MONTREAL — Prime Minister Mark Carney wanted the landmark EU-Canada summit to be about much more than “nomenclature.” He got what he craved. 

Over a whirlwind 48 hours in Montreal, top officials from Brussels and Ottawa huddled to pursue agreements on critical minerals, super computers and defense cooperation.

European Commission President Ursula von der Leyen, European Council President António Costa and Carney gathered as U.S. President Donald Trump continues to upend the global order and Chinese dominance of critical markets squeezes middle powers. 

Those challenges have pushed the EU and Canada into a rapidly developing partnership that eclipses anything attempted by Brussels with a non-member country since the bloc was formed. 

Here are all the key things POLITICO learned during the EU-Canada meetings. 

Carney finally embraced ‘associate membership’

Initially reluctant, the Canadian prime minister came around by the end of the summit to endorse von der Leyen’s controversial label for the global alliance the EU and Canada are building. 

Carney set a six-month deadline to firm up the ground rules of what “associate membership” is, trialing an induction process that could be a model for other non-European countries.

“With Canada becoming the European Union’s first associate member, in the coming months we will determine the full substance, scale and scope of this new form of membership,” he said Friday. 

Carney added he will meet periodically with von der Leyen to track progress, including a return trip for the College of European Commissioners to meet with their Canadian counterparts in March.

Got minerals

Both Canadian and EU officials are walking away from the summit with at least one major win: the framework agreement signed between the European Investment Bank and Canada that will open up the bloc’s lending arm to Canadian critical minerals crucial for future tech. 

That means batteries, circuit boards and semiconductors, which all require lithium, nickel, cobalt and other critical raw materials that, as of now, the EU is largely dependent on China to score.

The deal helps wean the Europeans off a politically volatile critical minerals dealer, for a more reliable Canadian supplier. 

The agreement does not immediately unlock funding for specific projects, but it supports pathways for future investments in Canadian mining and helps link the bloc’s supply chains with Canada’s.

Canada’s energy ambitions still point east

Critical minerals aren’t the only Canadian natural resource on the menu for Europeans. 

Carney has said he wants to make Canada an “energy superpower” and leverage huge stores of oil and liquefied natural gas in his country for export. The only problem: Most of it is in the western province of Alberta, far from Europe.

But the summit concluded with a commitment by both sides to a “long-term feasibility study” on exporting LNG to Europe via the east coast or Arctic ports closer to the bloc. 

“There’s also a huge opportunity in terms of bringing some of the fossils and gas from Canada to the EU,” said a Commission official, who was granted anonymity to talk about sensitive diplomatic negotiations. “The old infrastructure in Canada was built north-south for historical reasons, but now there is talk of starting to build east-west.”

Making nice with Washington? Don’t hold your breath.

As Europeans and Canadians preached deeper ties, Sen. Peter Welch (D-Vt.) was there doing damage control.

Welch, whose state is a little over an hour’s drive south of Montreal, spent Thursday reassuring business leaders that U.S. relations with Canada and beyond can, some day, get back to normal. When exactly, he couldn’t say for sure.

During his trip, Welch met with Quebec Chief Trade Negotiator Pascal Paradis, tourism industry leaders, businesses and manufacturers nailed by tariffs, and hit up a Eurasia Group lunch.

Tuesday’s U.S. midterm elections could offer a waypoint to warmer relations. But Welch loaded his optimism about Democratic Party fortunes with caveats.

“I think we’ll be successful, but you’ll still have a president who abuses his authority and acts in arbitrary ways,” he said. “It’s not like I can give any assurance that things are going to change.” 

Unspoken in the communiqué: China

Canada and the EU pledged deeper cooperation on pumping more European money into the mining, production and refining of critical minerals, a response to China’s dominance of the global market for those minerals. But the final summit communiqué steers clear of naming specific countries. 

Canadian Defense Minister David McGuinty was more candid.

“China has been vacuuming up as many critical minerals as they can throughout the world, particularly in the African continent, cutting deals, usually infrastructure for critical mineral deals. That could be a soccer stadium, for example. It could be a light rail system,” McGuinty told POLITICO at the summit Friday.

“It turns out that Canada’s got a huge amount of critical minerals, and basically all 10 of the 10 critical minerals on the short list for NATO, which the United States is also aware of. We’re going to not only exploit, but we intend to move to transform,” he said.

The common language: Sovereignty

Outside the summit, many Montrealers were oblivious to the landmark meeting taking place in the city. Inside, the vibe was existential.

The trio of leaders — Carney, von der Leyen and Costa — invoked individual and collective sovereignty as reasons to pursue a closer alliance to weather “new storms” stoked by climate change, challenges to democratic norms and the weaponization of trade. Carney has notably claimed concerns about encroachment on Canada’s sovereignty as a reason to walk away from trade talks with the Trump administration. 

“Today is about sovereignty,” Carney said. “We’re building the industries and infrastructure that underwrite our collective security.”

Quebec wanted a seat at the table

The summit came to Montreal weeks after Quebec — the French-speaking province in Canada that hosted the summit — elected a separatist government. Quebec shares powers with Ottawa and had its own seat in the CETA trade talks with the EU over a decade ago; and it had sought a similar role at this summit. 

But Ottawa refused to let new Premier Paul St-Pierre Plamondon address the summit, so he boycotted it, complaining he was being asked to “serve shrimp cocktail.” 

Carney accused him of leaving “an empty chair.” It stayed empty, even though six former Quebec premiers came to dinner.

The Europeans did not escape unscathed. The Quebec press panned von der Leyen’s English-only speech on the opening day as a faux pas in Canada’s largest francophone metropolis. Commission Executive Vice-President Teresa Ribera did little better, telling Radio-Canada in French that, for Brussels, summits like this are between national governments.

Bagel diplomacy

In a town where the original heated rivalry persists between two bagel shops, von der Leyen couldn’t resist picking a side with a photo-op at St-Viateur. 

Sorry Fairmount. 

MONTREAL — Canada embraced the European Union’s offer of “associate membership” after a two-day summit at which Brussels and Ottawa gave themselves until next June to work out what their new relationship will look like.

Prime Minister Mark Carney’s endorsement of the proposal by European Commission President Ursula von der Leyen followed weeks of hesitation, a hostile response from U.S. President Donald Trump and pushback from EU heavyweight Germany.

“In the coming months, we will determine the full substance, scale, and scope of this new form of membership,” Carney told a press conference on Friday at the end of the two-day summit at the Port of Montreal. 

“Today, we move towards associate membership for Canada,” Carney said, describing it as “the deepest possible partnership short of accession.”

The two sides have set a June 2027 deadline to determine the terms and boundaries of their intensifying relationship — an alliance that comes with a payment schedule. Carney danced around a question pressing him on how much associate membership will cost the Canadian public.

“We don’t view this as paying, personally,” Carney said, stressing the alliance as a “positive” project.

Von der Leyen and European Council President António Costa, standing either side of Carney, presented the experiment as a necessary survival strategy to thrive in an increasingly dangerous world.

“The concept of an associate member is uncharted territory but we have the ambition, trust and creativity to shape it together,” Von der Leyen told reporters. “To be crystal clear, this is not a partnership against anybody, but for our common strength.”

Canadian government officials who spoke to reporters after the press conference confirmed legislation won’t be necessary to legitimize Canada’s EU associate membership status.

“Our relationship is so special that we want to create something new — to go beyond a simple association, everything short of a full EU membership,” said Costa, pitching a new model for non-European countries to integrate more closely with the bloc. “Our association will be the closest, deepest and most unique of its kind.”

Irritants persist

Despite the upbeat rhetoric, some longstanding trade disputes remained unresolved after the summit.

Carney told reporters the two sides had reached an agreement on carveouts from a landmark EU anti-deforestation law, but Canadian government officials subsequently walked back his assertion.

The issue remains part of ongoing trade discussions, one official said, noting progress in addressing what Canada views as flaws in the legislation. The officials were granted anonymity to discuss sensitive diplomatic and trade negotiations.

Another irritant has been whether Canada would qualify for “Made in Europe” status under the EU’s Industrial Accelerator Act, a landmark measure that would seek to channel public procurement spending in sectors ranging from green energy to automotive toward locally produced goods. 

Von der Leyen said the regulation proposed earlier this year by the Commission foresaw including Canada as a free-trade partner, but added that it was now subject to review by EU lawmakers and governments.

“The Industrial Accelerator Act has been proposed by the Commission to include all countries with whom we have free-trade agreements. So automatically Canada would be in,” she said in response to a question. 

“Of course now the proposal has to go through the co-legislative process. But our proposal is very clear in including Canada.”

Despite months of preparations, the summit itself was chaotic, with agenda details confirmed at short notice and bilateral meetings split between two locations. The informal arrangements were intended to encourage more face time between EU commissioners and Canadian ministers, who are set to see much more of each other.

Canadian ministers have been invited to attend more meetings with their EU counterparts as part of a plan to deepen political alignment. Recent participation by Foreign Affairs Minister Anita Anand and International Trade Minister Maninder Sidhu in informal EU meetings has served as a trial run.

Carney himself is expected in Dublin in two weeks, having accepted Costa’s invitation to join an informal European Council meeting.

America is heading to the polls for the midterm elections — and Europe is watching closely. With the outcome set to have consequences far beyond Washington, from trade to defense, we’re bringing you a special episode of The Conversation, hosted by POLITICO’s Dasha Burns.

Dasha sits down with two political strategists working behind the scenes in some of America’s most consequential races: Republican T.W. Arrighi and Democrat Lis Smith. They take stock of the race, reveal what goes into running a high-stakes campaign and explore what’s shaping the battle for American voters.

If you have a question or comment, don’t hesitate! Message us on our WhatsApp here or at +32 491 05 06 29.

Prime Minister Andy Burnham will have an unofficial goal when he meets members of Britain’s former empire next week: Avoid a fight about slavery reparations.

Good luck, as they say, with that.

His predecessor Keir Starmer’s trip to the last Commonwealth Heads of Government Meeting, at a beach resort on the Pacific island of Samoa in 2024, is still the stuff of rueful mutters in parts of Whitehall.

Lined up in a semi-circle of armchairs — “like an Alcoholics Anonymous meeting,” as one person briefed on the gathering put it — leaders from many of the 56 Commonwealth nations negotiated live over a 16-page communique on laptops and tablets. Starmer, a barrister, found himself personally redrafting a key paragraph about reparations on a screen surrounded by other leaders, said two further people briefed on the meeting.

The unusually intimate format of the leaders’ retreat meant they had no officials with them on the veranda, and Starmer had just one civil servant — No. 10’s private secretary for foreign affairs — stationed in a tent close by. His chief of staff Morgan McSweeney was woken at 4 a.m. London time by a phone call to talk about the strategy for reparations.

That, however, was never clearly resolved. The retreat dragged on hours late; some leaders left before it was even over. Starmer was frustrated and felt he had been “ambushed,” said one U.K. official involved in the 2024 trip. A second said they had blocked the incident from their memory. A third said Starmer was left “furious,” adding: “He went in blind and it was terrible for him.” A fourth said simply: “It was a disaster.” All were granted anonymity to speak frankly.

The eventual communique agreed on a “conversation towards forging a common future based on equity.” This fudge kicked the issue of reparations down the road — where it now lands in Burnham’s lap.

Britain’s new prime minister will touch down at the biennial summit in Antigua and Barbuda next week to find the issue still firmly on some Caribbean and African leaders’ minds.

At the United Nations in May, 123 countries passed a motion calling for “inclusive, good-faith dialogue on reparatory justice.” The U.K. abstained. Barbados PM Mia Mottley announced a manifesto from Caribbean leaders on the “moral, ethical and legal case” for reparations in June. Commonwealth Secretary-General Shirley Botchwey said last week that an apology for Britain’s role in the slave trade “wouldn’t hurt.”

The visit will be a test of how Burnham — who has a reputation for speaking off the cuff, especially on issues of moral justice — maintains a delicate U.K. government line that reparations are not “the answer,” as Foreign Secretary Ed Miliband told POLITICO last month. And Burnham will face that challenge in a unique spotlight: It will be his first overseas visit with King Charles III, who is the head of the Commonwealth.

POLITICO spoke to a dozen U.K. officials or politicians who were involved in the 2024 summit or the planning for Burnham’s upcoming visit. They painted a picture of acute anxiety in the British state over how to deal with calls for reparations from its former colonies; tensions between Downing Street and the Foreign Office over the handling of 2024; and serious questions in Whitehall about whether the summit is even useful for No. 10 — despite the king’s role leaving U.K. prime ministers little choice but to attend.

Burnham will not have to deal with the extreme jetlag and communications hurdles that dogged Starmer’s trip, which involved a 28-hour flight in each direction. But like Starmer, he will fly out at a time when his in-tray is crowded by other issues — not least the U.S. midterms happening at the same time and the domestic aftermath of his first budget, just unveiled this past Wednesday.

The first U.K. official quoted earlier in this story said: “There’s a sense that there can’t be a repeat of [2024] this time around.” The third U.K. official quoted above said: “I don’t understand why they’re making the same mistake. Does the prime minister really have to go?”

A No. 10 official, however, said Burnham made clear soon after taking power on July 20 that he was “very keen” to attend the summit. Miliband has “laid the groundwork so that things hopefully won’t be as tricky as they were in 2024,” this person added.

“Andy’s style is that he is an honest broker with people, and he will give an instinctive response to things,” the official said. “But the government’s position is clear that reparations are not seen as the right route. It’s a careful balancing act, but one that we’re well prepared for.”

Climate resilience fund in the works

One tactic for the current No. 10 will be to try to avoid talking about it public.

Downing Street has broken with recent precedent by deciding not to bring the usual “pack” of political journalists, taking a smaller media “pool” instead. This will limit the scope of questions that Burnham faces. (Political editors from news outlets, including POLITICO, have written to No. 10 to object to the arrangement.)

Timing could also allow the visit to slip under the radar. Burnham and Foreign Secretary Ed Miliband will be there alongside counterparts including Anthony Albanese of Australia and Mark Carney of Canada, creating a rare opportunity for them to discuss the implications of the U.S. midterm results in private. The symbolism, as “middle power” nations deal with a drift in U.S. relations under Donald Trump, would be obvious.

Officially, the agenda is to build an alliance that can boost these middle powers, along with the developing states that global summits usually overlook. 

The Commonwealth Secretariat — the London-based body that co-ordinates the summit — said the aim of next week’s gathering is “partnerships and investment,” including in climate and youth employment, and removing trade barriers.

Likewise, the U.K. Foreign Office has been working on a climate resilience fund for developing nations, two people with knowledge of the talks said. A third said conversations in the U.K. government had focused on mobilizing public and private finance, and improving access to finance for climate-vulnerable countries.

Three people with knowledge of the planning emphasized that this summit would be an opportunity to build on relations with countries that could discuss bilateral trade, though they did not name specific nations and no U.K. trade ministers are due at the event.

“There will obviously be trade and investment discussions with a range of partners,” said one of the three people, a U.K. government official, who also noted that the U.K. will raise the impacts of El Niño. “The bigger picture is that we want to use the Commonwealth network to deepen trade and investment links across its 56 members — that Commonwealth advantage is one of the reasons the grouping matters to the UK.”

‘Playing Scrabble with words’

But leaders at these events, known by the awkward acronym CHOGM, can raise whatever topics they wish — reparations included.

Denis O’Brien, the Irish telecoms billionaire who founded the Repair Campaign calling for financial reparations to the Caribbean in 2022, said: “The conversation has moved radically forward.” He urged Britain and other European nations to “start off with an apology and then have an engagement,” adding: “The Foreign Office and the prime minister’s office are playing Scrabble with words — and unfortunately they’re leaving King Charles, who is so highly respected in the Caribbean, in a very difficult position.”

Paul Boateng, the Labour peer who was Britain’s first Black Cabinet minister and now campaigns on the issue, said Caribbean nations “are going to be pressing it. This issue is not going to go away.” The recent UN resolution reinforced Caribbean and African nations’ argument, argued Boateng: “We can’t be seen to simply ignore it … We cannot hold the Foreign Office line that it changes nothing.”

That position cast a long shadow two years ago.

No. 10 flew to Samoa in 2024 insisting reparations were “not on the agenda,” even though the summit’s free-wheeling format meant the choice was effectively out of Downing Street’s hands. 

This message “went down like a bag of sick” with Caribbean nations who saw it as “colonial” and “arrogant,” recalled one person involved in conversations at the time.

The handling created tension between Downing Street and the Foreign Office, then led by David Lammy, who also attended, according to six other people with knowledge of the 2024 trip. 

One of the six people said No. 10 figures had expected the Foreign Office to better manage expectations among Commonwealth nations ahead of Starmer’s arrival. The person said: “No. 10 did not feel like they were well enough informed, and felt some of this could and should have been handled in advance. There was the feeling that both Lammy and the Foreign Office were institutionally pre-disposed to this sort of stuff and not shutting it down. The PM didn’t know what he was going into.”

A second person said: “​​The FCDO world does forget, sometimes, the politics of what’s going on in the U.K. It’s very institutionalized.”

A third person stressed that senior aides in No. 10 had blamed Foreign Office officials, not Lammy personally. Before Starmer left office this year, No. 10 had been drawing up plans for Starmer to skip this year’s CHOGM — and send Lammy as his representative. By then Lammy had been moved from the foreign office and was Starmer’s deputy prime minister.

Another of the six people countered that it was No. 10 that persisted, ahead of the 2024 summit, with a line that was too binary — reparatory justice, as campaigners prefer to call it, has a wide definition that includes support for climate adaptation and education — and failed to listen to Foreign Office warnings ahead of time about the strength of feeling among Commonwealth nations.

“The audit trail would completely exonerate David and the Foreign Office,” this person said. They argued No. 10 officials — who were keen to hold on to the mantle of fiscal responsibility ahead of Starmer’s first budget — had viewed the row too much through how it would be perceived by the right-wing Daily Mail newspaper.

Two other people with knowledge of the 2024 trip insisted they did not remember any significant friction between No. 10 and the Foreign Office. Lammy’s office did not immediately respond to an invitation to comment.

UK review mooted a scaled-back summit

More significantly, the 2024 summit also led to discussions in Whitehall about the set-up of CHOGM itself.

Lammy commissioned an internal review by Foreign Office officials on the Commonwealth in the wake of the 2024 summit, his former Special Adviser Ben Judah told POLITICO.

Judah said the review suggested reducing the frequency of CHOGMs to “every four or five years,” potentially aligned with the hosting of the Commonwealth Games, and seeking to remove the final communique and leaders’ retreat.

It suggested an investment conference in alternate years modeled on the Asia-Pacific Economic Cooperation forum, which could keep the Commonwealth branding but with no organizational role for the Secretariat, said Judah.

Judah suggested this would improve attendance at CHOGM, which is often patchy; India’s Prime Minister Narendra Modi does not plan to attend next week’s summit, for example, though there will be a delegation led by External Affairs Minister Subrahmanyam Jaishankar.  “The Indians think this thing is ridiculous and self-harming and just totally bizarre,” said Judah. “They’d be interested in a real investment conference, not this farce.”

A second former U.K. government official said they knew about the report, which has not been made public, adding that No. 10 figures under Starmer discussed similar concerns about the format of the Commonwealth summit after the Samoa visit.

The Foreign Office declined to respond to questions about the report when contacted by POLITICO, including when it was finalized or whether any of its recommendations were pursued. One Foreign Office official, however, stressed that it was not the U.K. government’s position and that any decisions about future CHOGM arrangements would be for Commonwealth members collectively.

The U.K. government official quoted on trade and investment earlier in this piece said: “The Commonwealth is more important to our geostrategic position now than at any time throughout its 80-year history. In today’s more divided, unpredictable world, the Commonwealth has the potential to be a powerful, values-based force for good in the world.

“This gives us a huge opportunity to drive U.K. interests and priorities — Commonwealth relationships have helped to drive global support for Ukraine, and it is hugely important for our work on climate.”

Funding pulled from reserves

Judah, however, argued that the Commonwealth Secretariat is a “broken institution” and Britain should wind down its involvement to focus on an investment summit instead.

CHOGM has ended up as a “platform for the reparations campaign,” argued Judah: “There’s nothing else on the agenda because it’s not a real international organization, and it’s not a real summit with deliverables.” The Commonwealth and Secretariat, he said, has “essentially been taken over by the only countries that are still really invested in them, which are the Caribbean countries supported by a few African countries, to push the reparations agenda.”

For some, that extends to questions about the way the Secretariat spends its money.

Two people with knowledge of the situation said part of this year’s CHOGM summit is being paid for out of the Secretariat’s reserves. “There is a real sense of concern about the malaise and drift of the organization,” argued one of the two people. “Financially it’s in a dire, dire state.”

A Commonwealth spokesperson responded: “The Commonwealth Secretariat accesses reserve funds for the biennial Commonwealth Heads of Government Meeting and always with member country approval.”

Back in 2024, Starmer’s most senior aides privately raised the question about whether he should attend the Samoa summit at all. “We were overruled,” said another person who worked under him.

Whitehall officials initially assumed that Burnham would not go either, until he said otherwise. “To a lot of the Caribbean countries, the word [from officials] was that he wasn’t going to show,” said O’Brien. “I think people were taken aback by that.”

But despite Starmer’s experience in 2024, Burnham will attend. 

Among all other reasons, there is one very obvious one. “It’s very difficult for a prime minister not to go because the king goes,” said one person who worked under Starmer. “It’s important to him.”

Burnham’s ‘surer touch’

Once Burnham is in the room, campaigners hope he will at least be a listening ear.

Outside the prime minister’s Manchester office No. 10 North is a statue of Abraham Lincoln, commemorating the mill workers who refused to touch raw cotton picked by slaves.

Burnham referred to it in his first speech to the United Nations last month. “In 1862, people with little power used it to help those with none on the other side of the world,” he said. “The best change is change like that, bottom-up change led by people.”

The new prime minister “understands the importance of Manchester as the second great city of empire, and he has a surer touch than his predecessors,” argued Boateng. “We’ve got an opportunity to reset the relationship.”

What reparatory justice would look like is another matter. 

Previous estimates have suggested Britain should owe as much as £18 trillion, but the conversation is far more nuanced than talking about a single big number.

While Boateng argues that no measures should be taken off the table, he would begin with reforming the International Monetary Fund and World Bank to give more Commonwealth countries a meaningful seat at the table, and returning historic artefacts such as the Benin bronzes that are displayed in London’s British Museum. “The British Museum holds loot, literally loot. These are stolen goods,” he said.

Britain is working on debt relief too. Chancellor John Healey plans to make international finance for developing countries a key theme when Britain hosts G20 finance ministers next year. 

NGOs have urged Healey to make debt relief more generous by changing the G20’s common framework and UK domestic law, which sets the terms for 90% of debt that low-income countries owe to private lenders.

Maria Finnerty of Bond, the membership body for NGOs, said Britain “continues to play a role in enabling illicit financial flows through loopholes linked to the City of London and its overseas territories, amounting to the loss of billions from some Commonwealth countries.”

Miliband reflected all this in his POLITICO interview last month at the Labour Party Conference. While condemning the slave trade as “terrible,” he said his focus was on addressing current issues in countries “on the front line of the climate crisis, of the debt burden, of trying to reduce poverty in those countries.”

O’Brien is calling for monetary payments, however. Through the Repair Campaign, he wants to see the EU and U.K. make money available to the 15 Caribbean Community (CARICOM) countries — with a special case for Haiti — “each year for the next 75 years” for issues such as education, green energy and storm defenses to deal with climate change. 

O’Brien would not be drawn on a single figure, but suggested payments should supplement the national budget of each affected country by around 10% a year.

Asked if he had had conversations with the Foreign Office, O’Brien replied: “What do you think?

“I mean, we would like to. We’re approaching this in a very friendly way, taking a very, very sensitive period of history and trying to get results. We have the highest respect for the British government, and particularly the King. But it can’t go on forever.”

BRUSSELS — European coffin manufacturers are joining forces to ask Brussels to investigate Chinese imports, warning that low prices and potential customs loopholes are threatening an industry built around one of the continent’s most predictable markets: death.

A group of manufacturers — which until now had no dedicated lobby representation — has formed a coalition and met with European Commission officials, including from its trade department, the initiative’s organizers told POLITICO. The group is preparing an anti-dumping complaint — a request for the EU to investigate whether Chinese coffin makers are selling their products in Europe at unfairly low prices.

The industry says the damage is already being felt. Over the past five years roughly a quarter of European coffin manufacturers have shut down, their numbers falling from about 120 to 90, according to Folco Ciulli, a consultant helping coordinate the complaint.

“Smaller companies were unable to withstand competition from non-European importers,” Ciulli said, adding those that survived have absorbed only half the production previously handled by the businesses that closed.

The push follows an appeal by a group of EU lawmakers to Trade Commissioner Maroš Šefčovič last year. The MEPs raised concerns about Chinese competition, and were told the industry could submit a formal trade complaint.

“The EU takes robust action to protect its industries from unfairly traded imports and at present has over 200 measures in place,” a Commission spokesperson said. They declined to confirm meetings with the manufacturers, saying contacts with industry over potential trade defense complaints are confidential.

The price of death

At the heart of the industry’s case is a stark price difference.

According to manufacturers’ estimates, producing a coffin in China costs roughly one-third as much as an equivalent product in Italy, even when the same type of wood is used.

The coalition — which has yet to agree on a name for itself — flags several factors it believes give Chinese producers an advantage, including state subsidies, export-related tax benefits, lower labor costs and cheaper timber. It also argues that Chinese manufacturers benefit from preferential raw-material supply chains, and that higher U.S. tariffs on Chinese goods have helped redirect production toward Europe.

But cheap prices alone don’t constitute dumping under EU trade rules.

To secure anti-dumping duties, European manufacturers must provide evidence that Chinese producers are selling coffins in the EU below their established normal value, that the EU industry is suffering material injury, and that dumped imports are responsible for that injury.

The coalition is therefore collecting detailed information on production costs, raw materials, labor and factory-gate prices to compare equivalent coffins manufactured in China and Europe.

Not adding up?

European coffin manufacturers are also examining a hypothesis that some coffins entering the EU from China are not being categorized as such by customs authorities.

Emiliano Inguscio, a mathematician hired by the industry to analyze trade and production data, said his calculations had identified an unexplained discrepancy equivalent to around 30,000 coffins a year in Italy.

“In theory, the number of coffins available for consumption should broadly correspond to domestic production plus imports, minus exports and adjusted for changes in inventories,” Inguscio explained.

Because demand for coffins is relatively predictable and closely linked to mortality, he argues, significant discrepancies could indicate that some imports are not being properly recorded.

The coalition is concerned that such shipments could escape accurate recording in import statistics, obscuring the true extent of Chinese competition.

This has led to a hypothesis that manufacturers have dubbed the “IKEA loophole,” by which some Chinese coffins arrive in Europe flat-packed, with their components declared to customs as wooden parts rather than finished funeral products. Once inside the EU, the pieces are assembled and sold as coffins, the theory goes.

The Commission confirmed that unassembled goods can still be classified as finished products under international customs rules, provided they retain the essential characteristics of the completed item. That means a flat-packed coffin cannot necessarily be treated simply as wooden components for customs purposes.

The industry has also raised a second hypothetical loophole: coffins being imported as packaging for other merchandise, rather than declared as commercial products in their own right.

A widening trade battle

The coffin-makers’ campaign reflects a broader shift in Europe’s trade disputes with China, as complaints about low-cost competition spread beyond strategic sectors such as electric vehicles, steel and chemicals to more traditional manufactured goods.

According to the Commission’s latest annual trade defense report, published in September, the EU launched 32 new trade defense investigations in 2025, nearly matching the previous year’s record.

Coffin-makers would not be the first relatively small, traditional European industry to win protection.

In January, the Commission imposed anti-dumping duties of between 56% and 60% on Chinese candles following an investigation into damage to an EU industry employing around 9,000 people across 80 companies.

MONTREAL — Prime Minister Mark Carney is positioning Ottawa’s C$1.6 billion investment in Canadian artificial intelligence company Cohere as a downpayment on his country’s national security. 

“We’re not waiting for the future of AI to be decided somewhere else by those we don’t know or … don’t trust,” Carney said Thursday in Montreal ahead of the start of the Canada-EU summit.

Carney framed the upcoming congress, which includes meetings Friday with European Commission President Ursula von der Leyen and European Council President António Costa, as a shared endeavor to build a stronger transatlantic alliance in the face of global disruption.

“Sovereignty now requires secure access to semiconductors, critical minerals, payment systems, clean energy technology, vaccines, space-based communications and artificial intelligence,” Carney said. “Canada is taking a major step forward in artificial intelligence.”

In a pre-summit speech earlier Thursday in Montreal, von der Leyen cited April’s multi-billion dollar merger between Cohere and German counterpart Aleph Alpha as a key piece of the deepening Canada-EU cooperation that is set to unfold at Friday’s talks on AI.

“Both Canada and Europe believe this technology should serve people. So we will work together to tackle head-on the safety and security issues of runaway AI. We will develop together rules and standards and strong global governance,” she said.

Carney said Canada was making a commercial investment alongside private investors including Nvidia, Bell and Germany’s Schwarz Group.

Cohere co-founder and CEO Aidan Gomez announced the initial close of its Series E funding round on Thursday, which is targeting up to C$7 billion at a C$35.7 billion valuation.

Gomez joined Carney at Mila, the Quebec Artificial Intelligence Institute, for the Canadian portion of the funding announcement. 

“We believe that artificial intelligence would become one of the defining technologies of this century, and that Canadians should help build it, shape it and benefit from it,” Gomez said, standing next to the Canadian leader. 

The Canada-EU summit is unfolding against the backdrop of economic threats by U.S. President Donald Trump against both transatlantic partners.

Carney dismissed suggestions Thursday that the summit could draw reprisals by Trump against the participants. “This is a process which we’re doing absolutely in the interest of the Canadians, but ultimately the U.S. will see that,” he said.

MONTREAL, Canada — European Commission President Ursula von der Leyen said Thursday she aims to bring EU-Canada relations to the “highest level possible,” touting potential associate member status in the bloc for Ottawa despite capitals having rejected the term a day earlier.

Von der Leyen’s overture comes on the eve of a landmark EU-Canada summit in Montreal where she and Prime Minister Mark Carney are due to announce plans for deeper cooperation against a backdrop of rising autocracy globally and unpredictable relations with U.S. President Donald Trump.

“Canada cannot become a full-fledged member of the EU because of geography, but we both want to bring our relationship to the highest level possible,” von der Leyen said in a speech hosted by the C.D. Howe Institute. “This is why we are discussing the idea of Canada becoming the first associate member of the European Union.”

No sooner had von der Leyen finished speaking than German Chancellor Friedrich Merz issued a statement saying that the EU and Canada were establishing an “Alliance for the Future” — without mentioning the associate member status. Germany has led the opposition to using the term, according to EU diplomats.

“We are fighting each other about a few words which von der Leyen pulled out of thin air,” one of those EU diplomats told POLITICO on Wednesday. “It’s a bit silly while we should have ambition and focus on other things. This is not our proudest moment.”

In a speech hours later on the sidelines of the summit, European Council President António Costa sought to bridge the divide by playing down the importance of the term.

“Tomorrow, the European Union and Canada will launch an Alliance for the Future of Europe,” he said in a nod to Merz’s statement and using the term preferred by Carney to describe the relationship.

“President von der Leyen has even put forward the bold idea of making Canada an ‘associate member’ of the European Union,” he said, noting “I share her ambition.”

“Whether that ends up being the term or not, one thing is clear: our partnership will be the closest, deepest and most unique of its kind,” he added.

The Commission president said in her speech that talks about associate membership would focus on deeper cooperation across AI, climate and energy policy, as well as bolstering shared work between the European Commission and the Canadian government as well as “Parliament to Parliament” and “Court to Court,” a reference to the European Court of Justice and Canada’s Supreme Court.

Such a status, she said, would be open “only to our closest partners outside of Europe, who are ready to open a new frontier together — and to chart the course together, to think beyond the terms of our partnership today, toward the most ambitious vision we can build.”

Von der Leyen’s use of the term associate membership — which she first mentioned in September — is likely to rub some EU capitals the wrong way after a group of countries led by Germany objected to including a reference to the term in a joint EU-Canada statement that was seen by POLITICO and is due to be published on Friday.

After days of talks, EU countries opted for softer language to describe the two sides’ future relations, including the “Alliance for the Future” — the term used by the Canadian side — as well as an “even closer association … short of full membership.”

EU diplomats have told POLITICO that while capitals support the broader aim of closer ties with Canada, they are wary of offering a status that has never been proposed before and whose legal contours remain undefined. Berlin had previously floated associate member status for Ukraine, including specific privileges such as observer status in the European Commission, but that effort was rejected.

Reacting to reports that EU countries would drop the “associate member” term, Carney said on Tuesday: “The good news is it doesn’t matter about specific names or nomenclature. What matters is the difference that it will make to the lives of Canadians … and Canada as a whole becoming a more independent, more sovereign nation, so we can live our lives as we choose.”

Both Carney and von der Leyen have cast this week’s summit as part of a broader effort to deepen ties at a time when both Ottawa and Brussels have clashed with the Trump administration, with von der Leyen warning in her speech about “deeper decay in the international order.”

“Alliances and assumptions that have enabled our prosperity and security are changing rapidly, and each nation or region is looking at how to secure its own interests and its own independence,” she said. “We can no longer let ourselves be shackled by the limits of the old-world order.”

This story has been updated. Camille Gijs contributed reporting from Brussels.

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.

Quebec’s separatist premier says that he will boycott the EU-Canada summit that opens in Montreal on Thursday, warning European leaders that deals struck there without his government’s consent may not be applied in the country’s second-biggest province.

Paul St-Pierre Plamondon confirmed his absence late Wednesday in an open letter to the European delegation, which he posted on X. His announcement followed two days of public sparring with Canadian Prime Minister Mark Carney over Ottawa’s refusal to let him address the summit.

“This dynamic creates uncertainty as to the application of the agreements you could negotiate during the summit,” he wrote in French.

In the letter, St-Pierre Plamondon says Ottawa has “decided to sideline Quebec” from the talks. He says this leaves his government with “neither a chair at the negotiating table nor the opportunity to speak,” even though the summit is on Quebec soil.

Under Canada’s federal system, he argued, the provinces implement international agreements that fall within their powers. Without Quebec’s consent, a deal that runs against its interests “will simply not be implemented,” he wrote. He also accused Ottawa of withholding “critical information” on the negotiations.

He offered to meet European leaders “in the near future, in a more opportune context.” He will send Quebec’s chief diplomat, Pascal Paradis, to the summit in his place.

Carney said Wednesday his office had offered the premier the honor of welcoming the Commission president to Montreal, and a seat at the head table. “I hope he will reconsider,” he said. On Tuesday, the prime minister had accused St-Pierre Plamondon of choosing to “leave an empty chair again.”

The row has soured the upbeat mood around the summit, which Commission President Ursula von der Leyen and European Council President António Costa have billed as a milestone. Leaders will launch an “Alliance for the Future,” a framework for shared prosperity and economic security.

St-Pierre Plamondon’s letter says many of its topics fall under Quebec’s responsibility, including health, education and natural resources.

The premier has also pursued his own contacts with European leaders.

He spoke by phone with French President Emmanuel Macron on Monday, and said the two had agreed on a possible meeting in France in the coming weeks.

At working level, ties have held so far, and officials describe the relationship as constructive.

Hélène Drainville, Quebec’s delegate general in Brussels, told POLITICO last week that Quebec was in talks with the European Investment Bank and the Commission, and that “all the signals are green.”

Carney, Costa and von der Leyen are due to hold a joint press conference on Friday.

European leaders are descending on Montreal in a bid to forge closer ties with Canada.

On today’s show, host Zoya Sheftalovich catches up with Sarah Wheaton, who’s on the ground at the EU-Canada summit. They unpack what the talks could actually deliver — from defense and critical raw materials to space and AI — and the Trump-shaped shadow hanging over it all.

Next, Commission President Ursula von der Leyen may be here in Montreal, but back in Brussels, questions remain about her role in the EU’s Covid vaccine deal with Pfizer.

Finally: Eurovision has revealed its 2027 lineup — but the row over Israel’s participation is far from over.

Questions, comments? Please write in! Find us on WhatsApp here or at +32 491 05 06 29.

Articles mentioned in this episode:

• Our EU-Canada summit live blog.
• ⁠EU and Canada eye golden window to Trump-proof their ties.
• Eurovision confirms candidates for 2027 — but 2 EU countries are still on the fence.
• EU Public Prosecutor’s Office will be ‘killed softly for doing its job,’ says outgoing chief.

The EU and Canada are betting they can deepen their partnership while Donald Trump looks inward at the U.S. midterms — and before European elections upend the political calculus.

Their strategy is to push for the broadest possible upgrade and hope Trump is too busy campaigning to respond, four EU officials and two Canadian diplomats familiar with preparations for this week’s summit in Montreal said.

Trump, whose Republican Party is fighting to retain control of Congress in next week’s midterms, has called the EU’s offer of associate membership for Canada “laughable” and threatened “serious tariffs” if the two sides get too close.

European Commission President Ursula von der Leyen and European Council President António Costa will join Canadian Prime Minister Mark Carney for two days of talks on trade, security, energy, education and the Arctic on Thursday.

The summit “is a very strong statement,” said Mark Camilleri, president of the Canada and EU Trade and Investment Association. “I don’t think there’s any feeling that this is going to be some discreet get-together.”

Canada is also looking to move before Europe’s politics shift. Ottawa wants changes to the partnership that will outlast Trump and Marine Le Pen, whose National Rally is polling ahead in France and has criticized the EU-Canada trade pact, CETA, said a Canadian diplomat. All the officials and diplomats in this article were granted anonymity to speak frankly about the summit preparations.

Avoiding Trump’s ire

Brussels and Ottawa are pushing to strengthen their relationship, including by cooperating more closely on trade and defense, international engagement and institutional links, according to a draft joint statement obtained by POLITICO.

In her September State of the Union speech, von der Leyen emphasized that the EU-Canada alliance is “not against anyone else.” Yet officials acknowledge that a stronger alliance risks triggering retaliation from Trump.

Von der Leyen, Costa and Carney “are fully aware that the eyes of the world are upon them,” said Camilleri.

The Europeans and Canadians know “the U.S. is watching,” a senior EU official said, adding that the bloc and Canada were nevertheless proceeding with business as usual and pushing for the most expansive possible relationship with Ottawa.

Another possibility is that the summit yields only “nice pictures” and little substance, a third senior official said, making it less likely to “trigger” the president.

European capitals, EU institutions and Canada’s provinces are all waiting to see what von der Leyen and Carney agree on in their meeting, the Canadian diplomat said, adding it was impossible to pre-judge how Trump would react.

Shadow of Le Pen

For Ottawa, pressure comes from another direction: Europe’s electoral calendar and the rise of the far right.

With Spain, France, Poland and Italy all set to go to the polls in the next year, Canadian officials want to secure concrete gains while EU governments remain receptive to closer cooperation and keep the topic front of mind, before elections across the bloc risk shifting priorities and upsetting the political balance.

When Carney came to Strasbourg to lay out his vision for a closer alliance in September, he was heckled from the gallery by the far-right Alternative for Germany MEP Siegbert Droese, who led chants of “USA!”

But it’s France’s presidential election in April — and the prospect of Le Pen in office — that is causing the most concern, according to a second Canadian diplomat.

“It’s very fortunate we’re doing this summit now and not in six months,” the diplomat said, referring to the French election date.

Canada is pushing for big, bold “structural changes” in its relationship with the EU now that will outlast Trump and Le Pen, the diplomat added. Carney has grasped the moment’s rarity and urgency and will not leave the summit without securing major wins, the first Canadian diplomat said.

Another question is whether Brussels and Ottawa can upgrade their partnership without eventually drawing the U.S. president’s ire. The midterms might buy them some time, but the vote will not keep Trump busy forever.

Trump might be even more dangerous and more likely to take out his anger on the EU and Canada after the election, given that he will retain many of his tariff and foreign policy powers even if the Republicans lose Congress, the second Canadian diplomat warned.

“At the end of the day, his reaction could be anything,” Camilleri said. “We can only control what we can control.”

Mathieu Pollet contributed reporting.

Ask European Union leaders what they think of Mark Carney’s climate credentials, and you’ll get a gushing response.

“We see the world with the same eyes: from AI to climate change,” European Commission President Ursula von der Leyen said in her State of the Union speech last month, where the Canadian prime minister was the guest of honor.

“Canada and the EU are very, very like-minded,” the bloc’s climate chief, Wopke Hoekstra, told POLITICO in an interview when asked about his hopes for climate collaboration between the two powers ahead of this week’s EU-Canada summit in Montreal.

But this rosy view sidesteps a less comfortable reality: Canada is a major fossil fuel producer whose climate ambitions fall far short of Europe’s.

And under Carney, those ambitions are weakening.

Last year, Canada produced more crude oil than any other country outside the big three producers, Russia, Saudi Arabia and the United States. Oil and gas are Canada’s biggest exports by far, and the industry lobby is an influential force in Ottawa.

In his previous life as a central banker, Carney was considered a climate champion. POLITICO even dubbed him an “eco warrior” in 2018. But since taking over as prime minister last year, he has weakened Canada’s climate policies at a rate few predicted, scrapping a national carbon tax and electric vehicle mandate and opening new oil and gas projects.

The list of climate laws Carney has watered down, repealed and canceled makes the EU’s own recent backtracking on green laws look minor. Some environmentalists argue it is comparable to U.S. President Donald Trump’s wholesale dismantling of environmental protections.

“The track the Carney government has taken on climate and environmental regulation has been a decisive move in the direction of the U.S.,” said Tim Gray, executive director of environmental non-profit Environment Defence. Carney, he said, “seems to be all in on fossil fuels.”

Keean Nembhard, a spokesperson for Canada’s Environment Minister Julie Dabrusin, told POLITICO the Carney government is “committed to fighting climate change and reaching net-zero by 2050 by taking a pragmatic and durable approach.”

“This includes building major clean energy projects across the country, driving mass electrification, and making significant investment in the low-carbon economy,” he said.

But Gray argued that Carney’s support for fossil fuels and weakening of environmental standards may complicate Canada’s attempts to forge closer ties with Europe, which has some of the world’s most stringent green laws.

Still, in Europe, Carney’s green image persists.

Last week, Belgian member of the European Parliament Saskia Bricmont gave expression to this faith in Carney’s commitment to climate issues when she called on him to lead a global push to put climate back on the agenda ahead of next month’s U.N. climate summit.

“Mr Carney … relaunch the fight against climate deregulation and for the restoration of biodiversity, and re-mobilize the international community around concrete, coordinated measures,” she said.

Carney’s green aura

Carney’s reputation as a climate champion is well earned. As governor of the Bank of England, he led a push among central bankers to take the economic risks of climate change seriously — memorably captured in his 2015 ‘Tragedy of the Horizon’ speech, in which he warned: “The catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors.”

In 2021, after he’d left the Bank of England, he became a United Nations special envoy on climate action and finance and launched a net-zero financial alliance with some of the world’s biggest banks.

But things changed dramatically when Donald Trump took back the White House, and Carney replaced fellow Liberal Justin Trudeau as Canada’s prime minister in 2025. At the time, Trudeau and his Liberals had been way behind in the polls, battered by Conservative leader Pierre Poilievre’s attacks on his climate policies — in particular an unpopular consumer carbon tax.

Carney’s first act as prime minister was to scrap that tax.

Following his surprise victory in the elections that April, Carney set about promoting Canada as an “energy superpower.” To the dismay of environmental groups, he supported the “Pacific Link,” an oil pipeline costing tens of billions of dollars, designed to carry Alberta crude to Canada’s Pacific coast for export to Asia.

He then pushed for thawing relations with Beijing in January, a not-so-subtle pitch to find a new crude oil client that isn’t the U.S. Germany, rushing to replace its dependence on Russian energy, signed a long-term agreement in July to buy Canadian liquefied natural gas from a proposed port in British Columbia, despite backlash from environmental and indigenous groups.

He also scrapped laws on electric vehicle adoption, dropped plans for an emissions cap on oil and gas companies, watered down an existing industrial carbon price and introduced legislation to weaken environmental permitting rules for big infrastructure projects, which critics dubbed the “bulldoze nature bill.”

A landmark moment, according to Gray, came in November 2025, when Carney signed a memorandum of understanding with the government of Alberta, Canada’s biggest oil-producing province. That document, which promised to turn Canada into a “global energy superpower,” contained a string of promises to promote oil and gas and water down federal climate laws.

So why the dramatic shift?

Carney, who has repeatedly positioned energy sovereignty as a bulwark against Trump’s economic aggression, offered his realpolitik response at an event in the heart of Alberta’s oil patch earlier this month.

“There’s a structural challenge of energy security and the existential challenge of climate change, and these challenges are forcing countries to think differently about where their energy comes from and on who they can rely on to supply it,” Carney said in Fort McMurray, Alberta on Oct. 1.

“Even under any plausible net zero scenario, the IEA [International Energy Agency] forecasts the world will still need tens of millions of barrels of crude a day. So the question is: who will emerge as the world’s trusted suppliers? It should be us. It must be Canada.”

Not black and white

Carney, to be sure, is no Trump. Unlike the U.S. president, he has retained his pro-climate rhetoric and promised to develop the country’s mining of critical minerals essential for the clean energy transition.

In May, he unveiled a national electricity strategy which aims to double Canada’s largely clean electricity grid by 2050 to meet soaring demand. “The path to net zero is electrification,” Carney said then.

In August, he announced C$10 billion in federal support for the Churchill Falls hydroelectric project in Newfoundland and Labrador, saying it will be the largest clean energy project in North America, capable of generating enough electricity to light up the equivalent of Canada’s three largest cities.

Nembhard, Environment Minster Dabrusin’s spokesperson, also pointed to new electricity transmission lines, electric vehicle subsidies and a C$2 billion plan to retrofit homes with heat pumps.

Canadian climate activist Alex Cool-Fergus said she does not think Carney “believes that oil and gas is the future,” but is simply being pragmatic about Canada’s economic reality.

“The electricity strategy that came out in May was incredibly important, and actually gives us a better idea of what his thinking is for the future,” she said.

Trudeau’s approach to climate change was “very much values-based, and it was about doing the right thing,” said Cool-Fergus. “I think that’s hit its limits. Carney’s approach makes more sense for the world of 2025-2026.”

The limits of the partnership

Hoekstra, the EU’s commissioner for climate, said he wants to deepen ties with Canada. “Given all the complications the world is facing, it is imperative to team up more closely with your closest partners,” he said. But he’s realistic about how far that relationship can go.

Hoekstra has ambitions of cementing the EU into a global network of economies with carbon pricing regimes. While he conceded nothing is “off the table,” he acknowledged linking the EU’s Emissions Trading System with Canada’s “quite different” version, which varies from province to province: “You’re talking about a completely different horizon, and that is not something we would attempt in the very short run.”

There are, however, other ways Hoekstra believes the EU and Canada can closely link on environmental issues.

“Doubling down, tripling down on electrification, on solar, on wind, on nuclear, on batteries,” he said, adding “that is one area that I think is potentially very fruitful for my portfolio.”

Another is critical raw materials, a key focus of this week’s summit.

Brussels is exploring ways for the European Investment Bank, the EU’s lending arm, to help finance the mining of Canadian mineral deposits that could supply the bloc with an alternative to Chinese-produced metals, with a framework agreement expected to be signed during the summit. Lithium, copper, nickel, and other key ingredients for electric vehicle batteries and clean energy technologies essential for decarbonizing Europe are abundant but often undeveloped all over Canada.

This week’s summit will also explore investing in infrastructure on Canada’s east coast to liquefy and ship Canadian gas to Europe, a move that could help the EU diversify its supply away from the U.S., which, along with Norway, has become Europe’s dominant supplier since it cut off Russian gas imports following the full-scale invasion of Ukraine.

Many EU member countries will welcome success on these goals. But Gray warns that closer ties with Canada could lead to deeper penetration by the country’s powerful fossil fuel lobby, which he described as a “major, major force.”

“They’ll be spending time trying to make sure the alignment with the EU is in a direction that favors them,” he said.

The EU’s lack of oil and gas resources — and, by extension, the absence of a powerful fossil fuel lobby — has kept climate policy relatively bipartisan in the EU. Could inviting a fossil fuel “superpower” into the fold as an “associate member” change that?

“That would depend very much on what is an ‘associate member,’” Dutch Climate Minister Stientje van Veldhoven-van der Meer said.

At some point, maybe around the time Joe Biden declared on the debate stage that he “finally beat Medicare,” Washington got the idea that defeating an old man in an election was easy.

Not always.

Just days before an American election viewed by many voters as an opportunity to neuter an unpopular 80-year-old president, voters in Brazil and Israel delivered a vivid reminder that an old man in his country’s highest office usually didn’t get there by accident.

In Brazil, a decisive majority of voters on Sunday returned left-wing President Luiz Inácio Lula da Silva for a fourth term, defying expectations that Brazilians were ready to discard the fiery trade unionist as yesterday’s man. In Israel’s Tuesday election, Prime Minister Benjamin Netanyahu — the longest-serving premier in his country’s history — lost his parliamentary majority but may have thwarted his opponents from electing a viable governing coalition.

Lula, 81, and Netanyahu, 77, have almost nothing in common except their age and political resilience. They have towered over their countries for more than a generation, outfoxed prosecutors and humiliated electoral rivals, enraged and entranced Washington. They have done it with the loyal support of voters on the left and right who view each man in heroic terms, as a tireless champion of their interests and a shield against the most fearsome enemies.

President Donald Trump has, at times, shared those political traits. If he has one more escape act left in him, it would look more like what we’ve just seen in Israel and Brazil than anything in Trump’s second term so far.

Since returning to office in 2025, Trump has failed to deliver policy victories that most voters can feel in their own lives, while shedding some of the most important parts of the political identity that forged his populist base. He ran for president in 2024 pledging to whip inflation and railing against needless foreign wars. Trump’s signature acts this term — passing the One Big Beautiful Bill Act, waging a global trade war, attempting regime change in Iran — have made health care, consumer goods and energy more expensive.

What is his closing message in the midterm election? Trump makes one argument consistently: that Democrats are crazy. But you’d be hard-pressed to find a convincing through line in a series of campaign-trail monologues boasting about the economy, trashing individual Democratic candidates as weirdos and subversives, musing about renaming oceans, defending the Cheesecake Factory and admiring Jon Husted’s rock-hard bod.

Compare this to what voters heard in Brazil and Israel: relentless, ruthless, shameless appeals to the political coalitions that Lula and Netanyahu forged over decades.

In Brazil, Lula tapped into the regional and class-based divisions that have defined his electoral career, while offering a buffet of new economic promises to voters in his base. He hiked welfare payments, promised voters free public transit on weekends and endorsed a shorter workweek. His 45-year-old opponent, Flavio Bolsonaro, stumbled in the final days with a dismissive comment alluding to an accident Lula suffered as a young metalworker — a remark apparently taken by many voters as a gratuitous sneer at the working class.

In Netanyahu’s fight for political survival, the Israeli leader delivered an apocalyptic message aimed at polarizing the electorate to his advantage. He posted an AI-generated image of a nuclear strike on Tel Aviv, branded his challengers as soft on Iran and derided Arab political parties as an enemy within. Israeli and American news outlets have reported that Netanyahu pushed the military for a new wave of attacks on Iran before the election, an escalation that might have reshaped the campaign’s final days.

If Trump had approached the midterms with Lula- or Netanyahu-like focus and vigor, he would probably still be a very unpopular president. But he might be a very unpopular president with a firm grip on the red states that control the Senate, instead of scrambling in October to defend Kansas and Mississippi.

Trump’s populist campaign tactics have been comparatively slapdash and unresponsive to voters’ real needs. He floated giving away $5,000 checks to Americans if Republicans keep control of Congress, only to see lawmakers from his own party pan the idea as a budget buster. He has handed out locally tailored goodies — new funding pledges for a pipeline in Alaska, tariff exemptions as a gift to Maine — that might make a difference on the margins but can’t substitute for a national message on the cost of living.

And Trump has not made a concerted effort to heal the breach within the MAGA base over the war in Iran. He has toggled between Bibi-like warnings about nuclear attacks on Southern California and assurances that the war will end after the November election, all while fuel prices stay painfully high for the people who put him in office.

It may add up to the least effective campaign ever for the man who has overwhelmed American politics for 11 and a half years.

And yet, the midterms are not the end of the story.

Even a broad defeat for Republicans next week would leave Trump with half a term to work with. Two more years to recover his footing, return to political basics, reconnect with his base and fight, fight, fight for relevance and recovery. There is a bag of tricks available to him, if he were to get serious about salvaging his presidency.

For Trump’s opponents, the warning from abroad remains: Beware the old man in a hurry.

SAN FRANCISCO — Billionaire opponents of California’s proposed wealth tax have spent more fighting it than they ever have on a political cause in the state, according to a POLITICO analysis.

A record $612 million from more than 70 current and former California billionaires is flooding this year’s state elections, nearly half of it for groups working to defeat Proposition 40, the wealth tax initiative on Tuesday’s ballot, POLITICO found.

The fight over Prop 40 has brought California’s wealthiest residents — many from its native tech industry — together in an unprecedented show of political coordination, the new data reveals. Tech leaders say the wealth tax has accelerated plans for broader political engagement this cycle, building networks that could be the foundation for future campaigns.

It’s a particularly striking display of unity from Silicon Valley’s notoriously hard-to-organize donor class. Google co-founder Sergey Brin is by far the well-funded opposition’s biggest benefactor, with former Google CEO Eric Schmidt, venture capitalist John Doerr, Stripe CEO Patrick Collison and crypto executive Chris Larsen also among those who have contributed the most dollars in trying to stop the billionaire tax.

The possibility of a tax on their assets has drawn more than $293 million from at least 30 California billionaires, the majority of whom made their fortunes in tech but otherwise span industries, from agriculture to real estate — as well as the political spectrum, from established Democratic megadonors to some Republican allies and first-time donors.

Frank Slootman, the billionaire board chair and former CEO of cloud data company Snowflake, said he only had a “moderate” interest in politics despite giving $5 million to an anti-Prop 40 group, arguing that the measure erodes private property rights and the state’s economic dynamism.

“This upends the most basic assumptions we have about being a taxpayer and a resident of a state,” said Slootman, who has no prior record of California campaign contributions. “I vote in most elections, that’s about it. This is not about politics for me — it is far more important than that.”

The other half of billionaires’ spending this year came largely from Tom Steyer, a rare billionaire endorser of Prop 40 who bankrolled his own failed gubernatorial bid — the most expensive primary campaign in state history.

Even longtime strategists who have worked for statewide candidates and California’s costly ballot battles struggled to find a historical parallel for the coordination or scale of billionaire spending against Prop 40.

Rob Stutzman, a Sacramento political consultant whose past campaigns have involved a billionaire gubernatorial candidate and record-breaking ballot spending over sports betting, said that Silicon Valley leaders see Prop 40 as an “existential threat to tech in California” and the innovation that has taken root in the region for decades.

“Having to defend against a direct assault is a more unifying principle,” Stutzman told POLITICO. “They’re known for their pet issues that are harder to organize their peers around, but you can circle the wagons to protect yourselves. There is nothing that focuses similar-situated people.”

Proponents of Prop 40 contend the measure is necessary to backfill federal health care cuts.

The last year billionaires in California came closest to spending at this level was 2010, when they dropped $147 million on state races and measures, according to POLITICO’s analysis — a total that’s just over half of what the current wealth tax proposal mobilized. Most of it was the result of billionaire Meg Whitman, a former CEO of eBay and Hewlett-Packard, self-funding her unsuccessful Republican campaign for governor.

Scott Ellis, a millionaire and Prop 40 supporter who formerly served as a senior director at HP, described the magnitude of billionaire spending to fend off the measure as “a completely different animal” than past examples of “a lot of money spent by a rich person to get themselves elected.”

“People with wealth and extreme wealth are getting much more brazen than they used to be,” Ellis told POLITICO. “These people have tremendous resources. They have an incredible range of choices to make, including choosing to oppose this kind of ballot measure.”

Representatives for several billionaire opponents of Prop 40, including Schmidt, Larsen and agricultural titan Stewart Resnick, declined to comment on POLITICO’s findings.

Others, like Doerr, referred POLITICO to Building a Better California, a new Brin-led political operation that has become the primary vehicle for billionaire money against Prop 40.

The group defended the importance of its cause, arguing the measure would “permanently devastate” the state tax base and budget while undermining the health care funding it’s intended to patch.

“We are fortunate to be supported by entrepreneurs and business leaders who have built their businesses and created hundreds of thousands of jobs here, and who share a deep commitment to advancing policies that will improve quality of life for all and protect the state’s economic, jobs, and innovation engine for generations to come,” Building a Better California spokesperson Abby Lunardini said in a statement.

Debru Carthan, vice president of the SEIU-United Healthcare Workers West union behind the billionaire tax, responded to the contributions, saying, “no amount of billionaire spending is going to intimidate us or turn us back.”

A reawakening

Tech leaders have told POLITICO that the wealth tax awakened a sleeping giant in California politics: their previously disengaged industry peers, who months ago suddenly started spending across the ballot to steer California in a more moderate, business-friendly direction. The threat injected the wider political organizing, some of which preceded the measure’s introduction, with a new sense of urgency.

“The tech community has wanted to become a bigger player in California politics,” said veteran Democratic strategist Steven Maviglio.

“They’re building an infrastructure, I think, for the long term because they’ve become a dominant player in our economy, and they now, after literally a decade of being hands-off, want to be very involved because they see the consequences,” Maviglio, who is working on a separate housing and environment-related ballot fight where Schmidt’s wife, Wendy Schmidt, has given $10 million, told POLITICO.

Earlier efforts to unify faltered amid strategic disagreements and overinflated fundraising promises. That was especially apparent in the push to rally Silicon Valley around San Jose Mayor Matt Mahan, a business-friendly candidate with a background in startups, during the California gubernatorial primary.

Although Building a Better California wasn’t spared its share of donor turmoil, an initial patchwork of opposition efforts eventually consolidated resources under the Brin operation’s strategy, devised with the help of veteran ballot-measure consultant Ned Wigglesworth.

The group also brought on fundraisers associated with California Gov. Gavin Newsom’s inner circle. Newsom has publicly opposed imposing a billionaire tax at the state level.

In addition to funding Prop 40 attacks, several billionaires claimed to have fled the state to avoid the tax. Brin, for example, registered to vote in Nevada. Because the one-time, 5% tax on assets would apply to billionaires who lived in the state as of Jan. 1, 2026, POLITICO’s analysis covers billionaires with recent California ties, based on information from Forbes, the progressive nonprofit Americans for Tax Fairness and news reports.

Some of those billionaires made their moves quietly, highlighting a split over how they should respond to the possibility of the tax passing.

“This has been a point of friction between me and some of my other billionaire friends,” Palmer Luckey, the billionaire founder of defense tech giant Anduril, said on a call with reporters this week. “They’ve said things like, ‘Palmer, you have to have solidarity for us. You can’t enable these really bad policies. If you stay and if you don’t leave, it’s going to show them that there’s no consequences.’”

Luckey, a vocal critic of the tax who hasn’t donated to the opposition campaign, added, “I’m planning on staying in California. I’m going to keep fighting it. I’m hoping that this doesn’t pass.”

Meta revealed a plan last week incentivizing CEO Mark Zuckerberg to stay near the company’s Silicon Valley headquarters after the longtime California resident told a special committee of his board he was considering leaving over the tax. He also hasn’t challenged Prop 40 through political contributions.

DoorDash CEO Tony Xu, who poured almost $3.5 million into trying to prevent the wealth tax, was one of three members on the special committee negotiating with Zuckerberg.

Behind the money

Brin is single-handedly putting $102 million behind Building a Better California as it campaigns to sink Prop 40. This year, he’s also backed unsuccessful runs by Republican Chad Bianco and the moderate Mahan in the gubernatorial primary, plus Republican Steve Hilton’s campaign for governor. Federally, he’s given close to $450,000 to the Republican National Committee.

But before this cycle, Brin had been a sporadic donor, gone dark for many years. His last disclosed political donation in California was in 2010 — for $200,000 to join other Silicon Valley leaders in opposing an ultimately defeated ballot measure that would’ve suspended a state climate law.

Some of the billionaire donors — Slootman, Roblox CEO David Baszucki, Robinhood co-founders Baiju Bhatt and Vlad Tenev, Figma CEO Dylan Field, fintech executive Max Levchin and software founder Andrew Karam — have no history of spending on California politics before this year, according to state campaign records.

Tenev said in a statement that he donated to Building a Better California to support one of two other measures the group has advanced, which is designed to invalidate Prop 40 and would prohibit new taxes on various forms of personal savings.

“Special taxes on retirement and unrealized investment gains run contrary to the intent of the investment vehicles that have helped millions of Americans build wealth for the long term,” the Robinhood chief executive said. “History shows us that taxes aimed at a few have often been extended permanently to include more taxpayers over time.”

Another Building a Better California donor, Doerr, on the other hand, was a pioneer in shaping how Silicon Valley engaged with politics and Washington. He co-founded TechNet in 1997, which launched a political action committee as a key part of its strategy. Today, the influential industry trade association manages both federal and state-level PACs on top of a vast bipartisan lobbying network, with Google, Stripe and Kleiner Perkins among its many corporate members.

The wealth tax has also brought former Sequoia venture capitalists, Michael Moritz and Doug Leone, onto the same side after they previously diverged on California’s partisan redistricting fight at the ballot last year. They spent $7.5 million and $100,000, respectively, on groups fighting Prop 40.

Leone is a prolific Republican donor who re-endorsed President Donald Trump in 2024, while Moritz has consistently criticized Trump and chided his supporters in Silicon Valley for making a mistake.

No less than a dozen of the billionaires spending on groups that oppose Prop 40 are current CEOs — including DoorDash’s Xu, Roblox’s Baszucki, Robinhood’s Tenev, Stripe’s Collison, Affirm’s Levchin, Schmidt of rocketmaker Relativity Space, Hemant Taneja of top venture capital firm General Catalyst, Field of design platform Figma and Parker Conrad of HR software provider Rippling.

Collectively, they’ve plowed at least $88 million into their cause.

Several more of the billionaires in POLITICO’s analysis chair influential companies and firms. The opposition effort has received $40 million from Doerr, the Kleiner Perkins venture capitalist; $17.5 million from Larsen at the crypto company Ripple; and $2 million from George Marcus at the Bay Area real estate titan Marcus & Millichap — to name a few.

Will they come together again?

Whether the campaign infrastructure built by billionaires and the tech industry for the midterms will endure is still an open question.

Other new tech-funded groups this cycle have promised to play the long game and framed their plans around at least a decadelong horizon. Building a Better California itself has also committed to sticking around for the foreseeable future.

California political observers point to the size of the Brin-backed operation, as well as its decision to focus on additional environmental and housing measures, in predicting it won’t stop after the election.

Still, the unprecedented nature of their mobilization raises questions about what cause would be able to activate so many of these individuals again. Donors and advisers to Building a Better California previously clashed over whether spending on non-wealth-tax issues, such as environmental policy, could jeopardize the group’s success.

In the past, “if you look at those big dollar campaigns, ballot measure campaigns, those were funded in general by an industry,” said Jim Ross, a Bay Area-based Democratic consultant. “Wherein this, it’s a bunch of individuals, very wealthy individuals, but they don’t necessarily have any commonality other than they don’t want to be taxed.”

“When you have a group of wealthy people all putting money into this, a lot of the challenge is going to always be: How do you manage that coalition? How do you keep everybody moving in the same direction?” he added.

One ready answer is a revived wealth tax effort.

Last week, Rippling CEO Conrad said in a social media exchange with Silicon Valley Rep. Ro Khanna, whose early support for the wealth tax alienated some of his original tech backers, that he “absolutely cannot afford to stay” in California — reasoning the measure may soon be followed by another one-time tax in the next election.

Slootman made a similar calculation.

“In a one-party state with super majorities in both chambers, we are at risk for everything we own,” he said. “We are hunted animals in this state. They will be at it again in two years.”

Rosmery Izaguirre contributed to this report.

About this analysis

POLITICO’s analysis compiled records from the California secretary of state for 142 California billionaires that have contributed to state campaign committees, including 30 who had given to the following committees opposing Proposition 40: Building a Better California, Californians Against Tax Increases and Golden State Promise. Reporters reviewed donation records to verify names and employers matched with the billionaires who live in the state, as well as contacted each donor. Donations are as of Oct. 26.

Forbes estimated the wealth of the persons included in this analysis. Because billionaires often own properties in multiple states, we relied on Forbes to identify each person’s residence and supplemented with further data provided by the progressive nonprofit Americans for Tax Fairness. We included people who have recently left the state, including cases when they said they were leaving to avoid the potential wealth tax.

BRUSSELS — EU countries have dropped the idea of offering Canada “associate member” status in the 27-member bloc, opting instead for softer language promising “ever closer association” ahead of a landmark EU-Canada summit, according to the latest version of the draft statement, seen by POLITICO.

A group of countries including Germany, Greece and France all objected to mentioning associate membership in a joint EU-Canada statement to be issued in Montreal, the diplomats said.

European Commission President Ursula von der Leyen had originally proposed “associate membership” for Canada in her State of the European Union speech in September, catching some EU countries off-guard.

A previous draft of the joint statement had read that the EU and Canada would “work to define by the 2027 EU-Canada Summit the concept of Associate Member that will reflect, through this even closer association, our common endeavour and cooperation towards our shared goals of prosperity, economic security and strategic autonomy.”

In the final version, the text reads: “We will create an even closer association between Canada and the EU… and work to define by the 2027 EU-Canada Summit the concept of an ever closer association of Canada to the EU, short of full membership itself.”

Later in the statement, the language changes from “even closer” to “ever closer.” The text still needs final approval. EU countries have a deadline of 6 p.m. to raise objections.

While countries disagree over the wording to describe the relationship, Brussels is not softening its offering to Canada of a vastly expanded partnership.

“The good news is it doesn’t matter about specific names or nomenclature,” Canadian Prime Minister Mark Carney said Tuesday. “What matters is the difference that it will make to lives of Canadians.”

This story has been updated.

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.

LONDON — John Healey wants to keep his debut budget low-key — but he’s also got to show the British public his boss really does feel their pain.

The chancellor delivers the first financial statement of the Andy Burnham era Wednesday. The pitch? “Breathing space for today” mixed with some “fresh hope for the future.”

But with war in Iran driving up costs worldwide, government borrowing at its highest level in a year, and businesses warning they’re taxed to the max, Healey is up against it.

Here’s how POLITICO’s team of reporters will be poring over the big fiscal moment, unveiled at 12.30 p.m. U.K. time Wednesday.

U.K. Political Editor Dan Bloom

I’ll flip straight to the big table two-thirds of the way through the ‘red book,’ where Treasury officials list the total tax rises and spending cuts, and then the “headroom” against Healey’s fiscal rules in the executive summary.

The briefing suggests these numbers will be smaller than the £26 billion in tax rises and £23.6 billion in headroom former Chancellor Rachel Reeves notched up in March this year.

The Treasury has turned this into its comms strategy, pointing to “everyday fixes” and non-tax measures like scrapping business red tape. But these numbers will also show how Donald Trump’s war in Iran has reined in Burnham’s ambitions.

And they are indicative of something else — the budget just isn’t the main event this time. In the next seven weeks or so we’re expecting [former minister] Alan Milburn’s review of the benefit system, a U.K.-EU summit, a “10-year plan” and a white paper on “rewiring the state.”

Then next year is the spending review. That’s when the really hard choices will come — and the budget will give us a sign of how hard, since it will map out a path for departmental spending over the next few years.

U.K. Political Correspondent Sam Blewett

Andy Burnham’s team has been speaking a lot about “everyday fixes” — cheapo policies that can rectify real-life niggles. 

Headphone dodgers? You’re fined. Being ripped off by parking fines? We’ve got your backs. Balking at the cost of the supermarket shop? Gone are the tariffs on your gherkins.

That will buy the government a fair amount of goodwill, building a sense that the government isn’t entirely a useless beast being buffeted by global horror shows. But it’ll only go so far.

Healey is under pressure to show bold action on what really matters too — actual interventions that bring down the cost of living. We know already there will be support for household energy bills, a fuel duty freeze, support for pensioners and a hike to the minimum wage. All eyes will be on whether Healey has any more surprises on this front.

As costly as any support is for the exchequer, will it all pale in comparison to the effects of the Strait of Hormuz-sealing war with Iran? This is a self-declared “cost of living government” after all.

First, I’ll scour watchdog the Office for Budget Responsibility’s forecasts to see where the semi-official number crunchers reckon real household disposable income is headed. Then the analysts at the Institute for Fiscal Studies and the Resolution Foundation will provide more insight.

After that, the voices that really matter will be those sitting down to ever-costlier dinner, nursing pricy pints and rolling their eyes at the petrol pumps. Will this budget give Brits enough reason to believe Burnham’s new government is a force for good, trying to ease the pain? Or will they deem the new-look administration just the same old ineffective bureaucrats who need sweeping away in favor of a more radical response?

Senior Foreign Correspondent Esther Webber and U.K. Defense Reporter Mason Boycott-Owen

The number one thing we’ll be looking out for in today’s budget is how exactly Healey — who quit as defense secretary in the dying days of Keir Starmer’s government over exactly this issue — tries to demonstrate he is raising defense spending against a tough backdrop.

The chancellor has tried to manage expectations for the Ministry of Defence at the budget pretty closely, initially stating that he would only seek to cover a £4.7 billion pound shortfall in its already-unveiled Defence Investment Plan.

In recent weeks, however, the Treasury has suggested he could do more to show the U.K. is moving towards spending 3% of GDP on defense, something Healey sees as an important marker on the way to meeting the NATO target of 3.5%.

Media reports leading up to Wednesday suggest an increase will come from money funneled into the British Business Bank and National Wealth Fund.

But could he have something else in his back pocket? Healey is well aware of the potential for awkward questions about his commitment to follow through on the promises he made just four months ago that he said were crucial to U.K. security, now that he’s in charge of the money.

Financial Services Reporter Eleanor Myers

A hike in bank taxes is all but inevitable in today’s budget – but the City of London will be nervously watching how high the increase goes. Along with the lenders, I’ll be looking out for how much taxes are raised, whether any changes are temporary, and whether the City — Britain’s financial powerhouse — gets anything in return.

The easiest move for Healey is to increase the surcharge banks pay on top of corporation tax. That currently stands at 3%, after Conservative Chancellor Jeremy Hunt reduced it from 8% in 2023 to account for higher corporation taxes. Healey could simply reverse the surcharge to 8%, which would be unpopular with the banks and might not even go far enough for campaigners: the Trades Union Congress has called for an increase to 16%.

I’ll also be closely watching for how the bond markets react to the first budget under Burnham. Despite the prime minister describing Britain as “in hock” to the bond markets before he took office, odds are on for a “boring” budget, without any huge spending commitments that might spike borrowing costs.

But any cautious policy changes designed to placate the bond market will have to be tempered alongside demands from the Labour Party. It’s a tricky balance, and Labour MPs showed under Keir Starmer that they were willing to rebel when it mattered.

Senior U.K. Energy Correspondent Charlie Cooper

A sharp, painful spike in energy bills is coming for Britain; at this budget we’ll find out how much power Healey and Burnham have to help.

The latest energy price cap forecasts are brutal. Energy firms expect average, annual household bills to rise by more than £450 in January. They could go even higher in April. Why? Mainly because of gas. The fallout from the U.S.-Israeli war with Iran has sent wholesale prices soaring to levels not seen since December 2022.

Healey knows how bleak things look, but he may not have the fiscal firepower to offer much help. Burnham has hinted at removing gas standing charges from bills, which could save an average household a modest £27, according to one estimate. Meanwhile, payments to around 6 million low-income households — the Warm Homes Discount — are likely to get a top-up of between £100 and £150.

Businesses, meanwhile, could get details of a 10-year plan to bring their energy costs into line with European competitors, according to two people familiar with budget preparations.

But with the cost of living and cost of doing business set to rise so high, will that be it?

There’s “strong awareness” inside government “of how bad it will get,” said one senior government official. Unfortunately, they added, there are “not the pockets deep enough to do all the things we might like to do.”

Elsewhere, we’ll be watching closely to see whether net zero schemes — like the rollout of electric heat pumps — could face cuts to cover shortfalls in defense spending. 

Technology Reporter Joseph Bambridge

Healey put AI and innovation at the heart of his growth plan in a pre-budget speech back in September.

In that vein, the government has trailed a £600 million spending package to protect the U.K. from AI risks while growing its own share of the sector, calling it a “distinctively British” approach to mitigating risks from the technology while capturing the benefits.

The question now is whether more measures to support the U.K.’s tech and AI sector will come on Wednesday, with trade groups calling for bold moves to lower energy costs, tackle energy and planning delays, and help firms invest in AI and upskill workers.

Startups are also hoping for tax relief and further reforms to regulation and procurement rules. A relief for founders who re-invest their earnings in the U.K. has been a particular demand from the startup community, which has already bagged a win after Healey ruled out raising capital gains tax.

AI is also likely to play a significant role in the government’s plans to make Whitehall more efficient, as it did under Reeves.

The sector is also closely watching how the chancellor plans to meet his defense spending targets, in the hopes that drone makers and military tech firms might benefit from the uplift.

Trade Reporter Caroline Hug

I’m looking out for the chancellor’s VAT crackdown on foreign sellers, who register as U.K. based companies to avoid paying the tax. Healey is expected to make online marketplaces like Amazon, eBay and Temu responsible for collecting tax owed by all retailers.

We’re also waiting to see whether the government has more information on its de minimis crackdown, including whether it will introduce a handling fee for small packages below £135. The EU already has one in place.

Finally, we’ll be looking out for any more detail on the government’s suspension of tariffs on more than 100 food, drink, fuel and fertilizer products.

The U.S. and Canada are flirting again.

Washington and Ottawa have increased the tempo of their trade talks over the past week, after President Donald Trump and Prime Minister Mark Carney spoke by phone on Oct. 21.

Commerce Secretary Howard Lutnick, who helped torpedo a previous round of negotiations over the summer, and Canadian Trade Minister Dominic LeBlanc have been speaking regularly since then, according to two people with knowledge of the talks, granted anonymity because they were not authorized to speak publicly. They have primarily discussed Trump’s tariffs on sectors like autos and steel that have been a sticking point for Canada all along.

A senior Canadian government official told POLITICO that talks remain informal as of Tuesday.

The uptick in engagement — what Carney called “un petit intensification” speaking in French to reporters in Ottawa Monday — has triggered a flurry of headlines on both sides of the border as well as White House boasts that a deal is near. The North American trade spat will be “settled pretty soon,” Trump predicted at a rally Sunday in Michigan.

But unlike Trump, Carney has little political incentive to make concessions at the moment — or bail out Trump right before congressional elections heavily focused on affordability, including tariffs’ impact on prices. The Canadian prime minister is riding high in domestic polls after standing up to the American president and walking away from trade negotiations in August. And he is days away from welcoming European Union leaders to Montreal for a landmark summit aimed at deepening their alliance — and building an implicit counterweight to the U.S.

Neither side, moreover, has dropped its original demands, according to half a dozen current and former government officials, industry representatives and others with knowledge of the talks. Those outstanding sticking points include Carney’s ask for lower auto tariffs and Trump’s push for increased access to the Canadian alcohol and dairy markets.

The lack of new concessions or tangible breakthroughs is a sign that the recent flurry of outreach may be more of a White House effort to soothe Republicans’ midterm worries — particularly in border states whose economies are tightly connected to Canada’s — than to secure an immediate deal. The people say any denouement between the two countries is likely weeks if not months off, even as they expect the two North American neighbors to ultimately hammer out an agreement to lower tariffs and stabilize one of the world’s largest trading relationships.

“I think that we’re going to make a deal with Canada. I mean, first of all, we made a deal with Canada. They reneged on the deal,” Sen. Bernie Moreno (R-Ohio) said in an interview. Asked if the deal will come before the election, Moreno said, “I don’t know.”

Canada has also been cautious about promising that a deal is near. Carney said last week Ottawa doesn’t care about “the timing” of an agreement to roll back tariffs on each other’s imports. And both Mark Wiseman, the Canadian Ambassador to the U.S., and Pete Hoekstra, the U.S. Ambassador to Canada, suggested at an event in Ottawa Monday that there will be a deal, even if it takes time.

“We have to take a longer timeline into account. And at the end of the day, we have to remember neither of us is moving out of the neighborhood, and we’re going to make it work,” Wiseman said. “The state of the relationship is pretty damn good.”

Trump, however, has been lobbing attacks on Ottawa since he returned to the White House, calling Canada the 51st state and threatening tariffs since shortly after his reelection win. Canada, along with Mexico and China, was one of the first countries he targeted with new duties in 2025 — despite an existing North American free trade deal and deeply entwined economies, particularly in the auto industry.

The tensions hit a crescendo this summer, when Trump announced a preliminary deal with Carney to lower U.S. duties, among other measures, before talks collapsed at the 11th hour. Washington and Ottawa then traded 50% duties on about $20 billion worth of goods, with Trump imposing a ban on certain products, like alcohol, and threatening even more punitive duties come January if their differences have not been resolved.

The forces that caused the deal to unravel in August are still in place. Canada has continued to seek lower tariff rates for key sectors, including autos, trucks, steel and aluminum — policies that are under Lutnick’s purview at the Commerce Department. The previous talks hit a snag over whether the U.S. would lower tariffs on heavy duty trucks, some of which are built in Ontario.

“Any potential Canada deal is going to have the same issue,” said an industry official granted anonymity to discuss private conversations. “And that is Lutnick’s strong reluctance to negotiate on the [sector-specific tariffs], particularly now that he is much heavier involved.”

Lutnick “has signed off on auto [tariff] reductions,” in previous trade agreements the White House reached with partners like the European Union and Japan, “but those often come with promises of large investment.”

A White House official confirmed Lutnick and U.S. Trade Representative Jamieson Greer have held discussions with their Canadian counterparts in recent days.

“USTR and the Commerce Department continue to work together on the cross-cutting issues involving trade with Canada,” added the official, who was granted anonymity to share details about the negotiations.

The Commerce Department and the Office of the U.S. Trade Representative did not respond to requests for comment.

Industry groups that are in favor of keeping the existing duties on Canadian steel, aluminum and autos insist that Lutnick remains in their corner, even as talks intensify. Representatives for domestic manufacturing met with senior officials at the Commerce Department and USTR over the past week to lobby in favor of sticking with the status quo, according to two people granted anonymity to describe the private discussions.

“”The programs are effective as they are, and they should stay as they are,” said Century Aluminum President and CEO Jesse Gary, adding that Lutnick shows a “clear understanding of what makes these types of industries work.”

The Canada tariffs are unpopular among U.S. voters, however, and have been a headache for Republican candidates running in U.S. border states. Sen. Susan Collins of Maine, GOP Senate candidate Mike Rogers of Michigan and Republican Senate hopeful John Sununu of New Hampshire have all come out against the deal. The topic has even trickled into competitive races in Texas and Kansas.

Adam Hamilton, the Democrat challenging Sen. Roger Marshall in Kansas, is making tariffs part of his closing argument in a state where the agriculture industry has been pummeled by the trade war.

Trump and his National Economic Council Director Kevin Hassett have sought to play down Republicans’ concerns about the duties by suggesting a deal is close.

Speaking to Fox News on Sunday, Hassett said that the two sides are “very close” to a deal and emphasized Lutnick’s involvement in talks.

“I expect this is supposed to send some sort of signal to … Iowa and Kansas and other states,” said a person close to the administration who was granted anonymity to share details of private conversations with officials. But “no one expects a deal,” the person said.

“Carney would have to have some reason to want to get a deal before the midterms,” the person added. “But I can’t imagine why he would at this point.”

Megan Messerly, Sue Allan, Zi-Ann Lum and Nick Taylor-Vaisey contributed reporting.

Quebec’s new separatist government accused Ottawa on Tuesday of barring the province from this week’s EU-Canada summit in Montreal and warned it would have the last word on any deals struck there that concern its powers.

The dispute erupted Tuesday morning when Quebec Justice Minister Marie-Claude Sarrazin said in a statement that Ottawa had refused Premier Paul St-Pierre Plamondon’s request to address the summit, which opens Thursday.

St-Pierre Plamondon said in a post on X that the decision revealed a “serious lack of respect,” adding that Ottawa would rather he “serve shrimp cocktail” at a function rather than address one.

Ottawa also turned down a September request from the previous Quebec government to host a reception on the sidelines of the summit, Sarrazin noted.

Prime Minister Mark Carney hit back, saying St-Pierre Plamondon had himself turned down an invitation to the Thursday night summit dinner. “It’s his decision to leave an empty chair again,” Carney told reporters in French.

The tiff threatens to overshadow an international gathering that Carney, Commission President Ursula von der Leyen and European Council President António Costa have billed as a step change in mutual relations, driven by U.S. President Donald Trump’s aggressive tariffs and scorn for the postwar Western consensus.

Early drafts of the joint declaration include a digital trade deal and a pact that lets the European Investment Bank finance Canadian critical minerals projects. Many of those deliverables fall under provincial jurisdiction, such as natural resources.

“‘When you’re not at the table, you’re on the menu,’ Prime Minister Carney told us,” Sarrazin said in her statement. “The federal government has chosen to prevent Quebec from having a say on its own territory.”

Whatever agreements are signed at the summit, “Quebec is sovereign in its fields of jurisdiction internationally, so it will have the last word,” Sarrazin warned.

Her statement evoked the 1965 Gérin-Lajoie doctrine, a principle of Quebec’s international policy that holds it can conduct its own foreign relations in areas the Canadian Constitution assigns to the provinces. It also noted that Quebec had a seat at the table during negotiations on CETA, the EU-Canada trade deal signed in 2015, attending more than 100 meetings.

Yves-François Blanchet, leader of the separatist Bloc Québécois in the federal parliament, also said he had been refused a request to attend. “You’re invited to come, but above all, keep quiet. Don’t speak,” he told reporters on Parliament Hill.

The plot thickens

On Tuesday midmorning Ottawa time, Trump congratulated St-Pierre Plamondon on his election victory — three weeks after the actual Oct. 5 ballot — sharing an article headlined “Separatists win Quebec provincial election in blow to Mark Carney.”

Trump and Carney have been at odds since the dramatic implosion of mutual trade talks in late August, with the U.S. president deploring the Canadian leader as “nasty.”

The Quebec premier, meanwhile, is all-in on sovereignty in a province where support for separating from Canada reached a three-decade low of 29% earlier this year.

Carney rejected St-Pierre Plamondon’s claims of exclusion, saying Quebec had been consulted on the summit. “We have had three consultations with the Quebec delegation already on the agreement with the European Union,” he said. Carney’s office told POLITICO on Tuesday that it had invited every premier to attend the Thursday dinner in Montreal.

St-Pierre Plamondon also skipped a federal meeting with Indigenous leaders and premiers on Monday, an absence Carney criticized.

Industry Minister Mélanie Joly said the premier was “welcome” in Montreal, but that the summit was a federal meeting, with geopolitics a federal area of responsibility. “With everything going on in the world, we just need to make sure we can reach an agreement with the European Union,” she said. “That’s what Quebecers want.”

Despite the public spat over the summit logistics, working-level officials described the relationship between the different levels of government as constructive.

Hélène Drainville, Quebec’s delegate general in Brussels, told POLITICO last Friday that federal and provincial officials have set up joint working groups to implement the summit’s outcomes.

Quebec is also in talks with the European Investment Bank and DG GROW, the Commission’s industry department, about the bank’s entry into Canada, she said.

“Right now, all the signals are green,” Drainville said. She underlined, however, that the province “has to be at the table” if Ottawa and Brussels strike deals in its areas of jurisdiction.

Mickey Djuric and Sue Allan contributed reporting from Ottawa.

The European Investment Bank is due to sign a framework agreement with Canada this week that will pave the way for investments into critical raw materials and other areas, a Bank official told POLITICO.

The deal with the long-term lending arm of the European Union is expected to be signed on the sidelines of an EU-Canada summit on Thursday in Montreal, said the official who was granted anonymity to discuss internal preparations.

Such a deal would mark a concrete step toward closer ties amid broader discussions about cooperation on arctic security and the EU’s potential offer of “associate member” status to Canada. The summit will aim to highlight deepening ties between like-minded partners.

The signing follows a September visit to Ottawa by EIB President Nadia Calviño, during which she took the first steps toward establishing a permanent Canadian presence for the bank.

The imminent framework agreement is significant given that the EIB typically operates only in developing countries or members of the EU or the European Economic Area.

Earlier this year, Canada offered G7 members “priority access” to its critical raw minerals stockpile, according to a letter seen by POLITICO. Canadian Prime Minister Mark Carney has also said he wants to boost EU-Canada cooperation on critical raw materials.