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    Zelenskyy’s European ‘bodyguards’: which leaders joined Trump talks in Washington?

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    European leaders gathered in Washington on Monday for Volodymyr Zelenskyy’s meeting with Donald Trump in the Oval Office, in a show of support for the Ukrainian president. Their presence came amid expectations that Trump would try to bully Zelenskyy into accepting a pro-Russia “peace plan” that would include Kyiv handing territory to Moscow. The Europeans have been described as Zelenskyy’s “bodyguards”, with memories fresh of the mauling he received in February during his last Oval Office visit. So, who are they?Mark RutteSecretary general of NatoRutte has a proven record of flattering Trump for strategic purposes, using language that some allies find cringe-making. In June he referred to the capricious US president as “Daddy” in an attempt to avoid disastrous outbursts at the Nato summit. Rutte has repeatedly praised Trump in public, including in a recent interview on Fox News, and credits him for pushing Nato members to spend 3.5% of their GDP on defence. The US had carried the burden of European security for too long, Rutte has said – music to Trump’s ears.Ursula von der LeyenPresident of the European CommissionVon der Leyen is a staunch supporter of Ukraine who backs Kyiv’s EU membership. For Trump, she is a reminder of Europe’s combined importance as an economic bloc. The US struck a trade deal with the EU three weeks ago, and Trump hailed the relationship as “the biggest trading partnership in the world”. On Sunday she hosted Zelenskyy in Brussels. She said a post-peace-deal Ukraine had to become “a steel porcupine, indigestible for potential invaders”, with no limits on its armed forces.Keir StarmerUK prime minister Starmer has performed a balancing act when it comes to Trump, keeping him on side while advocating for Ukraine. So far, this tactic has worked. The US president has gone out of his way to emphasise their good relations, despite Starmer’s “liberal” outlook. Both men have an incentive to preserve this rapport ahead of Trump’s state visit next month to the UK. Meanwhile, Starmer and Zelenskyy have developed a warm personal relationship, hugging in February outside Downing Street after Zelenskyy’s previous, disastrous Oval Office meeting, and again last week. The prime minister stresses territorial integrity, which contradicts Trump’s “peace deal” that involves Russia taking more Ukrainian land.Alexander StubbPresident of Finland Stubb represents a small European state but he will be in Washington because he has managed to establish an unexpectedly warm relationship with Trump. The Finnish leader cultivated his access to the US president by hastily polishing his rusty golfing skills before an impromptu trip to Florida in March for a round with Trump, on the recommendation of the Republican senator Lindsey Graham. Stubb’s message on the putting green: you can’t trust Vladimir Putin. Finland sees parallels between Ukraine’s plight and its own history, the Soviet Union having invaded in 1939, saying it needed Finnish territory.Emmanuel MacronFrench presidentMacron combines French economic and military clout with a proven ability to get on with Trump, symbolised by their intense handshakes. In the lead-up to Russia’s 2022 invasion, Macron flew to Moscow to reason with Putin. He has since become a key diplomatic ally for Ukraine. Asked on Sunday whether Putin wanted a genuine peace deal, Macron replied: “No.” He said Ukraine needed a strong army and security guarantees if a lasting settlement was to be achieved. The French president will want to persuade Trump that his post-Alaska-summit plan to stop the fighting is a non-starter, and against Ukraine and Europe’s long-term security interests.Friedrich MerzGerman presidentMerz has cut a sure-footed figure on the world stage since taking office in May, including largely holding his own in an Oval Office face-off with Trump over the summer. He has emerged as a crucial partner for Zelenskyy, who was often frustrated with Merz’s slow-moving predecessor, Olaf Scholz. Berlin has clout as one pillar of the French-German axis at the heart of the EU. It is also a major financial donor to Kyiv. Merz’s task in the Oval Office is to persuade Trump not to act hastily and “over the heads of Ukrainians and Europeans”, as he put it last week.Giorgia MeloniPrime minister of ItalyMeloni has broken off from her holiday to fly to Washington, a sign that Trump’s Russia-friendly “peace plan” marks a moment of danger for Europe. She will be a useful bridge in the Oval Office meeting, as a European far-right leader whom Trump counts as a friend. Meloni has spent time at Mar-a-Lago, the US president’s Florida home, and was the only European leader invited to his inauguration in January. At the same time, she strongly supports Kyiv’s sovereignty. In July she hosted a Ukraine recovery conference in Rome, designed to help the country rebuild when Russia’s war finally ends. More

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      Putin ready to make Ukraine deal, Trump says before Alaska summit

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      Donald Trump has said he believes Vladimir Putin is ready to make a deal on the war in Ukraine as the two leaders prepare for their summit in Alaska on Friday, but his suggestion the Russian leader and Volodymyr Zelenskyy could “divvy things up” may alarm some in Kyiv.The US president implied there was a 75% chance of the Alaska meeting succeeding, and that the threat of economic sanctions may have made Putin more willing to seek an end to the war.Trump insisted that he would not let Putin get the better of him in Friday’s meeting, telling reporters: “I am president, and he’s not going to mess around with me.“I’ll know within the first two minutes, three minutes, four minutes or five minutes … whether or not we’re going to have a good meeting or a bad meeting.“And if it’s a bad meeting, it’ll end very quickly, and if it’s a good meeting, we’re going to end up getting peace in the pretty near future,” said Trump.He also said a second meeting – not yet confirmed – between him, Putin and Zelenskyy would be the more decisive.“The second meeting is going to be very, very important, because that’s going to be a meeting where they make a deal. And I don’t want to use the word ‘divvy’ things up, but you know, to a certain extent, it’s not a bad term, OK?” Trump told Fox News Radio.He was referring to the possibility that Zelenskyy will have to accept “land swaps” – in practice the handing over of Ukrainian territory to Russia, potentially including some not captured by Moscow.Later on Thursday, Trump suggested that any second, trilateral meeting could happen quickly – and possibly take place in Alaska.“Tomorrow, all I want to do is set the table for the next meeting, which should happen shortly,” he said. “I’d like to see it actually happen, maybe in Alaska.”Any such meeting would be a concession by Putin since he refuses to recognise Zelenskyy as the legitimate leader of Ukraine.Trump conceded he was unsure whether an immediate ceasefire could be achieved, but expressed interest in brokering a peace agreement. On Putin, he said: “I believe now, he’s convinced that he’s going to make a deal. I think he’s going to, and we’re going to find out.”Zelenskyy will face a difficult choice if Putin rejects Ukraine’s call for a full 30-day ceasefire and offers only a partial break in the fighting, particularly if Trump thinks a three-way meeting should still go ahead.The Ukrainian president spent much of Thursday in London discussing Wednesday’s video call between European leaders and Trump with the UK prime minister, Keir Starmer. European leaders were largely relieved with the way the conversation went, but know Trump is unpredictable and prone to acting on instinct, rather than sticking to a script.View image in fullscreenThe US secretary of state, Marco Rubio, said changes on the battlefield could make peace harder. “To achieve a peace, I think we all recognise that there’ll have to be some conversation about security guarantees,” he said.Trump has rejected offering such guarantees before, but it is possible European security guarantees could be agreed. Rubio said he believed Trump had spoken by phone to Putin four times and “felt it was important to now speak to him in person and look him in the eye and figure out what was possible and what isn’t”.Starmer and Zelenskyy met in Downing Street for breakfast on Thursday and hailed “a visible chance for peace” as long as Putin proved he was serious about ending the war.European leaders emerged from Wednesday’s meeting reassured that Trump was going into his summit focused on extracting Putin’s commitment to a durable ceasefire and was not seeking to negotiate over Ukraine’s head.The plan for Trump and Putin to hold a joint press conference after their talks suggests the White House is optimistic the summit will bring about a breakthrough. Moscow is determined that the summit should not just focus on Ukraine but also agree steps to restart US-Russian economic cooperation.skip past newsletter promotionafter newsletter promotionIn a brief summary of the Downing Street meeting, British officials said Zelenskyy and Starmer expressed cautious optimism about a truce “as long as Putin takes action to prove he is serious” about peace. In a separate statement, Zelenskyy said there had been discussions about the security guarantees required to make any deal “truly durable if the United States succeeds in pressing Russia to stop the killing”.On Wednesday Starmer co-chaired a virtual meeting of the “coalition of the willing” – a European-led effort to send a peacekeeping force to Ukraine to enforce any deal – where he said there was a “viable” chance of a truce.On Thursday the prime minister gave Zelenskyy a bear hug in the street outside the door to No 10 in a symbol of continuing British solidarity with the Ukrainian cause. Similar public displays of solidarity followed the disastrous February meeting between Trump and Zelenskyy, when the two leaders quarrelled in front of the cameras in the White House.View image in fullscreenFurther sanctions could be imposed on Russia should the Kremlin fail to engage, and Starmer said the UK was already working on its next package of measures targeting Moscow.Trump has frequently said he will know if he can achieve peace in Ukraine only by meeting Putin personally. He sets great faith in his personal relationship with the Russian leader, but on Wednesday he played down expectations of what he could do to persuade Putin to relent. At the same time he warned there would be “very severe consequences” for Russia if Putin did not agree to a ceasefire, a veiled threat to increase US sanctions on Russian oil exports.He has so far held off from imposing such economic pressure on Russia, but by the end of the month the US is due to impose additional tariffs on Indian imports into the US as a punishment for India continuing to buy Russian oil.The UK would like to see the US consider other, more targeted sanctions, either on the so-called shadow fleet of Russian oil tankers or on refineries that use Russian oil. But Moscow briefed that the Alaska summit, far from leading to extra economic pressure on the Russian economy, would instead include discussion and agreements on new US-Russian economic cooperation, a step that would relieve the pressure on Russian state finances.Some European leaders took heart from the detailed grasp of the issues shown on the call by the US vice-president, JD Vance, and by hints that Trump could be willing to contribute US assets to a European-led security guarantee for Ukraine in the event of a peace agreement.The Alaska summit, due to start at 11.30am local time (2030 BST), will include a one-to-one meeting between Trump and Putin, with interpreters, then a wider meeting.The Russian delegation will include the foreign minister, Sergei Lavrov; the defence minister, Andrei Belousov; the finance minister, Anton Siluanov; the head of the Russian sovereign wealth fund, Kirill Dmitriev; and Putin’s foreign policy adviser Yuri Ushakov. More

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      Shared prayers and tears: how Lammy wooed JD Vance and the White House

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      It was famously something that Tony Blair did not do with George W Bush, or at least not something to which the then British prime minister wished to admit. But these are very different times.When the US vice-president, JD Vance, and his family join David Lammy at the foreign secretary’s grace and favour home in Kent at the start of their summer holiday in the UK, they are expected to deepen their relationship by praying together, it is understood.Within the grounds of Chevening lies the pretty 12th-century St Botolph’s church. It is Anglican but, security risks and denominational differences aside, it may present one option for a place to take communion, sources suggested.Vance is a Catholic and Lammy has described his faith as Anglo-Catholic. The two men previously took mass in Vance’s residence in Washington when the vice-president hosted Lammy and his family in March.The burgeoning relationship between the two men, freshly evidenced by word that they will spend time together before the Vances head to the Cotswolds, may surprise some.As a backbencher, Lammy described Donald Trump as “a woman-hating, neo-Nazi-sympathising sociopath”. Now, Trump is “someone that we can build a relationship with” and Vance is a “friend”.The philosophy behind Lammy’s foreign policy has been described as “progressive realism” – taking the world as it is and not as we might wish it to be.Sceptics might be temped to describe such a pivot in different terms but the outcomes were difficult to argue with, said Michael Martins, formerly a political specialist in the US embassy in London and founder of the consultancy firm Overton Advisory.“I think they have done a pretty good job and you can see it with some of the incoming tariff increases which have not affected the UK as they have with other trading partners, like Canada,” Martins said.“I think it is paying off. I think President Trump’s view on Putin and Russia has changed, is changing and softening, in a way that I think the British government has been pushing for. I think the dividends from the relationship building are starting to come.”Lammy, a touchy-feely sort of politician, targeted Vance for a full charm offensive early on, when Labour was in opposition and Trump’s re-election was far from certain, sources said. The then shadow foreign secretary had a significant obstacle to overcome: Lammy has been a friend of Barack Obama since they met at a 2005 gathering of Harvard Law School’s black alumni.Such was the love-in that Lammy’s wife, Nicola Green, an artist, was given “unprecedented access” to chronicle Obama’s 2008 campaign. It was this political and personal relationship that has been front and centre of every US newspaper profile of Lammy in recent times. “A Friend of Obama Who Could Soon Share the World Stage With Trump” was the New York Times headline last April.View image in fullscreenLammy had a further card to play. He has spoken about how Vance’s bestselling memoir, Hillbilly Elegy, bore parallels to his own story of growing up with a single mother and an absent, alcoholic father. Lammy has said Vance’s book “reduced me to tears”.“I said to JD: ‘Look, we’ve got different politics, but we’re both quite strong Christians and we both share quite a tough upbringing,’” Lammy said of an early meeting.He recently elaborated in an interview with the Guardian. During drinks with Vance and the deputy Labour leader, Angela Rayner, in the US ambassador’s residence at the time of the new pope’s inauguration, Lammy had an epiphany. It struck him that they were “not just working-class politicians, but people with dysfunctional childhoods”, he said. “I had this great sense that JD completely relates to me and he completely relates to Angela.”Donjeta Miftari, a former foreign policy adviser to Keir Starmer in Downing Street who is now a director at Hanbury Strategy, said: “David is an incredibly pragmatic person and he likes to take the world as it is. Frankly, you don’t have influence over which populations elect certain individuals in the country.”Lammy had had a gut feeling that the Republicans would win the White House back, she said, and he worked for “years, not months” on building the necessary relationships.“I’ve known him for a few years now, and I’d say that he is also, just on a personal level, one of the most empathetic and relational kind of MPs and politicians,” she said.“You know, in the early days of opposition and in government, I think he had a strong sense of where the US was going, and that is grounded in the fact that he studied out there, lived out there. He knows America well and it’s a big part of who he is.“So I think he sort of clocked basically that that is the direction in which the country was going so built these relationships well before they came to power in the US. And I think that gives it, like, extra kind of credibility and authenticity as well, because you’re not just calling them when you need them when you’re both in post. He’s an incredibly effective operator. Frankly, he’s quite good company as well, which always helps.”There will be a formal bilateral meeting between the two politicians before Vance’s wife, Usha, and their three children join Lammy, his wife and their children for the weekend. After their stay with the Lammys, the Vances are understood to be heading to a Cotswolds period property near Charlbury, about 12 miles (19km) north-west of Oxford.Martins, who was working in the US embassy at the time of Trump’s first state visit, said he recalled the delight that the president took in the pomp and ceremony. “I think vice-president Vance has to walk a bit of a delicate line,” he said. “Obviously he is angling for his own White House bid at the end of the Trump presidency. You know, I think he has to be careful not to appear as the primary recipient of international flattery.” More

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      David Lammy refuses to say if UK supported US strikes on Iran nuclear facilities

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      The UK foreign secretary has repeatedly refused to say if the UK supported the US military strikes on Iran’s nuclear facilities on Saturday or whether they were legal.Interviewed on BBC Radio 4’s Today programme on Monday for the first time since the US launched airstrikes on three Iranian nuclear facilities, David Lammy also sidestepped the question of whether he supported recent social media posts by Donald Trump that seemed to favour regime change in Tehran, saying that in all his discussions in the White House the sole focus had been on military targets.Lammy said western allies were waiting for battlefield assessments of the impact of the strikes, but it was possible Iran still had a stockpile of highly enriched uranium, although the strikes “may also have set back Iran’s nuclear programme by several years”.Ever since the US strikes, senior figures in the Labour government have tried to make their criticism of the action only implicit rather than explicit.Lammy tried to focus on urging Iran to return to the negotiating table, insisting that Iran was in breach of its obligations by enriching uranium at levels of purity as high as 60%.The UK Foreign Office has denied Iranian reports that in a phone call on Sunday with the Iranian foreign minister, Abbas Araghchi, Lammy had expressed regret about the US strikes.Asked if the airstrikes were legal, Lammy said three times it was for Washington to answer such questions.But in the course of a 15-minute interview on BBC Radio 4, he at no point backed the US airstrikes, saying he was not going to get into the issues of whether they conformed with either article 2 or article 51 of the UN charter, clauses that permit military action in self-defence.Saying “there is still an off-ramp for the Iranians”, he admitted discussions with Iran involving France, Germany and the UK last Friday in Geneva had been “very tough”.He said: “Everyone is urging the Iranians to get serious about the negotiations with the E3 and the US.” Iran is currently refusing to talk to the US or Israel while it is under military attack.Lammy said he still believed Iran was engaging in “deception and obfuscation” about its nuclear programme, but added “yes, they [the Iranians] can have a civil nuclear capability that is properly monitored that involves outsiders but they cannot continue to enrich to 60 %”.His remarks left open whether the UK supported the US negotiating position of insisting on zero uranium enrichment inside the country, or whether he was prepared to accept that Iran could enrich to 3.67% level of purity, the maximum allowed in the Iran nuclear deal signed in 2015 and from which the UK, unlike the US, has not withdrawn.skip past newsletter promotionafter newsletter promotionHe also refused to say if he agreed with the latest US intelligence assessment that Iran was close to securing a nuclear weapon, saying instead he relied on the report from the UN nuclear inspectorate, the International Atomic Energy Agency. In its latest reporting, the IAEA said it had no evidence that Iran was seeking a nuclear bomb.He said: “You can only deal with the Iranian nuclear programme diplomatically. If Iran is able to enrich beyond 60%, is able to get a weapon, what we will see is nuclear proliferation across the Middle East.”Asked about Trump’s references to regime change he said: “I recognise there is a discussion about regime change but that is not what is under consideration at this time. The rhetoric is strong but I can tell you, having spoken to the secretary of state, having sat in the White House, that this targeted action is to deal with Iran’s nuclear capability.”When pressed to comment on a claim by Carl Bildt, the former Swedish prime minister, that by “being blind” on the issue of the legality of the US’s action, European leaders undermined their position on Vladimir Putin’s invasion of Russia, Lammy insisted there was no moral equivalence between the Russian invasion of a sovereign country and the actions the US had taken in Iran. More

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      No matter what Trump says, the US has gone to war – and there will be profound and lasting consequences | Simon Tisdall

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      Bombing will not make Iran go away. US bombs will not destroy the knowhow needed to build a nuclear weapon or the will do so, if that is what Tehran wants. The huge attack ordered by Donald Trump will not halt ongoing open warfare between Israel and Iran. It will not bring lasting peace to the Middle East, end the slaughter in Gaza, deliver justice to the Palestinians, or end more than half a century of bitter enmity between Tehran and Washington.More likely, Trump’s rash, reckless gamble will inflame and exacerbate all these problems. Depending on how Iran and its allies and supporters react, the region could plunge into an uncontrolled conflagration. US bases in the Persian Gulf and elsewhere in the region, home to about 40,000 American troops, must now be considered potential targets for retaliation – and possibly British and allied forces, too.Trump says he has not declared war on Iran. He claims the attack is not an opening salvo in a campaign aimed at triggering regime change in Tehran. But that’s not how Iran’s politicians and people will see it. Trump’s premature bragging about “spectacular” success, and threats of more and bigger bombs, sound like the words of a ruthless conqueror intent on total, crushing victory.Trump, the isolationist president who vowed to avoid foreign wars, has walked slap bang into a trap prepared by Israel’s Benjamin Netanyahu – a trap his smarter predecessors avoided. Netanyahu has constantly exaggerated the immediacy of the Iranian nuclear threat. His alarmist speeches on this subject go back 30 years. Always, he claimed to know what UN nuclear inspectors, US and European intelligence agencies and even some of his own spy chiefs did not – namely, that Iran was on the verge of deploying a ready-to-use nuclear weapon aimed at Israel’s heart.This contention has never been proven. Iran has always denied seeking a nuclear bomb. Its supreme leader, Ayatollah Ali Khamenei, issued a fatwa banning any such programme. Netanyahu’s most recent claim that Iran was weaponising, made as he tried to justify last week’s unilateral, illegal Israeli attacks, was not supported by the International Atomic Energy Agency (IAEA) or US intelligence experts. But weak-minded Trump chose to believe it. Reading from Netanyahu’s script, he said on Saturday night that eliminating this incontrovertible nuclear threat was vital – and the sole aim of the US air assault.So, once again, the US has gone to war in the Middle East on the back of a lie, on disputed, probably faulty intelligence purposefully distorted for political reasons. Once again, as in Iraq in 2003, the overall objectives of the war are unclear, uncertain and open to interpretation by friend and foe alike. Once again, there appears to be no “exit strategy”, no guardrails against escalation and no plan for what happens next. Demanding that Iran capitulate or face “national tragedy” is not a policy. It’s a deadly dead-end.Iran will not go away, whatever Trump and Netanyahu may imagine in their fevered dreams. It will remain a force in the region. It will remain a country to be reckoned with, a country of 90 million people, and one with powerful allies in China, Russia and the global south. It is already insisting it will continue with its civil nuclear programme.These events are a reminder of how profound is official US ignorance of Iran. Unlike the UK, Washington has had no diplomatic presence there since the revolution. It has had few direct political contacts, and its swingeing economic sanctions have created even greater distance, further diminishing mutual understanding. Trump’s decision to renege on the 2015 nuclear accord (negotiated by Barack Obama, Britain, France, Germany, Russia, China and the EU) was a product of this ignorance. Ten years later, he is trying to do with bombs what was largely, peacefully achieved through diplomacy by his wiser, less impulsive, less easily led predecessors.View image in fullscreenPeace seems more elusive than ever – and Netanyahu is celebrating. The US cannot walk away now. It’s committed. And, as Netanyahu sees it, he and Israel cannot lose. Except, except … Iran cannot somehow be imagined away. It still has to be dealt with. And the reckoning that now looms, short- and long-term, may be more terrible than any of Netanyahu’s scare stories.Iran previously warned that if the US attacked, it would hit back at US bases. There are many to choose from, in Bahrain, Iraq, Jordan and elsewhere. The Houthis in Yemen say they will resume attacks on shipping in the Red Sea. The strait of Hormuz, so important a transit point for global energy supplies, may be mined, as happened in the 1980s during the Iran-Iraq war. The result could be a global oil shock and markets meltdown. And Iran is still reportedly firing missiles into Israel, despite claims in Jerusalem that most of its ballistic missiles bases have been destroyed.Reacting to Trump’s attack, Iranian officials say no options are off the table in terms of retaliation. And they say they will not negotiate under fire, despite a call to do so from the British prime minister, Keir Starmer. Rejecting Trump’s unverified claims about the total destruction of all nuclear facilities, they also insist Iran will reconstitute and continue its nuclear programme. The big question now is whether that programme really will be weaponised.Two radical longer-term consequences may flow from this watershed moment. One is that Khamenei’s unpopular regime, notorious for corruption, military incompetence and economic mismanagement, and deprived of support from Lebanese Hezbollah and Hamas in Gaza, may crack under the strain of this disaster. So far there has been little sign of an uprising or a change in government. That’s not surprising, given that Tehran and other cities are under bombardment. But regime collapse cannot be ruled out.The other is that, rather than surrender the cherished right to uranium enrichment and submit to the Trump-Netanyahu ultimatum, Iran’s rulers, whoever they are, will decide to follow North Korea and try to acquire a bomb as quickly as possible, to fend off future humiliations. That could entail withdrawal from the nuclear non-proliferation treaty and rejection of the UN inspections regime. After years of trying to play by western rules, Iran could really finally go rogue.The supposed need to acquire nukes for self-defence is a grim lesson other countries around the world may draw from these events. The proliferation of nuclear weapons is the biggest immediate danger to the future of the planet. What Trump just did in recklessly and violently trying to eliminate an unproven threat may ensure the proven danger of a nuclear-armed world grows ever-more real.

      Simon Tisdall is a Guardian foreign affairs commentator More

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      Trump’s ‘revenge tax’ could threaten foreign investment into US, analysts say

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      Foreign investment into the US could be threatened by Donald Trump’s new “revenge” taxes, analysts have warned.A provision within the president’s One Big Beautiful Bill Act will allow the US to apply higher taxes on foreign individuals, businesses and investors connected to jurisdictions that impose “unfair foreign taxes” on US individuals and companies.Companies listed on the London Stock Exchange could choose to avoid the measure by redomiciling in New York.Section 899, as it is called, classes digital service taxes and “diverted profits taxes” as unfair, along with any taxes that target US entities. It would allow US authorities to impose an additional tax starting at 5% and increasing by five percentage points annually, up to 20%.Max Yoeli, a senior research fellow in the US and the Americas programme at Chatham House, says section 899 “threatens to further alienate foreign investors”.It could chill investment into the US by calling into question its “fundamental openness”, he added.The Italian bank UniCredit agrees that section 899 could further damage foreign investor sentiment towards US dollar-denominated assets. It could backfire on the US, it says, given the large amount of domestic assets held by foreigners.“The list of countries that would fall into this category is long and encompasses most European countries, including Italy and Germany,” UniCredit told clients, saying that foreign investors had more than doubled their holdings of US assets over the past decade.“Not only would this additional tax serve to finance corporate tax reductions, but it would also likely be used as a negotiating tool for the US in trade deals, especially as Republicans seem willing to withdraw from the global minimum tax framework.”View image in fullscreenUniCredit also fears the dollar’s safe haven status could be undermined if there are fresh tax disputes between the US and other countries.The One Big Beautiful Bill Act was passed by the US House of Representatives last month. The Senate is yet to approve the bill, with the White House setting a deadline of 4 July.George Saravelos, the global head of FX research at Deutsche Bank, warned last month that section 899 could allow the US administration to transform its trade war into a capital war by “explicitly using taxation on foreign holdings of US assets as leverage to further US economic goals”.UK companies could certainly fall foul of section 899, as Britain operates a digital services tax aimed at tech multinationals, and a diverted profits tax designed to clamp down on tax avoidance by multinationals.skip past newsletter promotionafter newsletter promotionGoldman Sachs has calculated that UK corporates are “particularly exposed” to section 899, as roughly 30% of the revenues of companies listed on the FTSE 100 are generated in the US.However, as companies that are majority-owned by US shareholders are exempt, City bosses may consider moving their stock market listing to New York, to dodge section 899.“This ownership dynamic not only mitigates tax risk but also reinforces the strategic case for relisting in the US, where investor bases are deeper and more aligned with US revenue exposure,” the Goldman Sachs analysts said.According to Goldman, the large UK companies with the most significant exposure to the US, and who are not majority-owned by US investors, are the media group Pearson, the business services group Experian, the pest control business Rentokil and the pharmaceuticals manufacturer Hikma.Ashtead Group, Compass and Melrose also generate a large proportion of their sales stateside, but as they have majority US ownership they should be exempt from section 899.French companies could also be at risk, as Paris operates a digital services tax on the revenues that large tech companies generate in France. More

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      The Guardian view on UK military strategy: prepare for a US retreat – or be left gravely exposed | Editorial

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      With the prime minister’s Churchillian claims that “the front line is here”, the public might expect a military posture that meets the drama of the moment. Yet the promised rise in defence spending – from 2.3% to 2.5% of gross domestic product by 2027 – suggests something less than full-scale mobilisation. The strategic defence review is systematic and detailed, but it remains an exercise in tightly bounded ambition. It speaks of daily cyber-attacks and undersea sabotage, but proposes no systemic institutional overhaul or acute surge in resilience. Given the developing dangers, it is surprising not to spell out a robust home-front framework.Instead, it is a cautious budget hike in the costume of crisis – signalling emergency while deferring real commitment for military financing. The review suggests that the more ambitious spending target of 3% of GDP, still shy of Nato’s 3.5% goal, is delayed to the next parliament. The plan is not to revive Keynesianism in fatigues. It is a post-austerity military modernisation that is technocratic and geopolitically anxious. It borrows the urgency of the past without inheriting its economic boldness.The review marks a real shift: it warns of “multiple, direct threats” for the first time since the cold war and vows to reverse the “hollowing out” of Britain’s armed forces. But in an age of climate emergencies and democratic drift, UK leadership should rest on multilateralism, not pure militarism. Declaring Russian “nuclear coercion” the central challenge, and that the “future of strategic arms control … does not look promising”, while sinking £15bn into warheads, risks fuelling escalation instead of pursuing arms control.Given the war in Ukraine, there is an ominous warning about changing US “security priorities”. This calls into question the wisdom of being overly reliant on America, which is now internally unstable and dismantling global public goods – such as the atmospheric data that drones rely on for navigation. Left unsaid but clearly underlying the report is the idea that the old defence model is no longer sufficient – for example, when maritime adversaries can weaponise infrastructure by sabotaging undersea cables, or where critical data systems are in commercial hands. It cannot be right that Ukraine’s sovereignty depends on the goodwill of the world’s richest man. But the private satellite network Starlink keeps Ukrainian hospitals, bases and drones online, leaving Kyiv hostage to the whims of its volatile owner, Elon Musk.The menace of hybrid warfare – including disinformation, cyber-attacks, economic pressure, deployment of irregular armed groups and use of regular forces – intensified in the last decade. This should see Britain forge deeper institutional ties with European partners, not just military but in infrastructure and information technologies. This would allow for a sovereign digital strategy for European nations to free them from dependency on mercurial actors.Though the review gestures toward greater societal involvement, it stops short of articulating a whole-of-society doctrine like Norway’s. This, when some analysts say the third world war has already begun with a slow, global breakdown of the post-1945 institutional order. The defence review should be about more than missiles and missions. It must also be about whether the country can keep the lights on, the gas flowing, the internet up and the truth intact. This review sees the threats, but not yet the system needed to confront them. In that gap lies the peril. More

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      Labour: changes to EV rules will have ‘negligible’ impact on UK emissions

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      Labour’s changes to electric vehicle (EV) rules in response to Donald Trump’s tariffs will have a negligible impact on emissions, the transport secretary has said.Keir Starmer has confirmed plans to boost manufacturers, including reinstating the 2030 ban on the sale of new petrol and diesel cars.But regulations around manufacturing targets on electric cars and vans will also be altered, to help companies in the transition, and new hybrids will be on the market for a further five years.Heidi Alexander said the taxes on imports announced by the US president last week, which spurred reciprocal action by some affected countries, “are bad news for the global economy, because it’s bad for global demand, it’s bad for prices and it’s bad for consumers”.Speaking on BBC Breakfast about the impact on carbon emissions of the government’s changes to electric vehicle rules, she said: “The changes we are making have been very carefully calibrated so as not to have a big impact upon the carbon emissions savings that are baked into this policy. In fact, the impact on carbon emissions as a result of these changes is negligible.”Under the measures, luxury supercar companies such as Aston Martin and McLaren will be allowed to keep producing petrol cars beyond 2030 because they manufacture only a small number of vehicles a year. New hybrids and plug-in hybrid cars will be allowed to be sold until 2035. Petrol and diesel vans will be able to be sold until 2035, as well as all hybrid models.Alexander said the government had “struck the right balance” between protecting British businesses and cutting carbon emissions.Asked whether the retention of a 2030 target for the phasing out of all pure petrol and diesel cars would restrict free markets at a time when the car industry was on its knees, she said: “It is an opportunity for the car industry to remain at the cutting edge of the transition to EVs, but it’s right that we’re pragmatic.“It’s right that we are looking at how we can be flexible in the way in which car manufacturers make this transition, because we want cheaper EVs to be available for consumers. We want people to be able to benefit from those lower running costs as well.“And so it’s important that, as a government, we do everything that we can – not only to support British businesses and manufacturing to grow the economy, but also to cut those carbon emissions, and I think we’ve struck the right balance in the package that we’re announcing today.”Asked on BBC Radio 4’s Today programme if Starmer was prepared to use the relationship he has built with Trump to ask him to change course, she said: “Obviously when the prime minister has discussions internationally with allies he will be honest about what is in the best interests of the British people.”Challenged that the EV measures were planned before the announcement of the tariffs and were a tweak to policy rather than dramatic change, she told Today: “These are significant changes to the car industry. You are right to say we started the consultation on Christmas Eve and that we closed the consultation in the middle of February.”skip past newsletter promotionafter newsletter promotionShe said Trump’s imposition of tariffs meant the UK government had to look at its EV plans with “renewed urgency”.The Green party MP Siân Berry said: “The government is wrong to apply the brakes on the sale of EV cars. This is just the latest in a series of boosts the Labour government has given fossil fuel industries. We’ve also seen the green light being given to airport expansion and a new road tunnel under the Thames. This suggests Labour is weakening its climate commitments, and its health-related policy goals because all these moves will have a detrimental impact on air quality.“Slowing down the move away from fossil-fuelled transport makes no economic sense either, since green sectors of the economy are growing three times faster than the overall UK economy.”Colin Walker, the head of transport at the Energy and Climate Intelligence Unit, said: “In weakening the mandate elsewhere by extending flexibilities and allowing the sale of standard hybrids between 2030 and 2035, the government risks reducing the competition it has stimulated between manufacturers, meaning prices for families seeking an EV might not fall as fast, and sales could slow.“The growth of the secondhand EV market, where most of us buy our cars, would in turn be stunted, leaving millions of families stuck in petrol and hybrid cars paying a petrol premium of hundreds, and even thousands, of pounds a year.” More