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.

Star Dakota Johnson made a surprise appearance on “Saturday Night Live” this week, playing the mysterious “Madeline” during Lily Allen‘s performance of that track. The song was Allen’s second of the night.

During the performance, Johnson was mostly hidden behind a screen through the song, as Allen sang about the mistress. But Johnson performed the spoken word portion of the song, which appears on Allen’s album “West End Girl.” In the track, Allen notes that she and her signficant other “had an arrangement: Be discreet and don’t be blatant. And there had to be payment. It had to be with strangers. But you’re not a stranger, Madeline.”

Later in the song, “Madeline” explains her side of the story via texts to Allen: “I hate that you’re in so much pain right now. I really don’t wanna be the cause of any upset. He told me that you were aware this was going on and that he had your full consent. If he’s lying about that, then please let me know. Because I have my own feelings about dishonesty. Lies are not something that I wanna get caught up in. You can reach out to me any time, by the way. If you need any more details or you just need to vent or anything. Love and light, Madeline.”

After reading those lines, Johnson came out from behind the curtain and walked up to Allen — and gave her a quick kiss.

A mass shooting during a Hanukkah celebration at Bondi Beach in Sydney, Australia, on Sunday evening left at least 12 people dead and 29 people hospitalized, authorities say.

The annual celebration, known as “Chanukah By The Sea,” was scheduled to kick off at 5 p.m. to celebrate the first day of the Jewish holiday by lighting the first candle on the Menorah. Police say the attack “targeted” the Jewish community and is being investigated as an act of terrorism.

The New South Wales Police Force (NSWPF) said officers responded to reports of shots fired at about 6:45 p.m. on Sunday. Police say there were at least two gunmen involved in the attack, and they are investigating the possibility of a third. Twelve people were killed in the shooting, including one of the two suspected gunmen, police said. The second alleged shooter is in critical condition.

At least 29 others were hospitalized after the shooting, including two police officers, the agency confirmed. The shooting is the worst attack against Jews since the Oct. 7, 2023, Hamas terror attacks.

ANTISEMITIC ATTACKERS VIOLENTLY TARGET SYNAGOGUE, ISRAELI RESTAURANT IN AUSTRALIA

Police added that they found evidence of multiple improvised explosive devices in a vehicle near the scene of the attack.

“We have our rescue bomb disposal unit there at the moment working on that,” he said. 

Israeli President Isaac Herzog acknowledged the attack while speaking at an event in Jerusalem recognizing immigrants’ extraordinary achievements on Sunday.

“At these very moments, our sisters and brothers in Sydney, Australia, have been attacked by vile terrorists in a very cruel attack on Jews who went to light the first candle of Chanukah on Bondi Beach,” Herzog said. “Our hearts go out to them. The heart of the entire nation of Israel misses a beat at this very moment, as we pray for the recovery of the wounded, we pray for them and we pray for those who lost their lives.”

AUSTRALIA’S JEWISH COMMUNITY ALARMED BY RISING ANTISEMITISM: ‘FEAR AND ANXIETY’

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Herzog also called on the Australian government to “seek action and fight against the enormous wave of antisemitism which is plaguing Australian society.”