BRUSSELS — NATO countries are bracing for a worst-case scenario in the U.S. midterm elections Tuesday.

European allies fear a Republican loss could spur President Donald Trump to dramatically step up his attacks on the alliance, according to five NATO diplomats, all of whom were granted anonymity to speak freely on the sensitive issue.

Their worry is that if he is restrained by Congress on domestic policy, Trump, as commander-in-chief of the U.S. military, may seek to cement his legacy on foreign affairs, where he has a freer hand. That could mean pulling thousands more troops out of Europe, three of the diplomats said.

“Usually what happens to lame duck presidents is a mix of venting frustrations and adventurism in foreign policy,” said one senior European defense official. And attacking NATO “seems to be a consistent part of [the] Trump worldview.”

White House Assistant Press Secretary Olivia Wales told POLITICO that “President Trump has done more for NATO than anyone else,” citing his successes in securing agreements by allies to raise defense spending to 5% of GDP by 2035, bolster U.S. military presence in Greenland, and efforts to end Russia’s all-out war in Ukraine.

Yet he “remains firm that our NATO allies should have been there for the United States” over the war in Iran, she said, adding: “The President will never settle for the West’s managed decline and will continue to unapologetically advance our interests at home and abroad.”

Democrats are widely expected to win the House of Representatives and potentially flip the Senate, while Trump’s personal approval ratings have fallen to his lowest on record.

The worries underscore growing transatlantic tensions after a U.S. cutoff of Starlink satellite services for Ukraine and a fresh rapprochement between Trump and Russian President Vladimir Putin weeks before the midterms. Further attacks would deal a fresh blow to NATO, just as Russia steps up its sabotage campaign and so-called hybrid war across Europe.

“He could be very pissed off,” said one of the NATO diplomats. If so, “he’ll be very harsh.”

Forces, money and Ukraine

At the heart of the concerns is an upcoming review of U.S. forces in Europe, expected by December. If Trump is blocked from legislating domestically, he may seek to significantly increase the scope of that pullback to rally his MAGA base, three of the diplomats said. 

The president could also decide to tie continued American presence on the continent to Europe accepting a U.S.-backed peace deal in Ukraine, said Oana Lungescu, a former NATO official and distinguished fellow at the Royal United Services Institute think tank.

“There is a risk that all these things — the U.S. force posture review, Ukraine, European security order … somehow are treated as part of a much bigger deal with Putin,” she said, “creating a very dangerous situation for security in Europe.”

Trump could also move to cut U.S. contributions to the alliance’s common funding, limit the NATO-backed PURL arms-buying scheme for Ukraine, as well as deepen ties still further with Russia, the diplomats said.

A major electoral defeat for the Republicans could also spell big changes at the Pentagon, which would have knock-on effects for any plans currently being hatched in the building.

Defense Secretary Pete Hegseth has become a deeply unpopular figure in Congress, given his refusal to provide regular briefings about budgets and operations to lawmakers, especially Democrats.

That unpopularity has led to speculation that Hegseth could be out after an electoral blowout for Trump, partially because a Democrat-led Congress would slap Hegseth with probes into his firing of dozens of generals and admirals with no cause, and the faltering war with Iran. Those hearings and investigations would hamstring Hegseth and his team, and could prove embarrassing for the administration.

If Hegseth does move on, there would be a transition period in the Pentagon which could push any decisions about moving U.S. troops out of Europe back by weeks or months.

In theory, a Democrat majority in the House and Senate would restrain Trump’s maneuverability even on foreign and defense issues, even if U.S. law currently imposes a minimum limit of 76,000 on troop presence in Europe. 

But “it is doubtful that at least the troop floors would stand up to legal scrutiny and in any case Trump has been very willing to ignore the courts,” said Jennifer Kavanagh, a senior fellow at the Defense Priorities think tank. “The Trump administration has regularly ignored funding guidance from Congress, spending money on activities the legislative branch has not authorized.”

If Trump decides to impose a more sprawling drawdown, Europe will have “the most trouble” replacing assets including electronic warfare capabilities, air defense systems, intelligence and reconnaissance support, aerial refueling, and some types of logistics, she said.

Other allies are more skeptical Trump would hammer NATO. “We have had speculations all the time about Trump … coming out of the NATO; this has not happened so far,” Montenegrin Defense Minister Dragan Krapović told POLITICO. “Congress is the one making the decision, the final decision about less troops in Europe.”

But “to make assumptions with a high probability of success needs an object of study that makes rational decisions,” said a sixth NATO diplomat. “I don’t think we are there with the current POTUS.”

NATO and the U.S. Department of Defense did not respond to requests for comment by POLITICO.

LONDON — Britain’s government runs on numbers — but what if they’re a shot in the dark?

From tepid economic growth to squeezed household incomes, this week’s budget from Chancellor John Healey was packed with grim figures about the state of play in the U.K. — and a host of costly measures to try and turn things around.

Yet it’s almost certain that the budget forecasts Healey relied upon Wednesday will be revised by the time the next fiscal event rolls around.

In this week’s episode of the Westminster Insider podcast, POLITICO unpacked the numbers that govern the U.K. — and found out just how many doubts there are about the information the country relies on.

1. True levels of immigration

Few issues divide Brits like immigration — but grappling with hard data on the issue has proven to be a repeated challenge to governments of all stripes.

For decades, immigration into the U.K. was calculated by the International Passenger Survey (IPS) — essentially people with clipboards at airports, train stations and ports asking people about their intention to stay in the U.K.

But between 2012 and 2020, the number of European Union nationals coming into the country was off by 76% — or 93,000 people a year. The Office for National Statistics (ONS) only discovered this error after trialing a new approach to counting immigration that focused less heavily on the IPS, which was dropped altogether in 2025.

The ONS now uses this new measurement — relying on a combination of Home Office data, information from the Department for Work and Pensions and tax receipts.

But this was again wrong in the year to June 2023 — by 234,000 people.

The original numbers published by the ONS in November 2023 said net migration to the U.K. was 672,000. A year later, the ONS admitted there had been a mistake and said it was in fact 906,000.

Laura Gilbert, who ran data science in No. 10 Downing Street until last year, told POLITICO that net migration numbers are often incredibly misleading — and even the way we calculate those numbers is “highly spurious.”

Gilbert says the quality of the numbers on immigration normally improves months later, sometimes by “quite a lot.” But she warned, “if politicians are making a decision based on exact numbers, often they are using the first number that comes out, which is the worst one.”

2. The scale of unemployment

Healey and Prime Minister Andy Burnham have vowed to get welfare spending down “but in a Labour way.” Much of this will rest on getting young people into work, the subject of a 217-page report by Tony Blair-era minister Alan Milburn.

But Britain’s workforce — and the number of young people out of work — is counted by the Labour Force Survey (LFS), an ONS measurement beset with issues.

For example, between 2019 and 2024, the LFS missed 1 million workers because people with full-time jobs are less likely to answer the phone to surveyors during the week, according to the Resolution Foundation think tank.

The Office for Budget Responsibility (OBR) admitted just this week that the survey is too unreliable to measure productivity. “In recent years, falling response rates have significantly affected the quality of the LFS, making it more difficult to estimate reliably the number of workers and the hours they work,” the watchdog said.

Gilbert says Healey’s claim that there are “1 million young people out of work” is unlikely to be accurate.

The number of NEETs — people not in education, employment or training — is also based on figures from a subset of the LFS, which is particularly susceptible to inaccuracies.

“I think being within 50,000 on either side of that number is very unlikely to be the sort of level of accuracy that you’re at,” Gilbert said. “It’s entirely spurious, if I’m completely honest, but it’s a big number, you write it down, and everyone reads the papers.”

Ben Warner, who set up 10DS, Downing Street’s data science unit, says the LFS can’t accurately measure the number of entrepreneurs arriving in the country, either, making it difficult for ministers to know if decisions — such as a much-hyped tax relief for founders — are actually encouraging people to come to the U.K.

“I’m willing to bet you a hundred quid [we don’t have accurate numbers] at the level that you would need to make thoughtful policy around this,” Warner said. “I am sure there are people who have very, very good knowledge of the economic statistics. But if you’re a minister, you don’t necessarily have access.”

3. Where inflation and GDP sit

These are hugely important measures for a government: Are costs rising for households — and is the British economy growing?

But buried inside this week’s budget assessment by the OBR was a startling admission: There is a one in five chance inflation in 2027 will come in at over 4.5% … and the same chance it will be under 2.5%. They are profoundly different outcomes for the cost of living, a top political issue.

Warner told POLITICO, “The whole thing is mental. We are discussing the uncertainty of the numbers and pretending that these are real.”

Gilbert says there are knock-on effects at play: problems with net migration numbers and workforce data bleed into inflation and GDP projections.

“Understanding migration tells us about the demographics of the country, and when we look at how many people are in work, and that is wildly undercounted, it looks like there are more people who are unemployed, which has a knock-on effect on GDP and inflation,” she explained.

4. The number of kids on free school meals

The number of pupils in England on free school meals is just over 2.2 million, according to government statistics from the start of this year. That’s more than a quarter of all children in the country.

But Gilbert warns that these numbers are likely to be overestimated because schools “game the system” when census data is collected. “So for anyone who has children in school they may have received a text message that says don’t send them to school with a packed lunch — because the schools get funding based on how many children are on school meals,” she said.

5. The number of rough sleepers on the streets

One of Burnham’s flagship promises when he became prime minister was to end homelessness in the U.K., and Wednesday’s budget put £432 million towards precisely that promise.

Yet the way rough sleepers are counted in the U.K. varies according to each council, with some areas relying on an estimate and others on a street count — sending workers out to physically count the number of people on the streets on a particular day in autumn.

Some councils have swapped between methods — which can make it look as though they have dramatically reduced their rough sleepers from one year to the next.

For example, in 2017 Brighton and Hove Council used an estimate of rough sleepers which put that number at 176. The following year, the council used a street count — but this took place on a snowy night, so the number fell to 68.

This made it appear as though the number of people experiencing homelessness had been more than halved.

BRUSSELS — The European Union should ready its Anti-Coercion Instrument, otherwise known as its “trade bazooka,” for use against Washington over its push to raise EU drug prices, Belgium’s deputy prime minister has said.

Frank Vandenbroucke, who also serves as the country’s health minister, issued the call in a position paper published Thursday by the Egmont Institute think tank, co-authored with his deputy head of cabinet Gloria Ghéquière.

He also said the EU should be ready to suspend the tariff concessions it granted to Washington under the Turnberry trade deal from August 2025 if the U.S. imposes additional duties on European goods.

The Trump administration has been pressuring European governments to pay more for medicines under its “most-favored-nation” policy as it seeks to bring American drug prices into line with those in other wealthy countries.

Washington argues that Americans are unfairly shouldering the costs of pharmaceutical research and development, while Europeans reap the benefits.

The MFN policy ties American drug prices to the lowest prices charged in a basket of wealthy countries, including France, Germany and Italy. The U.S. has already concluded MFN pricing agreements with 26 pharma companies, which have agreed to benchmark the prices of drugs supplied to the U.S. Medicaid program.

The intended effect is for drugs manufacturers to either increase prices in third countries, to lower their U.S. prices, or both.

Washington is also ramping up pressure on individual member countries to pay more for their drugs. In June, the U.S. launched a so-called Section 301 investigation into Germany’s alleged “persistent underpayment” for innovative drugs. The investigation could lead to additional tariffs, exceeding the 15% ceiling agreed under Turnberry.

Capitals are banding together to counter the U.S. pressure. At an informal meeting in Dublin last week, ministers from Ireland, France, Germany, Italy, Denmark, Sweden, the Netherlands and Belgium discussed creating an EU-wide pharmaceutical task force to coordinate their response.

“If we don’t work together and act as a team, countries are inevitably tempted to go it alone,” French Trade Minister Nicolas Forissier told POLITICO.

In the paper, Vandenbroucke and his colleague argue that Brussels should open an ACI investigation in response to Washington’s drug pricing policy. The instrument allows the EU to impose tariffs and restrictions on services in response to foreign threats to trade if backed by a qualified majority of member countries.

“The procedure is quite heavy, but already opening an examination would have an effect of its own,” the paper argues.

The authors also highlight a clause in Pfizer’s MFN agreement requiring it to share additional revenue from higher prices outside the U.S. with the American government. “Higher foreign payments thus become a source of revenue for the American government itself,” they write.

The deputy PM questioned the underlying basis of the policy. Because the U.S. market is so lucrative compared to all the rest, drugmakers would accept withdrawing from third countries as long as it meant keeping U.S. prices high.

Vandenbroucke, an economist by training, said the net effect would likely be an extreme increase in European drug prices — or the withdrawal of drugs from the market — while producing comparatively modest price cuts in the U.S.

According to one forecast cited in the paper, prices could triple in countries used as benchmarks, while U.S. prices would fall by just 7.5% to 15%.

“The consequences would reach well beyond the medicines budget, putting pressure on the solidarity that universal insurance is designed to secure,” the authors write.

LONDON — Andy Burnham became Britain’s prime minister 100 days ago on a pledge to end 40 years of neoliberalism. His first budget announced he wouldn’t do that on the front page.

Wednesday’s 150-page red book was titled “breathing space for today, fresh hope for the future”, a confession, with true British modesty, that it was a stepping stone to bigger pledges downstream.

Burnham’s top finance minister, Chancellor John Healey, unveiled 98 changes, including help for most households’ energy bills, which are due to spike this winter because of Donald Trump’s war with Iran, and a £10 billion defense package to support Ukraine.

Many of the tax tweaks were limited and technical, including an 8% cut to tariffs on soy milk. Healey’s ambition was reined in by surging global oil prices and a political choice by his boss not to blow the doors off yet.

Burnham has reviews on the creaking welfare system, devolving power to the regions and a “10-year plan” all coming before Christmas. Only then can he grind out the numbers for next year’s spending review.

The Labour MP Darren Jones, who served in the Treasury until Burnham arrived in July, called it a “steady-as-she-goes budget” that was to be expected. Many Labour MPs were happy, cheering measures for their area and pointing toward a bigger bang later on. Industry lobby groups could grasp onto something in their area of expertise.

But with U.K. growth struggling, others were less generous. Joe Shalam of the center-right Centre for Social Justice think tank called it the “fudge-it budget.” Tory leader Kemi Badenoch asked: “Is that it?”

Perhaps the trickiest response for Burnham was from Mainstream, the left-wing campaign group that helped propel him to the Labour leadership this year. “Ending 40 years of neoliberalism can only be delivered by radical action,” read a statement by the group’s interim council.

POLITICO looks at five other takeaways from Wednesday’s budget.

1) We’re in the holding pen

The chancellor’s big bazooka was to slap a much-anticipated tax rise on banks — but he surprised many by saying it will last only 15 months. It will raise less than £1 billion in its peak year.

It wasn’t the only temporary measure Healey unveiled on Wednesday. He extended existing cuts to fuel duty, a tax cut on household energy bills and a £2 cap on bus fares, but only until 2027. They will all need to be reviewed again before his next annual budget.

Likewise, some of Healey’s spending plans thin out after a few years, which suggests they may need topping up later. This applies even to the areas closest to Burnham’s heart. Budget documents suggest support to end rough sleeping will total £1.1 billion in the two years from April 2027 but only £270 million in the three years after that.

There were plenty of changes, of course, such as to writing-down allowances, property income taxes and tax on savings. Whitehall will have to find more administration cuts while tax inspectors hunt down another £3.2 billion a year. But the Institute for Fiscal Studies, a non-partisan economic think tank, called it all a “hodgepodge” of “fiddly measures” that would do little to affect growth.

Many of the more fundamental decisions were kicked down the road. Healey has committed to spending 3.5% of GDP on defense by 2035, but will only spell out how to fund it in a spending review at some point in 2027. Major reforms to the welfare system — spending on which is still rocketing — will only be decided after two reports by the Labour grandees Stephen Timms and Alan Milburn are published in November.

Healey published a “fiscal devolution roadmap” that spelled out a path to handing regional mayors full control of the business rates raised in their areas by the end of the decade, but this has an element of wait-and-see too.

Healey had a narrative for his cautious approach. “I decided on an early budget to give the country a bit of breathing space and to provide stability and direction in the face of speculation,” he told MPs Wednesday. “We’ll continue to map out that direction for Britain through the prime minister’s 10-year plan and the spending review.”

This is not the Burnham who complained Britain was “in hock to the bond markets” last year.

2) Everything is terrible, so blame the White House.

Burnham and Healey can blame Trump — up to a point.

The chancellor said the headwinds that once faced Britain are now “global economic storms,” fueled above all by the U.S. conflict with Iran. “We did not want this war,” Healey told MPs.

Journalists spent Wednesday trawling through the usual gloomy parade of numbers about the U.K. economy produced by the independent Office for Budget Responsibility. Britain’s projected growth in 2027 was cut from 1.6% to 1% (though Treasury officials insisted GDP per person will rise overall by the end of the decade).

Healey chose to leave himself with a smaller fiscal buffer than his predecessor Rachel Reeves, telling MPs he had used it to “absorb the impact of the Iran war.” He also raised net taxes by £7 billion a year, though this was far less than the £26 billion in Reeves’ last budget.

But the situation is so volatile that these numbers, based on market energy prices in mid-August, are probably already out of date. The OBR’s “severe shock scenario” had oil prices peaking at around $115 a barrel in the first half of 2027. They already hit that level this week.

Healey insisted that Britain is doing well in the circumstances; his ministers all point to an International Monetary Fund prediction that the U.K.’s deficit will be the lowest in the G7 by 2029.

Opposition parties, however, paint a picture of a nation where everything is just getting gloomier. The tax take was already on course to rise to a record high; Healey broke that record again on Wednesday. (It is now due to reach 38.6% of GDP.) Britain’s spending on debt interest has almost tripled since 2020.

3) Defense spending is still a big, big headache

Healey resigned as defense secretary under former Prime Minister Keir Starmer in June to protest the lack of military spending — but now faces mounting unanswered questions about his own plans.

Healey did two big new things on defense spending on Wednesday. First, he confirmed an open secret in Westminster: he plans to reach 3% of GDP by 2030 — on a path to NATO’s 3.5% by 2035 — but repeated that the details of how he’ll pay for it will only be spelled out in next year’s spending review.

Secondly and more significantly, he outlined his plan to plug a ​​£1.8 billion-a-year gap in Starmer’s defense investment plan — but provided only scant details. 

The Treasury said it will be paid for by shaving 1% off each Whitehall department’s capital budget in the coming years. However, those departments have not yet worked out what they will cut; that is a problem for another day. These questions will dog Healey for the next year.

At least one person was delighted: Volodymyr Zelenskyy. The Ukrainian president said the chancellor “made my day” with a £10 billion package of economic and military support to Kyiv. Part of the package needed special sign-off by ministers because civil servants warned they could not guarantee it would provide value for money.

4) There was something to make Labour MPs happy

Much of what Healey did unveil appeared to be aimed at preserving the “Burnham bounce” in the polls and with his own MPs. 

The chancellor called it a “budget for the working people of Britain” and Treasury analysis says it was redistributive, handing the biggest boost to the poorest households (albeit only raising their incomes by 0.6%).

Central to this was Healey’s closest thing to a “rabbit out of the hat” — a £100-per-household cash payment to people living in homes below a certain value this winter. One Labour MP enthused that the criteria for the payment (which Treasury officials say will capture 88% of the poorest households) was “absolutely brilliant” because it will capture working households and those on benefits at the same time.

There was another £1.5 billion for social and affordable housing, a “covenant” to govern new AI data centers and changes to mileage rates for self-employed workers. Burnham has prided himself on being a grassroots politician; it was a grassroots package.

How much voters will notice is another question. The IFS warned the package of “breathing space” measures was still “relatively small.” It could be swallowed by a rise in annual energy bills in January — predictions of which have recently ranged from £276 to £469.

The OBR warned there has been “virtually no growth” in real household disposable income per person over the last decade or so, and predicted “no real earnings growth in 2027” despite Burnham and Healey’s efforts to help.

5) MPs won’t stop chattering about an election

Burnham only has to call an election by mid-2029 and keeps trying to snuff out talk of going earlier — but every prime minister does this until they don’t.

His MPs were studying the budget Wednesday to work out if it makes an early general election more or less likely. It’s fair to say they couldn’t agree.

On the one hand, this cautious budget of temporary measures might suggest Burnham — who needs his own mandate for more radical changes to the electoral system or Britain’s relationship with the EU — is holding out for the country’s backing.

Others would say a cautious stepping-stone budget is hardly the eye-catching approach you would take if you were about to sell yourself to voters. Growth is set to be slow next year; Burnham needs time to turn the economy round and show he can change things.

Burnham told journalists on Wednesday: “I don’t know how many times I’ve done this now, but yes, I can rule out calling a general election in the next 12 months.” The speculation will continue anyway.

Esther Webber, Emilio Casalicchio, Sam Blewett and Charlie Cooper contributed reporting.

CORRECTION: This article was updated on Oct. 29 to better reflect the Centre for Social Justice’s ideological stance.

BELGRADE — Brussels has lost its man in Belgrade.

The opposition Student List’s landslide victory on Sunday ended Aleksandar Vučić’s 12-year run as the EU’s key interlocutor in Serbia. For more than a decade, every step of the candidate country’s accession process and trade negotiations had to pass through him.

“Aleksandar Vučić acted like the go-to person for everything while ignoring all the laws in the country, including the constitution,” Jugoslav Gašić, an assistant professor in medicine at several universities and soon-to-be MP, said in an interview.

When POLITICO reached him, Gašić was in the middle of grading student papers — a fitting snapshot of a new parliamentary majority made up largely of professors, doctors and other political novices.

The Student List won an outright parliamentary majority at the weekend: a stunning result for a leaderless movement born out of protests.

The party’s first order of business will be undoing much the legacy of Vučić and his Serbian Progressive Party (SNS), starting with reversing years of rule-of-law rollbacks. But it will also reset Serbia’s relationship with Brussels, which the Student List argues the former leader managed more as a transactional tool than a genuine path to EU membership.

“Ultimately, [Vučić] always represented his own interests and not the interests of Serbia,” said Gašić.

Representatives for the SNS didn’t immediately respond to a request for comment.

Even among Serbia’s most committed pro-Europeans, Brussels’ willingness to route all progress through Vučić personally has left a bitter aftertaste.

“The key lesson that should be drawn from the case of Serbia is that the EU can very easily lose credibility and integrity if it ignores the causes of democratic backsliding in a country,” said Srdjan Majstorović, chairman of the governing board of the European Policy Center (CEP), a think tank.

According to CEP data published earlier this year, as many 41.6% of citizens believe the EU is more interested in pursuing its own political and economic interests in the region than improving the state of democracy and the rule of law in the country.

For years, anytime non-governmental organizations, journalists or activists argued that Brussels should try to include other voices in the EU negotiation process, they were told “that there was no alternative to the regime in Serbia,” Majstorović continued.

The Student List’s election program casts the EU as Serbia’s most important economic partner and pledged to deepen Belgrade’s existing strategic partnerships with EU members such as Greece, Italy, Hungary and France, while seeking closer bilateral ties with other European capitals.

It does not, however, explicitly name EU membership as an immediate goal.

Gašić wouldn’t be drawn on concrete aims for the Serbia-EU relationship, but said: “We don’t want to be cut off by Europe. We don’t want to be an isolated island.”

“I respect how well-ordered they are, the rule of law and democratic principles,” he added. “Yet I think we need to reset our priorities with the EU, where we consider Serbia’s interests first. A one-sided approach doesn’t foster long-term cooperation.”

The Student List grew out of a mass protest movement sparked by a 2024 railway station roof collapse that killed 16 people. Students blamed the deaths on corruption in state construction contracts and began blockading universities, and within months the protests had swelled into the largest Serbia had seen in decades.

Brussels’ response was muted as students marched across the country, with EU officials largely avoided criticizing Vučić directly. EU flags were conspicuously absent from the demonstrations.

The European Commission didn’t respond to a request for comment for this article.

“The Commission must first restore its long-lost credibility after years of propping up Vučić,” said Djordje Bojović, a foreign policy advisor for Greens in the European Parliament.

He said that Serbia has long been demonized and struggled to reinvent its image since the 1990s, an image “only further cemented by Vučić’s repressive authoritarianism.”

Despite those concerns, Serbia’s economic ties with Europe flourished during Vučić’s time in power, with the country becoming one of the region’s leading destinations for foreign investment.

Under Vučić, Serbia went from about €750 million in foreign direct investment in 2012 to more than €30 billion over the following decade, more than the rest of the Western Balkans combined.

In Brussels, figures such as Bojović and representatives of the opposition parties would plead with institutions such as the Parliament and the Commission to meet with them or take their concerns seriously.

“Vučić had convinced all of them that the opposition is not worth talking to and that they’re not credible,” Bojović said.

Now, with SNS firmly relegated to the opposition, Brussels will need to rethink how it works with Serbia. To many Serbians, the EU has 12 years of looking the other way to answer for first.

DUBLIN — EU and Chinese officials are already discussing the next sectors for trade talks as Brussels prepares to review implementation of their latest understanding in January, EU trade chief Maroš Šefčovič told POLITICO on Friday.

“In January we can assess how it worked and if it delivered all parts of our agreement,” Šefčovič said, referring to an Oct. 9 pact by which China will voluntarily reduce exports of hybrid vehicles to the EU by almost half to 350,000 units in 2027.

That deal also lowers tariffs on European goods such as auto parts and footwear, and smooths exports of rare earth elements to the EU. 

After a scheduled January videoconference with his counterpart Wang Wentao, Šefčovič said he hopes the two can deliver results in March 2027 at their next round of in-person talks in Brussels. 

“I would like to see that we both have an understanding of what sectors we are going to focus on next,” he said.

The intense engagement with China comes as the bloc seeks to rebalance mutual economic ties, which EU officials say have been distorted by Chinese subsidies, market barriers and a surge in imports. Šefčovič stressed the urgency of the task, given that the EU’s trade deficit with China “reached almost €197 billion in the first half of this year. At this rate, we could break the 2022 record” of €397.3 billion.

“A part of our team is working on implementing all what we agreed, and [another] part of the team is talking to our Chinese counterparts on what should be the next sectors, next areas on what we want to focus the work on. Hopefully with another [Trade and Investment Consultation] in Brussels we can actually deliver the results,” he added. 

“The primary objective for us … is to rebalance the trade.”

At a press conference on Friday, the trade chief said the European Commission was looking to shield more sectors from Chinese overcapacity, with plastics the leading candidate for safeguard measures — a mix of quotas and tariffs.

“We are currently analyzing what would be the best candidates and sectors to be addressed” through safeguard measures, he said. “Currently, what I think is the closest, is the plastic sector.”

Brussels is also juggling requests from the EU’s 27 member countries, which all seek to protect the industries that are key to their economies.

Commission President Ursula von der Leyen told EU leaders last week that Brussels wants to shield the chemical and machinery sectors next, POLITICO reported.

Šefčovič added that the European Commission was looking at proposing new trade tools to nudge EU companies to diversify their suppliers, expected in early December.

“We would respect what we have heard from every single business: Keep it simple, no additional reporting,” he said. 

The EU executive is also looking to incorporate a proposal by France and Germany for a new tool that would allow Brussels within days to restrict — or even close — access to Europe for countries that severely distort the bloc’s single market. 

“It’s better to present a new instrument,” Šefčovič told POLITICO. “We could initiate it very quickly and … act very quickly.”