Why US Experts Hope Europe Will Stand Up to Trump

Canadian Prime Minister Mark Carney is urging the nation to accelerate its economic rebuilding and seek new global markets, signaling a strategic pivot as its trade relationship with a protectionist United States undergoes a fundamental shift.

Speaking in Quebec City, Carney addressed the challenges facing Canada as the U.S. moves in a starkly different direction on trade and foreign policy than it has in decades. The uncertainty is already having an impact, with tepid economic activity as Canadian businesses and households delay spending decisions pending clarity on the future of U.S.-Canada trade.

A Diplomatic Clash Over Economic Dependence

Carney's remarks follow a sharp exchange with U.S. President Trump. After the Canadian leader spoke at the World Economic Forum in Davos about the need for middle powers to counter economic coercion from "hegemons," Trump responded directly.

"Canada gets a lot of freebies from us," Trump said in Davos. "Canada lives because of the United States. Remember that Mark the next time you make your statements."

In his Quebec speech, Carney offered a direct rebuttal. "Canada and the United States have built a remarkable partnership in the economy, in security, and in a rich cultural exchange," he stated. "But Canada doesn't live because of the United States. Canada thrives because we are Canadian."

U.S. Commerce Secretary Howard Lutnick echoed Trump's sentiment, telling Bloomberg News that Canada has the "second-best trade deal in the world with the U.S., after Mexico," but that Carney chooses to "whine and complain."

Economic Uncertainty and the USMCA Factor

The core of the economic uncertainty lies in the upcoming renegotiation of the U.S.-Mexico-Canada trade treaty (USMCA). This agreement is critical for the Canadian economy, as it allows approximately 80% of its imports to enter the U.S. without tariffs.

Carney emphasized that Canadians are living in a "time of great consequence" and must "redouble our efforts" to strengthen their domestic economy. He framed the push for resilience as a choice to work together and build a unified Canadian economic front.

The China Variable Complicates Negotiations

Adding another layer of tension, U.S. officials have warned Canada about its deepening trade ties with China. Commerce Secretary Lutnick stated that this relationship would not be viewed favorably by Trump during the USMCA renegotiation and that Canada would ultimately have to choose between doing business with the U.S. or China.

This warning came just a week after Carney secured an agreement with Chinese leader Xi Jinping. That deal resolved trade irritants related to electric vehicles and agricultural products and included promises of increased Chinese investment in Canadian manufacturing.

Carney suggested Canada's path could serve as a global example. "We can't solve all the world's problems, but we can show that another way is possible," he said, "that the arc of history isn't destined to be warped towards authoritarianism and exclusion."

Venezuela is proposing a sweeping reform of its hydrocarbons law in a landmark effort to overhaul its struggling oil industry and attract critical foreign and local investment. Drafts of the proposal reveal a plan to give companies greater control over operations, including the ability to manage oilfields independently and directly commercialize their output.

This initiative, submitted to the National Assembly by interim President Delcy Rodriguez, aims to fundamentally change the oil law established under former President Hugo Chavez, signaling a significant pivot in the OPEC nation's energy policy.

Key Reforms: More Autonomy and Better Terms for Operators

The proposed changes are designed to offer more attractive and flexible conditions for companies operating in Venezuela. The core elements of the reform include:

• New Contract Models: The law would formalize production-sharing contracts, allowing companies to manage operations at their own risk and expense. Under this model, the state avoids acquiring debt, and companies are compensated with a percentage of the oil they produce.

• Flexible Royalty Rates: The government would gain the discretion to lower royalties and related taxes from 33% to 15% for special projects or those requiring massive investment. "These are fields that require large investments, but to achieve them, there must also be flexibility in royalties," explained lawmaker Orlando Camacho.

• Independent Arbitration: To resolve disputes, the reform introduces the option of independent arbitration. This has been a long-standing request from foreign companies following numerous lawsuits over asset expropriations.

This new framework would allow private firms, even as minority partners with the state-run company PDVSA, to receive proceeds from oil sales directly.

Political Momentum and International Context

The reform proposal has already cleared an initial hurdle, with lawmakers in the National Assembly approving it in a first vote. A second debate and vote are required for final approval.

During the session, National Assembly head Jorge Rodriguez urged legislators to support the changes to attract foreign capital, stating, "Oil beneath the ground is useless." No lawmakers present spoke out against the proposal.

This legislative push follows a 50-million-barrel oil supply deal between Caracas and Washington this month. The deal was agreed upon after the U.S. captured President Nicolas Maduro, giving the U.S. control over Venezuela's primary revenue source, according to U.S. President Donald Trump.

However, the National Assembly, which contains only a few opposition lawmakers, is not formally recognized by the United States due to questions about its legitimacy.

Investor Hopes Clash with Legal and Structural Risks

The proposed reforms directly address demands from oil executives and potential investors, who have been calling for more autonomy to produce, export, and manage cash flow. These demands are part of a broader $100 billion reconstruction plan for Venezuela's energy sector and reflect deep-seated concerns stemming from the nationalizations that occurred two decades ago.

Despite the potential benefits, independent lawyers have raised serious concerns. They warn that the reforms may conflict with Venezuela's Constitution, which reserves the oil industry's main activities for the state. Implementing the changes would also require scrapping numerous related laws passed under Chavez and Maduro.

Experts also point to potential confusion arising from the coexistence of two different operating models. The new production-sharing contracts would operate alongside the traditional joint-venture model, where PDVSA holds a dominant partnership role. This could complicate an industry that has already lost investors due to inflexible rules, nationalizations, and the impact of U.S. sanctions.

Donald Trump has filed a $5 billion lawsuit against JPMorgan Chase and its CEO, Jamie Dimon, alleging the bank illegally closed his accounts for political reasons.

The lawsuit, submitted in Miami-Dade County, Florida, claims the largest lender in the United States singled out Trump and his businesses to align with the prevailing "political tide." This action, the suit argues, directly violated JPMorgan's own stated policies.

JPMorgan Denies Allegations, Cites Regulatory Risk

JPMorgan Chase has pushed back against the accusations, stating the lawsuit has no merit while acknowledging Trump's right to sue.

In a formal statement, the bank asserted that it does not terminate customer relationships based on political or religious beliefs. Instead, JPMorgan explained that account closures are a necessary step when they pose a "legal or regulatory risk" to the company. "We regret having to do so but often rules and regulatory expectations lead us to do so," the bank clarified.

Trump's filing counters that the bank acted unilaterally and without warning, causing "extensive reputational harm" to him and his hospitality companies. The lawsuit claims being forced to seek new financial institutions made it clear that JPMorgan had "debanked" them.

The complaint also accuses Dimon, who has led JPMorgan for two decades, of orchestrating a "blacklist" to discourage other banks from doing business with the Trump Organization and family members. The suit describes this alleged blacklist as an "intentional and malicious falsehood."

The Broader "Debanking" Controversy in US Finance

This legal battle highlights a growing political flashpoint for the banking industry. Banks have faced mounting pressure, especially from conservatives, who argue that financial institutions are improperly adopting "woke" political stances. These critics claim banks have discriminated against controversial but legal industries, such as firearms and fossil fuels.

This pressure has intensified during Trump's second term, with the president claiming that some banks have refused to provide services to him and other conservatives—an allegation the banks have denied.

Last month, a U.S. banking regulator acknowledged that the country's nine largest banks had previously restricted financial services to certain industries in a practice often described as "debanking." In response to the administration's scrutiny, JPMorgan confirmed last year that it was cooperating with government inquiries into its policies and procedures.

A Clash Over Regulation and Rate Caps

The lawsuit arrives as the Trump administration and the banking sector find themselves at odds over other key policies. The industry strongly opposes Trump's proposal to cap credit card interest rates at 10%, a move Dimon has labeled an "economic disaster."

At the same time, many bankers have welcomed the administration's broader deregulatory agenda, which they believe will reduce red tape and stimulate economic growth.

Federal regulators have begun to loosen their oversight, announcing last year they would no longer police banks based on "reputational risk." This standard previously allowed supervisors to penalize institutions for activities that, while not illegal, could expose them to negative publicity or litigation. Banks have long complained that the reputational risk standard is vague and gives regulators too much discretion.

The industry has also called for updated anti-money laundering rules, which can require banks to close suspicious accounts without providing a reason to the customer.

As of Thursday afternoon, shares of JPMorgan Chase were trading up 1.2%. The lawsuit was first reported by Fox Business. The White House has stated it will refer the matter to the president's outside counsel.

Source: Reuters

The European Union is preparing to resume work on a major trade deal with the United States after President Donald Trump withdrew a recent tariff threat, according to European Parliament President Roberta Metsola.

"We are happy to see that the escalation is off the table for now," Metsola stated on Thursday. She explained that the development allows for the continuation of internal EU discussions on the trade agreement, which had been paused.

Talks Halted Over Tariff Threat

Earlier this week, the European Parliament decided to suspend its work on the transatlantic trade deal. The move was a direct response to fresh tariff threats issued by the Trump administration, reportedly connected to the U.S. president's attempt to acquire Greenland.

With that specific threat now removed, lawmakers are optimistic about restarting the legislative process.

Key Terms of the Proposed Agreement

The trade deal in question focuses on removing numerous EU import duties on U.S. goods. The framework for the agreement was established in Turnberry, Scotland, at the end of July.

A key component of the pact is the continuation of zero duties for U.S. lobsters, a policy first agreed upon with President Trump in 2020. The proposals require final approval from both the European Parliament and the governments of EU member states.

Lawmaker Concerns and Conditions

The deal has faced criticism from many lawmakers who argue it is lopsided. Their primary complaint is that the EU is expected to cut most of its import duties while the U.S. largely maintains a broad 15% tariff rate.

Despite these reservations, parliamentarians had previously seemed willing to accept the agreement, provided certain conditions were met. These included adding an 18-month sunset clause and establishing measures to counteract any potential surges of U.S. imports.

What Happens Next

The European Parliament's trade committee had been scheduled to vote on its official position on January 26-27 before the process was paused.

President Metsola noted that lawmakers are hopeful that discussions can resume soon, putting the trade deal back on its original track for approval.

The U.S. House of Representatives is set for a critical vote on Thursday to pass the last major government funding bills, racing against a January 30 deadline to prevent a partial federal shutdown.

Momentum for the package grew after it narrowly passed a key procedural hurdle earlier in the day. The 214-213 vote to establish rules for consideration suggests the measures have enough support to clear the chamber, with a final vote expected Thursday afternoon.

House Speaker Mike Johnson and Majority Leader Steve Scalise manage negotiations on the government funding package.

$1.2 Trillion at Stake in Final Funding Bills

This legislative package represents the largest portion of government spending, totaling approximately $1.2 trillion. The four bills are the final pieces of the 12 annual appropriations bills required to keep the government fully operational.

The funding covers several key federal departments, including:

• Defense

• Health and Human Services

• Homeland Security

• Labor

• Housing and Urban Development

• Transportation

• Education

Even if the bills pass the House, they must still be approved by the Senate, which does not return until next week, before heading to President Donald Trump for his signature. Lawmakers from both parties are eager to avoid a repeat of last year's record-setting 43-day shutdown.

Political Hurdles Complicate Bipartisan Push

Despite a general consensus to prevent a shutdown, specific provisions within the bills have created significant political friction, forcing leadership to navigate delicate compromises.

Homeland Security Funding Under Fire

Democrats have voiced strong opposition to the bill funding the Department of Homeland Security. The resistance follows the fatal shooting of a U.S. citizen in Minnesota by an Immigration and Customs Enforcement (ICE) agent earlier this month. Due to this political sensitivity, the Homeland Security bill is being considered separately from the other three.

Midwest Republicans Demand E15 Concession

Meanwhile, a group of Midwestern Republicans has been pushing for a provision to allow the year-round sale of gasoline with a high ethanol blend, known as E15. This fuel is typically restricted during summer months over concerns about smog, though waivers are common.

To secure their votes, House Republican leadership agreed to create a congressional "E-15 Rural Domestic Energy Council" to address their concerns, avoiding a direct change in the spending bill itself.

Looking ahead, President Trump commented to Fox Business on Thursday that he "think[s] we're going to probably end up in another Democrat shutdown," though he did not clarify if he was referring to the imminent January 30 deadline.