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Analysis: Trump’s policies set to widen EU-US innovation gap

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Analysis: Trump’s policies set to widen EU-US innovation gap

As the curtain falls on 2025, policymakers in Brussels have yet to decisively counter the negative economic impacts of two major developments: the trade deal struck between the European Union and the United States this summer, and President Trump’s so-called “Big Beautiful Bill”, a mammoth piece of domestic legislation with global economic implications.

The EU’s slow progress toward improving relative business conditions at such a volatile moment has left investors frustrated and looking elsewhere.

According to a report published this week by the European Round Table for Industry, the leaders of the bloc’s industrial giants are “alarmed at the lack of urgency in delivering on Draghi and Letta’s bold reforms to restore the business case for investing in Europe.”

The report also points to a survey of CEOs conducted in October, which shows that only 55% expect to stick to their investment plans. Even worse, a mere 8% intend to invest more in Europe than they planned to six months prior, in contrast with the 38% who will either invest less than previously intended or have put decisions on hold.

And most tellingly, the US now attracts more investment than originally planned by 45% of respondents.

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The ‘carrot-and-stick’ approach

The Trump administration’s combination of supply-side economics and protectionism has converted the necessity of avoiding US tariffs into a massive financial incentive for foreign companies and multinationals to invest in the United States directly.

The Big Beautiful Bill, which Trump signed into law in July, formalised huge tax breaks and effectively guaranteed incentives to shift investments across the Atlantic. Namely, the 100% bonus depreciation for new machinery and factories, as well as the 100% immediate expensing of domestic research and development (R&D) costs, mitigating the expenses of moving production and innovation to the US.

Companies have until 1 January 2026 to finalize their decisions and collect retroactive benefits for capital deployed in 2025, but the conditions will remain the same next year.

To compound the EU’s growing inability to compete, the heavily criticised EU-US trade deal was agreed in the same month. The agreement de-escalated the transatlantic trade war of 2025 but it levied a 15% tariff on the vast majority of the EU’s industrial exports to the US, with an exemption from duties for most US-made goods bound for the EU market.

In addition, the EU committed to spending over €640 billion in US energy, investing more than €500 billion in the US economy and buying around €35 billion worth of US-made AI chips, until the end of President Trump’s mandate. Meanwhile, the United States made no similar pledges.

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As for corporations, the choice became simple: relocate investment to the US, avoid the tariff and claim massive tax deductions.

The innovation gap in numbers

The R&D siphon is the most critical threat to Europe’s future competitiveness, as the Trump administration’s new incentives pull core innovation to the US.

In the most innovative industries, such as the AI and healthcare sectors, the numbers for 2025 already demonstrate the chasm between the EU and the US.

In the first three quarters of this year, private investment flowing into US AI companies exceeded €100 billion, with the US capturing over 80% of global AI funding. In contrast, the entire EU attracted just shy of €7 billion, according to the widely read State of AI Report 2025.

This severe 15-to-1 funding deficit means the technological future is being built and scaled primarily outside the EU, something that has been recognised by the European Parliament.

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Likewise, the EU is aiming to achieve 20% market share in semiconductor manufacturing by 2030, as outlined in the Chips Act, but experts say such a goal is unlikely given that Europe is among the slowest growers in the sector year-on-year.

Furthermore, the EU is even falling behind on AI adoption among young users, according to a new survey by the Organisation for Economic Cooperation and Development.

As for the pharmaceutical industry, CEOs sent a stark warning to President von der Leyen back in April that “unless Europe delivers rapid, radical policy change then pharmaceutical research, development and manufacturing is increasingly likely to be directed towards the US.”

In the following weeks, fuelled by the fear of the ongoing transatlantic trade war at the time and frustration with the European regulatory scene, the third largest company in Europe by market capitalization, the Swiss-based Roche, committed over €40 billion in US investment over the next five years. Likewise, the French multinational Sanofi announced an investment of €17 billion to expand manufacturing in the US through 2030.

In July, as the Big Beautiful Bill and the EU-US trade deal were being agreed, the British-Swedish company AstraZeneca also declared investing over €40 billion in the US over the next five years, including the construction of a chronic disease research centre in the state of Virginia, the company’s largest single investment in a facility to date.

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In November, the White House announced a large-scale agreement between two pharmaceutical rivals, the American manufacturer Eli Lilly, and the Danish corporation Novo Nordisk, known for pioneering the prescription drug for type 2 diabetes, Ozempic, which has also been widely used off-label for weight loss.

The two companies agreed a strategy to reduce the prices of several medications for Americans and announced new investments in the US, with Novo Nordisk committing roughly €8.5 billion to expand US manufacturing capacity. In exchange, the Danish company is expected to receive a three-year exemption from US tariffs, among other benefits.

In total, the European pharmaceutical industry has pledged more than €100 billion for US expansion in 2025 alone with multi-year commitments.

The scramble to deregulate

The pressure applied by the US is evident as this year has seen the European Commission pivot to an aggressive deregulation agenda.

In response to a request from the European Council, six simplification proposals, referred to as “omnibuses”, have been presented since February covering energy, finance, agriculture, technology, defence and chemicals.

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Notably, the so-called Digital Omnibus was introduced in November, and it includes delays to provisions of the AI Act and modifications to the GDPR.

These initiatives aim to rapidly cut red tape and reduce bureaucratic costs for European businesses in an attempt to stem the outflow of talent and capital. However, the proposed measures are still facing legislative scrutiny, as well as administrative oversight and political backlash from privacy and climate advocates, among others.

It was only this week that an agreement was finally reached on the first omnibus, another sign that the EU is still far from offering the immediate financial certainty of minimising or avoiding US tariffs while benefiting from President Trump’s policies where possible.

The numbers reveal the plain economic truth: while the EU debates the fine print of deregulation, the investment in innovation is already being decisively relocated.

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Box Office: ‘Avatar 3’ Leads in First Weekend of 2026 With $40 Million, ‘The Housemaid’ Surpasses $75 Million

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Box Office: ‘Avatar 3’ Leads in First Weekend of 2026 With  Million, ‘The Housemaid’ Surpasses  Million

“Avatar: Fire and Ash” is towering over the domestic box office during the first weekend of the new year.

James Cameron’s latest Na’vi adventure has collected $40 million from 3,825 North American theaters in its third weekend of release, declining 35% from the busy post-Christmas frame. Those ticket sales are pushing the third “Avatar” to $306 million domestically and $1.08 billion globally after just 18 days in theaters. “Fire and Ash” crossed the coveted billion-dollar benchmark slower than 2022’s “Avatar: The Way of Water,” which took 14 days, and the original “Avatar,” which took 17 days. Now it’s a matter of where “Avatar: Fire and Ash” will top out at the box office — and whether the third installment has the stamina to surpass $2 billion like its predecessors.

Since January is often glacial in terms of movie theater attendance, Hollywood studios barely release anything new around the dawn of the new year. That means a smattering of Thanksgiving and Christmas leftovers, such as “Zootopia 2,” “The Housemaid” and “Marty Supreme,” were behind “Avatar: Fire and Ash” on North American charts.

Disney’s “Zootopia 2” remained a force at No. 2 with $19 million from 3,285 venues, marking a minimal 4% drop from the previous weekend. After six weekends of release, the beloved animated sequel has grossed a mighty $363 million domestically and $1.588 billion globally. “Zootopia 2” recently outperformed “Frozen 2” ($1.45 billion) to become Walt Disney Animation’s highest-grossing movie of all time. That means the announcement of a third trip to the animal-filled metropolis can’t be too far off.

Lionsgate’s psychological thriller “The Housemaid” rose to No. 3 with $15.2 million from 3,070 screens, a barely-there 1% dip from the prior weekend. The R-rated film, starring Sydney Sweeney and Amanda Seyfried, has earned an impressive $75.7 million in North America and $133 million worldwide against a $35 million budget.

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Fourth place went to A24’s “Marty Supreme” with $12.5 million from 2,887 locations, declining just 30% from the post-Christmas frame. So far, the Timothee Chalamet-led ping-pong dramedy has generated $56 million in North America, a great result for the original arthouse release. With those ticket sales, “Marty Supreme” has outgrossed the director Josh Safdie’s prior film “Uncut Gems” ($50 million globally) and ranks among A24’s biggest movies of all time. However, “Marty Supreme” cost $70 million to produce, making it the most expensive film to date for A24. It’ll need to remain a draw into the new year to justify its budget.

Sony’s action comedy “Anaconda” remained in fifth place with $10 million from 3,509 theaters, a drop of 31% from the prior weekend. After two weekends of release, the meta reboot of 1997’s “Anaconda, this one starring Jack Black and Paul Rudd, has grossed $45.8 million in North America and $88 million globally against a $45 million production budget.

Another Christmas release, the Focus Features musical drama “Song Sung Blue,” slid to the No. 8 spot with $5.87 million from 2,705 venues, a scant 17% drop. So far, the tear-jerker, led by Hugh Jackman and Kate Hudson as performers in a Neil Diamond cover band, has grossed $25 million domestically and $30 million worldwide against a $30 million budget.

Although the year is very young, 2026 is already pacing ahead of 2025 by 26.5%, according to Comscore. Last year’s revenues hit $8.9 billion across 12 months, a modest 1.5% increase from 2024, though just short of the $9 billion that analysts had expected the industry to generate. As studios prepare to unveil major blockbusters — including “Avengers: Doomsday,” “Spider-Man: Brand New Day,” Christopher Nolan’s “The Odyssey” and “The Super Mario Galaxy Movie” — will this year’s grosses manage to return to pre-pandemic heights?

“With a killer slate on the docket, there’s confidence that 2026 will be the biggest year for theaters since 2020,” predicts Comscore’s head of marketplace trends, Paul Dergarabedian.

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Now, Hollywood just needs audiences to show up at multiplexes.

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Rubio vows to eliminate Hezbollah, Iran operations from Venezuela after Maduro capture

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Rubio vows to eliminate Hezbollah, Iran operations from Venezuela after Maduro capture

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The day after elite U.S. forces captured wanted narco-terrorist and former Venezuelan leader Nicolás Maduro in Caracas, Secretary of State Marco Rubio announced that the Iran-backed Lebanese terrorist movement Hezbollah will no longer have operations in the South American state.

The Iranian regime-backed Hezbollah terrorist organization is responsible for both the bombing of the U.S. embassy, which killed 63 people, and the Marine barracks bombing in Beirut in 1983, when 241 U.S. military personnel were killed.

Speaking on CBS’ Face the Nation, Rubio said, “It’s very simple, okay? In the 21st century, under the Trump administration, we are not going to have a country like Venezuela in our own hemisphere, in the sphere of control and the crossroads for Hezbollah, for Iran and for every other malign influence in the world. That’s just not gonna exist.” He also told NBC’s Meet the Press that, in regard to Venezuela, that meant, “No more Iran/Hezbollah presence there.”

GOP SENATOR PREDICTS TRUMP’S NEXT MOVE IN VENEZUELA AMID HEZBOLLAH’S INFLUENCE: ‘LONG PAST DUE’

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Hezbollah members salute and raise the group’s yellow flags during the funeral of their fallen comrades Ismail Baz and Mohamad Hussein Shohury, who were killed in an Israeli strike on their vehicles, in Shehabiya in south Lebanon on April 17, 2024.  (AFP via Getty Images)

Walid Phares, who has advised U.S. presidential candidates and is a leading expert on Hezbollah, told Fox News Digital that “Hezbollah has a long history in Venezuela and has emerged as a significant security concern in Latin America, particularly after the September 11, 2001 attacks. The origins of Hezbollah’s presence in Venezuela date back to the mid-1980s, when the organization began recruiting members from segments of the local Lebanese diaspora.”

He noted that Hezbollah gained greater traction following the late Venezuelan President Hugo Chávez’s consolidation of power in 2002. “During this period, Hezbollah’s presence became more visible, with reports indicating that some of its members gained access to Venezuelan state institutions, including security agencies, often through the acquisition of Venezuelan passports and legal documentation. These developments facilitated the expansion of Hezbollah-linked networks throughout Latin America, extending into Brazil, Argentina and Chile, and reportedly reaching as far as the U.S.–Mexico border.”

Phares said, “Hezbollah is believed to maintain a substantial presence across Venezuela, including command-and-control elements in Caracas. Margarita Island has been frequently cited in open-source reporting as a logistical hub used for activities ranging from financial operations to intelligence gathering and alleged narcotics trafficking. Additional public reporting has suggested Venezuelan cooperation with Iranian and Hezbollah-linked operations targeting Iranian dissidents abroad, including attempted kidnappings and intimidation campaigns in the Western Hemisphere.”

ON MADURO’S ‘TERROR ISLAND,’ HEZBOLLAH OPERATIVES MOVE IN AS TOURISTS DRIFT OUT

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The U.S.-designated terrorist organization Hezbollah lashed out at the U.S. after it captured Maduro. Hezbollah said it “condemns the terrorist aggression and American thuggery against the Bolivarian Republic of Venezuela” and “further affirms its full solidarity with Venezuela — its people, presidency and government — in confronting this American aggression and arrogance.”

The thorny challenge of how to purge the Venezuelan state and society of embedded Hezbollah operatives was addressed by Phares. He said, “One option would be to rely on a post-Maduro transitional authority that has pledged to dismantle terrorist networks. In practice, however, it is likely that U.S. intelligence and counterterrorism agencies would play a leading role in identifying and disrupting pro-Iranian networks operating within Venezuelan territory.”

Matthew Levitt, a scholar on Hezbollah from the Washington Institute, told Fox News Digital that “It will all come down to what kind of regime comes next. Trump’s statements leave that wide open. There is, however, an opportunity to address the longstanding Hezbollah presence in Venezuela, and the strategic relationship between Venezuela and Iran more broadly.”

Carrie Filipetti, executive director of the Vandenberg Coalition, and a former deputy assistant Secretary of State during Trump’s first administration, told Fox News Digital, “Among the many ways in which the Iranian regime and Maduro regime coordinated until Maduro’s arrest was providing a safe haven for Hezbollah fighters. Hezbollah took advantage of the lack of rule of law in Venezuela and parts of Latin America more generally to engage in money laundering connected to the drug trade. They are also believed to have used connections within the Maduro regime to secure Venezuelan passports for members of Hezbollah.”

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She noted that “It isn’t a surprise that the plot to kidnap Iranian American journalist Masih Alinejad involved taking her by speedboat to Caracas. Hezbollah and Iran knew under Maduro, they could operate with impunity there, spread anti-American propaganda, and plan anti-American attacks. Whether there are any implications for the Maduro- Hezbollah relationship now that Maduro is gone will depend on whether regime insiders are allowed to remain in power or not.”

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Hundreds march in silence to honour Crans-Montana fire victims

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By Sunday morning, Swiss authorities identified 24 out of the 40 fatalities. They include 18 Swiss nationals aged between 14 and 31, two Italians aged 16, a dual Italian–Emirati national also aged 16, a Romanian aged 18, a 39-year-old French national, and an 18-year-old Turkish national.

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