Authored by Andrew Korybko via Substack,

The New York Times’ recent report about his government’s responsibility for the worst corruption scandal in Ukraine’s history suggests that the walls are closing in and his foreign media allies are jumping ship out of desperation to retain some of their credibility after years of deifying him.

It was earlier assessed that “Ukraine’s Anti-Corruption Investigation Is Turning Into A Rolling Coup” after it took down Zelensky’s grey cardinal Andrey Yermak, consequently weakened the already shaky alliance keeping him in power, and thus placed more pressure upon him to cede Donbass. The latest development concerns the New York Times’ (NYT) report about how “Zelensky’s Government Sabotaged Oversight, Allowing Corruption to Fester”, which brings the investigation closer to implicating him.

It also represents a stunning narrative reversal after the NYT spent the past nearly four years practically deifying him only to now inform their global audience that “President Volodymyr Zelensky’s administration has stacked boards with loyalists, left seats empty or stalled them from being set up at all. Leaders in Kyiv even rewrote company charters to limit oversight, keeping the government in control and allowing hundreds of millions of dollars to be spent without outsiders poking around.”

Predictably, “Mr. Zelensky’s administration has blamed Energoatom’s supervisory board for failing to stop the corruption. But it was Mr. Zelensky’s government itself that neutered Energoatom’s supervisory board, The Times found.” Just as scandalously, “The Times found political interference not only at Energoatom but also at the state-owned electricity company Ukrenergo as well as at Ukraine’s Defense Procurement Agency”, the latter of which Kiev plans to merge with the State Logistics Operator.

None of this was a secret either: “European leaders have privately criticized but reluctantly tolerated Ukrainian corruption for years, reasoning that supporting the fight against Russia’s invasion was paramount. So, even as Ukraine undermined outside oversight, European money kept flowing.” The NYT then detailed the political meddling employed by Zelensky’s government to “impede the (supervisory) board’s ability to act” and therefore facilitate the worst corruption scandal in Ukraine’s history.

Their report is significant since it strongly suggests that there’s now tacit consensus between the NYT’s liberal-globalist backers, the conservative-nationalist Trump Administration, and the US’ permanent bureaucracy (“deep state”) about the need to expose Zelensky’s corruption. Gone are the days when he was presented as the next Churchill since he’s now being portrayed as no less corrupt than the strongmen in Global South countries that most Americans have never heard of or can place on a map.

To be sure, the aforementioned liberal-globalists and members of the “deep state” (oftentimes one and the same) still oppose Trump’s envisaged endgame in Ukraine, but they seem to have concluded that a ‘phased leadership transition’ is in their and Ukraine’s interests.

It appears inevitable that the anti-corruption investigation will soon implicate Zelensky so it’s best for them to get ahead of the curve in order to retain some credibility among their audience and possibly shape the next government.

Their goal isn’t to facilitate Ukrainian concessions like Trump wants in exchange for Putin agreeing to a profitable resource-centric strategic partnership after the conflict ends but to clean up some corruption and thus optimize government operations in the hope of inspiring the West to rally around Ukraine. It’s likely a losing bet, however, since the political momentum favors Trump’s vision. In fact, his opponents’ narrative reversal arguably advances Trump’s goal, but they’ll accept that to save their credibility.

Ahead of today’s jobs report, Goldman Delta One Head Rich Privorotsky wrote that with the October print backward looking and mostly govt related and irrelevant, “anywhere near consensus for November (+/-25k of 50k) feels like the sweet spot…that said, hard to see the FOMC feeling compelled to halt accommodation or even talk about hiking if labor momentum is still sub-100k on trend. Too cold (<25k or negative) and the pro-cyclical rally we’ve seen has to be questioned. Probably bigger risk to the market narrative is a re-acceleration in labor which is consistent with some of the bonce in open jobs visible in the higher frequency data.”

With that in mind, moments ago the the BLS published a very mixed report, with payrolls coming solid, thanks to a big beat in the November print, offset by an unexpected jump in the unemployment rate to 4.6%, above estimates, and the highest since Sept 2021.

Here are the details: in October, the US lost 105K jobs, entirely due to a plunge in government jobs (more below) but this was offset by the November jump of 64K jobs, which came in higher than the 50K expected. 

Naturally, the negative revisions continued: the BLS also reported that the change in total nonfarm payroll employment for August was revised down by 22,000, from -4,000 to -26,000, and the change for September was revised down by 11,000, from +119,000 to +108,000.  With these revisions, employment in August and September combined is 33,000 lower than previously reported. 

Of note, government employment tumbled in November by -6,000. This follows a sharp decline of 162,000 in October, as some federal employees who accepted a deferred resignation offer came off federal payrolls. Federal government employment is down by 271,000 since reaching a peak in January. (Federal employees on furlough during the government shutdown were counted as employed in the establishment survey because they received pay, even if later than usual, for the pay period that included the 12th of the month. Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)

But while payrolls were generally solid, the unemployment rate was a problem and is what will likely prompt the Fed to cut more: in November, the unemp rate rose to 4.6% (with October blank), worse than the 4.5% estimate and the highest since Sept 2021.

Among the major worker groups, the unemployment rate for teenagers was 16.3% in November, an increase from September. The jobless rates for adult men (4.1 percent), adult women (4.1 percent),  Whites (3.9 percent), Blacks (8.3 percent), Asians (3.6 percent), all rose, and just the unemp rate for Hispanics (5.0 percent) dropped.

Both the labor force participation rate (62.5 percent) and the employment-population ratio (59.6 percent) were little changed from September. These measures showed little or no change over the year. 

In November, average hourly earnings for all employees on private nonfarm payrolls edged up by 5 cents, or 0.1 percent, to $36.86. Over the past 12 months, average hourly earnings have increased by 3.5%, lower than the 3.6% expected. The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.3 hours in November. In manufacturing, the average workweek changed little at 40.0 hours, and overtime was unchanged at 2.9 hours. 

Taking a closer look at the report we find the following details:

• The number of people jobless less than 5 weeks was 2.5 million in November, up by 316,000 from  September. The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.9 million in November and accounted for 24.3 percent of all unemployed people. 
• The number of people employed part time for economic reasons was 5.5 million in November, an increase of 909,000 from September. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. 
• The number of people not in the labor force who currently want a job, at 6.1 million in November, was little changed from September. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.8 million in November, was little changed from September. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, also changed little at 651,000 in November. 

Taking a closer look at the monthly change in jobs, employment rose in health care and construction while federal government employment declined by 6,000, following a loss of 162,000 in October. 

• In November, health care added 46,000 jobs, in line with the average monthly gain of 39,000 over the prior 12 months. Over the month, job gains occurred in ambulatory health care services (+24,000),  hospitals (+11,000), and nursing and residential care facilities (+11,000).
• Construction employment grew by 28,000 in November, as nonresidential specialty trade contractors added 19,000 jobs. Construction employment had changed little over the prior 12 months. 
• Employment in social assistance continued to trend up in November (+18,000), primarily in individual and family services (+13,000). 
• In November, employment edged down in transportation and warehousing (-18,000), reflecting a job loss in couriers and messengers (-18,000). Transportation and warehousing employment has declined  by 78,000 since reaching a peak in February. 
• The big outlier was Federal government employment, which continued to decrease in November (-6,000). This follows a sharp  decline of 162,000 in October, as some federal employees who accepted a deferred resignation offer came off federal payrolls. Federal government employment is down by 271,000 since reaching a peak in January. (Federal employees on furlough during the government shutdown were counted as employed in the establishment survey because they received pay, even if later than usual, for the pay period that included the 12th of the month. Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)

And visually:

While the quantitative aspects of the report were ok, the qualitative were ugly. In November, the number of full-time workers plunged by 983K from September to 134.17 million. At the same time, in the two months since Sept, the number of part-time workers soared by over 1 million (1.025 million to be precise) to 29.486 million…

… the highest on record while full-time workers tumbled to a 2025 low!

As for the closely watched “immigrant” shift, in November there were no fireworks here, with Native Born workers up 114K, while foreign-born increased by 58.

There was more: the number of people who need more than one job to make ends meet soared by almost 500K in the 2 months since Sept to 9.301 million, the highest on record!

Overall, this jobs report was weaker than it will be spun for political reasons, which however is precisely what the market is looking for because as Morgan Stanley’s Mike Wilson put it, “bad news is now good news for stocks.”

President Trump’s gunboat diplomacy in the Caribbean, off Venezuela’s coast, has the effect of a maritime blockade, disrupting oil flows to Cuba and to global markets via shadow-fleet tankers. The Trump administration calculates that choking off this oil trade could trigger cascading economic stress, first in Cuba and then in Venezuela, ultimately accelerating the end goal of regime change in Caracas.

The latest report from Axios shows that the Trump administration’s seizure of a shadow-fleet tanker in the Caribbean is only in the early innings, with 18 sanctioned oil-laden ships currently in Venezuelan waters.

Last week, a US Special Forces unit seized the tanker Skipper, which was carrying crude contracted by Cubametales, Cuba’s state-run oil trading firm.

The tanker was part of a dark fleet that shipped crude from Venezuela to Cuba and onward to Asia.

Samir Madani, co-founder of the firm Tanker Trackers, told Axios that of the 18 sanctioned oil-laden ships off the country’s coast, eight are classified as “Very Large Crude Carriers” (VLCCs), such as Skipper, which can carry nearly 2 million barrels of Venezuelan crude. “It’s quite a buffet for the U.S. to choose from,” he said.

Given the unprecedented US naval presence in the Caribbean, mainly offshore of Venezuela in international waters, the Trump administration’s theory of gunboat diplomacy centers on cutting off all support to Cuba. To do that, it follows the money, starting with oil flows via dark tanker fleets. Once those oil flows are disrupted, Venezuela falls, and then Cuba follows.

Related:

• Seized Tanker Reveals Cuba’s Secret Oil Lifeline As Trump Turns To Gunboat Diplomacy

Axios quoted one Trump adviser as saying, “We have to wait for them to move. They’re sitting at the dock. Once they move, we’ll go to court, get a warrant, and then get them,” adding, “But if they make us wait too long, we might get a warrant to get them there,” in Venezuelan waters.

And gunboat diplomacy it is.

Amid the growing specter of a ‘k-shaped’ economy, BofA’s (almost) omniscient analysts forecast strong retail sales for October – considerably stronger than Bloomberg’s consensus of a marginal uptick.

BofA was wrong – very wrong – as the headline retail sales was unchanged MoM, which pulled sales down to +3.5% YoY (still relatively strong)…

Source: Bloomberg

However, Ex-Autos, and Ex-Autos and Gas both beat expectations.

The figures indicate consumer spending picked up steam in the early weeks of the holiday-shopping season as shoppers, many worried about their jobs and frustrated by the high cost of living, sought out deals.

Eight out of 13 retail categories posted increases, including solid advances at department stores and online merchants.

Motor vehicles fell 1.6%, held down in part by the expiration of federal tax incentives on electric vehicles. Cheaper gasoline prices held down the value of gas station receipts.

However, there is a silver lining, as the Retail Sales Control Group (which excludes food services, auto dealers, building materials stores and gasoline stations) – which feeds into the GDP calc – surged 0.8% MoM – double expectations and the biggest MoM jump since June…

Source: Bloomberg

That MoM jump leaves sales up a strong 5.1% YoY and while the ‘k-shaped’ economy continues to weigh on market sentiment, it is not evident in the aggregate data and supports solid Q4 GDP growth.

By Stefan Koopman, Senior Macro Strategist at Rabobank

With Christmas approaching, Home Alone offers a fitting image to start this Global Daily: Kate McCallister, flying high in seats that by today’s standards look very comfy, suddenly shrieks “KEVIIIIINNNN” when she realizes she has left her son behind. Kevin Hassett’s fast climb toward the Fed chair resembles such a flight: a strong ascent, apparently some nice tailwinds, and then a moment of doubt as he may have flown too close to the sun.

Just as Icarus overreached, high visibility and scrutiny can bring Kevin Hassett down too. Recent media reports suggest the field is open again, with former Fed governor Kevin Warsh back in the running. The question is whether this Kevin represents an upgrade.

Indeed, Warsh’s record is at odds with the White House’s policy agenda. As governor, he pushed for rate hikes even as the U.S. economy plunged into recession, he opposed key tools to expand the balance sheet to deal with the financial crisis and then he warned of inflation that – if you’re generous – arrived about 13 years late. His critique of the Fed aligns with Friedman’s free-market and limited-government ideals, and also a very narrow interpretation of the Fed’s remit. While this is at least internally consistent, his calls were wrong at nearly every major turning point in the economy.

More problematically, his current fixation on balance-sheet reduction (while the Fed has shifted to an ample reserves framework) should be read less as an intellectually coherent framework and more as political positioning. It offers an easy way to sound hawkish and serious about inflation while providing cover to later advocate for the rate cuts this White House wants. His logic only works if fiscal deficits shrink substantially – and here we can think of Clinton-era Rubinomics – but Trump and Bessent have shown zero interest in deficit reduction.

Perhaps his candidacy is floated simply to make Hassett look better. Either way, everything Warsh says now must also be viewed through the lens of ambition. If appointed, the hard-money man could go soft, not out of conviction, but because doing the president’s bidding becomes part of the job. So if Hassett’s risk is proximity to the sun, Warsh’s risk is opportunism. Markets may conclude that neither choice secures the Fed’s long-term credibility on inflation expectations and central bank independence.

Meanwhile, Governor Miran offered a detailed inflation outlook to explain why he voted for a 50bp cut at last week’s meeting. He sees underlying price pressures closer to the Fed’s 2% target than the headline rate suggests, citing expected deceleration in shelter inflation as the PCE’s lagged metric catches up with flat market rents, and the way portfolio management fees are imputed from rising asset prices. He also argued against blaming tariffs for the rise in core goods inflation. While he wasn’t able to provide alternative facts, he did suggest that goods price inflation may settle at a structurally higher level than pre-pandemic norms, largely driven by efforts to strengthen supply-chain security and resilience.

Helpfully for both Kevins and Stephen, the near-term inflation picture looks more benign. Crude oil fell to a two-month low yesterday, helped by optimism around a potential deal to end the war in Ukraine that would lift restrictions on Russian flows. With WTI at $56.4 per barrel in an oversupplied market, with unemployment rising and wage growth easing, and rental inflation indeed largely flat, outside of tariffs there’s only the AI-boom that looks to keep inflation elevated in 2026. That would mean that the hawkish case to not cut rates at all in 2026 largely rests on the absence of a clear path to deceleration to the 2% target.

Day Ahead

Today is busy in terms of data.

The UK labor market data for October/November kicks off the morning. Conditions have weakened sharply in 2025: vacancies fell first, now employment is declining. Soft demand combined with rising labor supply has pushed unemployment to a four-year high of 5%, slowing private-sector pay growth. This reduces concerns about inflation persistence. If today’s report confirms the trend, the path is clear for further Bank of England easing at this week’s meeting and into early 2026.

In Europe, attention turns to the latest political psychodrama ahead of the Mercosur vote expected later this week. France is reportedly pushing to delay (or possibly derail) the process to revisit its long-standing concerns one more time, while supporters warn that another pause could kill the deal altogether. Also on the agenda this morning are the December PMIs. The Eurozone composite PMI is forecast at 52.6, slightly below November’s 52.8, but that would still indicate that the economy continues to expand modestly despite weak foreign demand. The UK reading may improve from November’s 51.2, partly reflecting the lifting of uncertainty after the Budget. Last Friday’s GDP data suggested the economy stagnated through most of the second half of 2025.

The FOMC meeting a week ago was about as market-friendly as it could reasonably get. Even so, Chair Powell reiterated that policy settings are now close to neutral, raising the bar for additional easing in the near term. Futures still price about a 60% chance of a 25bp cut in March. That stance faces a test this week as today’s November payrolls and Thursday’s CPI highlight the Fed’s conflicting mandate.

Today’s jobs report is unusual. It not only arrives on a Tuesday but also reflects distortions from the longest U.S. government shutdown. The BLS will publish October and November payrolls simultaneously, though markets will probably just focus on November. The unemployment rate, based on the household survey, covers only November. Data collection started after the shutdown’s end on November 12. The BLS warns of slightly increased standard errors due to technical issues with the sample itself, with a lot of first-time survey respondents that typically report higher unemployment rates than more experienced respondents. This suggests a small upward bias and makes the print a bit of a wildcard.

Consensus sees November payrolls slightly below trend at +50k and unemployment at 4.4–4.5%, a just-about-right print that would temper labor concerns while preserving optionality for cuts. A weaker print could spur risk-off moves: equities lower, a softer dollar, and flows into cash and Treasuries.

Finally, October retail sales are expected to rebound, with the control group up 0.4% after September’s 0.1% drop. Tariff-sensitive categories such as autos, electronics, and apparel are under pressure, while service-related spending still looks firm. For October, some retailers flagged a negative impact from the government shutdown, only reinforcing the “K-shaped” narrative Chair Powell talked about in last week’s press conference.

A December 2025 study of the electric vehicle market names the 2026 Porsche Cayenne Electric as the most anticipated EV set to launch next year. Conducted by B2B automotive platform eCarsTrade, the research analyzed more than 20 upcoming electric models and ranked them based on global search interest related to pricing, specifications, range, and release timing.

The Cayenne Electric stands out clearly, attracting around 911,000 monthly searches worldwide. Buyers across North America, Europe, the Middle East, and Asia are closely following the model, which is expected to deliver up to 1,139 horsepower in its Turbo version—making it the most powerful production Porsche ever—and feature an 800-volt system capable of charging at up to 400 kilowatts.

Close behind, the MG Cyberster has generated more than 800,000 searches, drawing attention as one of the first mass-market electric roadsters, with a starting price near $73,000 in Europe, China, and the UK.

(View the full study here)

Audi also features prominently in the rankings. The Q6 e-tron, which shares its platform and charging technology with the Porsche Macan Electric, has attracted roughly 793,000 potential buyers at a starting price of $63,800, while the Audi A6 e-tron Sportback adds to the brand’s strong presence.

Volkswagen’s ID.7, positioned as the electric successor to the Passat, has also drawn significant interest from fleet and company-car buyers, with more than 700,000 people researching the $50,000 sedan for its long-range highway capability.

Family-focused electric SUVs are another area of strong demand. Hyundai’s three-row Ioniq 9, offering seating for seven and a 300-mile range at a $60,600 starting price, has recorded 665,000 searches as buyers look for practical electric alternatives to traditional large SUVs.

The study also notes growing curiosity around high-end models, including Ferrari’s first electric vehicle, the Ferrari Elettrica, which has generated more than 300,000 searches despite an estimated starting price above $535,000.

According to eCarsTrade, interest in these models reflects broader market momentum, with electric vehicles expected to account for about 27% of all new car sales in 2026. The findings suggest that established automakers such as Porsche, Audi, Volkswagen, and Hyundai are gaining ground in the EV space, driven by demand from both fleet buyers and individual consumers who place greater trust in familiar brands when making major purchases.

Authored by Tom Ozimek via The Epoch Times,

Britain’s new intelligence chief warned on Dec. 15 that the UK is operating in an era when “the front line is everywhere,” as she set out an assessment of global threats and described Russia as an “aggressive, expansionist, and revisionist” power determined to export instability across Europe and beyond.

Blaise Metreweli, who recently became head of the Secret Intelligence Service—commonly known as MI6—said that Russia’s campaign against Ukraine and its wider hybrid operations pose an acute and enduring danger to Britain and its allies, according to a preview of her first public speech released by the British government.

“The export of chaos is a feature, not a bug in the Russian approach to international engagement, and we should be ready for this to continue until Putin is forced to change his calculus,” Metreweli said.

‘The Front Line Is Everywhere’

Speaking from MI6 headquarters in London, Metreweli said that as Russia and other hostile actors rewrite the rules of conflict through cyber operations, information warfare, and covert sabotage, the global threat environment is becoming increasingly complex and interconnected.

“The front line is everywhere,” she said, warning that the UK faces a new “age of uncertainty.”

Metreweli said Britain’s support for Ukraine will remain firm and that pressure on Moscow will be sustained despite the length and cost of the war.

“Putin should be in no doubt, our support is enduring,” she said. “The pressure we apply on Ukraine’s behalf will be sustained.”

NATO Warns Russia Could Target Allies Next

Her remarks come as European leaders have issued increasingly blunt warnings about Russia’s intentions beyond Ukraine.

NATO Secretary-General Mark Rutte said last week that allied countries could become “Russia’s next target,” saying that Moscow’s willingness to absorb massive losses in Ukraine demonstrated a readiness to confront the wider alliance.

“We need to be crystal clear about the threat,” Rutte said. “We are Russia’s next target, and we are already in harm’s way.”

Rutte called for a rapid rise in defense spending to deter aggression and prevent the kind of wide-scale conflict that past generations experienced.

“Russia has brought war back to Europe, and we must be prepared for the scale of war our grandparents or great-grandparents endured,” he said.

“Imagine it, a conflict reaching every home, every workplace, destruction, mass mobilization, millions displaced, widespread suffering, and extreme losses. It is a terrible thought, but if we deliver on our commitments, this is a tragedy we can prevent.”

In June, NATO allies agreed to raise defense spending targets to 5 percent of gross domestic product by 2035—more than double the current 2 percent benchmark and in line with demands long made by U.S. President Donald Trump.

Sanctions and Diplomacy

Metreweli’s speech also follows a series of British and European actions aimed at countering Russian and Chinese influence operations.

The UK recently sanctioned multiple Russian entities accused of conducting information warfare, as well as two China-based companies linked to what the British government described as “indiscriminate cyber activities” targeting Britain and its allies.

Separately, the European Union on Dec. 15 announced fresh sanctions against individuals and companies supporting Russia’s so-called shadow fleet, which transports oil and generates revenue for the war effort, as part of a broader effort to restrict Moscow’s ability to finance its military operations.

Metreweli’s remarks in London coincided with fresh talks in Berlin on Dec. 15 involving U.S. envoys, Ukrainian President Volodymyr Zelenskyy, and European officials aimed at securing peace and stability in Europe amid pressure from Russia.

U.S. envoy Steve Witkoff and Jared Kushner, Trump’s son-in-law, held talks with Zelenskyy and other delegates on Dec. 14 in Berlin, as part of efforts to bring the Ukraine war to an end.

“Representatives held in-depth discussions regarding the 20-point plan for peace, economic agendas, and more,” Witkoff said in an update on social media. “A lot of progress was made.”

Trump has pressed for a quick end to the nearly four-year war, but a compromise that both Russia and Ukraine would accept has been elusive.

During an October swing through Southeast Asia, US President Donald Trump struck same-day agreements with Malaysia and Thailand to deepen cooperation on critical minerals and rare earths, underscoring Washington’s push to diversify supply chains away from China, according to SCMP. 

According to the White House, Trump and Malaysian Prime Minister Anwar Ibrahim agreed to expand collaboration on building and securing critical mineral and rare earth supply chains. Using similar language, Washington said it would also “strengthen cooperation [with Thailand] on critical minerals supply chains development and expansion,” including exploration, extraction and processing.

The back-to-back deals reflect how resource-rich economies have become central battlegrounds in the US-China rivalry over rare earths. Analysts say Beijing currently holds the advantage, having spent decades engaging countries across Southeast Asia, Africa and Latin America. These nations often view China as a “partner that actually builds,” with investment that comes with fewer political conditions than US funding.

China’s dominance is structural. It mines about 70 per cent of the world’s rare earths and controls roughly 90 per cent of global processing capacity, meaning even minerals extracted elsewhere are often sent to China for refinement. As Marina Zhang of the University of Technology Sydney noted, this long-term engagement has given Beijing a “commanding lead,” particularly in downstream processing.

Enrique Dans of IE Business School said China already controls the “chokepoints that matter,” from separation to magnet manufacturing, allowing it to “lock in long-term offtakes and joint ventures in resource-rich countries.” He contrasted that with a US approach that “tends to arrive with conditions, compliance, and slower money,” adding that many governments see Beijing as the partner that delivers visible projects and jobs quickly.

Sun Chenghao of Tsinghua University said China’s model — combining infrastructure, trade and mineral cooperation — has given it a more positive image in the Global South, while the US is increasingly seen as “aggressive.” Although Washington retains influence, he said “China still holds a relative advantage in the rare earth sector,” especially in emerging resource-rich economies.

SCMP writes that the rivalry is intensifying. Rare earths now sit at the centre of a strategic contest that both powers see as vital to economic security, defence manufacturing and technological leadership — with Southeast Asia, Africa and Latin America likely to remain key theatres in the years ahead.

Authored by Elen Irazabal Arana and Nikolai G. Wenzel via TheDailyEconomy.org,

Last month, we lamented California’s Frontier AI Act of 2025. The Act favors compliance over risk management, while shielding bureaucrats and lawmakers from responsibility. Mostly, it imposes top-down regulatory norms, instead of letting civil society and industry experts experiment and develop ethical standards from the bottom up.

Perhaps we could dismiss the Act as just another example of California’s interventionist penchant. But some American politicians and regulators are already calling for the Act to be a “template for harmonizing federal and state oversight.” The other source for that template would be the European Union (EU), so it’s worth keeping an eye on the regulations spewed out of Brussels.

The EU is already way ahead of California in imposing troubling, top-down regulation. Indeed, the EU Artificial Intelligence Act of 2024 follows the EU’s overall precautionary principle. As the EU Parliament’s internal think tank explains, “the precautionary principle enables decision-makers to adopt precautionary measures when scientific evidence about an environmental or human health hazard is uncertain and the stakes are high.” The precautionary principle gives immense power to the EU when it comes to regulating in the face of uncertainty — rather than allowing for experimentation with the guardrails of fines and tort law (as in the US). It stifles ethical learning and innovation. Because of the precautionary principle and associated regulation, the EU economy suffers from greater market concentration, higher regulatory compliance costs, and diminished innovation — compared to an environment that allows for experimentation and sensible risk management. It is small wonder that only four of the world’s top 50 tech companies are European.

From Stifled Innovation to Stifled Privacy

Along with the precautionary principle, the second driving force behind EU regulation is the advancement of rights — but cherry-picking from the EU Charter of Fundamental Rights of rights that often conflict with others. For example, the EU’s General Data Protection Regulation (GDPR) of 2016 was imposed with the idea of protecting a fundamental right to personal data protection (this is technically separate from the right to privacy, and gives the EU much more power to intervene — but that is the stuff of academic journals). The GDPR ended up curtailing the right to economic freedom.

This time, fundamental rights are being deployed to justify the EU’s fight against child sexual abuse. We all love fundamental rights, and we all hate child abuse. But, over the years, fundamental rights have been deployed as a blunt and powerful weapon to expand the EU’s regulatory powers. The proposed Child Sex Abuse regulation (CSA) is no exception. What is exceptional, is the extent of the intrusion: the EU is proposing to monitor communications among European citizens, lumping them all together as potential threats rather than as protected speech that enjoys a prima facie right to privacy.

As of 26 November 2025, the EU bureaucratic machine has been negotiating the details of the CSA. In the latest draft, mandatory scanning of private communications has thankfully been removed, at least formally. But there is a catch. Providers of hosting and interpersonal communication services must identify, analyze, and assess how their services might be used for online child sexual abuse, and then take “all reasonable mitigation measures.” Faced with such an open-ended mandate and the threat of liability, many providers may conclude that the safest — and most legally prudent — way to show they have complied with the EU directive is to deploy large-scale scanning of private communications.

The draft CSA insists that mitigation measures should, where possible, be limited to specific parts of the service or specific groups of users. But the incentive structure points in one direction. Widespread monitoring may end up as the only viable option for regulatory compliance. What is presented as voluntary today risks becoming a de facto obligation tomorrow.

In the words of Peter Hummelgaard, the Danish Minister of Justice: “Every year, millions of files are shared that depict the sexual abuse of children. And behind every single image and video, there is a child who has been subjected to the most horrific and terrible abuse. This is completely unacceptable.” No one disputes the gravity or turpitude of the problem. And yet, under this narrative, the telecommunications industry and European citizens are expected to absorb dangerous risk-mitigation measures that are likely to involve lost privacy for citizens and widespread monitoring powers for the state.

The cost, we are told, is nothing compared to the benefit.

After all, who wouldn’t want to fight child sexual abuse? It’s high time to take a deep breath. Child abusers should be punished severely. This does not dispense a free society from respecting other core values.

But, wait. There’s more…

Widespread Monitoring? Well, Not Completely Widespread

Despite the moral imperative of protecting children — a moral imperative so compelling that the EU is willing to violate other core values to advance it — the proposed CSA act introduces a convenient exception. Anything falling under national security, and any electronic communication service that is not publicly available (i.e. available only to elected officials and bureaucrats) would remain entirely untouched. Private chats among citizens require scrutiny — but the conversations of those who claim to protect us are off limits.

As the good minister said, “behind every single image and video there is a child who has been subjected to the most horrific and terrible abuse.” If that is indeed true of every “single image and video,” why would it not also be true of the messages shielded by the CSA’s national security and non-public exceptions? Does the horror somehow dissipate when the users are politicians or bureaucrats? Is the unacceptable suddenly made acceptable when it concerns those who write the rules?

In the EU’s hierarchy of rights, protecting children trumps privacy. But protecting Eurocrats trumps protecting children. In the end, modern technology gives politicians unprecedented opportunities to monitor citizens, while exempting themselves from scrutiny.

There is no chatter yet — that we know of — about imposing similar measures in the US. But, from the wealth tax to AI regulation — and the very origins of the American administrative state — bad ideas from Europe have a nasty way of making their way across the Pond. 

The European Commission is preparing to retreat from its planned 2035 ban on new combustion-engine car sales, yielding to pressure from Germany, Italy and automakers struggling to compete with U.S. and Chinese rivals, according to Reuters. The announcement is expected Tuesday.

EU and industry sources say the ban could be delayed by five years or softened indefinitely, turning a once-firm rule into something more aspirational. The reversal would mark the bloc’s biggest climb-down from its green agenda in the past five years.

“The European Commission will be putting forward a clear proposal to abolish the ban on combustion engines,” said Manfred Weber, head of the European Parliament’s largest political group. “It was a serious industrial policy mistake.”

Traditional automakers such as Volkswagen and Stellantis have lobbied hard for relief, arguing EV demand has fallen short, costs remain high and charging infrastructure is uneven. EU tariffs on Chinese EVs have barely dented the pressure.

“It’s not a sustainable reality today in Europe,” Ford CEO Jim Farley said last week, adding industry needs were “not well balanced” with EU CO2 targets.

EV-focused companies warn the rethink hands China an even bigger advantage in electrification.

“The technology is ready, charging infrastructure is ready, and consumers are ready,” said Polestar CEO Michael Lohscheller. “So what are we waiting for?”

Reuters writes that the 2023 law was meant to force a rapid shift to batteries or fuel cells, with fines for non-compliance. But European carmakers still trail Tesla and Chinese groups like BYD and Geely on scale and cost. Earlier this year, the EU already granted automakers “breathing space” by spreading 2025 compliance over three years.

Manufacturers now want to keep selling combustion engines alongside plug-in hybrids, range-extender EVs and vehicles running on so-called CO2-neutral fuels. Commission President Ursula von der Leyen signaled openness to e-fuels and “advanced biofuels” in October.

“We recommend a multi-technology approach,” said Todd Anderson of Phinia, adding the internal combustion engine will “be around for the rest of the century.”

EV industry players say regulatory backtracking will undermine investment.

“It’s definitely going to have an effect,” said ChargePoint CEO Rick Wilmer.

Automakers also want the 2030 target of a 55% cut in car emissions phased in over several years and the 50% reduction target for vans dropped. Germany wants climate credits for low-carbon steel and other upstream measures.

Environmental groups say the EU should stick to the 2035 deadline, arguing biofuels are scarce, expensive and not truly carbon-neutral.

“Europe needs to stay the course on electric,” said William Todts of T&E. “It’s clear electric is the future.”

Whether Brussels actually stays the course, or keeps rewriting the rules when reality intervenes, remains to be seen.