Kyiv’s near-term prospects for NATO or EU membership.

Some Europeans may hesitate at this idea, fearing that too much political leadership and autonomy might push the United States to further decouple from the continent. But if anything, the new NSS reinforces the need for Europe to develop new models of decision-making to bolster cooperation with the United States when practical and boost European agency to act alone when necessary and where interests diverge. If carried out effectively, this reorganization will lead to a stronger European pillar in NATO, more capable European allies and partners, and a more resilient relationship with the United States.

Even before the White House released its new NSS, elements of a new European security architecture had already begun to emerge. Since Russia launched its full-scale war of aggression against Ukraine, European nations have made unprecedented investments in their militaries and have been preparing their armed forces for territorial defense. On the Alliance’s eastern flank, where deterrence and defense are most at stake, NATO’s posture has evolved from a tripwire force of four battlegroups first deployed in 2017 to nine Forward Land Forces, positioned from Finland to Romania, that are better equipped to defend allied territory. The investments made by the lead European Forward Land Forces nations represent burden-sharing in action.

With Sweden and Finland’s integration into NATO, the Alliance can now operate as a united front from the Baltic Sea to the Black Sea. The quick accession of both countries has put Russia in a more difficult position geographically along the eastern flank: the Black Sea is effectively neutralized and the Baltic Sea has become a NATO bastion. This consolidation allows for unprecedented European military activity and reinforces allied territory against air and missile threats, which have been compounded in recent years by the broken or expired arms control treaties that previously underwrote European security.

As NATO adapts its posture to new forms of pressure from Russia, many of its military activities and operations now rely on European initiatives and assets. This is the case with NATO’s Operation Baltic Sentry, which was launched in January after several allied undersea cables were damaged or severed in 2023 and 2024. NATO’s Operation Eastern Sentry, launched in September 2025 in response to Russian drone incursions into Poland, also relies extensively on European capabilities. Both operations show that European nations can operationalize NATO’s adapted posture.

And even outside NATO frameworks, European countries and the United Kingdom are creating new dilemmas for Russia. Europeans have continued to push sanctions and are focusing on dismantling Russia’s “shadow fleet” of oil tankers. In October, for instance, French forces boarded a Russian shadow fleet tanker as part of a broader effort to hinder Russia’s ability to illegally acquire revenue.

New defense agreements between several European countries have reinforced a commitment to mutual defense that has, outside of US extended deterrence, primarily existed to date in NATO’s realm of crisis management. In just the past few months, the United Kingdom and France penned the Lancaster House 2.0 Agreement to modernize their defense and security relationship, Germany and France agreed to develop a defense and security council to better operationalize joint responses, and the United Kingdom and Germany signed a mutual defense agreement called the Kensington Treaty.

While these agreements and initiatives affirm the respective nations’ commitment to NATO’s collective defense and the EU’s mutual defense clause, they also highlight European countries’ push to work more closely with one another on security amid increasing uncertainty emanating from Washington. Importantly, these agreements also create complexities for Russia and China, both of which would prefer to deal with a less-intertwined continent.

Coalition and consortium approaches to security

Next, Europe needs to strengthen its ability to take bold and decisive action. The first step in doing so is for democratic European nations to follow through on their pledges to increase defense spending. NATO’s new target of 5 percent of gross domestic product for defense spending, coupled with the EU’s Readiness 2030 plan, gives leaders fiscal and political headway to drive up defense budgets. This will not be easy given anemic economic growth and the strength of populist opposition parties across Europe, but the threat of a revanchist Russia makes higher defense spending even more urgent. With defense industrial capacity nowhere near the scale and speed necessary to meet the strategic environment on both sides of the Atlantic, nations should also direct new defense spending toward effective and efficient defense industrial initiatives that will fill Europe’s urgent capability shortfalls.

At the multilateral level, if Europe is to spearhead proposals for and by itself, European nations must prioritize decision-making formats that are smaller than NATO and the EU. This is true with Ukraine, as the future of Kyiv’s armed forces will be a cornerstone of the new European security architecture. The British and French-led “coalition of the willing” that supports Ukraine began as a summit. Today, twenty-six countries have made formal pledges, the coalition has established a permanent headquarters in Paris, and it plans to create a coordination cell in Kyiv.

The coalition, though currently stalled amid frustrated cease-fire negotiations, at least allows Europeans to shape how Ukraine could integrate into Europe’s security architecture in the future. The coalition has announced that it would support Ukraine in a post-cease-fire environment by regenerating Ukraine’s land forces (possibly with boots on the ground), securing Ukraine’s skies, and ensuring safe and secure access for vessels transiting Ukraine’s ports. This structure remains the best model for supporting Ukraine in the future, given the United States’ lack of clarity around security guarantees for Ukraine or support for Kyiv’s future NATO membership.

To build up the continent’s defense industrial base, European nations should adopt a consortium approach aimed at jointly developing and procuring military equipment and technologies that are complementary with NATO. This approach will be critical for rapidly resourcing and filling gaps that might be left by departing US capabilities in the coming years. For example, the European Long-Range Strike Approach (ELSA) shows promise, and it can be regarded as a blueprint for how European nations can work together to develop new capabilities together and decide when and how to use them. ELSA, which includes France, Italy, Germany, Poland, Sweden, and the United Kingdom, aims to build a full-spectrum system for weapons with a range exceeding 500 kilometers. It complements the European Sky Shield Initiative, which although incomplete, aims to create a ground-based integrated air-defense system to protect European airspace that remains heavily dependent on US enablers.

For these capability-centric consortiums to reach their potential, Europeans should pool financial resources through the EU and make better use of the intergovernmental European Defense Agency for funding and coordination. Several projects show promise such as the satellite programs for intelligence or observation as a future alternative to Starlink through Eutelsat. The uptick in Italian and French land-air missile SAMP/T co-production, which will in the future equip Denmark, the third European country to operate the system rather than Patriot. For smaller scale projects, the EDA should continue to support programs like the Belgian Dutch-led “replacement Mine Countermeasures” (rMCM), which aims at upgrading mine warfare capabilities.

A new way of working with the United States

As Europe seeks to maintain US interest and commitment in the near term, it has a once-in-a-generation opportunity to rethink its security architecture and rebalance the transatlantic relationship. In this new strategic landscape, the future of transatlantic relations will rest on Europe working toward being able to defend itself while carving out room to advance proposals with the United States where advantageous for both sides of the Atlantic. Europe has strengths of its own in the balance of power against Russia, despite the latter’s perceived escalation advantage, and a major one is its high level of cooperation and interoperability.

Only a few years ago, building European coalitions and capabilities independent of the United States would have seemed a potential threat to transatlantic and European unity. Now it is the opposite. As the United States repositions and reprioritizes, more European action does not have to equal less cooperation with Washington. This new security architecture would also allow the United States to better identify points of dialogue on specific issues, helping answer the Cold War–era dilemma of who to dial when the United States wants to call Europe. Especially as the new NSS calls for the United States to “organize a burden-sharing network.”

Trump’s new NSS has outlined US goals, and neither Europe nor Ukraine should wait any longer for Washington to reinforce its commitment to transatlantic security. US priorities lie outside the European theater regardless of the security threats Russia or China may pose. Moreover, Europe will not receive such strategic clarity from an administration that pursues a situation-based and transactional approach to security dilemmas. Instead, Europe must be bold in advancing a new security architecture that has the potential to strengthen European defense and reset the transatlantic relationship for the better.

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Russia’s insistence on a defenseless Ukraine betrays Putin’s true intentions

Peter Dickinson — Thu, 11 Dec 2025 08:21:08 +0000

As American, Ukrainian, and European officials continue to debate potential peace plans among themselves, there remains very little to indicate that Russia is genuinely interested in ending the war. On the contrary, many of the Kremlin’s key demands during negotiations appear tailored to facilitate a continuation of the invasion on more favorable terms.

Russian President Vladimir Putin’s territorial claims alone should be enough to set off alarm bells. He insists that in order to secure a ceasefire, Ukraine must first hand over the remaining 10 percent of the Donbas region that his troops have failed to seize since the invasion first began eleven years ago.

As the ruler of what is by far the largest country in the world, Putin has no pressing need for the approximately 6600 square kilometers of Donbas territory still under Ukrainian control. Nor does the region contain any particularly important natural resources or historic sites that could justify its present position at the very heart of the peace process.

Putin’s true motivation is not difficult to discern. The unoccupied portion of the Donbas that he now so openly covets may seem relatively inconspicuous on the map, but it plays host to some of Ukraine’s strongest fortifications. Developed over the past decade, this fortress belt represents a formidable obstacle to Moscow’s invasion.

Analysts estimate that it could take years for Russia to occupy the area by force, and would likely cost the Kremlin hundreds of thousands of additional casualties. Beyond the fortress belt, the way would be open for further sweeping Russian advances into central Ukraine and toward Kyiv itself. This vital role in Ukraine’s overall defense explains why Putin is prepared to reduce his demands elsewhere but remains so eager for Kyiv to hand over this particular territory without a fight.

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Among Moscow’s many demands, the biggest red flag of all is the Kremlin’s determination to demilitarize Ukraine and deprive the country of international allies. Ever since the first round of peace talks during the initial months of the war, Putin has consistently sought to impose restrictions on the size of the Ukrainian military and the categories of weapons the country can possess. While recent drafts envision a Ukrainian army of 600,000 troops, the fact that Russia remains so keen on limiting Ukraine’s ability to defend itself is an unambiguous signal of Putin’s bad intentions.

Likewise, the Kremlin’s bitter opposition to continued international support for Ukraine betrays the reality behind Moscow’s current peace posturing. This extends far beyond Russia’s well-documented objections to Ukrainian membership of NATO. Putin’s negotiators also seek to block future arms supplies to Kyiv and have completely ruled out the possibility of even a symbolic Western troop presence in postwar Ukraine, while demonstrating a deep reluctance to accept anything resembling credible security guarantees.

Attempts to defend Russian objections on security grounds are unconvincing. Putin has debunked his own claims of a NATO security threat to Russia by reacting with obvious indifference to neighboring Finland’s NATO accession in 2022, just months after using the issue as a convenient pretext for the invasion of Ukraine. According to this bizarre Kremlin logic, Ukraine’s slim hopes of joining NATO in the distant future were sufficient grounds to unleash the largest European war since World War II, but Finland’s almost immediate membership of the alliance was “no problem” for Moscow, despite the fact that both countries share long land borders with Russia.

Putin’s refusal to countenance purely defensive commitments from Kyiv’s allies that are clearly designed to safeguard Ukrainian sovereignty is even harder to justify. If the Russian ruler intended to coexist with an independent Ukraine, he would surely recognize the need for international involvement in efforts to reestablish stability in the region. Instead, he has adopted the opposite approach. While Ukraine appeals for security guarantees, Putin seeks to guarantee Ukraine’s insecurity.

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The insincerity of Russia’s current approach to the US-led peace process should come as no surprise. After all, while Putin may be willing to consider a pause in hostilities if it comes on Kremlin-friendly terms, he simply cannot risk a peace deal that secures the continued existence of an independent Ukrainian state. Any settlement based on the present front lines of the war would leave around 80 percent of Ukraine beyond Kremlin control and free to continue along the path toward greater European integration. That is exactly what Putin is fighting to prevent.

The Kremlin dictator has always viewed his war against Ukraine in the broadest of historical contexts as a crusade to reverse the verdict of 1991 and return Russia to its rightful place as a global superpower. Like many of his contemporaries, Putin remains embittered by the Soviet collapse and determined to avenge what he perceives as modern Russia’s humiliating fall from grace. This has fuelled his obsession with independent Ukraine, which he has come to regard as the ultimate symbol of the historical injustice resulting from the breakup of the USSR.

Putin’s increasingly rabid opposition to Ukrainian independence reflects his Cold War experience as a KGB officer in East Germany, where he witnessed the disintegration of the Soviet Empire firsthand. This traumatic experience has helped to convince him that the Ukrainian state-building project now poses an existential threat to Russia itself. If Ukraine is able to consolidate its statehood and emerge as a recognizably European democracy, Putin fears this could serve as a catalyst for the next phase in a Russian imperial retreat that began with the fall of the Berlin Wall.

Over the past two decades, Putin’s determination to undermine Ukrainian statehood has come to dominate his entire reign and has led directly to a new Cold War. From the 2004 Orange Revolution to the 2014 seizure of Crimea and the full-scale invasion of 2022, Ukraine has been at the epicenter of each new milestone in the deteriorating relationship between Russia and the West.

Time after time, Putin has demonstrated his readiness to sacrifice all other Russian national interests in his quest to subjugate Ukraine and force the country permanently back into the Kremlin orbit. He has reversed decades of integration into Western economies, placed Russian society on a wartime footing, and sent hundreds of thousands of Russian soldiers to their deaths. It is deeply delusional to think that he is now suddenly ready to abandon all of this and accept the reality of Ukrainian independence in exchange for the marginal gains of a compromise peace.

Putin’s own position during peace talks betrays his complete lack of interest in ending the war. His territorial demands would rob Ukraine of crucial fortifications and set the stage for further Russian advances, while his calls for restrictions on the Ukrainian armed forces and Kyiv’s ability to maintain military ties with the West would leave postwar Ukraine disarmed and defenseless. In isolation, any of these demands would look deeply suspect. Taken together, they represent overwhelming evidence of Putin’s intention to continue the invasion.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

AN #ACFRONTPAGE EVENT—US Trade Representative Jamieson Greer discusses the major changes in US trade policy that have taken place during the first year of the second Trump administration and how the strategy will evolve in the years ahead.

Economy & Business Politics & Diplomacy Trade and tariffs United States and Canada

Even with China’s unfair trade practices, the United States and China still “should trade,” said US Trade Representative Jamieson Greer. “Just . . . it needs to be managed.”

Greer spoke at an Atlantic Council Front Page event on Wednesday, hosted by the GeoEconomics Center, where he unpacked a year in which US President Donald Trump implemented an aggressive trade strategy that resulted in clashes with China over tariffs, export controls, and other trade measures.

“The president’s interest is not in blowing up everything,” Greer argued, “and that includes our relationship with China.”

Greer said that the administration’s actions are intended not to solidify geopolitical camps but to address the “giant deficit” in trade. “The landing zone with China is really we just have more balanced trade,” he argued.

Below are highlights from the event, moderated by The Wall Street Journal’s Greg Ip, where Greer talked about the Trump administration’s broader strategy, what it has and has not yet achieved, and what to expect next on tariffs and trade.

Partners and allies

Greer said that he was “disappointed” to see how the European Union (EU) is implementing the bloc’s digital regulations, with social media platform X receiving the first fine under the EU’s Digital Services Act last week.
Greer argued that the EU had promised “no discrimination against US digital actors” in trade dealings this summer, but “what we think is fair treatment and what they think is fair treatment is quite different,” he added.
“With respect to our companies, we’re going to regulate our companies,” he said. “We’re not going to allow that regulation to be outsourced.”
In discussing whether the EU and United States will take a common approach to China on trade, Greer said that “we’re not really in a position of telling everybody, ‘You’re either with them or you’re with us.’” He added, “if we align in a way that helps America, great. If not, we’re going to take our own actions.”
Yet, he argued, “it’s in every country’s interest to take action against overcapacity and distortions, whether that’s from China or that’s from Vietnam or Indonesia.”
On the US-Mexico-Canada Agreement (USMCA), which enters review next year, Greer said that the United States is going to likely talk to each of the other signatories “separately,” because “our economic relationship with Canada is very, very different than our economic relationship with Mexico.” He indicated that all options are on the table for the USMCA—including a withdrawal.
When Ip raised the idea that the rules-based international order and its fair-trade norms are dead, Greer asked whether “it was ever alive at all,” saying “sometimes we kind of have white lies we tell ourselves in international relations to paper over the actual power politics that really control everything.”

Performance review

Greer, in jotting up his own report card for the Trump trade strategy, said that while the US trade deficit globally “is tracking higher than it was last year,” he attributed that increase to “people front-running the tariffs.”
He called attention to other datapoints to show the impact of the Trump administration’s trade policies, including that the trade deficit with China has decreased and that he expects it to be down 25 percent by the end of the year. “It’s clearly going the direction we want it to go, and we expect it to go,” he said.
Greer also noted that manufacturing as a share of the gross domestic product is up, a sign that some sectors are reshoring their production. And while reshoring has centered around select items “that matter most” (such as cars, pharmaceuticals, and semiconductors), Greer said that “a lot of other manufacturing . . . comes along with it.”
As reshoring takes place and manufacturing jobs become more plentiful, the US trade representative pointed out that manufacturing jobs in the United States “on average pay more than services jobs,” so Americans shouldn’t “turn up our nose” at such work.
Despite the impact of tariffs and the reshoring of select items, Greer said that “stores are stocked up and ready for a record holiday season,” quipping, “I’m not the Grinch just yet.”

What comes next

In response to GeoEconomics Center analysis about the potential impact of the Supreme Court’s review on Trump tariffs, Greer said that if the court blocks tariffs issued under the International Emergency Economic Powers Act, the administration would use alternative instruments to attempt to recreate the nearly $200 billion in tariff revenues.
“The default position for a long time in the United States was to raise revenue to fund the government, and then we switched to an income tax early in the twentieth century,” he explained. “So it’s not crazy to have revenue helping to fund your government.”
Greer said his main focus with tariffs is “getting the trade deficit down,” and he pointed out that the countries with the largest trade surpluses with the United States do so because they “have a variety of unfair trading practices,” including overcapacity and subsidization. “Those countries currently have the highest tariffs.”
On the possibility of working with the US Congress to legislate some of the tariff increases, Greer said that he has “had some interest” from members of Congress. He argued that doing so would “provide a new baseline for companies to understand” that the use of tariffs “is a bipartisan expression.”
When asked whether next year will be quieter on tariffs, Greer said that it will depend on the president, but he added that the administration is “in the middle” of the tariff project, suggesting more movement to come.

Katherine Golden is an associate director of editorial at the Atlantic Council.

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Europe’s choice: Fund Ukraine now or pay a far higher price if Russia wins

Elena Davlikanova, Lesia Orobets — Tue, 09 Dec 2025 20:39:44 +0000

When European leaders convene in Brussels on December 18, continued funding for the Ukrainian war effort will be top of the agenda. However, it remains far from clear whether the European Council meeting will result in a breakthrough. Failure to reach a consensus could have catastrophic consequences for Ukraine and may prove disastrous for the future of European security.

The most realistic financing option currently under consideration is a so-called reparations loan backed by frozen Russian assets. With more than $200 billion of immobilized Russian Central Bank assets currently held in Europe, this loan would be sufficient to bankroll Ukraine’s defense for the coming two years, with Russian reparations set to cover repayments.

European officials are also mulling an alternative format that would involve a joint debt guaranteed by the EU budget. This approach would generate around $100 billion over the coming two years. However, while the reparation loan would place the financial burden on Russia, this approach would introduce new demands on the already overstretched budgets of individual EU member states.

Using frozen Russian funds as security for a major Ukrainian loan would send a message to Moscow about Kyiv’s ability to continue defending itself for years to come. Advocates of the reparations loan see it as a justified move to make Russia pay for the invasion, but the proposal faces obstacles on both sides of the Atlantic.

The Trump administration has reportedly been working behind the scenes to obstruct the reparations loan. US officials argue that the frozen Russian assets should instead become bargaining chips during negotiations with Putin to end the war.

Belgium, which hosts the largest portion of immobilized Russian funds in Europe, remains the main obstacle. The Belgian government has complained that seizing the Russian assets will expose it to legal liabilities that could bankrupt the country. Meanwhile, Belgian Prime Minister Bart de Wever claims that Moscow has “let us know that if the assets are seized, Belgium, and me personally, will feel the effects for eternity.”

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The debate over further funding for Ukraine comes at the precise moment when Russia’s own economic model is showing signs of fragility. Indeed, some forecasts indicate that Putin’s war economy will face mounting challenges in 2026 that could have a major impact on the Kremlin’s ability to continue the invasion. This may be a factor driving Moscow’s determination to block further EU funding for Ukraine.

As Russian military spending reaches new highs, the Kremlin is rapidly burning through strategic reserves. At the same time, revenues from Russia’s economically crucial energy exports have recently fallen to multi-year lows amid mounting sanctions pressures and escalating long-range Ukrainian attacks on oil and gas industry infrastructure across the Russian Federation.

For now, Putin can still afford to pay his military. However, as Russia’s economic outlook worsens, he will have to prioritize the invasion of Ukraine over other state expenditures, while shifting the burden increasingly onto the Russian public. These trends do not imply imminent collapse, but they do expose a vulnerability reminiscent of the late Soviet era that Western governments could exploit in order to push the Russian dictator toward the negotiating table.

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One of the best ways to pressure Putin is by backing Ukraine. Right now, Kyiv faces a massive funding gap for the coming year that could have serious implications for the war. Unless Ukraine can secure tens of billions of dollars in additional financing, it will be extremely difficult to pay for the military, rebuild battered energy infrastructure, and cover basic social expenditures.

Crucially, a lack of Western financial backing for Ukraine will also embolden Russia. Why should Putin consider ending the invasion when Ukraine is running out of money and Kyiv’s Western partners are showing such obvious signs of hesitation?

Europe’s reluctance to pay for Ukraine’s defense is shortsighted, to say the least. If Russia’s invasion succeeds, European governments will soon have to boost defense spending to levels that would dwarf the current cost of backing Ukraine.

A recent New York Post article highlighted the sheer scale of the likely price tag for Europe if Russia achieves victory in Ukraine. Citing research by Scandinavian think tanks, the report predicted that the expense of fortifying Europe’s eastern flank against a triumphant Russia would be approximately $1.6 trillion, or more than double the likely figure required to finance the Ukrainian war effort for four more years.

The EU’s reparations loan initiative is lawful, financially sound, and strategically necessary. By hesitating now, Western leaders risk repeating the same mistakes that shaped earlier phases of Russia’s invasion, when delayed decisions and piecemeal support only served to embolden the Kremlin and prolong the war. If European leaders are unable to act decisively on December 18, Putin will toast another strategic victory and the cost of stopping Russia will rise even further.

Elena Davlikanova is a senior fellow with the Center for European Policy Analysis and Sahaidachny Security Center. Lesia Orobets is the founder of the Price of Freedom air defense initiative and a former member of the Ukrainian parliament.

At the start of the full-scale invasion, Ukraine’s vibrant tech sector represented an important asset that the authorities in Kyiv were quick to mobilize. This tech prowess helped cement the country’s strategic focus on drones, which could be designed and produced domestically to compensate for a lack of more conventional weapons.

Since 2022, the number of Ukrainian companies developing drones has skyrocketed, while annual output has risen to millions of units. This has allowed Ukraine to establish a “drone wall” along the front lines of the conflict, making any buildup of enemy forces extremely challenging. Over the past year, around three-quarters of all Russian casualties have been as a result of Ukrainian drones.

At sea, Ukraine has used drones to sink multiple warships and break the Russian navy’s Black Sea blockade, forcing Putin to withdraw the bulk of his remaining fleet from Russian-occupied Crimea. Ukraine’s growing drone capabilities have also made it possible to bring Putin’s invasion home to Russia with an escalating campaign of deep strikes on military and industrial targets across the Russian Federation.

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Russia has responded to Kyiv’s groundbreaking use of drone warfare by studying Ukrainian tactics and technologies, while also dramatically expanding its own domestic drone manufacturing base. The Kremlin has been aided in this by allies including China and Iran, who have provided vital components along with the blueprints for key drone designs.

The Kremlin strategy has focused on mass producing a limited range of models for use on the battlefield and in the bombardment of Ukrainian cities. This methodical approach has paid dividends. By the end of 2024, it was already becoming clear that the drone war was turning in Russia’s favor. This trend has only intensified over the past year.

One of Russia’s most important innovations has been the widespread use of fiber-optic drones. These drones are controlled by a wire connected directly to the operator, making them immune to jamming technologies and extremely difficult to intercept.

Russian commanders first began using large quantities of fiber-optic drones during fighting in late 2024 to push Ukrainian troops out of Russia’s Kursk region. The drones proved highly effective at disrupting Ukrainian logistics by targeting supply vehicles. This was widely seen as a crucial factor behind the success of the operation.

Russia has now replicated and scaled up these tactics throughout southern and eastern Ukraine, creating a drone wall of its own while reaching deeper and deeper into Ukrainian-controlled territory. Fiber-optic drones are being used to ambush supply vehicles far behind the front lines, forcing Ukraine to become increasingly reliant on ground robotics to supply combat units and evacuate the wounded.

In addition to striking Ukrainian logistics, Russian drone forces are also prioritising attacks on their Ukrainian counterparts, forcing Ukrainian drone crews to pull further back from the line of contact to ensure safety. This distance gives Russian operators room to move their own teams forward, increasing their ability to dominate the battlefield.

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Russia’s Rubicon drone unit has emerged during 2025 as a prominent symbol of the Kremlin’s rapidly evolving and increasingly effective drone warfare strategy. Highly trained and well funded Rubicon teams are leading the campaign to cut Ukraine’s supply lines and widen the kill zone.

Crucially, Rubicon pilots pass their experience on to newcomers and provide extensive training that is helping to improve the effectiveness of other Russian army drone units. According to Ukrainian drone commander Yurii Fedorenko, Rubicon can rapidly scale up drone units using manpower and financial advantages that Ukraine cannot replicate.

In the drone war between Russia and Ukraine, the Kremlin is betting on mass and hoping that a combination of smart choices, specialised production, extensive training, and sheer numbers will eventually overwhelm Ukraine’s technological edge. In contrast, Kyiv continues to rely on a highly decentralised ecosystem of volunteer groups, startups, and military workshops producing a wide variety of different drone models. This diversity helps to drive innovation but also creates coordination challenges.

The current effectiveness of Russia’s drone units does not mean the drone war has shifted decisively in Moscow’s favor, but recent trends do expose a gap that Ukraine must urgently close. In order to counter Russia’s increasingly centralised and well-resourced drone formations, Kyiv needs to adopt key elements of the Rubicon model. This means scaling up training pipelines, sharing front line experience more systematically, and ensuring Ukrainian drone units have all the resources they need to hunt down Russian operators and regain the initiative.

Since 2022, the Russian military has been widely mocked for its primitive “human wave” tactics and generally poor performance in Ukraine. However, the progress made by Russia in drone warfare indicates an army that is fully capable of learning, adapting, and innovating. Moscow has not been able to achieve any major technological breakthroughs, but Russian military strategists have significantly strengthened their country’s position by concentrating on scale, training, and relentless battlefield experimentation.

This progress should be a major wake-up call for European leaders. Small numbers of suspected Russian drones are already causing chaos and disruption across Europe. The longer the war in Ukraine lasts, the more advanced Russia’s drone capabilities will become.

David Kirichenko is an associate research fellow at the Henry Jackson Society.

Executive summary

President Donald Trump’s policies are substantially reshaping prospects for transatlantic cooperation across a range of policy areas. In digital competition, the picture is complex. The Trump administration opposes Europe’s competition regulation, but both the European Commission and US federal and state competition enforcers have similar priorities when it comes to competition in digital markets.

US-European Union (EU) dialogue could help make interventions to promote digital competition more effective. It could boost consistency (helping firms adopt the same remedies across both sides of the Atlantic) and help regulators share knowledge and best practices. Beyond technical alignment, EU and US authorities can coordinate on narratives and messaging, ensuring that regulatory measures are perceived as fair and mitigating the risk of digital competition policy fueling foreign policy disputes.

At a recent roundtable hosted by the Centre on Regulation in Europe (CERRE) and the Atlantic Council, we identified the following recommendations for competition enforcers on digital antitrust.

The European Commission and national competition authorities should continue to cooperate with US federal agencies and strengthen their cooperation with US state attorneys general, given their important role in US digital antitrust cases.
To effectively learn from each other’s experience with remedies, and to enhance mutual learning and correct remedies when needed, competition agencies in both the EU and the United States should have a robust, evidence-based assessment about how their remedies have performed.
The European Commission needs to improve its communication strategy when pursuing antitrust cases. Antitrust enforcement must be closely linked to consumer welfare, competitiveness, and economic growth. Enhancing its legitimacy can help ensure European competition enforcers withstand any political pressure.
Europe needs to better highlight how open and competitive markets foster innovation. Tools to open competition are therefore important ways to support US and European global technological leadership.

In relation to merger policy, competition authorities on both sides of the Atlantic are evolving to better tackle the role of innovation in digital markets. Recommendations include the following.

EU and US authorities should develop consistent guidelines setting out how they will assess a merger’s impacts on innovation capabilities (such as chips and computing power, skills, data, and risky and patient capital) and incentives to innovate. Pro-innovation merger control should promote the new innovators and not protect the old ones.
The Directorate-General for Competition (DG-Comp) should aim to learn from the US merger guidelines and US authorities’ recent practices to inform the EU’s current exercise of revising its own guidelines.
As with antitrust remedies, competition authorities in both the EU and the United States must be honest and clear about how their merger remedies have performed, so that different authorities can become better by learning from each other’s successes and mistakes.

Introduction

Trump’s policies have challenged the transatlantic relationship and are reshaping prospects for transatlantic cooperation. On digital competition, the picture is particularly complex. The president and some of his appointees to the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division oppose Europe’s competition regulation, the Digital Markets Act (DMA)—and the president recently threatened to investigate the EU’s nearly €3 billion fine imposed on Google as an unfair trade barrier under Section 301 of the Trade Act of 1974. Despite this, when it comes to ex post digital antitrust cases, US federal and state competition enforcers and the European Commission have similar priorities. More broadly, competition authorities on both sides of the Atlantic are grappling with how to adopt consistent, principled, and predictable approaches in digital markets. This can better take innovation, investment, and firms’ capabilities into consideration during competitive analysis, and a consistent approach is key for global corporations.

US-EU dialogue could help improve the efficiency and effectiveness of interventions to promote digital competition. It could do the following.

Facilitate mutually consistent approaches to common regulatory challenges, reducing burdens on regulators and making it easier for global firms to adopt the same business models across both sides of the Atlantic.
Even where consistency is not possible, help regulators by sharing knowledge and best practices, or even help authorities to divide and conquer in areas such as ex post antitrust cases in which authorities on both sides of the Atlantic are pursuing similar goals.
Mitigate the risks of foreign policy disputes as digital competition interventions increasingly have cross-border impacts, and as the Trump administration bristles at foreign governments enforcing competition law and pro-competitive regulation against US champions.

But how can this mutually beneficial cooperation be maintained? In 2021, the EU and United States established a Joint Technology Competition Policy Dialogue, supplementing established agreements between the European and US competition agencies, and there is still dialogue between antitrust enforcers. However, given the growing perception of a difference in values between the EU and the United States, and tensions on a range of topics from trade to defense, prospects for cooperation risk becoming narrower in the future.

Cooperation on digital antitrust

European and US authorities have a significant degree of alignment on ex post antitrust enforcement in the digital sector. In digital markets, large firms have often argued that highly innovative digital markets had natural “winner take all” characteristics, but there is nevertheless competition for the market. These firms argue they are subjected to significant competitive pressure from those who might displace them with disruptive innovation and, therefore, have strong incentives to keep innovating. This implies a marginal role for competition agencies. In practice, however, many digital markets have seen little displacement of incumbents in recent years. Effective antitrust remedies not only enforce competition law but also create space for innovation, enabling new entrants and disruptive technologies to challenge incumbents and thrive. While, until recently, innovation in some markets appeared to have slowed, there is an open question about how much artificial intelligence (AI) could disrupt the architecture of digital ecosystems—and whether that implies antitrust authorities should step back or play a role in keeping this possibility open.

In the meantime, competition authorities in the EU and United States have become more assertive. On the US side, the FTC and DOJ are pursuing cases against tech firms brought under previous administrations, despite the Republican Party’s traditional light-touch approach to antitrust. The FTC and DOJ’s approach is fueled by a view that conservative antitrust must not allow “private tyranny,” just as it is opposed to government tyranny.¹ In particular, FTC Chairman Andrew Ferguson has applauded that “this administration . . . is rediscovering the wisdom of taking competition enforcement seriously.”²

In Europe, although there have been few new antitrust cases under the new European Commission, a number of ongoing cases are being pursued against the same firms, on similar timeframes and in relation to similar conduct. These cases have been supplemented by enforcement action under the DMA. Some of these cases might have different underlying motivations—with US authorities more concerned with the potential role of large technology firms in stifling plurality of voices online, and the EU more concerned with ensuring market contestability. But they nevertheless illustrate authorities’ common challenges, particularly how to design remedies for highly complex and fast-moving digital markets.

EU and US competition policies increasingly interact. For example, in a case brought by the US DOJ and some states against Google regarding its conduct in the search market, the DOJ sought an extensive list of potential remedies, including data-sharing rules that looked similar to obligations in the EU’s DMA. In September 2025, the district court decided to apply a narrower data-sharing remedy. A similar question about alignment of remedies will arise in the EU and US cases concerning Google’s digital advertising technologies.

However, challenges remain in coordinating antitrust actions on both sides of the Atlantic.

A first challenge is ensuring that the tenets of antitrust analysis remain synchronized. Protecting disruptive innovation in digital markets, for example, might require identifying robust theories of harm closer to market realities and moving away from reliance on static market definitions. However, the US legal system—in which the FTC and DOJ must convince a judge of their case—makes EU-US alignment difficult. Even if EU and US competition authorities agree on a common approach to a particular case, judges might take a different approach. In particular, competition cases in the United States go before generalist US judges, some of whom might be relatively conservative about government intervention. For example, European competition agencies are exploring how large firms can stymie disruptors by preventing their access to inputs to innovate or impacting their access to customers. They have used these concerns to rework the essential facilities doctrine and the tests for when discrimination is anticompetitive (with EU courts often sympathetic to their approaches, as in the Google Shopping and Android Auto cases).³ However, there is limited evidence that US courts are as willing to see principles evolve.

A second challenge is remedy design. Ex post antitrust remedies can have global impacts—for example, by raising costs of operating different business models in different countries, or by requiring structural changes to large firms or technical changes that cannot be implemented at a regional level. Conversely, for firms that can benefit from remedies, a consistent approach to remedy design in the EU and United States could lower costs and allow innovative firms to scale faster. Securing consistent approaches to remedies between the EU, the United States, and third countries such as the United Kingdom could therefore have widespread benefits. There is acceptance that past remedies in tech antitrust cases have sometimes not been very effective, and that innovation seems to have played more of a role than antitrust remedies in promoting competition in digital markets. Both sides seem to be learning from these past experiences, but they have adopted different lessons. The EU has sought to front-end tougher remedies in the DMA while, in the US Google Search case, the judge adopted a narrower set of remedies and instead put more faith in possibilities for AI to disrupt online search markets. Both European and US authorities can benefit from robust and transparent evaluations of past remedies, learning from successes and failures to design more effective interventions in the future.

Thirdly, the EU and United States also take different approaches to the merits of ex ante digital competition regulation. Europe’s DMA has few influential friends among the current US administration. Trump has implied he sees the law as an attack on “the growth or intended operation of United States companies,” and FTC Chair Andrew Ferguson has described the DMA as a “tax on American companies” and one which is “overly rigid,” despite most of the beneficiaries of the DMA being US firms.⁴ The EU’s objectives with the DMA were to foster a competitive and fair digital market, creating opportunities for challenger firms from both Europe and the United States, and supporting the West’s global technological leadership. From a European perspective, there is no appetite to rescind or water down the DMA; Commissioner Teresa Ribera has signaled the European Commission would take a “brave” approach to enforcement and has fined Apple and Meta for noncompliance.⁵ However, there is a widespread perception that the commission is tailoring its enforcement approach to reflect the current environment. For example, the Apple and Meta fines came only after the commission missed its own self-imposed deadlines, seemingly to avoid torpedoing EU-US trade talks.⁶

There is also a question of how European and US regulatory authorities can best cooperate and coordinate in practice, given the different timeframes and processes of their respective cases and concerns in the United States about Europe taking the lead on antitrust matters. Ferguson, for example, has argued, “If we think that Americans are suffering from anticompetitive conduct at home, we should address it here at home . . . I don’t want the Europeans doing it for us.”⁷ The EU and United States have a positive comity agreement, which allows one party affected by anticompetitive behavior originating in the other party to request that said party address the conduct. But this agreement has never been used in practice. Under the Trump presidency, the European Commission has shown a desire to allow the United States to take the lead. For example, in the Google AdTech case, the European Commission has found that Google breached competition law. However, the US federal court also considered remedies in its case regarding the same conduct. The commission has therefore delayed a final decision on remedies, stating that it wanted to “ensure that Google puts in place an effective remedy on both sides of the Atlantic . . . It is in everyone’s interest to achieve a joint outcome, including for Google itself, and for citizens worldwide.”⁸ While in principle such an approach might lead to harmonization, and would provide the EU with political cover, it poses the risk of delaying the imposition of remedies or encouraging the EU to accept remedies that might prove ineffective in the European context.

The broader political backdrop remains challenging. Trump has challenged the independence of numerous public authorities, including the FTC—and there is a risk of the president seeking to change the direction of US digital antitrust policy in the future. On the European side, while the EU secured a trade deal with the United States without needing to change its digital antitrust or digital regulation, the European Commission’s enforcement of the DMA and competition law—both procedurally and substantively—already appears to have been influenced by fears of triggering retaliation by the United States. It is difficult to see how the EU can adopt a rigorous and independent approach while remaining dependent on the United States for its security.

These challenges suggest several lessons for competition enforcers.

The European Commission and national competition authorities should continue cooperating with the US federal agencies and strengthen their cooperation with US state attorneys general, given their important role in US digital antitrust cases.
To effectively learn from each other’s experience with remedies, and to enhance mutual learning and correct remedies when needed, competition agencies in both the EU and the United States should have a robust evidence-based assessment of how their remedies have performed.
The European Commission needs to improve its communication strategy when pursuing antitrust cases. Antitrust enforcement must be closely linked to consumer welfare, competitiveness, and economic growth. Enhancing its legitimacy can help ensure European competition enforcers withstand any political pressure.
Europe needs to better highlight how open and competitive markets foster innovation instead of protection of national champions. Tools to open competition are therefore important ways to support US and European global technological leadership.

Merger policy and innovation

The discussion on antitrust enforcement naturally leads to questions about how merger policy can also protect innovation and competition in digital markets. Both EU and US approaches to competition policy are evolving to better tackle the role of innovation in digital markets. In particular, there is growing unease that competition authorities need to improve how they approach the impacts of a merger on innovation.

Reflecting these concerns, the United States updated its merger guidelines in 2023 after a two-year process. Merger guidelines are traditionally intended to describe the FTC and DOJ practices to the public, businesses, and courts—such as setting out important questions to which the agencies seek answers during the review process, including what type of evidence they are looking for and how that evidence is typically analyzed. However, the updated guidelines have been perceived by some as a more political document and a statement of the agencies’ intent to toughen merger policy, with more mergers likely to be presumed anticompetitive and the introduction of novel theories of harm. These guidelines remain in place for now, despite changes of leadership at the DOJ and FTC.⁹

The European Commission is still in the process of updating its merger guidelines, a process that it aims to finalize in 2027. Recently, both Mario Draghi and Commission President Ursula von den Leyen have pushed for the process to speed up. Much of the debate has centered on the importance of scale. Draghi’s report on European competitiveness—often interpreted as reigniting discussion about the merits of allowing EU firms to merge to create more innovative “European champions”—also proposed an innovation defense to allow mergers that would otherwise be prohibited. While some consider the report to be misunderstood, Draghi’s subsequent speeches have contributed to the perception that he is arguing for a loosening of merger policy. However, the extent to which new guidelines will (or can) represent a significant evolution in approach is unclear.

First, in Europe, different stakeholders have vastly different objectives when they argue that innovation (and other factors such as resilience) should play a bigger role in merger review. For enforcers, taking innovation into account might imply being able to intervene in more mergers; it is difficult to argue that EU merger policy has been too lax given that only a tiny proportion of mergers have ever been prohibited. For other stakeholders, the objective of giving innovation a stronger role in merger policy is to allow more deals. It is unclear how the guidelines can promote European champions while preventing foreign competitors from engaging in similar large-scale mergers.
Second, the recommendations in Draghi’s report are modest. His report has been understood to propose relaxing EU competition law constraints on mergers of major industrial companies. In fact, he acknowledges that a dominant firm would still be precluded from making use of the innovation defense, which would make it inapplicable in almost all cases in which a merger is blocked today. It would also be accompanied by strict safeguards and investment commitments by the merging parties. If Draghi’s proposal is adopted, there might not be much difference from today’s efficiency defense, which has never changed the outcome of a merger review process in Europe (though that might be, in part, because so few mergers are challenged in the first place or because the efficiency defenses have not been clearly articulated or sufficiently convincing). Therefore, there is a significant gap between some of the political rhetoric surrounding the review and the technical reality.
Third, the EU’s existing merger guidelines have already been superseded by changes in the commission’s practices, so the urgency of a new set of guidelines can be overstated. In reality, the guidelines should not be a statement of intent but, rather, a description of current practices and approaches. This means they might not fundamentally change case-specific analysis.
Fourth, it is difficult to see how changes in merger review alone will significantly alter the EU’s innovation trajectory. In the absence of further development of the single market, and greater availability of venture capital, highly innovative European firms will remain more likely to move to the United States or be acquired by foreign companies rather than remain European.

This might mean that—despite the call for a fundamental change in approach in Europe—the EU and the United States will stay relatively aligned.

One area in which divergence remains a risk is adopting predictable approaches to assessing the impact of a merger on capabilities and incentives to innovate, particularly in relation to disruptive innovation. Competition authorities have pursued theories of harm based on how a merger might impact innovation, even in the absence of immediate impacts on price or quality in particular markets. For example, innovation and innovative capabilities (or access to assets considered essential for innovations) featured heavily in cases such as Dow-DuPont, Amazon-iRobot, Facebook-Giphy (in the UK), and Google-FitBit. However, these cases have often (but not exclusively) focused on sustaining innovation rather than disruptive innovation. Where competition authorities have taken disruptive innovation into account (such as the UK authority in Facebook-Giphy) or examined markets for research and development (as the US and EU authorities did in the Illumina/Grail merger) they were highly criticized for making the results of merger reviews unpredictable.

Authorities will need to make decisions when the evolution of markets is not fully certain. An insistence on only acting when the anticompetitive outcome is undeniable will, on the whole, lead to less competition. On one hand, this suggests authorities should be humble. Sources of disruptive innovation are hard to identify beforehand, which suggests some firms might have more vulnerable positions than static markers of market power might imply. On the other hand, if authorities take the need to protect possibilities for disruptive innovation seriously, this might help illuminate previously under-identified types of anticompetitive effects, such as mergers that stymie potentially disruptive firms even if they appear to be in an unconnected market. This might require defining markets for innovation or focusing more on firms’ capabilities, their management practices, and their strategies in merger review.¹⁰ While the outcomes might not always be predictable, EU and US authorities could work together to try to ensure more transatlantic consistency when identifying the impact of a merger on innovation and incentives to innovate. This could increase certainty about the process and framework that competition authorities will adopt.

A second area of potential conflict is whether competition authorities should seek to promote certain types of innovation over others. In line with the Trump administration’s broader deregulatory approach, US competition authorities appear to be taking an agnostic and free-market approach to this question. In contrast, European authorities have emphasized how merger control can contribute to innovation in the area of sustainability and protect incentives for green innovation.¹¹ This includes reflecting customer and government preferences for sustainable products when defining markets. For example, when the European Commission prohibited the Hyundai-Daewoo merger in 2022, it took into account the parties’ incentives to invest in lower-emission liquefied natural gas (LNG) vessels.

A third area of divergence risk relates to politicization of the merger process in both the EU and United States. More than ever, there is a perceived risk of US merger policy and practice being influenced by industry lobbying and top-down political influence. The lack of an institutionally independent competition regulator at the EU means this also remains a risk in Europe. Industry capture could happen at the level of guidelines—where there is a risk of helping today’s largest European companies rather than promoting the growth of disruptive and innovative firms—or on a case-by-case basis. There have been previous merger cases in which the formal technical analysis did not align well with the final decision reached. In this respect, updating the EU’s merger guidelines—by reducing the European Commission’s room for maneuver in response to political pressure—could provide significant cover for taking difficult decisions.

Lessons for merger review authorities include the following.

EU and US authorities should develop consistent guidelines setting out how they will assess the impacts of a merger on innovation capabilities (such as chips and computing power, skills, data, and risky and patient capital) and incentives to innovate. A pro-innovation merger control should promote the new innovators and not protect the old ones.
DG-Comp should aim to identify and adopt positive aspects of the revised US merger guidelines and US authorities’ recent practices to inform the EU’s current exercise of revising its own guidelines. For example, adopting the US approach by combining horizontal guidelines (which signal how a competition authority examines mergers between direct competitors) and vertical guidelines (which signal the approach to mergers between players at different points in the supply chain) would prove useful to ensure the European Commission thinks holistically about the impact of mergers on innovation, including in digital ecosystems in which horizontal and vertical concerns can be closely related. On the other hand, the EU guidelines still need to follow and reflect DG-COMP’s practices and should avoid becoming politically charged or signaling major changes to the EU approach.

As with antitrust remedies, competition authorities in both the EU and the United States must be honest and clear about how their merger remedies have performed, so different authorities can become better by learning from each other’s successes and mistakes. This will be especially important if there is increasing use of long-term investment commitments as a merger remedy (as in the UK with the Vodafone-O2 merger, and as recommended by Draghi). Such an approach can help ensure authorities across the Atlantic can work with each other. DG-COMP’s previous retrospective studies on remedies are an excellent starting point.

About the author

Zach Meyers is the director of research at the Centre on Regulation in Europe (CERRE). Previously the assistant director of the Centre on European Reform, Meyers has a recognized expertise in economic regulation and network industries such as telecoms, energy, payments, financial services and airports. In addition to advising in the private sector, with more than ten years’ experience as a competition and regulatory lawyer, he has consulted to governments, regulators, and multilateral institutions on competition reforms in regulated sectors.

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1 “Assistant Attorney General Gail Slater Delivers First Antitrust Address at University of Notre Dame Law School,” US Department of Justice, April 28, 2025, https://www.justice.gov/opa/speech/assistant-attorney-general-gail-slater-delivers-first-antitrust-address-university-notre.

2 Andrew N Ferguson, “Competition in the 21st Century: Heeding the Rallying Cry for Deregulation,” US Federal Trade Commission, May 7, 2025, https://www.ftc.gov/system/files/ftc_gov/pdf/chairman-ferguson-2025-icn-remarks.pdf.

3 “Judgment of the Court (Grand Chamber ) of 25 February 2025: Alphabet Inc. and Others v Autorità Garante della Concorrenza e del Mercato,” European Union, February 25, 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:62023CJ0233.

4 “Defending American Companies and Innovators From Overseas Extortion and Unfair Fines and Penalties,” White House, February 21, 2025, https://www.whitehouse.gov/presidential-actions/2025/02/defending-american-companies-and-innovators-from-overseas-extortion-and-unfair-fines-and-penalties/.

5 Francesca Micheletti, “Trump’s Antitrust Agency Chief Blasts EU Digital Rules as ‘Taxes on American Firms,’” Politico, April 2, 2025, https://www.politico.eu/article/trumps-antitrust-agency-chief-blasts-eu-digital-rules-as-taxes-on-american-firms/.

6 Francesca Micheletti and Jacob Parry, “Big Tech Fines Just Got Political, Whether the Commission Likes It or Not,” Politico, April 14, 2025, https://www.politico.eu/article/big-tech-fines-digital-markets-act-political-european-commission-meta-apple-donald-trump-tariffs/.

7 Micheletti, “Trump’s Antitrust Agency Chief Blasts EU Digital Rules as ‘Taxes on American Firms.’”

8 “Statement by Executive Vice-President Ribera on the Adoption of the Google Adtech Decision,” European Commission, September 4, 2025, https://ec.europa.eu/commission/presscorner/detail/en/statement_25_2034.

9 “Chairman Ferguson Memo re Merger Guidelines,” US Federal Trade Commission, February 18, 2025, https://www.ftc.gov/legal-library/browse/cases-proceedings/public-statements/chairman-ferguson-memo-re-merger-guidelines.

10 Giulio Federico, Fiona Scott Morton, and Carl Shapiro, “Antitrust and Innovation: Welcoming and Protecting Disruption,” Innovation Policy and the Economy (2019), https://www.journals.uchicago.edu/doi/full/10.1086/705642?af=R; David J. Teece, Dynamic Capabilities and Strategic Management: Organizing for Innovation and Growth (Oxford, UK: Oxford University Press, 2009).

11 Catherine Ellwanger, et al., “EU Green Mergers & Acquisitions Deals—How Merger Control Contributes to a Sustainable Future,” Competition Merger Brief, September 2023, https://competition-policy.ec.europa.eu/system/files/2023-09/kdal23002enn_mergers_brief_2023_2.pdf.

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Returning Ukraine’s abducted children should be central to any peace plan

Kristina Hook — Wed, 03 Dec 2025 21:30:17 +0000

This week, the US Senate is holding a landmark Congressional hearing on Russia’s mass abduction of Ukrainian children. Most will understandably frame the issue as a grave human rights crisis, but it is also much more. Rescuing Ukraine’s abducted children can help pave the way for peace, while allowing Russia’s crimes to go unpunished would set a disastrous precedent for global security.

Russia’s systematic removal, indoctrination, and militarization of Ukrainian children goes to the heart of the broader security dilemma that must be resolved before the war in Ukraine can end. Any credible conversation about peace negotiations or security guarantees for Ukraine must begin with a demonstration that the United States and its allies can meaningfully influence Russian behavior. Ensuring the safe return of these children is a concrete way to do that.

The scale of the crime is staggering. Ukrainian authorities have verified 19,456 children taken to Russian or Russian-occupied territories, while independent experts estimate the actual number of victims may exceed 35,000.

What is indisputable is that Russia’s mass deportations are now among the best-documented crimes of modern warfare. Among numerous other investigations, the Yale School of Public Health’s Humanitarian Research Lab identified at least 210 facilities inside Russia or Russian-occupied territory where deported Ukrainian children have been sent for “re-education,” forced assimilation, and in many places, military-style training.

The evidence is overwhelming and includes coerced relocations, illegal adoptions and naturalization under Russian citizenship, ideological indoctrination aimed at erasing Ukrainian identity, and numerous violations of international law. This is not incidental collateral damage. It is a deliberate state policy of population transfer and Ukrainian national identity destruction; a Russian program that mirrors the legal definitions of numerous atrocity crimes, including genocide.

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So far, it has only been possible to rescue a small fraction of abducted children. As of November 2025, 1,859 children have returned to Ukraine, while international experts estimate that 90 percent of the burden of rescue currently falls to Ukrainians themselves.

Moscow’s refusal to facilitate repatriation and its ongoing efforts to conceal identities and locations underscores the impossibility of any stable post-war order without addressing this crime. Humanitarian language alone obscures a critical truth: The forced transfer of children is not a peripheral human rights issue; it is a central obstacle to any credible security settlement in Europe.

For months, United States and European officials have been exploring frameworks for eventual peace talks with Russia and long-term security guarantees for Ukraine. But these conversations often treat Russian atrocities, including child deportations, as adjacent to the real business of hard security. This is a mistake.

Russia’s abduction of children is a window into its strategic intent. The Kremlin campaign to kidnap young Ukrainians and turn them into Russians reveals that Moscow’s war is not merely about territory but about imperial restoration. If Vladimir Putin only sought to adjust borders, the millions spent on relocating, indoctrinating, and militarizing thousands of Ukrainian children would make little sense.

Putin’s ominous intent becomes clearer when viewed alongside Russia’s broader atrocities. The Russian ruler clearly seeks to diminish the demographic future of an entire neighboring nation, while preparing the next generation for future Russian military aggression.

The issue of abducted Ukrainian children is especially relevant for Ukrainians as they debate painful political compromises, territorial concessions, and security guarantees premised on Western assurances. If world leaders cannot secure the return of the most vulnerable victims of Russia’s aggression, how could Ukrainians trust that those same leaders can prevent Russia from reigniting the war or committing new atrocities?

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Western policymakers insist that any post-war settlement must include credible enforcement mechanisms. But credibility is not defined by rhetoric; it is a matter of capability and political will. Right now, both are in question.

If the United States, with its immense military, diplomatic, and economic power, cannot compel Russia to return thousands of abducted Ukrainian children, it becomes harder to argue that Washington can deter further aggression or prevent violations of a future peace agreement. Ukrainians understand this reality well.

Demonstrating US leverage over Russia is therefore not merely symbolic. It is a strategic prerequisite to any durable peace. The United States has untapped tools at its disposal. These include sanctioning individuals and institutions directly involved in the abduction of Ukrainian children, while supporting multilateral accountability efforts. It should be also possible to condition further diplomatic engagement on verifiable steps toward repatriation. Meanwhile, the United States could lead a coordinated information effort to identify children and counter Russian concealment tactics.

These measures are proportional responses to atrocity crimes recognized under international law. The forcible transfer of children is a premeditated crime designed to shatter Ukraine’s future. A successful effort to bring Ukrainian children home will demonstrate that the United States can influence Russian behavior. This is a critical condition for any effective peace initiative.

Securing the return of abducted children would also help to build the trust needed for Ukrainian society to accept Western-backed security frameworks. After many failed efforts to constrain Russian aggression, Ukrainian society needs to know that Western promises are not empty.

Ignoring the issue, or relegating it to the humanitarian margins, undermines the very negotiations that the Trump administration is seeking to advance. Ending the war requires Ukrainian faith in international guarantees.

Child abduction is among the clearest moral red lines in global conflict. Failure to uphold this red line in Ukraine will invite repetition elsewhere. If Russia can abduct tens of thousands of children with impunity during a major European war and face no real consequences, then no norms protecting children in conflict can hold anywhere.

This week’s hearing marks an opportunity for Congress, the Trump administration, and Ukraine’s other partners to clarify that returning abducted Ukrainian children is not optional, negotiable, or separate from security discussions. It is central.

Kristina Hook is assistant professor of conflict management at Kennesaw State University and a nonresident senior fellow at the Atlantic Council’s Eurasia Center.

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One of the most striking provisions in US President Donald Trump’s recently unveiled 28-point Ukraine peace plan was a full amnesty for all parties for their actions during the war in Ukraine and an agreement not to make any claims or consider any complaints in future. While Trump’s initial plan has already been subject to multiple revisions, the idea of a blanket amnesty has sparked alarm and outrage among Ukrainians, with critics viewing it as a move to pardon all Russians responsible for war crimes in Ukraine.

The Trump peace plan first emerged just days after a Russian missile strike on a residential building in Ternopil that killed more than thirty people including seven children. Many Ukrainians recalled this attack following the publication of Trump’s plan, noting that it served to highlight the injustice of offering an amnesty for the vast quantity of crimes committed since the start of the full-scale invasion almost four years ago.

Some have also pointed out that failure to prosecute war crimes in Ukraine could have disastrous implications for the future of global security. “It would ruin international law and create a precedent that would encourage other authoritarian leaders to think that you can invade a country, kill people and erase their identity, and you will be rewarded with new territories,” commented Ukrainian Nobel prize winner Oleksandra Matviichuk.

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Addressing Russian war crimes in Ukraine is not only a matter of providing justice for victims. It is also essential in order to prevent further Kremlin aggression. While the legitimacy of the Nuremberg Tribunal continues to provoke discussion, few would argue that it provided important lessons for Germany and sent an unambiguous message that international aggression ends in defeat and accountability.

Russian society has never experienced anything comparable to Nuremberg. They was no accountability for the Soviet invasion of Hungary in 1956, the crushing of the Prague Spring in 1968, or the invasion of Afghanistan. Since the fall of the USSR, there have been no systematic investigations into crimes committed during Russia’s Chechen wars, the 2008 invasion of Georgia, or the initial invasion of Ukraine in 2014.

This absence of accountability has fueled a sense of impunity in the Kremlin and throughout Russian society that has been instrumental in creating the political climate for the current attack on Ukraine. Unless addressed, this historically rooted sense of Russian impunity will inevitably fuel further aggression.

Advocates of the US-led peace initiative have suggested that the priority now should be securing peace rather than seeking justice. In reality, however, the two goals are interlinked. It is delusional to think that any future treaty obligations or declarations of non-aggression from Russia’s leaders can be trusted, especially if they are not held to account for the crimes of the past four years.

It is important to recognize that many of the 28 points featured in the United States plan are realistic and could serve as the basis for a viable peace settlement. At the same time, it is also abundantly clear that the proposed amnesty for war crimes will only embolden the Kremlin. If adopted, it would encourage Russia to continue the invasion of Ukraine or escalate elsewhere in the Baltic region, the southern Caucasus, or Central Asia. That is clearly not in the interests of the United States, Europe, or the wider international community.

It is therefore vital to thoroughly investigate all war crimes committed in Ukraine and establish the facts in a manner that challenges Russia’s sense of impunity and allows for the rehabilitation of victims. The Nuremberg Tribunal did not succeed in ending wars of aggression, but it did establish a precedent of legal responsibility. If we now forego this principle of accountability entirely, progress toward a safer world will not be possible.

Ivan Horodyskyy is an associate professor of the School of Public Management at the Ukrainian Catholic University.

Spain’s defense spending has long fallen short of NATO’s benchmarks. Under the previous NATO benchmark of reaching 2 percent of GDP in military spending by 2024, Spain consistently underperformed, spending only about 1.2 percent in recent years. In 2024, its military budget stood at approximately €17.2 billion, or 1.24 percent of the country’s GDP, the lowest among NATO members as a percentage of economic output.

Meanwhile, most allies have increased spending to levels closer to or above 2 percent in response to Russia’s aggression in Ukraine. As Atlantic Council Fellow Andrew Bernard noted, Spain’s promise to reach 2 percent, which it only committed to in April of this year, has yet to translate into the modern military capabilities the Alliance needs. Although Spain contributes approximately three thousand troops to NATO missions from the Baltics to the Sahel, deployment alone does not substitute for investment in equipment, readiness, and modernization.

Few within the Alliance believe Spain can meet NATO capability requirements by spending just over 2 percent of its GDP. This gap only deepens the impression that Spain is benefiting from NATO without fully contributing to it.

Domestic politics: The main barrier to higher spending

Why does Spain lag so far behind in defense spending when it is one of the fastest-growing economies in the eurozone? The answer lies mainly in domestic politics and public opinion.

Sánchez leads a fragile minority coalition dependent on left-wing and regional nationalist parties that are skeptical of increased military spending. His Socialist Party governs in partnership with the far-left parties Unidas Podemos and Sumar, and it relies on small Basque and Catalan nationalist parties to maintain a parliamentary majority. These partners view military investment with suspicion, fearing that higher defense budgets would come at the expense of social spending programs.

As Ione Belarra, one of the leaders of Podemos, bluntly put it, these parties refuse to help the government “continue licking the boots of the United States.” Pro-independence Catalan and Basque parties are equally unwilling to strengthen the Spanish army, which they historically distrust.

Public opinion reinforces these pressures. The legacy of Francisco Franco’s dictatorship left Spaniards skeptical of the military for decades, and while the armed forces have gradually gained trust through peacekeeping and humanitarian missions, there remains limited enthusiasm for large budget increases. In a recent poll by the national polling institute CIS, only around 14 percent of Spaniards supported significantly increasing the military budget, as most prioritize healthcare and education.

Spain’s official neutrality during both world wars and its largely peripheral role during the Cold War helped shape a political culture that views defense as secondary to social welfare.

A weaker ally means weaker influence

Spain’s unwillingness to spend on defense comes at a cost, particularly to its image abroad. Eastern European NATO members such as Poland and the Baltic states, which are investing heavily in defense, may interpret Spain’s stance as a troubling lack of solidarity at a critical time. Burden-sharing in NATO is ultimately about sharing risk. Spain’s refusal to invest in new capabilities raises concerns over its willingness to do so. And that reluctance carries risks of its own, given the security challenges it faces at home, including tensions with Morocco over the bordering Spanish cities of Ceuta and Melilla, migration pressures, and instability across the Mediterranean, which could require NATO support in the near future.

The practical implications of this credibility gap are already visible. Diplomatically, Spain has found itself sidelined in some high-profile discussions on European security. In August, for instance, Sánchez did not take part in a White House meeting of key European leaders on Ukraine, a signal of its second-tier status among allies. If Madrid is perceived in Washington or Brussels as an unreliable partner on defense, it risks further losing influence, not just on defense and security issues, but in crucial areas such as trade, as well.

The spectacle of being publicly singled out by the US president only deepens the damage. Trump’s sharp criticism of Spain and his threat of tariffs have reinforced the country’s image as an underperforming and unreliable ally. The idea that Sánchez leads “an anti-Trump coalition” may play well domestically, but it has done little to strengthen Spain’s standing abroad. In reality, no such coalition exists, and the Spanish government has failed to find allies or present any credible alternative approach, leaving Spain isolated and exposed. Consequently, Spain’s internal vulnerability is translating into external weakness.

Spain needs to make hard choices

Spain now faces a strategic choice. On the one hand, the Sánchez government can continue trying to appease its domestic political partners, delaying or limiting defense investments to maintain the support of far-left and regional factions. This path may ensure short-term governmental stability, but it will likely further erode Spain’s standing within NATO and Europe.

On the other hand, it could make the hard political choices needed to shift course, accepting that Spain’s internal fragility is already damaging its international credibility. Until then, Spain will continue to be seen as NATO’s easy target.

The Sánchez government cannot have it both ways. A country cannot expect to benefit from NATO membership with deterrence, geopolitical influence, and allied solidarity, while not meeting the targets that almost all allies, even poorer ones, are striving to meet. If Spain wants to become a reliable ally, it will need to demonstrate, not just declare, a stronger commitment. That means real budgetary increases that translate into modern jets, ships, and infrastructure.

Ultimately, the more Spain appears divided and hesitant on defense, the more it invites actors such as Russia to exploit those divisions within NATO. With Europe’s security environment the most dangerous it has been in decades, the margin for underperformance is thin. The country’s friends and even some of its critics would welcome a Spain that robustly funds its defense and contributes its full weight to transatlantic security, in accordance with its status as the European Union’s fourth-largest economy. But getting there requires the political courage to prioritize long-term national and allied security interests over short-term parliamentary survival. Until that shift occurs, Spain’s own political choices will continue to undermine its international credibility and Europe’s collective defense.

Jacobo Ramos Folch is an international policy consultant, Contributor at Newsline, and a visiting professor at Universidad de Navarra and IE University. He is part of the Atlantic Council’s European Leadership Accelerator program.

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Strengthening Ukraine’s wartime economy can set the stage for peace

Zahar Hryniv — Tue, 25 Nov 2025 20:33:10 +0000

A comparative assessment of the Russian and Ukrainian wartime economies underlines that Russia’s ongoing invasion has imposed far greater costs on Ukraine by depleting its manpower, worsening its demographics, and straining the country’s financial resources. Sustained support for the Ukrainian economy is therefore crucial as Europe and the United States seek to push Putin toward the negotiating table.

American and European security interests remain closely tied to Ukraine’s survival as an independent, democratic state anchored within the Euro-Atlantic community. This will require a combination of economic and military support for Ukraine along with tougher Western sanctions on Russia.

Western sanctions and military assistance to Ukraine have undoubtedly inflicted significant damage on the Russian economy, leading to an outflow of skilled labor, deepening technological isolation, growing Russian dependence on China, and other negative trends. However, Russia’s far larger population, considerable economic resources, and vast fossil fuel reserves have allowed the Kremlin to keep the war going.

While recent US sanctions on two Russian energy giants mark an important step forward in efforts to pressure Putin, their immediate impact is limited as China and India are unlikely to stop buying Russian oil. Moreover, sanctions alone will not force Putin to abandon an invasion that he regards as central to his entire reign.

The coming fourth winter of the war will arguably be Ukraine’s most arduous since the full-scale invasion began in February 2022. Ukraine faces a constant barrage of Russian missiles and drones, along with a persistently worsening economic outlook and acute manpower crisis on the front lines. Russian President Vladimir Putin is confident that he can wear down Ukrainian military and civilian resistance, and is also counting on Western support to dwindle.

The war is now as much a test of economic endurance as it is a military struggle. The United States and Europe should be under no illusions that Putin is unlikely to compromise on Ukraine unless he is forced to accept that continuing the war will be prohibitively costly.

The Kremlin dictator’s intransigence was underscored by a recent US intelligence assessment stating that he is more determined than ever to prevail. This makes it even more important to underline the West’s own unwavering determination to continue supporting Ukraine economically as well as militarily.

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To effectively support Ukraine, Washington and Brussels need to move beyond short-term crisis responses and embrace a longer term strategy. The goal should be to help Ukraine strengthen its wartime economy and put the country in a position to continue military operations throughout 2026 and beyond.

The most pressing issue is removing obstacles to the use of immobilized Russian assets. Before the end of 2025, EU leaders must resolve internal disagreements that are currently preventing Europe from utilizing these frozen assets to cover large gaps in Ukraine’s budget for the coming year.

Plans for a $160 billion reparations loan have so far been blocked by Belgium over concerns of retaliatory Russian lawsuits and other potential Kremlin countermeasures. In order to minimize the threat, Belgium wants all EU member states to offer political guarantees for the loan. One option is to have Norway step up as guarantor, but Oslo has so far refused to take on that role alone. The United States could use its influence and leverage to offset European concerns. Alternatives to the reparations loan are subpar and would signal a weakening of Western resolve to Moscow.

Any breakthrough on the issue of immobilized Russian assets would set the stage for a proposed “mega deal” that would see Ukraine purchase large quantities of arms from the United States using $90 billion backed by European partners. Washington’s weapons deliveries to Ukraine could also be accelerated by working with Brussels through the EU’s $170 billion Security Action for Europe (SAFE) funding mechanism. This kind of transatlantic coordination would ensure that Ukraine receives the weapons it so urgently needs while strengthening NATO’s industrial base.

Support for Ukraine’s energy sector will also be vital as Western partners seek to provide Kyiv with greater economic stability. The Kremlin has dramatically expanded domestic drone production over the past year, making it possible to increase the bombardment of Ukraine’s cities and energy infrastructure. This is leading to widespread blackouts that undermine Ukrainian morale while impacting economic activity and military production.

Brussels must do more to persuade EU member states including Romania and Slovakia to lift existing restrictions on gas exports to Ukraine. This would help Kyiv cover energy supply shortfalls. Increased funding is equally crucial. Energy experts currently estimate that it will take $2.5 billion for Ukraine to import enough gas to get through the coming winter heating season. Meanwhile, the US and EU should take steps to encourage investment in Ukraine’s energy security to help repair, replace, and upgrade critical infrastructure.

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As Russia’s full-scale invasion approaches the four-year mark, policymakers in Washington, London, and across the EU must recognize that strengthening Ukraine’s wartime economy is a top strategic priority. Ukraine’s economic resilience will shape the outcome of the war and help determine European security for decades to come.

Funding Ukraine is expensive, but the arguments in favor of such an investment are convincing. After all, the cost of supporting the Ukrainian economy today would be dwarfed by the far higher price Western governments will have to pay in terms of increased defense spending if Putin’s invasion succeeds.

At present, there is little reason to believe a just and lasting peace is close. Ukraine is suffering on the battlefield, while the credibility of the country’s leadership has been seriously undermined by the largest domestic corruption scandal of the wartime period. Nevertheless, the public mood across Ukraine remains defiant and determined. In Russia, Western sanctions and Ukrainian airstrikes are causing real pain for Putin’s wartime economy, but his fixation on establishing political control over Ukraine far outweighs his need to address these mounting costs.

The United States and Europe must adopt a long-term perspective to effectively counter Moscow’s maximalist aims. Current efforts to broker a hasty peace deal risk emboldening Putin, sacrificing Ukrainian sovereignty, and compromising European security. Instead, Western leaders should send a clear message to the Kremlin that their own resolve is as strong as ever. Taking steps to strengthen Ukraine’s economic resilience would certainly underline this message, and could help to convince Putin that his hopes of outlasting the West are futile.

Zahar Hryniv is a Young Global Professional at the Atlantic Council’s Eurasia Center.

While Zelenskyy is understandably eager not to alienate Trump, there is little optimism in Kyiv or across Europe that this latest US initiative can end the continent’s largest invasion since World War II. Multiple similar attempts to secure a settlement by offering the Kremlin generous terms have already been made without success.

This approach reflects a fundamental failure to recognize that Russian President Vladimir Putin is not driven by the same straightforward cost-benefit rationality as his Western counterparts. On the contrary, Putin believes he is engaged in an existential struggle to revive Russia’s great power status and secure his own place in history. It is therefore delusional to think that he can be satisfied by promises of minor territorial concessions or future economic opportunities.

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The disconnect between Moscow and Western capitals over Russia’s war aims has been most immediately apparent during Trump’s attempts to broker a peace agreement. Since February 2025, US-led discussions over a possible negotiated settlement have featured plenty of vague talk about lucrative joint ventures and potential US investments in Russia. Some Trump administration members may have interpreted the prominent role of Putin’s economic envoy Kirill Dmitriev as a positive signal that Moscow is open to such overtures. However, promises of business opportunities have not translated into any meaningful progress toward peace.

Trump has also often given the impression that he views the issue of a territorial settlement between Russia and Ukraine from the perspective of a real estate developer solving a property dispute. The US leader has spoken of the need for “land swaps” and described Russian-occupied regions of Ukraine as “prime territory,” while indicating that the two sides should sit down and agree on new boundaries. This overlooks the awkward but important fact that Putin is not actually fighting for Ukrainian land. He is fighting for Ukraine itself, and will regard the war as lost unless he is able to reassert complete Russian dominance over the whole country.

Another issue that highlights the tendency of Western leaders to project their own logic onto Putin is the topic of Russian military losses. Western officials and media outlets often identify the extremely high Russian casualty figures in Ukraine as a key argument for ending the war, while pointing to Russia’s slow advance as evidence that the invasion has reached a strategic stalemate.

From a Western perspective, this makes perfect sense. But high casualty rates are a traditional feature in the Russian army, which has always relied on mass to win wars. Furthermore, Putin has been careful to make sure his army’s heavy losses in Ukraine do not destabilize the domestic front. Since 2022, the Kremlin has focused recruitment efforts on the poorest provinces of Russia and has enlisted large numbers of inmates from the country’s vast prison network, while also offering extremely attractive financial packages to volunteers. This has helped reduce any social pressures to a minimum, despite the high death toll of the invasion.

Some Western leaders have sought to strike a chord by underlining the damage Putin is doing to Russia’s long-term prospects and his own legacy. Outgoing British MI6 chief Richard Moore offered a good example of this in his September 2025 farewell speech, which highlighted the threats posed by the ongoing invasion of Ukraine to Russia’s economic and demographic outlook. Moore’s logic would certainly have resonated with Western policymakers and electorates, but it meant little to an ageing autocrat guided by imperial delusions and his own distorted reading of history.

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If Western leaders wish to end the war, they must stop trying to implement peace plans that they themselves would find persuasive and accept that Putin’s motivations are altogether different. He sees the invasion of Ukraine as part of a sacred historic mission that will define his reign and determine Russia’s place in the world for decades to come. Extinguishing Ukrainian independence is only one part of this process. Putin ultimately aims to reshape the global order and end what he sees as the period of geopolitical humiliation suffered by Russia since the collapse of the Soviet Union.

Most of all, Western policymakers must finally come to grips with the sheer scale of Putin’s imperial ambitions and acknowledge the central role these ambitions play in fueling Russian aggression in Ukraine and beyond. This would be long overdue. Since 2022, Putin has publicly compared himself to Russian Emperor Peter the Great. He frequently claims to be returning historically Russian lands, and has declared that “all Ukraine is ours.”

Attempting to bargain with such a man by appealing to common sense or offering limited concessions is worse than futile; it actually helps convince Putin that his Western opponents are too weak and overindulged to grasp the historical significance of the moment. This makes him more confident than ever that his enemies will ultimately back down and hand him victory in Ukraine.

Instead of trying to appease Russia, Ukraine’s allies must first admit that Putin is playing for the highest possible stakes and has no interest whatsoever in a compromise peace. They must then demonstrate that they have the political will to prevent his twisted imperial fantasies from becoming reality.

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Many Western countries continue to view the issue of information warfare as primarily a matter of fact-checking and debunking fakes. In contrast, there are growing indications that Moscow and Beijing share a vision of the information space as a key element of their power projection and national security strategies.

A recent meeting between Russian Prime Minister Mikhail Mishustin and his Chinese counterpart Li Qiang signaled deepening cooperation between Moscow and Beijing on the information front. The annual summit held in Hangzhou in early November featured commitments from both sides to partner on media initiatives, countering disinformation, and promoting traditional values.

Moscow already has extensive experience in information operations designed to disrupt and reshape Europe’s political landscape, and is widely regarded as a global pioneer in the use of multimedia information operations to advance foreign policy objectives. Beijing has also faced accusations of playing a role in these activities, which are aimed at exploiting social divisions and boosting polarizing narratives with a view to generating support for anti-establishment political forces throughout the Western world.

While measuring the success of information operations is not an exact science, there is certainly no shortage of evidence to suggest that these tactics are having an impact. Support for far-right political parties is now surging across Europe. While each party has its own individual agenda, these populist political forces tend to share a sympathetic stance toward Russia while enjoying extensive coverage on Kremlin-linked media platforms.

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Perhaps the clearest indication of cooperation between Russia and China in the information arena is the growing Russian state media presence on TikTok. This is alleged to include coordinated campaigns and the use of AI technologies.

Disinformation watchdogs from Ukraine’s National Security and Defense Council have accused the Kremlin of using the TikTok platform to conduct information campaigns designed to demoralize Ukrainian society and undermine resistance to Russia’s invasion. Ukrainian officials claim Moscow has employed AI to create videos featuring “ordinary Ukrainians” conveying pessimistic messages.

Russia is also reportedly using Chinese social media platforms to recruit Chinese citizens for the war in Ukraine. The large volume of recruitment adverts across China’s strictly controlled and monitored social media sphere has been interpreted by some as a sign of tacit approval from the authorities in Beijing.

Chinese and Russian information ecosystems appear to be engaging in significant cross-promotion. Kremlin outlets actively promote war-related content on platforms such as China’s Weibo. Meanwhile, Chinese state media and officials amplify key Kremlin narratives blaming the West for the Russian invasion of Ukraine and framing sanctions policies as self-defeating. Both Beijing and Moscow employ similar language to describe the war in Ukraine, which they typically depict as a defensive reaction to the West’s provocative policies.

As information cooperation between Moscow, Beijing, and other authoritarian regimes expands, Western policymakers must recognize that information warfare is now a tier-one national security threat requiring a comprehensive response. This should include signaling that information offensives will be treated as comparable to other violations of sovereignty, with the European Union and NATO working to establish clear diplomatic, legal, and economic red lines in the information domain.

Efforts must be undertaken to defend the information space more effectively by combining the initiatives of individual governments along with civil society. This could draw on a wide range of specific examples, such as Ukraine’s wartime experience and recent elections in Romania and Moldova. Greater accountability for hostile information operations is also crucial. Western governments must be prepared to publicly expose attacks and impose tangible costs.

The authoritarian axis that has taken shape since the onset of Russia’s full-scale invasion of Ukraine is currently setting new standards in terms of coordinated information operations across media platforms. The West’s response must be equally systematic. The tools and frameworks exist; Western governments must now demonstrate the necessary political will.

William Dixon is an associate fellow of the Royal United Service Institute specializing in cyber and international security issues. Maksym Beznosiuk is a strategic policy and security analyst with a focus on Ukraine, Russia, European security, and EU-Ukraine cooperation.

Vladimir Putin fears entering Russian history as the man who lost Ukraine

Peter Dickinson — Tue, 18 Nov 2025 21:47:02 +0000

The invasion unleashed by Vladimir Putin almost four years ago has often been called unprovoked, but nobody can say it was entirely unexpected. On the contrary, the full-scale invasion of 2022 was merely the latest and most extreme stage in a prolonged campaign of escalating Russian aggression aimed at preventing Ukraine from leaving the Kremlin orbit and resuming its place among the European community of nations.

During the early years of Putin’s reign, this campaign had focused primarily on massive interference in Ukrainian domestic affairs. Following Ukraine’s 2014 Revolution of Dignity, the Russian dictator opted for a far more forceful combination of military and political intervention. When even this descent into open aggression failed to derail Kyiv’s westward trajectory, Putin sought to solve Russia’s Ukraine problem once and for all by launching the largest European invasion since World War II.

As the fifth year of the war looms on the horizon, there is very little to indicate that Putin’s hard line tactics are working. While Russia has managed to occupy around 20 percent of Ukraine, opinion in the remaining 80 percent of the country is now overwhelmingly hostile to Moscow and supportive of closer European ties. For the vast majority of people in Ukraine, the invasions of 2014 and 2022 represent watershed moments that have profoundly impacted their understanding of Ukrainian identity while radically reshaping attitudes toward Russia.

The transformation in Ukraine’s geopolitical orientation is being mirrored by changes taking place domestically as the country’s center of gravity shifts decisively from east to west. For the first decade or so of independence, Ukraine was politically and economically dominated by the industrial east, with major cities including Donetsk, Kharkiv, Dnipro, and Zaporizhzhia serving as power bases for billionaire oligarch clans who shaped the Ukrainian national narrative and helped maintain high levels of Russian influence across the country. At the time, the comparatively quaint cities of central and western Ukraine lacked the wealth and general wherewithal to compete.

The first indication of a significant change in this dynamic was the 2004 Orange Revolution, which saw an unprecedented nationwide protest movement erupt over an attempt to falsify the country’s presidential election orchestrated by Kremlin-backed political forces rooted firmly in eastern Ukraine. This popular uprising represented a clear and unambiguous rejection of the idea that Ukraine was inextricably bound to Russia. A decade later, the onset of Russian military aggression would turbo-charge modern Ukraine’s historic turn toward the west.

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Since 2014, traditional east Ukrainian bastions of Russian influence such as Donetsk and Luhansk have been occupied by Kremlin forces and effectively cut off from the rest of Ukraine. More recently, the full-scale invasion has left the broader Donbas region devastated and depopulated, while the formerly preeminent metropolises of the east face an uncertain future as fortified front line cities under relentless Russian bombardment.

The situation in western Ukraine is strikingly different. Cities throughout the region are experiencing rapid growth thanks to an influx of families and businesses seeking to relocate away from the war zone. The experience of Lviv since 2022 illustrates this trend. The largest city in western Ukraine, Lviv’s population has expanded by around a quarter since the start of Russia’s full-scale invasion to reach approximately one million. The Lviv real estate market has comfortably surpassed the regional capitals of eastern Ukraine and now rivals Kyiv itself. Likewise, Lviv is also second only to the Ukrainian capital in terms of new companies and investments.

Politically and diplomatically, Lviv is clearly in the ascendancy. Many Kyiv embassies partially relocated to the city in 2022 and continue to maintain a presence. Over the past three years, Lviv has hosted a number of high-level international events including presidential summits and gatherings of EU ministers. The rise of Lviv has been so striking that it has sparked rumors of jealousy among the establishment in Kyiv, with some suggesting that the potential reopening of Lviv International Airport has been deliberately sidelined in order to prevent the further eclipse of the Ukrainian capital.

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Whatever happens in the war, the shift in Ukraine’s national center of gravity toward the west of the country is unlikely to be reversed. In addition to the urgent impetus provided by Russia’s ongoing invasion, the emergence of western Ukraine is also being driven by the pull factor of EU integration. Over the past decade, Ukraine has secured visa-free EU travel and been granted official EU candidate status. This is transforming the investment climate in western Ukraine, which shares borders with four EU member states.

Large-scale infrastructure projects are already helping to cement western Ukraine’s status as the country’s most attractive region and gateway to the EU. Work on a 22km European-gauge railway line from the EU border to Uzhhorod was completed earlier this year, while construction of a far more ambitious Euro-gauge line connecting Lviv to the Polish border is scheduled to begin in 2026. As the EU accession process continues to gain momentum, these logistical links will only strengthen.

It remains unclear exactly when Ukraine will become a fully fledged EU member state, but there is a growing sense of confidence throughout the country that the once distant dream of EU membership is now finally within reach. For western Ukraine in particular, joining the European Union will complete the region’s historic journey from imperial outpost on the fringes of the Soviet Empire to economic engine nestled in the heart of the world’s largest single market.

All this is very bad news for Vladimir Putin. The Kremlin dictator’s Ukraine obsession reflects his fear that the consolidation of a democratic, European, and genuinely independent Ukraine could serve as a catalyst for the next phase in the long Russian retreat from empire that began almost four decades ago with the fall of the Berlin Wall. As Putin’s reign has progressed, his determination to prevent Ukraine’s geopolitical defection has only intensified, as has his readiness to sacrifice Russia’s more immediate national interests in pursuit of his anti-Ukrainian crusade. It is now increasingly obvious that his decision to invade Ukraine has backfired spectacularly, eroding centuries of Russian influence while accelerating the European integration he so bitterly opposes.

Unless Putin succeeds in dismantling Ukrainian statehood entirely and erasing the very idea of the Ukrainian nation, he must surely realize that the Ukraine of the postwar period is now destined to establish itself within the wider Western world while remaining implacably hostile to Russia. Rather than acknowledging this disastrous outcome, he will seek to continue the war indefinitely. If he stops now and accepts a compromise peace, Putin knows he will be doomed to enter Russian history as the man who lost Ukraine.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

Meanwhile, Chinese global exports continue to increase, reaching 20 percent of its gross domestic product (GDP) in 2024. As China-US economic ties weaken, the European Union (EU) has become China’s main export market. Chinese goods losing ground in the United States are now being redirected to Europe, flooding EU markets and creating growing trade imbalances reminiscent of those seen before in the United States. Chinese exports to the EU increased by 14 percent on the year in September, the sharpest rise in over three years, pushing the EU’s trade deficit with China to nearly double its 2018 levels. Between 2017 and 2024, China-EU trade increased by about $140 billion, with trade deficits increasing from $202 billion in 2017 to $333 billion in 2024. If this year’s trajectory continues, the EU’s trade deficit with China could exceed $400 billion this year.

The surge of Chinese goods is reshaping Europe’s industrial landscape, exposing the EU to the same state-driven capitalist practices from Beijing that long challenged the United States under the guise of free trade. Frustrations in Brussels run beyond inexpensive electric vehicles (EVs) and low-cost goods. In July, European Commission President Ursula von der Leyen accused China of “flooding global markets with cheap, subsidized goods,” warning of a new “China shock.” Chinese EVs, which are 20-30 percent cheaper than European EVs due in large part to government subsidies, challenge Germany’s automotive hub and its European supply chains. In solar and green technologies, China’s dominance has already shuttered numerous European firms in the steel, aluminum, machinery, and batteries sectors.

At the core of the problem is China’s persistent industrial overcapacity, which creates market distortions fueled by state subsidies and heavily impacts the EU’s competitiveness. Most Chinese exports to the EU still face low tariffs of 2-3 percent under World Trade Organization rules, but Brussels is increasingly imposing 20-50 percent duties on strategic sectors such as green tech, EVs, and industrial goods, signaling a more defensive EU trade stance. China, which has been the world’s top manufacturer for fifteen years, produces over 31 percent of global manufacturing output, compared to 17 percent from the United States and under 13 percent from the EU. With weak domestic demand from a property slump, youth unemployment, and deflation, China is redirecting excess production toward Europe as its long-standing access to the US market is curtailed, a shift that now poses a direct challenge to the EU’s industrial base.

At the same time, Europe’s growing frustration with Beijing is still tempered by its deep economic dependence. The EU relies on China for nearly all of its rare earth and permanent magnets supplies, as well as associated processing technologies—all of which are vital for Europe’s green-tech, digital, and defense industries. This gives Beijing significant leverage in trade and geostrategic relations with the EU. Europe’s ability to respond to China’s questionable trade practices is complicated further because Europe depends on Chinese supply chains to compete in the very industries in which China dominates. As part of the deal with the United States, Beijing will extend the suspension of rare earth export controls to the EU, giving the bloc some breathing space. But this relief alone will not be enough for the EU to diversify its sources even with initiatives such as the Critical Raw Materials Act and the Global Gateway strategy.

China’s dominance in critical raw materials is systemic, not temporary; its lead in global processing capacity allows it to control strategic choke points in supply chains. Many other suppliers in Africa and Latin America are themselves linked to China through ownership stakes or processing dependencies that keep Beijing embedded in global supply chains. Reducing dependence on China will require long-term investments in mining and processing, with significant financial and environmental costs.

In the meantime, the EU has proposed a joint purchase and storage of raw materials to secure better prices and reduce supply risks, with the first pilot tenders for joint purchasing of rare earths and lithium expected next year. In July of this year, the European Commission launched its EU Energy and Raw Materials Platform to empower domestic companies to jointly procure energy products and raw materials, but it seems that implementation has been minimal. So far, this platform has facilitated contracts for just 2 percent of potential demand of European companies in the gas sector.

While European policymakers want to avoid being drawn into the US-China rivalry, they nonetheless recognize the systemic challenges posed by China’s rise and know that Beijing’s leadership is unwilling to change course. It’s time for the EU to step up and protect its economic resilience and competitiveness. My co-author and I explore this issue in detail in a new Atlantic Council report titled “Is Europe waking up to the China challenge?” But a first step the United States and the EU can take is to launch a joint critical-minerals coordination platform—supported by co-financing, harmonized standards, and strategic stockpiles—to align project pipelines, risk screening, and offtake planning. Such efforts could eventually be elevated to the Group of Seven (G7). But this will only help if the group remains united and is not strained one of its member countries pursues a more autonomous China policy, such as when France recently floated the idea to invite China to the 2026 G7 summit. Engagement is necessary but will be effective only if all G7 members take a common approach. The EU’s best long-term insurance policy on that front is doubling down on stronger transatlantic and G7 coordination to bolster the collective leverage of the West.

Valbona Zeneli is a nonresident senior fellow at the Atlantic Council with a dual affiliation at the Europe Center and at the Transatlantic Security Initiative of the Scowcroft Center for Strategy and Security.

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Ukraine’s drone war lesson for Europe: Technology is nothing without training

David Kirichenko — Tue, 11 Nov 2025 00:47:02 +0000

As Europe races to strengthen its defenses against the mounting threat posed by Russian drones, more and more countries are looking to learn from Ukraine’s experience. Speaking in October, Danish Prime Minister Mette Frederiksen acknowledged that Ukraine is currently a world leader in drone warfare and called on her European colleagues to “take all the experiences, all the new technology, all the innovation from Ukraine, and put it into our own rearming.”

It is clear that Europe has much to learn. A spate of suspected Russian drone incursions during the second half of 2025 have highlighted the continent’s vulnerability to drone-based aggression and raised fundamental questions over whether European armies are currently preparing for the wrong kind of war. While Europe’s rearmament efforts continue to gain ground, even big spenders like Poland remain focused primarily on traditional weapons systems. This is fueling concerns that European defense policymakers may not fully appreciate the growing dominance of drones on the battlefields of Ukraine.

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Ukraine’s embrace of drone warfare since 2022 can provide Kyiv’s partners with a wide range of important insights. Following the onset of Russia’s full-scale invasion almost four years ago, Ukraine has turned to relatively cheap drone technologies in order to offset Moscow’s often overwhelming advantages in conventional firepower and reduce the country’s dependence on Western weapons supplies. As a result, the number of Ukrainian drone producers has skyrocketed from a handful of companies to hundreds, while overall drone output has shot up to millions of units per year.

Ukraine’s vibrant prewar tech sector has proved a major asset, serving as fertile ground for the dynamic expansion of the country’s defense sector. Meanwhile, Ukrainian initiatives like the government-backed Brave1 defense tech cluster have helped to empower innovators and optimize cooperation between the army, the state, and individual drone producers. In summer 2024, Ukraine became the first country to establish a separate branch of the military dedicated to drones with the launch of the Unmanned Systems Forces.

The results speak for themselves. Drones are now thought to be responsible for up to three-quarters of Russian battlefield casualties, with Ukrainian army units creating a “drone wall” around ten kilometers in depth along the front lines of the war. At sea, Ukraine has used naval drones to break the Russian blockade of the country’s ports and force Putin to withdraw the bulk of his fleet away from occupied Crimea to the relative safety of Novorossiysk on Russia’s Black Sea coast. Kyiv has also deployed an expanding arsenal of long-range drones to strike high-value targets with increasing frequency deep inside Russia.

In addition to these offensive roles, drones have become a vital element in Ukraine’s air defenses. Since 2024, Russia has dramatically increased the production of kamikaze bomber drones, making it possible to launch hundreds of drones at targets across Ukraine in a single night. The sheer scale of these attacks has meant that traditional missile-based air defenses are no longer practical due to the high cost and limited availability of interceptor missiles. Instead, Ukrainian defense companies have focused on developing and producing interceptor drones in large quantities.

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So far, European efforts to learn from Ukraine’s drone warfare experience have concentrated primarily on securing access to the latest Ukrainian drone innovations. This approach certainly makes sense. However, many Ukrainian specialists have stressed that as their European partners look to develop drone capabilities of their own, effective training programs will be just as important as advanced technologies.

Maria Berlinska, who heads Ukraine’s Victory Drones project, has argued that up to 90 percent of success in drone warfare depends on the training of the team behind the drone rather than the technology involved. “A drone on its own, without the coordinated work of the team, delivers nothing,” she commented in an October 2025 article addressing the need for skilled drone crews.

Training an effective drone pilot is a complex task that can take at least three months. Many categories of drone operators must also be able to act as engineers and mechanics with the ability to repair and reconfigure their systems in the field. To help meet this challenge, Ukraine has developed a strong network of volunteer organizations dedicated to training new drone pilots and preparing them for combat operations. By late 2024, the Ukrainian Ministry of Defense had certified over thirty training centers for drone operators. Novel innovations include a mobile drone school located inside a converted bus.

Speaking to Euronews in October, Ukrainian drone warfare expert Fedir Serdiuk warned that Europe was currently focusing too much on drone technologies while overlooking the need to train operators and commanders in the effective battlefield use of drones. “I don’t see as many training centers being built as factories. It’s a major mistake. Not only for technical skills but also for tactical skills,” he commented.

Ukraine appears poised to play a central part in the training of Europe’s drone forces. Ukrainian trainers have already reportedly begun sharing their expertise with a number of countries including Britain, Denmark, and Poland. This trend reflects an important eastward shift in Europe’s defense landscape, with Ukraine emerging as a key contributor to the continent’s future security. This contribution will draw heavily on technological innovations developed during the war with Russia, but it will also emphasize the importance of effective training.

David Kirichenko is an associate research fellow at the Henry Jackson Society.

AN #ACFRONTPAGE EVENT—Representative Adam Smith (D-WA), ranking member of the House Armed Services Committee, shares his priorities for the upcoming National Defense Authorization Act (NDAA) and discusses how Congress can ensure the Pentagon meets today’s security challenges.

Security & Defense United States and Canada

“I don’t think simply committing this large number of assets—hundreds of millions, probably billions of dollars by the time it’s done—to blow up some drug boats in international waters in Latin America is going to make an appreciable difference” in the fight against drug trafficking, said Representative Adam Smith (D-WA), the ranking member of the House Armed Services Committee, at an Atlantic Council Front Page event on Thursday.

The event, part of the Atlantic Council’s Commanders Series, came amid uncertainty over whether the Trump administration’s campaign of attacks on boats that it claims are trafficking drugs will escalate into an effort to overthrow Venezuelan autocrat Nicolás Maduro.

Based on a briefing he received from the State Department and Department of Defense on Wednesday, Smith said he thinks that “the administration does not want to go to war with Venezuela.” But, Smith added, US President Donald Trump sometimes “very quickly” changes his mind. “So who knows?”

Thursday’s event also came amid the longest US government shutdown in history, with the House out of session even as the National Defense Authorization Act (NDAA) for the next fiscal year has yet to be passed, a situation Smith called “unbelievably disruptive.”

Read below for more highlights from this conversation with Smith, which was moderated by Fox News Chief National Security Correspondent Jennifer Griffin.

The NDAA

“The NDAA itself is moving forward,” Smith said of the annual bill, noting that different versions have been passed by the House of Representatives and the Senate, and now the two versions need to be reconciled.
One of Smith’s priorities for the bill is acquisition reform: “My position is we’ve had the risk wrong for a long time” on defense acquisition policy, said Smith. “We’ve been only focused” on the risk of corruption in the procurement process “as opposed to the risk of not moving fast enough,” he said. One way to speed up acquisition, he said, is “consolidating the decision makers” in the process “instead of having to go through nine or ten different layers.”
Smith also said he wants to “have procurement people stay in their job longer.” Constant turnover in procurement roles, he said, “doesn’t really help with corruption. It just means that the person doesn’t know the system as well when they’re working on it.”

US strikes on boats in the Caribbean and Pacific

Transnational drug-trafficking gangs in the Western Hemisphere are “a problem for our national security” and “a problem for Latin America,” Smith said. “You’ve got budding narco-states down there. They’re having a harder and harder time dealing with that. We need to be engaged and involved in that.”
However, Smith was critical of the Trump administration’s campaign of attacks on alleged drug-trafficking boats in the Caribbean and the Pacific. “It seems very problematic to me that we have decided that drug dealing will now have the death penalty attached to it,” with “no process whatsoever.”
“They’re certainly bad policy in my view,” Smith said of the strikes.

US military presence abroad

“I think one of the mistakes that we have made is to assume that our global presence is just a cost that isn’t benefiting us,” Smith said of US troop deployments abroad.
Citing threats posed by Russia, China, Iran, North Korea, and transnational terrorist organizations, Smith said that to pull US troops back from allied countries now and “ignore” these dangers “places us at risk.”
Smith took issue with the Trump administration’s decision to draw down its forces in Romania and noted that there is “bipartisan, bicameral support” in the House and Senate armed services committees “to maintain our presence in Europe and defend them.”
“If any of you have been to Romania, the Baltics, Poland,” said Smith, addressing the crowd, “they want a lot of things, but the one thing they want more than anything is us,” meaning a US military presence. “They don’t believe Russia wants to come in and kill a bunch of US troops. So a little bit of presence can give us a maximum amount of deterrence, and we’re going to fight that out in the defense bill.”

Daniel Hojnacki is an assistant editor on the editorial team at the Atlantic Council.

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Vladimir Putin’s endless nuclear threats are a sign of Russian weakness

Stephen Blank — Thu, 06 Nov 2025 21:41:31 +0000

When Russian President Vladimir Putin first announced the full-scale invasion of Ukraine in February 2022, his official video address was accompanied by thinly-veiled nuclear threats aimed at Western leaders. This Russian nuclear saber-rattling has remained a prominent feature of the war ever since.

Putin’s nuclear threats have made plenty of headlines but have only partially succeeded in deterring Western countries. For more than three and a half years, this strategy has helped Russia to slow down the flow of military aid to Ukraine without ever cutting off Western support entirely. Nevertheless, Kremlin leaders are seemingly unwilling or unable to abandon their nuclear scare tactics.

Putin himself frequently hints at possible nuclear escalation and has even officially revised Russia’s nuclear doctrine to lower the threshold for nuclear strikes. Meanwhile, Russian nukes have reportedly been deployed in Belarus, with Kremlin officials also recently threatening to supply nuclear weapons to Cuba and Venezuela. On November 5, Putin ordered Russian officials to begin preparations for the possible resumption of nuclear testing.

The Kremlin dictator is particularly fond of showcasing new weapons with nuclear capabilities. In late October, Putin announced the successful testing of the nuclear-powered and nuclear-capable Burevestnik missile. “This is a unique product that nobody else in the world has,” he commented. Days later, Putin hailed the similarly successful testing of the Poseidon drone, an atomic-powered and nuclear-capable underwater weapon. He trumpeted the Poseidon’s supposedly unmatched capabilities and stated that “there is no way to intercept it.”

It is impossible to independently assess the veracity of Putin’s claims or confirm the effectiveness of his latest alleged “wonder weapons.” Many have noted that neither weapon is entirely new, with the development of both being first announced back in 2018. In reality, the timing of these alleged tests is probably far more significant that the weapons themselves, and reflects Russia’s desire to engage in yet more nuclear saber-rattling.

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Russia’s latest bout of nuclear posturing reveals much about Moscow’s frustration over continued Western support for Ukraine, and is likely a direct response to strong energy sector sanctions imposed in recent weeks by US President Donald Trump. It is a tactic that could eventually backfire on the Kremlin. By threatening to renew nuclear tests and boasting of unstoppable nuclear-capable wonder weapons, Putin risks highlighting Russia’s inability to project strength via more conventional means. In other words, the Kremlin dictator’s increasingly frequent use of nuclear blackmail may actually be a sign of weakness rather than strength.

Like a geopolitical gangster, Putin has come to rely on Mafia-style intimidation tactics as he seeks to reassert Russia’s great power status amid mounting evidence of his country’s steadily eroding military capabilities. Putin’s nuclear threats are at least in part an attempt to distract attention from the lackluster performance of the Russian army in Ukraine. While Russian forces currently hold the battlefield initiative and continue to advance, they have only managed to seize around one percent of Ukrainian territory over the past three years while suffering exceptionally high losses. This underwhelming outcome led Trump to brand Russia a “paper tiger” in September. The insult is believed to have struck a particularly raw nerve with Putin.

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By brandishing his nuclear arsenal on the international stage, Putin aims to menace risk-averse Western leaders and deter them from opposing Russia in Ukraine. He also hopes to underline that victory over Ukraine remains Moscow’s overriding goal. Putin seeks to demonstrate his readiness to prioritize this quest for victory above all other considerations, including the nuclear deterrence system established over decades by Russia and the United States.

So far, Trump has offered a fairly robust reaction to Russia’s nuclear saber-rattling. This has included ordering US nuclear submarines to be moved closer to Russia in response to “provocative statements,” and indicating a readiness to resume nuclear testing “on an equal basis.” The US leader’s stance is a welcome sign that he is no longer easily swayed by Putin’s dramatics and recognizes the dangers of allowing himself to be intimidated.

Other Western leaders should now follow Trump’s example and acknowledge that the only way to bring Putin’s reckless nuclear blackmail to an end is by demonstrating resolve and reviving deterrence. This must include regenerating sufficient European and American conventional forces to deter Russia from attacking its neighbors. In parallel, sanctions on Putin’s war economy should be tightened, while Ukraine must finally be provided with the weapons its needs to defeat Russia’s invasion.

Nobody can afford to to take the risk of nuclear war lightly, of course. Nevertheless, it is unfortunately necessary to remind the Kremlin that Russia is not the only country with a nuclear arsenal. Genuine conventional and nuclear deterrence must be restored to deprive gamblers like Putin of the ability, let alone the desire, to employ nuclear blackmail in order to enable further acts of international aggression. Unless this is achieved, Putin will continue to use nuclear threats as a tool to intimidate his opponents and disguise Russian weakness.

Stephen Blank is a senior fellow at the Foreign Policy Research Institute.

Ukraine’s youth exodus highlights mounting demographic challenges

Kateryna Odarchenko, Zoryana Golovata — Thu, 06 Nov 2025 20:26:31 +0000

A large number of young Ukrainian men have left the country in the past two months following an August 2025 decision allowing males aged between eighteen and twenty-two to travel internationally. While there are no exact figures confirming how many men have exited, the exodus has sparked a lively debate within Ukrainian society and added to existing concerns over the deteriorating demographic situation in wartime Ukraine.

With millions of Ukrainians crossing the border in both directions each week, it is difficult to gain a clear sense of the recent surge in young men traveling abroad. Britain’s Daily Telegraph reported in late October that almost one hundred thousand Ukrainian males in the eighteen to twenty-two age bracket had entered Poland during the previous two months. Meanwhile, Germany’s Interior Ministry noted that the number of young Ukrainian men registering in the country had risen tenfold from around one hundred per week to almost a thousand.

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With men younger than twenty-five not currently subject to mobilization by the Ukrainian military, the recent outflow has been primarily felt in the employment sector. Since the relaxation of martial law travel restrictions in August, many labor-intensive industries that have traditionally relied on large numbers of young employees have reported a sharp decline in the workforce.

Ukraine’s low birth rates and high levels of economic migration meant that the country was already experiencing mounting labor shortages prior to 2022. Following the onset of Russia’s full-scale invasion, these demographic challenges have become far more acute, with millions displaced internally or crossing the border into the European Union. A 2024 survey conducted by Ukraine’s European Business Association found that 71 percent of companies were experiencing significant workforce deficits.

Ukrainian companies are responding to these new recruitment realities in a variety of ways. With hundreds of thousands of men now serving in the military, more and more women are being recruited to take on professional roles traditionally occupied by males. In an August 2024 article highlighting this employment trend, the New York Times claimed that the unprecedented wartime influx of women was “reshaping Ukraine’s traditionally male-dominated workforce, which experts say has long been marked by biases inherited from the Soviet Union.”

There has also been increased focus on retraining opportunities and vocational programs as business owners and educational institutions seeks to fill gaps in the workforce. With current shortages most severe in skilled blue collar professions, many of these training initiatives are geared toward producing candidates with the skills to address immediate shortages in strategically important sectors of the economy. According to Ukraine’s State Employment Service, the industries experiencing the largest shortfalls include construction, manufacturing, and transportation.

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In the Ukrainian retail sector, some companies are turning to teenagers and seeking to employ those aged fifteen to seventeen during vacation periods and after school hours. This trend is expected to gain momentum as employers search for practical solutions to staffing shortages. As a result, large numbers of Ukrainian teens may now be set to gain an unprecedented degree of economic independence, with possible knock-on effects for the job market and beyond.

Nobody currently anticipates a wave of returning Ukrainian refugees anytime soon. Instead, Ukrainians living in the EU are now widely recognized as an economic asset for their host countries. Research conducted in summer 2025 for the UN Refugee Agency found that Ukrainian refugees living in Poland generate around 2.7 percent of Polish GDP. “All evidence shows that Ukrainian refugees will continue having a positive economic impact while they remain in Poland, vastly outstripping the cost of any support they received,” the report concluded.

As the wartime Ukrainian diaspora becomes increasingly well established in the European Union, fewer and fewer refugees will seek to relocate back to Ukraine. At the same time, however, many of those living and working abroad continue to maintain strong ties with friends and relatives in their home country. These transnational networks are often led by Ukrainian women. They serve as an informal but importance source of economic support for families separated by the war and those based in Ukraine.

Ukraine’s demographic challenges were present long before Russia’s full-scale invasion, but the outlook has worsened significantly as a result of the war. Addressing these challenges will require coordinated efforts to integrate young Ukrainians into the workforce, mobilize underutilized labor, provide more opportunities for vocational training, and take steps to support return migration. For now, the Ukrainian labor market reflects the harsh realities of the Russian invasion, while also highlighting the resilience, resourcefulness, and ingenuity of the Ukrainian population.

Kateryna Odarchenko is a partner at SIC Group USA and president of the PolitA Institute for Democracy and Development. Zoryana Golovata is head of the Expert Group on Cognitive Management at the Ukrainian Political Science Association and founder of Women’s Voice in Action, focusing on economic resilience and mental health recovery for women in wartime Ukraine.

Ukraine’s cyber defense is critical to international security and the stability of the global digital environment. As a testing ground for Russian cyber tools, Ukraine faces attacks that, once refined, can be directed against allied governments, critical infrastructure, and private sector entities. The question is not whether such attacks will occur, but when this will happen, how costly these attacks will be, and how quickly recovery can be achieved.

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Unlike conventional warfare, cyberspace has no borders. A criminal or adversary can strike targets in Kyiv, Washington, or New York with equal ease. Sustained collaboration between Ukrainian, United States, and allied cyber specialists is therefore critical, especially given the escalating cyber threat posed by China, North Korea, Iran, Belarus, and their state-backed proxy groups.

Despite the growing threat, institutional capabilities for a coordinated response by Ukraine, Europe, the US, and other allies are still underdeveloped. The NIS2 Directive, the legal framework that sets minimum cyber security standards across the EU, was an important step toward increasing coordination around risk management, threat sharing, and supply chain security. However, the process of building a dynamic cyber defense coalition has been slow, given the large number of jurisdictions in Europe.

To compound these challenges, Western governments have often been hesitant to share sensitive information with Ukrainian counterparts, or even with each other. Thankfully, there are measures that can be adopted to offer more effective support to Ukraine while still safeguarding classified information. These include sharing tiered or sanitized intelligence reports, conducting joint cyber security operations, and expanding advisory access to expertise. Sustained knowledge exchange, international assistance, and cooperative engagement remain essential to countering the breadth and sophistication of Russian cyber operations.

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Ukraine’s experience highlights the importance of increased investment in critical infrastructure protection. Since 2014, Russia has repeatedly targeted Ukraine’s critical infrastructure with cyber offensives designed to disrupt vital services. The cyber defense of these assets is highly specialized and requires specific strategies.

Cooperation between the public and private sectors is crucial in the fight against Russian cyber warfare. Civilian engagement and private sector partnerships have played important roles in Ukraine’s cyber defense, with both groups filling gaps that government and military structures cannot fully cover, especially under conditions of relentless hybrid warfare. However, there are a number of problematic related issues that need to be resolved.

One of the most difficult topics in terms of legislation is the issue of cyber volunteers. Ukrainian initiatives such as the IT Army have shown that civilians are prepared to work long hours to protect their country. Meanwhile, Ukraine’s private sector and international companies have provided a multi-layered defense by combining technical expertise, rapid incident response, and coordination with state authorities and civilian volunteers.

These contributions have proved vital in the struggle to preserve Ukraine’s digital sovereignty, protect citizens, and support the broader war effort. But many questions remain. How can large numbers of volunteers be effectively vetted? How should they be organized, when in many cases they are not cyber security specialists? Who should lead? Do volunteer cyber defenders become legitimate military targets? One solution could be to formalize a framework for civil-military-tech collaboration integrating vetted civilian volunteers with appropriate oversight.

There is a strong case for strengthening sanctions against Russia’s IT sector. Sanctions already play a critical role in constraining the Kremlin’s offensive cyber capabilities, but additional measures could further limit access to advanced technologies and signal the risks of collaboration with sanctioned entities, thereby reducing opportunities for knowledge transfer.

Potential measures include technology export bans, targeted entity designations, secondary sanctions, restrictions on software and cloud services, limitations on talent pipelines, and the financial isolation of IT firms. Implemented multilaterally, these steps could weaken Russia’s ability to innovate in cyber warfare, increase the Kremlin’s reliance on less advanced domestic technologies, and raise the cost of sustaining long-term cyber operations against Ukraine and its allies.

Finally, it is important to underscore that people remain the central element of effective cyber defense. Even with regular training designed to strengthen the skills of cyber defenders, individuals remain vulnerable to cyber fraud and social engineering techniques. Addressing these risks requires not only technical safeguards but also robust organizational policies and a sustained commitment to individual vigilance. Continuous awareness, preparedness, and adaptability are therefore essential components of a comprehensive cyber security posture.

Dr. Oleksandr Bakalinskyi is a Senior Researcher at the G. E. Pukhov Institute for Modeling in Energy Engineering at the National Academy of Sciences in Ukraine. Maggie McDonough is currently affiliated with the Center for Education & Research in Information Assurance and Security at Purdue University, where she serves as a technical advisor on global cyber security resilience programming.

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The criticism currently being leveled at the Ukrainian authorities in Brussels is not entirely unexpected. In July 2025, Zelenskyy stunned Ukraine’s Western allies and sparked domestic outrage by backing a controversial parliamentary bill that was widely interpreted as an attempt to end the independence of the country’s anti-corruption agencies.

The scandal provoked Ukraine’s largest street protests since the onset of Russia’s full-scale invasion, with thousands of Ukrainians braving possible Russian bombardment to rally in cities across the country against Zelenskyy’s apparent power grab. Kyiv’s partners were also quick to voice their alarm and signal that the move could put future international support for the Ukrainian war effort at risk.

Faced with overwhelming opposition at home and anger in key foreign capitals, Zelenskyy quickly backed down and reversed efforts to assert control over Ukraine’s anti-corruption institutions. Nevertheless, this week’s European Commission Enlargement Report has highlighted the lingering damage done by this brief and entirely self-inflicted crisis to the Ukrainian leader’s credibility.

Nor is this the only fly in the ointment. In addition to his headline-grabbing summer 2025 U-turn over Ukraine’s anti-corruption reforms, Zelenskyy is also facing accusations from political opponents and civil society representatives of using lawfare to silence critics and consolidate power in his own hands. This is not a good look for a man who has sought to position himself as one of the leaders of the democratic world.

Zelenskyy has pushed back hard against his critics. He has pointed to Ukraine’s unprecedented success in meeting EU accession targets amid extremely challenging wartime conditions, while underlining the scale of his country’s anti-corruption reforms. “We have implemented the widest, the broadest anti-corruption infrastructure in Europe. I don’t know about any country that has as many anti-corruption authorities,” he commented in response to this week’s report. “We are doing everything possible.”

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For the time being, any disquiet over Zelenskyy’s anti-corruption credentials is unlikely to derail Ukraine’s EU membership momentum. While there is no agreement on how soon Ukraine can expect to join, the country’s eventual accession is now viewed in most European capitals as crucial for the continent’s future stability and security.

Ukrainian aspirations to join the EU first began to take shape in the wake of the country’s 2004 Orange Revolution, leading to years of meandering negotiations over a possible Association Agreement between Kyiv and Brussels. When this document was finally ready to be signed in 2013, Russia intervened and pressured the Ukrainian authorities to reject the deal. This led directly to a second Ukrainian revolution and the fall of the country’s pro-Kremlin government.

With Moscow’s efforts to thwart Ukraine’s European integration rapidly unraveling, Russian President Vladimir Putin chose to escalate and launched the invasion of Crimea in February 2014. This watershed moment marked the start of Russian armed aggression against Ukraine. Following the seizure of the Crimean peninsula, Moscow established Kremlin-controlled “separatist republics” in eastern Ukraine’s Donbas region. When this limited Russian military intervention failed to derail Ukraine’s EU ambitions, Putin raised the stakes further with the full-scale invasion of 2022.

As Russian aggression has escalated, Ukrainian public support for EU membership has increased and opposition has withered away. An issue that once divided Ukrainians fairly evenly now unites the nation. This is hardly surprising. For millions of Ukrainians, the quest to join the EU has become synonymous with the country’s civilizational choice of European democracy over Russian autocracy.

Zelenskyy would be well advised to keep this in mind as he seeks to balance domestic political considerations with Ukraine’s EU aspirations and the urgent need to maintain international support for the war effort. Ukrainians have made staggering sacrifices along the road toward EU membership and will not take kindly to anyone who places this progress in jeopardy. Meanwhile, Ukraine’s EU integration currently enjoys strong public and political support across Europe, but backsliding on core values could still undermine Kyiv’s case and provide fuel for Russia as it seeks to discredit Ukraine and prevent the country’s historic exit from the Kremlin orbit.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

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A number of legislative complexities will need to be addressed during negotiations to determine the final version of the ban, with talks expected to continue into next year. The European Commission published the first draft of the phaseout roadmap for imports of Russian pipeline and liquefied natural gas during summer 2025. The document stipulated that short-term contracts of less than a year would be discontinued in 2026, while longer-term contracts would be terminated by January 2028.

The draft proposal raised some eyebrows, particularly due to the introduction of an article suggesting that the ban could be temporarily lifted in case of market emergencies. Contrary to expectations, the clause was not pushed through by Hungary and Slovakia, the EU’s most Kremlin-friendly Russian gas buyers. Instead, it was introduced under pressure from Spain, where several companies still hold long-term LNG import contracts with Russian producers.

The text has been reviewed by both the European Parliament and the Council of Ministers, with the former pushing for even more ambitious terms. For example, MEPs would like to see all imports terminated by 2027, a year earlier than initially stated by the European Commission. They also insist on closing loopholes by targeting circumvention risks.

The draft version adopted by the Council of Ministers aligns to a large degree with the version circulated by the European Commission and continues to include an emergency brake. The final text will have to be negotiated as part of talks involving the European Parliament, Council of Ministers, and European Commission.

To further complicate matters, the EU recently adopted its nineteenth Russian sanctions package, which includes a ban on Russian LNG imports from 2027, a year earlier than the deadline proposed by the EU’s own phaseout roadmap. This fast-tracked LNG ban was likely introduced in response to pressure from US President Donald Trump, who has singled out Europe for continuing to buy Russian fossil fuels.

While this sanctions-mandated ban may lead to an earlier block on Russian LNG exports, many observers fear that it is insufficiently robust and could be overturned, since EU sanctions are up for review every six months and require unanimous backing in order to be extended. This means the fast-tracked LNG ban could be vulnerable to opposition from any individual EU member.

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While the legislative path toward a full EU ban on Russian gas imports remains long and complex, enforcement may prove even more difficult. The ban enjoys strong political backing across Europe, but there are widespread concerns that the Kremlin will try to identify potential loopholes to evade the ban.

Russian gas is currently exported to Europe via the Black Sea and Turkey, using a dedicated pipeline transporting the gas to the Balkans and Hungary. The EU has included this entry point in legislation and notes that flows must stop from 2028, but Russian gas arriving in Turkey via an interconnection point nearby could be relabelled and sold under a different name. The risk of relabelling Russian gas also extends to the entire bloc because there are still a number of companies with large import portfolios which hold long-term LNG contracts with Russian producers.

Regulations related to the enforcement of the EU ban, including penalties for potential breaches, will need to be reviewed and tightened up. Existing EU proposals may not be sufficient, while it is still unclear how violations will be penalised. This must be addressed in order to deter non-compliance.

EU officials are well aware that Moscow will fight efforts to exclude it from lucrative European markets. Deprived of fossil fuel revenue and with its economy facing mounting difficulties, the Kremlin will seek any opportunity to continue selling oil and gas to Europe. Allowing loopholes to remain could create large grey areas in European energy markets that would fuel Russia’s war in Ukraine and allow the Kremlin to retain leverage over Europe.

Dr. Aura Sabadus is a senior energy journalist who writes about Eastern Europe, Turkey, and Ukraine for Independent Commodity Intelligence Services (ICIS), a London-based global energy and petrochemicals news and market data provider. Her views are her own.

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The mobilization issue has been exacerbated by President Zelenskyy’s reluctance to lower the age for compulsory military service from twenty-five to eighteen. This has led to criticism from Ukraine’s Western partners, who have argued that it is unrealistic to wage a major war while exempting so many young Ukrainians from mobilization. Rather than take the politically dangerous decision to reduce the conscription age, Zelenskyy has backed an incentive scheme to attract volunteers in the eighteen to twenty-five age bracket. However, the initiative has so far failed to fill the gaps in Ukraine’s decimated front line units.

The recent decision to lift international travel restrictions on young Ukrainian men aged eighteen to twenty-two has further complicated Ukraine’s manpower problems. Around 100,000 Ukrainian males have left the country since restrictions were eased around two months ago, Britain’s Daily Telegraph reports. This exodus deprives the country of potential future army recruits and has created a range of more immediate personnel issues that are already reverberating throughout the Ukrainian economy. While some of these men may plan on returning to Ukraine, experience since 2022 suggests that many will seek to settle elsewhere in the European Union.

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Moscow is also facing difficulties replenishing its invasion force amid catastrophic losses in Ukraine that dwarf the death toll from every other Kremlin war since 1945. Putin initially sought to address this problem by launching a partial mobilization in September 2022, but the move proved hugely unpopular and led to around one million young Russians fleeing the country. Instead, the Kremlin has introduced a system a lavish financial incentives including huge enlistment bounties and generous monthly salaries in order to attract volunteers willing to join the invasion of Ukraine. While it has proved necessary to repeatedly increase the sums on offer, this approach has made it possible to secure around thirty thousand new recruits per month.

Based on the current trajectory of the war, Russia’s manpower advantage over Ukraine will only grow wider during the coming year. This is already making itself on the battlefield, with Russian forces exploiting gaps in Ukraine’s defenses along the more than one thousand kilometers of front line and edging forward at multiple points. While Putin’s troops have so far been unable to achieve any major breakthroughs, Russia’s territorial gains are slowly but surely adding up.

The most intensive fighting is currently taking place in the Donetsk region as Russia seeks to complete the capture of Pokrovsk. If Putin’s commanders succeed in taking the city, it will be seen by many as vindication of the Kremlin strategy to grind out victory by relying on the sheer size of the Russian army. Putin has long believed that he can win the war by outlasting the West and overwhelming Ukraine. He will view Kyiv’s increasingly evident infantry shortage as a strong indication that time is on his side.

For Zelenskyy, there are no easy options. Lowering the mobilization age would generate a new wave of recruits but could also pose a significant threat to Ukrainian national morale. Reforming the terms of military service to provide greater rotation guarantees while also adopting a more meritocratic approach to the appointment of army commanders may help restore flagging public confidence and attract more volunteers, but this would take time that Ukraine quite frankly no longer possesses.

For now, the battle-hardened but exhausted and outnumbered Ukrainian army has little choice but to remain in a defensive posture. Ukraine’s commanders must be prepared to cede ground when necessary in order to preserve precious fighting strength, while looking for opportunities to maximize enemy casualties. The goal should be to withstand the Russian onslaught until a combination of punishing front line losses, escalating long-range strikes inside Russia, and deepening economic woes finally forces Putin to the negotiating table.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

European Commission President Ursula von der Leyen echoed Nausėda’s comments and expressed solidarity with Lithuania, calling the Belarusian balloons a “hybrid threat” that Europe will not tolerate. She linked the issue to the European Union’s broader push for enhanced military readiness, particularly in terms of airspace defense capabilities against the growing threat posed by Russian drones and aircraft.

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Belarusian dictator Alyaksandr Lukashenka has dismissed European concerns and attacked the Lithuanian decision to close the border as a “crazy scam,” while also accusing the West of waging a hybrid war against Belarus and Russia. His denials lack credibility, however, given the recent spate of airspace violations across Europe and along the EU’s eastern frontier with Russia and Belarus.

Around twenty Russian drones penetrated Polish airspace in early September, leading to an unprecedented armed response from NATO jets. Some of the Russian drones entered Poland via Belarus, highlighting Minsk’s role in Moscow’s campaign of hybrid aggression. Days later, a small group of Russian fighters violated NATO airspace off the coast of Estonia.

There have also been numerous incidents over the past two months involving suspected Russian drones close to strategic sites throughout Europe including military bases and international airports. Speaking in September, Danish Prime Minister Mette Frederiksen claimed the drone incursions were part of a Russian hybrid war and said Europe was facing its “most difficult and dangerous situation” since the end of World War II.

European airspace violations serve a number of purposes for Putin and his Belarusian proxy. In practical terms, they allow the Kremlin to probe NATO defenses and test the alliance’s readiness to combat incursions. Russian drones and Belarusian balloons also inconvenience the European public and intimidate European leaders at a time when the continent is already increasingly alarmed by US President Donald Trump’s mixed messaging over America’s commitment to European security.

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In response to Lithuania’s border closure, Lukashenka has warned that he may now stop cooperating with Brussels on migration issues. Given his regime’s well-documented prior weaponization of migrants on the Belarusian border with the European Union, this is a very thinly-veiled threat.

At the same time, the Belarusian ruler is also attempting to engage in renewed outreach to the West, with a particular emphasis on the US. Lukashenka has held a number of meetings with United States officials in recent months, leading to the release of political prisoners held by Belarus and an easing of American sanctions against Belarusian national airline Belavia.

This apparent thaw has been hailed in Washington as a sign of progress, but not everyone is convinced. Human rights groups have identified 77 new political prisoners in Belarus during September 2025, more than the total number of detainees freed in US-brokered releases since the start of the year. In other words, it would appear that Lukashenka is seeking sanctions relief without committing to end repressive policies at home and while continuing to serve Moscow’s strategic interests.

The Trump administration has signaled its dissatisfaction over recent Belarusian balloon violations of Lithuanian airspace. “I made clear we stand in solidarity with Lithuania amidst recent balloon incursions. Belarus should prevent further such incidents,” commented US Special Envoy John Coale, who has been directly involved in this year’s talks with the Lukashenka regime.

Growing tensions on the Lithuanian border with Belarus should serve as further confirmation that Lukashenka remains fully committed to participating in Russia’s confrontation with the West. Belarusian balloon violations of EU airspace are part of a Kremlin-led campaign to test Western resolve, strain NATO solidarity, and intimidate Europe. As long as Lukashenka continues to play a supporting role in Putin’s hybrid war against the West, he should be regarded as an adversary.

Hanna Liubakova is a journalist from Belarus and nonresident senior fellow at the Atlantic Council.

Meanwhile, a decision is pending in an arbitration suit by Liechtenstein-based RTI Rotalin Gaz Trading AG against Moldova, also at the ICSID. The company alleges de facto partial expropriation of its natural gas distribution business, which was the only competitor to Russia’s state-owned Gazprom in the Moldovan market. The government has so far refused to pay its half of the arbitration costs as prescribed in the Energy Charter Treaty (ECT), to which Moldova is a party. At the same time, the government has continued to pursue collection of the fine in local courts despite the ICSID issuing an injunction blocking its enforcement. Moldova also revoked the company’s gas supply license and slapped a $2.9 million fine, the largest in the country’s history, on the company for making profits in early 2023—after Russia’s invasion of Ukraine drove gas prices up in Europe—that the government deemed excessive. Although the arbitration is actually about natural gas distribution tariffs and return of investments made almost twenty years ago, the government contends that Rotalin broke Moldovan law by overcharging customers and then refusing to supply gas below cost during the country’s state of emergency following Russia’s invasion of Ukraine.

The years prior to 2025 are similarly checkered. For an inexhaustive sampling: In 2023, ICSID awarded $2.1 million in damages or reinstatement of the investor’s duty-free business for Moldova’s violation of a bilateral trade treaty with France. Moldova refused to pay, triggering new suits in the United States seeking enforcement of the award, which is now up to $50 million. In 2013, a tribunal ruled for the investor in a $46 million suit brought under the ECT by a power company after a state-owned entity defaulted on a contract, which continues to be fought in parallel proceedings in the US District Court in Washington, DC and the French Court of Cassation. In 2007, the ECHR found Moldova had violated the Convention for the Protection of Human Rights and Fundamental Freedoms in a case brought by US and Bahamian company Bimer SA for the illegal closure of its business. Moldova has racked up similar losses in other international courts and arbitration tribunals, and the country’s habitual unwillingness to honor the judgments often results in follow-on enforcement proceedings.

Enough investor lawsuits or defaults, or a credit rating downgrade, or even just a worse reputation, could be an obstacle to Moldova’s EU candidacy.

The most obvious and immediate consequence of such a history of investment disputes is the difficulty faced by Moldova in attracting foreign capital—money desperately needed to help the country stabilize against the ever-present threat of Russia. As much as 8 percent or more of Moldova’s gross domestic product is foreign assistance, and almost 13 percent is from remittances. This leaves Europe’s poorest country vulnerable to political vacillation and more likely to suffer from brain drain just when it needs local talent most. Developing reliable domestic economic sectors is critical, but this is a challenge when foreign investors remain justifiably wary of Moldova’s notorious corruption and rule of law problems. The country’s 2024 score in Transparency International’s Corruption Perceptions Index was just forty-three out of one hundred, giving it a ranking of seventy-sixth out of 180 countries.

Equally concerning is the impact that the lawsuits and Moldova’s reluctance to adhere to its investment treaty obligations and to tribunals’ judgments could have on its chances of being admitted into the European Union (EU). Both substantive and measurable anti-corruption and rule-of-law improvements are a requirement under the Copenhagen Criteria, which govern EU accession. Although Moldova has made noted progress in recent years, there remains a long road ahead. The country still ranks only sixty-fourth out of 142 on the World Justice Project’s Rule of Law Index and forty-eighth out of 190 on the World Bank’s Ease of Doing Business index.

Relatedly, if Moldova doesn’t honor the results of the various ongoing arbitration proceedings arising under treaties to which it is a party, its defaults could affect its credit rating—and, in turn, its chances of EU accession. Moldova currently has a B-average among the leading rating agencies, meaning it is below investment-grade with a higher-than-average risk of default.

Credit ratings are not themselves a Copenhagen criterion, but the European Union learned the hard way during the 2008-2010 eurozone crisis that admitting new EU members without adequately stable monetary and economic situations could bring trouble. Accordingly, the criteria require an EU hopeful to have a “functioning market economy” and “the capacity to cope with competitive pressure and market forces.” These in turn require, among other attributes, a good business environment, adequate human and financial capital, a prominent role for small and medium-sized enterprises, and general economic resilience. Assessments are done by the European Commission, but all twenty-seven EU member states have to ultimately agree on accession. Enough investor lawsuits or defaults, or a credit rating downgrade, or even just a worse reputation, could be an obstacle to Moldova’s EU candidacy. The political reality that Russia-sympathetic Hungary and Slovakia wield a veto may well mean that those opposed to Moldova’s accession will jump on any excuse to block it.

Adding Europe’s poorest and most energy-insecure country, and the one most beset by Russian meddling—second to Ukraine, of course—to the EU was always going to be a hard sell. Wealthier EU member states still grumble about having bailed out Greece three times between 2010 and 2015 to the tune of $330 billion. If Moldova wants to improve its odds and capitalize on its postelection momentum, then it would be wise to embrace investors rather than burn them. Both its economy and political future would be brighter as a result.

Suriya Jayanti is a nonresident senior fellow at the Atlantic Council’s Eurasia Center.

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Why Washington should pay attention to Turkey’s presence in Central Asia

Kiran Baez — Thu, 23 Oct 2025 13:00:00 +0000

Introduction
A brief history: Turkey in Central Asia until the 2010s
Assessing attitudes towards Turkey today
Understanding Turkish soft power
Regional integration, changing dynamics, and the Organization of Turkic States
Economic presence
Security
The Russia question and limits to Turkish ambitions
Spotlight on Turkmenistan
Interpretations for the American policy maker

Key findings

Turkey has taken significant strides over the last two decades to establish itself in Central Asia, now boasting significant economic, cultural, and political presence, as well as steadily growing defense ties.
Turkey and the other four Central Asian Turkic states continue to highlight shared cultural and linguistic heritage in government communications and public media. The underpinnings of these relationships are nonetheless pragmatic, with “pan-Turkic” thought remaining both diverse and debated across Central Asia. Turkey’s growing presence in the region—combined with local media and governments promotion of pan-Turkic narratives, however—will likely mean such ideologies will be more influential on future generations of both Central Asians and Turks.
Turkey’s activities in the region pose a dilemma to Russia: They are not overtly threatening enough to justify a strong reaction, but ultimately encourage economic and political autonomy. As a result, the Kremlin is concerned by Turkey’s presence in the region, though it has limited options to respond.
Turkey’s activities and goals in the region often align with those of the United States. Those that do not are largely benign to US foreign policy objectives.
The United States should consider greater partnership and communication with its allies better established in the region, including but not limited to Turkey. Doing so could augment US foreign policy goals at limited political and economic cost.
Despite strides in economic, cultural, and political presence, Turkish activities are still ultimately dwarfed by those of Russia and China. Russia, in particular, exhibits immense cultural staying-power that permeates many Central Asian societies.
Both Tajikistan and Turkmenistan deserve increased examination by policymakers. Tajikistan will be an important factor to watch in determining the ultimate direction of Central Asian regional integration. Turkmenistan has major potential for augmenting the Middle Corridor project. Turkey’s relationships with both countries will prove important.

Introduction

In an increasingly turbulent world, the importance of Central Asia has grown rapidly. Abundant with mineral and energy resources, burgeoning markets, and strategically located between China, Russia, and Iran, the region that includes Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan is quickly drawing the attention of actors from around the globe—while Turkey burnishes its Central Asia ties.

Russia and China still dominate the economic and political landscape of Central Asia, though the region is increasingly engaged by a diverse cast of characters. The rise of the Trans-Caspian International Transport Route—a project also known as the Middle Corridor, which functions as a multilateral transport network linking China and the European Union through Central Asia, the Caucasus, and Turkey—has opened the door to billions of dollars in funding and associated projects, including over £20 billion ($26.78 billion) from the United Kingdom, and €12 billion from the European Union since 2024. ¹ France, Germany, the UK, and India have all fostered ties to the region in recent years, while Japan, South Korea, and the United Arab Emirates have long maintained an economic presence.² In recent years few countries have so successfully integrated themselves into the cultural, political, or economic fabric of Central Asia as Turkey.

As the region rises in importance, understanding the increasingly complicated field of actors in Central Asia and its implications for US policy goals is key. A major NATO member with a complicated bilateral relationship with the United States, Turkey’s extensive presence in Central Asia deserves exploration, as well as an analysis of the opportunities and challenges surrounding Ankara’s influence in the region. This report seeks to understand Turkey’s policy toward and presence in Central Asia and offer interpretations for US policymakers.

For this report, the author interviewed thirty-seven foreign policy experts, including former and current government officials from across Central Asia, many of them speaking anonymously given consideration of their respective countries’ political environments. Information that could not be substantiated by open-source media is only included if it was widely agreed upon and regarded as “common knowledge” across several interviews and is explicitly indicated as such.

A brief history: Turkey in Central Asia until the 2010s

Following the Soviet Union’s collapse, Turkey quickly engaged Central Asia’s Turkic states and, to a lesser degree, Tajikistan, leaning heavily into the perception of shared linguistic, cultural, and religious ties to strengthen relations. The region’s opening coincided with Turkish politicians seeking greater global influence.

In 1991, Turkey swiftly recognized the independence of Central Asian countries, in particular building ties through its development agency, Turkish Cooperation and Coordination Agency (TIKA), and co-founding the International Organization of Turkic Culture (TURKSOY). Turkish businesses were some of the first to enter newly opened Central Asian markets.

The reception to Turkey’s overtures in the early 1990s was mixed. Relishing their newfound independence from Russia, many Central Asian states were skeptical of Turkish intentions and feared exchanging one “big brother” for another. At the time, Turkey was in an economically precarious situation and unprepared to assume the role it may have imagined; in addition, its growing and complicated relationship with Russia did not aid its outreach in Central Asia. Combined with Turkish aspirations to rapidly liberalize the region economically, many Central Asian leaders feared a loss in their newly gained sovereignty.

The religious aspects of Turkish engagement also raised alarm for many. While Kemal Atatürk’s secular legacy was largely respected by regional post-communist elites, outreach in the 1990s prominently featured religious elements through religious schools and the Turkish Directorate of Religious Affairs (Diyanet). Still a major soft-power institution today, the Diyanet established the Eurasian Islamic Council in 1994 and financed mosques across the region. Despite progress, by the mid-1990s, Turkey’s momentum in the region had notably declined, a product of economic constraints, Russia’s return to the region, and Turkey’s lukewarm reception among the Central Asian states.³

Uzbekistan represented the most severe fallout from mismatched expectations. President Islam Karimov deeply distrusted Turkish intentions, linking them with growing domestic terrorism from the Islamic Movement of Uzbekistan (IMU).⁴ In 1993, Uzbekistani opposition leader Muhammed Salih fled to Istanbul, further fueling Uzbekistani suspicions. Subsequently, Uzbekistani authorities targeted Turkish-associated political movements including the Erk and Birlik parties.⁵ Tensions peaked in 1999 when Uzbekistan accused a Turkish citizen of attempting to assassinate Karimov. Over the ensuing years, Uzbekistan would go on to target several Turkish businesses with severe restrictions.⁶ Relations did not recover until Karimov’s death in 2016.

By the late 1990s, pan-Turkic ambitions had given way to quieter, steady cultural and economic interactions. Under Recep Tayyip Erdoğan’s regime, Turkey reemerged in the late 2000s within a transformed geopolitical environment: Russia’s resurgence and China’s growing influence. Erdoğan’s administration balanced ideological outreach with more pragmatic strategies, emphasizing aid, infrastructure work, military cooperation, and expanded trade.

This era marked a shift toward more inclusive engagement, supporting broader mutual interests, while retaining some of the pan-Turkic undertones. Multilateral forums emerged, notably the Turkic Council (today’s Organization of Turkic States, OTS), which was founded in 2009 on the basis of shared “historical ties, common language, culture, and traditions.”⁷ Although Turkish media and politicians continued emphasizing ethnic narratives, relations became driven primarily by pragmatism and Central Asia’s desire for diversification away from China and Russia. Erdoğan’s strong personal relationships with other Central Asian leaders also play a key role in deepening connections. Similarly, Erdoğan’s son, Bilal, is famously interested in and has spent extensive time in the region—both as an unofficial representative of his father and the head of the Turkish Youth Foundation and World Ethnosport Confederation, which was originally established in Bishkek before moving to Istanbul.⁸

Assessing attitudes towards Turkey today

Turkish cultural and business presence across Central Asia has elicited mixed reactions in the region, generally ranging from “lukewarm” to “brotherly.” A 2023 Central Asia Barometer (CAB) survey ranked Turkey as the most favorable country among respondents from Kyrgyzstan and Kazakhstan, ahead of Russia, Iran, China, and the United States. Kyrgyzstan displayed the greatest affection, with 40 percent of respondents holding “very favorable” views and 44 percent holding “somewhat favorable” views.⁹ Turkmenistan and Uzbekistan placed Turkey second, behind Russia. Turkish goods, particularly textiles, carry positive cultural associations of quality, bolstered by Turkish companies often importing European goods. Turkish diplomatic visits receive prominent coverage in Central Asian media. In non-Turkic Tajikistan, favorability remains notably lower but positive despite historical Turkish support for its then-regional rival Kyrgyzstan (the survey predated the landmark Tajikistan-Kyrgyzstan border agreement).

Among the political and business elites with warm attitudes toward Turkey, motivations vary. Some genuinely support pan-Turkic ideals; others view Turkey pragmatically as a reliable partner or gateway to the West. Debate persists over Turkey’s ideal role, with ideological factions including traditional pan-Turkists, pro-Russian groups, pragmatic nationalists, and advocates for regional integration as independently as possible from major powers.

Central Asia is increasingly trending toward regional integration, yet critical questions persist: How should non-Turkic Tajikistan be incorporated? How close should ties remain with Russia? What is Turkey’s appropriate regional political role? Such discussions remain contentious and vary significantly from country to country.

These questions are particularly important to Uzbekistan, which generally favors regional integration yet appears to remain among the most skeptical of pan-Turkic messaging, especially due to its deep economic and cultural ties with Tajikistan. Beyond the large populations of Tajikistani migrant workers, and a dependence on the Amu Darya and Zeravshan rivers,¹⁰ the two nations are culturally linked at the hip: Tajik is spoken widely in several important Uzbekistani cities, including Bukhara. Many Uzbekistanis interviewed for this project echoed the words of an Uzbekistani political analyst asked about the topic: “Uzbekistan will always put the idea of ‘Central Asia’ above Turkey.”

The Zeravshan river near Panjakent, Tajikistan. Photo by Petar Milošević, via Wikimedia Commons.

Despite ideological divides, interviewees across the region expressed that Ankara has cultivated strong institutional trust and bilateral relationships, particularly among senior state officials and younger diplomats who began their careers after the dissolution of the USSR. In contrast, older career bureaucrats trained or educated in Moscow tend to identify more with their Russian past.

Turkey’s reputation and diplomatic standing is not without its limits, however. Several Uzbekistanis and Kazakhstanis interviewed for this paper commented that the “big brother” attitude of Turks famously documented in the 1990s persists in the minds of many Turkish businessmen and diplomats,¹¹ though most agreed this has improved in recent years. In interviews with Uzbekistani experts, there was a consensus that the decision of the Organization of Turkic States (OTS) to admit the Turkish Republic of North Cyprus (TRNC) as an observer state was done with great apprehension. This aligns with Uzbekistan’s later public downplaying of the situation and ensuing confusion about the status of the TRNC in Uzbekistani and Central Asian politics.¹² In April 2025, Uzbekistan, Kazakhstan, and Turkmenistan appointed ambassadors to the Republic of Cyprus, and affirmed support for UN Security Council resolutions 541 and 550 which calls “attempts to create a ‘Turkish Republic of North Cyprus’ invalid,” to bolster ties with the EU—marking the pragmatic limits of Turkish influence.¹³ A joint declaration at the 2025 OTS summit held in Gabala called for the need to “reach a negotiated, mutually acceptable […] settlement,” to the “Cyprus issue”, and expressed “solidarity with the Turkish Cypriot people,” a statement likely designed to strike a neutral tone that balances both Ankara and Brussels.¹⁴

Understanding Turkish soft power

Media

Central Asian news media remains dominated by Russia and Russian-language sources, except in Uzbekistan, where local-language media promotion is vigorous. The Turkish state-owned Turkish Radio and Television company (TRT) is the sole major Turkish media outlet distributing content in Uzbek, Kyrgyz, Turkmen, and Kazakh. In December 2024, it expanded to include broadcasts in Farsi, spoken in Tajikistan.¹⁵ TRT also runs Avaz (meaning “voice”), a channel largely focused on promoting pro-Turkey and Turkic narratives through the form of soap operas, documentaries, news, and movies, which is distributed throughout the region in local languages. Other Turkish outlets typically publish only in Turkish or English, restricting local accessibility, while Turkish media that publishes in Russian, such as Anadolu Ajansi (the Turkish state-run news agency), rarely cover Central Asia. Turkish news is not widely consumed, except in Turkmenistan, where 47 percent of respondents in a CAB survey reported “occasionally viewing” Turkish news.¹⁶

In entertainment media, Turkish films and soap operas enjoy broad popularity throughout the region, including Tajikistan. Kazakhstan’s state television regularly airs Turkish dramas, and the two states have intensified cooperation in the field including jointly producing TV series and hosting a “Turkic film festival”.¹⁷ Some Turkish musicians are well-known, although Uzbekistani, Russian, and Kazakhstani artists still dominate the music scene. Media exchanges are increasingly reciprocal: Kazakhstan’s state-owned Silk Way TV began broadcasting in Turkish in May 2024, and many Turkish shows are filmed in the region. These Turkish TV exports are part of a broader trend, with global demand for Turkish series increasing 184 percent from 2020 to 2023.¹⁸

Development aid and projects

Turkey’s global development aid programs extensively engage Central Asia, historically prioritizing Kyrgyzstan and Kazakhstan. Uzbekistan resisted Turkish aid until rapprochement in 2017, while resource-rich Turkmenistan has shown fluctuating interest and non-Turkic Tajikistan fell lower on the list of priorities. Between 1991 and 2018, Turkey ranked as Kyrgyzstan’s largest official development assistance provider ($1.156 billion) and the second largest to Kazakhstan ($669 million).¹⁹ Turkish aid often focuses on prominent infrastructure projects—including museums, mosques, hospitals, and universities—typically built by Turkish construction firms.

Recently, Turkey’s soft power model appears to be moving away from direct development aid however, influenced by rising alternative donors such as India, Gulf countries, and the European Union, Turkey’s own economic constraints, and its increasing prioritization of Syria and Africa. Importantly, rapidly developing Central Asian states like Kazakhstan and Uzbekistan prefer investments and technical assistance over traditional aid. Kazakhstan has rebranded itself as an aid provider, establishing the Kazakhstan Agency for International Development (KazAID) in January 2021.

Despite this shift, Turkish aid’s legacy continues to enhance its image in the region. TIKA’s projects are often strategically located and visible. Examples include the Recep Tayyip Erdoğan Bishkek Kyrgyz-Turkish Friendship State Hospital, adorned with Turkish flags, and the renovated Kyrgyz State History Museum, featuring a plaque thanking Turkey, adjacent to the Kyrgyzstani parliament.

Turkish-supported projects, such as archaeological excavations in Akmola (Kazakhstan) and a traditional handicrafts center in Khiva (Uzbekistan), frequently reinforce pan-Turkic narratives. Education initiatives explicitly promote Turkic cultural and historical studies, particularly the creation of “Turkology” departments, including in autonomous public universities. Despite the creation of numerous faculties of Turkology across the region, there is still a major disconnect with everyday people, many of whom assume it is simply the study of Turkey, with one Kazakhstani professor of Turkology describing “even our students didn’t know about Turkology before they came to the department.”²⁰

Beyond supporting Turkology departments, the Turkish government maintains a network of schools in the region both through its Maarif program and two joint universities: Hoca Ahmet Yesevi University (Kazakhstan) and Manas University (Kyrgyzstan), alongside quotas designed to encourage Central Asians to study in Turkey. In 2020, Central Asians received 793 university scholarships, comprising 21 percent of all Turkish international scholarships despite representing 6.5 percent of applicants.²¹

Regional integration, changing dynamics, and the Organization of Turkic States

Originally founded as the Turkic Council in 2009, the OTS has grown increasingly influential in Central Asia. Since its 2021 rebranding, OTS has moved toward more concrete regional integration and coordination, addressing significant economic and political issues. OTS’s evolution has involved the establishment of several working bodies like the Civil Protection Mechanism for disaster relief, the Union of Turkic Chambers of Commerce (TCCI), and the Turkic Investment Fund (TIF), which launched in May 2024 with $500 million in starting capital,²² and increased to $600 million with Hungary’s entry in February 2025.²³ As of September 2025, the TIF has yet to post its first tenders, which are largely expected to focus on supporting SMEs, renewable energy, and transportation. An announcement from OTS heads of state at a meeting in Budapest suggested the TIF may begin operating in full by the end of 2025, though few details remain available.²⁴

Turkish President Recep Tayyip Erdoğan speaks at the 7th OTS summit in Baku, Azerbaijan. Handout from the Press Office of the President of the Republic of Azerbaijan.

OTS’ primary focus has increasingly transitioned from cultural to economic integration, supporting standardized customs processes, transport infrastructure development, and logistics improvements through its Transport Connectivity Program and Turkic Investment Fund. These projects have received broad international support, aligning with China’s Belt and Road Initiative and the Trans-Caspian International Transport Route (TITR/Middle Corridor), backed by institutions like the Asian Development Bank, European Bank for Reconstruction and Development, and the EU. Instead of working through these routes, Turkey prefers to support these initiatives via OTS and the Eurasian Transport Route Association, cofounded in September 2024 with Azerbaijan, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Austria.²⁵

It should be noted that OTS is not a military alliance, something that would conflict directly with the charter of the Collective Security Treaty Organization,²⁶ but is increasingly moving toward security cooperation. The most recent development in this area came during the 2025 OTS summit in Gabala, Azerbaijan, when Azeri President Ilham Aliyev called for joint OTS military exercises, a significant step.²⁷ Similarly, Kazakhstani President Kassym-Jomart Tokayev called for the establishment of a Turkic cybersecurity council designed to jointly prepare for and respond to cyberattacks and threats.²⁸

While Turkey remains a major economic, military, and demographic power within OTS, it does not appear to dominate unilaterally. Experts interviewed from Uzbekistan, Kyrgyzstan, and Kazakhstan broadly emphasized their satisfaction with their representation in OTS, highlighting, for example, the foundational role of the former president of Kazakhstan, Nursultan Nazarbayev, and Azerbaijan’s active participation. Nonetheless, Turkey has secured notable policy victories through OTS, such as establishing the curriculum for the International University of Turkic States, based on Turkey’s university system, and admitting the Turkish Republic of Northern Cyprus as an observer state.²⁹

Economic presence

Turkish businesses have established significant presence across Central Asia, leveraging shared language, culture, geographical proximity, and Western business connections. Predominantly active in construction, hospitality, and manufacturing (especially textiles), nearly 4,000 Turkish businesses currently operate in the region.³⁰ By 2025, eight years after Uzbekistan’s reproachment with Turkey, nearly 1,900 Turkish companies operated in the country, ranking only behind China and Russia.³¹ Since 2008, Turkey has consistently ranked in Kyrgyzstan’s top three sources of foreign direct investment (FDI), sometimes as number one on the list, most recently in 2022.³² Additionally, Turkish markets are increasingly attracting Central Asian investors, exemplified by Kazakh fintech firm Kaspi.kz’s acquisition of Turkish e-commerce giant Hepsiburada in October 2024.³³

Turkish businesses enjoy key competitive advantages in Central Asia, particularly easier access to capital and financial transactions through established Turkish banks. Demir Bank in Kyrgyzstan, now owned by HSBC, has operated for over twenty years and was Kyrgyzstan’s first fully foreign-capitalized bank.³⁴ In September 2024, the Turkish state-owned Ziraat Bank announced plans to open a Bishkek branch, and was already operating subsidiaries in Uzbekistan, Turkmenistan, and Kazakhstan.³⁵ By 2018, shortly after Turkey’s rapprochement with Uzbekistan, Ziraat’s Uzbek subsidiary had roughly 1,000 institutional customers and 13,000 individual clients, and it secured a $350 million credit line.³⁶

Turkish businesses also maintain extensive connections and experience working alongside Russian banks and corporations, which are crucial to regional operations. Turkish companies often serve as intermediaries for Western firms hesitant about local market conditions, particularly in Uzbekistan and Kyrgyzstan. Three of sixteen US businesses in Kyrgyzstan operate through Turkish intermediaries. Additionally, US Chambers of Commerce (aka AmChams) in Central Asia increasingly welcome third-country involvement, promoting regional dialogues with Western businesses. Central Asian AmChams established partnerships with those from Turkey, Greece, and Bulgaria during the October 2024 Eurasian Economic Summit in Istanbul.³⁷

Turkey’s economic footprint in Central Asia is increasingly shaped by bilateral agreements and diplomatic ties. Public pledges to aggressively increase bilateral trade often follow high-level meetings. Between 2018 and 2024, Turkey announced bilateral trade targets of $5 billion with Turkmenistan, $2 billion with Kyrgyzstan, $15 billion with Kazakhstan, $5 billion with Uzbekistan, and $1 billion with Tajikistan. Despite the goals, actual bilateral trade has only increased substantially with Kazakhstan and Kyrgyzstan, largely stagnating or inching forward elsewhere, according to UN Comtrade data.³⁸ Nonetheless, Turkey has struck several deals to support its economic position in the region in recent years like preferential trade agreements with Uzbekistan or Turkey’s November 2024 commitment to purchase Kazakh beef at double China’s offered price.³⁹ Though the economic impact of deals such as these is often limited, they are widely covered in local news, serving to strengthen Turkey’s local image. Economic policy increasingly underpins diplomatic ties, exemplified by an April 2024 memorandum of understanding for central bank cooperation between Turkey and Kazakhstan; Turkey’s November 2024 decision to waive Kyrgyzstan’s $59 million debt in exchange for renewable energy projects; and plans for a Turkish-backed industrial zone in Kyrgyzstan’s Chui province.⁴⁰

The port of Aktau, in Kazakhstan, is pictured. Ashina via Wikimedia Commons.

Competition is intensifying as Central Asia’s geopolitical importance grows. Gulf-based companies are rapidly entering sectors traditionally prized by Turkish firms, particularly energy and hospitality in Uzbekistan and Kyrgyzstan. In Uzbekistan alone, Saudi Arabia recently launched $3 billion in renewable projects,⁴¹ the UAE has signed several agreements on tourism,⁴² and Qatar Airways launched flights to Uzbekistan in February 2024, challenging Turkish Airlines’ near monopoly on long-distance routes following Russia’s full-scale invasion of Ukraine.

Energy diversification ambitions significantly influence Turkey’s Central Asian strategy. Kazakhstan holds substantial gas reserves and thirty billion barrels of crude oil; Turkmenistan has the world’s fifth-largest gas reserves alongside major oil deposits. Uzbekistan, though comparatively smaller, has considerable undeveloped fossil-fuel reserves. While currently minor suppliers, these countries have long entertained increasing westward exports via Turkey, benefiting both Central Asian energy producers and Turkey by reducing Turkish dependence on Russian energy, enhancing Turkey’s energy hub ambitions, and allowing Central Asian states to gain direct European market access. Accessing Europe’s markets may be increasingly important for Turkmenistan, which exported 70 percent of its gas to China in 2024, while China has taken steps to diversify its energy sources, and Russia moves to corner the Central Asian gas market.⁴³ Though the theoretical potential for western movements of Central Asian gas is often entertained by some outspoken Turkish energy analysts, there is a wide gap between potential and reality.⁴⁴

The political environment may be changing to make these projects more feasible: Russia’s 2022 invasion of Ukraine, international interest in the Middle Corridor, and major infrastructure advancements present new opportunities for westward energy exports. The Baku-Tbilisi-Ceyhan pipeline (BTC), initially designed for Azerbaijani oil, now increasingly sources from Central Asia. Kazakhstan began BTC oil shipments from its Tengiz field in 2008; Turkmenistan followed in 2010.⁴⁵ Discussions are reported to be underway for Turkmenistan to export gas via the Trans-Anatolian Pipeline (TANAP), bolstered by plans to double the pipeline’s capacity from 16 billion cubic meters to 32 bcm.⁴⁶ By 2024, Kazakh and Turkmen oil accounted for about 18 percent of BTC’s throughput.⁴⁷ In November 2024, Kazakhstan’s energy minister, Almasadam Satkaliyev, announced intentions to significantly reduce oil exports via Russia’s Caspian Pipeline Consortium (CPC), shifting instead to BTC and boosting exports from 1.5 million metric tons annually to 20 million tons.⁴⁸

Security

Over the past decade, defense and intelligence cooperation has become increasingly central to Turkey’s Central Asia strategy, driven by the rapid growth and quality of Turkish arms. Turkish weapons exports grew 29 percent in 2024 alone, with Turkish ships, drones, and armored vehicles appearing in regions including Libya, Indonesia, Saudi Arabia, and Ukraine.⁴⁹ Central Asia is no exception, as all four Turkic states now utilize Turkish defense technology, notably the competitively priced Anka, Akinci, and TB drone series to fill gaps left by Russian assistance. Historically reliant on neighboring Russian and, to a lesser extent, Chinese arms, Central Asian countries are cautiously exploring diversification. Kazakhstan’s agreements with Turkish firms YDA and Asfar to expand its Caspian fleet,⁵⁰ and Kyrgyzstan’s October 2021 purchase of Turkish armored vehicles, exemplify this slow but steady shift.⁵¹ Turkey also pursued weapons sales to Tajikistan, including a July 2023 agreement offering to front $1.5 million of arms purchases⁵² and, according to Turkish media reports, drone sales.⁵³ However, Tajikistan’s procurement remains uncertain, even after its landmark February 2025 border agreement with Kyrgyzstan—a recipient of Turkish weapons and military aid. With Russia maintaining its sole regional military base there, and China having built an extensive security apparatus, including private contractors—and a “secret” base, according to The Telegraph (a British newspaper) but denied by China and Tajikistan—external pressures severely limit Tajikistan’s maneuvering space.⁵⁴ Considering little has been heard from either Tajikistan or Turkey since their July 2023 agreement, these and other factors may indicate that further cooperation has stalled.

Turkey’s military cooperation in Central Asia extends beyond arms sales. Uzbekistan signed agreements for military and technical cooperation in 2022 and intelligence sharing in 2024.⁵⁵ Kyrgyzstan, which first partnered militarily with Turkey in 1993, benefited from Turkish, Uzbek, and Russian support in defeating the IMU’s 1999 Batken incursion.⁵⁶ By 2024, Kyrgyzstan-Turkey relations elevated to a “comprehensive strategic partnership,” explicitly incorporating security issues.⁵⁷ All four Turkic Central Asian nations regularly join military exercises with Turkey and send personnel for training in Turkish military institutions.

The Indian Chief of Army Staff, General Bipin Rawat visits the Aselsan Engineering Defence Industrial Base in Kazakhstan, a joint project with Turkey. Handout from the Press Information Bureau of the Ministry of Defense of the Government of India.

Kazakhstan’s security relationship with Turkey is the deepest, particularly in defense industrial collaboration, beginning with the establishment of Kazakhstan Aselsan Engineering (KAE) in 2011, a joint venture between Kazakh Engineering JSC and Aselsan. Operational since 2013, KAE quickly expanded from electronics and optics to aircraft components and complete weapon systems refurbishments.⁵⁸ Importantly, KAE is increasingly focusing on producing more sophisticated technologies including circuit-boards and cryptographic communication systems.⁵⁹ Beyond KAE, Kazakhstan and Turkey reportedly signed agreements on broader defense-industry cooperation and intelligence sharing in 2020 and 2023.⁶⁰ In 2022, both countries agreed to jointly produce Turkey’s Anka unmanned aerial vehicle, with additional reports of potential collaboration with Turkish drone manufacturer Baykar.⁶¹ Similarly, in August 2024 Turkey and Kazakhstan drafted an agreement opening their airspace to each other’s military personnel and equipment, although the current status remains unclear.⁶²

Turkey’s NATO membership is a key consideration for its security engagement with Central Asia. Turkey has actively supported NATO’s Partnership for Peace program’s expansion to the region since the 2004 NATO Istanbul Summit,⁶³ which also appointed a Turkish official as NATO’s first special representative to the region.⁶⁴ Though NATO’s work in the region is collaborative and distributed among members, it is not uncommon to encounter Central Asians who perceive Turkey as a “bridge” to the Alliance. Many Central Asians “count on Turkey, as a member of NATO and the international order, to assist [Central Asian states] with sensitive international issues,” according to a former senior Uzbek foreign policy adviser. Still, Turkey does play a role in boosting NATO’s Central Asia presence through its sale of NATO-compliant arms as well as support for projects like Kazakhstan’s Military Institute of Foreign Languages. The institute has received funding from the United States and United Kingdom because of its perceived value to NATO relations.⁶⁵

The Russia question and limits to Turkish ambitions

Russia remains an unavoidable factor in Central Asia, deeply influential in almost every sector ranging from agriculture to defense, telecommunications to aid (despite low formal official development aid rankings, Russia often acts through intermediaries like the World Food Programme.)⁶⁶ Beyond economic and military might, Russians, along with many Central Asians, view the region as firmly within even the most conservative definitions of its sphere of influence, and essential to its interests.

So far, the Russian government’s official reaction to Turkey’s increasing regional presence appears largely muted; Turkey has historically balanced its approach to the region carefully, with consideration for Russia. Russian and Turkish officials in Central Asian countries reportedly maintain amicable relations and have cooperated previously. Yet Russia likely feels increasing discomfort with Turkey’s expanding security and political involvement—domains Russia guards zealously. Turkish firms are gaining market share in sectors prized by Russian companies such as defense, energy, and construction. In just the three months following December 2024, Turkish companies announced major infrastructure projects in areas historically dominated by Russia and China, including a 400 megawatt power plant in Kashkadarya, Uzbekistan;⁶⁷ a seaport in Kuryk, Kazakhstan;⁶⁸ and four power plants across Kyrgyzstan.⁶⁹

Russia’s policy toward Turkey in Central Asia remains complex. First, Russians generally do not categorize Turkey as a blatantly “Western” entity despite its NATO membership, reflecting the pragmatism that exists between the two countries and Turkey’s often complicated relationship with the West. Additionally, Russia’s regional strategy has suffered from complacency, assuming Central Asia’s permanent alignment despite significant advancements in Central Asia’s economic wealth and development, cultural and political trends favoring increased autonomy, and the entrance of other actors in the region. Only in recent years has Russia begun to refocus on the region, due to both economic necessity amid the war in Ukraine and a response to geopolitical changes in the region. Second, increasing levels of economic interdependence between Turkey and Russia, particularly after the latter’s 2022 full-scale invasion of Ukraine, complicates direct confrontation; as of August 2025, Turkey is now Russia’s largest purchaser of oil products and third-largest buyer of both crude oil and pipeline gas.⁷⁰ This economic interdependence helps ensure Russia and Turkey compartmentalize any issues to avoid broader disruptions; the two countries have sparred in Libya, the Caucasus, and elsewhere, with little impact on broader diplomatic and economic engagement. Third, while Turkey’s regional influence grows, it neither fully replaces nor directly threatens Russia, unlike a US presence would. Instead, Turkey merely provides a degree of relief to Russia’s dominance in security, intelligence, and energy, cautiously pushing boundaries without provoking extreme Russian reactions. Turks, Russians, and Central Asians recognize this dynamic, granting Turkey some protection; any severe Russian response would undermine Russia’s narrative as the region’s “benevolent protector.”

Nonetheless, there are signs that Turkey’s deepening security and economic ties may increasingly unsettle Russia. A leaked internal Russian document addressed to Russian Federation Prime Minister Mikhail Mishustin in April 2023 explicitly warned that Central Asian states sought integration “without Russia,” highlighting the Organization of Turkic States.⁷¹ The same document expressed anxiety over the region’s shifting worldview, including English replacing Russian as a second language. Shortly after, all OTS members except Kyrgyzstan adopted new Latin-script alphabets closely aligned with those of Azerbaijan and Turkey.⁷² In response, Russia initiated a campaign promoting Cyrillic script in Kyrgyzstan, including launching russian.kg, a website explicitly promoting Cyrillic and Russian use.⁷³ A September 2025 analysis done by renowned Kazakhstani foreign policy expert Eldaniz Gusseinov found that Russia is increasingly promoting a “Greater Altai narrative” in its outreach to the region as a cultural counterweight to OTS’ pan-Turkic underpinnings, and that “Russia is beginning to see OTS as a challenge to its presence in Central Asia.”⁷⁴ Though anecdotal and unquantifiable, many of the Uzbekistan experts interviewed for this paper noted a perceived uptick in “anti-Turkish” and “anti-pan-Turkic” sentiments in Russian-language news media over the past two years.

The drive to diversify relations intensified following Russia’s 2022 invasion of Ukraine. Symbolic incidents such as Tokayev’s last-minute decision to switch a speech to Kazakh to rebuke Putin’s claim that “Kazakhstan is a Russian speaking country,”⁷⁵ or Tajik President Emomali Rahmon’s emotional demand for “respect” from Russia,⁷⁶ though small were meaningful enough to garner millions of views. Such events do not imply sudden hostility between Russia and Central Asian states but illustrate a trend towards empowerment and regional autonomy.

Despite these subtle shifts, underestimating Russia’s profound influence remains unwise. Turkey, like all other external players, must tread carefully: The decision to expand its presence more aggressively than its current rate could lead to push back from not only Russia but also Central Asians. Beyond political leverage, and despite recent conversations raising a pan-Turkic or pan-Central Asian identity, the lingering cultural impact of nearly 150 years of Russian rule is impossible to ignore; as one Kyrgyzstani former cabinet minister mused when asked about relations with Turks: “I think in Russian.”⁷⁷

Spotlight on Turkmenistan

Special attention should be paid to Turkey’s uniquely strong relationship with Turkmenistan, a reclusive, neutral country that tightly controls its media, economy, and security apparatus. Most countries struggle to engage meaningfully with Turkmenistan despite its vast resources, including the world’s fifth-largest gas reserves, significant oil deposits, critical minerals, and strategic location along the Caspian Sea.⁷⁸ Turkey, however, enjoys exceptional access, rooted in its greater linguistic similarities than other Central Asian nations, prompting Turkey’s Ministry of Foreign Affairs to frequently describe relations as “one nation, two states.”⁷⁹

Energy and construction form the pragmatic foundation of their relationship, initially driven by Turkish businessmen in the 1990s who actively lobbied for deeper economic ties. Today, Turkish-led projects are substantial, including an active role in the construction of the new smart-city project, Arkadag,⁸⁰ and a major seaport in Turkmenbashi.⁸¹ Over 600 Turkish companies operate in Turkmenistan, with contractors undertaking $216 million in projects in 2024 and $50 billion since independence.⁸² A notable milestone occurred in February 2025, when the two countries agreed on their first gas swap via Iran. They exchanged a modest yet symbolic 1.3 bcm, representing progress toward linking their energy sectors. In March 2025, Turkey publicly invited Turkmenistan to “jointly develop its oil and gas deposits” as well as expand cooperation on electricity transfers, according to Hurriyet Daily News.⁸³

The growing economic partnership has expanded into media and security, positioning Turkey alongside a select group of states—including Russia, Azerbaijan, and China (notably, Turkmenistan supplies more than 28 percent of China’s gas imports).⁸⁴ Turkey has previously acted as a diplomatic bridge between Turkmenistan and the West, promoting broader regional engagement. Turkmenistan has indicated some receptiveness to the idea of joining OTS as a full member but progress remains slow.⁸⁵

Signs of Turkmenistan’s gradual opening have emerged recently, including the Caspian Sea-Black Sea transport corridor agreement with Romania, Georgia, and Azerbaijan,⁸⁶ and a free trade agreement with Uzbekistan.⁸⁷ In March 2025, Turkmenistan announced it was considering joining the Gas Exporting Countries Forum, another meaningful step.⁸⁸ However, optimism should be tempered, as prior hopeful developments have been undermined by Turkmenistan’s deep-rooted isolationism and stringent security priorities.

Turkmenistan’s potential role in the Middle Corridor

Meaningful engagement with Turkmenistan remains valuable to the West, as the country occupies a critical position between Russia and Iran and could significantly bolster Europe’s energy and mineral security. Turkmenistan’s complicated relationship with Russia, aggravated by Russia’s expanding interests in Central Asian gas markets⁸⁹ and China’s ongoing diversification away from Turkmen gas, underscore this opportunity.⁹⁰ Furthermore, Turkmenistan’s full participation in the Middle Corridor could notably improve the viability of the project. This would alleviate Uzbekistan’s and Kyrgyzstan’s reliance on Kazakh transit routes, previously a source of concern for Bishkek,⁹¹ and ease congestion in Kazakh ports such as Kuryk and Aktau, enhancing overall transportation efficiency. Despite major progress in the creation of key infrastructure—including port expansion projects in Kuryk, Poti, and Anaklia; Kazakhstan’s plans to purchase 446 new locomotives by 2028;⁹² and a 70 percent increase in Middle Corridor freight volume in 2024—significant challenges remain.⁹³ These include inefficient Caspian port operations, overloaded rail infrastructure in Georgia, outdated logistics software, and inconsistent customs standards. Transportation via the Middle Corridor remains roughly 150 percent more costly than via the Northern Corridor, according to multiple interviews with experts. Turkmenistan seems unusually eager to expand its outside connectivity through corridors beyond the Middle Corridor project, including exploring coordination with Afghanistan.⁹⁴

Interpretations for the American policy maker

Over two decades, Turkey has steadily grown into a major player in Central Asia across economic, security, and cultural spheres. Even in Tajikistan, the region’s sole non-Turkic state closely aligned with Russia and China, Turkey now ranks among the top five import and export partners, having accrued substantial economic and cultural presence.⁹⁵ Similarly, Turkey has gained exceptional access to isolated Turkmenistan despite the nation’s restrictive political environment.

Despite Turkey’s significant presence in the region, Russia continues to dominate security, telecommunications, and media, while China holds unmatched economic influence. While Turkish media frequently emphasizes shared ethnic ties as the foundation for Turkey-Central Asia relations, pragmatism likely remains the primary driver of warm relations, with linguistic and cultural commonalities supporting, though not forming, the basis-of deep ties. Yet as the Organization of Turkic States strengthens and cultural and economic exposures increase, ethnic bonds will likely genuinely strengthen over time.

Turkey’s influence in Central Asia faces some external constraints, particularly from Russia, China, and to a lesser extent, Iran, all holding significant leverage over Turkish and Central Asian affairs. By gradually expanding its presence, Turkey can maintain control over its regional narrative and avoid overly provoking nationalist or pro-Russian elements. Attempting a more aggressive strategy risks backlash, both internally within Central Asia and externally from Russia or China. Internally, Turkey’s constraints have somewhat eased as it shifts from foreign aid to energy and security issues, thereby reducing the direct financial burden. Despite this, Turkey’s potential to project power in the region also remains constrained by its increasing commitments to other regions, including Somalia, Libya, and Syria.

On the flip side, the array of international actors interested in transport connectivity across Central Asia may end up bolstering Turkey’s presence and goals in the region, including the EU and China, due to Turkey’s key geostrategic position along the Middle Corridor route. The EU, which has already begun investing billions of euros in Central Asia’s energy, mining, and transport sectors, finds common ground with Turkey on this issue, which has long sought to function as an energy hub for Europe.⁹⁶

All told, American policymakers should regard Turkey’s growing regional presence favorably, even amid broader disagreements between Washington and Ankara. Turkey has historically shown the ability to compartmentalize relations—collaborating and competing simultaneously with other states. Considering geographic distance, local attitudes, domestic politics, and budget constraints, US goals and expectations towards the region should be focused and pragmatic, a far cry from any dreams of hegemony.

US official policy objectives for Central Asia have not been publicly updated since 2019.⁹⁷ Based on interviews and existing public documents, this paper proposes defining America’s core objectives in Central Asia today as:

Securing European and US critical mineral and energy security.
Providing viable political and economic alternatives to China and Russia to bolster Central Asian autonomy.
Promoting regional stability.
Countering Islamic terrorism, especially as radicalized Central Asian fighters and groups have demonstrated their reach as far as Russia, Syria, and Afghanistan, while continuing to threaten the stability of the region.⁹⁸
Facilitating American business access to Central Asia’s growing markets.

Investing and engaging in Central Asia is in the United States’s interests, though this will inevitably remain severely limited by lack of political will and geographical difficulties.⁹⁹ Though there is no substitute for fully focused American economic and military might, these goals may be more achievable at minimized political and economic cost by supporting partner countries already committed to and invested in the region, including Turkey. There is already established business collaboration, with many American businesses opting to partner with companies from friendly nations in joint ventures or as intermediaries to navigate the complexities of the region. Most importantly, Turkey’s activities in the region largely align with US interests, whether by promoting autonomy from Russia and China or developing transport and energy infrastructure. Areas of Turkish policy that don’t align with US interests, such as the emphasis on Turkic heritage or cultural overtures, are largely benign to US goals. Major opportunities for increased coordination remain, bolstered by the Trump administration’s already-indicated interest in working with Turkey on other foreign policy areas such as Libya and Syria.¹⁰⁰ This paper recommends the following cost-effective policy actions:

Consider informal or technical engagement with the Organization of Turkic States, particularly to coordinate on transit and economic issues. Unlike the C5+1 format, OTS includes Azerbaijan and Turkey, both of which maintain deep and strategic ties to Central Asia and are essential players in projects like the Middle Corridor.¹⁰¹ Appointing a special envoy may be a solution that allows dialogue without full endorsement of OTS, akin to the US approach to the Organization of Islamic Cooperation (OIC). At the September 2025 OTS summit in Azerbaijan, the ensuing joint declaration also called for the establishment of an OTS+ framework to significantly expand cooperation with other states, though details remain to be revealed.
Create a regular multilateral dialogue platform involving major US-allied regional partners with strong existing ties to the region, especially Turkey, South Korea, and Japan, to coordinate Central Asian policy and facilitate greater dialogue. Partially inspired by the 2023 Camp David trilateral summit—which established annual trilateral dialogues, outlined common policy goals, and included a commitment to coordinate policy in the Indo-Pacific—this could further institutionalize policy coordination in Central Asia.¹⁰²
Contribute targeted technical expertise to partner-led aid programs, especially in agriculture, water management, and resource mapping—fields where US technology outperforms that of many regional donors. For example, American seed and soil management technologies demonstrated superior results in Kyrgyzstan during prior USAID programs compared to a similar Turkish program.¹⁰³ With direct US aid scaled back, supporting partner agricultural or environmental initiatives by contributing American tools or knowledge can yield significant development gains and enhance regional food and water security—at minimal cost and without expanding a direct US aid footprint.
Invest selectively in critical transport and energy infrastructure projects through minority stakes, with Turkish or other allied countries’ firms as primary operators. Though American companies have a long-established presence in Kazakhstan and in Uzbekistan to a lesser degree, elsewhere they often hesitate to lead due to regional complexities and geopolitical sensitivities. Indirect investment through trusted intermediaries, with consideration for political and environmental, social, and governance compliance, when necessary, could mitigate risk while advancing US objectives to link Europe and Central Asia economically.¹⁰⁴
Explore consolidating intelligence sharing, particularly regarding Afghanistan and Taliban threats, among NATO allies, particularly Turkey and the UK, with the intention of coordinating with Central Asian states. The Taliban are a source of significant unease to Central Asian states, particularly with their diversion of 20 percent to 30 percent of the Amu Darya River’s water, which poses a serious security threat to Uzbekistan, Turkmenistan, and Tajikistan.¹⁰⁵ Uzbekistan has made progress in overtures to resolve the issue in recent months, though major concerns remain. Leaked documents widely circulated on Russian and Central Asian social media platforms allege that the United States and the UK may already have intelligence-sharing agreements with Uzbekistan;¹⁰⁶ extending this partnership across the region, as is safe and feasible, would bolster security against Taliban-linked extremism such as the Islamic Movement of Uzbekistan.¹⁰⁷
Assist partner-led migrant labor exchange programs to reduce Central Asian dependence on Russian remittances,which form the supermajority of total remittance inflows in the region. Remittances are a major portion of the economies of Uzbekistan, Tajikistan, and Kyrgyzstan, representing 49 percent of Tajikistan’s gross domestic product in 2024, for example.¹⁰⁸ Uzbekistan already actively sends migrant workers to Turkey, South Korea, and several European countries through exchange programs. Expanding such programs with US diplomatic and modest financial support would further loosen Russia’s economic grip at minimal cost.
Leverage Turkey’s relationship with Turkmenistan to advance US relations with this strategically critical but isolated state. Turkish President Erdoğan’s close ties with the Turkmen father-son presidential leadership of Gurbanguly and Serdar Berdimuhamedov, combined with American private-sector interest in partnering with Turkish corporations already trusted in Turkmenistan, represent strategic opportunities for enhancing Western access.

Over the past twenty years, Turkey has managed to secure a significant foothold in Central Asia, presenting as both a pragmatically useful economic and security partner, while reinforcing its standing through common linguistic and cultural ties. The bonds between Turkey and the region appear to be growing in strength. Though pragmatism largely motivates high-level relations today, future generations will likely bear increasingly tight bonds that supersede only the pragmatic.

Though Turkey’s influence is still overshadowed by the titans of the neighborhood—Russia and China—it is nonetheless noteworthy. For the United States, Central Asia represents a region with great potential value, though the current political and geographic circumstances make major investment difficult. By critically assessing and coordinating with other partners that are far more established and dedicated to working in the region, the United States could see significant progress toward goals that match its foreign policy objectives.

About the author

Kiran Baez is a research assistant at the Atlantic Council’s Turkey program focusing on Central Asia and energy issues. Add him on LinkedIn and X.

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16 Kuandykov, Public Perception.

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26 The CSTO is a security organization involving Russia, Belarus, Kazakhstan, Armenia, Tajikistan, and Kyrgyzstan. See Alexander Libman, Igor Davidzon, and Rheea Saggar, “How to Intervene Symbolically: The CSTO in Kazakhstan,” Chatham House, June 27, 2023, https://www.chathamhouse.org/2023/06/how-intervene-symbolically-csto-kazakhstan.

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45 Balci and Liles, “Turkey’s Comeback to Central Asia.”

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72 Nagima Abuova, “Turkic States Revive Latin-Based Alphabet to Preserve Linguistic Heritage,” Astana Times, September 23, 2024, https://astanatimes.com/2024/09/turkic-states-revive-latin-based-alphabet-to-preserve-linguistic-heritage/.

73 “РУССКИЙ ЯЗЫК В КЫРГЫЗСТАНЕ (Russian Language in Kyrgyzstan),” accessed March 2025, https://www.russian.kg/ru.

74 Nightingale Intelligence, “Russia Attempts to Build Its Own Turkic Framework,” LinkedIn, September 28, 2025. https://www.linkedin.com/posts/nightingale-int_russia-attempts-to-build-its-own-turkic-framework-activity-7376897869380804609-MKnK?utm_source=social_share_send&utm_medium=member_desktop_web&rcm=ACoAACGqkNAB5clxQrJMXcVXofibGQG7sBDwDWw.

75 Leo Chiu, “Kazakh Leader Bewilders Russian Delegation with Language ‘Power Move,’ ” Kyiv Post, November 10, 2023, https://www.kyivpost.com/post/23920.

76 “Tajik President’s Demand for ‘Respect’ from Putin Viewed Millions of Times on YouTube,” Radio Free Liberty, October 15, 2022, https://www.rferl.org/a/tajikistan-russia-rahmon-youtube-respect/32084773.html.

77 Author’s interview with former Kyrgyzstani cabinet minister, Bishkek, August 2024.

78 “Turkmenistan Country Commercial Guide,” International Trade Administration, November 30, 2023, https://www.trade.gov/country-commercial-guides/turkmenistan-oil-gas.

79 “Relations between Turkiye and Turkmenistan,” Turkish Ministry of Foreign Affairs, accessed March 2025, https://www.mfa.gov.tr/relations-between-turkiye-and-turkmenistan.en.mfa.

80 2024: Turkish Companies Receive Projects Worth $216 Million in Turkmenistan,” Business Turkmenistan, February 17, 2025, https://www.business.com.tm/post/13112/2024-turkish-companies-receive-projects-worth-216-million-in-turkmenistan.

81 “Turkish Firm Wins Prestigious Engineering Award with Caspian Port Project in Turkmenistan,” Daily Sabah, October 9, 2018, https://www.dailysabah.com/economy/2018/10/09/turkish-firm-wins-prestigious-engineering-award-with-caspian-port-project-in-turkmenistan.

82 “2024: Turkish Companies,” Business Turkmenistan.

83 “Turkiye Seeks New Energy Partnership with Turkmenistan,” Hurriyet Daily News, March 20, 2025, https://www.hurriyetdailynews.com/turkiye-seeks-new-energy-partnerships-with-turkmenistan-207127.

84 Danila Bochkarev, Turkmenistan: The Gas Monetization Challenge, Oxford Institute for Energy Studies, September 2024, https://www.oxfordenergy.org/wpcms/wp-content/uploads/2024/09/Turkmenistan-The-gas-monetization-challenge.pdf.

85 Haji Jadov, “Turkmenistan May Become Full Member of OTS in 2024,” Azeri Press Agency, March 4, 2024, https://en.apa.az/cis-countries/turkmenistan-may-become-a-full-member-of-ots-in-2024-429901.

86 Paul Goble, “Turkmenistan at New Crossroads of North-South and East-West Corridors,” Eurasia Daily Monitor 21, no. 111 (2024), https://jamestown.org/program/turkmenistan-at-new-crossroads-of-north-south-and-east-west-corridors/.

87 Kamol Ismailov, “Uzbekistan, Turkmenistan Roll Out Free Trade Regime,” Trend News Agency, March 7, 2025, https://en.trend.az/casia/uzbekistan/4014990.html.

88 Central Asia Review (@cenasreview), “Туркменистан рассматривает возможность присоединения к Форуму стран-экспортеров газа, что может способствовать укреплению позиций страны на мировом энергетическом рынке (Turkmenistan is considering the possibility of joining the Gas Exporting Countries Forum, which could help strengthen the country’s position in the global energy market),” Telegram, March 21, 2025,https://t.me/cenasreview/8146.

89 Bruce Pannier, “Russia Is Pushing Turkmenistan Out of the Natural Gas Market,” bne IntelliNews, May 24, 2024, https://www.intellinews.com/pannier-russia-is-pushing-turkmenistan-out-of-the-natural-gas-market-326833/.

90 Bochkarev, “Turkmenistan: The Gas Monetization Challenge.”

91 “Kyrgyzstan Complains of Kazakhstan Restricting Border Trade,” Reuters, October 18, 2017, https://www.reuters.com/article/markets/kyrgyzstan-complains-of-kazakhstan-restricting-border-trade-idUSL8N1MT5XP/.

92 Logistan (@logistan), “Казахстан намерен купить 446 локомотивов до 2028 года [Kazakhstan intends to purchase 446 locomotives by 2028],” March 19, 2025, https://t.me/logistan/8312.

93 Elvira Mami, “The Middle Corridor: Trends and Opportunities,” ODI Global, January 22, 2024, https://odi.org/en/insights/the-middle-corridor-trends-and-opportunities/.

94 Dana Omirgazy, “Kazakhstan, Turkmenistan to Build Trans-Afghan Corridor,” Astana Times, October 11, 2024, https://astanatimes.com/2024/10/kazakhstan-turkmenistan-to-build-trans-afghan-corridor/.

95 “Tajikistan Trade,” World Integrated Trade Solution, accessed March 2025, https://wits.worldbank.org/countrysnapshot/en/tjk.

96 “Joint Press Release following the First EU-Central Asia Summit,” European Council, April 4, 2025, https://www.consilium.europa.eu/en/press/press-releases/2025/04/04/joint-press-release-following-the-first-eu-central-asia-summit/.

97 “United States Strategy for Central Asia 2019-2025,” US Department of State, February 2020, https://tj.usembassy.gov/wp-content/uploads/sites/143/United-States-Strategy-for-Central-Asia-2019-2025-1.pdf.

98 Bruce Pannier, “Countering a ‘Great Jihad’ in Central Asia,” Foreign Policy Research Institute, November 19, 2024, https://www.fpri.org/article/2024/11/countering-a-great-jihad-in-central-asia/.

99 Haley Nelson and Natalia Storz, “Central Asia’s Geography Inhibits a Mineral Partnership,” EnergySource, Atlantic Council blog, April 15, 2025, https://www.atlanticcouncil.org/blogs/energysource/central-asias-geography-inhibits-a-us-critical-minerals-partnership/.

100 Joint Statement on the U.S.-Türkiye Syria Working Group,” US Department of State, May 20, 2025, https://www.state.gov/releases/office-of-the-spokesperson/2025/05/joint-statement-on-the-u-s-turkiye-syria-working-group.

101 Nicholas Castillo, “C5+1 in the New Year,” Caspian Policy Center, January 1, 2025, https://caspianpolicy.org/research/security/c51-in-the-new-year.

102 “The Spirit of Camp David: Joint Statement of Japan, the Republic of Korea, and the United States,” US Mission to Korea, August 19, 2023, https://kr.usembassy.gov/081923-the-spirit-of-camp-david-joint-statement-of-japan-the-republic-of-korea-and-the-united-states/.

103 Author’s interview with Tilek Toktogaziev, former minister of agriculture, Kyrgyz Republic, September 2024.

104 Aibarshyn Akhmetkali, “Sustainability Reporting Vital for Kazakh Companies’ ESG Compliance, Says Regional Expert,” Astana Times, April 5, 2024, https://astanatimes.com/2024/04/sustainability-reporting-vital-for-kazakh-companies-esg-compliance-says-regional-expert/.

105 Bruce Pannier, “New Canal Threatens the Peace between the Taliban and Central Asia,” Foreign Policy Research Institute, July 3, 2023, https://www.fpri.org/article/2023/07/new-canal-threatens-the-peace-between-the-taliban-and-central-asia/.

106 “Секретные документы, касающиеся тесного сотрудничества США и Великобритании с Кыргызстаном и Узбекистаном (Secret Documents Concerning Close Cooperation between the US and UK with Kyrgyzstan and Uzbekistan,” original source unknown for this widely circulated item, accessed August 2024, https://telegra.ph/Sekretnye-dokumenty-kasayushchiesya-tesnogo-sotrudnichestva-SSHA-i-Velikobritanii-s-Kyrgyzstanom-i-Uzbekistanom-04-02.

107 Author’s virtual interview with Ajmal Sohail, Founder, A.S. Geopolitics, October 15, 2024.

108 “Tajikistan: Country Overview,” World Bank, accessed May 2025, https://www.worldbank.org/en/country/tajikistan/overview.

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Budapest summit postponed as Putin rejects Trump’s ceasefire proposal

Peter Dickinson — Tue, 21 Oct 2025 21:27:35 +0000

Just days after US President Donald Trump announced plans for a new peace summit with his Russian counterpart Vladimir Putin, their proposed Budapest meeting has been thrown into doubt. Trump first shared news of the summit late last week following a lengthy and “very productive” telephone call with Putin. Speaking on Tuesday, however, White House officials said there were now “no plans” for the two leaders to meet in the “immediate future.”

This sudden change in tone came after US Secretary of State Marco Rubio and Russian Foreign Minister Sergei Lavrov reportedly failed to make any meaningful progress during a preliminary call ahead of planned talks in Budapest. Lavrov later confirmed that Putin had dismissed Trump’s ceasefire proposal and remained fully committed to achieving the maximalist goals of his invasion. “A ceasefire now would mean only one thing: A large part of Ukraine would remain under Nazi rule,” Russia’s top diplomat stated.

Lavrov’s latest comments serve as a timely reminder that Moscow’s objectives in Ukraine go far beyond limited territorial concessions and extend to regime change in Kyiv. His insistence on branding the Ukrainian government as “Nazis” is nothing new, of course, but it does underline Russia’s rejection of peaceful coexistence with an independent Ukraine, while also highlighting the scale of the current disconnect between Moscow and Washington. While Trump attempts to broker a geopolitical real estate deal, Putin is seeking to secure his place in history by extinguishing Ukrainian statehood and reviving the Russian Empire.

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It is not surprising that some within the Trump administration still struggle to grasp the true motives behind Russia’s attack on Ukraine. After all, the current invasion has been accompanied by an unprecedented deluge of disinformation designed to distract international attention from Putin’s imperial ambitions. Since 2022, the Kremlin has sought to pin the blame for the invasion on everything from NATO enlargement to phantom fascists. Moscow’s many excuses have undeniably succeeded in clouding perceptions of the war, but none of the justifications presented by the Kremlin can stand up to serious scrutiny.

Putin has repeatedly framed the war as a response to decades of NATO expansion that has brought the alliance ever closer to Russia’s borders. His own actions, however, have largely debunked this argument. When neighboring Finland responded to the invasion of Ukraine in spring 2022 by announcing plans to join NATO, Putin did nothing and said he had “no problem” with Helsinki’s decision. He has since gone even further and withdrawn most Russian troops from the frontier with Finland. Given the fact that Finnish accession virtually doubled Russia’s shared border with NATO, this nonchalance is revealing. Clearly, Putin knows very well that NATO poses no threat to Russia itself. His real problem is with Ukrainian independence not NATO expansion.

The Kremlin’s claims to be waging a crusade against Ukrainian Nazis are even more far-fetched. Russian attempts to equate Ukrainian national identity with Nazism date all the way back to World War II and have been enthusiastically revived by the Putin regime. This approach shamelessly exploits the Russian public’s reverence for the Soviet role in the defeat of Hitler, while conveniently ignoring the political realities in today’s Ukraine.

Ever since Ukraine regained independence in 1991, Far Right political parties have been relegated to the margins of the country’s fledgling democracy. During Ukraine’s last prewar parliamentary election in 2019, most nationalist parties formed a single coalition in a bid to overcome years of ballot box disappointment. They failed miserably, receiving just 2.16 percent of the vote.

Nothing has exposed the absurdity of Kremlin attempts to portray Ukrainians as Nazis more than the election of Jewish candidate Volodymyr Zelenskyy as the country’s president. Ever since Zelenskyy won the presidency by a landslide in 2019, Putin and other Kremlin officials have engaged in deeply unsavory mental gymnastics as they have struggled to explain how a supposedly Nazi nation could overwhelmingly vote for a Jewish leader. The most notorious example of this disgraceful trend came in spring 2022, when Russian Foreign Minister Lavrov declared during an Italian television interview that “Hitler also had Jewish blood.”

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Putin has typically been far franker about his war aims when speaking to domestic Russian audiences. For years, he has argued that Ukrainians are in fact Russians (“one people”) who are occupying historically Russian lands and have no right to a separate nation of their own. On the eve of the full-scale invasion, he began referring to Ukraine as an artificial “anti-Russia,” and took the highly unusual step of publishing a rambling 5000-word history essay that read like a declaration of war against Ukrainian statehood. Following the outbreak of hostilities, he began proclaiming the “return” of Russian lands and comparing his invasion to the imperial conquests of eighteenth century Russian Czar Peter the Great.

The criminal actions of the Russian army in Ukraine have been profoundly shaped by Putin’s bitter opposition to Ukrainian national identity. In areas under Kremlin control, anyone viewed as a Ukrainian patriot or deemed a potential threat to the occupation authorities is likely to disappear into a vast network of camps and prisons. A United Nations probe has ruled that these mass detentions represent a crime against humanity.

Huge numbers have also been deported. This includes tens of thousands of children, who are subjected to ideological indoctrination to rob them of their Ukrainian heritage and impose a Russian identity. Those who remain in occupied Ukraine are being forced to accept Russian citizenship amid a brutal campaign to systematically erase all traces of Ukrainian history, culture, language, and identity. This genocidal conduct makes a complete mockery of attempts to portray the invasion of Ukraine as a mere border dispute that can be settled via limited land swaps.

Putin’s Ukraine obsession is rooted in his experience as an eye witness to the collapse of the Soviet Empire while serving as a KGB officer in East Germany, and reflects his fears that the further consolidation of a democratic and European Ukraine could act as a catalyst for the next stage in Russia’s imperial retreat. Beginning with the 2004 Orange Revolution, his determination to force Ukraine back into the Kremlin orbit has come to dominate Russian foreign policy and has slowly but steadily compromised Moscow’s relationship with the wider Western world. Putin has now bet everything on the reconquest of Ukraine and knows that his entire reign will be judged by the outcome of the current war.

If Trump wishes to end the bloodshed in Ukraine and secure his precious Nobel Peace Prize, he must first recognize that Putin is playing for the highest possible stakes on the stage of history and will never compromise unless forced to do so. Indeed, he dare not back down. At this point, anything less than the destruction of Ukraine as a state and as a nation would be regarded in Moscow as a major defeat that would plunge the Kremlin into crisis.

Putin will doubtless continue to profess his desire for peace while engaging in stalling tactics and playing for time. He will string Trump along with yet more seductive phone calls and headline-grabbing summits that flatter the US leader’s ego, but he will almost certainly not enter into genuine peace negotiations until the alternative is defeat in Ukraine and disaster for Russia itself. The sooner Trump accepts this reality, the sooner we can move beyond the current phony peace process and begin the hard work of securing a sustainable settlement through the long overdue application of Western strength.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

Vladimir Putin’s war machine may finally be running out of fuel

Vladyslav Davydov — Tue, 21 Oct 2025 20:46:18 +0000

As reports of cracks in Russia’s wartime economy continue to mount, Ukrainian President Volodymyr Zelenskyy is now predicting that the Kremlin will face an unprecedented budget deficit of around $100 billion in 2026. The Ukrainian leader is far from alone in forecasting more economic pain in the pipeline for Russian dictator Vladimir Putin. US President Donald Trump has recent stated that the Russian economy is “going to collapse” unless Putin ends the invasion of Ukraine.

This is not the first time since the start of the full-scale invasion that Russia has faced major budgetary strains. In 2022, the Kremlin’s urgent need to cover rising military expenditures forced it to resort to improvised measures such as windfall taxes on the energy and banking sectors. A surge in commodity prices then helped cover Russia’s ballooning defense budget, while mobilization and additional recruitment in 2023 and 2024 were financed mainly through municipal and regional budgets, along with minor tax hikes.

For much of the past three and a half years, international attention has focused on Russia’s apparent success in overcoming the impact of sanctions, along with the Kremlin’s ability to maintain modest GDP growth while transitioning to wartime conditions. However, the economic strain of the ongoing invasion is now becoming increasingly hard to disguise.

Russia’s deepening economic difficulties have been exacerbated by a highly effective Ukrainian campaign of long-range air strikes targeting the oil and gas industry that fuels Putin’s war machine. Since August 2025, Ukraine has launched a large-scale air offensive against oil refineries, gas processing plants, fuel depots, pipelines, logistics hubs, and export terminals across the Russian Federation. This has contributed to a sharp drop in Russian energy export revenues and led to spikes in fuel prices for domestic consumers. In recent months, fuel shortages have been reported in regions throughout Russia, with car owners forced to queue for hours in search of limited supplies.

The current fuel crisis in Russia is unlikely to be resolved soon. In a recent assessment, the Paris-based International Energy Agency stated that the impact from Ukrainian drone strikes is expected to suppress refinery processing rates for Russia’s economically crucial oil industry until at least mid-2026. Ukrainian strikes are also continuing to gain pace, with Kyiv in the process of developing a new generation of domestically produced missiles that should enable a further escalation in the bombing campaign.

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To cover the growing gaps in the Russian budget and continue funding the war, the Kremlin plans to hike the country’s VAT rate from 20 to 22 percent. Tax increases are also expected to impact entrepreneurs, as the threshold for Russia’s simplified system with lower rates is set to be reduced fourfold. Critics have characterized this strategy as redirecting money away from ordinary Russian citizens and private businesses in order to finance the invasion of Ukraine.

Russia’s deteriorating economic situation places the Kremlin in a difficult position. On the one hand, a combination of sustained Western support for Ukraine and funding issues in Moscow mean that the Russian military could soon face increasing difficulties on the battlefield. On the other hand, the longer the fighting drags on, the more Russia’s economy is likely to suffer. Meanwhile, further sanctions measures and Ukrainian strikes on Russia’s energy industry are creating new pressure points that risk fueling domestic discontent inside Russia.

With relatively little movement along the military front lines in Ukraine over the past two years, the economic front of the war may ultimately prove decisive. “Putin will only stop this war when he thinks he can’t win, and for him to come to that conclusion, there needs to be more pressure on the Russian economy and more help for the Ukrainians,” commented Polish Foreign Minister Radosław Sikorski in September. “The war will likely end the way World War I ended. One side or another will run out of resources to carry on.”

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The objective in Western capitals must now be to make sure Russia runs out of resources before Ukraine. This should not be beyond the realms of possibility, given the vastly superior resources of Ukraine’s allies.

Russia’s current goal is to reduce its dependence on oil and gas. The planned Russian budget for 2026 is based on a lower oil price and aims to rely more on domestic taxes instead. Over time, this approach could make Russian state finances more resilient by cutting the share of oil and gas revenues from the current level of around 40 percent to about half that figure. But if Western countries tighten sanctions at the right moment, this plan could backfire, triggering runaway inflation and a further slowdown in Russian economic activity.

There are currently encouraging signs of Western readiness to increasingly target Putin’s war economy. Trump’s efforts to impose tariffs on countries that buy Russian oil have already made some nervous about trading with Moscow. The EU and UK have also stepped up sanctions, including blacklisting more ships from Russia’s shadow fleet. These measures are having an impact. For example, China’s Qingdao Port recently introduced technical restrictions on tankers that will effectively ban shadow fleet vessels, a move that underscores growing caution toward doing business with the Kremlin.

Ukraine’s deep strikes have exposed Putin’s Achilles heel and have helped demonstrate that the Russian economy is far more fragile than many in Moscow would like us to believe. Kyiv’s Western partners should now exploit their economic leverage over Russia in order to increase the pressure on Putin and convince the Kremlin that continuing the war could lead to economic ruin.

Vladyslav Davydov is an advisor to Ukraine’s First Deputy Minister for Development of Communities and Territories.

#AtlanticDebrief – Why is health important to global economic resilience? | A debrief with Michael Oberreiter

lignac — Tue, 21 Oct 2025 13:41:15 +0000

IN THIS EPISODE

Finance ministers and central bank governors from around the globe descended on Washington, DC for the World Bank/IMF 2025 Annual meetings last week. This year’s Annual meetings touched upon everything from debt and development to trade, monetary policy, artificial intelligence, and geopolitical risk. What was markedly missing from many of the discussions was the importance of health and innovation, which promises both economic and societal benefits.

In this episode of the #AtlanticDebrief, Jörn Fleck sits down with Michael Oberreiter, Head of External Affairs International at Roche, to discuss why heath should be part of the broader global economic agenda.

This #AtlanticDebrief is supported by Roche.

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Russian strikes on Ukraine’s energy infrastructure are a European problem

Aura Sabadus — Tue, 14 Oct 2025 11:47:09 +0000

Winter is not yet here but Russia has already intensified missile and drone strikes on Ukraine’s civilian energy installations. A series of powerful bombardments in the first ten days of October hit gas production in eastern Ukraine and left large parts of Kyiv and neighboring regions without electricity and water.

This is nothing new, of course. Since the start of the full-scale invasion, Russia has unleashed thousands of attacks on power lines, substations, pipelines, storage facilities, and processing plants as the Kremlin attempts to plunge Ukraine into darkness and cow the country into submission.

Russian attacks are now being conducted on an unprecedented scale. Targets are pounded by dozens of drones in one go, overwhelming Ukraine’s anti-missile systems. For example, in the early hours of October 9, Russia launched approximately 450 drones and 30 missiles at energy infrastructure, dwarfing the scale of attacks in previous years.

The coming winter is shaping up to be the harshest of the war for Ukraine’s civilian population. Kyiv Mayor Vitali Klitschko described the recent attack on the city’s electricity infrastructure as one of the most devastating since the start of Russia’s full-scale invasion. Meanwhile, officials at Ukraine’s state-owned energy giant Naftogaz say the latest Russian strikes have disabled 60 percent of the country’s gas production.

Ukraine has repeatedly demonstrated remarkable resilience, including in recent days as emergency crews worked to restore electricity to millions of people within hours of Russian strikes. Nevertheless, with the situation set to become more critical in the weeks and months to come, Ukraine’s allies need to consider decisive action.

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Russia’s strikes on Ukrainian energy infrastructure are no longer just a Ukrainian problem. Moscow’s bombing campaign will become a wider European issue unless more support is offered to Kyiv. The threat to European energy markets has been increasingly apparent throughout the current year. A number of Russian attacks on Ukrainian gas production assets in February 2025 led to severe imbalances, with a knock-on impact on most central and eastern European countries.

Between February and September, Ukraine bought close to five billion cubic meters of gas from European markets to plug the gap and prepare for winter, lifting regional demand and prices. If Russia continues its attacks this winter, the impact on Ukraine and the wider region promises to be even more dramatic. To prevent a regional deficit, all neighboring countries should therefore consider lifting existing restrictions on exports to Ukraine.

Europe has options to improve the energy outlook for Ukraine, but this will require quick political decisions. Global supplies of liquefied natural gas are set to rise in the coming months thanks to a surge in production, primarily in the US. While most western European countries will benefit from these additional imports because they have access to sea terminals and functional markets, consumers further to the east are less privileged as most are landlocked or have regional transmission capacity that is either congested or too expensive to use.

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Restrictions on energy logistics networks are having a direct impact on Ukraine. Despite sharing borders with four EU countries, Kyiv has been relying mostly on Poland and Hungary to secure imports and offset the domestic deficit caused by Russian attacks. Although Slovakia could offer ample transmission capacity, most of which is now idle because the country no longer transits Russian gas, its transmission tariffs are prohibitively expensive, limiting Ukraine’s ability to import gas from western Europe.

To compound matters, tariffs could increase by a further 70 percent in January 2026 if a planned hike is approved before the end of the year. Meanwhile, neighboring Romania has no less than four border interconnectors with Ukraine. However, its gas grid operator, Transgaz, allows gas to be shipped only on one of these at less than full capacity.

Romania has significant gas production but currently bans exports to Ukraine, quoting technical differences in gas quality in the two countries. Transgaz also charges some of the most expensive transmission tariffs in the region, which means that even countries which would like to ship gas to Ukraine via Romania may be discouraged from doing so.

Keeping tariffs high or blocking infrastructure is not only bad news for Ukraine. It also poses risks to the entire region, including consumers in Romania and Slovakia, because any congestion creates artificial deficits which lead to higher prices. EU and US policymakers understand the extent of the problem and privately admit that even their own interests may be impacted. For example, blocked capacity could also limit the ability of US companies to sell LNG to clients across central and eastern Europe.

Discussions are ongoing but the clock is ticking. As winter approaches, it is now more pressing than ever for Brussels and Washington to convince countries such as Slovakia and Romania to cooperate.

In an ideal scenario, Western allies would consider radical measures such as establishing a no-fly zone over parts of Ukraine with NATO aircraft patrolling its skies and protecting its people and civilian infrastructure. However, as NATO members remain deeply reluctant to risk a direct clash with the Kremlin, the next best option is to persuade Ukraine’s neighbors to put narrow national interests aside and take concrete steps to support Kyiv.

At the same time, it is difficult to believe that Putin is in a position to dramatically expand the current war. The Kremlin dictator has committed the vast majority of Russia’s available military potential to the invasion of Ukraine, leaving him too overstretched to intervene elsewhere on behalf of Russian allies in Armenia, Syria, and Iran. A Russian attack on NATO therefore looks unlikely, at least for now. Instead, the recent surge in Russian hybrid warfare activities is primarily an attempt to intimidate Europe and deter further support for Ukraine.

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Putin has long been recognized for his skill in the dark arts of international intimidation. This reputation has been significantly enhanced by the success of his scare tactics during the full-scale invasion of Ukraine. Indeed, while Putin’s armies have struggled to live up to expectations on the battlefield, his ability to intimidate his Western adversaries has been arguably the Russian leader’s single greatest achievement of the entire war.

Since the initial hours of the invasion, Putin has used a combination of thinly-veiled threats and nuclear saber-rattling to browbeat the West and isolate Ukraine. Like a geopolitical gangster, he has repeatedly intimidated Europeans with the prospect of shattering their peaceful existence if they dare to interfere in his criminal affairs. While he has typically steered clear of direct ultimatums, the underlying message behind Putin’s many menacing statements has been unmistakable: “Nice countries you have there. It would be a shame if something happened to them.”

This strategy has proved remarkably effective. While Western governments have condemned Russia’s “irresponsible” use of nuclear rhetoric and have publicly insisted that they will not be bullied by the Kremlin, there can be no serious debate that Putin’s threats have had the desired effect. His intimidation tactics have been fundamental in shaping the overly cautious international response to Russia’s invasion, which has been consistently characterized by an excessive emphasis on avoiding escalation.

The Kremlin dictator is now looking to employ the same approach as he seeks to exploit Europe’s growing sense of insecurity. Putin is well aware that European leaders have been unnerved by US President Donald Trump’s mixed messaging on NATO and his plans to reduce America’s involvement in the defense of Europe. For Moscow, this presents an inviting opportunity. By engaging in increasingly open acts of aggression across Europe, Putin is sending a signal to European capitals that they are all alone against a resurgent Russia and can no longer count on the reassuring presence of the United States.

Earlier this week, former Russian President Dmitry Medvedev provided the most explicit indication yet that the recent spike in Russian gray zone operations is aimed at intimidating Europeans. While refusing to accept responsibility for the sharp rise in disruptive drone activity, Medvedev noted with satisfaction that the “drone epidemic” was causing widespread panic and could persuade Europeans to turn away from Ukraine. “The main thing is for narrow-minded Europeans to experience the dangers of war for themselves. To tremble like dumb animals in a herd being driven to the slaughter. To soil themselves with fear, anticipating their imminent and painful end,” he commented in typically understated fashion.

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Putin is clearly hoping his drone diplomacy will spread a sense of alarm across Europe and encourage the continent’s leaders to abandon Ukraine. Desired initial outcomes include a reduction in European military aid for Kyiv and the redirection of existing resources away from Ukraine in order to bolster defenses closer to home. By exposing Europe’s vulnerability to Russian attack, Moscow may also be able to undermine the prospects of a unified European defense policy and strengthen support for Kremlin-friendly political parties advocating appeasement toward Russia.

This strategy is not without risk, of course. Some in Europe, particularly those with firsthand experience of Russian imperialism, are pushing hard for comprehensive countermeasures to Putin’s recent provocations that will underline the continent’s commitment to defending itself. Many remain unconvinced that Europe will rise to the challenge, however. The Kremlin certainly appears confident that the current rhetoric in European capitals will ultimately result in little concrete action.

This apparent lack of concern in Moscow should come as no surprise. After all, Putin has been betting on Western weakness for over two decades. Ever since he first embarked on an expansionist foreign policy with the 2008 invasion of Georgia, Putin has been counting on the democratic world’s deep reluctance to risk a direct military confrontation with the Kremlin. So far, his low opinion of the West has proved more than justified.

Putin’s invasion has not gone according to plan but he still firmly believes he can win the war by outlasting the West and overwhelming Ukraine. He has recently been encouraged by Trump’s efforts to downgrade US involvement, and now views Europe as the last remaining obstacle to Russian victory. It is therefore safe to assume that the Kremlin’s campaign of gray zone aggression will continue to gain momentum as Putin seeks to cow Europe and isolate Kyiv. The Russian leader thinks his enemies are weak and can be easily intimidated. Until he is proved wrong, the cost of stopping him will only rise.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

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Ukraine’s rapid rise to drone superpower status confirms the old adage that necessity is the mother of invention. When Putin first launched the full-scale invasion of Ukraine in February 2022, it was clear that the Ukrainian military could not realistically hope to compete with Russia’s often overwhelming advantages in terms of manpower and conventional firepower. Instead, Kyiv would have to rely on a combination of raw courage and innovative technological solutions.

From the early stages of the war, Ukraine began pioneering the large-scale deployment of drones in combat roles. By 2023, this was enabling Ukrainian commanders to compensate for artillery shell shortages and blunt Russian advances. This emphasis on relatively cheap and highly effective drones has transformed the battlefield and created a kill zone along the front lines that Ukrainians have dubbed the “Drone Wall.”

With drones now ubiquitous above the battlefield, any soldier or vehicle that breaks cover in a zone stretching for many kilometers on either side of the zero line risks becoming an instant target. This has made it extremely challenging to concentrate large quantities of troops and armor, which helps explain the lack of major front line breakthroughs over the past three years.

Ukraine has also employed drone technologies to great effect far beyond the battlefield. Kyiv’s innovative use of marine drones has turned the tide in the Battle of the Black Sea, breaking the Russian blockade of Ukraine’s southern coastline and forcing Putin to withdraw the bulk of his warships from occupied Crimea to the relative safety of Russian ports. More recently, Ukrainian marine drones have been modified to carry anti-aircraft missiles and have reportedly shot down Russian helicopters over the Black Sea. This unprecedented success has revolutionized naval warfare and led to growing global interest in Ukraine’s domestically developed marine drones.

Kyiv has dramatically expanded its long-range drone fleet in recent years as part of a strategy to bring Putin’s invasion home to Russia. As a result, Ukraine has been able to mount a highly effective bombing campaign since August 2025 targeting oil refineries, logistics hubs, and military industrial sites deep inside the Russian Federation. This has led to a fuel crisis across Russia, with some regions forced to introduce gasoline rationing amid supply shortages and record price hikes. Ukraine’s long-range strikes have helped to reshape perceptions of the war and have demonstrated how Kyiv’s technological edge can offset its material disadvantages.

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Former Ukrainian Commander in Chief Valerii Zaluzhnyi was one of the architects of Ukraine’s drone warfare doctrine until being relieved of his position in early 2024. In a recent commentary, he argued that innovation must remain the foundation of a sustainable Ukrainian resistance strategy against Russia. Zaluzhnyi stressed that Ukraine’s embrace of drone technologies has helped offset the imbalance between the two countries while inflicting disproportionate costs on the Kremlin. “Ukraine must compensate for its relative lack of resources by constantly introducing military innovations,” he commented.

Ukraine and Russia now find themselves locked in a relentless race to innovate, with the window between the appearance of new weapons systems and the development of effective countermeasures now sometimes reduced to a matter of weeks. The intensity of this competition has turbo-charged Ukraine’s domestic drone industry and propelled it far ahead of its Western counterparts.

If NATO members wish to close this gap, they must lean heavily on the technical and strategic lessons learned by the Ukrainian military over the past three and half years of full-scale drone warfare. Training initiatives are already underway, with President Zelenskyy expressing his readiness to share Ukraine’s experience with more of the country’s NATO partners.

A growing number of countries are also looking to establish joint drone production in order to benefit from Ukrainian defense tech know-how. In late September, Britain announced that it would soon launch the mass production of interceptor drones developed in collaboration with Ukraine. Romania has also recently unveiled ambitious plans to manufacture drones in partnership with Ukraine for domestic use and for potential export to NATO allies. Meanwhile, a Ukrainian delegation is reportedly in the United States this week to negotiate a landmark deal with the Trump administration that would see Kyiv sharing battle-tested drone technology with the US.

The Russian invasion of Ukraine is the world’s first fully fledged drone war and represents a watershed moment in military history. With drones now set to play a dominant role in the wars of the future, Ukraine’s unique experience in this technologically advanced form of warfare makes the country a key partner for NATO and an indispensable ally in the defense of Europe.

David Kirichenko is an associate research fellow at the Henry Jackson Society.

The results speak for themselves. Ukrainian drones have excelled along the front lines of the conflict and have allowed Kyiv to turn the tide in the Battle of the Black Sea. Far beyond Ukraine’s borders, the country’s growing fleet of bomber drones now routinely strike targets deep inside the Russian Federation.

Many partner countries are understandably eager to incorporate Ukrainian drone technologies into their own defense doctrines. Britain recently confirmed that it will begin mass producing drones developed in collaboration with Ukraine as part of efforts to strengthen NATO’s eastern flank against the threat of Russian incursions. A Ukrainian delegation reportedly set off for the United States in late September to begin discussions on a potentially major drone production cooperation agreement.

Ukrainian President Volodymyr Zelenskyy is well aware of his country’s rising military profile and sees the current mission to Denmark as a potential model for a more comprehensive approach to Ukrainian drone warfare training initiatives with other European countries. “Our experience, our specialists, and our technologies can become a key element in Europe’s future Drone Wall initiative,” he commented on September 30.

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Ukraine’s burgeoning reputation as a key player in the field of drone warfare reflects the dramatic shifts currently taking place in Europe’s security architecture. Until quite recently, Ukraine was treated as a military minnow struggling to adopt NATO standards. Strikingly, it is now NATO that is seeking to adopt Ukrainian standards.

The emergence of Ukraine as a drone superpower is only one aspect of the country’s remarkable recent transformation into a major military force. The Ukrainian army is also at the cutting edge of innovation in defense tech sectors including electronic warfare, robotic systems, and cyber security. It came as no surprise that the recent Defense Tech Valley industry showcase event in western Ukraine attracted at least 5000 participants from over 50 countries, with Western companies pledging more than $100 million in investments.

The technological progress made by the Ukrainian Armed Forces since 2022 is certainly eye-catching, but the country’s human capital remains its greatest asset. Today’s Ukraine boasts Europe’s second-largest army, with almost one million men and women currently in uniform and a large reserve of battle-hardened combat veterans. This dwarfs anything else on the continent, even before Ukraine’s unrivaled experience of modern warfare is taken into account. With the United States seeking to reduce its role in European security, the Ukrainian military is now the biggest single barrier between an expansionist Russia and an unprepared Europe.

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Ukraine’s newfound status as one of Europe’s leading military powers is Russian President Vladimir Putin’s worst nightmare. It is nightmare entirely of his own making. Indeed, this military metamorphosis would have been inconceivable without the impetus of Russian imperial aggression.

When Putin began the invasion of Ukraine in 2014, Kyiv had only a few thousand combat-ready troops at its disposal. At first, things went according to plan for Moscow, with minimal Ukrainian resistance to the seizure of Crimea. However, Russian efforts to push further into mainland Ukraine then sparked a wave of popular resistance, with thousands of ordinary Ukrainians forming improvised volunteer battalions to block the Kremlin advance. This epic grassroots response saved Ukraine and laid the foundations for the subsequent expansion and modernization of the Ukrainian army.

Despite this stunning setback, Putin refused to accept defeat. With his initial plans to extinguish Ukrainian statehood thwarted, the Kremlin dictator made the fateful decision to escalate further and began preparing to launch the full-scale invasion of February 2022.

On the morning of the invasion, Putin identified the “demilitarization” of Ukraine as one of his two key war aims. This made perfect sense. After all, in order to effectively subjugate Ukraine, it would first be necessary to render the country defenseless. However, it is now abundantly clear that Putin’s plan to demilitarize Ukraine has backfired disastrously.

Russia’s invasion has spurred the creation of a formidable military machine in Ukraine that has quickly come to occupy a pivotal role in European security. In capitals across Europe, there is a growing sense of recognition that the Ukrainian army is indispensable for the defense of the continent and will remain so for the foreseeable future. Kyiv’s partners now have an obvious and urgent self-interest in supporting Ukraine’s defense industry and financing the Ukrainian war effort. Indeed, the choice currently facing European leaders is disarmingly simple: Support Ukraine today or face Russia tomorrow.

With Russian troops still advancing and Russian drones and missiles pummeling Ukrainian cities, it remains far too early to declare Putin’s invasion a failure. Nevertheless, it is already difficult to conceive of any outcome that would leave Ukraine undefended and at Moscow’s mercy. Instead, the Ukrainian army is likely to emerge from the war stronger than ever and fully capable of defending the country’s place within the European community of nations. Putin had hoped to disarm and decapitate the Ukrainian state, but his self-defeating demilitarization campaign has inadvertently created the strong and fiercely independent Ukraine he feared most of all.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

What can this mean in a world that is vastly different from the last time Turkey rode an export-led expansion wave? What clever policies need to be implemented to ensure Turkey harnesses opportunities and mitigates risks? This report will try to answer these questions.

Turkey in the global trade realignment

Over the past few months, the world has needed to adapt to the Trump administration’s high tariffs policy, which is more aggressive than markets and pundits expected. “Reciprocal” country-specific tariffs on any good imported into the United States start at 10 percent and often reach much higher. Given the administration’s self-professed goal of repatriating manufacturing to the United States, exemptions to this policy—even for essential inputs that are currently unavailable in the United States—are very rare.

For now, the Trump administration has shown an uncanny ability to anchor global debates and impose its tariffs without facing much retaliation. However, it seems the United States will remain a strange outlier with its completely different set of policies. Bilateral deals will sometimes bind partners into a specific rate for the United States (in return for a high US tariff lower than it otherwise might have been). But otherwise, markets are still following what has been the general practice of global trade for decades: Countries can set product-specific tariffs and balanced quotas applying to all World Trade Organization (WTO) members or they can enter bilateral trade agreements, which bring tariffs down and lift quotas if they apply.

The reassuring view broadcast by the Turkish government is that the Turkish economy is isolated from new US trade policy.¹ The government also argues that Turkey does 80 percent of the value of its trade with markets with which it has a free-trade agreement (FTA). At 31.2 percent of imports and 41 percent of exports,² the most important of these FTA partners remains the European Union (EU), whose customs union has included Turkey since 1995. The common external tariff policy could have put Ankara in a difficult position had the EU decided to retaliate against US tariffs. But it hasn’t.

Initially Turkey got the basic rate of “only” 10 percent but this was moved up to 15 percent when the EU managed to secure the same rate through the Turnberry deal. This is the bearable tariff rate Turkey will have to face for the foreseeable future, while having to apply slightly lower rates for US manufactured goods than before—as agreed between Trump and Commission President Ursula von der Leyen.

The less reassuring reality is that Turkey is trying to reverse its trade deficit at a time of global trade fragmentation. The International Monetary Fund (IMF) has shown that in the first decade of this century, when Turkish gross domestic product (GDP) accelerated rapidly, trade volume growth was 6.5 percent per annum on average and outpaced global GDP growth by more than 2 percentage points. This outpacing became negligible in the next decade: 3.7 percent trade growth for 3.5 percent GDP growth. In this decade, trade growth has been slightly behind GDP growth, and it might even start to become a drag in the next five years.

Several sticky factors entrench Turkey’s trade deficit. Turkey’s reliance on energy imports has been a key driver, especially in high price environments. This effect is currently muffled. On the other hand, Turkey can’t compete on wages and other production costs as much as the depreciation of the lira would usually imply. Frequent pay adjustments have been unavoidable considering persistent inflation. The monthly Turkish gross minimum wage of $817 is close to Romania’s $955 yet Turkey doesn’t enjoy the same access to the EU single market and continues to exhibit high inflation.

The pre-2023 focus on boosting consumption led to a surge in imports. Meanwhile, lower foreign direct investment (FDI) and an ever greater prevalence of real estate investments over more productive sectors have stymied modernization in Turkey’s manufacturing (see Chart 1). A sectoral study of the imports Turkey needs to produce its own exports shows that this dependency was on a downward trend from early 2013 until September 2019, but that it reversed after this date and the import dependency of exports started to increase rapidly.³ The highest import dependence of exports is observed in the manufacturing sector, including textiles, apparel, and basic metals.

It is imperative to reverse these trends to ensure Turkey can again benefit from its trade links, but the global context will make this more challenging than ever. The United States is adding barriers to its market, which will hamper growth in markets that import goods and services from Turkey. These include the EU but also markets which currently face much higher US tariffs, like China, India and Vietnam. Meanwhile, the output of China’s manufacturing capacity continues to far outstrip the country’s own needs.

Turkey’s trade deficit with China exceeded $30 billion in 2023. Ankara has already been taking targeted measures against cheap supply by primarily targeting Chinese electric vehicles through a flat 40-percent tariff and a minimum per vehicle price of $7,000. Investigations into Chinese solar panel components are ongoing and, in October 2024, Turkey imposed definitive anti-dumping duties on hot-rolled flat steel imports from China, Russia, India, and Japan to protect its domestic steel sector. These escalations have led to formal complaints and disputes at the WTO.

There are some encouraging, if very early and mixed, signs in Turkey’s latest Medium-Term Program, published on September 8. When examining the contribution of production factors to growth, the largest contribution to the 3.3 percent growth in 2024 came from capital stock and employment. In 2025, the main determinants of growth are expected to be total factor productivity and increases in capital stock. For the 3.3-percent growth projected in 2025, capital stock and total factor productivity are expected to contribute 1.3 percentage points and 2 percentage points, respectively. On the other hand, exports net of imports switched from enhancing growth in 2024 back to being a drag on growth in the fourth quarter (Q4) of 2024 and the first two quarters of 2025.

So nothing will fall into Turkey’s lap; it will need to fight for trade to contribute more positively to the economy. Section 2 will take a closer look at the opportunities Turkey should seize.

Opportunities for Turkey to seize

Turning trade into a reliable engine for Turkish growth and prosperity will take hands-on coordination between the Turkish government and firms. It is clear that Turkey cannot rely on its web of extant FTAs. There are opportunities for Turkey to seize by diversifying the substance and the geographic reach of its trade relations. The United States might have changed philosophies, but this doesn’t rule out bilateral trade deals with others. It so happens that the European Union, with which Turkey does almost $250 billion of trade every year, is even more committed to updating these agreements.

Figure 2 emphasizes the European Union’s central role in Turkish global trade ties, especially as Turkey’s primary export market. This contrasts with major trade partners, such as Russia or China, where large deficits persist.

The long-professed goal of modernizing the customs union has yielded such little progress that it has become the subject of derision. The fact that Turkey and its main trading partner trade in goods and services from each other in a framework settled in the mid-1990s can seem absurd. As economies have evolved, the proportion of goods falling under the customs union has dwindled to only 37.9 percent of Turkey’s exports and 44.1 percent of EU exports.⁴ This does not cover agriculture (although bilateral trade concessions apply), services, or public procurement.

Volatile political relations have been the dominant reason why possibilities for modernizing this relationship have been left unexplored. The revival of High-Level Dialogues on Economics and Trade in 2024 was a good sign. The Turkish side has keenly argued that Brussels has been even more eager to make progress since Trump’s return to the White House. But the readout from the latest meeting in July 2025 still suggests an incremental approach to removing barriers by streamlining customs procedures and revising quotas for some agricultural goods.

How can the level of ambition be raised, bearing in mind the EU’s reticence to discuss free movement of workers or agriculture? Whether or not these qualify as modernizing the customs union, there are three areas in which feasible updates would positively affect Turkish trade.

First, there is a clear case for further alignment on emissions trading systems as Turkey prepares to launch its own in 2026. It is important that this alignment spares Turkey from the EU’s Carbon Border Adjustment Mechanism duties when the system moves into its next phase. The healthy supply of boron, chromium, thorium, tungsten, and cobalt provides the EU with another reason to keep Turkey “in the tent” on carbon emissions. It will also want to ensure Turkey can build out its processing capacities for these critical minerals in a way that is cost-effective.

Second, although amendments were made in March 2024 to further align Turkish law with the General Data Protection Regulation (GDPR), the EU has not yet issued an “adequacy decision” on Turkish data protection laws. Discussions should aim to bridge any remaining gaps.

And third, geopolitical developments have revived interest in new security arrangements beyond the frozen accession process. Turkey’s role in NATO and the volatile European security landscape—especially concerning the war in Ukraine—make it a vital partner, but innovative partnerships between firms also need to be bolstered. The good news is that June 2025 saw the confirmation that Turkish firms will be able to access loans from the EU’s new fund for defense innovation.

Finally, both sides should continue to think of creative solutions to the disadvantage Turkey has in negotiating its own trade agreements. As part of the customs union, Turkey must currently align its external tariffs with those of the EU. When the EU signs a deal with a third country, Turkey most open its market on the same terms but this is not reciprocal, and the third country is not obliged to open its market to Turkish exports. Naturally, Ankara should not wait for a solution to this long-standing problem to enhance its other existing trade partnerships or initiate new ones.

Turkey’s size and geographic location are often presented as natural advantages, but these should not be taken for granted. Turkish leaders were frustrated by Turkey’s conspicuous absence from the India–Middle East–Europe Economic Corridor (IMEC) when it was first announced at the New Delhi Group of Twenty (G20) Summit in 2023, with US and EU backing. Trump has since signaled support for the project in his own way, even suggesting it could provide opportunities to reconstruct the Gaza strip.⁵ Turkey participates in other big and small connector projects, such as China’s Belt and Road Initiative and Iraq’s Development Road. It even plays a leadership role the Middle Corridor (or Trans-Caspian International Transport Route), which connects Europe and Asia via Turkey, the Caucasus, the Caspian Sea, and Central Asia.

The point is that Turkey’s role as a trade and manufacturing hub isn’t guaranteed and cannot be secured through geography and new infrastructure alone. Incentives like free ports already exist, but Turkish firms will also need to reach new markets—whether these are riskier, like Syria and Ukraine, or farther away. Syria rebuilding activity could provide a 0.6-percent boost to Turkish GDP.⁶ Turkish firms will also be the most willing to go into Ukraine first as soon as there is a ceasefire. They should bear in mind that they will not be eligible for EU funding—the major resource on which Ukraine will rely—if they have major activities in or with Russia.

Projects in the Middle East, Africa, and Southeast Europe already make Turkish construction contractors the second global force after China’s.⁷ The sector makes a positive contribution to Turkey’s trade surplus in services. The government and firms should use this good position to revive manufacturing sectors by aiming to produce a higher share of the construction firms’ inputs domestically. Supply of white goods and electronics, minerals, and construction materials can flow into Turkish-led construction projects. The same strategy could work with Turkey’s impressive trade surplus in medical services; the goal should be to produce more of the goods that this industry requires, instead of importing them.

The High Technology Investment Program (HIT-30), announced in July 2024, commits $30 billion in incentives to establish Turkey as a hub for modern manufacturing. The program pinpoints semiconductors, e-mobility, green energy, advanced manufacturing, healthy living, communication, and space technologies as the promising sectors. This is, of course, welcome as only 3.6 percent of exports are high-tech exports.⁸ While Turkey is already at the cutting edge on drone technology, catching up in enough other fields to affect the trade deficit noticeably is a tall order. Investment partnerships with foreign firms can help speed up the transition, provided these include some technology transfer. Turkey can continue to use the EU customs union to welcome investment from firms that want to sell into the EU. This is happening with Chinese electronic vehicle (EV) brand BYD, which is making a $1-billion investment. To improve the terms, Turkey must make sure it is welcoming investment from different sources.

Finally, on defense partnerships, the prowess of Turkish drones in the early stages of the war in Ukraine have created a considerable amount of interest. Sadly, residual US sanctions on the defense sector, dating back to Turkey’s purchase of a Russian S-400 missile system, continue to have a chilling effect. This needn’t remain so. In 2024, Turkey managed to get itself off the Financial Action Task Force’s gray list by making a limited number of regulatory and transparency reforms.⁹ Ensuring Western firms feel no reticence about partnering with Turkish firms should be a priority.

Cranes and shipping containers are pictured. Photo by Kurt Cotoaga on Unsplash

Stabilizing the domestic economy remains a precondition for rebalancing trade

We have seen how Turkey is blessed with geographic, strategic, and workforce quality advantages that should enable it to continue seizing opportunities in otherwise challenging times for global trade. But we also know the record of the past 10–15 years has been patchy. International investors have been spooked by policy volatility. Opportunities to modernize the manufacturing base have been missed due to state-owned banks placing too much emphasis on consumer spending and high-visibility investment projects. Since 2023, the orthodox turn has gone some way toward alleviating these challenges. But it also comes with risks, especially because of high interest rates.

Many objectives have been squeezed into the Medium-Term Program, which was updated on September 8. They are, at least, coherent. The Turkish government currently aims to strengthen macroeconomic and financial stability to enable sustainable growth. This involves maintaining fiscal discipline and reducing inflation to single digits in the medium term. Ancillary goals include improving research and development (R&D) and innovation capacity, ensuring technological transformation with a focus on transition to a green and digital economy, strengthening human capital, further activating the labor market, improving the business and investment environment, and reducing informality in the economy.

Can Turkey do this?

The plan appears to be working on restoring current account and reserves. But this is also the result of good luck coming with lower energy prices. In the second quarter of 2024, the impact of disinflationary policies became more apparent and, for the first time in eighteen quarters, net exports of goods and services contributed more to growth than domestic demand did. And despite constant pressure to spend and raise wages, the government is slowing the pace of increase for both.

Still, it is alarming that the reshoring of manufacturing has not been seen as a source of growth for Turkish firms. A May 2024 S&P Global survey of Turkish manufacturers found just 22 percent expected growth from reshoring in the next twelve months, with 61 percent not expressing an opinion.¹⁰ Seventy-one percent of firms cited capital cost and availability as challenges to reshoring, while 64 percent cited labor availability. While a small minority also cited access to raw materials as a challenge, it’s clear that high interest rates and wage pressures—the price to pay for the much-needed macroeconomic policy normalization—are taking their toll.

The strategy espoused by Ankara and Turkish firms needs to be more holistic and take Turkey’s own import dependencies into account. Greening the economy is often cited as a way to reduce dependency on energy imports, and Turkey has some of the critical minerals required in its soil. But it shouldn’t neglect other resources that can be used as inputs in services exports. These include raw materials and semi-manufactured goods, such as steel and aluminum, refined oil products, and raw minerals and ores ranging from building materials like marble to industrial metals such as chromium, copper, and lead. Minerals and ores only accounted for a small percentage of total exports, but nearly half of shipments to mainland China.

In the end, Turkey’s ability to turn trade into a lasting engine of growth will depend less on geography or one-off projects than on the strength of its institutions and the consistency of its external partnerships. Transparent, predictable, and rules-based institutions are essential for attracting investment, upgrading production, and ensuring that trade contributes to financial stability rather than volatility. At the same time, maintaining constructive and forward-looking relations with the West, especially the EU and the United States, remains important. They are both Turkey’s largest markets and its most important sources of capital, technology, and credible alternatives to turn to as Ankara rightly courts investment from China.

Acknowledgments

The Atlantic Council would like to extend special thanks to Limak Holding for its valuable support for this report.

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1 John Paul Rathbone, “Turkey sees opportunity in tariff turmoil, finance minister says,” Financial Times, April 8, 2024, https://www.ft.com/content/247051bf-1bca-490f-a371-50d668f9ade1

2 “EU trade relations with Türkiye,” European Commission, September 5, 2025, https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/turkiye_en

3 Serdar Varlik, N. Hande Sevgi, and Hakan Berument, “Analyzing Türkiye’s Import Dependency of Exports: A Sectoral Approach,” Fiscaoeconomia 8, 2 (2024), https://www.researchgate.net/publication/380843766.

4 Andrew Birch, et al., “Turkey as a Supply Chain Reshoring Center: Opportunities and Challenges,” S&P Global, September 4, 2024, https://www.spglobal.com/market-intelligence/en/news-insights/research/turkey-supply-chain-reshoring-center-opportunities-challenges.

5 Kristina Kausch, “IMEC’s Comeback,” German Marshall Fund,April 11, 2025, https://www.gmfus.org/news/imecs-comeback

6 Ben Holland, “Who Else Benefits From Syria’s Postwar Recovery,” Bloomberg, July 12, 2025, https://www.bloomberg.com/news/newsletters/2025-07-12/who-else-benefits-from-syria-s-postwar-recovery-new-economy-saturday

7 “Turkey Second Only to China in Global Ranking of Top 250 Contractors: Ministry,” Turkish Minute, August 23, 2025, https://www.turkishminute.com/2025/08/23/turkey-second-only-to-china-in-global-ranking-of-top-250-contractors-ministry/.

8 “The Trilemma of Turkish Techno-Nationalism,” Deutsches Institut fur Internationale Politik und Sicherheit,” May 30, 2025, https://www.swp-berlin.org/publikation/the-trilemma-of-turkish-techno-nationalism.

9 “Press Release on Türkiye’s Removal from the Grey List,” Republic of Türkiye Ministry of Treasury and Finance, press release, June 28, 2024k https://en.hmb.gov.tr/haberler/press-release-on-turkiyes-removal-from-the-grey-list.

10 Birch, et al., “Turkey as a Supply Chain Reshoring Center.”

The post Turkey in the changing transatlantic trade environment appeared first on Atlantic Council.

Belarus dictator must not be rewarded for releasing his own prisoners

Hanna Liubakova — Tue, 30 Sep 2025 20:20:43 +0000

Belarusian dictator Alyaksandr Lukashenka is currently attempting to repair relations with the West by trading political prisoners for concessions. If this hostage diplomacy proves successful, it will strengthen Lukashenka’s grip on power in Belarus while encouraging other autocrats to adopt similarly cynical tactics.

In early September, Belarus and the United States announced an agreement that saw 52 political prisoners released in exchange for an easing of sanctions against Belarusian state airline Belavia. This was the second such deal brokered by the US in the past few months, with 14 detainees freed in June 2025 during a visit to Minsk by United States Special Envoy Keith Kellogg.

The release of political prisoners by the Lukashenka regime has been hailed by the White House as a step in the right direction as the Trump administration seeks to reengage with Belarus following years of frosty relations. In a further indication of a thaw in Washington-Minsk ties, US officers were invited to observe recent joint military exercises between Belarus and Russia.

This might look like progress at first glance, but the reality is less encouraging. For every Belarusian prisoner released, others are being jailed. Just days after the US delegation left Minsk in September, journalist Ihar Ilyash was sentenced to four years in prison. Since June, when former Belarusian opposition leader Siarhei Tsikhanouski and others were freed thanks to American efforts, 131 new political prisoners have been locked up, representing almost exactly double the total number released during the same period. Today, around 1,300 Belarusian political prisoners remain behind bars.

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It should come as no surprise to see Lukashenka imprisoning more people. After all, recent sanctions relief has given him an obvious incentive to manufacture more hostages, which he can then trade for further concessions during future negotiations.

The United States and Europe have been down this road before. Between 2015 and 2020, some Western sanctions against Belarus were lifted and high-level visits to Minsk resumed, while Lukashenka was courted as a potential mediator in efforts to resolve Russia’s undeclared war against Ukraine. This led to a series of symbolic gestures but no structural reforms. Ultimately, hopes of building bridges with Belarus collapsed in 2020 when Lukashenka responded to nationwide pro-democracy protests by launching a brutal crackdown.

Any serious effort to improve relations between Minsk and the democratic world must be grounded in a realistic appraisal of the Lukashenka regime. In the final analysis, Lukashenka will always choose Moscow over the West because his political survival depends on it. This has become abundantly clear since 2020, when the Kremlin intervened to help the Belarusian dictator crush protests. Two years later, Belarus served as a launchpad for Russia’s full-scale invasion of Ukraine.

Today, Belarus reportedly hosts Russian tactical nuclear weapons and plays a supporting role in Moscow’s hybrid war against the West. Even when he appears to be acting independently, Lukashenka is careful not to directly cross the Kremlin. When Russian drones recently violated Polish airspace, including some that entered Poland via Belarusian territory, Minsk warned Warsaw of the threat but carefully avoided blaming Moscow.

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Advocates of renewed engagement with Minsk argue that efforts to punish Lukashenka have failed to prevent Belarus’s slide deeper into authoritarianism. But a premature thaw would now carry enormous costs. Relaxing sanctions and reopening trade would boost state-controlled Belarusian companies and revitalize the regime while demoralizing the democratic resistance at home and abroad. Crucially, it would also provide Russia with a potential sanctions loophole in the heart of Europe.

Addressing the challenges posed by an authoritarian Belarus is vital for European security. As long the Lukashenka dictatorship endures, NATO’s eastern flank will remain unstable and Ukraine will continue to face a major threat along the country’s northern border. Other authoritarian regimes are also watching the Western approach toward Belarus closely. If Lukashenka is able to secure benefits without compromising his own position, his fellow autocrats will draw the obvious conclusions and act accordingly.

Rejecting high-level engagement with Lukashenka does not mean abandoning Belarus. Instead, the current focus should be on seeking ways to support Belarusians directly while maintaining pressure on the regime. This could involve greater support for Belarusian civil society and independent journalism in exile, along with cultural and educational outreach that strengthens links between Belarusians and the wider European community. More scholarships should be made available, while access to visas and professional opportunities could also be significantly enhanced.

Rewarding Lukashenka without requiring any meaningful change in Belarus is not pragmatism. It is appeasement. This kind of short-term thinking will only serve to further entrench the current dictatorship. Instead, the message to Minsk must be one of Western unity and resolve, with a commitment to maintaining sanctions pressure on the regime while investing in a better future for ordinary Belarusians. Ultimately, Western policy toward Lukashenka must be shaped by recognition that only a democratic Belarus can bring lasting stability to the wider region.

Hanna Liubakova is a journalist from Belarus and nonresident senior fellow at the Atlantic Council.

Highlights from the Transatlantic Forum on GeoEconomics, as US and European leaders reimagine transatlantic cooperation

Katherine Golden, Daniel Hojnacki — Tue, 30 Sep 2025 18:20:08 +0000

A new US-Europe relationship is taking shape.

Over the past year, the economic and security environment shared by the transatlantic partners has rapidly changed. With the return of the Trump administration, the United States launched a trade war—that led to a trade deal—with the European Union (EU). Meanwhile, Washington has continued to press NATO allies to increase their defense spending, as Russia’s war in Ukraine carries on and its incursions into European airspace accelerate.

Amid such headwinds for the US-Europe relationship, our experts flew to Brussels for the Transatlantic Forum on GeoEconomics to hear from US and EU leaders on their visions for enhancing US-European cooperation on trade, security, technology, and other era-defining issues. Below are highlights from the forum, hosted by Atlantik-Brücke and the Atlantic Council’s GeoEconomics Center and Europe Center.

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Matthew Whitaker’s message to NATO allies: ‘Start spending money’ on defense ‘and stop buying Russian energy’

US Ambassador to NATO Matthew Whitaker speaks at the Atlantic Council’s 2025 Transatlantic Forum on GeoEconomics on September 30, 2025.

As Europe continues to face increasing threats from Russia, the United States “remains committed to NATO and to defending every inch of NATO territory,” but “there are still issues to address,” said US Ambassador to NATO Matthew Whitaker.
In a conversation with Atlantic Council President and CEO Frederick Kempe, Whitaker said that “the ball is in the court of the European and Canadian allies” to address these issues: “Every single ally needs to start spending money on their defense and stop buying Russian energy.”
Whitaker said that if Europe’s purchases of Russian energy continue, then “sanctions”—including the package currently under consideration in the US Congress—“aren’t going to ultimately have as much bite.”
On defense spending, “The Hague defense commitment was a good start,” Whitaker said, referring to the agreement at this year’s NATO Summit by allies to spend 5 percent of gross domestic product on defense and defense-related needs. “But, unfortunately, I think some of our allies are dragging their feet, and they need to pick up the pace.”
Whitaker pointed to Spain and Italy as examples of countries that still need “to get serious” on defense spending. At the same time, he said that Germany’s ability to meet the spending targets in the next four years is “good news.” Meanwhile, Whitaker argued that France and the United Kingdom have the “desire” to spend more, “but the economics are just not there,” and their “borrowing capacity is not really going to cover what they need to do.”
As Russia continues to violate the airspace of European countries, Whitaker argued that NATO’s response has proven that the Alliance is “serious and ready to move.” Still, he said, NATO can do better to maintain a “multilayered” air defense that ensures allies are “not firing two-million-dollar missiles to shoot down six-hundred-dollar Shaheds.”
“A lot of people think that somehow these challenges that Russia presents to us somehow demonstrate our weakness. It’s quite the opposite,” Whitaker said. “We’re all over every single one of these threats.
“In an uncertain world, we can only have peace through strength,” Whitaker said. “If the whole team is strong and there’s no weak link, then that strength is what’s going to ensure peace, and no one will challenge that strength.”

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EU trade chief Maroš Šefčovič: US-EU trade deal better than ‘full-scale trade war’

The European Commission’s Maroš Šefčovič speaks with Atlantic Council Europe Center Senior Director Jörn Fleck at the Atlantic Council’s 2025 Transatlantic Forum on GeoEconomics on September 30, 2025.

“Global trade will not go back” to the era before US President Donald Trump unveiled a sweeping package of tariffs on April 2, Šefčovič said, in conversation with Atlantic Council Europe Center Senior Director Jörn Fleck. “So, all those who are longing for the world of the past, they’re losing time” to adjust to a new order.
The first way to adjust, he said, is to secure deals with the United States and continue to revisit the US-EU trade relationship, in what Šefčovič called “permanent relationship management.”
But, he added, he hopes that every time the $1.7 trillion per year US-EU trade relationship is revisited, it would not be a “huge political issue” and that disputes would be resolved swiftly.
Šefčovič argued that the US-EU trade agreement solidified in August, which set a maximum for US tariffs on EU goods at 15 percent, is the “best possible deal,” especially considering the alternative: “Would we be better off with a full-scale trade war?”
With questions arising about Trump’s recent announcement of 100 percent tariffs on foreign brand-name drugs, Šefčovič said that the EU “should be shielded from the incoming very high tariffs on pharmaceuticals” by the 15-percent ceiling.
While Trump has applied 50 percent tariffs to steel and aluminum, Šefčovič argued that “we are not each [other’s] problems” when it comes to steel, considering that US-EU steel trade is relatively low and the EU exports a specialized steel that the United States needs. His solution: “A tariff rate quota” with “very low or zero tariffs.”
Yet, at the same time, the EU is adjusting to the new trade order in two other ways, Šefčovič explained. The first is diversifying its trade relationships—pursuing tighter ties with countries such as Japan, Mexico, Australia, the United Arab Emirates, and India. “With all these partners, we can progress significantly this year,” he said.
The second is working to reform multilateral institutions such as the World Trade Organization so that they can best respond to today’s trade challenges, from overcapacities to illegal subsidies—”otherwise this rule-based global order would be under more and more pressure,” Šefčovič warned.

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US Ambassador to the EU Andrew Puzder: ‘We need Europe strong’ as a partner for trade and defense

US Ambassador to the EU Andrew Puzder speaks at the Transatlantic Forum on GeoEconomics on September 30, 2025.

For years, Europe’s economy was “based on a three-legged stool,” made up of defense costs covered by the United States, “cheap Russian energy, and a retail market in China that seemed like it would never go away,” Andrew Puzder, US ambassador to the EU, told Kempe. Now, he said, “we’ve seen that three-legged stool collapse,” after Russia’s full-scale invasion of Ukraine, Washington’s defense priorities shifting to Asia, and China’s consumer market weakening.
It is in the best interest of the United States “to have an economically strong Europe,” said Puzder. “We need Europe strong for trade purposes,” as well as for “defense purposes so they can cover their defense costs” and “can help us in other troubled parts of the world,” he said.
“Europe got a really good deal,” said Puzder of the recent US-EU trade agreement. “I know that’s not the popular opinion here” in Brussels, he acknowledged.
But he argued that Europe would benefit from increasing its purchases of energy from the United States and noted that the 15 percent tariffs and investment commitments were more favorable for Europe than the deals the United States struck this year with South Korea and Japan. “I’m hoping that gets ratified in the European Parliament,” he said.
Puzder described some remaining areas of disagreement between the United States and EU, including nontariff trade barriers and EU regulations under the Digital Services Act and Digital Markets Act, which the Trump administration views as discriminatory against US companies.
Washington needs to ensure that the Digital Markets Act is “not intended to penalize companies because they’re American and large,” Puzder said. “If that’s the intent, then that’s an issue we need to address. That’s not the way you treat allies.”
“If Europe’s going to enter the AI age,” its policymakers “need to start looking at the problem of energy in the future,” said Puzder, arguing for an approach to energy policy that emphasizes a US framing of “energy abundance” over a European emphasis on “energy efficiency” or “energy cleanliness.” With artificial intelligence (AI), he said, “you’ve got a whole new incredible energy demand going forward that you really need an all-of-the-above approach to energy to meet.”

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European Commission Executive Vice-President Teresa Ribera: The EU must stick to its climate goals to remain competitive

European Commission Executive Vice-President Teresa Ribera speaks at the Transatlantic Forum on GeoEconomics on September 30, 2025.

Teresa Ribera, European Commission executive vice-president for a clean, just and competitive transition, said that it “has not been particularly easy” to keep good relations between the EU and United States this year.
In a conversation with Bloomberg News Brussels Bureau Chief Suzanne Lynch, Ribera explained that the EU always regarded the United States as a “real partner” in building global governance, innovating, and ensuring that trade flows smoothly. “We have . . . learned that we need to develop and count on our own capacities,” she said. “It has been kind of a shock.”
After the EU placed an antitrust fine on Google earlier this month, Ribera said she does not believe that the EU’s regulatory oversight will damage US-EU relations, because such antitrust measures are in line with US principles around protecting against monopolies. The US and EU have the same goal, she said, “which is to ensure that things work well, that the level playing field is respected, that innovation is not being killed, and that consumers are protected.”
Ribera said that as AI competition ramps up, the EU will encounter “new challenges” related to its energy consumption and data privacy measures. She called for the EU to build the governance capacity needed to ensure that AI development “does not create additional distortions.”
She acknowledged that while the EU may not be known for its speed in crafting new regulations, it is “reliable, stable, predictable: Things that others may be missing.”
She added that with China moving at “high speed” in producing its own technological breakthroughs, it will be important for the EU to consider how it maintains a labor force, investment pool, and business capacity to provide its own tech solutions, such as in clean energy.
On these clean-energy solutions, “the United States seems to be backtracking,” Ribera said, and “it’s not helpful for the technology breakthroughs that still need to happen”—although the US private sector and state-level leaders are still showing up, she noted. “There may be lots of new things happening at smaller scale,” but they add up to “quite a big amount of modernization of the American economy,” she said.
As the EU looks to remain competitive, Ribera said that she will be focusing on “driving the single market,” which she highlighted as one of the EU’s unique strengths. She also stressed the importance of EU members continuing to keep to the union’s climate goals through innovation, as doing so “is the only way to become competitive and to keep on creating wealth.”

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EU Commissioner Valdis Dombrovskis: A digital euro is likely six years away

EU Commissioner Valdis Dombrovskis speaks at the Transatlantic Forum on GeoEconomics on September 30, 2025.

With the geopolitical situation “getting more complicated,” the European Union has had to “reassess” its role as an institution, especially on security and defense, said Valdis Dombrovskis, European commissioner for economy and productivity.
Dombrovskis told Atlantik-Brücke Chief Executive Officer Julia Friedlander that while the European Union began as a “peace project,” it has had to take on new “tasks” and “competencies” as war returned to the continent. He pointed to the ReArm Europe Plan, which aims to provide an additional 800 billion euros in defense spending over four years.
Yet, he argued, the European Commission still respects a “certain division of competencies” when it comes to defense, considering NATO’s prerogatives.
Regarding the US-EU relationship, Dombrovskis said that the two sides are “strategic allies” and that it is important that they work together in a more “conflictual geopolitical situation” in which “autocracies are trying to assert themselves.”
Dombrovskis, who is also the European commissioner for implementation and simplification, also spoke about the Commission’s effort to simplify EU laws and regulations, which he said would save billions of euros per year and would help the EU with its “competitiveness agenda.”
He said to expect new proposals over the next few months to simplify regulations related to digital matters, the environment, chemicals, and cars. Such simplifications are “equally important” for European companies and US companies working in Europe, he said. “Often they point to the same problems and issues to be resolved.”
Dombrovskis said that while the European Commission has made “slow and steady progress” on a digital euro, “it’s important now to accelerate” that work.
He explained that right now, the European Commission, European Council, and European Parliament are each finalizing their approaches to central bank digital currencies and should discuss them next year. After that, it will be “some five years before the actual introduction of the digital euro,” he said.

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EU trade chief Maroš Šefčovič on why Europe got the ‘best possible’ trade deal with the United States

Atlantic Council — Tue, 30 Sep 2025 12:31:43 +0000

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JÖRN FLECK: Please. A warm welcome on my behalf as well to the Transatlantic Forum on GeoEconomics. And I am extremely excited to be joined by Maroš Šefčovič, the European commissioner for trade and economic security. Thank you for being with us this morning and helping us kick off the trade discussions at the Transatlantic Forum.

I think the Brussels audience here in the room is very familiar with you, but to our transatlantic and global audience I think it’s worth highlighting that you’re now in your fifth term, one of the longest-serving commissioners, someone who has handled some of the most dynamic, most challenging portfolios, from energy and energy security to Brexit and now trade, and someone who has earned, I think well-deserved the nickname Mr. Fixit in the Commission. And so I can’t think of anyone better to help us kick off the trade conversations at the Transatlantic Forum.

And I think a natural place to start is, obviously, the US-EU framework agreement, the so-called Turnberry deal. You were—you played a pivotal role in securing that deal and you’re well aware of the criticisms that has received. And yet, you’ve said it’s the only responsible way forward. So maybe we kick off by you telling us why you still believe that and also, then, where you believe that deal will hopefully lead us in the transatlantic economic relationship in terms of the politics and the big picture of the relationship.

MAROŠ ŠEFČOVIČ: Thank you very much, Jörn. And I also would like to thank our hosts. As economist and transatlanticist, I am always very happy to be—to be here and discuss with friends and partners where we can do more to make sure that our EU-US transatlantic ties are as strong as ever.

And that was clearly the attitude we have adopted when we started the challenging and demanding negotiations with the new US administration on the EU-US trade deal. I have to say that I spent hundreds of hours talking to my counterparts in US, and I would say thanks to that very strong interactive—and I have to add very intense, but at the same time cordial—discussions we have, I think that now we are in the stage that we understand each other much better.

America has the same goal as European Union: to reindustrialize; to be much more secure against all kinds of weaponization of the goods, semiconductors, rare earths, magnets, you name it. So, simply, we feel that we are in this new age of geoeconomics where two of us, as the biggest trading partners and closest of allies, that we should simply work together.

Just for the—for the audience to imagine the magnitudes of that relationship, every year we trade more than 1.7 trillion of euros. So if you can imagine almost five billion euros flying across the Atlantic, that’s what is happening every single day. We are the biggest mutual investors. So it’s almost five trillion euros of assets which we mutually invested in our economy. And at least six million people on the—on the both sides of Atlantic has a direct dependence in their jobs on these trade flows, making it forward. So this was very clearly what was very much on my mind, because I think first and foremost we have to think about jobs, about the prosperity of our companies, about our alliance and relationship as close partners, and these being, I would say, the frameworks with which we started to work.

It was very clear that for the new US administration the agenda is different than the—from the—from the previous one. They believe that lots of economic challenges in US has been caused by unfair trade policies. And their decision not only against Europe, but against everyone was to fix this issue through the—through the tariffs.

So we found a way—and coming to your—to your question—I believe that, indeed, we got the best possible deal, and I’m ready to compare the EU-US deal with any other deal which is on the table or was already approved. And I very much appreciated that we found the understanding with our partners that 15 percent should be all-inclusive. There is no stacking on top of it. And once we agreed this deal, I’m happy to say that we are following it to the dot.

So there have been two executive orders signed by President Trump. We put on the table legislative proposals for lowering the tariffs on American goods. And it means that parts of the deal which is so important for our car industry is retroactively applied as of 1st of August, which means that 600 million euros for August, 600 million euros for September will be returned back to the—to the car manufacturers. And of course, I can go into the details of the carveouts which are so key for our aerospace industry, or generics for our pharmaceutical business, and many other areas, and also this forward-looking element which I think will become very important right now because, according to our agreement, we should be shielded from the incoming very high tariffs on pharmaceuticals by this 15 percent all-inclusive tariff.

So if I—if I look at it from the perspective of economics, from the perspective of the new geopolitics, and from the perspective of what kind of mood it brings to transatlantic dialogue and exchange of the views, there have been all the positives on this side.

So I’m very glad to say that we are in permanent regular contact with my counterparts. Yesterday late night I had another call with the secretary of commerce. We had very good discussion about the next step with Jamieson Greer, US trade representative, in Kuala Lumpur. And as you know, our president of the Commission, Ursula von der Leyen, is in regular contact with the president of the United States to discuss, of course, day-to-day, I would say, geopolitical challenges. And this was something which was not thinkable in February, in March, but now we are there. And I see it, indeed, as an opening to the wider agreement and to, eventually, the trade agreement between EU and US, which we are missing and which would add, I would say, additional energy, additional flow into the trade, and I’m sure create more jobs and bring even more investments.

JÖRN FLECK: Thank you, Commissioner.

To the audience here and online, you can submit questions at AskAC.org—AskAC.org. So I’ll try and get to one or two towards the end.

But a quick follow up on—you know, on the deal and the criticisms. There’s been questions—it was supposed to bring stability. At the same time, there’s been questions about the durability with the Trump administration and the president personally still pushing on, for example, digital regulations. We had the uncertainty around pharma, movies, questions about whether it is really a best deal in terms of the administration expanding the list of sectoral tariff products and questions around WTO compatibility. Whichever one of those you want to respond to, one or two, how would you respond to that?

And you mentioned the forward-looking nature of this agreement. How do we really get to a deal and not have an endless set of negotiations?

MAROŠ ŠEFČOVIČ: Yeah. I think I would answer with a question: What was the alternative? Would we be better off with a full-scale trade war with the United States of America or with tariffs somewhere between 30 to 50 percent? Our projection has been quite clear, and this is what we shared with our American colleagues on all levels: If the tariffs are over 30 percent, our trade is more or less halted with all the repercussions for this, six million jobs on both sides of Atlantic—in US, in the EU. We, over the decades, built an absolute unique system of supply chains which are integrated, and a lot of them is based on SMEs which simply cannot move to US or vice versa because they’re small companies living in a special ecosystem. And therefore, I am absolutely convinced that this was only responsible choice to make.

We are getting first data for the—for the trade from August, from September. We can compare our deals to other deals which have been there. And every comparison, you know, looking at the—at the trade flows, if we are looking at the actual tariffs being paid, EU is compared very favorably with any—with any other deal, and we are very happy about that.

Of course, you rightly pointed out—and this is what is a permanent discussion with my US counterparts—this is very massive trade relationship, and therefore it would be permanent relationship management. So there are a lot of things, a lot of questions of our American partners, and of course we have a lot of questions on our own. But I think the best thing is to discuss it as allies, to sit at the table, to look for the solutions, and resolve them. And I think that we are now in the atmosphere and the personal relations that we can have normal debate/discussions.

I’m sure that not on everything we will agree. For sure we will have disputes, as big trading powers must have if we are talking about 1.7 trillion of euros of trade every year. But what is important is how we approach it. And if we approach it from the perspective, OK, there is an issue; let’s explain, which I think was a big part of what I was doing in US, is to simply explain some of our laws, explain that none of them is directed against US enterprises, against [US] entities; and if there are some issues which persist, let’s look at them how we can—how we can resolve them. And this process, of course, is continuing. But what I hope we will achieve would be that this would not be every time huge political issue; that it would be the matter-of-fact there is a dispute, there is an issue, there is a discussion, and there is a—there is a resolution or there is an adjustment on how we—how we conduct certain policies.

So that’s the something what I would like to achieve, to set up the process. And we are discussing with my—with my American partners how we can—how we can achieve that.

JÖRN FLECK: As a follow-on to that, with your experience of now these negotiations, dealing with the Trump 2 administration, your engagement, you had similar experience in Trump 1 administration dealing with some very challenging energy issues. What—how did the last few months inform your perspective on what is possible on a positive, proactive US-EU cooperative agenda? You mentioned your conversations with US Trade Representative Jamieson Greer on steel and aluminum that you’ve restarted, where the United States and the European Union are trying to address very similar—the same overcapacity/national security/reindustrialization issues. So what space do you see for a collaborative, proactive US-EU trade agenda moving forward, both in the small and the big things and issues?

MAROŠ ŠEFČOVIČ: Let met just give you two examples. One would be the steel and second would be semiconductors. And I think both are very much linked with economic security and the challenge which we face both—and this is global—overcapacity of production of certain products like, for example, the steel.

So in—the steel issue was actually also the one I discussed yesterday late night with secretary of commerce because I think we concluded very early on in our negotiations in early spring that if it comes to the steel export we are not each other problems. We are exporting to US something like four million tons with one million of additional ton of steel derivatives. The exports from US to Europe are even smaller. We are focusing on highly specialized steel which is needed for our, you know, military industry, for aerospace, and so on and so forth. So we are just really natural, natural partners there.

But we have the same problem, and the problem is that our markets for a long time been simply too open, and the—and the global overcapacity of the steel production just grew by unprecedented pace. EU lost seventy million of ton of steel production over the last ten years, and half of it in the course of the last three years. So it’s very clear that we have to—we have to protect our industry. And therefore, very soon they are going to propose the post-2026 safeguard measures, meaning that we would work with the [tariff-rate quotas (TRQs)], meaning with the quotas, for all those who would like to export steel to European Union.

And we are discussing with our American partners kind of ringfencing model where we would, between us, trade on the TRQ with very low or zero tariffs, because our steel business is actually quite complementary, but we would have very similar measures if it comes to deal with the global overcapacity, because it’s a big issue for everyone. And this is, I think, something which is very promising. I also explain to my American partners how the steel derivatives business is affected by these additional 232 tariffs, because we are talking about fridges, dishwashers, motorbikes. And I know that very often we, in the EU, our approach, that we have very complicated rules and regulations. But try to count how much steel there is in a fridge or in a motorbike, and you can compare them both. So I think the best thing would be really to find the solution in this regard.

Second example, on semiconductors. US has the best chip designers. We have the best machine in the world which is printing the chips. And I think we are really absolute natural partners. And therefore, when we looked at the deal and this so-called strategic purchase chapter, we added our interest in buying forty-billion-dollars worth of AI chips, because we want to build these AI chip centers also here in Europe. And it’s only natural that there should be kind of strategic cooperation between US and the EU. So these are just the two examples, but I believe that on overall I would say bilateral trade agenda, we can do much more. Because in many aspects these two economies have been built as a complementary to each other. And I think that it’s a time to kind of restore it and open new potential, which we have been missing in the past.

JÖRN FLECK: Zooming out a little bit and taking a look at the broader geoeconomic and geopolitical picture, it seems that the global economic order, multilateral rules-based system is under serious pressure. Not just from a Trump administration shifting US trade and international economic policy, but from China and its overcapacity and nonmarket practices, from rising protectionism. How are you, and how’s the European Commission, thinking about whether we are at the precipice of a fundamental shift in the global order, and how the European Union, very much as a child of that existing order, of multilateral rules-based order, should respond, learn some new tricks maybe?

MAROŠ ŠEFČOVIČ: I think that first and foremost is it’s important to acknowledge the fact that the global trade will not go back to the pre-April the second situation. Especially because in United States, I would say, this new approach has bipartisan support. So all those who are longing for the world of the past, they’re losing time. So I think what is very important is to adjust as what we are doing is that we are looking for the best possible arrangement, relationship, and the deal with the US. And I believe that there we are—we are—we are doing as well as we could in the short period of time in this dramatic paradigm shift of how to approach the trading relationship.

Second very important element for us is that US is our biggest trading partner, but it represents 20 percent of our trade relationships. So we are working very hard on the remaining 80 percent. So it means we are diversifying our trade relations. Just this year we put on the table for the final ratification an agreement with Mercosur, which would be our biggest [free trade agreement]. Just to compare, it’s four times bigger than our free trade agreement with Japan. We put on the table the free trade agreement with Mexico. I just came from Southeast Asian countries where we signed the new agreement with Indonesia. And I believe that Malaysia, Philippines, and Thailand will be able to conclude the next year. We had very good discussion with Australian trade minister. And we are also intensively negotiating with the UAE and GCC countries.

So I believe that with all these partners we can progress significantly this year, the next year. We are having regular meetings with India, which, again, is one of the—I would say, the biggest markets and one of the biggest economies in the world. So that’s where we want to kind of diversify our trade relationship. And I would say that we put it on top of what we already have. As you probably know, we, we are biggest trader on this planet. We have already now forty-four free trade agreements with more than seventy countries. And we are looking at them also from the perspective which one needed to be upgraded. Upgraded from the perspective of digital trade, digital services, because many of these agreements have been signed before this became significant part of the economy. So that’s very important second track.

And third track is linked with multilateralism, with our commitment to the rules-based trade, and the needed deep reform of the WTO. And here, I think we have the same view as Dr. Ngozi, director-general of the WTO, that we simply need to reform WTO to reflect much better the accumulated problems over the last decade. How to deal with the overcapacities? How to deal with the illegal subsidies? How to better capture the advantage the nonmarket economies are taking from the WTO? And a lot of other challenges which simply we need to face as a global community, otherwise this rule-based the global order would be under more and more pressure. So these would be the three tracks—find the best possible solution and permanent relationship management with US, spread the wing even more with our global partners, and reform multilateral global institutions which are looking after trade agenda.

JÖRN FLECK: Well, I’m going to try and squeeze in two questions. You can choose which one to answer from the audience. First one from Emily Kerstens. If [the International Emergency Economic Powers Act (IEEPA)], the current legal basis for President Trump’s tariffs, is struck down by the Supreme Court, how would that impact the US-EU framework agreement? And secondly—from your perspective—and secondly, can the current talks and the negotiations lead to a real trade agreement, similar to what was attempted with [the Transatlantic Trade and Investment Partnership (TTIP)], between the US and the EU?

MAROŠ ŠEFČOVIČ: I think that I can—I can answer them both. I mean, I will start with the second. What I think we are going through right now is really, I would say, the beginning of the—of the new chapter. Simply, the perception in US is that the trade system, as it was built until the 2nd of April, is something which was not fair to the US. They want fundamentally to change the trade relationship with their partners. And we are going now through, I would say, this very elaborate, and sometimes very, very painful, process. But I think that we understand now each other much better than before. And through this, I would say, gradual step—and that was the part of the discussions we had also in in Kuala Lumpur—is that we should kind of aim for the trade agreement with US.

How ambitious, how detailed, and what sectors you would cover, it’s for late. Because what we need right now is to stabilize the relationship, to make sure that trade flows are flowing, that the impact on real economy, on jobs and company, is as minimalistic as possible, to deal with the problems which are still on the table. And we are focusing on that. And see where this would lead us in the form of the future trade agreement. This is how we see it also from the perspective of the compatibility with the WTO. And of course, if the Supreme Court would decide otherwise, I’m sure that it would be up to the US partners to see how they would adjust their policies. And I think what is very important right now, that we can pick up the phone, we can talk about anything, and we can find solutions to any challenge which is arising from US trade. Thank you.

JÖRN FLECK: Ever the pragmatist. So thank you so much, Commissioner.

That’s all we have time for this morning, but really appreciate you giving us these insights, kicking off our trade conversations which will now continue with my colleague Josh Lipsky, senior director of the Geoeconomics Center, and a session on triangulating trade. Where I’m sure his panel will dive into all of the issues you’ve raised in more—even more detail. And thank you again, in a huge round of applause. Thank you for the Commissioner. Thank you.

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Moldova’s pro-EU ruling party won despite Russian interference. Now what?

Atlantic Council — Mon, 29 Sep 2025 16:49:03 +0000

JUST IN

Europe for the win. Moldova’s ruling Party of Action and Solidarity (PAS) won a parliamentary majority in Sunday’s national elections, in an outcome widely viewed as affirming the country’s pro-European Union (EU) direction under President Maia Sandu. The elections followed a campaign marked by efforts from the Kremlin to undermine the PAS and aid pro-Russian candidates. What’s next for Moldova’s EU accession path? And how will Russia and Moldova’s pro-Kremlin elements respond to this geopolitical setback? Our experts provide their insights below.

TODAY’S EXPERT REACTION BROUGHT TO YOU BY

John E Herbst (@JohnEdHerbst): Senior director of the Atlantic Council’s Eurasia Center and former US ambassador to Ukraine
Victoria Olari (@Olari_Victoria): Research associate for Moldova at the Atlantic Council’s Digital Forensic Research Lab
Alex Șerban: Senior advisor for the Atlantic Council’s Romania Office and nonresident fellow with the Atlantic Council’s Transatlantic Security Initiative

A ‘historic’ outcome

With the PAS outperforming pre-election polls, “the impact of this election will be historic,” says John, who recently visited the capital Chișinău. Given Sandu’s “rock solid” commitment to reforms, her party “should be able to pass the legislation needed to deliver EU membership,” he says.
“The outcome is unequivocal” as a signal of the country’s pro-Western direction, says Victoria. “PAS not only dominated among the diaspora, as in the presidential elections, but also placed first in most districts across the country, giving it broad legitimacy,” she says, adding that other pro-European parties also will enter parliament, a sign that the “overwhelming share” of Moldovans want a European future.
Alex notes that, in addition to Russian meddling, the PAS also overcame domestic challenges: “Despite unpopular economic measures and criticism over slow rule-of-law reforms, voters again endorsed the European path.”

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The Kremlin falls short

Because of the ruling party’s orientation toward Europe and away from Russia, “Moscow not only backed multiple parties in the election but used its full bag of dirty tricks to try to block a victory for the PAS,” says John.
The pro-Russian parties’ electoral defeat was a “a sharp rebuke to Moscow’s influence operations,” Victoria tells us. She points to evidence of Russia spending hundreds of millions of dollars; disinformation spreading across TikTok, Facebook, and Telegram; accusations of electoral corruption; and intensifying cyberattacks. Despite all this, “Russia failed to sway the Moldovan vote,” she writes.
Another one of the Kremlin’s efforts to sway the vote was calling for mass protests if the PAS won. This plan, “has already been launched,” says John. Igor Dodon, leader of the pro-Russian Patriotic Electoral Bloc, “did not wait for the first returns to come in to publicly declare that he had actually won the elections.” He led a demonstration outside the parliament building on Monday, which reportedly drew about one hundred protesters.

What’s next?

Leaders across the continent were quick to congratulate the PAS on its victory and express their support for Moldova’s embrace of Europe, Alex tells us. This included expressions of support from Romania’s government, EU officials, and a joint message from the French, German, and Polish governments that “signaled EU resolve to anchor Moldova in Europe’s political and security architecture,” says Alex.
But challenges remain for the leadership of a country that remains politically divided and vulnerable to Russian interference, Alex notes. “Moscow is unlikely to abandon efforts to stir instability,” particularly in the separatist regions of Transnistria and Gagauzia, he says.
“Any missteps” from the PAS government, says Alex, “whether from weak institutions or stalled reforms, could reignite political turbulence and turn the clock back on popular support.”

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Stable US-EU trade requires a new approach to globalization

Beth Baltzan — Mon, 29 Sep 2025 04:00:00 +0000

Much has been said about the unequal terms of the US-EU trade deal reached in Turnberry, Scotland, in July. Two camps have emerged: those who see Europe as having prematurely capitulated to US coercion and those who see Europe as having had little choice.

The road to Turnberry

Any assessment of the outcome of the Turnberry negotiations—and, therefore, any assessment of where to go from here—hinges not on the negotiations themselves but on the amount of leverage the two parties brought to Turnberry. The European Union (EU) had less of it. Europeans have a goods export dependency on the United States that the United States does not have with any country, let alone those in Europe. This asymmetry is long-standing, an outcome of the post-war trade system that emerged after Bretton Woods. That system was grounded in a model of export-led growth. As the richest market and with the lone currency pegged to gold, the United States was the target designation for others’ exports, not least so that European countries could earn dollars to rebuild.

US negotiators of that era were comfortable with asymmetrical concessions because they believed the global economy as a whole would grow, aggregate demand would rise, and all trading nations could benefit from increased production. The United States did not undertake these commitments with the expectation that increased imports would come at the expense of US workers or producers. At some point, however, that is just what happened, contributing to the Nixon Shock of 1971. Part of Richard Nixon’s goal in allowing the dollar to float was to correct for overvaluation that had depressed US export competitiveness. The accession of China’s non-market economy to the World Trade Organization (WTO) in 2001 accelerated US deindustrialization and, along with it, the loss of jobs that had provided many blue-collar Americans with lifelong economic security. Today, this is known as the China Shock.

As the last three years have exposed all too well, exports are not the only area of asymmetrical European dependency. The EU has also relied on the United States for its security—another outgrowth of the post-war environment. The United States was not only the market of first and last resort, but Europe’s security guarantor. To be sure, this was not an altruistic undertaking. The United States sought to keep Europe democratic and market oriented, part of an overall effort to fend off the threat of communist encroachment.

European prosperity flourished. Today, more than half the Group of Seven (G7)—the club of rich countries—comprises European democracies as well as all three former Axis powers. Nevertheless, these dependencies persisted.

The China Shock, the financial crisis, and popular backlash

As the China Shock began to unfold in US communities, the 2008 financial crisis and resulting recession severely widened inequality and aggravated precarity in many of those same communities. The one-two punch of deindustrialization and the Great Recession sparked popular backlash against a global governance regime seen as serving the interests of elites at the expense of the middle and working classes. In retrospect, this backlash can be understood as the beginning of the end of the United States’ willingness to serve as the market of first and last resort.

In 2013, academics began to document the China Shock, formally publishing the results of their work in 2016. These results showed that US imports from China had caused a significant loss of manufacturing jobs, concentrated in particular regions, with economic effects that lasted throughout workers’ lifetimes. The researchers also linked the China Shock to electoral outcomes. In 2015, the Chinese government adopted a Made in China 2025 industrial strategy that promised to transform China into a producer and innovator of cutting-edge goods. The combination of the China Shock and Made in China 2025 triggered a profound and rapid shift in US thinking. Policymakers who had supported the effort to create a global free market confronted the rise of a non-market economy that was dominating one critical industrial sector after another. Made in China 2025 sought to expand that dominance from steel, aluminum, and glass to advanced sectors such as electric vehicles, robotics, and aerospace. It was precisely to avoid that kind of dominance that the architects of Bretton Woods planned to embed antimonopoly rules in the global trading system in 1948.

The “free trade” paradigm breaks down

Made in China 2025 was inspired by Germany 4.0, Germany’s industrial strategy, and both were grounded in export-led growth. As early as the 1970s, the United States complained that Germany was promoting exports at the expense of domestic consumption.

In 1995, Europeans and Americans led the creation of an entirely new trade regime, yet this failed to address the long-standing transatlantic tension of Germany’s export orientation. Moreover, the tariff asymmetry dating back to the founding of the General Agreement on Tariffs and Trade (GATT) lingered; the US tariff cap was 3.4 percent, while Europe’s was 5 percent. While the United States sought to use the narrower tools of trade remedies (known as “trade defence” in Europe), the WTO Appellate Body over time eroded the strength of those tools, even creating commitments that the parties had expressly declined to make during negotiations. The EU has been well aware of this dynamic, having lost the first of several disputes involving one of the commitments in question.

The 2016 double shock of Brexit and the election of Donald Trump should have served notice that popular discontent was manifesting as an angry rejection of the system as a whole. Yet trading partners who had come to rely on export-led growth largely rejected calls for change, instead pressing for more of the same. Similarly, despite a clear message that NATO partners needed to bear more of the burden of collective security, now-wealthy allies neglected to step up.

The COVID-19 pandemic drove home the vulnerability that comes with that kind of domination. Not only did shortages of personal protective equipment prove lethal, but production around the world was hamstrung when Chinese lockdowns persisted.

The Biden reset and Trump 2.0

The Joe Biden administration came into office offering strong support for the transatlantic relationship, from declaring a truce on rancorous trade disputes like Boeing-Airbus in 2021 to providing military support to Ukraine in the wake of its invasion by Russia. Europeans consistently expressed fear of a second Trump administration but, in the end, seemed disinclined to do much to bolster the Biden administration’s efforts to address the core challenge of US deindustrialization. The European posture was infused with a conviction that the only proper course was restoration of the status quo ante. Early on, one European paper characterized Biden as “Trump with manners,” a line that administration officials would routinely hear in person. To meet climate commitments, as well as to begin to address deindustrialization, the United States enacted the Inflation Reduction Act (IRA). Europeans responded by complaining that the IRA represented a “continuation of President Trump’s hard-nosed America First policies.” A more pragmatic and less ideological analysis revealed that the IRA played to European manufacturing strengths and thus presented an opportunity, rather than a constraint, for European exporters.

Now we have the second Trump administration. It is indeed engaged in hard-nosed “America First” policy, deploying tariff authorities in unprecedented ways while criticizing trading partners for regulating their economies contrary to the preferences of some US multinational corporations—the very thing the Biden administration had declined to do. This policy led not only to Turnberry, as the Europeans felt a trade war would lead to an even worse outcome, but to an ongoing discussion about European regulatory sovereignty.

The EU position is more precarious still. Europe risks not only the loss of export opportunities to the United States, but the possibility that the European market will itself become the destination of choice for the next China Shock. All this is happening as the Trump administration expresses fatigue with guaranteeing Europe’s security.

The way out

Is there a way out of this downward spiral? Yes. But it requires policymakers around the world to spend less time pining for the past and more time focused on what to build next.

Fortunately, there are signs that a shift is taking place. Germany’s willingness to remove the debt brake for defense spending suggests that the long-standing goal of having Germans consume more and export less might indeed be coming to pass—all while addressing outsized dependence on the United States for security. It is a fraught debate. If Germany pairs military Keynesianism with austerity, the result could be an acceleration of authoritarian sentiment reminiscent of the policies that ushered in the end of the Weimar Republic. Still, the shift in approach is a positive step.

Germany’s efforts have been followed by a pledge for Franco-German cooperation, signaling a shared commitment to charting a new path for Europe to extricate itself from these challenges. On a still broader European scale, the recent report by Mario Draghi rightly argues that the EU must do more to integrate and unleash the power of the internal market.

Similarly, there are signs that China is wrestling with the harmful consequences of its economic model. Xi Jinping recognizes that fierce internal competition leads to excessive production (much of which is then exported). As finance professor Michael Pettis has argued for years, China must find a way to encourage greater domestic consumption, relieving the emphasis on exports that is problematic for advanced economies and has also contributed to premature deindustrialization in less advanced economies.

The United States must also adjust. If other governments succeed in reducing their dependencies, the United States will have less influence. Shifting overnight to a world of pure power politics, coupled with the erosion of US domestic rule of law, will have implications for the long-term viability of the dollar as the reserve currency. That, in turn, will have implications for the servicing of US debt, which is expected to grow as a result of the One Big Beautiful Bill.

The answers suggested here lie principally in the domestic policies of each relevant economy. Many trade experts reach for trade tools, such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and other free trade agreements (FTAs), as the escape hatch. Yet too few understand what these agreements actually do: They lock in existing supply chains rather than diversify them. This is especially true for intermediate goods. If Europe is looking to further strategic autonomy by diversifying away from existing dependencies—one of the goals of the Franco-German alliance—then signing agreements that incentivize half the content of an FTA good to come from non-FTA partners will not do the trick.

None of these transitions is without cost or pain. Europe has struggled for decades to complete the internal market. Still, even the shock of the first Trump administration did not move Europeans to minimize their exposure in any significant way. Weighing existential threats to Europe, Draghi—who recognizes the shortcomings of the old system—pleaded before the European Parliament: “Do something!”

China’s reorientation of its economy toward consumption will not be easy either, which is why it has not yet happened. But the potential consumption power of its huge domestic market means that China is not fated to play the role of a predatory global monopolist, distorting markets and crushing the ability of market-oriented producers to compete.

The biggest obstacle to moving toward a global trading system more suited to contemporary circumstances might be intellectual: the lingering belief that there is, in essence, only one way to do globalization and it was done in 1995. History tells us otherwise. The previous great globalization boom was grounded in UK hegemony, colonialism, and the gold standard. This model also once seemed inexorable. Yet the onset of World War I proved the beginning of the end. Countries struggled for two decades thereafter to salvage the gold standard, but they were eventually forced to accept the demise of what John Maynard Keynes referred to as a “barbarous relic”—and to come up with something else.

The post-war regime, suited for its era, encouraged dependencies that shifted over time from beneficial to unhealthy. We are now living through a period in which the adverse consequences of those dependencies have become manifest. Just as the architects of the post-war vision summoned the courage and imagination to create a new system to foster peace and stability, so must we.

About the author

Beth Baltzan is a nonresident senior fellow with the Atlantic Council GeoEconomics Center. She previously served as a trade policy adviser in the Biden administration.

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What drives the divide in transatlantic AI strategy?

Alisha Chhangani, Ananya Kumar — Mon, 29 Sep 2025 04:00:00 +0000

As both the United States and European Union unveiled their respective AI strategies this summer, a paradox emerges: despite sharing broadly similar objectives—boosting domestic AI capabilities, maintaining technological leadership, and managing AI risks—the two allies find themselves increasingly at odds over how to achieve these goals. The divergence reflects fundamental differences in regulatory philosophy, economic structure, and geopolitical positioning — all of which threaten to fragment what should be a unified Western approach to AI governance at a critical moment of competition with China.

The Donald Trump administration’s “Winning the Race: America’s AI Action Plan” outlines a vision of AI as a decisive frontier of global economic and security competition. The first pillar advocates for a deregulated, private-sector-led environment by reducing regulations, promoting open-source AI models, and fast-tracking AI deployment in industries such as healthcare, while tackling some questions about workforce transition. The second pillar addresses energy capacity by upgrading the electric grid, restoring domestic semiconductor manufacturing, building secure data centers, and establishing cybersecurity measures including incident response capabilities. The third pillar on international diplomacy and security, seeks to counter Beijing’s growing influence in international governance bodies and export the full stack of US AI to allies and partners. The plan also identifies financial services as both an opportunity and a vulnerability. AI is viewed as a driver of financial innovation and efficiency, but also as a channel for risks including misinformation, cyber fraud, and systemic instability.

The European Commission’s AI Continent Action Plan was unveiled in April 2025, and is part of a long series of reports and regulations undertaken by the EU to bolster its competitiveness in AI. It lays out a five-pronged plan to scale up computation models through new AI factories, innovation hubs, and pooled resources, improve access to and availability of high-quality data, accelerate application of AI through public services and industrial activities, enable the Draghi report’s ambition to “exceed the US in education” when it comes to training and retaining skilled talent, and further fortify the European single market for AI.

Both the approaches aim to buttress domestic adoption and application of AI—often through nudges from the state when it comes to exploring applications in public services, and encouragement for many kinds of commercial activities. China has come to a similar conclusion, with its continual emphasis on using local government action plans to diffuse AI into public service provisions, and all kinds of industrial activities through its “AI Plus” initiative. There are few references to China in the EU’s latest AI document, while Washington’s approach has both implicit and explicit connotations of a largely two-way race between itself and Beijing.

Approaches from the United States and the EU are both likely to face issues regarding capital and financing of these action plans. While US private-sector investments in AI are many-fold those in the EU and China, the scale and focus of spending make a big difference. In the United States, the Trump administration has put AI contracts front and center in its broader deregulation approach—recent quarters have seen dozens of venture capital rounds above $100 million, and large megadeals (one of about $40 billion in the first quarter of 2025 alone aside) are becoming more common. Major players like Microsoft have committed to $80 billion this year for AI-capable data centers, and overall US tech capital expenditure for AI and infrastructure is being projected in the hundreds of billions over the next few years.

Meanwhile, across the EU, fiscal rules constrain deficit and debt levels: member states are required to keep deficits below 3 percent of gross domestic product (GDP) (though some exceed this threshold) and debt below 60 percent. The EU’s budget amounts to about 1 percent of GDP, and key instruments such as the Recovery and Resilience Facility are set to expire in 2026—leaving a gap in large-scale funding. The EU is currently negotiating its next seven-year budget (2028–2034), which is expected to place strong emphasis on large-scale investments, including a proposed Competitiveness Fund. In China, while growth targets remain and fiscal policy is being kept “flexible,” debt burdens, weak investment returns in sectors such as property and manufacturing, and slowing external demand limit what Beijing can unilaterally spend without risking macroeconomic instability.

These differences mean that even when headline figures like “$500 billion investments” are floated, much of that tends to flow into private capital for infrastructure, cloud and chip production, startup rounds, and acquisitions. They are not distributed evenly or necessarily aimed at building strategic domestic capabilities. Europe and China risk being unable to match the pace of US capital expenditure, not only because of absolute capital constraints but because of institutional, regulatory, and macro-fiscal drags.

Challenges to US-EU alignment on AI

These structural spending imbalances are compounded by inconsistent US policy decisions that leave European partners scrambling to adapt. For example, Joe Biden administration’s AI diffusion rule in January 2025 left many countries in Europe with restrictions on importing advanced chips from the United States, and led to a call for maintaining a “secure transatlantic supply chain on AI technology and super computers, for the benefit of our companies and citizens on both sides of the Atlantic.” The Trump administration repealed this rule and, in its place, the EU committed to purchasing $40 billion of US-made chips as a part of its trade agreement with the United States.

This interaction lays bare the two tensions complicating the US-EU alignment on AI strategies. The first concerns the strategies’ time horizons and the enabling actions undertaken by each jurisdiction. The EU’s approach has been solidified with years of iterative public discussion amid the market transformation from AI—starting with the Draghi report, the AI Act and even Ursula von der Leyen’s European Commission presidency campaign. In contrast, the US AI strategy has seemed reactive and temperamental—shifting focuses between administrations on important issues such as risk and safety, open-source models, and export controls. Recent partnerships with the Gulf states and lifting of controls on NVIDIA’s H20 chips sale to China have also demonstrated a deal-making approach to AI, which is often at odds with the stated US strategy.

The EU has embraced binding rules such as the AI Act, in line with its broader tradition of digital regulation. By contrast, US administrations have favored light-touch, voluntary frameworks, and sectoral oversight rather than comprehensive law. This reflects a bipartisan reluctance to over-regulate the industry. This divergence in regulatory culture means that even when Washington and Brussels agree on broad goals, they often diverge on the instruments used to achieve them,

The second tension in the US and EU strategies concerns the EU’s own complicated motivations in the context of its present economic interdependence on the United States and China. This reliance is visible across the entire AI input stack. At the software level, European firms overwhelmingly depend on US-developed foundational models, cloud platforms, and AI tools provided by companies such as Microsoft, Google, and OpenAI, reflecting the absence of a globally competitive European alternative. In 2025, the United States produced about forty large foundation models, China around fifteen, and the EU only about three. At the infrastructure and cloud level, the “big three” US cloud hyperscalers are estimated to power about 70 percent of European digital services. At the hardware level, the EU remains structurally reliant on advanced semiconductors designed in the United States and fabricated in Asia, with Europe’s domestic semiconductor sector making up less than 10 percent of global production. Supply chains for critical minerals and legacy chips further reinforce exposure to Chinese producers, which control a significant share of upstream inputs and mid-tier manufacturing. Chinese companies dominate the refining of critical minerals such as rare earths and graphite, essential for chipmaking and AI datacenter equipment. They are also leading suppliers of mid-range GPUs, networking hardware, and AI server components, which European firms may increasingly source to diversify away from US vendors. Chinese technology companies, including Baidu and Alibaba, are also emerging players in foundation model training and deployment, reinforcing Europe’s reliance on external providers. These dependencies complicate the EU’s sovereignty ambitions and its ability to balance relations with the United States.

Recognizing these vulnerabilities, the EU launched initiatives to expand domestic capacity, raising about €20 billion to build “AI gigafactories.” These factories would be capable of hosting large-scale compute infrastructure, with the aim of catching up to the US and China. While these projects signal a commitment to reduce dependency, they remain long-term efforts. Even as Europe invests in its own infrastructure, there is still high exposure to non-EU supply chains for the critical inputs into AI. The European Central Bank noted that about half of Euro area manufacturers sourcing critical inputs from China report being exposed to supply chain risk.

These two tensions—uncertainty in US policy actions and the gap between the EU’s ambitions of sovereignty and its reliance on US and China for critical inputs—will continue to play out over the next few years.

The financial services sector and AI action plans

For financial services in particular, AI adoption is accelerating—banks now flag AI as core to transformation. JPMorgan reports hundreds of production use cases across fraud, marketing, and risk in its shareholder communications, while Bank of America’s “Erica” virtual assistant has logged more than 2 billion client interactions—evidence that AI is reshaping front-, middle-, and back-office processes from customer service to underwriting to treasury operations. This brings opportunities including cost and error reduction, real-time risk sensing, and new AI-enabled products like cash flow intelligence for corporate treasurers.

But financial services also represent one of the highest-risk sectors for AI adoption, given the direct societal impact of errors or bias in lending, risk modeling, or compliance monitoring. The AI Index 2025 shows that measurable gains remain modest, with most firms reporting less than 10-percent cost savings or revenue growth below 10 percent. AI adoption for financial services also lags in key areas. Many institutions remain in pilot phases, data quality and legacy infrastructure limit deployment, and regulatory uncertainty combined with talent shortages slows uptake in high-risk applications such as credit scoring and underwriting. Regulatory divergence sharpens these trade-offs: The United States leans on voluntary risk-management tooling (the National Institute of Standards and Technology – Artificial Intelligence Risk Management Framework) that gives firms latitude to innovate, whereas the EU’s binding AI Act and sectoral guidance from the European Securities and Markets Authority impose high-risk classifications and board-level accountability for AI in investment services—raising documentation, testing, and oversight burdens for cross-border finance.

Ultimately, the private sector and business in both jurisdictions need to adapt to these tensions and, in some cases, even begin to view them as productive in their journey of AI adoption and diffusion across various functions. What the AI action plans have done is provide a broad framework of AI strategy. But for financial services companies and the broader commercial sector, the devil is in the details and will require closing the transatlantic gap in the regulatory approach to AI. This seems more difficult than it would have a year ago.

About the authors

Ananya Kumar is the deputy director, Future of Money, at the GeoEconomics Center.

Alisha Chhangani is an assistant director at the GeoEconomics Center

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At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

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Dispatch from Chișinău: Will Russia’s political pincer move put Moldova’s EU hopes in jeopardy?

John E. Herbst — Fri, 26 Sep 2025 15:43:08 +0000

CHIȘINĂU—As this frontline country approaches a pivotal and closely contested election, I picked up a sense of cautious optimism here last week. Moldovans who see their future in Europe believe they will prevail, but Russia is deploying novel tactics to try to steer that future in Moscow’s direction. Washington would do well to engage in the fight.

I spent three days in Chișinău for a Board of Directors meeting of the Ukraine-Moldova American Enterprise Fund* and for meetings with senior Moldovan officials. The principal topic for discussion was Moldova’s September 28 parliamentary elections. The stakes are high because the reformist party of President Maia Sandu, the Party of Action and Solidarity (PAS), risks losing control of the parliament, which could put in jeopardy her goal of Moldova joining the European Union (EU) this decade. Moldova is currently in accession talks with the EU regarding the deep reforms required to join the organization. If parties less committed to reform take control of the parliament, then it could be difficult, if not impossible, to pass the legislation needed to secure EU membership.

That is why senior European officials such as French President Emmanuel Macron, German Chancellor Friedrich Merz, and Polish Prime Minister Donald Tusk visited Chișinău in late August. They wanted to underscore for Moldovan voters that if they truly want the benefits of EU membership, then they need a parliament committed to reform. And that is why the Kremlin is working to ensure that PAS does not achieve a majority in the upcoming election.

To keep PAS from a majority, Moscow is backing two horses in this race. One is the Patriotic Electoral Bloc, an uneasy alliance of communists and socialists cobbled together by and largely loyal to the Kremlin. The second is the National Alternative Movement, which claims to favor joining the EU and is headed by the mayor of Chișinău, Ion Ceban. The actual commitment of the National Alternative Movement to EU membership is, however, far from clear. The Kremlin also backs this party in order to hive off the support of pro-EU Moldovans (a majority of the population) from PAS. Moscow’s support for these two parties is likely based on the calculation that while PAS may win a plurality of votes on September 28, the two largest opposition groups will together constitute a majority, making it unlikely they will work with PAS.

Old ways and new ways

Moscow’s interference in Moldova’s elections this year is just the latest of its more than twenty-year effort to impose its will on its neighbors by manipulating elections. Moscow does this deftly in evolving circumstances using both old and new tactics. Old tactics include providing massive funding for their political favorites—hundreds of millions of dollars, according to my Moldovan interlocutors. This money is used for campaign activities and vote buying. In the past, such activity has led to the disqualification of political parties and their leaders and even to indictments.

But Moscow is also quick to seize new opportunities to manipulate elections. For example, in recent Moldovan elections, pro-Kremlin actors have recruited online “ambassadors” to amplify anti-EU propaganda and offered a series of tiered financial incentives to do so. They have created vast networks of fake media outlets to circumvent Moldovan and EU sanctions and showered public figures with death threats to reduce voter turnout. They have even paid unwitting Western celebrities to produce anti-PAS and anti-Sandu content. In neighboring Romania, widespread fears of similar Russian interference led the government to nullify and redo its December 2024 presidential election.

Perhaps of even greater significance are the possibilities for election manipulation offered by artificial intelligence, which enables the creation of slickly packaged “news stories” that appear to be of Western origin, but which are in fact created by Kremlin-controlled bot farms. These farms are located not just in Russia, but also in African countries and in the target countries holding elections that Moscow would like to influence. This also appears to be the case in Moldova now.

In the run-up to the election

Moscow’s efforts are designed first to block PAS from winning a majority in the parliamentary election and, if that fails, to set the stage for demonstrations and public disorder to protest its victory. Recognizing the danger, Moldovan authorities conducted police raids across the country on September 22 that arrested seventy-four people suspected of preparing public disturbances.

The range of polls do not suggest that Sandu’s party will win the majority it seeks. But several of my Moldovan interlocutors expressed a cautious optimism about the upcoming vote, anticipating a major boost from diaspora voters in Europe and the United States. That’s what happened in the presidential election in 2024 that Sandu won. Past is not necessarily prologue, but many Moldovans remain enthusiastic about joining the EU, and that might be enough to keep the country on the path of reform.

John E. Herbst is the senior director of the Atlantic Council’s Eurasia Center and a former US ambassador to Ukraine.

Note: Ambassador John Herbst’s visit to Moldova was sponsored by the Ukraine-Moldova American Enterprise Fund.

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Trump called Russia a ‘paper tiger’ because he believes Putin is losing

Peter Dickinson — Thu, 25 Sep 2025 20:41:25 +0000

US President Donald Trump made headlines this week with a social media post that suggested a dramatic shift in his position on the Russia-Ukraine War. After months of insisting that Ukrainian President Volodymyr Zelenskyy “doesn’t have the cards” and must “make a deal” involving sweeping concessions to the Kremlin, Trump suddenly declared on September 23 that Ukraine was now “in a position to fight and win all of Ukraine back in its original form.”

Much of Trump’s post focused on taunting Putin over his faltering invasion. In characteristically abrasive language, the US leader mocked the Russian army’s lack of progress in Ukraine and suggested Moscow was facing major economic problems due to the spiraling cost of the war. “Russia has been fighting aimlessly for three and a half years a war that should have taken a real military power less than a week to win,” Trump wrote. “This is not distinguishing Russia. In fact, it is very much making them look like a paper tiger.”

Many commentators chose to leap on Trump’s statement as proof of a major change in US policy toward Ukraine. In fact, the post contained nothing that suggested a new approach to relations between Washington and Kyiv. On the contrary, Trump stressed that it would now now be up to Europe to take the lead in supporting Ukraine.

While the US President repeatedly asserted that Ukraine could defeat Russia, there was no indication that America was ready to increase its support for the Ukrainian war effort or expand sanctions against Moscow. Instead, Trump limited himself to confirming that the US will continue to sell weapons to Ukraine via NATO partners. In other words, the Trump administration’s stance on the war is set to remain largely unchanged. However, instead of pressing Ukraine to accept a Kremlin-friendly peace deal, Trump is now openly talking about Ukrainian victory.

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What caused President Trump’s rather radical change in tone? Putin’s relentless stalling tactics and his shameless backtracking have no doubt played a role, exhausting the US leader’s patience and making him look foolish for touting their alleged personal friendship. Trump himself has suggested that his new assessment of the war is based on a detailed understanding of the current military and economic situation in Russia and Ukraine. This version has been endorsed by US Vice President JD Vance, who commented this week that Trump has “grown very confident this war is bad for Russia.”

It is not difficult to imagine how intelligence briefings on the current state of the war in Ukraine might have convinced Trump to revise his earlier assumptions regarding Russia’s economic and military might. Putin’s recent summer offensive was billed as a potential turning point in the war but has clearly failed to achieve its objectives. Russian troops were unable to secure any major breakthroughs during the summer months and have made little progress toward the establishment of a border buffer zone in northern Ukraine. This underwhelming outcome was entirely in line with broader battlefield trends that have seen Russia forces seize less than one percent of Ukrainian territory over the past three years.

Russia’s modest gains have come at a terrible price. While neither Moscow nor Kyiv release official casualty figures, independent research based on open source data and intelligence reports indicate that hundreds of thousands of Russian soldiers have been killed in Ukraine, with even greater numbers wounded. This dwarfs the losses suffered in all the wars waged by the Kremlin since World War II.

In order to replenish the depleted ranks of his army, Putin has been forced to offer ever-larger bounties to new recruits. Nevertheless, the catastrophic casualty rate in Ukraine means that even the present steady flow of Russian volunteers may not be enough to sustain the invasion. In an indication of Moscow’s mounting manpower challenges, Putin brokered a deal with Pyongyang last year that saw more than ten thousand North Korean soldiers deployed to fight alongside the Russian army.

Putin is also visibly in struggling in the wider geopolitical arena. With the vast majority of Russia’s military resources already committed to the invasion of Ukraine, the Kremlin has found itself unable to project strength elsewhere. Russia could do nothing when the simmering war between Azerbaijan and Armenia flared up in 2023, and has since been largely excluded from the peace process between the two countries, leaving centuries of Russian imperial influence in doubt. Similarly, when the regime of Kremlin client Bashar al-Assad was under threat in late 2024, Moscow was unable to intervene to save the Syrian dictator. Iranian officials encountered the same toothless response more recently when they appealed to their Russian allies for help during Israel’s brief air war against the country.

As Russia’s international influence declines, Putin is facing growing economic woes on the home front. These problems are being compounded by an escalating Ukrainian bombing campaign targeting the Russian oil and gas industry. Since the beginning of August, Ukraine has launched dozens of airstrikes against Russian refineries, pipelines, pumping stations, and ports. This Ukrainian aerial offensive has dealt the biggest blow to the Russian economy since the start of the war, Reuters reports, with refining capacity significantly curtailed and energy exports down. Crucially, Ukrainian attacks have sparked a worsening fuel crisis in regions across Russia, with long queues forming at gas stations amid supply breakdowns and record price hikes.

Russia’s inability to defend its economically vital energy industry against Ukrainian long-range drones has highlighted just how overstretched the country’s military currently is. With the army’s limited supply of air defense systems deployed to the front lines in Ukraine or guarding major Russian cities along with the palaces of Putin and his cronies, there is simply not enough spare capacity to protect the vast oil and gas infrastructure that serves as the engine of Putin’s war machine.

This does not bode well for the Kremlin. Ukraine is clearly intent on methodically destroying Russia’s energy industry and is developing its own domestically produced cruise missiles to do so. If these weapons become more readily available in the coming months as anticipated, Kyiv’s capacity to strike targets deep inside Russia will be drastically enhanced.

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The unfavorable current military and economic outlook helps to explain why Trump chose to brand Russia a “paper tiger.” The jibe seems to have struck a nerve among Russians, many of whom are no doubt already beginning to feel uneasy about the worsening domestic situation and their army’s lack of progress in Ukraine. Pro-war bloggers and Kremlin pundits lined up to attack Trump and ridicule his “paper tiger” assertion, while Putin’s spokesman Dmitry Peskov felt obliged to directly address the insult. “Russia is by no means a tiger. Russia is traditionally seen as a bear. There is no such thing as paper bears. Russia is a real bear,” he somewhat bizarrely insisted during a radio interview.

Putin has so far remained silent but is likely to be seething. The Kremlin dictator is well known for his gangster-like obsession with respect, and has made no secret of his bitter resentment over Russia’s humiliating loss of superpower status following the collapse of the Soviet Union. Putin was said to have been deeply offended when US President Barack Obama dismissed Russia as a mere “regional power” in 2014 during the initial stages of Moscow’s attack on Ukraine. He will now also be haunted by Trump’s “paper tiger” taunt, which strikes at the very heart of his imperial insecurities.

The invasion of Ukraine was conceived by Putin as a decisive step to reverse the injustice of the Soviet breakup and revive the Russian Empire. He had hoped for a rapid victory that would transform the wider geopolitical landscape and return Russia to its rightful place among the world’s great powers. Instead, the war has ruthlessly exposed the limitations of the Russian military.

Today, Putin’s armies remain bogged down in brutal fighting for control over villages that lie within walking distance of the original front lines when Russia’s invasion first began more than three and a half years ago. At sea, Russia’s blockade of Ukraine’s Black Sea ports has been broken, with the bulk of Putin’s fleet forced to retreat from Crimea. Despite possessing one of the world’s largest air forces, Russia has been unable to secure air superiority in Ukraine and cannot even prevent the Ukrainians from striking targets deep inside the Russian Federation itself.

In light of this poor performance, it is hardly surprising that Russia’s military reputation has taken such a battering since 2022. Putin still possesses a vast and powerful war machine that is capable of inflicting untold harm and misery, but few would now classify Russia as a global superpower. Trump’s “paper tiger” barb was meant as an insult, but it may be closer to the truth that Putin’s pretensions to great power status.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

In recent weeks, the Kremlin has launched drones into Polish and Romanian airspace, while also sending warplanes into Estonian airspace above the Baltic Sea. On September 22, major airports in Norway and Denmark were forced to suspend operations due to suspicious drone activity. While the source of this sophisticated drone disruption has not yet been clarified, Denmark’s Prime Minister Mette Frederiksen said Russian involvement cannot be ruled out.

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Russia’s recent actions reflect the ongoing integration of drones into the Kremlin’s hybrid warfare playbook as Moscow looks to raise the stakes in its confrontation with the democratic world. Since US President Donald Trump returned to the White House in January 2025, Moscow has been cheered by his efforts to reduce support for Ukraine and limit the US role in European security. Russia now appears intent on exploiting growing divides within the Western camp and intimidating Europe with thinly-veiled threats of possible drone bombardment.

European leaders must take the Russian drone threat seriously. Since 2022, the Kremlin has made drones one of the key components of Russia’s overall military strategy. Domestic production of bomber drones has increased dramatically over the past year in particular, making it possible for Russia to conduct mass bombing raids on Ukrainian cities featuring as many as 800 drones in a single night.

In addition to increased numbers, Russian drones are also undergoing significant upgrades. The most common form of kamikaze drone used by the Russian army is based on the Iranian Shahed model, but recent versions are significantly larger, faster, and more explosive. Russia has also implemented improved navigation and control systems, making the current generation of bomber drones far deadlier than their predecessors.

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At this stage, it appears that Russia is looking to assess NATO’s readiness to defend itself and is unlikely to be preparing any large-scale attacks. However, there is no time to waste. European countries cannot wait until Russia goes even further before addressing the urgent security concerns raised by the Kremlin’s drone diplomacy.

Crucially, this means learning from Ukraine’s unrivaled experience in defending against large-scale Russian drone attacks. Only Ukraine has the know-how to develop layered air defenses featuring ground-based missile systems, mobile gun crews, fighter jets, propeller planes, helicopters, and a rapidly expanding fleet of interceptor drones. Likewise, only Ukraine can offer practical tips on effective jamming and other electronic warfare strategies. These lessons make Ukraine an indispensable security partner for Europe.

NATO member states need to collectively establish realistic and unambiguous rules of engagement for cross-border drone and fighter jet incursions that provide maximum clarity for all countries, including Russia. The alliance’s somewhat improvised Eastern Sentry initiative along the NATO frontier with Russia should be expanded and given permanent status, with Ukraine fully integrated as a strategic partner. Europe should prioritize the production of cost-effective anti-drone technologies and invest in Ukrainian defense sector companies that are already producing key elements such as interceptor drones and electronic warfare tools.

Individual European countries also need to make sure civilian populations are protected against potential Russian drone attacks. This means checking existing bomb shelters. In many cases, it will no doubt be necessary to conduct comprehensive renovation works. By addressing this issue now rather than waiting for the next Russian escalation, governments can prevent panic and demonstrate that the security situation is under control.

Putin has clearly been encouraged by Trump’s efforts to downgrade America’s involvement in transatlantic security and feels emboldened to escalate his own hybrid war against Europe. For now, the Kremlin dictator appears to be focused on probing Europe’s responses and fueling insecurity across the continent. Looking ahead, his strategic objective is to split the Euro-Atlantic alliance and reduce support for Ukraine to minimal levels. If he succeeds, the threat to Europe will reach a new level entirely and the cost of stopping Russia will only rise.

Maksym Beznosiuk is a strategic policy specialist whose work focuses on Russia’s evolving military and hybrid strategy, EU-Ukraine cooperation, and Ukraine’s reconstruction.

Moldova accuses Russia of election interference ahead of key vote

Aidan Stretch — Mon, 22 Sep 2025 23:10:53 +0000

Moldova is raising the alarm over escalating Russian interference as the country approaches a crucial geopolitical crossroads. On September 28, Moldova’s pro-Western government will face a parliamentary election amid widespread allegations of Kremlin cyberattacks, propaganda, and various other Russian attempts to influence the outcome of the vote. If pro-European parties lose their majority, Moldova’s Western integration could stall.

The implications of an election victory for pro-Russian forces would extend far beyond Chisinau. Moldova shares a long border with Ukraine, while the two countries are currently on a joint EU accession track. A Kremlin-friendly government in Moldova could potentially derail EU integration for both nations, while also creating a significant new security threat on Ukraine’s southwestern frontier. The coming vote is therefore an important test of Russia’s ability to reassert its influence and a potential landmark moment for the wider region.

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Allegations of Russian interference have become a routine feature of Moldovan elections in recent years. During the country’s 2024 presidential election, the Kremlin reportedly spent $217 million funding Russian proxies, representing nearly 1 percent of Moldova’s GDP. Despite these efforts, incumbent Maia Sandu narrowly defeated pro-Russian candidate Alexandr Stoianoglo.

Russia is now accused of escalating its interference operations, with Moldovan President Sandu warning recently of an “unprecedented” Kremlin campaign that includes party financing, cyberattacks, and disinformation. These efforts reportedly expand beyond Moldova itself and are targeting the Moldovan diaspora, which played a key role in Sandu’s 2024 election win.

Moscow’s main goal is to boost support for pro-Russian parties including Stoianoglo’s Alternative Bloc and the Socialist-leaning Patriotic Bloc. There are also claims that the Kremlin’s plans extend beyond the ballot box. The Moldovan authorities reportedly detained dozens of suspects on Monday as part of an ongoing probe into an alleged Russian-backed plot to destabilize the country around this weekend’s pivotal parliamentary election.

Recent election forecasts position Sandu’s PAS party in first place but without sufficient support to govern alone. PAS is expected to receive around 25 percent of the vote, which would be enough to deliver a plurality but not an outright majority of seats. The most likely scenario at this stage of the campaign may be a coalition government led by PAS and featuring one or more of the pro-Russian parties. This would almost certainly undermine Moldova’s European integration.

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Kyiv will be watching the Moldovan vote closely. Ukraine’s 1,222 kilometer border with Moldova has been quiet since the beginning of Russia’s full-scale invasion more than three years ago. However, this tranquility cannot be taken for granted. Moldova is home to Transnistria, a Kremlin-backed breakaway region that currently hosts around 1,500 Russian soldiers along with large supplies of Soviet-era military equipment.

According to Moldovan intelligence assessments, Russian President Vladimir Putin wants to reinforce Transnistria by sending an additional 10,000 troops. If a more Moscow-friendly government takes power in Moldova, this may become feasible. Ukraine would then be forced to divert precious military resources from other fronts to counter the mounting Russian threat coming from across the Moldovan border. In particular, a reinforced Russian troop presence in Transnistria would directly threaten nearby Odesa, Ukraine’s main port city and the country’s maritime lifeline to global markets.

The coming vote could also shape the European aspirations of Moldova and Ukraine. Both countries have been granted EU candidate status in recent years. Officials in Brussels have made clear that the two bids are linked and will be reluctant to advance one country without the other. A pro-Russian victory in Chisinau could therefore undermine Kyiv’s momentum while placing Moldovan EU ambitions in doubt. Moldova’s pro-Western politicians have stressed this potential outcome if they lose control of parliament.

For Russia, the Moldovan vote is an opportunity to push back against Western influence in the former Soviet Empire and demonstrate that the invasion of Ukraine has not deprived Moscow of its ability to dominate the region. At present, Putin is confronted with a mixed picture. Georgia’s Kremlin-friendly government has effectively stalled the country’s EU integration, while nearby Armenia has recently began the EU accession process.

While Russia’s objectives in Moldova appear obvious, there is less clarity regarding the Western position. In late 2024, Brussels committed nearly $2 billion in aid to bolster Moldova’s economic security and thwart Russian influence. This year, however, the United States has shuttered offices charged with combating Russian disinformation, while also slashing funding for democracy assistance programs in Eastern Europe.

This week’s Moldovan parliamentary election is part of the escalating confrontation between Russia and the West. A pro-Kremlin victory could significantly impact the war in Ukraine and undermine EU integration momentum in both Chisinau and Kyiv. Amid growing signs of disunity between Brussels and Washington, Putin may sense that he currently has a window of opportunity to secure a meaningful success in a country that is small in size but strategically important for the wider region.

Aidan Stretch is a freelance journalist living in Ukraine.

The most common take on Trump’s post is that he is asking for NATO (most of which are also part of the European Union) to do impossible things as a delaying tactic in order not to have to impose sanctions himself.

It is true that this administration takes a dim view of sanctions, which it sees as one of the reasons why countries are looking for alternatives to the dollar. It is also undeniable that Trump is reluctant to impose additional sanctions on Russia. His administration has explained that imposing additional sanctions would risk breaking the already thin ice on which negotiations rest.

And yet, according to the new etiquette of transatlantic relations, the Europeans accept that they must at least engage with Trump’s demands, even when the opening bid is outlandish. The EU and the United Kingdom are being asked to say to the world that they too are giving up on sanctions and adopting the United States’ weaponization of tariff policy. While their strategic dependence on the United States is well known, it is fundamentally against their interests to be perceived as so dependent that they have no say on their commercial relations with India and China.

The timing for a body blow to the Russian economy couldn’t be better.

The Commission’s proposals for the nineteenth package include a ban on liquefied natural gas purchases but do not yet commit the EU to removing the exemption granted to Hungary and Slovakia for Russian crude oil imports. On Friday, von der Leyen also spoke about the EU taking tougher stances on China and even India by targeting cryptocurrencies, banking, and energy firms that are helping Russia circumvent sanctions.

Given that Trump has set the bar so high, the risk is that he accepts nothing short of tariffs and even returns to musing about dismantling the current sanctions regime against Russia. But the Europeans should try to engage on what they know Trump really wants: reducing Russia’s energy exports to Europe while keeping global oil prices low. In this struggle, the volumes covered by the oil sanctions exemption for Hungary and Slovakia are small—about 500,000 barrels per day. To convincingly demonstrate its seriousness, the EU ought to find a way to phase these purchases out sooner, even if this means compensating the member states involved to avoid their vetoing the renewal of sanctions, which EU member states must do every six months.

Trump is right to focus on oil exports, as these have provided a lifeline to the Russian economy since the beginning of the full-scale war. However, as has been clear just as long, creating the expectation that Russian supply will be taken off the market increases prices, which benefits Russia. The Biden administration’s response was a price cap in late 2022 that has allowed India to buy more Russian crude using Western shipping and insurance, provided it was below the cap. High oil prices increase the temptation to cheat, so the cap hasn’t always worked, but there is still strong evidence the policy reduced Russia’s income from crude oil exports by $48 billion to $122 billion in 2023. Falling oil prices this year have allowed the EU to drop below the original sixty dollars per barrel to a floating cap of 15 percent below global market prices.

The EU’s offer to Trump therefore should involve more crackdowns on price-cap evasion, including tougher policing by EU member states such as Denmark of shipments through their waters. Instead of tariffs, the Europeans could also suggest threatening a joint secondary-sanctions regime with the United States, which might be daunting enough for Beijing and New Delhi to consider reducing their purchases of Russian oil and natural gas. Such an outcome could have a significant effect on the global oil market (much larger than ending the 500,000-barrel-per-day exemption for Hungary and Slovakia). The United States and the EU would need to anticipate carefully how oil prices might react to measures that could credibly reduce supply over a few months, and Washington may need to draw down from the Strategic Petroleum Reserve to cover any gap. It will take six-to-nine months for the United States to ramp up supply, and there are only a million spare Saudi barrels per day at present.

The timing for a body blow to the Russian economy couldn’t be better. It’s moved from overheating to recession in just six months due to low oil prices. This year’s deficit is likely to be double the moderate 2 percent deficits the Kremlin has managed since 2022. Government expenditures tend to pile up later in the year for Russia, so the fact that it is already faring much worse than previous years must have Moscow concerned. Reducing export income would push that deficit to a level that Russia cannot fully mitigate by depreciating the ruble, issuing domestic bonds, or raiding its already much-depleted liquid savings. The lower Russia’s export income, the earlier the Kremlin will have to cut spending, including on equipment and generous recruitment packages for soldiers.

Europe is performing a delicate balancing act—demonstrating commitment to Kyiv, relevance to Washington, resolve to Moscow, and rational self-interest to Beijing and New Delhi. The latter rules out following Trump’s instructions on tariffs, but alternatives that may still cause China and India to reduce their purchases of Russian oil and gas are available, provided the United States and Europe can coordinate their plans. And this will take some effort from Europe to reduce its own purchases.

Von der Leyen’s latest proposal on mobilizing the value of immobilized Russian assets gives renewed credibility to Europe’s commitment and resolve. Quite sensibly, the plan doesn’t cross the Rubicon of confiscating immobilized Russian assets in the EU—something most of the bloc has opposed despite US pressure. At the same time, this proposal could face difficulties, as it will bring new fiscal liabilities to member states that will be on the hook to protect the Central Securities Depositories where the money is blocked but Russia still has a claim. Nonetheless, von der Leyen’s proposal remains a very useful point for Europe to make at this juncture, signaling that Ukraine can count on an important stream of funding for the years to come if necessary.

Charles Lichfield is the deputy director and C. Boyden Gray senior fellow of the Atlantic Council’s GeoEconomics Center.

The post The EU won’t tariff China and India to please Trump. But it is working on a counteroffer. appeared first on Atlantic Council.

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