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European Union Unveils Fresh Sanctions on Russia, Including a Nord Stream Ban

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Ursula von der Leyen, president of the European Commission, announced a proposal meant to ramp up pressure on Moscow.The European Union’s executive arm unveiled its latest package of sanctions against Russia, aiming to apply pressure to President Vladimir V. Putin by damaging the nation’s energy and banking sectors.The sanctions proposed on Tuesday — which still need to be debated and passed by member states — would ban transactions with the Nord Stream pipelines, hoping to choke off future flows of energy from Russia into Europe.They would lower the price cap at which Russian gas can be purchased on global markets, hoping to chip away at Russian revenues.And they would hit both Russian banks and the so-called “shadow fleet,” old tanker ships, often registered to other countries or not registered at all, that Moscow uses to covertly transport and sell its oil around the world to skirt energy sanctions. The new measures would blacklist a new batch of ships that are being used in this way.The proposal is the 18th sanctions package to come out of Brussels since Russia’s full-scale invasion of Ukraine. Taken as a whole, the measures are a sweeping effort to threaten Russian economic might and morale at a critical juncture in the war.The announcement comes as peace talks between Russia and Ukraine stall. Despite pressure from the Trump administration to work toward a cease-fire, the latest round of talks between the two sides, earlier this month in Istanbul, created little result outside of another agreement to swap prisoners.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    As Trump Upends Global Trade, Europe Sees an Opportunity

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    President Trump has big ambitions for the global trading system and is using tariffs to try to rip it down and rebuild it. But the European Union is taking action after action to make sure the continent is at the center of whatever world comes next.As one of the globe’s biggest and most open economies, the E.U. has a lot on the line as the rules of trade undergo a once-in-a-generation upheaval. Its companies benefit from sending their cars, pharmaceuticals and machinery overseas. Its consumers benefit from American search engines and foreign fuels.Those high stakes aren’t lost on Europe.Ursula von der Leyen, the president of the European Commission, the E.U.’s executive arm, has spent the past several weeks on calls and in meetings with global leaders. She and her colleagues are wheeling and dealing to deepen existing trade agreements and strike new ones. They are discussing how they can reduce barriers between individual European countries.And they are talking tough on China, trying to make sure that it does not dump cheap metals and chemicals onto the European market as it loses access to American customers because of high Trump tariffs.It’s an explicit strategy, meant to leave the economic superpower stronger and less dependent on an increasingly fickle America. As Ms. von der Leyen and her colleagues regularly point out, the U.S. consumer market is big — but not the be-all-end-all.“The U.S. makes up 13 percent of global goods trade,” Maros Sefcovic, the E.U.’s trade commissioner, said in a recent speech. The goal “is to protect the remaining 87 percent and make sure that the global trade system prevails for the rest of us.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    After Trump’s Pause on Tariffs, EU Delays Retaliation to Allow Talks

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    E.U. officials ​announced on Thursday that they would delay their plans for retaliatory tariffs after President Trump’s abrupt decision to hit pause on some of the levies he had placed on Europe and much of the rest of the world.Mr. Trump’s announcement, a day before, had signaled what European leaders were hoping for: a possible willingness to negotiate.Washington’s pivot came just hours after European officials had approved retaliatory levies of 10 to 25 percent on about $23 billion of U.S. imports. But given the American shift in stance, E.U. leaders said on Thursday that they would take a 90-day pause of their own.“If negotiations are not satisfactory, our countermeasures will kick in,” Ursula von der Leyen, president of the European Commission, announced in a statement. “Preparatory work on further countermeasures continues.”The Trump administration is specifically pausing what it has called “reciprocal” tariffs — across-the-board taxes that apply in different amounts to different countries. Mr. Trump announced those levies on April 2 and said that the European Union would face a levy of 20 percent. With his about-face on Wednesday, the bloc would most likely instead face a 10 percent across-the-board tariff for the next 90 days.But the 25 percent tariffs that Mr. Trump has placed on both cars and on steel and aluminum seemed to be still in place — and the retaliation that Europe approved on Wednesday was in response to those metal-sector tariffs, not to the tariffs that Mr. Trump has now delayed. The retaliation plan would have applied tariffs of 10 to 25 percent on a wide range of goods, including soybeans, peanut butter and hair spray. Officials will now “take a bit of time to think, take a bit of time to analyze, take a bit of time to reflect,” Olof Gill, a spokesman for the European Commission, said at a news conference on Thursday.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Europe Braces for a New Trump Era, Uncertain About What It Means

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    As Donald J. Trump took the oath of office in Washington on Monday, the crowd at a jam-packed party held by Ukrainian business groups in Davos, Switzerland, intently watched the ceremony on huge screens.The event, on the sidelines of the World Economic Forum’s annual conference, seemed to be a display of enthusiasm for the returned American president. Speakers praised Mr. Trump and predicted that he would be a valuable partner for Ukraine in its war against Russia, despite his criticism of U.S. spending on the military effort. Waiters served mini cheeseburgers on red-and-blue buns (“American food,” attendees whispered). A few people applauded at the end.Yet the apparent optimism was a thin veneer over deep uncertainty.“We expect President Trump to surprise us, but we do not know what the surprise will be,” Andy Hunder, president of the American Chamber of Commerce in Ukraine, said at the party.Mr. Trump’s return to the White House has plunged Europe’s business leaders and policymakers into a precarious era, and officials have been bracing for it behind the scenes. The European Commission — the European Union’s executive arm — formed a never-officially-announced group, sometimes colloquially referred to as a “Trump task force,” which spent much of 2024 working on possible responses to changes to American trade and foreign policy.There is almost no aspect of European policy that Mr. Trump does not seem poised to upend. He is threatening to impose sweeping tariffs and is pressing for much heftier European spending on defense. Two of his first acts as president were to withdraw from the Paris climate agreements and the World Health Organization.How he will adjust America’s stance toward Ukraine is one of the biggest questions: During his campaign, he pledged to end the war on his first day in office, though that timeline has crept back and he has not said how.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Europe Has Fallen Behind the U.S. and China. Can It Catch Up?

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    A “competitiveness crisis” is raising alarms for officials and business leaders in the European Union, where investment, income and productivity are lagging.Europe’s share of the global economy is shrinking, and fears are deepening that the continent can no longer keep up with the United States and China.“We are too small,” said Enrico Letta, a former Italian prime minister who recently delivered a report on the future of the single market to the European Union.“We are not very ambitious,” Nicolai Tangen, head of Norway’s sovereign wealth fund, the world’s largest, told The Financial Times. “Americans just work harder.”“European businesses need to regain self-confidence,” Europe’s association of chambers of commerce declared.The list of reasons for what has been called the “competitiveness crisis” goes on: The European Union has too many regulations, and its leadership in Brussels has too little power. Financial markets are too fragmented; public and private investments are too low; companies are too small to compete on a global scale.“Our organization, decision-making and financing are designed for ‘the world of yesterday’ — pre-Covid, pre-Ukraine, pre-conflagration in the Middle East, pre-return of great power rivalry,” said Mario Draghi, a former president of the European Central Bank who is heading a study of Europe’s competitiveness.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Can Europe Save Forests Without Killing Jobs in Malaysia?

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    The European Union’s upcoming ban on imports linked to deforestation has been hailed as a “gold standard” in climate policy: a meaningful step to protect the world’s forests, which help remove planet-killing greenhouse gases from the atmosphere.The law requires traders to trace the origins of a head-spinning variety of products — beef and books, chocolate and charcoal, lipstick and leather. To the European Union, the mandate, set to take effect next year, is a testament to the bloc’s role as a global leader on climate change.The policy, though, has gotten caught in fierce crosscurrents about how to navigate the economic and political trade-offs demanded by climate change in a world where power is shifting and international institutions are fracturing.Developing countries have expressed outrage — with Malaysia and Indonesia among the most vocal. Together, the two nations supply 85 percent of the world’s palm oil, one of seven critical commodities covered by the European Union’s ban. And they maintain that the law puts their economies at risk.In their eyes, rich, technologically advanced countries — and former colonial powers — are yet again dictating terms and changing the rules of trade when it suits them. “Regulatory imperialism,” Indonesia’s economic minister declared.The view fits with complaints from developing countries that the reigning international order neglects their concerns.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Eurozone Inflation Eases on Lower Energy Prices

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    The rate of price increases in countries using the euro slowed to 9.2 percent in December, down from 10.1 percent a month earlier.Lower energy prices helped to push inflation in Europe lower last month, the European Commission reported on Friday, but many prices are still rising at a brisk pace and policymakers have given little indication that they plan to halt planned interest rate increases.Consumer prices in the countries that use the euro as their currency rose at an annual rate of 9.2 percent in December, down from the double-digit levels of 10.1 percent in November and 10.6 percent in October.Declines in inflation reported this week in France, Germany and Spain sparked hopes that the relentless rise across the continent may have finally peaked. But several influential voices urged caution, noting that while the so-called headline rate of inflation has eased, core inflation, which strips out volatile food and energy prices, has not shown the same drop. In fact, for December, the eurozone’s core rate of inflation rose to 5.2 percent, from 5 percent the month before.Europe has benefited from a streak of mild weather, which has lowered the demand for energy, particularly the natural gas used to power much of the continent’s heating infrastructure. Several governments have also offered subsidies to blunt the painfully high energy prices that consumers pay. The drop in Germany’s inflation rate, to 9.6 percent in December from 11.3 percent the month before, was partly due to one-time assistance to help households pay their energy bills, according to the government’s statistics office.The data showed that energy prices in the eurozone rose at an annual rate of 25.7 percent in December, down from as high as 41.5 percent in October. “Europe is very lucky at the moment with the weather,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics. He added that government energy relief had inserted a “wedge between reality and the data.”“It’s a price control,” he said, and “once you take out that, it’s not as clear that inflation is that benign.”Nearly all eurozone countries marked a decline in their main inflation rate in December, including France (6.7 percent, from 7.1 percent in November), Italy (12.3 percent, from 12.6 percent), Spain (5.6 percent, from 6.7 percent) and the Netherlands (11 percent, from 11.3 percent). The numbers bolstered the argument that the eurozone’s record-setting pace of inflation in the past year will slowly lose steam in 2023. “We are likely past the peak,” said Riccardo Marcelli Fabiani, an economist at Oxford Economics, in a note on Friday. But he added, “we expect inflation to cool only gradually, remaining high in the short term.”The European Central Bank, which has a target of 2 percent annual inflation, has already indicated that it is likely to raise interest rates half a point in February. Christine Lagarde, the bank’s president, said last month that she expected interest rates to rise “significantly further, because inflation remains far too high and is projected to stay above our target for too long.”The December data, showing easing overall inflation but persistent underlying price pressure, will probably stoke “tense negotiations among policymakers in the next few months” noted Mr. Vistesen after the numbers were released. The Federal Reserve, the U.S. central bank, is also expected to continue raising rates.This week, Gita Gopinath, first deputy managing director of the International Monetary Fund, told the Financial Times that the Fed should “stay the course” with its planned increases.“I think it’s clear that we haven’t turned the corner yet on inflation,” she said. At the same time, the fund has also projected that a third of the world economy will face recession this year. More

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    Shock Waves Hit the Global Economy, Posing Grave Risk to Europe

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    The threat to Europe’s industrial might and living standards is particularly acute as policymakers race to decouple the continent from Russia’s power sources.Russia’s invasion of Ukraine and the continuing effects of the pandemic have hobbled countries around the globe, but the relentless series of crises has hit Europe the hardest, causing the steepest jump in energy prices, some of the highest inflation rates and the biggest risk of recession.The fallout from the war is menacing the continent with what some fear could become its most challenging economic and financial crisis in decades.While growth is slowing worldwide, “in Europe it’s altogether more serious because it’s driven by a more fundamental deterioration,” said Neil Shearing, group chief economist at Capital Economics. Real incomes and living standards are falling, he added. “Europe and Britain are just worse off.”Several countries, including Germany, the region’s largest economy, built up a decades-long dependence on Russian energy. The eightfold increase in natural gas prices since the war began presents a historic threat to Europe’s industrial might, living standards, and social peace and cohesion. Plans for factory closings, rolling blackouts and rationing are being drawn up in case of severe shortages this winter.The risk of sinking incomes, growing inequality and rising social tensions could lead “not only to a fractured society but a fractured world,” said Ian Goldin, a professor of globalization and development at Oxford University. “We haven’t faced anything like this since the 1970s, and it’s not ending soon.”Other regions of the world are also being squeezed, although some of the causes — and prospects — differ.Gazprom, Russia’s state-owned energy company, said this week that it would not resume the flow of natural gas through its Nord Stream 1 pipeline until Europe lifted Ukraine-related sanctions.Hannibal Hanschke/EPA, via ShutterstockHigher interest rates, which are being deployed aggressively to quell inflation, are trimming consumer spending and growth in the United States. Still, the American labor market remains strong, and the economy is moving forward.China, a powerful engine of global growth and a major market for European exports like cars, machinery and food, is facing its own set of problems. Beijing’s policy of continuing to freeze all activity during Covid-19 outbreaks has repeatedly paralyzed large swaths of the economy and added to worldwide supply chain disruptions. In the last few weeks alone, dozens of cities and more than 300 million people have been under full or partial lockdowns. Extreme heat and drought have hamstrung hydropower generation, forcing additional factory closings and rolling blackouts.A troubled real estate market has added to the economic instability in China. Hundreds of thousands of people are refusing to pay their mortgages because they have lost confidence that developers will ever deliver their unfinished housing units. Trade with the rest of the world took a hit in August, and overall economic growth, although likely to outrun rates in the United States and Europe, looks as if it will slip to its slowest pace in a decade this year. The prospect has prompted China’s central bank to cut interest rates in hopes of stimulating the economy.Understand the Decline in U.S. Gas PricesCard 1 of 5Understand the Decline in U.S. Gas PricesGas prices are falling. More

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    Portugal Could Hold an Answer for a Europe Captive to Russian Gas

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    Portugal has no coal mines, oil wells or gas fields. Its impressive hydropower production has been crippled this year by drought. And its long-running disconnect from the rest of Europe’s energy network has earned the country its status as an “energy island.”Yet with Russia withholding natural gas from countries opposed to its invasion of Ukraine, the tiny coastal nation of Portugal is suddenly poised to play a critical role in managing Europe’s looming energy crisis.For years, the Iberian Peninsula was cut off from the web of pipelines and huge supply of cheap Russian gas that power much of Europe. And so Portugal and Spain were compelled to invest heavily in renewable sources of energy like wind, solar and hydropower, and to establish an elaborate system for importing gas from North and West Africa, the United States, and elsewhere.Now, access to these alternate energy sources has taken on new significance. The changed circumstances are shifting the power balances among the 27 members of the European Union, creating opportunities as well as political tensions as the bloc seeks to counter Russia’s energy blackmail, manage the transition to renewables and determine infrastructure investments.The Alto Tamega dam, part of a hydropower facility in northern Portugal that will be operational in 2024.Matilde Viegas for The New York TimesThe urgency of Europe’s task is on display this week. On Wednesday, Russia’s energy monopoly, Gazprom, again suspended already reduced gas deliveries to Germany through its Nord Stream 1 pipeline. With natural gas costing about 10 times what it did a year ago, the European Union has called for an emergency meeting of its energy ministers next week.As Brussels tries to figure out how to manage the crisis, the possibility of funneling more gas to Europe through Portugal and Spain is gaining attention.Portugal and Spain were among the first European nations to build the kind of processing terminals needed to accept boatloads of natural gas in liquefied form and to convert it back into the vapor that could be piped into homes and businesses.This imported liquefied natural gas, or L.N.G., was more expensive than the type much of Europe piped in from Russia. But now that Germany, Italy, Finland and other European nations are frantically seeking to replace Russian gas with substitutes shipped by sea from the United States, North Africa and the Middle East, this disadvantage is an advantage.Solar panels in Sintra. Connecting such panels to Europe’s electricity grid could help ease energy shortages on the continent.Matilde Viegas for The New York TimesTogether, Spain and Portugal account for one-third of Europe’s capacity to process L.N.G. Spain has the most terminals and the biggest, though Portugal has the most strategically located.Its terminal in Sines is the closest of any in Europe to the United States and the Panama Canal; it was the first port in Europe to receive L.N.G. from the United States, in 2016. Even before the war in Ukraine, Washington identified it as a strategically important gateway for energy imports to the rest of Europe.Spain also has an extensive network of pipelines that carry natural gas from Algeria and Nigeria, as well as large storage facilities.Understand the Decline in U.S. Gas PricesCard 1 of 5Understand the Decline in U.S. Gas PricesGas prices are falling. More