EU imposes new sanctions on Russia after Robert Fico lifts his veto
The sanctions, endorsed on Friday by ambassadors in Brussels, ban all transactions with 22 Russian banks, the Russian Direct Investment Fund and its subsidiaries, and the direct and indirect use of the underwater Nord Stream pipelines, which are currently closed off but which Moscow seeks to restart at some point in the future.
Additionally, the EU transforms the price cap on Russian crude oil, fixed at $60 per barrel since December 2022, into a dynamic mechanism that will remain 15% lower than the average market price, according to diplomatic sources.
The new cap will kick in at $47.6 per barrel and be automatically adjusted every six months, with the possibility of ad-hoc tweaks if the market fluctuations require.
The United States, a chief proponent of the price cap at the G7 level during the previous administration, has not supported the downward revision.
Moreover, a further 105 vessels belonging to the "shadow fleet", the old-age tankers that Moscow employs to bypass the price cap, are denied access to EU ports and EU services. This brings the "shadow fleet" blacklist to more than 400 vessels.
In a key change to plug a notorious loophole, the EU has decided to forbid the imports of petroleum products made by refining Russian crude and sold across the bloc under a different label. These mostly come from India and Turkey.
The restrictions also target 11 companies outside Russia accused of enabling circumvention, including four in mainland China and three in Hong Kong.
The deal represents the 18th package of sanctions since February 2022. High Representative Kaja Kallas called it one of the "strongest" packages to date.
"We are striking at the heart of Russia's war machine," said Ursula von der Leyen, the president of the European Commission.
"The pressure is on. It will stay on until Putin ends this war," she added.
The political breakthrough was made possible only after Slovakia relented and lifted its veto, which had until now prevented the approval of the new sanctions.
The Slovak opposition related to an entirely different matter: the proposed phase-out of all Russian fossil fuels by the end of 2027.
The European Commission unveiled the roadmap in May and presented the draft legislation in June, based on gradual bans on short-term and long-term gas contracts.
As a landlocked country, Slovakia vociferously protested the plan, warning it would raise prices for consumers, weaken competitiveness and endanger energy security. Since the phase-out is subject to a qualified majority, Bratislava resorted to sanctions, which require unanimity, to extract concessions from Brussels.
During an EU summit last month, Slovak Prime Minister Robert Fico upped the ante with a series of demands for financial compensation that were not met.
Fico said his country risked facing a lawsuit from Gazprom, Russia's gas monopoly, worth between €16 and €20 billion due to the termination of its long-term contract, which runs until 2034. The Commission, by contrast, argues the gas bans will act as "force majeure" in court and shield governments and companies against damages.
Fico's solitary crusade
The deadlock intensified dialogue between Bratislava and Brussels, with a focus on practical solutions to diversify Slovakia's energy mix away from Russia, strengthen connections to neighbouring countries and mitigate price volatility.
Fico welcomed the outreach as "constructive" but held his ground, surprising diplomats who thought the veto would be lifted sooner. German Chancellor Friderich Merz and Polish Prime Minister Donald Tusk intervened to break the impasse.
On Tuesday, von der Leyen sent Fico a three-page letter with reassurances about the implementation of the phase-out, including the possible deployment of state aid and EU funds to "compensate the negative impacts for households and industry".
Von der Leyen also promised to clarify the criteria to trigger the "emergency break" and temporarily suspend the application of the gas bans in case of "extreme price spikes".
The letter did not mention a tailor-made financial envelope for Slovakia.
"We have been working closely wth member states most directly concerned, notably Slovakia, to ensure that the EU-wide phase-out of Russian energy imports will be gradual and well-coordinated across the Union," von der Leyen wrote.
According to Fico, who posted the entire confidential letter on his social media, von der Leyen's offer was flat-out rejected by his coalition partners.
"Their response is that the Commission's guarantees to Slovakia are insufficient – some even described them as NOTHING," he said.
He then demanded a complete exemption from the phase-out to continue buying Russian gas until the contract with Gazprom ends in 2034.
But a few days later, amid mounting pressure, Fico gave up his veto.
"At this point, it would be counterproductive to continue blocking the 18th sanctions package," he said on Thursday evening. "All options have been exhausted for now, and remaining in our blocking position would already endanger our interests."
The Slovak, however, vowed to continue his crusade against the "ideologically and obsessively anti-Russian" phase-out, as he called it.
"The second stage of our battle with the European Commission on the issue of Russian gas begins," he said. "We have a clear plan for fulfilling our national interests."
The deal on the new sanctions comes as US President Donald Trump hardens his rhetoric against Vladimir Putin, pledging to send lethal aid to Ukraine and impose "severe tariffs" on Russia, a major shift that was immediately welcomed across Europe.
The White House, however, has so far refused to endorse a lower price cap on Russian oil, leaving other G7 allies to go it alone. For Brussels, the participation of the UK was considered fundamental due to its dominant position in maritime insurance.
This article has been updated with more information.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
France 24
2 hours ago
- France 24
State of play in Trump's tariffs, threats and delays
Here is a summary of duties President Donald Trump has introduced in his second term as he pressures allies and competitors alike to reshape US trade relationships. Global tariffs US "reciprocal" tariffs -- imposed under legally contentious emergency powers -- are due to jump from 10 percent to various steeper levels for a list of dozens of economies come August 1, including South Korea, India and Taiwan. The hikes were to take effect July 9 but Trump postponed them days before imposition, marking a second delay since their shock unveiling in April. A 10 percent "baseline" levy on most partners, which Trump imposed in April, remains in place. He has also issued letters dictating tariff rates above 10 percent for individual countries, including Brazil, which has a trade deficit with the United States and was not on the initial list of higher "reciprocal" rates. Several economies -- the European Union, Britain, Vietnam, Japan, Indonesia and the Philippines -- have struck initial tariff deals with Washington, while China managed to temporarily lower tit-for-tat duties. Certain products like pharmaceuticals, semiconductors and lumber are excluded from Trump's "reciprocal" tariffs, but may face separate action under different authorities. This has been the case for steel, aluminum, and soon copper. Gold and silver, alongside energy commodities, are also exempted. Excluded too are Mexico and Canada, hit with a different set of tariffs, and countries like Russia and North Korea as they already face sanctions. Canada, Mexico Canadian and Mexican products were hit by 25 percent US tariffs shortly after Trump returned to office, with a lower rate for Canadian energy. Trump targeted both neighbors over illegal immigration and fentanyl trafficking, also invoking emergency powers. But trade negotiations have been bumpy. This month, Trump said Canadian goods will face a higher 35 percent duty from August 1, and Mexican goods will see a 30 percent level. Products entering the United States under the USMCA North American free trade pact, covering large swaths of goods, are expected to remain exempt -- with Canadian energy resources and potash, used as fertilizer, to still face lower rates. China focus Trump has also taken special aim at China. The world's two biggest economies engaged in an escalating tariffs war this year before their temporary pullback. The countries imposed triple-digit duties on each other at one point, a level described as a trade embargo. After high level talks, Washington lowered its levies on Chinese goods to 30 percent and Beijing slashed its own to 10 percent. This pause is set to expire August 12, and officials will meet for further talks on Monday and Tuesday in the Swedish capital Stockholm. The US level is higher as it includes a 20 percent tariff over China's alleged role in the global fentanyl trade. Beyond expansive tariffs on Chinese products, Trump ordered the closure of a duty-free exemption for low-value parcels from the country. This adds to the cost of importing items like clothing and small electronics. Autos, metals Trump has targeted individual business sectors too, under more conventional national security grounds, imposing a 25 percent levy on steel and aluminum imports which he later doubled to 50 percent. The president has unveiled plans for a 50 percent tariff on copper imports starting August 1 as well and rolled out a 25 percent tariff on imported autos, although those entering under the USMCA can qualify for a lower rate. Trump's auto tariffs impact vehicle parts too, but new rules ensure automakers paying vehicle tariffs will not also be charged for certain other duties. He has ongoing investigations into imports of lumber, semiconductors, pharmaceuticals and critical minerals that could trigger further duties. Legal challenges Several legal challenges have been filed against the tariffs Trump invoked citing emergencies. The US Court of International Trade ruled in May that the president had overstepped his authority, but a federal appeals court has allowed the duties to remain while it considers the case. If these tariffs are ultimately ruled illegal, companies could possibly seek reimbursements. © 2025 AFP
France 24
2 hours ago
- France 24
What is the status of US tariff negotiations?
Many of these tariff hikes were part of a package first announced in April, under which dozens of economies were due to face higher levies -- up from a 10 percent level -- over their trade surpluses with the United States. The twice-postponed deadline for duties to take effect is now Friday, August 1. But Washington has expanded its group of targets coming up against these tariffs, while announcing agreements with the European Union, Britain, Vietnam, Japan, Indonesia and the Philippines. A deal with the European Union unveiled on Sunday sees a 15 percent tariff imposed on European exports to the United States, down from the 30 percent that Trump earlier threatened. Where do other US trade talks stand? South Korea: Heightened pressure Seoul is racing to reach a deal with Washington, as Tokyo's success in landing an agreement has "amped up the pressure for South Korea," a government source told AFP. Local media reported that Seoul was preparing to propose more than $100 billion in investment as part of a broader agreement, with expected participation by major firms such as Samsung and Hyundai Motor. The South Korean government did not confirm this. But South Korean officials have outlined proposals to deepen collaboration in sectors like shipbuilding, semiconductors and batteries. National Security Advisor Wi Sung-lak has told reporters that the two countries are in "the final and most crucial phase of negotiations" to avert Trump's proposed 25 percent duty. India: Cautious optimism Indian Commerce Minister Piyush Goyal told Bloomberg Television Thursday that he was optimistic his country could reach an agreement with the United States to avert Washington's 26 percent tariff threat. Goyal insisted there were not any sticking points in the US-India relationship or in trade talks, and clarified that immigration rules —- including those around H-1B visas for skilled workers -- had not come up in negotiations. Despite Goyal's remarks, local media reported the prospects of an interim deal before August 1 had dimmed. Taiwan: Working hard Taiwanese Premier Cho Jung-tai said Thursday that officials are "working hard" on negotiations, amid worries that an unfavorable tariff level could hit the self-ruled island's economy. Vice President Hsiao Bi-khim said Taipei's negotiating team was "working almost 24 hours a day to achieve trade balance and Taiwan's industrial interests, and even to further deepen cooperation." Canada, Mexico: Deal unclear Although Canada and Mexico were spared from Trump's "reciprocal" tariffs announced in April, goods from both countries entering the United States generally face a separate 25 percent duty if they fall outside a North American trade pact. This figure stands to jump to 30 percent for Mexico come August 1, while the level for Canada was set at 35 percent. Mexican President Claudia Sheinbaum said her administration was "doing everything" possible to avert the duties and that she would speak with Trump if necessary to try to reach a pact. Trump told reporters Friday there was no deal with Canada so far. Brazil: Political nature Brazil is girding for a virtual trade embargo on its planes, grains and other goods if Trump's threatened 50 percent tariff on its exports takes effect on August 1. The United States runs a trade surplus with Latin America's biggest economy, which was not originally expected to face steeper tariffs under Trump's "reciprocal" duties plan. Trump has not attempted to hide the political motivation in targeting Brazil, citing a judicial "witch hunt" against his right-wing ally, former president Jair Bolsonaro, when he unveiled the tariff rate. The political nature of the spat makes a last-minute deal appear less likely. burs-jug-bys/sst © 2025 AFP
Fashion Network
6 hours ago
- Fashion Network
US, China to resume tariff talks in effort to extend truce
The Stockholm talks, led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, come right on the heels of Trump's biggest trade deal yet, with the European Union accepting a 15% tariff on its goods exports to the U.S. and agreeing to make significant EU purchases of U.S. energy and military equipment. That deal struck with European Commission President Ursula von der Leyen on Sunday in Scotland also calls for $600 billion in investments in the U.S. by the EU, Trump told reporters. No similar breakthrough is expected in the U.S.-China talks, but trade analysts said that another 90-day extension of a tariff and export control truce struck in mid-May was likely. An extension of that length would prevent further escalation and help create conditions for a potential meeting between Trump and Chinese President Xi Jinping in late October or early November. Spokespersons for the White House and U.S. Trade Representative's office did not immediately respond to requests for comment on a South China Morning Post report quoting unnamed sources as saying the two sides would refrain from introducing new tariffs or take other steps that could escalate the trade war for another 90 days. Trump's administration is poised to impose new sectoral tariffs that will impact China, including on semiconductors, pharmaceuticals, ship-to-shore cranes and other products. "We're very close to a deal with China. We really sort of made a deal with China, but we'll see how that goes," Trump told reporters before his meeting with von der Leyen, providing no further details. Previous U.S.-China trade talks in Geneva and London in May and June focused on bringing U.S. and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia's H20 AI chips and other goods halted by the United States. So far, the talks have not delved into broader economic issues. They include U.S. complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that U.S. national security export controls on tech goods seek to stunt Chinese growth. "Stockholm will be the first meaningful round of U.S.-China trade talks," said Bo Zhengyuan, Shanghai-based partner at China consultancy firm Plenum. Trump has been successful in pressuring some other trading partners, including Japan, Vietnam and the Philippines, into deals accepting higher U.S. tariffs of 15% to 20%. Analysts say the U.S.-China negotiations are far more complex and will require more time. China's grip on the global market for rare earth minerals and magnets, used in everything from military hardware to car windshield wiper motors, has proved to be an effective leverage point on U.S. industries. In the background of the talks is speculation about a possible meeting between Trump and Xi in late October. Trump has said he will decide soon whether to visit China in a landmark trip to address trade and security tensions. A new flare-up of tariffs and export controls would likely derail any plans for a meeting with Xi. "The Stockholm meeting is an opportunity to start laying the groundwork for a Trump visit to China," said Wendy Cutler, vice president at the Asia Society Policy Institute. Bessent has already said he wants to work out an extension of the August 12 deadline to prevent tariffs snapping back to 145% on the U.S. side and 125% on the Chinese side. Still, China will likely request a reduction of multi-layered U.S. tariffs totaling 55% on most goods and further easing of U.S. high-tech export controls, analysts said. Beijing has argued that such purchases would help reduce the U.S. trade deficit with China, which reached $295.5 billion in 2024. China is currently facing a 20% tariff related to the U.S. fentanyl crisis, a 10% reciprocal tariff, and 25% duties on most industrial goods imposed during Trump's first term. Bessent has also said he would discuss with He the need for China to rebalance its economy away from exports toward domestic consumer demand. The shift would require China to put an end to a protracted property crisis and boost social safety nets to encourage household spending. Michael Froman, a former U.S. trade representative during Barack Obama 's administration, said such a shift has been a goal of U.S. policymakers for two decades. "Can we effectively use tariffs to get China to fundamentally change their economic strategy? That remains to be seen," said Froman, now president of the Council on Foreign Relations think tank.
