It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Politician who pushed Philippines natural gas boom is behind firm that planned to profit The sun sets over a liquefied natural gas power plant in Santa Clara, Batangas province, Philippines on Tuesday, Aug. 8, 2023.
BY ED DAVEY
June 20, 2024
BATANGAS, Philippines (AP) — An influential politician in the Philippines, who has been a cheerleader for natural gas power, is behind a company that planned to make a fortune from it, an Associated Press investigation of thousands of pages of documents has found.
Gov. Hermilando Mandanas of Batangas province and his late wife stood to profit from a buildout of liquified natural gas power — he owned the largest share in a real estate firm that soared in value as energy companies moved in, while he promoted the expansion in media interviews and public events. The firm also launched its own natural gas project.
Experts in government ethics deplored the scenario, with one environmental law advocate calling for an investigation into Mandanas. In an interview with the AP, Mandanas denied his associated businesses are involved with the buildout and called natural gas the best choice for the country.
Batangas Gov. Hermilando Mandanas gestures during an interview with The Associated Press at his office in the city of Batangas, Batangas province, Philippines on Thursday, Aug. 10, 2023.
The major commitment to natural gas comes at a time when many countries are ramping down the use of the fossil fuels that cause climate change. Scientists say that to avoid profound disruption from climate change, no new fossil fuel infrastructure that emits carbon dioxide can be built. Some analysts say all the Philippines’ future electricity growth could be met with clean renewables.
Filipinos will likely pay more for electricity than if the country went all in for wind and solar power, because in many places renewable energy is now the cheapest form of new electricity.
The construction also is happening in an ecologically vibrant zone with coral reefs and communities that depend on their fish. The AP previously reported that both could be harmed by the planned power stations.
A man swims along coral reefs off Verde Island, Batangas province, Philippines on Wednesday, Jan. 24, 2024.
Gerry Arances, who heads up the Center for Energy, Ecology and Development, a Philippine nonprofit, said natural gas was not the path the country should have chosen.
“There’s only one reason” it became the Philippines’ energy priority. “That is greed and self-interest.”
Promoters of the gas plants see the Batangas region, about two hours south of Manila, as a new energy center for the country. Four gas power plants sit along the coastline already and four more are planned. Six new terminals for importing chilled, liquefied natural gas are also on the way in Batangas or have started operating. The Ilijan liquified natural gas plant is visible along the coast of Ilijan, Batangas province, Philippines on Friday, Aug. 11, 2023.
The government says it wants the Philippines to become an LNG hub for the entire Asia-Pacific region.
“It is needed very much for development,” Mandanas told the AP in an interview in the white-columned regional capitol. The electricity will attract other industries, he said, which benefits the entire country.
Mandanas is well known in the Philippines for winning a landmark Supreme Court case that increased local government funding nationwide.
The governor said he was “very conscious” that what he referred to as the “center of marine biodiversity of the entire world” needed to be protected, and his administration is taking such action. “We have to balance the need of the environment and development,” he said.
A fisherman stands beside his boat along a shoreline at the coastal village of Calatagan, Batangas province, Philippines on Wednesday, Aug. 9, 2023.
Small fishing boats are docked beside homes as waves batter the coastal village of Simlong in Batangas province, Philippines on Tuesday, Aug. 8, 2023.
Alleged conflict of interest
Not only did companies affiliated with the governor own coastal real estate where gas developments are happening, the family firm, AbaCore Capital Holdings Inc., launched its own gas power project in Batangas.
Legal experts said these dealings violate the Philippine law on ethics in public office and very possibly the nation’s law on local government. Philippine politicians are not allowed to own major stakes in companies with goals that could be at odds with their official duties. Governors must also maintain a balanced ecology and conserve marine resources.
Michael Henry Yusingco, a lawyer and fellow at the Philippine Institute for Autonomy and Governance, called the situation a clear conflict of interest that could merit Mandanas’s suspension or removal from office. He said there was a strong case that the governor is not meeting his legal responsibilities to the environment or residents, which would be a dereliction of duty.
Mandanas led a takeover of AbaCore in the 1980s, building it into a real estate behemoth beyond its original interests in mining and gaming.
When voters returned him to the governor’s seat in 2016 after an absence, Mandanas stepped down from the CEO position at AbaCore. His wife Regina Reyes took over the post.
In the Philippines press, AbaCore is frequently referred to as a Mandanas family company. Documents filed with the Philippines Securities and Exchange Commission shows as of last fall, Mandanas still owned almost 30% of it through a complex structure involving three layers of Philippine companies.
In 2019, Reyes said publicly that her husband’s policies would benefit the family company. Addressing shareholders, she said the infrastructure buildout in Batangas “implemented and led by its current governor” would boost AbaCore, increasing property values, cash flow and revenue.
Construction is visible at the Ilijan liquified natural gas plant along the coast of Ilijan, Batangas province, Philippines on Tuesday, Aug. 8, 2023.
The energy industry moving in, she said, would help AbaCore grow, continuing, “We expect land values to increase exponentially.” In a separate interview with Philippine TV, she agreed the gas expansion meant the value of surrounding areas rose, benefitting shareholders.
Reyes died of natural causes in May 2022, and Mandanas recently remarried.
San Miguel Corporation, one of the Philippines’ biggest power providers, affirmed in an email to the AP that its LNG projects there “led to a substantial increase in local property values.” They rose more than 13-fold, it said.
Mandanas was in Beijing during a deal signing in 2019 that involved an AbaCore sister company in which he now holds a large stake. The AbaCore affiliate and three Chinese firms agreed to build a $3 billion LNG complex, including a power plant, in the fishing village of Simlong in Batangas.
According to filings with Philippine authorities in December 2018, four properties including the land in Simlong, where the power hub will be built, were valued at $6.2 million. Shortly after that deal was struck, they were revalued at more than $30.6 million. The vast majority of AbaCore’s income has come from land revaluations in recent years, its filings show.
Asked in an interview whether the Simlong energy hub was a conflict of interest, Mandanas suggested AbaCore’s role was limited to selling land.
“Probably one of the subsidiaries sold a piece of property” to the developers, indicating a distance from the transaction. “That would be probably the involvement of AbaCore.”
“AbaCore is not in any energy business here in Batangas,” he said.
Yet that conflicts with AbaCore statements in official documents from 2021 that its then-renamed AbaCore Energy Hub would result in “huge recurring revenues.”
Mandanas did not reply to followup questions via email.
A boy walks past small boats at a coastal village in Batangas province, Philippines on Wednesday Aug. 9, 2023.
Call for an investigation
Elizabeth David-Barrett, director of the Centre for the Study of Corruption at University of Sussex, England, reviewed the AP’s findings and agreed with Yusingco, the Philippine governance attorney, that they amount to a conflict of interest and the “abuse of entrusted power for private gain which harms the public interest.”
A professor in political science at the University of the Philippines, Maria Ela Atienza, said Mandanas may also be violating a Philippine law on conduct and ethics. She cited a ban on favors being granted to relatives.
Yusingco called it “a sad, tragic aspect of Philippine politics. Political dynasties thrive because of their business interests, and their business interests thrive because of their positions in government.
“The really tragic result (is) fisherfolks suffering, the environment suffering.”
Barnaby Pace, at the nonprofit Center for International Environmental Law, said evidence of Mandanas’s business interests in the LNG buildout was “deeply concerning” and demanded authorities investigate.
“LNG projects should be reviewed in light of this information,” he said. “The local population has a right to know what’s behind the push for LNG facilities.”
A woman walks along a shoreline in the coastal village of Calatagan, Batangas province, Philippines on Wednesday, Aug. 9, 2023.
AP Photos/Aaron Favila
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News researchers Rhonda Shafner and Jennifer Farrar in New York contributed to this story.
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The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.
Saturday, June 22, 2024
Hanwha Agrees to Pay $100M to Acquire Philly Shipyard
Hanwha has agreed to acquire the operations of Philly Shipyard (Philly Shipyard)
South Korea’s Hanwha Group announced a deal to acquire Philly Shipyards, an operation focused on building Jones Act vessels, from the yard’s Norwegian owners Aker Capital. The negotiations had first been reported in October 2023 as the South Korean company looks to expand its foothold in the U.S. market and naval and government shipbuilding.
Philly Shipyard traces its originals to the late 1990s when the U.S. Navy's Philadelphia Shipyard was closing and the government drydocks were leased to Norway’s Kvaerner Shipbuilding. Plans were announced for the yard in 1997 and they began building the first containerships in 2000. Since then, most of the yard’s work has been in the commercial sector building containerships and tankers for companies including Matson, Crowley, OSG, SeaRiver, and Kinder Morgan as well as a few U.S. government repair jobs. Since 2000, they noted that Philly Shipyard has delivered approximately half of all the new large ocean-going Jones Act commercial ships.
Recently, the yard won the contract to build five new training ships for MARAD, of which the first was delivered in 2023 and the second is approaching delivery while work progresses on the other three vessels. Philly also has construction underway on a rock installation vessel for Great Lakes Dredge and Dock Company and has a contract to build three LNG-fueled containerships for Matson. The total orderbook is valued at approximately $1.6 billion.
Under the terms of the agreement, Hanwha Systems and Hanwha Ocean will split the purchase paying a total of $100 million in cash for the shares of the company. Aker Capital (an investment company and the successor to Kvaerner) is the largest shareholder owning approximately 60 percent of the stock. They expect the transaction to close in the fourth quarter of 2024 subject to regulatory approvals including the Committee of Foreign Investments in the U.S. (CFIUS).
"The opportunity to collaborate with Philly Shipyard, a significant shipbuilder with a storied history, is an exciting strategic opportunity that will allow Hanwha Systems to deploy its state-of-the-art naval systems and associated technologies in the U.S. market," said CEO of Hanwha Systems, Charlie SC EOH.
Aker highlights it realized $150 million in dividends from Philly in the past decade in addition to the $100 million purchase price to be paid by Hanwha. The purchase price however could be adjusted if the shipyard has more than $100 million in cost overruns on its current projects. The shipyard had previously reported that it expected to record a loss on the training ships for MARAD.
The shipyard has a history of working with the Koreans including designs and components from the former Daewoo Shipbuilding and Marine Engineering (DSME) which was acquired by Hanwha to become Hanwha Ocean. Hanwha and Aker have also been involved in previous business transactions including the 2022 acquisition of Arker’s stake in Rec Silicon, a silicon manufacturer for commercial applications, by Hanwha.
Philly Shipyard had also drawn the attention of Hanwha’s rival HD Hyundai. In April, HD Heavy Industries signed an MoU with Philly Shipyard to form a new partnership targeting U.S. government work and cooperation. Between 2005 and 2017, Hyundai supported the design and procurement for 22 commercial product tankers built by Philly. There was no mention of this agreement in today’s acquisition announcement.
Hanwha and Philly said their boards would work on defining the company’s future strategy and structure following the completion of the transaction.
This deal comes after Hanwha also proposed an acquisition of Australia-based Austal, a major naval builder in the U.S. That transaction is caught up with regulatory concerns, but Hanwha has said it is still interested in exploring the combination. The company’s proposal for a due diligence to formalize its offer was rejected by Austal which said it was not certain a deal could be completed due to national security considerations in Australia.
The grant was awarded at a ceremony hosted by the Norwegian minister of climate and the environment together with ENOVA at DNV HQ at Høvik.
“This is a significant milestone towards realizing carbon free transportation systems within the gas carrier segment. Amon Gas will provide the market with low-emission vessels while simultaneously meeting customer demands with innovative solutions.” says André Risholm, CEO Amon Maritime
Amon Gas is targeting a shipbuilding series starting with 2 firm orders of ammonia- powered MGCs with a goal of being in operation by 2028.
The vessels are designed to use ammonia as fuel, for both propulsion and power consumption, also when transporting LPG as cargo and incorporates the best energy-saving measures.
MGC is a large vessel type with high fuel consumption. This means that the climate impact per ship by switching to ammonia as fuel will be significant. Carbon emission calculations give an estimated 87% reduction compared to conventional vessels from the start of operations, with ambitions for further reductions towards 100%.
If ammonia is the fuel of the future, it will lead to a high growth in sea transport of ammonia. Ammonia is primarily transported on MGCs today.
If the ship transports ammonia, the "chicken-and-egg" dilemma of making bunkering available is avoided—the substance is already on board as cargo.
Because the ship is already designed for transporting ammonia, the relative additional cost in this segment compared to conventional ships will be less than in most other segments.
SRC and GREEN MARINE Join Forces to Bring Methanol Superstorage to Market
Hannes Lilp, CEO, SRC Group and Morten Jacobsen, President, GREEN MARINE sign collaborative agreement to deliver Methanol Superstorage to the maritime market.
SRC Group and GREEN MARINE have signed a collaborative agreement which brings two of the strongest advocates of methanol as a marine fuel together to develop and deliver Methanol Superstorage to market.
The cooperation aims to realise benefits available to SRC’s Methanol Superstorage solution, which has been turning heads among owners, builders, repairers, class societies and insurers since its launch. Using the SPS Technology Sandwich Plate System instead of traditional cofferdams that separate tank walls, Methanol Superstorage boosts shipboard tank volumes by 85% and provides effective mitigation for methanol’s significantly lower energy density than conventional HFO.
Independent advisory and project management firm GREEN MARINE has built an unrivalled track record for delivering methanol transition solutions for all ship segments. With a pedigree reaching back to the first use of methanol as a marine fuel, its services cover ship design, yard selection, construction supervision, technical management and operations, training, procurement, sales and bunkering, GREEN MARINE is involved in the majority of methanol-related ship projects in the world today.
“Following the huge initial impact made by Methanol Superstorage, SRC and GREEN MARINE will work together to provide comprehensive technical coverage for methanol integration,” said Hannes Lilp, CEO, SRC Group. “With GREEN MARINE’s extensive experience in methanol projects and overall technical knowledge of the entire process, combined with SRC’s expertise in methanol storage and over 23 years of experience in ship refits and conversions, we are well-placed to onboard Methanol Superstorage for both retrofit and new build vessels, and establish a mature sales framework to enable global adoption.”
GREEN MARINE continues to drive development of the methanol supply chain in the marine market, with recent agreements including preparations for projected supplies of green methanol from Chinese partners. The firm also recently named Singapore-based former Methanol Institute Chief Commercial Officer, Chris Chatterton as Managing Director & Partner, with effect from 1st July, 2024.
Chatterton commented: “Market receptiveness to Methanol Superstorage has been exceptional and we look forward to working with SRC to realise its extraordinary potential to help drive forward methanol as a mainstream marine fuel. Investors will be encouraged to know that, as the most experienced technical player in marine methanol, GREEN MARINE’s expertise, insight and global support stands alongside SRC in the demonstration phase of Methanol Superstorage.”
Methanol Superstorage has already received Approval in Principle from a leading IACS society, which indicates that no conceptual issues have been identified relating to ship regulatory requirements. “In parallel to class approvals, SRC and GREEN MARINE will also oversee and manage 3rd Party technical development” said Lilp.
Norway Provides Record Funding for Ammonia and Hydrogen Vessel Projects
Enova awarded 15 vessels grants to advance hydrogen and ammonia propulsion (Enova)
Enova, the Norwegian government’s clean energy fund developed to spur decarbonization efforts including in the maritime sector, is making its largest-ever awards. The latest competition round will provide approximately $114 million in support for a total of fifteen ships. Six of the vessels will be ammonia-fueled while nine will be cutting-edge hydrogen projects, including five dry bulk newbuilds for Maris Fiducia and the charter market.
The awards are going to Hoegh Autolines which is building a new class of the world’s largest car carriers with the last four slatted for dual-fuel ammonia propulsion. Amon Gas was also awarded for an ammonia project. The Norwegian division of Dutch shipowner Maris Fiducia, as well as Møre Sjø, Napier, and Halten Bulk, are all being awarded grants for hydrogen vessels.
Maris Fiducia announced plans for its project which will include five 6,000 dwt vessels designed by the Dutch firm Ankerbeer. The hull design is being optimized for efficiency and low fuel consumption.
The power plant will be a dual-fuel hydrogen ICE combined with fuel cells for auxiliary power. In addition to the ICE plant, they will be equipped with a Zero Emission Pod, a module containing a complete hydrogen energy system that is being developed and tested by Norway-based HAV Hydrogen. The company is currently developing its first full-scale pods, which will be ready for testing by 2025. They anticipate having them available by the end of 2025.
Maris Fiducia will build five hydrogen-fueled vessels for the charter market (Maris Fiducia)
Each of the ZEPODs is expected to deliver a total capacity of 400 kW, which will be enough to run all the auxiliary systems on the bulk carriers. They expect to be able to upgrade the ZEPODs to a 1 MW capacity at a later date.
Maris Fiducia notes that the technology is advancing rapidly. Just over a year ago, they said they were inspired to based on the fuel availability and emerging technical competence to pursue this concept. Enova awarded over $28 million in support for the project.
“This brings us another step closer to the commercial breakthrough for our hydrogen-based energy systems for ships,” says Kristian Osnes, managing director of HAV Hydrogen.
Another key part of the project will focus on establishing a commercial operation for vessels employing hydrogen fuel. The five bulkers will go on hire through a zero-emission time charter agreement with Schulte & Burns to establish the market for the vessels and the sector.
Enova reports “The competition was fierce, and there were many good projects,” applied in this round. They received applications for a total of 45 projects, of which 13 applications were distributed among eight unique companies on the hydrogen program and 32 applications from 11 companies on the ammonia program. The goal was to reduce the barriers for actors who use hydrogen and ammonia as fuel in vessels so that the first functioning value chain within hydrogen and ammonia can be established in Norway. The next application deadline for the program’s hydrogen and ammonia in vessels is September 27.
Study Finds High Fuel Quality in Biodiesel Supply Chain
The Global Center for Maritime Decarbonization, the green-fuel think tank founded by Singapore's Maritime and Port Authority, has released a comprehensive report on the stability of biodiesel (FAME) as a marine fuel. First-generation biodiesel has been in production and use for road transport applications for decades, and it is trickling into the marine fuel market for the same reasons that it is popular on land: it is relatively cost-competitive, and it can be blended in any proportion with fossil-derived diesel fuel. GCMD set out to determine how FAME fuels are faring in maritime supply chains, with a particular eye to biodiesel's problems with degradation - and its researchers came away with positive results.
First-generation biodiesel is made by reacting natural fats - like vegetable oil or tallow - with methanol in the presence of an alkaline catalyst (lye). The products of the reaction are fatty acid methyl esters (FAME), plus a smaller quantity of glycerol. After extensive purification, the FAME is sold as a fuel. It is a common ingredient in over-the-road diesel blends in the United States and Europe.
This chemical process differs from the next-generation "renewable diesel" or "RLD" process, which runs the same natural fat feedstocks through a hydrocracker, resulting in a product identical to fossil diesel. First-generation FAME has many desirable attributes, but it also has shortcomings compared with RLD. FAME slowly degrades in the presence of water and atmospheric oxygen, both found in abundance at sea. It can also deteriorate in the tank if water is present and bacteria or mold take hold. At worst, these problems can cause sludging in fuel injectors, pumps and piping, much like "bad bunkers." FAME's natural oxidation process also creates organic acids, which can corrode piping and fuel systems.
Given these potential contamination problems, and the increasing interest in biodiesel as a marine fuel, GCMD set out to study how FAME works in real-world bunker supply chains. It followed the use of FAME fuels aboard 13 vessels bunkering in three different ports, drawing on four different suppliers. Its researchers sampled the fuel at multiple points along two of these supply chains - from the producing facility to the bunker barge - to determine whether the fuel could get contaminated or degrade before loading. (The research did not cover long-term performance aboard the vessels after loading.)
The group's findings were positive: no substantial changes were found in the substance's characteristics during five months of midstream storage, transport and blending. There were no meaningful issues with acidity, sludginess, reduced energy content or biological contamination.
"The results from our end-to-end supply chain trials indicate no significant degradation of FAME, arising from autoxidation, hydrolytic oxidation or microbial contamination under standard commercial operations conditions," the team concluded. "Given the potential for higher adoption of biofuels, the shipping industry will need to continue to build up a crucial database to develop best practices to guide the development of biofuels use."
Mitsubishi Shipbuilding Joins Methanol Sector with Order for First RoRos
Mitsubishi Shipbuilding recently launched the first LNG-fueled car carrier for Toyofuji Shipping (Toyofuji)
Japan’s Mitsubishi Shipbuilding is joining the emerging group of shipyards capable of building ocean-going methanol-fueled vessels. While the alternative fuel is dominating new orders, with 269 orders due for delivery over the next five years according to DNV, only a few shipyards are building the vessels.
Mitsubishi Shipbuilding signed an order for Japan’s first methanol dual-fuel RoRo car carriers. The two ships will be deployed on a Japanese coastal service and designed to address the emerging trends in shipping.
Toyofuji Shipping is ordering two ships as part of a promotional project jointly sponsored by the Ministry of the Environment and the Ministry of Land, Infrastructure, Transport and Tourism. Toyofuji will own the first vessel and the second with be shared with Fukuju Ship Company. Both vessels are due for delivery by the end of 2027.
In addition to being the first dual-fuel methanol-fueled RoRos for Japan, the vessels will incorporate other design elements to improve efficiency. They will be equipped with Mitsubishi’s energy-saving technology system and energy saving propellers and high-performance rudders with reduced resistance. They will have a high-efficiency dual-fuel main engine and the shape of the bow and vertical stem is designed to reduce propulsion resistance.
The ships will be larger than the conventional coastal car carriers. The length will be increased by approximately five meters (more than 16 feet) and the tonnage will increase from 12,687 to 15,750. Loading capacity will expand by 15 percent or 300 vehicles to a total of 2,300 units. This will permit the companies to reduce CO2 emissions by more than 20 percent per unit. Overall, they expect an initial 10 percent reduction in CO2 emissions which can be further increased through the conversion to green methanol. Mitsubishi Gas Chemical Company and Kokuka Sangyo will supply the methanol bunkering from conventional vessels.
While the ships are larger, they will be able to call at conventional ports. The size increase will also address the labor shortages being experienced in the shipping industry as well as the calls for work style reforms. The increased loads will provide more schedule flexibility and rest time for crews.
Mitsubishi Shipbuilding reports it will expand on its experience with LNG to develop the new vessels. The Enoura shipyard in Shimoseki City earlier this month launched the first LNG-fueled car carrier for Toyofuji Shipping. Named Trans Harmony Green, the vessel is 49,500 tons with a capacity for 3,000 vehicles. It will be operating the company’s Asia weekly service.
Methanol-fueled car carriers are a new segment for the emerging alternative fuel. DNV reports less than seven percent of the methanol-fueled orderbook is for car carriers with only 18 vessels ordered so far for the segment. Containerships continue to make up the vast majority of the orders for methanol-fueled vessels although other segments are starting to emerge.
Genting Awards Chinese Yard Wison $1B Order for New FLNG
Wison's yard at work on the Congo FLNG project for Eni (file image courtesy Wison)
Malaysian conglomerate Genting Bhd has signed a contract with Chinese shipyard Wison New Energies to build an FLNG for its Teluk Bintuni offshore natural gas field. The $1 billion plant will be the first of its kind in Indonesia and the ninth FLNG ever built.
The floating LNG plant will have a capacity of 1.2 tonnes per annum, one-third the output of Shell's category-defining Prelude LNG. Wison plans to deliver the unit in just over two years' time; Genting began buying long lead time materials for the unit last September, well before awarding the contract.
If construction proceeds as expected, the plant could be installed and producing as early as the third quarter of 2026.
The plant will capitalize on Genting's exploration successes in the Kasuri Block, off the coast of West Papua. The block's Asap, Merah and Kido gas reservoirs will feed up to 230 million cubic feet per day to the FLNG unit for liquefaction, and will send another 100 million cubic feet per day to an onshore ammonia/urea plant.
"We have had a lot of very significant success on this block. We drilled ten wells, all ten wells have encountered hydrocarbons," Genting President and Chief Operating Officer Tan Kong Han told Reuters.
Genting is still in talks with potential offtakers for the FLNG's production.
Wison has secured a series of FLNG contracts in recent years, including Eni's Tango and Congo FLNG units and two larger 3.0 mtpa units for Nigerian customers, currently in the front end engineering and design phase. It has also secured a design and engineering contract from Delfin Midstream for FLNG units for a Gulf of Mexico project.
Russia Transshipping Fish Through Norway to Avoid Dutch Shipping Ban
Russian's Belomorye alongside the Norwegian Silver Copenhagen for the transfer in Svalbard (Kystvakten)
There has been extensive reporting on Russia’s use of transshipping with ship-to-ship transfers of oil in secluded locations, but now comes a report from the Norwegian public broadcaster NRK of ship-to-ship transfers of frozen fish. While pointing out that it is technically not a violation of the EU sanctions against Russia, the action appears to be taking place to avoid a Dutch ban on Russian shipping.
The fish, likely cod from the Barents Sea, have become caught in political issues and geopolitics with the fears sweeping across Europe. The Dutch banned Russian-flagged vessels with the report saying it was due to a fear of spying and espionage. They also cite Russia’s military doctrine pronounced after the 2022 invasion of Ukraine that would permit the use of civilian vessels by the military.
The Russian company Norebo has the highest fishing quotas for cod in the Barents Sea NRK reports but is facing problems with the export and delivery of its catch. The reports are that its vessels are being blocked from the port of Eemshaven in the Netherlands. The company had been exporting to the Netherlands with the Dutch being the largest market for its catch. NRK says over 130,000 tonnes of Russian seafood was landed in the Netherlands in 2023.
The fishing vessel Belomorye had been at sea for more than 16 days without landing its catch and was unable to proceed as it would normally have to Eemshaven. Instead, NRK reports the vessel was sighted in a deserted fjord on Svalbard last month.
The Norwegian Coast Guard was monitoring the activity and confirmed that it inspected the vessel for any potential violations in May. The Belomorye was seen in a photo released by Kystvakten (the Norwegian Coast Guard’s account) alongside the Norwegian freeze ship Silver Copenhagen.
According to the report, 2,000 tonnes of frozen fish were transferred ship-to-ship from the Russian vessel to the Norwegians. The vessel is operated by a Norwegian company Silver Sea which reports it has a 20-year relationship with Norebo. They contend that everything was being done legally. They received the catch and transferred it to the customers in the Netherlands.
Officials confirmed that fish are not part of the EU sanctions. Dutch authorities also confirmed their position that the fish were a legal import and had no problems landing it from the Norwegian ship after a delay of several weeks.
Russia is reported to have increased its fish exports in 2023 by 12 percent. Total exports were 2.2 million tons.
EU Imposes Small-Scale Sanctions on Russian LNG Exports
A Russian LNG carrier (foreground) transships Russian cargo to a foreign-flag LNG carrier (background) for re-export at Zeebrugge (Fluxys file image)
The EU's member states have agreed to roll out the bloc's first-ever sanctions on Russian LNG, though the impact on trade volume is expected to be minimal.
Diplomats with inside knowledge of the talks say that the 14th package of EU sanctions will ban Russian LNG re-exports from European ports. Novatek uses ports in France and Belgium to transload and re-export LNG from its Yamal project to markets overseas, like China. The use of EU infrastructure allows Novatek to shorten the voyages of its unique icebreaking LNG carriers, freeing them up for more trips to and from Yamal.
However, EU-based transloading and re-export activity represents a small fraction of Russian LNG shipping, according to analysts at Atlas Network. European utilities will still be able to purchase and import Novatek's Russian LNG for local consumption, continuing a trend that began when Russian pipeline gas was cut off in 2022. The likely outcome, according to Atlas, is that the small fraction of Russian LNG that used to be re-exported will now remain in Europe. In this scenario, Novatek and its trading partners would likely use locational swap agreements with non-Russian LNG producers in order to fulfill contractual obligations for re-export cargoes.
The package also bans European financing for three Russian LNG export terminal projects, diplomats told Reuters. It also adds more Russian "dark fleet"s tankers to the list of EU-sanctioned vessels.
The details of the sanctions agreement have not yet been released, but EU leaders said that the overall package would have a substantial impact. It is the EU's 14th set of Russian sanctions measures since the invasion of Ukraine in 2022.
"This hard-hitting package will further deny Russia access to key technologies," European Commission President Ursula von der Leyen said in a statement. "It will strip Russia of further energy revenues and tackle Putin’s shadow fleet and shadow banking network abroad."
"This package provides new targeted measures and maximizes the impact of existing sanctions by closing loopholes," the Belgian presidency of the European Council said in a brief statement.
The package omits a long-discussed element that would have required the overseas subsidiaries of EU companies to stop re-exports of their goods to Russia. Moscow's weapons developers have had few problems gaining access to Western high-tech components for missile guidance systems, navigation equipment and other key defense technology, in part because sanctions can be easily evaded by routing shipments through third countries like Kazakhstan or China. The proposed limit on European-owned subsidiaries would have closed a loophole, but the German government objected, fearing that it would damage small German businesses. Ultimately this measure was dropped, diplomats told Euractiv and Politico.
Friday, June 21, 2024
Summary
Donald Trump remains erratic and inconsistent when it comes to foreign policy. But the broader Republican foreign policy ecosystem forming around his administration is increasingly clear and organised.
This ecosystem comprises three main “tribes” – restrainers who want US foreign policy to focus on America; prioritisers who want it to focus on Asia; and primacists who want it to continue to focus globally.
We used ideas that come from all three tribes, and the Trump campaign itself, to imagine six scary scenarios for US foreign policy and their implications for Europe.
These scenarios imagine futures for Ukraine, the South China Sea, strategic industrial policy, NATO, the Middle East, and an illiberal internationale. None of the scenarios is inevitable, but they are all derived from Republican ideas and are at least plausible
Europeans are not prepared for these scenarios and, given their current divides over the US and the appropriate response to Trump, will struggle to respond to them collectively.
What they can do is to prepare some contingencies for what might happen and understand how personnel choices and intra-Republican debates could shape the foreign policy of another Trump presidency.
Imagining the Trump presidency
These are difficult times. The Russian threat has returned to Europe while a brutal war rages in the Middle East. Populism is sweeping across the European continent, China seems increasingly scary, and nobody can stop looking at their phones. But in this maelstrom of woes, one prospect frightens European policymakers more than anything else: the return of Donald Trump to the US presidency.
The prospect is certainly real. As of May 2024, Trump leads in the polls nationally and in five out of the six key swing states. And so is the European trauma. Europeans are still licking their wounds from Trump’s first term: they have not forgotten the former president’s tariffs, his deep antagonism towards the European Union and Germany, or the US withdrawal from the Paris climate accords and the Iran nuclear deal. Nor have they recovered from Trump’s general boorishness at international summits, not to mention his regular threats to withdraw from NATO.
Beyond these flashbacks, Europeans are predominantly worried about the security implications of a second Trump presidency. Trump’s renewed threat to withdraw from NATO, his encouragement of Russian attacks on “delinquent” NATO members, and his claim that he could resolve the war in Ukraine in 24 hours take on even more resonance against the backdrop of Russia’s aggression. The fact that the nations of Europe cannot defend themselves without resorting to NATO and the help of the United States has never been more obvious; and yet, it has never been less certain that the US commitment to European security will remain firm.
But if Trump is elected, the implications for Europe will go well beyond the issues of Ukraine and European security. The Trump administration will challenge European policymakers across a range of issues: from China to trade, climate to the Middle East. Worse, another nightmare lurks beneath the potential foreign policy shocks: an international coalition that could emerge as a framework for populists in Europe to establish special ties with Trump’s Washington. Trump’s re-election might well embolden the populist right in Europe to obstruct common EU policies and initiatives more forcefully. They may also seek US endorsement for far-right parties in national elections, including in Germany and Poland in 2025.
Of course, the American people might still re-elect Joe Biden, but it seems only prudent to think about what will happen if they don’t. To guide Europeans in this task, we have developed six imagined foreign policy scenarios that could take place in the first year or so of a second Trump term. The scenarios build on Trump’s own statements and those of his campaign, numerous private conversations and workshops we have held with Republican thinkers, as well as policy ideas emanating from Republican think-tanks. As a tribute to the AI-enhanced fever dream that may lie ahead, we have created images using ChatGPT to illustrate each scenario. This would not have been possible just a couple of years ago, and serves as a signpost of our AI-powered future.
The broader ecosystem of Republican thought will matter a great deal for a new Trump administration’s foreign policy. Trump controls the Republican party. He dominates the party’s politics, drives its public narrative, and determines the range of acceptable opinion. But Trump remains as inconsistent and incoherent as ChatGPT on many if not most foreign policy issues.
Within the broad limits that Trump sets, personnel will be policy, which is to say that the people he appoints to key positions will have an enormous impact on the administration’s foreign policy. But no one, probably including Trump himself, knows who those people will be. In this report, we take a guess at his main foreign policy picks, but these are highly speculative. An understanding of broader Republican thought will serve a more useful role in predicting Trump’s foreign policy than the usual parlour game of guessing who the next national security advisor or secretary of state will be.
Three main Republican foreign policy camps or “tribes” currently vie for influence: the “primacists”, the “prioritisers”, and the “restrainers”. The dominant segment in the Congressional caucus and among the Washington establishment are the traditional primacists. They support continued US global leadership and a large US military footprint around the world. The restrainers, who want a radical reduction in the US security role abroad, arguably have the support of the Republican base. The prioritisers enjoy less support among voters. But their calls for US foreign policy to focus tightly on Asia and China are having an increasingly outsized influence in foreign policy circles.
Trump himself has moved erratically between all three camps in the nine years since he began running for president. In his campaign for the 2024 election, he has publicly distanced himself from the primacist camp, branding them “globalists” and “warmongers”. But all three camps will have influence in his administration and they will remain in ideological competition with each other. They are all focused on forming a coherent foreign policy narrative that will appeal to Trump’s instincts and interests – a sort of “battle for Trump’s mind”. They are all seeking to install (or to be) the political appointees that will drive Trump’s second-term foreign policy agenda.
The six scenarios reflect our understanding of the balance of power between the three tribes on the given issue as well as Trump’s occasionally consistent positions. They are, in our humble opinion, eminently plausible. However, these scenarios are also very far from inevitable and solely designed to stimulate thought. Rather than making predictions, they simply point out what could plausibly go wrong. Our hope is that the possibilities will encourage Europeans to consider how they can approach the very difficult trade-offs that may lie ahead. Maybe they can even get people to stop looking at their phones so much.
Ukraine: Minsk 3.0
Donald Trump seems to hate Ukraine almost as much as he admires Vladimir Putin. He blames the country for his first impeachment, his election defeat in 2020, and for “covering up” Biden’s supposed crooked dealings in Ukraine. Trump’s restrainer instincts are particularly strong on the Ukraine war: he wants out. He has promised to “end the war in 24 hours”, claiming he could get both sides to make a deal. No one knows what such a deal would entail, although the past offers some clues, particularly Trump’s first-term outreach to North Korea. The president would likely expect Europeans to fall in line with his “historic peace deal” or start dealing with the war by themselves.
On the first full day of Trump’s second term in office, the president announced his intention to make a deal to end the war in Ukraine. “That war has to be stopped,” he noted, as he had during the campaign. “It is a disaster that wastes our money. Ukraine is not America’s responsibility, and we have other problems. Biden’s Russia policy only helped China, North Korea, and Iran.” Ten days later, after the president’s first phone call with President Vladimir Putin, Trump told the press that “Putin was very firm that he wants to do this. I think he might want to do this even more than me.”
As usual, Trump said very little about how he intended to achieve his goals. His freshly installed cabinet seemed divided on the question. Various sources leaked to the press that US intelligence was reporting very few substantial differences between Russia, China, North Korea, and Iran on Ukraine. Secretary of state Robert O’Brien seemed wary of pushing a deal, but quickly embarked on a trip to Ukraine and major European capitals to hold consultations on the process.
In those meetings, O’Brien emphasised that the US and its allies had always said that the war should end in negotiations, so now was the time to start. He hinted strongly that at the core of the US approach to the deal was de facto acceptance of Russian control of the occupied parts of Ukraine. NATO membership for Ukraine would be off the table, at least for the time being. And Europeans had to be on board with the broad contours of a summit, otherwise the US would need to reconsider its role in European security.
O’Brien also confessed that the Trump administration had not yet fully thought through all the aspects of a settlement and Ukraine’s future. These included the possibility of a peacekeeping or monitoring force, Ukraine’s accession to the EU, the country’s bilateral security arrangements with the West, and an economic development and reconstruction plan for Ukraine. Also largely unexamined were the disposition of Russian sovereign assets and the question of sanctions relief.
At the beginning of March 2025, the Trump administration submitted a new budget to Congress that included over $30 billion in aid to Ukraine. Trump used the press conference announcing the budget to state his intention to bring together Ukraine’s president Volodymyr Zelensky and Putin for a meeting to resolve the conflict. “This aid only goes to Ukraine if Zelensky helps me to end this war. But if Russia opposes this beautiful idea, there can be a lot more aid to Ukraine.” His speech was accompanied by a slick video portraying him, Putin, and Zelensky as peacemakers.
A week later, letters went out to Putin and Zelensky proposing a trilateral summit in Riyadh, Saudi Arabia in May – without preconditions. The US Department of State invited European leaders to declare their support for the process and announce what they were ready to do for it to succeed.
The Russian response was muted. In a press conference, Kremlin spokesman Dmitri Peskov noted that Russia had always been willing to negotiate and could consider the meeting if it met Russia’s core security interests. At a minimum, this would involve Ukraine recognising Russia’s new “constitutional territories” – Crimea, Donetsk, Luhansk, Kherson, and Zaporizhzhia. Zelensky stated he would only consider the summit if Russia recognised Ukrainian sovereignty over its internationally recognised territory and began to withdraw its forces. The White House spokesperson responded that Trump would meet with whomever showed up.
Meanwhile, the Ukrainian government communicated to various European leaders that Trump was pressing Zelensky to give up sovereignty over the regions Russia had illegally annexed, or else risk losing US aid. In an ensuing phone call between Washington and Berlin, Trump’s new national security advisor Richard Grenell threatened the withdrawal of US troops from Europe if Germany objected the plan. He also made clear that the US expected Germany and the EU to take full responsibility for financing Ukraine’s reconstruction and providing security guarantees. The US might consider assisting with loans, but under the precondition that European contracts remained open for US companies.
As the negotiations over these negotiations continued, backchannel envoys from the Kremlin arrived in Paris and Berlin. The envoys indicated Putin’s openness to a summit. They hinted that the “official performing the duties of the CIA director”, Kash Patel, had told them Trump would demand an end to Russia’s military modernisation efforts with Iran as the price of the deal, but that this would be accompanied by economic incentives. The envoys also expressed reservations about whether Trump could get his NATO allies or even the US Congress to go along with the deal. They wanted to understand European attitudes towards the idea and towards sanctions relief in the event a negotiation began.
China: Crisis in the South China Sea
A core consensus on China has emerged within the Republican Party. All three Republican camps view China as the greatest challenge to US national security interests, and all are focused on prevailing in the technological competition with China. The restrainers, often including Trump, emphasise the economic challenge China presents and particularly the US trade deficit with China. But pressures within the Republican party and in Congress, as well as the available personnel, mean that the next Trump administration’s China policy will probably be set by prioritisers – who see an urgent need to shift military resources from Europe to the Indo-Pacific. Faced with a crisis, Trump and the prioritisers would likely accelerate this shift in resources but would also probably escalate on the trade front, leaving Europe stuck between a rock and a hard place.
Just days after Trump’s inauguration in January 2025, the president faced his first foreign policy crisis in the Indo-Pacific. A vessel of the Chinese navy rammed a Philippine naval ship trying to run the Chinese blockade of the disputed “Second Thomas Shoal” in the South China Sea. Eighty-five Filipino sailors drowned with the Chinese making little effort to rescue them. The Chinese promptly tightened the blockade and declared that any further efforts to run it would occasion more sinkings. This put the Trump administration under pressure to uphold its obligations under the US-Philippines Mutual Defense Treaty and to support a key ally.
But Trump was not keen to engage militarily in China’s backyard: “Why go to war over a rock?” he moaned to his national security advisor, Richard Grenell. But the president did not want to appear bullied by China either – showing strength is crucial for Trump. A split emerged in his cabinet. One side argued that if the US sent forces south to help the Philippines, it would open up serious vulnerabilities around Taiwan. The rest insisted that breaking US defence treaty obligations with allies in the Indo-Pacific would encourage China to continue testing red lines in Taiwan. From an operational point of view, this faction warned that a lack of response from Washington may endanger US access to strategic military bases in the Philippines, which would be critical for Taiwan contingency planning.
As pressure grew from Congress, Trump decided that he must stand up to Beijing and show strength. He posted on Truth X – the new social network born out of the merger between X and Truth Social – “In 2012, Obama showed weakness trying to solve this with his ‘diplomacy’ and ‘international law’. But China doesn’t care about international law, it only cares about STRENGTH and FORCE!”
Trump ratcheted up the rhetoric and announced that he would draw a red line in the South China Sea, though he didn’t say exactly what that meant. The administration put US forces on high alert. It dispatched additional units of the US Pacific Fleet to the South China Sea to conduct joint patrols with ships from Australia, Japan, and the Philippines. The US also increased air patrols over Second Thomas Shoal using F-35 fighters operating from its aircraft carriers. Finally, Washington announced accelerated delivery of military equipment to Manila. Trump, meanwhile, opened a channel to negotiate with Beijing, holding a two-hour phone call with Chinese leader Xi Jinping and announcing a face-to-face meeting in February.
As the risk of military confrontation between the US and China increased, shipping routes were disrupted, investors panicked, and world markets plunged.
After returning from a hastily arranged trip to Tokyo and Canberra, Grenell called his counterparts in the EU, France, Germany, Italy, and Poland. He demanded that European leaders take a clear position, join the US in condemning Chinese aggression, and press for a prompt withdrawal of all China’s navy from Philippine territorial waters. He reminded EU member states that China had violated Philippine sovereignty and a 2016 international arbitration court ruling that had dismissed its claims to much of the South China Sea.
A couple of days earlier, Congress had adopted a package of punitive sanctions to be imposed on China unless it stopped its attacks and left Philippine waters. The legislation foresaw the US severing large portions of its business transactions with China. Trump announced that the sanctions may also cover Chinese-owned companies that operated in Indonesia, Mexico, Thailand, and Vietnam. Over several meetings and phone calls, US officials demanded that Europeans publicly declare that they would join the sanctions. China announced that it would retaliate by selectively shutting off supplies of rare earths to European countries that complied with the US sanctions.
But Trump also realised that the crisis in the South China Sea presented an opportunity to introduce the type of tougher economic warfare against China that he had long planned. He instructed the administration to start implementing a package of economic measures on China he had announced during his electoral campaign. The aim was to reduce the US trade deficit with China and “bring jobs back” to America. As he posted on Truth X, “America’s workers are losing jobs because China is pulling off the greatest theft in the history of the world. So UNFAIR! And it funds their aggression against the Philippines. Tomorrow I will announce a plan to get a FAIR deal for American workers. TAX CHINA TO BUILD AMERICA!”
The next day, US trade representative Katie Britt announced that, consistent with Trump’s campaign pledge, the US would impose a universal baseline tariff of 10 per cent on all imports (including imports from the EU). On top of that, Britt announced that the US would impose a 60 per cent tariff on most Chinese imports. The administration then introduced a four-year plan to phase out all imports of essential goods from China, from electronics to steel and pharmaceuticals. Trump followed this up with another social media post: “Weak Joe Biden let China dominate our pharmaceutical market. China produces 95% of all ibuprofen, 91% of hydrocortisone, 70% of all Tylenol, and nearly half of all penicillin. Can you imagine that? This ENDS TODAY!”
From Trump’s perspective, all these measures were the opening gambit for a negotiation to secure a better deal on trade with China. He was less concerned about the details of strategic industrial policy and its national security-related measures. But, to retain negotiating leverage with China, his administration kept the existing Biden-era export control measures in place and even pushed for further tightening of technology controls. This locked Trump into the Biden-era policy, meaning he was unable to offer China anything that even resembled a palatable deal. His agenda on China thus translated into a series of unilateral US measures to further decouple from China and limit its ability to prevail in technological competition with America.
In conversations with EU leaders, the Trump administration was unambiguous that Europe must take decisive action to match US technology and export controls. Europeans were also instructed to prevent intellectual property theft, forced technology transfers, and China’s purchase of key dual-use technologies. Furthermore, the EU – especially Germany – must finally address the issue of Chinese telecommunications giant Huawei’s presence in its critical infrastructure and secure European technology supply chains. The following areas emerged as “critical” to demonstrate alignment with the US: inbound and outbound investment screening, procurement restrictions, export controls, supply chain resilience policies, and cybersecurity measures.
Strategic industrial policy: Total energy dominance
Trump announced the United States’ withdrawal from the US from the Paris climate agreement in 2017, in an early demonstration of his hostility to climate action. His point of view was that this “very unfair” deal imposed “draconian financial and economic burdens” on the US while China and India gained an advantage. This time around, Trump has promised to slash regulations limiting the production of fossil fuels. All three Republican camps share Trump’s disdain for environmental measures, though each for their own reason: primacists see energy as a tool to promote global US leadership, prioritisers see it as a critical US advantage over China, and restrainers see it as the best route to greater US competitiveness and a manufacturing renaissance.
Trump’s first address to a joint session of Congress took place in March 2025 and introduced the idea of “total energy dominance”. It quickly became clear that energy dominance would be the main concept linking his administration’s effort to inspire an American economic and manufacturing renaissance with US foreign policy goals. The idea was to use cheap and abundant US energy resources to boost prosperity and ensure economic security at home, but also to help the United States’ allies and weaken its adversaries.
“TOTAL ENERGY DOMINANCE”, Trump posted on Truth X, “will make America great and respected again. OIL (ENERGY) is back!” His cabinet began messaging that total energy dominance would revive America’s industrial and manufacturing sector, take back the industries of the future from China, leave dangerous regimes like Russia in the dust, and make the US new friends in Africa, South America, and the Pacific.
In Trump’s view, this policy would only help the climate. “The climate needs total energy dominance,” Trump said in his speech, “because American energy is clean energy. Biden’s green obsession just empowered China.” US carbon emissions had been declining, the Department of Energy noted in support of the speech, through the use of “clean natural gas”. Biden’s policies of mandating the use of renewable energy and electric vehicles had not, in this telling, really reduced global carbon emissions. They had only shifted them to China, while simultaneously conceding America’s greatest economic and geopolitical advantage. The department emphasised that between 2005 and 2021, US carbon dioxide emissions fell by 1 billion metric tonnes while China’s grew by 5 billion metric tonnes. Freeing up the use of US natural gas, oil, clean coal, and nuclear power would enable energy dominance and reduce global carbon emissions.
Total energy dominance involved several aspects that were elaborated in subsequent speeches by secretary of commerce Marco Rubio, secretary of the treasury Robert Lighthizer, and environmental protection agency administrator Andrew Wheeler. As Rubio explained, the US would profit from energy dominance to build up its domestic industrial base and enrich the working class, not from fantasies like the “green transition”. This “means supporting critical industries such as mining, oil and gas, and metallurgy, all of which are vital to our security. It means tying generous government subsidies to performance requirements … and it means getting serious about deregulation and permitting reform … [so that] industrial policy can actually work.”
The administration first sought to “end the war on energy”, removing regulatory impediments to the production and sales of fossil fuels, nuclear power, and critical minerals. Through executive orders in April and May 2025, Trump reversed the Biden administration’s pause on the export of liquefied natural gas (LNG) and lifted its ban on exporting gas only to countries with which the US had free trade agreements. The Trump administration also ordered the resumption of sales of both off-shore and on-shore drilling leases. It also introduced a streamlined approval process for nuclear power plants, fossil fuel infrastructure, and export terminals and sought to repeal Biden-era taxes on natural gas.
As Wheeler explained in a congressional hearing in June 2025, “the Trump administration supports expanding both fossil fuel and renewable energy sources, but we want to let the market decide which combination of sources represents the optimal path to US energy dominance.” This meant that the administration intended to dismantle the numerous regulations put in place by the Biden administration to dictate the use of green energy sources, such as its mandate for how many electric vehicles car companies had to produce in relation to petrol vehicles. The administration would continue to support the research, development, and production of green technologies that could prove themselves in the marketplace. Finally, Wheeler set out how the Trump administration would also reduce the burden of environmental review for infrastructure projects and prevent liberal states from using these processes to slow down infrastructure construction and energy production.
In June 2025, Rubio gave a speech at the American Compass forum. He highlighted research from the think-tank that demonstrated how China uses cash injections, tax breaks, low-interest and forgivable loans, cheap land and energy, and other incentives to systematically favour Chinese industry – including in the energy sector and energy-intensive industries such as AI. China specifically offers support to coal-fired power plants in the form of direct funding, preferential loans, and power purchase guarantees. The EU, he noted, had similarly implemented massive fossil fuel subsidies after the Russian invasion of Ukraine.
To counter the anti-competitive advantage this confers on Chinese and European industry and power production, Rubio announced, the Trump administration intended to introduce some direct subsidies to encourage the reshoring of critical industries. The administration also intended to reduce royalty rates on oil and gas leases on public land and reform the tax code to favour energy production.
The combination of these measures, Rubio concluded, means that “the Trump administration will lead on solutions to boost energy production, lower energy costs across the board, and make life more affordable for Americans. Globally, it will allow the United States to deploy its abundant energy resources to sustain its lead in the critical industries of the future, keep global prices low, and disempower authoritarian regimes such as Russia and Iran that depend solely on energy revenues to support their global ambitions.”
But the most controversial aspect of US energy dominance was the proposal from Lighthizer’s treasury to impose an export tax on LNG. Lighthizer noted in a press conference that the increased US exports of LNG since the Russian invasion of Ukraine in 2022 had more than doubled domestic natural gas prices, effectively imposing a tax on American consumers. “Germany protects its consumers and industry from rising natural gas prices, why shouldn’t America?”, Lighthizer added, referring to a similar German export tax from 2024.
The treasury proposed a scalable tax designed to create a permanent wedge between US and global natural gas prices that would encourage energy-intensive industry in America. The tax would be paid by foreign importers on delivery and the proceeds used to fund the direct subsidies to American industries.
Trump dismissed his allies’ concerns about his plans at the G7 summit and doubled down on his message. “America’s beautiful TOTAL ENERGY DOMINANCE is a gift to America and the world,” he posted on Truth X, “ALL countries that depend on America for security MUST support it!!”
European security: NATO’s slumber
Foreign policy thinkers in Trump’s orbit have set out proposals to adapt NATO to a reduced American presence in Europe. For both the restrainers and the prioritisers, a weakened commitment to NATO is a logical and necessary first step to reposition the US in the world. Nervousness among primacists at home about Trump’s commitment to NATO is such that Congress passed bipartisan legislation in 2023 to prevent the president from withdrawing from the alliance. Alas, no amount of legislation can compensate for the political symbol of a NATO at war with itself.
After Trump’s inauguration, European anxiety about US commitment to the NATO alliance remained high. The presidential campaign had seen Trump declare that he would pull out of NATO, unless other members of the alliance “paid up”, and that Russia could “do whatever the hell they want” to anyone who didn’t pay.
When journalists questioned the president on the US commitment to its NATO allies, Trump answered: “NATO should be grateful that I am back. When I was president the first time, Russia invaded no country. Because I got the NATO countries to put up an extra $420 billion a year. That’s to guard against Russia.” Soon after, the newly appointed national security advisor, Richard Grenell, added that Trump was actually strengthening the alliance’s deterrent by getting Europeans to pay their way. “American taxpayers cannot subsidize the affluent European way of life forever,” he posted on Truth X.
At the Munich Security Conference in February 2025, the new NATO secretary general trumpeted that more than 20 NATO members would reach the 2 per cent of GDP spending target in the current year – a number that had doubled in the last two years – and that European countries and Canada together had now contributed nearly twice as much as the US to Ukraine.
“Not enough”, Republican senator JD Vance told Fox News, “that means that 12 NATO allies are still under 2 per cent, including Canada, Italy, and Spain. If Ukraine is such an existential issue for Europe as you all say it is, then Europe should act as if it is. In 2024, Russia spent one-third of its budget on its military but affluent European countries think they can wait until 2030 to reach 2 per cent. That’s absurd.”
In the spring of 2025, the Pentagon conducted a global posture review to assess the state of the United States’ forces and its military footprint around the world, in view of the upcoming National Security Strategy. In a news conference, the US secretary of defence Anthony Tata presented the defence department’s main recommendations based on the review. A few points were particularly concerning to various NATO allies:
Firstly, due to the previous administration’s “reckless” decisions, ammunition stocks had depleted, and those that remained were needed to defend the United States’ southern border and for troop readiness in case of a major confrontation with China. In addition to announcing incentives to double the monthly production of artillery, the Pentagon would now retain 80 per cent of this for national defence purposes. The US contribution to NATO’s “Mission for Ukraine” plan, which foresaw a joint NATO military fund for Ukraine to the tune of €100 billion over five years, would have to be put on hold.
Secondly, the increase of rotational US forces in Europe – many of which had extended their deployment after the retreat from Afghanistan and Russia’s invasion of Ukraine – would now be reversed. This would bring the number down from 100,000 to the 2020 level of around 65,000. The Department of Defense would also re-establish a cap on active-duty troops in Germany at 10,000; the rest would be deployed to nations that contributed more to the alliance.
Thirdly, the US would prioritise resources to respond to the China challenge in the Indo-Pacific, including for strike weapons like HIMARS and ATACMS rocket systems and tactical drones, as well as defensive systems such as Patriot, Stinger, and Javelin missiles that can resist an invading force, for example in Taiwan. These weapon systems would now be prioritised for the Asia theatre over Europe.
Prioritiser think-tankers were less than impressed by the review. They briefed that Tata’s proposals did not go nearly far enough, and that the US should radically rebalance its forces towards the Indo-Pacific. They pushed for proposals along the lines of the “dormant NATO” model, whereby the US would withdraw most of its troops and capabilities from the European theatre. Europeans would become the primary provider of manpower and capabilities for Europe’s territorial defence, while America would remain only an offshore balancer of last resort.
Ahead of the 2025 NATO summit in the Netherlands, prioritiser think-tankers testified in front of the Senate appropriation committee that America’s European commitments dangerously limited US capabilities in the Indo-Pacific. Their increased influence became clear when Republican senators subsequently recommended reducing the US contribution to the NATO headquarters’ operations and scaling back the number of US personnel involved in running it. The goal was to ensure less US involvement in the alliance even as the country remained a member.
The US permanent representative to NATO Douglas Macgregor then informed Europeans that they were now expected to commit direct resources to finance US tactical capabilities used in the defence of Europe (command and control capabilities; airlift capabilities; and intelligence, surveillance, reconnaissance, and target acquisition capabilities).
When the summit arrived, Trump gave a frustrated and angry performance. Europeans, he said, “threw a wrench in the gears of beautiful peace meeting with Russia” [sic]. He added, “Peace must be achieved, and NATO will not stand in the way.” Trump then demanded that the formal summit declaration include a clause that NATO would not expand beyond its current members and that it would support the US strategy in the Indo-Pacific. Discreetly, the American team reached out to France and Germany to muster support for the Australia-UK-US effort to produce nuclear submarines.
The Middle East and North Africa: Making Israel great again
Trump has not been very vocal on the Israel-Palestine question since Hamas’s 7 October attack on Israel. But in his first term, he presented a picture of unequivocal support for Israel that exceeded even Biden’s strong level of commitment to Israel’s security. Trump has indicated he will focus his administration’s efforts on normalising Israel’s position within the Middle East, expanding on the Abraham accords that established diplomatic relations between Israel and some of its Arab neighbours. He considers the accords one of his greatest achievements and some of his key advisors would like to expand them to Saudi Arabia. For primacists, US leadership on the Israeli-Palestinian issue is traditional Republican foreign policy in the Middle East. For restrainers and prioritisers, helping Israel integrate with its neighbours is one way for the US not to have to secure the region and pivot away from it.
In the period following his election in November 2024 and before taking office, president-elect Donald Trump made a series of phone calls to friends and partners in the Middle East. He signalled his intention to all of them to bring peace back to the region – “after Biden messed it up so much” – and suggested that an era of prosperity was “around the corner.”
The six months prior had seen tensions increase continuously in the Levant. Israel had reduced the immediate threat posed by Hamas in the Gaza strip, which it continued to occupy. The Israeli military had been striking periodically at Hizbullah in Lebanon to degrade its capabilities. It also continued to conduct air raids on Iranian interests in Lebanon, Syria, and Iraq. In retaliation, Hizbullah conducted drone and missile attacks against northern Israel. Iran had also been producing uranium at weapons-grade levels, effectively becoming a nuclear threshold state.
During Biden’s lame-duck period, Trump spoke several times to Israeli prime minister Binyamin Netanyahu, who invited him for a visit. He also talked to Saudi crown prince Muhammad bin Salman, calling him his “fellow peacemaker”. He spoke to Sultan Haitham of Oman about the threats posed by Iran and hinted that the Trump Organization’s multibillion-dollar real estate project in Oman would not be jeopardised by his new presidential mandate, but would continue to be handled by his children.
On the first day of his new term, which a Fox News commentator approvingly dubbed “Dictator Day”, Trump signed a series of executive orders meant to reinitiate “maximum pressure” on Iran. One of these orders incentivised Elon Musk’s SpaceX to triple the number of Starlink internet connectors over Iran to enable the mobilisation of democratic forces.
Trump’s first trip abroad in February 2025 was to Israel. Along with a congressional delegation, the president toured the areas struck by Hamas’s 7 October attacks and northern Gaza, an area devoid of civilians and still secured by the Israeli army. Trump then gave a speech from the grounds of the US embassy in Jerusalem, in which he congratulated Israel for crushing Hamas in Gaza, lambasted his predecessor for calling for a ceasefire even though “the job was clearly not finished”, and called for a new approach towards a peaceful Middle East. Trump then hinted at the need to work out a sustainable solution for Palestinians in the West Bank and Gaza.
In anticipation of the trip, Trump’s new White House coordinator for the Middle East David M Friedman had presented the administration’s dual objectives: first, achieve a sustainable solution to the Palestinian problem; and second, revive a process of Arab-Israeli normalisation along the lines of the Abraham accords, starting with Saudi Arabia.
To fulfil the first objective, in line with the Trump administration’s 2020 “Peace to Prosperity” vision, the White House called for the creation of a demilitarised Palestinian state with limited sovereign powers – Israel would serve as the sole security provider for both states. The administration also called for the annexation of West Bank settlements and the Jordan Valley into Israel, and for massive economic investments of up to $50 billion in the Palestinian economy.
The US would advocate for a “Dubai model” for Palestinians, meaning the creation of physical infrastructure and a loose regulatory environment that would transform the West Bank and Gaza into regional financial and trading hubs. In Israel, Trump discussed the plan with the Israeli government, which appeared divided but eager to put something on the table before new Israeli elections at the end of 2025.
Trump stopped over in Riyadh on the way back from Jerusalem. There, he met with Saudi leaders to discuss the administration’s objectives. In exchange for Saudi economic investments in the Palestinian economy, and a normalisation of relations with Israel, Trump offered a greenlight on civil nuclear energy, enhanced security cooperation (including new arms deals and security guarantees), advantageous trade privileges, and US investments in energy and tourism. Trump got a friendly but uncommitted answer from the crown prince, who needed more time to weigh his options.
In the spring of 2025, a pro-Iranian Iraqi Shia militia targeted a US base in Iraq and killed three contractors. The United States’ immediate response was to bomb into oblivion a militia training camp in the border region with Iran. On Truth X, Trump repeatedly told Iran not to mess with America: “I can kill another general, no problem.” Republicans in Congress praised Trump for his strong response to the attack. They also signalled their agreement with his longstanding opinion that the US troops in Syria and Iraq no longer served any strategic purpose by reintroducing a bill directing their withdrawal. This idea of strength through withdrawal only seemed paradoxical to Democrats and the liberal media. To Trump and his supporters, it made perfect sense.
The Houthis, meanwhile, increased their attacks on ships navigating the Red Sea. Around the same time, Iranian proxy forces started threatening maritime traffic in the Strait of Hormuz, attacking a Norwegian tanker off the coast of the United Arab Emirates, which resulted in 12 casualties.
With commercial maritime traffic in chaos all around the Arabian Peninsula, countries in the region had begun calling on the UN to set up a regional peacekeeping operation to protect trade flows. Experts speculated the US might lead a coalition to strike the Houthis’ territorial hold in Yemen and destroy its capabilities. Behind the scenes, the Trump administration let their Iranian counterparts know that they were watching their arms deliveries to the Houthis, and that they were holding them responsible for the situation.
Trump ignored global calls to intervene, announcing that it was not up to the US to secure the transportation of Chinese TVs and refrigerators to Europe. The administration was sending a message to Saudis that they were responsible for security in the Red Sea and a message to Europeans that they were responsible for securing their own trade routes with their own ships and to China.
In the summer of 2025, the secretary of defence announced that the US would pull out of Iraq, Syria, and Jordan entirely, “not to remain targets for an unhinged regime in Tehran”. In a speech in Michigan soon after, Trump congratulated himself for his smart move to clear the path for Israel “to go after Iran”, stating that “no American troops will be in the way, they can finish the job”. He went on to say that what he wanted was peace in the Middle East, and that, if Iran’s supreme leader Ayatollah Ali Khamenei was interested, he could drop him a line and together they’d “make the deal of the century”.
Ideology: The global alliance of peoples and nations
For Republican restrainers, and not coincidentally for Trump himself, re-invigorating nationalism at home and abroad is key to reshaping the global political order. Trump’s team have thus established links with various populist movements in Europe and particularly with the Hungarian prime minister, Viktor Orban, whom Trump in April 2024 called a “great man”. Trump’s links with surging European populists will allow his administration to play on European political divides, implying that for Europeans, a new Trump administration is as much an internal as a foreign policy challenge.
In February 2025, Trump delivered the keynote address at the Conservative Political Action Committee in Washington. The White House had pointedly invited only those world leaders who had unequivocally supported Trump in his re-election bid, including Hungary’s prime minister Viktor Orban, the Slovak prime minister Robert Fico, the newly installed Austrian chancellor Herbert Kickl, the Serbian president Aleksandar Vucic, Polish opposition leader Jaroslaw Kaczynski, and Geert Wilders, the leader of the Dutch Party for Freedom.
The Trump administration declared publicly that the intent of the speech and the conference was to launch a new global ideological movement: the Global Alliance of Peoples and Nations. The idea behind this was to make common cause on conservative issues such as immigration, pronatalism, and ‘anti-wokeism’.
After his speech, Trump descended the stage to chat and pose for photos. He posted a group picture with the European leaders present on Truth X: “Glad to see my friends from Europe join us in DC! Starting today, we are joining forces against common enemies: the liberal transnational elite that want to take away the rights of OUR BEAUTIFUL NATIONS!! The globalist warmongers dragging us into World War III over Ukraine, and the woke propagandists promoting the Green Garbage agenda while opening OUR BORDERS to migrants and terrorists!”
Robert O’Brien, Trump’s newly appointed secretary of state, rounded up several of these European leaders the next day to solicit their support for this new globalist movement. He understood that Europeans would be at the core of this new alliance. European conservatives had gained strength after the 2024 European Parliament election and a stronger new-right faction had emerged in the European Parliament. But the larger, liberal EU member states still dominated EU policy. O’Brien told the assorted populists that, in exchange for their adherence to the movement and general support for the administration’s priorities, Trump would support them in their intra-EU struggles.
The European populist leaders had a long list of items with which they needed Trump’s help. The EU members among them wanted to slow down the EU’s fossil fuel phase out, to block the implementation of the re-allocation quotas in the European Asylum and Migration Pact adopted in April 2024, and to defy the EU by refusing to pay the financial penalties for violating the pact. They also wanted stricter EU enforcement of border controls and to drastically reduce the cap for new asylum seekers.
O’Brien pledged Trump’s vocal support on all these issues. But in exchange, the secretary of state noted that he wanted them to serve as Trump’s allies within the EU and to promote some key US priorities in Europe. He expected them to increase fossil fuel purchases from the US and to forestall the broadening of the EU’s carbon border adjustment mechanism to additional industrial sectors. He also implied that he would expect them to advocate for increased European defence purchases from the US and to support Trump’s peace plan in Ukraine.
At the same time, Steven Bannon convened a strategy lunch with Geert Wilders and Jaroslaw Kaczynski at Cafe Milano in Georgetown to show them how the Trump administration could help them consolidate power in their countries. Noting that the liberal “deep states” in their countries had effectively prevented them from, in the Dutch case, taking power as a prime minister and in the Polish case, continuing their mandate, Bannon pledged that the Trump administration would help its fellow conservatives from now on by explicitly endorsing conservative candidates in elections. He particularly implied that the US president might show sympathy for the Polish Law and Justice candidate in the run-up to the 2025 Polish presidential election and for the Alternative for Germany party in the 2025 German parliamentary elections, if those parties agreed to support the Trump administration’s priorities in Europe. Bannon also suggested that the US should send election monitoring missions to all future elections in Europe to put US and international pressure on their governments to “play fair”.
Meanwhile, national security advisor Richard Grenell met with Vucic in the West Wing of the White House to discuss the details of a potential Serbia-Kosovo peace plan that Grenell had been contemplating while out of office. Grenell said that Trump wanted a historic peace agreement between Belgrade and Pristina, suggesting that Kosovar prime minister Albin Kurti, a “Marxist obstructionist”, was a problem. This was due to Kurti’s rejection of the “revision of borders” in the north of Kosovo that would transfer four Serb-dominated municipalities to Serbia, which was Vucic’s key precondition for concluding the settlement.
Grenell suggested that Trump would visit Belgrade once the deal was done, provided “a great many people show up on the streets of Belgrade to celebrate the US president as a peacemaker.” He also implied that the Serbian government could help by granting all the permits for a planned investment by Trump’s son-in-law Jared Kushner to build a luxury hotel, 1,500 residential units, and a museum in Belgrade.
With all these deals under its belt, Trump’s Global Alliance for Peoples and Nations was off to a strong start. The power of the US presidency allied with Trump’s ideological allies in Austria, Hungary, the Netherlands, Poland, Serbia, Slovakia, and beyond amounted to a formidable transatlantic coalition that could easily challenge the entire EU. The rest of the EU member states could only ponder a response to this transatlantic populist onslaught.
What the scenarios mean
These imagined scenarios represent a daunting set of challenges for European policymakers. They highlight just how dependent Europeans are on the US and just what damage a less congenial US administration could do to European interests across a variety of dossiers. Collectively, they would represent a virtual policy apocalypse. They would likely hobble European competitiveness, blow up Europe’s climate goals, demolish Europe’s influence in the world, and leave European security exposed to Russian depredations and Chinese pressure.
Of course, these scenarios are not inevitable or even likely, particularly collectively. But all of them are plausible in the early months or years of a second Trump term, depending on the distribution of the restrainer, prioritiser, and primacist tribes within the new administration.
The need for preparation seems essential and obvious. Most commentators recommend that Europeans spend more on defence and acquire more military capabilities, either to give the EU greater bargaining power with a potential Trump administration or to make Europe more autonomous from the US.
It is indeed a very good idea for the EU and its member states to achieve greater capability and self-sufficiency. This would be true even if Trump were not elected given the longer-term trends in US policy towards Europe. But so close the US election, that advice somewhat misses the point. The EU and its member states will enter a potential second Trump term in a state of extreme security dependence on the US – indeed that dependence has only grown since Trump left office in 2021.
The question in the meantime is how Europeans can manage that dependence on a potentially unreliable and transactional American administration. The difficulty in managing dependence is not awareness of the problem. In Brussels and beyond, European policymakers understand the risks a second Trump term might pose for Europe. Most European officials accept in private that the former president can and indeed may win a new mandate. They remember that Trump’s first term was hardly a picnic. Trump’s renewed threats to withdraw from NATO and promises to resolve the war in Ukraine in 24 hours have certainly got their attention.[1]
Various ministries across Europe have convened study groups or task forces to examine the problem and to recommend hedging strategies. They have often identified European assets that matter to the US, such as the EU single market and the European economic relationship with China. If deployed skilfully, they argue, these assets could give the EU a lot of leverage vis-à-vis the Trump administration and enable a forceful EU to assert its interests in any of the above scenarios. They further almost universally agree that Europeans should “do more”, particularly in terms of defence spending and rearmament to enhance European capabilities and bargaining capacity.
Alas, awareness and discussion are not the same as preparation. And, as far as we can tell, there are precious few policy measures being taken specifically to prepare for Trump’s second term; nor are there inter-agency working groups in most European capitals, let alone collectively at the European level.
The explanation for the disconnect between thought and action resides in the generally fraught politics among Europeans regarding the US and intra-European disagreements over how to respond to a potential second Trump term.
Some European officials suggest in private that the EU will “survive” Trump 2.0 by pursuing the same tactics as in his first term. They intend to flatter and distract him, while working with what they hope will be ‘more rational’ members of his administration as well as Congress, state governments, and civil society actors. The first Trump administration, the officials point out, made a lot of threats when it came to Europe, but implemented very few of them. Despite all the work that Trump acolytes have done since 2020 to improve a new administration’s capacity to implement his will, the question remains whether Trump has really changed and whether his new administration would indeed follow through on its foreign policy threats any more than in the first term. These officials often feel that they can best manage Trump 2.0 by emphasising their bilateral relationship with the US. For them, there is little need for additional preparation for Trump as they already know what to expect and what to do.[2]
And of course, some European governments, particularly in Hungary and Slovakia, welcome the idea of a new Trump administration. They feel that Trump redux would make common cause with their populist governments and help them avoid the rule of law and democracy discussions that have roiled their relationship with the EU. Trump’s history of unpredictability and lack of delivery also makes his potential allies in Europe nervous. But not so nervous that they advocate for the EU to engage in any kind of common preparation or response to the possibility of him returning to power.
In the end, meaningful preparation for a US administration that might be hostile to Europe is expensive – fiscally, politically, and even psychologically. Many Europeans would prefer to hope that it will not happen or to imagine that the worst scenarios are just catastrophising.
Political unity among the EU 27 will be difficult to attain in these circumstances. But at the same time, individual European responses will simply not be sufficient. Right after Trump took office in 2017, there was something of an unseemly rush among European governments to get to the White House first and to establish an effective bilateral relationship with the president. In the process, they did little but demonstrate weakness and disunity to Trump. Theresa May, the then UK prime minister, won the competition, but her victory meant nothing in terms of the post-Brexit trade deal she had hoped for. Europeans have absorbed that lesson about Trump. But intra-European dynamics nonetheless mean that, in the event of a Trump re-election, they may well repeat that unseemly rush and convey the same message to his new administration.
To avoid that message, Europeans will likely need to form smaller coalitions of the willing that can present a unified pre-agreed message to Trump even if the EU-27 cannot. Various formats seem plausible and useful on different issues, particularly the recently resurrected Weimar Triangle that includes France, Germany, and Poland. A joint mission comprising those three leaders and perhaps the new (or renewed) European Commission president would send a powerful message of at least partial unity.
They should arrive conscious of their continued need for a US presence in Europe, but refrain from nostalgic soliloquys about the glories of the Atlantic alliance. History and sentiment will not move Trump, but hard-nosed, smart bargaining that leverages Europe’s existing assets might help. This group should also engage in some scenario planning like the above, preparing contingency policies that, even if they cannot be implemented in advance, will at least allow Europeans to respond quickly if any of these scenarios actually come to pass.
The sad fact is that think-tank speculation and hypothetical scenarios will not move Europe. Only the reality of a new Trump administration’s anti-alliance policies can do that. At that moment, Europe will be in crisis and European commentators will loudly lament that government should have prepared earlier and better for what so many had seen coming. But they will know in their hearts that Europeans will never voluntarily emerge from under the American security blanket. Someone will have to pull it off them.
About the authors
Célia Belin is a senior policy fellow at the European Council on Foreign Relations and head of its Paris office. She is a former visiting fellow at the Center on the United States and Europe at the Brookings Institution, in Washington, DC, and she briefly served as the interim director of the Center in 2022. She also served as an adviser on US affairs in the policy planning unit (CAPS) of the French foreign ministry between 2012-2017.
Majda Ruge is a senior policy fellow at the European Council of Foreign Relations in Berlin. Between 2017-2019, she was a research fellow at the Foreign Policy Institute, School of Advanced International Studies at Johns Hopkins University in Washington, DC.
Jeremy Shapiro is the director of research at the European Council on Foreign Relations and a non-resident senior fellow at the Brookings Institution. He served at the US State Department between 2009-2013.
Acknowledgements
We would first like to thank the future for liberating us from the never-ending monotony of covering current events and unleashing our creativity. The future is perhaps not what it used to be, but it remains an open canvas onto which we can paint both our hopes and our fears. Moving to more prosaic types of gratitude, the authors owe enormous thanks to Mark Leonard who moved (really forced) us to write this paper, then offered brutally effective critiques that delayed the paper’s publication. We would also like to thank Kim Butson for her diligent editing and for believing in us more than we believe in ourselves. We’d also like to thank Chris Herrmann for his limitless patience, dedication and support, as well as for demonstrating, jointly with Nastassia Zenovich, how stupid artificial intelligence is. Thanks to Susi Dennison, Janka Oertel, Nicu Popescu, Marie Dumoulin, Camille Grand, Camille Lons, and a broad range of very generous European and American officials for helping us with the scenarios. Any errors in this text are solely the fault of the future.
[1] Private conversations with European officials, Brussels, Berlin, Paris, and Washington, January-May 2024.
[2] Private conversations with European officials; Brussels, Berlin, Paris, and Washington; January-May 2024.
The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.
