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.
Ein rein berufliches Frauenproblem bringt den Kanzler in Bedrängnis. Zwar stößt die Aussicht auf die erste Bundespräsidentin im kommenden Jahr auf breite Zustimmung, doch die historische Personalie entwickelt sich zur politischen Hängepartie.Friedrich Merz droht die Kontrolle über die Debatte um die richtige Kandidatin zu entgleiten. Dabei drängt die Zeit massiv vor der Wahl Ende Januar, sodass plötzlich wieder völlig offen ist, ob am Ende wirklich eine Frau oder doch ein Mann antritt.
Rasmus Buchsteiner analysiert die hitzige Diskussion um das höchste Staatsamt. Er beleuchtet das strategische Dilemma der Akteure und den wachsenden Druck vor der nahenden Entscheidung.
Während der außenpolitische Fokus auf der Asienreise des Kanzlers liegt, ist die SPD-Entwicklungsministerin Reem Alabali Radovan im Libanon unterwegs. Carlotta Diederich von POLITICO begleitet sie und ordnet ein, welche Auswirkungen die Wahl in Israel auf den blutigen Konflikt im Süden haben könnte und wie Deutschland versucht, seine humanitäre Rolle in diesem Teil des Nahost-Konflikts versucht einzunehmen.
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As Europe’s energy ministers meet in Brussels this week, they are weighing legitimate concerns around energy security, affordability, and the pressures facing businesses and households.
The European Commission’s proposal to delay selected EU Methane Regulation requirements for fossil-fuel importers is now moving quickly through the legislative process. Ministers have an opportunity to keep any adjustment tightly focused, while preserving the policy stability that companies and investors need to plan, invest and manage risk over the long term.
Investors need a stable framework against which companies can plan, manage risk and allocate capital with confidence.
For investors, the question is not whether implementation should be practical. It should. The question is whether a response to current pressures becomes a wider change to a framework that companies have already begun to implement.
Sixty investors, representing over €9.5 trillion in assets under management, have called for the EU Methane Regulation to be maintained and implemented as adopted. That statement pre-dated the Commission’s proposed one-year delay. Its central concern, however, is more relevant now: investors need a stable framework against which companies can plan, manage risk and allocate capital with confidence.
The regulation was designed with phased implementation. It gave companies, importers and national authorities time to prepare for stronger measurement, reporting and verification of methane emissions. It has helped bring methane from the margins into boardroom discussions, where it belongs.
Why methane matters to investors
For investors, methane performance can offer a useful view of how a company is run. It is an indicator of operational discipline, process safety and the quality of management oversight. By setting requirements for measurement, reporting and verification, the regulation can also improve the availability, consistency and reliability of methane data. That gives investors a stronger basis to compare companies and assess whether they are managing risks that could affect long-term value. Maintaining the regulation’s core provisions and avoiding any further delay would protect the progress already under way.
The EU’s position as a major oil and gas importer gives the Methane Regulation particular weight. Clear import requirements can improve the quality and comparability of emissions information across global supply chains. They can help create a more level playing field for companies supplying the European market, rather than allowing weak data or weaker controls to become a commercial advantage.
The choice is not between competitiveness, affordability and effective methane management. Europe can support all three.
This matters for competitiveness as well as climate-related financial risk. Energy affordability is a legitimate concern, particularly for businesses and households facing continued market volatility. But well-designed, practical rules can reward operational excellence, support informed investment decisions and give companies a clearer basis on which to plan, while implementation can be managed in ways that preserve market flexibility and limit unnecessary costs for consumers.
The choice is not between competitiveness, affordability and effective methane management. Europe can support all three. A three-year postponement, however, would not serve institutional investors, companies or Europe’s competitiveness.
Methane is often treated as a narrow technical issue. It is not. Reducing emissions from oil and gas operations is one of the quickest and most cost-effective ways to limit near-term warming. For companies, stronger measurement and reporting can also identify avoidable losses, improve operational performance and strengthen confidence among lenders and investors.
Companies and investors have already begun to respond to the direction set by the impending regulation. Investors are looking more closely at the quality of companies’ emissions data and the systems behind it. A predictable regulatory framework supports that work. Repeated changes to the timetable would do the opposite: they would make it harder to judge preparedness, compare performance and distinguish between companies that are acting now and those that are waiting for the rules to move again.
A longer delay would not remove the work needed to implement the regulation. It would postpone it, weaken incentives for companies and suppliers to prepare, and leave investors with less visibility over how methane-related risk will be managed. It could also disadvantage businesses that have already invested in stronger measurement and reporting, while slowing the development of the market for independent verification services needed to support credible implementation. When the requirements eventually return, the adjustment may be sharper and more costly. That uncertainty carries a cost for companies, investors and the wider market.
Practical implementation, not prolonged delay
The practical challenges facing importers are real and should be addressed through consistent implementation. This includes clear guidance from national authorities, practical ways to link relevant methane data to imported fuels, and clear standards for countries outside the EU whose methane rules are recognized as comparable to EU requirements. This approach would preserve market flexibility and help limit unnecessary costs, without weakening the regulation’s purpose.
If a one-year adjustment is judged necessary, ministers should keep it tightly defined, with a clear end date and no reopening of the regulation’s core provisions. They should use the period to provide the guidance that companies, importers and national authorities need to implement the rules consistently.
The choice facing ministers is not whether Europe should address methane emissions, but whether it does so through a stable framework that rewards preparedness and investment. A limited adjustment may be manageable. A prolonged delay risks creating uncertainty, slowing preparation and leaving Europe less competitive.
Stephanie Pfeifer, CEO, Institutional Investors Group on Climate Change
The views expressed are those of the author and do not necessarily represent those of all IIGCC members.
Disclaimer
POLITICAL ADVERTISEMENT
The sponsor is Institutional Investors Group on Climate Change (IIGCC).
The advertisement relates to EU methane and energy policy and advocates for maintaining the core provisions of the EU Methane Regulation, limiting any implementation delay and preserving a stable regulatory framework for companies and investors.
Canada and Europe want to reshape the global order. But whose vision will prevail?
Mark Carney’s push for a middle-powers alliance meets Ursula von der Leyen’s bid for influence.
By ZI-ANN LUM, SEBASTIAN STARCEVIC and CAMILLE GIJS
Illustration by Natália Delgado/POLITICO
Mark Carney’s pursuit of a global alliance of middle powers has a Europe problem.
Canada’s prime minister wants to help build a new world order that can counterbalance the power of the United States and China. But his vision depends on a new relationship with a Europe that doesn’t see itself as a middle power at all.
European Commission President Ursula von der Leyen has a different vision: a Brussels-centered bloc that extends the EU’s economic and geopolitical influence, starting with Canada. The idea, according to senior European lawmaker Siegfried Mureșan, is to create an opportunity for the EU to become the “global center of gravity for liberal democracies.”
The competing visions will be tested this week when Carney and von der Leyen meet in Montreal for a summit intended to chart a new course for transatlantic relations. Both want to demonstrate they can prosper in a world upended by U.S. President Donald Trump. But they have different ideas about their curious new alliance — and face political resistance that could limit how far the partnership can go.
Von der Leyen’s offer of “associate membership” in the EU surprised officials on both sides of the Atlantic. Four diplomats told POLITICO they were not consulted before she floated the idea in the State of the Union. The officials added that they don’t understand the label, which has yet to be defined. Germany has since led pushback on the plan.
“We’ve definitely put the cart before the horse,” one of the diplomats said. “We’re announcing something and then figuring out how to flesh it out.”
Trump called the membership idea “laughable,” but also threatened “very serious tariffs” should it come to be — a reminder that leaders in pursuit of Washington workarounds must avoid provoking the White House.
The leaders are under pressure to leave Montreal with more than a liberal democratic photo-op. For starters, they need to decide what “associate membership” means — and disarm resistance in the EU capitals blindsided by von der Leyen’s plan.
Canada’s Ambassador to the EU Jonathan Wilkinson told POLITICO last month that people got too hung up on a label that was revealed prematurely. Carney called the Canada-EU relationship an “alliance for the future” when he addressed European lawmakers in Strasbourg.
Wilkinson said the Canada-EU project will show other democratic nations how to deepen partnerships. “It ties into very much what [Carney] talked about at Davos — and after Davos.”
Carney, von der Leyen and European Council President António Costa have two days to chart what’s next while American foreign policy continues to stress test geopolitical relationships in midterm campaigns that will shape Trump’s last two years in office.
The economic divide
Ottawa considers the EU an obvious partner in its push to diversify trade away from the U.S. There’s already a free-trade agreement that both sides view as being underutilized.
Leaders gathering in Montreal this week will celebrate the 10th anniversary of the Canadian-EU trade agreement, nicknamed CETA. But nine EU member countries have yet to ratify the deal, underscoring the challenge of turning rhetoric into reality.
“We have shared challenges and many more shared opportunities,” Canadian International Trade Minister Maninder Sidhu told reporters last week in Dublin, where he was invited to participate in an informal meeting of EU trade ministers, a preview of what a more integrated Canada could look like. “Canada wants to be Europe’s most reliable partner.”
Sidhu said CETA utilization rates in EU member countries range from 60% to 80%, making a point about room for improvement and perennial challenges. “We know there’s room to grow.”
Von der Leyen’s associate membership plan “has been coldly received by member states,” a senior EU official said. “It [the summit] is more about what we do, how we can use the real potential of the CETA agreement.” CETAhas been provisionally in force since 2017.
Trade talks between Canada and the bloc read like a lengthy transatlantic grievance list.
At a meeting between Brussels and Ottawa last October, the EU complained about Canadian taxes it says disproportionately hit European carmakers, opaque cheese-import quotas, cumbersome rules on cosmetics and what it considers discriminatory provincial taxes and markups on European wines and spirits.
Canada, meanwhile, warned that the EU’s deforestation rules could burden its exporters, questioned the impact of Brussels’ carbon border tax and pressed for greater recognition of Canadian standards in areas including AI.
The senior EU official described the relationship as constrained by “irritants and unfulfilled promises” that must be resolved if the two sides are to make progress.
Canadian Prime Minister Mark Carney shakes hands with European Commission President Ursula von der Leyen, next to European Parliament President Roberta Metsola, in Strasbourg, eastern France, on September 17, 2026. | Jean-Christophe Verhaegen/ AFP via Getty Images
There are hurdles ahead. Even as Canada and the EU imagine a deeper economic and security partnership, both are pursuing industrial policies that could shut the other’s companies out of lucrative public contracts — death by compounded trade barriers.
Brussels has concerns about Ottawa’s “Buy Canadian” initiatives and their compatibility with the EU-Canada free trade agreement. “Some member states didn’t like the ‘Buy Canada’ thing from Carney,” the official added.
Canada is likewise uncertain whether its companies will qualify for the EU’s proposed “Made in Europe” preferences foreseen in a major industry bill that would seek to channel public procurement spending to European companies. The EU is divided over whether to extend those preferences to trusted trading partners, a topic that is expected to come up in Montreal.
Canadian business leaders recognize the domestic appeal of “Buy Canadian” in the face of Trump’s threats, but warn there will need to be concessions.
“It’s something that will have to be resolved in order to move the relationship deeper, particularly with respect to industrial cooperation or collaboration,” Mark Camilleri, president of the Canada EU Trade and Investment Association, told POLITICO.
Camilleri likened the 10-year-old CETA deal to a garden overgrown with weeds. “It pains me to see market access being eroded through Canadian and European preferences,” he said.
Pressure is on
European and Canadian leaders are under pressure to deliver wins this week that demonstrate that “non-hegemons” — a descriptor Carney used in his Davos speech — can survive and thrive in an age of great-power rivalry.
Canadians currently support closer ties with Europe. But the EU faces political headwinds of its own, from fraught budget negotiations within the bloc to right-wing populist movements that are picking up momentum in some of its biggest economies.
One likely deliverable is a new digital trade agreement. Talks launched in March and were still underway last week. But the agreement lacks substantive text on artificial intelligence, leaving the two sides to find other places to cooperate, potentially through the EU’s proposed Cloud and AI Development Act. That proposal seeks to reduce reliance on U.S. tech giants, raising the risk of a new row with Washington.
The European Commission is also pushing for Canada to join Erasmus+, the bloc’s student exchange program, according to one EU official. Carney has already publicly expressed interest.
But Brussels has bigger ambitions for the partnership. The EU is pressing Canada to increase its funding for Ukraine, a test of Canada’s willingness to take on more of the security burden.
For von der Leyen, securing that commitment would be a win. So would leaving the summit with a pledge from Carney to explore her offer of an “associate membership” — or whatever they end up calling it.
Zi-Ann Lum reported from Toronto, Sebastian Starcevic from Brussels and Camille Gijs from Dublin.
BRUSSELS — Centrist parties backing European Commission President Ursula von der Leyen clashed at Thursday’s European Parliament plenary over whether to hold artificial intelligence firms accountable for harm.
The EU executive had considered specific liability rules for AI in 2022, but withdrew these last year as part of the EU’s major simplification effort to make the bloc more competitive.
“To withdraw the AI liability directive was a big mistake,” said Alex Agius Saliba, a Maltese vice-president of the Socialists and Democrats, part of the majority coalition. “We strongly urge the Commission to bring forward this important piece of legislation.”
Thursday’s plenary debate, in which discussions centered on a global framework to regulate AI, showed strong tensions inside Europe between the centrist coalition backing von der Leyen. While the center-left pushed for new rules to address a series of AI-fueled hacking incidents, the center-right doubled down on simplification to ensure European companies can compete in the global AI race.
Socialist and Green lawmakers called for a new AI Liability Act in a bid to hold AI companies liable for harm done by their models, as with more traditional manufacturers’ products.
OpenAI CEO Sam Altman floated a similar idea for a new liability framework for companies whose models are capable of autonomous cyberattacks in the wake of this summer’s hack by autonomous OpenAI agents into another AI platform, Hugging Face.
“If a phone charger explodes in your house, we never call it innovative. We call it cheap, dangerous junk, and we hold the manufacturer liable for damages,” said Dutch Green European Parliament lawmaker Kim van Sparrentak.
She urged the Commission to “stop scrapping rules to please [U.S. President Donald] Trump” and come up with a “strong new liability act that covers the testing and the development of AI.”
The debate quickly descended into a fierce back-and-forth between key AI-focused lawmakers from von der Leyen’s centrist coalition.
“It feels [to] me like the Greens and the Socialists are living [on] a completely different planet than the rest of us when they are screaming for more regulation,” said Swedish center-right lawmaker Arba Kokalari, who led the work on the AI omnibus, which delayed a core section of the EU’s flagship AI law.
She said the EU already had a comprehensive regulatory framework — the AI Act — of which some parts are not even into force, and said the EU should focus on avoiding falling behind in the global AI race instead. She called for “less bureaucracy, more private investments, better access to data and computing infrastructure.”
Italian Social Democrat Brando Benifei, who led work on the AI Act in the previous mandate, snapped back that Europe should lead with new liability rules, “or we will need to wait for the next blogpost of a CEO to know what is happening.”
German Green lawmaker Sergey Lagodinsky also fired back at Kokalari: “What planet do you live on? Not on the planet where [AI] agents break out.”
International Partnerships Commissioner Jozef Síkela pointed out at the end of the debate that the rules were withdrawn because EU countries and European Parliament lawmakers couldn’t reach an agreement on them.
The Arctic is becoming a geopolitical battleground — and the EU wants a bigger role.
The European Commission is unveiling a new strategy focused on security, as Russia builds up its military presence, China explores new shipping routes, and Donald Trump’s Greenland ambitions raise tensions.
Also on the show, hosts Zoya Sheftalovich and Nick Vinocur discuss signs of progress in the EU’s long-term budget negotiations: Emmanuel Macron and Friedrich Merz appear to be finding common ground, while Kaja Kallas warns that proposed cuts could undermine Europe’s global influence.
Slashing the EU’s humanitarian aid budget risks wrecking the bloc’s dominance and influence in international discussions, warned the head of the world’s largest food aid organization.
As Europe’s leaders clash over just how much they’re prepared to fund the EU and its programs in the next seven-year budget, initial funding plans for global development have already been cut.
The latest compromise position presented by the Irish rotating presidency of the Council of the EU would carve €38 billion out of the Global Europe envelope — which funds development and external aid — shrinking it by roughly 17% to €177 billion.
The European Commission “has remained a predictable donor when others have cut,” Carl Skau, acting chief of the U.N. World Food Programme said. This has earned Europe “a lot of trust, a lot capital, a lot of leverage in the international system,” he added.
That influence has helped the EU shape WFP priorities, including commitments to gender equality, climate action and protecting vulnerable populations in its 2026-2029 Strategic Plan.
Now, Brussels risks throwing that advantage away, Skau warned.
World Food Programme donations are unloaded in Chichiriviche de la Costa, Venezuela on July 16, 2026. | Raul Arboleda/AFP via Getty Images
It will be “unfortunate also to do away with that muscle that Europe benefits from,” he said, urging the EU to protect the “ambitious budget.” Compared with the billions being poured into defense, he argued, humanitarian aid amounts to “peanuts.”
Talks on squeezing the EU’s contribution land as other international powers have also cut their global development budgets.
The World Food Programme’s global funding has plunged by 40% over the past two years, according to its official records. Its largest donor, the United States, halved its contributions in 2025 under President Donald Trump compared with the previous year. Germany, France, and the United Kingdom also tightened the purse strings.
Record need for aid
Funding cuts to the organization come when the need for its programs has never been higher. According to WFP projections, as many as 363 million people could face acute food insecurity this year — nearly 90% more than in 2021.
“We see the consequences of the cuts that we’re now going through. They are human, because we are cutting [food programs for] women and children, who are likely to die in South Sudan, in Afghanistan, in Somalia, off our support because of these deep funding cuts we’ve been going through,” said Skau.
The world’s largest food aid agency is now running dangerously short of cash and has to make “impossible choices,” such as “choosing between the starving,” Skau said. Moreover, wars, extreme weather, the looming threat of El Niño and disruptions to global trade routes are deepening hunger crises worldwide.
Some officials previously warned that cuts to development aid risk fueling more migration into Europe, something Brussels has been trying to curb.
“I would not put that as my main argument, but there is a clear linkage,” said Skau. “And if that’s what it takes to get the resources needed to save lives in South Sudan, you know, fair enough,” he added.
Skau is serving as WFP’s interim chief following Cindy McCain’s departure. He is set to hand over to Luke Lindberg at the end of October.
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