Competitiveness Check—October 31 Edition
The Quick Take
US President Donald Trump’s whirlwind tour through Asia yielded a flurry of new trade agreements. Deals were struck with Cambodia, Malaysia, Thailand, and Vietnam. So-called “technology and prosperity deals” were also signed with Japan and South Korea.
In a much-anticipated meeting between Trump and his Chinese counterpart, Xi Jinping, the two sides agreedto roll back some of the punitive measures they had imposed on each other earlier this year.
Meanwhile, Europe remains gridlocked over how to leverage €200 billion in frozen Russian central bank assets to support Ukraine. The debate exposes deeper fault lines in Europe’s ability to pool risk, raising questions about its readiness for broader initiatives such as a capital markets union or defense union. Read Penny Naas’ analysis here.
Top Five Transatlantic Trade-Related Developments
October 20: The European Commission proposed targeted measures to simplify compliance with the EU Deforestation Regulation. The rules will apply from December 30, 2026, for micro and small enterprises. Large and medium companies remain subject to the December 30, 2025 deadline, with a six-month grace period for checks and enforcement.
October 22: The United States announced new sanctions on Rosneft and Lukoil, Russia’s two largest oil companies, aiming to pressure Moscow into a ceasefire in Ukraine. Germany is reportedly considering nationalizing Rosneft’s local subsidiary in response to the sanctions.
The same day, the European Parliament voted against a negotiating mandate on the European Commission’s Omnibus Directive. The proposal aimed to simplify and streamline sustainability reporting and due diligence obligations under the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive.
October 23: Airbus, Leonardo, and Thales signed a memorandum of understanding to merge their space businesses.
The same day, the European Commission preliminarily found TikTok and Meta to be in breach of transparency obligations under the Digital Services Act. France’s National Assembly voted on October 28 to increase the digital services tax on major tech firms (Google, Apple, Meta, Amazon) from 3% to 6%, intensifying EU-US tech tensions.
October 27: The European Commission partnered with private investors to launch the multi-billion euro Scaleup Europe Fund, which aims to boost European tech competitiveness.
October 29: D66, Dutch politician Rob Jetten’s centrist liberal party, won Wednesday's tight election race.
The same day, the European Commission approved the Digital Commons European Digital Infrastructure Consortium (DC-EDIC), enabling member states to jointly develop open-source alternatives to widely used (non-European) software. France, Germany, the Netherlands, and Italy are founding members.
Meanwhile, a WTO arbitrator authorized the EU to impose $13.64 million in tariffs on US goods after the United States failed to comply with a ruling on countervailing duties on Spanish olives.
Figure of the Fortnight
90%: China’s share of global rare-earth refining capacity in 2025. The country controls almost all processing of heavy rare earths. It also controls 94% of sintered permanent magnet production, vital for cars, wind turbines, industrial motors, data centers, and defense systems.
Quote Unquote
“We are proud to have just concluded a Free Trade Agreement with Indonesia, our third such agreement with an ASEAN member, following those with Singapore and Vietnam. Negotiations with Thailand, the Philippines, and Malaysia are progressing well.… We must keep our regions linked, not just through trade, but also through deeper ties in areas like digital infrastructure, energy, and green transition.… Our partnership is long-term and strategic. Together, we are building a future of peace, prosperity, and stability. You can count on the European Union as a reliable, predictable and trustworthy partner.”
European Council President António Costa at the October 26 opening session of the 47th ASEAN summit in Kuala Lumpur
“I'm here on a mission of friendship and goodwill and to deepen our ties of commerce, to strengthen our common security, and to really promote strongly stability, prosperity, and peace for all of the countries in this room and long beyond this room. That's why I'm delighted that, in addition to the agreement with Malaysia this week, we're also signing or nearing completion on trade deals with many other Indo-Pacific partners, from Cambodia to Japan to South Korea. We're delighted to forge richer partnerships on energy technology, artificial intelligence, critical minerals, and other industries.… My message to the nations of Southeast Asia is that the United States is with you 100%, and we intend to be a strong partner and friend for many generations to come.”
US President Donald Trump at an October 26 working lunch at the 47th ASEAN summit in Kuala Lumpur