Europe
US secures multi-billion-dollar energy and AI deals at Three Seas summit in Dubrovnik
A struggle for influence is intensifying between the European Union and the United States in Central, Eastern and South-Eastern Europe, with the “Three Seas Initiative” (3SI) emerging as a primary arena for this geopolitical contest.
An analysis published by German Foreign Policy reveals that Western European nations and the EU are increasingly positioning renewable energy as a strategic counterweight to US liquefied natural gas (LNG) deliveries in the region.
At a 3SI summit convened in late April in the Croatian coastal city of Dubrovnik, representatives from the Trump administration met with officials from the 13 EU member states that comprise the initiative. The parties agreed on a series of new projects spanning energy supply, pipelines, artificial intelligence (AI), and digital infrastructure.
The immediate focus of these talks centred on new natural gas interconnectors for South-Eastern Europe and a massive AI project in Croatia carrying an estimated investment volume of €50 billion.
Originally established to modernise and expand infrastructure between the Baltic, Adriatic and Black Seas, the initiative has increasingly transformed into a vehicle for American power projection in Eastern and South-Eastern Europe.
Energy policy remains the critical battleground: whilst the Trump administration seeks to lock in long-term US LNG export markets, the EU is pushing to pivot the region towards renewable energy. Notably, investments targeting renewable energy systems were also approved during the Dubrovnik proceedings.
A brief history of the Three Seas Initiative
The Three Seas Initiative was launched in 2015 by Polish President Andrzej Duda and Croatian President Kolinda Grabar-Kitarović, holding its inaugural summit in Dubrovnik in August 2016. The platform comprises 13 EU member states stretching from the Baltic nations (Estonia, Latvia and Lithuania) through the Visegrád Group (Poland, Hungary, the Czech Republic and Slovakia) and Austria, down to Croatia, Romania, Bulgaria and Greece.
Albania, Montenegro, Ukraine and Moldova have subsequently associated themselves with the platform.
The initiative derives its name from its geographical objective: linking the Baltic, Adriatic and Black Seas through the territory of its member countries.
The creation of the 3SI was heavily driven by the United States. US strategists drew direct inspiration from an interwar Polish foreign policy concept formulated by Marshal Józef Piłsudski. Piłsudski’s “Intermarium” plan sought to unite Eastern European nations—spanning from the Baltic states to Yugoslavia and Romania—into a geopolitical bloc designed to act as an anti-Soviet bulwark.
In late 2014, the US think tank the Atlantic Council, collaborating with Central Europe Energy Partners (CEEP)—a lobby group representing energy companies in Poland, Lithuania and Romania—published an influential analysis. The report focused on developing a “North-South Corridor” extending from the Baltic Sea to the Adriatic and Black Seas.
The founding documents of the Three Seas Initiative explicitly reference this American strategic blueprint.
Washington has spent years utilising the 3SI to consolidate and expand its influence over the participant states. The cornerstone of this strategy is energy policy, specifically aimed at substituting imports of Russian pipeline gas with US-sourced LNG.
A North-South corridor to bypass the East-West axis
To achieve this geopolitical shift, the Three Seas Initiative seeks to expand the infrastructure of Eastern and South-Eastern Europe by adding robust north-south transport and energy links. Since 1990, infrastructural development in the region had run predominantly on an east-west axis, prioritising integration with Germany at the heart of the EU.
Constructing a north-south network will not only facilitate the distribution of US LNG imported via Adriatic and Baltic ports, but also foster a more autonomous regional infrastructure. By reducing reliance on road and rail networks terminates in Germany, the project threatens a significant dilution of Berlin’s economic and political leverage in the region.
Following the EU’s commitment to phase out Russian gas imports entirely by 2027, the strategic weight of LNG terminals and their corresponding north-south pipelines has steadily grown.
This structural dependency is visible within Germany itself. According to the Federal Ministry for Economic Affairs and Climate Action, approximately 96% of the LNG imported via German North Sea and Baltic terminals in 2025 originated from the US. This US supply accounts for 10.3% of Germany’s total gas imports.
German-American friction in South-Eastern Europe
The struggle for influence in Eastern Europe, and the decisive role of energy transit within it, was recently illustrated by a leadership crisis in Bosnia and Herzegovina surrounding the German diplomat Christian Schmidt, the international community’s High Representative.
Schmidt’s eventual resignation was precipitated by intense political maneuvering between certain Western European nations—led by Germany—and the Trump administration, which has been actively pursuing gas and raw material agreements in Bosnia and Herzegovina.
Having successfully pressured Schmidt to step down, the US proposed Italian diplomat Antonio Zanardi Landi as his successor. The nomination served to drive a wedge between EU member states, with Germany opposing Washington’s preferred candidate whilst Italy offered its support. President Trump warned that Washington would halt financial assistance to Bosnia and Herzegovina if the US plans were thwarted.
The move aligns with a new US strategy for South-Eastern Europe submitted by the Trump administration to Congress in May. The updated policy pivots away from “democracy promotion,” focusing instead on security and securing market access for American corporations.
Historically, Bosnia and Herzegovina has relied on Russian natural gas delivered via the TurkStream pipeline. Washington aims to replace this supply with US LNG imported through a terminal on the Croatian island of Krk.
The proposed infrastructure plans involve constructing a new pipeline extension into Bosnia and Herzegovina, to be built by US engineering firm Bechtel alongside AAFS Infrastructure and Energy. Schmidt had increasingly been viewed by US officials as an obstacle to these plans.
A victory for the Trump administration at the 3SI summit
In late April, Dubrovnik hosted the 10th anniversary summit of the 3SI alongside an aligned Business Forum. The event drew high-level participation, including seven presidents and prime ministers from 3SI member states, numerous cabinet ministers, and senior representatives from the Trump administration.
At the forum, the US successfully leveraged multi-billion-dollar energy and technology projects to entrench its footprint in South-Eastern Europe.
US Secretary of Energy Chris Wright declared in Dubrovnik: “The United States is ushering in a new era of cooperation for Central and Eastern Europe. This partnership is built on our mutual support for an aggressive energy expansion agenda.”
To formalise this initiative, Wright, Croatian Prime Minister Andrej Plenković and the Chairwoman of the Council of Ministers of Bosnia and Herzegovina, Borjana Krišto, signed a memorandum of understanding to launch the “Trump Peace Pipelines Framework”.
The agreement directly advances the “Southern Interconnection” project, which will link Bosnia and Herzegovina’s gas grid to the Croatian network and the Krk island LNG terminal.
At the summit, Polish Climate and Environment Minister Miłosz Motyka also emphasized the region’s commitment to expanding nuclear energy, calling it the “cornerstone of our new security architecture.”
Parallel to these energy agreements, American investors announced plans to build a massive AI and data centre hub in Croatia. The Pantheon Atlas investment group signed a memorandum of understanding with the Croatian firm Končar Group to construct an AI campus.
The total investment is projected at approximately €50 billion—a sum exceeding half of Croatia’s annual gross domestic product (GDP).
The gigawatt-scale power capacity required to run the data centre is comparable to the electricity demand of a major metropolitan area like Zagreb. To meet its current power requirements, Croatia relies heavily on natural gas, much of which is imported through the Krk LNG terminal.
Foreign policy implications of the energy transition
The Dubrovnik summit also marked the establishment of a new regional infrastructure fund. The vehicle is designed to finance joint investments in hydrogen production, cross-border transport infrastructure, renewable energy systems and electrical grid expansion, with at least €2 billion earmarked for initial projects.
By comparison, more than €4 billion was invested in natural gas infrastructure within the region between 2016 and 2025.
This gradual shift toward renewable energy introduces a distinct foreign policy dynamic. While LNG supplies are overwhelmingly dominated by imports from the US, the hardware and technology required to deploy renewable energy infrastructure do not carry the same transatlantic dependency. In the vast majority of cases, this technology is manufactured and supplied from within Europe itself.
Europe
European industry urges EU action against China trade practices
A coalition of 44 European industrial associations has urged the EU to take tougher action against what they describe as “unfair Chinese trade practices”.
The associations, representing sectors such as metals, chemicals, and automotive components, stated that these practices threaten European manufacturing and could trigger further job losses.
The groups demanded that EU member states deploy existing trade defence instruments more effectively and introduce new mechanisms to redress market distortions.
The appeal comes as the EU grapples with a goods trade deficit with China exceeding €1 billion per day. In this context, EU Trade Commissioner Maroš Šefčovič travelled to Beijing to hold talks with his Chinese counterpart.
European leaders are scheduled to debate the bloc’s response at a summit in Brussels next Thursday.
The outcome of the discussions in Beijing appears poised to shape that debate substantially.
In their appeal, the industrial groups urged the European Commission to examine entire value chains when reviewing trade complaints and to recruit additional staff to resolve cases more swiftly.
They also called for new tools to counter state-driven market distortions, whilst warning against measures that could adversely affect close European partners such as the UK, Norway, and Switzerland.
EU Trade Commissioner in Beijing
The purpose of Maroš Šefčovič’s two-day visit to Beijing is to secure concessions from China to help reduce the trade imbalance.
Discussions with Chinese Commerce Minister Wang Wentao focused on vehicle exports that are growing increasingly prevalent across the European market, particularly plug-in hybrid cars.
According to a Politico report published on Thursday, one in eight cars purchased in the EU in August was of Chinese origin, a trend driven primarily by a surge in plug-in hybrid sales.
The EU introduced additional countervailing tariffs on Chinese-origin battery electric vehicles in 2024, but plug-in hybrids were excluded from the scope of those measures.
European negotiators aim to restrict China’s exports in this sector in some manner.
According to Politico’s reporting, if meaningful commitments fail to emerge from the negotiations, the European Commission is considering the imposition of unilateral trade restrictions on cars, including import quotas and tariffs, to protect European carmakers.
The EU is also preparing protective measures for other industrial sectors. European Industrial Commissioner Stéphane Séjourné said the Commission plans to introduce targeted safeguards for plastics and composite materials, depending on demand from EU governments.
Germany urges UK to raise tariffs
According to a source close to Berlin’s stance who spoke to Politico, Germany wants the UK to raise tariffs on Chinese-origin electric vehicles in exchange for an exemption from “Made in Europe” rules.
The source stated that the government of Friedrich Merz believes this move would reflect reciprocity in trade and serve as an answer to accusations from other EU member states that Britain is attempting to “cherry-pick” the benefits of EU membership.
The development follows Prime Minister Andy Burnham’s meeting with the German Chancellor during his first official visit to Germany this week.
Burnham and Merz were set to discuss the prospects of Britain’s future relationship with the EU, as the British prime minister has returned the issue of rejoining the bloc to the UK political agenda for the first time in a decade.
Berlin’s position on electric vehicle tariffs is significant because Germany, unlike countries such as France that have adopted tougher stances, had generally pursued an accommodating policy towards the UK on trade issues since Brexit.
In response to the trade practices of rivals such as China and the US, the EU is preparing new “Made in Europe” rules designed to favour European manufacturers over producers outside the bloc.
The UK fears these measures could harm British business, particularly car manufacturers, and is seeking assurances from Brussels that it will be exempted from the application of these rules.
If Berlin has its way, these assurances could be contingent upon adopting EU trade policy regarding Chinese-origin electric vehicles.
Europe
German exports pivot to Eastern Europe amid drops in US and China
Central and Eastern Europe is becoming increasingly vital for the German export sector amid declining shipments to China and the US.
While German exports to the world’s two largest economies have dropped significantly in recent times, rising exports to Central and Eastern Europe have more than offset these losses.
Trade with the Visegrad Group countries in particular is expanding with considerable strength, according to German Foreign Policy.
In the first half of 2026, German exports to Poland grew by 9.2%, while exports to the Czech Republic rose by 14%.
During the same period, exports to China fell by 12.4%, and exports to the US contracted by 6.5%.
Germany currently exports nearly 50% more goods to Poland than it does to China.
The German Eastern Business Committee describes the region as a “key region for German exports” and is demanding the expansion of the EU single market through the admission of eastern and south-eastern countries into the EU.
At the same time, China’s economic influence in Eastern Europe is also expanding. However, Chinese companies are not merely competing with German firms; they are also becoming increasingly integrated into European production chains.
The EU and its neighbourhood carry great weight for German industry
An intensifying international competitive environment is elevating the importance of the EU single market for the German export sector.
In 2024, just under 54% of all German goods exports went to EU member states. In 2019, this share stood at approximately 51%.
The five largest export markets within the EU in 2024 were France, with goods valued at 111 billion euros; the Netherlands, with 105 billion euros; Poland, with 90 billion euros; Italy, with 78 billion euros; and Austria, with 72 billion euros.
Approximately 52% of Germany’s exports to the EU consisted of intermediate goods, such as metals, basic chemicals, or electrical components, which undergo further processing in other EU countries, often at the foreign facilities of German companies.
Capital goods, such as machinery and equipment, accounted for 17% of exports, while consumer goods comprised approximately one-third.
The growing concentration on Europe carries certain risks. Because the German economy had diversified its trade heavily towards Asia, it was less affected by the eurozone crisis than other EU member states.
The decline in this geographical diversification heightens the vulnerability of the German export model to crises.
The export boom in Eastern Europe
Central and Eastern European countries in particular managed to compensate for the declines in exports to China and the US.
One reason for these declines is that the People’s Republic of China has begun producing domestically many high-tech products previously imported from Germany; another is that exports to the US were adversely affected by Trump’s tariffs.
Cathrina Claas-Müller, chairwoman of the German Eastern Business Committee (OA), told the Handelsblatt newspaper: “Central and Eastern Europe has become a key region for German exports.”
While the volume of German exports to China and the US fell overall by just over 10 billion euros, Central and Eastern Europe more than made up for these drops with an increase of approximately eleven billion euros.
Claas-Müller emphasised that “Central and South-Eastern Europe […] cannot, of course, replace China and the US.” However, she stated that recognizing the region’s importance for Germany’s economic development is vital.
For this reason, the chairwoman argued that the European single market must be expanded rapidly towards the east and south-east so that the region’s potential can be utilized in the best possible way, even beyond existing EU borders.
The OA chairwoman stressed that progress in EU accession negotiations conducted with Ukraine, Moldova, and the Western Balkan countries must be “courageously seized.”
Germany’s industrial core: the Visegrad countries
Within Central and Eastern Europe, the Visegrad countries (Poland, Hungary, the Czech Republic, and Slovakia) occupy a prominent position.
These countries have become some of the most critical manufacturing hubs worldwide for German industry.
From Germany’s perspective, these countries offer several investment advantages: geographical proximity to Western Europe, a well-developed industrial infrastructure, an extensive pool of skilled labour, and relatively low wage levels.
German companies maintain a strong presence in this region across core sectors such as mechanical engineering and the automotive industry, alongside the chemical and electrical sectors.
In the first half of 2026, German exports to China fell by 12.4% compared with the same period of the previous year, while exports to the US declined by 6.5%.
In contrast, German exports to Hungary rose by 6.7%, exports to Poland grew by 9.2%, and exports to the Czech Republic increased by up to 14%.
From January to June, Germany exported goods worth 53.8 billion euros to Poland. Exports to China, by comparison, reached only 36.3 billion euros.
This means Germany exported nearly 50% more goods to Poland than to China.
Poland has ranked as the fourth most important market for German companies since 2024; China currently sits in only ninth place.
Even the Czech Republic, a much smaller country, came close to China with 30.3 billion euros in German exports.
Poland between Germany and China
At the same time, Poland is also increasing its imports from China.
In the first half of the year, the country imported German goods worth 43.1 billion euros (18.6% of total imports) and Chinese goods worth 36.7 billion euros (15.9% of total imports).
The US ranked third, with imports valued at 12.7 billion euros (5.5% of total imports).
In July, for the first time, more goods were shipped to Poland from China than from Germany.
A tripartite trade pattern is becoming increasingly pronounced in Poland: China is gaining importance as a supplier of electronics, automobiles, and other consumer goods, while Germany retains its central position in terms of investments and European production chains.
In parallel, Germany remains the undisputed leader when it comes to Polish exports: Poland exported goods worth 59.7 billion euros to Germany. This figure constitutes 26.3% of Poland’s total goods exports.
Czechia and France follow, each accounting for approximately 14 billion euros.
Competition and division of labour between Germany and China
Chinese companies in Central and Eastern Europe are not solely competing with German firms.
This dynamic is clearly visible in the German automotive industry’s network in Hungary. In 2022, Contemporary Amperex Technology (CATL), the Chinese firm that is the world’s largest battery manufacturer, announced that it would establish a new factory in Debrecen in eastern Hungary.
CATL also supplies batteries to companies including BMW, Mercedes, Volkswagen, and Stellantis, which manufacture in Hungary as well.
In 2023, other Chinese companies, such as Huayou Cobalt and Sunwoda Electronics, also invested in Hungary.
In 2024, Eve Energy joined this trend by establishing a factory to supply BMW.
The integration of Chinese car manufacturers and suppliers into European automotive production has now become a widespread strategy to address the automotive crisis.
In Spain, France, and Italy, Stellantis plans to utilise idle production capacity by building models for Chinese companies Leapmotor and Dongfeng. Leapmotor models will be produced at Stellantis plants in Madrid and Zaragoza.
Plans in France call for the joint production of an electric car with Dongfeng, while in Italy, joint production of a compact electric car with Leapmotor is planned.
Production of an Opel SUV using Chinese technology is also planned in Madrid.
Volkswagen’s new strategy likewise aims to produce VW models previously sold only in China for the European market.
The plan to bring its Chinese models to the European market involves both imports from China and, at a later stage, the manufacturing of the vehicles or their components in Europe.
General decline in German exports
German exports contracted unexpectedly in August due to a sharp drop in shipments to the US.
This development revealed that momentum in the eurozone’s largest economy waned following a robust first half of the year.
According to data released on Thursday by the Federal Statistical Office, exports fell by 0.8% compared with the previous month.
The outcome fell short of the 0.6% increase forecast in a Reuters poll.
Carsten Brzeski, global head of macroeconomics at ING, said: “Trade is the area where Germany’s resilience is faltering.”
Brzeski noted that while German exporters benefited in the second quarter from Asian rivals being more heavily affected by the closure of the Strait of Hormuz, the third quarter has so far experienced a setback.
Volker Treier, head of foreign trade at the Association of German Chambers of Commerce and Industry (DIHK), said: “The current decline shows that the recovery in exports is merely a light breeze.”
Imports rose by 0.9% on a calendar- and seasonally adjusted basis compared with July.
Consequently, Germany’s trade surplus narrowed from 21.6 billion euros in July to 19.5 billion euros in August.
Despite rising prices caused by the Iran crisis and uncertainty triggered by US tariffs, the German economy demonstrated resilience in the first half of the year.
Germany grew by 0.4% in the first quarter and by 0.3% in the second quarter.
Europe
Berlin Left Party backs Israel’s right to exist for coalition pact
Following its victory in the Berlin state election, the Left Party (Die Linke) agreed to a series of binding decisions regarding antisemitism and Israel during coalition negotiations with the Social Democratic Party (SPD) and the Greens.
Accused of antisemitism across mainstream political and media circles over the stances of certain members, the party announced that it explicitly rejects the BDS movement and recognises “Israel’s right to exist”.
A joint declaration issued by the three parties stressed Berlin’s “historical responsibility to protect Jewish life, safeguard the open freedom of religious expression, allocate resources for security measures at Jewish institutions (personnel and infrastructure improvements), and support Jewish and Israeli students, academics, and cultural projects.”
The statement further indicated that the parties would “commit to preserving historical memory, supporting memorial sites, and vastly expanding efforts to prevent antisemitism in schools, teacher training, and youth work.”
While “Israel’s right to exist” was reaffirmed, the suffering and devastation endured by the Palestinian civilian population in Gaza and the West Bank were also “explicitly acknowledged.”
In their joint statement, the parties affirmed that “legitimate criticism of the Israeli government does not justify antisemitism, and vice versa.”
The Left Party explicitly rejected the BDS (Boycott, Divestment, Sanctions) movement, ruling out any cooperation with or public participation alongside organisations and actors that spread antisemitism, glorify violence, or fuel conflict.
Clear internal party and parliamentary group mechanisms will be established to address infractions by members who breach these principles, ranging from disciplinary sanctions to expulsion from the parliamentary group.
Furthermore, the three parties proposed an amendment to the Berlin State Constitution, modelled on the example of Brandenburg, to enshrine explicit constitutional protections against antisemitism, antiziganism, racism, and other forms of group-focused enmity.
The first casualty of Berlin’s prospective red-red-green coalition could be Left Party lawmaker Vanessa Emde. The 45-year-old Emde was elected in the Nord-Neukolln constituency after securing 46.2% of the first-preference votes.
According to Tagesspiegel, Emde remains a contentious figure even within the Left Party due to her pro-Palestinian views, and some party members have considered expelling her from the parliamentary group to avoid jeopardising the coalition with the SPD and the Greens.
During the election campaign, Emde drew scrutiny for anti-Israel statements and opposed the Left Party’s entry into government.
On election night, she was photographed with Ibrahim Ibrahim, an individual alleged to have ties to the PFLP.
Emde is also a member of the internal party working group “Palestine Solidarity” and, according to reports, stated in May 2026: “States do not have a right to exist; it is human beings who have a right to exist.”
In this context, Emde has expressed support for a “one-state solution” across Israel and Palestine.
As noted in reports, Emde’s remark was perceived within the Left Party as an argument in favour of a “Greater Palestine”, running counter to the party’s official recognition of “Israel’s right to exist”.
Emde’s statements could therefore be deemed a breach of this commitment, particularly as all Left Party candidates signed a pledge during the election campaign binding them to the party and electoral platform.
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