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EU fears influx of Chinese goods amid Trump tariffs

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According to a report in the Financial Times (FT), analysts warn that discounted imports from China will increase the economic dangers to Europe from Donald Trump’s tariffs, prompting Brussels to prepare measures to protect itself from a wave of cheap goods from Asia.

The direct impact of the US President’s 20% tax on EU products has triggered fears about the outlook for bloc manufacturers, who are already struggling due to US taxes on automobiles and steel.

However, the severity of the tariffs Trump has imposed on economies such as China and Vietnam means that Brussels is on alert against the possibility of Asian-origin products such as electrical goods and machine tools being directed to its own markets.

Officials said the European Commission is preparing new emergency tariffs to respond to this and is increasing surveillance of import flows.

“The sudden trade shock to Asia will likely spill over to Europe as well,” said Robin Winkler, Deutsche Bank’s chief economist for Germany.

Chinese manufacturers will try to sell more of their products in Europe and elsewhere because they face “a tough tariff wall in the US.”

A senior EU diplomat said, “We will have to take protection measures for more of our sectors. We are very concerned that this will be another point of tension with China. I don’t think they will change their models of exporting excess capacity.”

The diplomat added that the EU already applies tariffs of up to 35% on Chinese-made electric vehicles, and Brussels may have to apply “much higher” tariffs on other products.

The EU is among the economies subject to a higher tax than the 10% basic tariff that the White House applies to all partners except Canada and Mexico, but China has been hit even harder.

While some commentators have noted that the tariffs could bring the EU and China closer together, Brussels has been on edge for months over the risk that Chinese manufacturers will try to increase their market share through discounts in the face of US obstacles.

Indeed, French President Emmanuel Macron warned that high taxes on Asian countries could lead these countries to direct their extra capacity to Europe, which could have “major consequences” for continental industries.

The EU had to struggle with similar pressures during Trump’s first term. Following Trump’s implementation of similar measures, Brussels imposed a 25% “safeguard” tariff on steel imports above a quota in 2018. The aim was to prevent exporters such as China from directing their products to the single market due to US barriers.

Officials say they are ready to take action again. A senior Commission official said, “We can close our markets due to an unexpected sudden influx of imports. We have been applying this to steel for some time and we will see if we need it for other sectors as well.”

However, previous experiences show how difficult it is to combat China’s subsidized production. According to the OECD, EU steel production shrank in 2024, while other countries continued to increase their production.

According to the OECD’s latest figures, global excess steel capacity, estimated at 602 million tons in 2024, is expected to reach 721 million tons in 2027, which is more than five times the EU’s steel production.

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Meloni government implicated in spyware scandal, claims victory in referendum failure

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Italian Prime Minister Giorgia Meloni experienced a significant setback followed by a major victory within the span of a week.

The setback originated from a parliamentary inquiry into the Israeli spyware, Graphite. The parliamentary committee confirmed that the government had utilized this spyware, developed by the offensive cyber company Paragon, to hack the smartphones of several activists working with migrants.

The committee verified that Paragon supplied Graphite to two Italian institutions, including the country’s foreign intelligence service, starting in 2023. According to the report, the version of Graphite provided did not include the capability to activate a phone’s microphone or camera. Instead, it allowed operators to access encrypted communications on the hacked devices.

The report also confirmed that Graphite exploited a vulnerability in WhatsApp, which Meta detected and fixed in December 2024, just one month before the spyware’s activities were publicly disclosed. A recent report on Israeli television revealed that the discovery of this vulnerability caused panic within Unit 8200, Israel’s military intelligence unit.

Government’s use of Israeli spyware confirmed

The Italian committee also confirmed Meta’s claim that the phones of several activists involved in migrant rights in Italy had been hacked. These activists included Luca Casarini, Giuseppe Caccia, and David Yambio. However, in Yambio’s case, the hacking was carried out by another, unnamed spyware, not Graphite.

According to the committee’s final report, the phone of investigative journalist Francesco Cancellato, known for his criticism of the country’s ruling party, was not hacked by Italian intelligence agencies. The report stated that these activists were legally monitored and that the use of spyware against them was coordinated with the relevant legal authorities in Italy.

Nevertheless, the committee recommended improving the oversight mechanisms that regulate the use of spyware in the country. It also emphasized that Casarini and Caccia were targeted in operations initiated by previous governments before Giorgia Meloni came to power.

Israeli company halts Italian intelligence access

Paragon developed the Graphite spyware, which has been sold to intelligence and law enforcement agencies in Israel, Europe, the US, and Singapore. In January, WhatsApp announced it had detected that approximately 100 user accounts were hacked using Paragon’s spyware.

The list of potential targets included civil society activists and an Italian investigative journalist who had exposed links between Prime Minister Giorgia Meloni’s party and neo-fascist movements.

Unlike Israel’s more famous spyware manufacturer, NSO, Paragon promotes itself as a “clean and responsible” company committed to human rights. This was the first time it faced backlash over allegations of misuse of its spyware, which allows states to access encrypted devices.

After Meta announced the WhatsApp hack, Paragon cut off the Italian intelligence agency’s access to its systems until the results of the ongoing parliamentary commission inquiry in Rome were released. According to a recent report by the Israeli television program Zman Emet (Real Time), Italian officials were so angered by Paragon’s decision that the Italian prime minister reportedly called Prime Minister Benjamin Netanyahu to demand an explanation.

Referendum boycott proves effective

Italy’s attempt to repeal significant labor and citizenship laws through five national referendums failed due to low turnout, which remained at 30%. This participation rate was well below the 50% required for the results to be valid.

According to the Italian Ministry of the Interior, approximately 30% of eligible voters participated in the two-day referendum, which aimed, among other things, to halve the time migrants must live in Italy before they can apply for citizenship.

Although polling was open on Sunday and Monday (June 8-9) until 3:00 PM, turnout never approached the constitutional threshold. The referendums—four concerning the protection of workers’ rights and one on reducing the residency requirement for non-EU citizens applying for Italian citizenship from 10 to 5 years—were declared invalid due to insufficient participation.

The referendum, supported by the left-wing opposition and activist groups, sought to repeal a 1992 law that had increased the residency requirement for non-EU foreigners from 5 to 10 years. Had the referendum succeeded, 2.5 million foreign migrants who have lived in Italy for five years or more would have been immediately eligible to apply for citizenship.

Among those who did vote, support for the “Yes” campaign was overwhelming: about 80% supported the changes to labor laws, while approximately 65% backed the citizenship proposal. However, because the quorum was not met, the results have no legal standing.

The referendum campaign began amid heated debates following Italy’s Olympic gold medal win last year with a women’s volleyball team composed of daughters of African immigrants.

Opposition blames government as ruling party declares victory

The opposition parties, which largely supported the referendums, accused the government of deliberately suppressing turnout by calling for a boycott, thereby discouraging voters from going to the polls. Forza Italia was particularly active in this tactic, drawing criticism for a social media post urging voters to “go to the beach” instead of the ballot box.

As soon as the failure was certain, Prime Minister Giorgia Meloni’s party, Fratelli d’Italia (Brothers of Italy), went on the offensive. The party shared an image of opposition leaders with the caption “You lost,” claiming the referendums were a veiled attempt to weaken the government.

Government officials framed the result as a broader endorsement of the status quo. Deputy Prime Minister Giovanbattista Fazzolari stated, “The opposition tried to turn the five referendums into a vote against the Meloni government. The result is clear: the government has emerged stronger, and the left weaker.”

Once it became clear the referendum would not reach a quorum, Deputy Prime Minister Matteo Salvini announced that his Lega party would push for stricter laws to make naturalization even more difficult. “Citizenship is not a gift,” Salvini said in a statement. “We want stricter and tougher rules to become an Italian citizen. A few more years of residence is not enough.”

In response, Pina Picierno, a Democratic Party deputy and Vice President of the European Parliament, described the outcome as a “deep, serious, and avoidable defeat.” She warned her own side against “political myopia,” adding, “Outside our bubble, there is a country that wants a future, not a settling of old scores.”

Italy’s state broadcaster, Rai, and other mainstream media outlets and newspapers almost completely censored coverage of the referendum. On the Sunday of the vote, the national newspaper headlines barely mentioned it.

Calls for reform from both sides

While the vote exposed Italy’s deep-seated political divisions, it also revealed a rare point of consensus: the current referendum system is facing increasing criticism. Representatives from both the government and the opposition have openly called for its reform, albeit for very different reasons.

Antonio Tajani, leader of Forza Italia and Deputy Prime Minister and Minister of Foreign Affairs, argued that issues put to a referendum should require more signatures and questioned the cost of the current system. “Perhaps the time has come to revise the law,” Tajani said. “Considering the money spent, for example, on the hundreds of thousands, even millions, of ballots sent abroad and returned blank, the signature threshold may need to be raised.”

These remarks drew sharp criticism from referendum supporters. Riccardo Magi, leader of +Europa and chairman of the citizenship referendum committee, called Tajani’s comments “literally shameful,” noting that the government showed no concern for the “much more expensive and scandal-ridden detention centers in Albania.”

“It is dangerous to play with public disillusionment,” Magi warned, announcing he would propose a constitutional amendment to abolish the turnout requirement.

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French automotive and defense firms to partner for Ukraine drone production

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The French government has requested that Renault produce unmanned aerial vehicles (UAVs) in Ukraine.

Under the proposed plans, the French automaker will collaborate with a small drone specialist to mass-produce UAVs. This marks the first time French companies will establish operations to manufacture weapons on Ukrainian soil.

According to the Financial Times, French Defense Minister Sébastien Lecornu told LCI television last Friday evening that the country’s automotive and defense companies would work together to set up production lines in a “completely unprecedented partnership” to supply Ukrainian forces with drones.

Renault confirmed that the French Ministry of the Armed Forces had contacted them. “Discussions have taken place, but no decision has been made at this stage as we are awaiting further details from the ministry regarding this project,” the company stated.

This move would signify the first time the automaker has produced defense equipment since the Second World War. Renault’s R35 tanks were famously unsuccessful against German Panzers during the Battle of France.

The initiative comes as drones have become a central element of Ukraine’s military strategy. UAVs played a key role in last week’s attack on Russian military airbases thousands of kilometers from Kyiv, demonstrating how drone technology is transforming military tactics.

The Ukrainian front line is dominated by UAVs, and the new French production lines will support the manufacturing of this critical equipment.

Lecornu stated that the potential withdrawal of US support for Ukraine has created a “moment of awakening,” necessitating that European countries provide more “robust” security guarantees to the nation.

Kyiv has been actively encouraging Western companies to invest in its defense industry and form joint ventures with local arms manufacturers. German arms producer Rheinmetall is currently building an ammunition factory in Ukraine, with production scheduled to begin next year, as announced by CEO Armin Papperger at the Munich Security Conference in February. The company already operates a facility in Ukraine for repairing foreign-made military equipment.

Kyiv has announced that it has attracted over 40 foreign defense companies to the country. In February, Ukrainian Minister for Strategic Industries Herman Smetanin revealed that the French aerospace and defense electronics group Thales had signed an agreement to establish a joint venture with the Ukrainian state-owned defense company Ukroboronprom.

Smetanin noted that the joint venture will focus on producing technological solutions in air defense, radar, electronic warfare, and tactical communications.

Last week, Lecornu described the decision for French companies to produce drones in Ukraine as a “win-win situation.” He argued it would also benefit the French military by providing “permanent tactical and operational training linked to the realities of this front line.”

Lecornu added that the production lines in Ukraine would employ local workers, eliminating the need for companies to send French personnel.

It remains unclear what type of UAVs Renault would produce if the plans are finalized.

This French initiative arrives at a time when the fortunes of Europe’s automotive and defense industries are diverging. While arms manufacturers are seeing a surge in orders as the continent increases its defense spending, the automotive sector is grappling with the transition from traditional engines to electric vehicles and intense competition from China.

In Germany, defense company Hensoldt has offered to hire laid-off workers from struggling auto parts suppliers, while Rheinmetall has expressed interest in acquiring idle car factories from Volkswagen.

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Ramstein format delivers massive military packages to Ukraine

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The 28th meeting of the Ukraine Defense Contact Group, held in the Ramstein format, concluded with unprecedented military support for Ukraine from its allies.

According to a statement from the Ukrainian Ministry of Defense, the security assistance to be provided this year is expected to exceed the figures from all previous years of the full-scale war.

Ukrainian Defense Minister Rustem Umerov stated after the meeting, “The 28th meeting of the Ukraine Defense Contact Group in the Ramstein format was another confirmation that partners remain reliable and determined in supporting Ukraine.”

Umerov emphasized that Ukraine achieved significant results, adding, “According to the outcomes of the meeting, our partners announced new aid packages and significant support measures.”

Record drone aid from Britain

Britain announced a record £350 million in aid for drone procurement. According to Minister Umerov, this will enable the delivery of 100,000 drones to Ukraine in 2025.

Overall, Britain’s military support in 2025 will amount to £4.5 billion, with £247 million of this sum allocated for the training of the Ukrainian Armed Forces.

Germany’s massive €5 billion package

Germany approved a new military aid package totaling €5 billion.

Umerov shared the information, stating, “The Federal Parliament (Bundestag) has already approved this decision.” The package will specifically include funding for long-range weapons to be produced in Ukraine, as well as the delivery of air defense systems, weapons, and ammunition.

Netherlands’ contribution to naval power

The Netherlands is providing an aid package worth €400 million. This package includes a mine countermeasures vessel, boats, and naval drones.

Belgium’s long-term commitment

Belgium announced a long-term initiative. Within this framework, €1 billion in annual aid will be provided to Ukraine until 2029, and a mine countermeasures vessel will be delivered.

Norway allocated $700 million for drones, focusing on Ukraine’s defense industry, and $50 million to the NSATU Trust Fund.

Canada allocated $45 million for drones, electronic warfare systems, IT solutions, and Coyote and Bison armored vehicles.

Sweden will contribute €440 million to international programs for the procurement of artillery ammunition, drones, and other weapons for Ukraine.

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