World
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.
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.
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.
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.
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.
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.
World
Denise Powell wins Democratic primary in Nebraska’s ‘blue dot’ 2nd District
OMAHA, Neb. (AP) — Denise Powell won the Democratic primary in Nebraska’s 2nd Congressional District on Wednesday in a contest focused on the state’s “blue dot” status in presidential elections.
The Omaha-area district, where Republican U.S. Rep. Don Bacon is retiring, is one of Democrats’ biggest targets this midterm season. It’s also a national focus every four years in presidential contests because Nebraska is one of just two states that splits its electoral votes. The 2nd District has gone to Democratic presidential candidates three out of five times since 2008 — a “blue dot” in an otherwise sea of red.
Powell, a political activist, defeated state Sen. John Cavanaugh and several other candidates in the Democratic primary. She and Cavanaugh were in a tight race that could not be called Tuesday.
Powell will face Brinker Harding, an Omaha City Council member endorsed by President Donald Trump. He ran unopposed in Tuesday’s GOP primary.
“This country and Nebraska are worth fighting for — and I’m ready to spend the next six months working for every vote and sharing my vision for Nebraska so we can finally have a representative in Congress who will serve us,” Powell said in a statement. “It’s time to be brave.”
Powell led Cavanaugh by 2.1 percentage points, or 1,080 votes, out of more than 51,000 votes counted.
AP called the race after Douglas County election officials said there were only 5,125 outstanding mail-in ballots in the Democratic primary, and a total of 830 provisional ballots from all political parties. Even if all those ballots are counted in the Democratic primary, Cavanaugh would have to win them by about 18 percentage points over Powell to close the gap, a margin he didn’t come close to achieving in any of the five vote updates provided by Douglas County so far. Cavanaugh trailed in all three counties in the district, though Douglas accounted for about 93% of the votes.
The matchup between Powell and Harding is expected to be among this fall’s most competitive House races, as Democrats try to win control of the chamber for the second half of Trump’s term.
The 2nd District is one of just three districts in the country that supported Democrat Kamala Harris for president in 2024 while also electing a Republican representative. Trump won the district in 2016, and the retiring Bacon, who has clashed with Trump, has held the House seat for five terms.
The Nebraska GOP said in a statement Wednesday that Republicans are ready to fight back against a “radical left” that has poured money into the state.
“The left wants Nebraska, and we are going to make sure they don’t get it,” said NEGOP Chairman Mary Jane Truemper.
Powell, who is Latina, co-founded Women Who Run Nebraska, a political action committee that supports progressive female candidates, and she has a decade of Democratic political activism. She had the backing of EMILY’s List and the Congressional Hispanic Caucus’ campaign operation.
Powell has never held office but said her deep connections have helped her with independents and third-party voters, who make up nearly 30% of the district’s electorate.
Some Democratic critics argued that a Cavanaugh primary victory would have jeopardized the district’s “blue dot” status because he’d be leaving his valuable state legislative seat, making it easier for Republicans in the Nebraska Legislature to change the law that allows the state to split its electoral votes.
___
Peoples reported from New York.
World
Iran says its small subs deployed to Strait of Hormuz as expert explains threat: ‘Vulnerable to detection’
US tightens Iran blockade in Strait of Hormuz as Trump warns to shoot boats
Fox News national correspondent Bryan Llenas discusses Middle East tensions and U.S. policy towards Iran. White House press secretary Karoline Leavitt details a ceasefire extension for Iran’s regime. Bryan Llenas reports on U.S. efforts to clear the Strait of Hormuz of Iranian mines. Former Secretary of the Navy Kenneth Braithwaite emphasizes America’s naval power and its importance for global commerce and preventing conflict in the Gulf.
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Iran says it has deployed small submarines to act as an “invisible guardian” of the Strait of Hormuz amid a series of rejected peace deals between Tehran and the U.S., according to reports.
The deployment claim came as analysts said that although the Iranian Ghadir-class mini-subs could threaten U.S. naval forces, the vessels’ limited range, firepower and endurance would blunt any real strategic impact.
The submarine deployment was highlighted by Bloomberg and first reported by the semi-official Tasnim News Agency.
Rear Admiral Shahram Irani, commander of Iran’s navy, said that his forces deployed its light submarine, referred to as the “dolphins of the Persian Gulf,” according to the Iranian state media outlet.
IRAN TURNS TO PUTIN AS US TALKS COLLAPSE, HORMUZ STANDOFF THREATENS GLOBAL OIL FLOW
Iran claims that it has deployed small submarines to act as an “invisible guardian” of the Strait of Hormuz. (Vahid Reza Alaei / AFP via Getty Images, File)
It also comes as Tehran seeks to reinforce its control over the strait, now defining it as a far larger zone, Reuters reported.
“Time would be limited, probably a couple of days at the most,” defense analyst Tom Shugart told Fox News Digital about the Iranian vessel deployment.
The retired U.S. Navy submarine warfare officer also said the small diesel-electric submarines face fundamental operational constraints.
IRAN HOLDS WORLD ENERGY HOSTAGE WITH ‘NIGHTMARE’ STRAIT OF HORMUZ SEA MINES, FORMER CENTCOM OFFICIAL WARNS
U.S. Marines aboard USS New Orleans (LPD 18) stand watch in the Arabian Sea during naval blockade operations against Iran. (U.S. Central Command)
“If they run their diesel engines to snorkel and recharge batteries, that could generate sound that could be detected,” Shugart said.
“Their snorkel mast projecting from the water could be detected by radars on patrol aircraft or helicopters,” Shugart added.
The submarines are said to be designed for shallow waters like the Strait of Hormuz and can operate quietly for limited periods on battery power.
“While they may be able to sit on the bottom for a while and operate somewhat quietly on their batteries for a while, they have no air-independent propulsion system (AIP) like more modern diesel-electric submarines,” Shugart said before adding that they’ll, “eventually have to come up and snorkel. This will make them more vulnerable to detection and destruction.”
INSIDE IRAN’S MILITARY: MISSILES, MILITIAS AND A FORCE BUILT FOR SURVIVAL
A navy vessel sails in the Strait of Hormuz. (Sahar Al Attar / AFP via Getty Images)
The IRGC Navy is said to be the sole operator of this class of submarine, all of which serve in the Southern Fleet.
“Any remaining Ghadirs, if they exist and are actually deployed, may be able to lay mines and may be able to threaten merchant ships,” Shugart warned.
“But I don’t see them as a serious threat to U.S. Navy warships — and certainly not to U.S. submarines,” he said.
“But I can say for sure that I wouldn’t want to go out on one in the current environment.”
HORMUZ CHOKE POINT PERSISTS AS IRAN HALTS OIL TRAFFIC DESPITE TRUMP CEASEFIRE
The U.S. Navy confirmed May 10 that a U.S. Navy Ohio-class nuclear-armed submarine had arrived in Gibraltar.
“The port visit demonstrates U.S. capability, flexibility and continuing commitment to its NATO allies,” U.S. Sixth Fleet Public Affairs said in a statement.
“Ohio-class ballistic missile submarines are undetectable launch platforms for submarine-launched ballistic missiles, providing the U.S. with its most survivable leg of the nuclear triad,” it added.
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Meanwhile, Shugart’s remarks came as the Strait of Hormuz remains effectively closed, with commercial tanker traffic largely choked off amid ongoing military activity and the continued U.S. blockade of Iranian ports.
The United Arab Emirates and South Korea reported new strikes on stranded vessels Wednesday, while the IRGC increased its fast-attack craft activity, according to reports.
President Donald Trump has maintained Iran’s navy is “completely obliterated.”
The Pentagon did not immediately respond to Fox News Digital’s request for comment.
World
Iran war: Why the BRICS foreign ministers meeting in India matters
India is hosting a meeting of foreign ministers from BRICS nations on May 14-15 in a precursor to the 18th BRICS summit, which New Delhi will host in September. The meeting, which starts on Thursday morning, coincides with United States President Donald Trump’s three-day visit to Beijing for a state visit with Chinese leader Xi Jinping.
Here is more about the foreign ministers’ meeting, who is attending and why it matters.
What is BRICS?
BRICS is a grouping of major emerging economies seeking to coordinate security and economic policy in order to amplify the demands of the Global South at international organisations and on issues where the West has traditionally dominated economically and politically.
The acronym stands for Brazil, Russia, India, China and South Africa. The organisation was called BRIC in its initial form – Brazil, Russia, India and China – when its foreign ministers began meeting in 2006, and when it held its first summit in 2009. It became BRICS when South Africa joined in 2010.
In 2023, BRICS extended invitations to Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates after these countries applied for membership. Saudi Arabia has yet to formally join, but the others have. An invitation was also extended to Argentina, but was turned down as President Javier Milei, elected in December 2023, had campaigned on the promise of bolstering ties with the West.
Indonesia joined the group in January 2025, after its membership was approved during the summit in 2023 in Johannesburg.
The group sets priorities and holds discussions at an annual summit, which members take turns hosting. Last year, Brazil hosted the BRICS meeting and, in 2024, Russia hosted the annual meeting. This year, it is India’s turn to host.
This week’s meeting in New Delhi will bring together the foreign ministers of BRICS countries, who are expected to discuss economic cooperation and coordinate their positions on key global issues.
When and where is the BRICS foreign ministers’ meeting?
The BRICS foreign ministers’ meeting, held to prepare for the 18th BRICS summit in September, will take place on Thursday, May 14, and Friday, May 15, in New Delhi, India’s Ministry of External Affairs said on Tuesday.
On Thursday, foreign ministers are expected to arrive at 10:00am (04:30 GMT), and sessions are expected to take place throughout the day, concluding with a dinner at 7pm (01:30 GMT).
On Friday, one session is expected to take place, starting at 10:00am (04:30 GMT).
All of the meetings except one will take place in Bharat Mandapam, an exhibition hall and convention centre located close to the Supreme Court of India.
On Thursday at 1pm (07:30 GMT), Indian Prime Minister Narendra Modi will join a joint conference call with the visiting leaders from Seva Teerth, a new administrative complex that serves as the official headquarters of the prime minister’s office.
Who is attending the meeting?
Foreign ministers from within and outside the BRICS group are expected to attend the meeting.
The Russian Foreign Ministry has said that Foreign Minister Sergey Lavrov will attend the meeting. South Africa’s Ronald Lamola and Brazil’s Mauro Vieira are also both attending.
Chinese Foreign Minister Wang Yi will not attend due to Trump’s visit to Beijing. Instead, China will be represented by China’s Ambassador to India Xu Feihong, Indian media has reported.
Iranian Foreign Minister Abbas Araghchi has landed in New Delhi to participate. Indonesia’s Foreign Minister Sugiono also arrived in New Delhi on Wednesday.
It is not clear who will be representing the UAE at the BRICS meeting, even as the US-Israel war on Iran exacerbates tensions between the UAE and Iran.
What’s on the agenda?
The theme of this meeting is “Building for Resilience, Innovation, Cooperation and Sustainability”, according to India’s Foreign Ministry. This will focus on “people-centric and holistic healthcare, with an emphasis on collaboration on pressing health challenges, including communicable and non-communicable diseases”, it added.
However, the ongoing war on Iran is likely to dominate, and discussions will set the agenda for the annual BRICS summit in September, observers say.
“The Iran war is likely to cast a shadow over both the BRICS summit and the Trump-Xi meeting,” Rafael Loss, a policy fellow for defence, security and technology at the European Council on Foreign Relations (ECFR), told Al Jazeera.
The war on Iran entered its 76th day on Thursday, with diplomatic efforts to end the conflict hanging in the balance.
Iran’s Tasnim news agency reported that, as well as taking part in the main BRICS sessions, Araghchi will hold separate meetings with Indian Foreign Minister Subrahmanyam Jaishankar and other officials attending the meeting.
In April this year, India hosted a BRICS Deputy Foreign Ministers and Special Envoys for the Middle East and North Africa meeting in New Delhi. That gathering ended without a joint statement after Iran and the UAE clashed over how to address the US-Israeli war on Iran, with the UAE also seeing itself as a victim of Iranian aggression.
Since then, tensions between Iran and the UAE have only risen, with Tehran’s war messaging increasingly targeting the UAE.
Israel’s genocidal war on Gaza is also another point of stress within the bloc. At the April meeting, India – recently an Israeli ally – attempted to soften criticism of Israel’s actions in Gaza, leading to a failure within the bloc to arrive at a consensus on the subject.
“The meeting in India occurs at a difficult time in which the cohesion of the BRICS confronts challenges due to the closer relations of India with the US and Israel, and the conflict in West Asia between Iran and the UAE,” Michael Dunford, emeritus professor at the School of Global Studies at the University of Sussex, UK, told Al Jazeera.
What about Trump’s meeting with Xi at the same time?
Trump landed in China on Wednesday evening and, after a ceremonial welcome, headed straight to his hotel. On Thursday, he will hold bilateral talks with the Chinese president, and will also join President Xi for a working lunch on Friday, before flying back to the US.
“A consequence of the coincidence of Trump’s visit to China with the BRICS foreign ministers’ summit in India is that Wang Yi will not attend, with China represented by its Indian ambassador Xu Feihong,” Dunford said.
ECFR’s Rafael Loss predicted that Trump is likely to try to convince Xi to put pressure on Iran to accommodate US demands to end the naval standoff in the Gulf and open the Strait of Hormuz.
In the past, he said, China avoided getting involved in protracted international conflict management efforts and instead attempted to “swoop in” to seal deals during the final stages, such as in the Iran-Saudi Arabia normalisation agreement of 2023, which has since collapsed.
“But if the price is right, and with Trump’s short-termism and disregard of traditional US allies, Xi could be persuaded to take a more vocal line vis-a-vis Iran,” Loss said. “Taiwan might end up bearing the brunt.”
How significant is this meeting?
This meeting of foreign ministers also comes amid an energy crisis triggered by the closure of the Strait of Hormuz during the US-Israel war on Iran.
Since early March, Iran has restricted shipping through the strait, a narrow waterway linking Gulf oil producers to the open ocean and through which 20 percent of the world’s oil and liquefied natural gas (LNG) supplies were shipped before the war. Iran has allowed passage by vessels from select countries, but they are required to negotiate transit with the Islamic Revolutionary Guard Corps (IRGC).
Iranian attacks on US assets and oil and gas facilities in the Gulf in the early weeks of the war have also affected energy supplies.
In April, the US announced a naval blockade on ships entering or leaving Iranian ports, further adding to the disruption of global oil and gas supplies.
This has had a direct impact on several BRICS members. Both India and China rely heavily on Gulf oil shipped through the strait. Saudi Arabia and the UAE both ship oil through the strait. While Brazil, Egypt and South Africa are not as directly reliant on the oil that moves through the strait, they are impacted by rapidly rising fuel prices.
“It is unlikely that the BRICS summit will produce a consensus statement that goes beyond condemning attacks on nations’ sovereignty in general terms as BRICS has opted to do in the past, including on Russia’s war against Ukraine,” ECFR’s Loss said.
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