This week’s featured stories 19 October – 25 October 2026…
Beyond free trade and protectionism
Andrew Watt and Claes-Mikael Ståhl argue that trade policy has weakened unions and democracy, and propose an open, democratically governed, pro-worker economy where trade advances share social goals
From fragmented procurement to a European defence market
In a new Bruegel Policy Brief Gene Frieda argues that the Multilateral Defence Mechanism should be built out into a wider treaty-based institution for joint procurement and defence finance
China rare-earth squeeze threatens Japan and global supply chains
China has sharply restricted yttrium exports, leaving Japan months from stockpile exhaustion and risking severe disruption to automotive, semiconductor, and defence production worldwide. Tokyo has asked the US to press Beijing for relief as non-Chinese prices surge dramatically
The intangible Great Wall of China’s rare earth dominance
China’s rare earth export controls, a key tool against the US, face an emerging narrative of declining power: Japan leads in permanent magnets and the US in catalytic, luminescent and polishing technologies, potentially cracking Beijing’s rare earth empire and constraining its position
US-Mexico trade talks stall over steel and aluminium tariffs
Negotiations have hit an impasse after US officials, including Commerce Secretary Lutnick, rejected Mexican demands for reduced Section 232 metals duties. Major progress is unlikely before midterm elections, prolonging uncertainty for North American supply chains
Quantum computing pilots advance in credit and portfolio management
American Express and JPMorganChase reported early quantum experiments improving credit-default models and portfolio optimisation, while Gartner forecasts finance will become the largest commercial quantum spending sector from 2028. Results remain modest but signal growing institutional interest
Hong Kong plans digital trade-finance links with Southeast Asia
Hong Kong is exploring connections between its CargoX and Commercial Data Interchange infrastructure and regional systems to speed SME financing and cross-border transactions, following APEC discussions on digital infrastructure financing
EU firms direct significant capital to sustainable and transition assets
Large European companies allocated roughly 21% of capex to taxonomy-aligned or credible transition activities, with cumulative investment exceeding €1.2 trillion since 2022, though equity channels and actual SFDR portfolio alignment remain limited
WTO and development banks expand supply-chain finance for emerging markets
Multilateral development banks provided about $65 billion in direct financing in 2026, including $10 billion for supply-chain finance in developing economies—a two-to-threefold rise from 2024—aimed at helping SMEs join global value chains
IFC and Standard Chartered launch $300 million African supply-chain facility
The new guarantee-backed facility will support trade and supply-chain finance across eight African markets, targeting roughly $1.9 billion in transactions and more than 500 suppliers over three years to improve liquidity for smaller firms
China’s Q3 GDP accelerates to 4.5%, on track for annual target
Third-quarter growth quickened from 4.3% in Q2, lifting year-to-date expansion to 4.6% and keeping the economy within its 4.5–5% full-year goal, driven mainly by strong technology exports and industrial output
China EximBank boosts foreign-trade lending by 9%
The policy bank extended nearly 1 trillion yuan in new foreign-trade loans in the first nine months, with about 40% supporting trade enterprises and supply chains, while continuing innovation in Belt and Road financing
France and Germany reach EU automotive policy compromise
Berlin and Paris sealed a deal balancing combustion-engine phase-out timelines with restrictions on non-EU partners’ access to ‘Made in Europe’ support, reflecting competing industrial and climate priorities
What the EU–China trade deal means for Asia
EU-China auto restrictions reflect protectionism that briefly shields European firms but risks higher prices, delayed decarbonisation and weaker innovation. Asia faces redirected Chinese exports; open trade, Chinese investment and WTO defence preserve competitiveness and global trade
UK publishes illustrative CBAM rates ahead of 2027 launch
HMRC released sector-level illustrative Carbon Border Adjustment Mechanism rates and default emissions values to help importers model costs from 1 January 2027, with rates significantly lower than full UK ETS prices due to free allocation
Physical shocks and economic resilience: a central bank perspective
James Talbot explains how physical climate shocks affect inflation and output, and how central banks can assess and respond across two linked horizons: near-term monetary policy and the longer-term roles of resilience, adaptation, and insurance in supporting price and financial stability
Strengthening the Paris Agreement
In a CEPS paper Irina Kustova and Christian Dietz assess the extent to which Parties to the Paris Agreement have succeeded in ensuring the effective functioning of the Paris framework through their collective decisions
ASEAN finance ministers seek World Bank support for clean energy financing
Ministers requested deeper cooperation to mobilise private capital for clean energy, infrastructure, and climate adaptation, highlighting large financing needs such as the ASEAN Power Grid
AI and graduate employment: separating fear from evidence
In a World of Labour piece, Robert Fairlie and Jane Wu say graduate unemployment shows no clear AI-driven rise, but hidden pressures warrant closer monitoring
Top tips for applied intelligence and not artificial
AI-driven productivity means maintaining quality, not simply producing more work. Jonathan Sharp shares practical tips for making AI your collaborator rather than letting it do the work for you
Hungary’s path to the euro: five tests for a sustainable adoption strategy
Hungary’s new government aims to meet the conditions for euro adoption around 2030. In a new Bruegel Policy Brief Zsolt Darvas proposes five domestic readiness tests to complement the Maastricht criteria
