That came as a surprise to anyone who had been following the recent AI news emerging from China. Just weeks earlier, a Stanford University report had found that Chinese AI models had “caught up or even pulled ahead” of their American competition. In his New Year’s Address, Xi Jinping boasted about what he called a “transformative 2025 for China’s AI,” describing “breakthrough developments” on the subject. So, who is ahead of who here?

“I know it doesn’t fit into headlines, but this is so much more nuanced than just a simple ‘who’s ahead’,” says Thomas Derksen, a Shanghai-based entrepreneur, influencer and consultant who has covered the Chinese tech world for years. “It really depends on what your metrics are whether you’re looking at open or closed source, for instance.”

Open vs Closed AI Models: Where the US and China Lead

Closed-source AI models are engineered to perform a wide variety of tasks for their users, but their algorithms remain closed off and cannot be altered. “With these models, the Americans are for sure still leading the way with OpenAI, Anthropic and Google,” says Grace Shao, founder and analyst of industry newsletter AI Proem on Substack.

Image: Open AI Logo – Flickr via Trong Khiem Nguyen

“There are specific use cases where the Chinese AIs make some waves, such as in having very advanced video generation abilities,” Shao says, “but the pioneering of these general-purpose models is still being done by the American labs.”

Open-source AI models, however, are a much different story. With their code usually available publicly, developers can alter the workings of the models for their own use cases, particularly relevant when companies want to use the models. “In the end, nobody cares if you or I use the American closed source models to write a poem or get a cooking recipe,” Thomas Derksen says. “What matters is what open-source businesses are making money with- and this is where the Chinese are dominating.”

Why Businesses Are Choosing Chinese AI Models

Chinese AI models have indeed increasingly been favoured in the business world, for instance by global players like Pinterest and Airbnb, who are now using Deepseek open-source models and Alibaba’s Qwen AI respectively. Airbnb CEO Brian Chesky told the BBC the Chinese-made models were simply “good, fast, and cheap.” 

“Are these Chinese models the absolute frontier technology? Probably not yet,” Grace Shao says. “But if a company from a pure business perspective wants a top-notch model in terms of performance but is also cost-conscious, they may well choose a Chinese model.” 

Image: Chinese AI Deepseek – Flickr via Trong Khiem Nguyen

“A lot of companies do just favour Chinese models because they’re so cheap,” Derksen agrees. “Deepseek’s models are roughly on the level of Chat-GPT 5 now,” he says, “but at a fraction of the cost. Especially in markets like Africa or Southeast Asia, many firms just can’t afford the pricey American models, and opt for the Chinese ones.” 

For Derksen, this is a classic Chinese strategy. “Often when Chinese companies see that they might not quite be able to keep up in terms of quality, they bring the cost down,” he says. “And with the conditions on the ground in China, this is easy.”

Powering cheap AI, one windmill at a time

On a cold February morning in the dimly lit train station of Ulanqab, an industrial city in Inner Mongolia province in China’s far north, migrant worker Li vents his frustrations. “They have us building windmills all day out on that bloody steppe,” he grunts. “Sometimes the wind blows so cold I could freeze into an ice block.” Smirking, he points to the AI translation app flickering across his phonescreen. “The big bosses there need our windmills, though.” 

To build their cheap AI models, companies like Deepseek rely on a crucial factor- China’s affordable, seemingly infinite electricity production. “Over the last decade, we have seen a huge rise in Chinese renewable energy solutions,” says Grace Shao. Once largely dependent on coal, the value of China’s green energy sector has doubled between 2022 and 2025, with massive investment into wind and solar power, often in the country’s north. China now has some of the cheapest electricity on the planet.

Image: Power lines in rural Inner Mongolia, China – Julius Buhl

And this cheap, scalable electricity allows Chinese AI-makers to run massive, energy-intensive AI training centers at a lower cost than many Western competitors. Inner Mongolia has become one of the main hubs for this, as the cold steppes are now crowded with windmills that power several state-of-the-art data centers. “The Chinese now have the capacity here, and can thus push the price down,” Shao says.

Meanwhile, the competition in America is struggling in this area. “The US grid is old, and the electricity demand has not changed in decades,” Shao says. “Expanding it now to power the AI datacenters is expensive, and there is only slow progress on unlocking new renewable power sources. This is a kind of bottleneck for the US.” And electricity is not the only area in which China seems to have a leg up these days.

China’s AI Talent Boom and the “Reverse Brain Drain”

For long, observers argued that China was struggling to pioneer new technologies because much of its prime talent headed for Silicon Valley when given the chance. “But that’s the past,” Grace Shao says.

AI-trailblazer Tencent recently hired Vinces Yao, a top researcher who worked on OpenAI’s first AI agents. Several other high-profile engineers who had previously worked in the development of key AI models in the US have recently moved across the Pacific, a trend some have dubbed a “reverse brain drain.”

“Talent is no longer a bottleneck for Chinese AI,” Grace Shao says. “Some people are homegrown, some are engineers returning from the Bay Area- either way, the calibre is very high.”

According to Derksen, this is very much part of Beijing’s plan. “If Xi Jinping declares something a priority as he has done with attracting AI talent, that impacts everyone in China; every university, every province, every city will do their best to fulfil the order,” he says. “The scientists are feeling this, they get resources and support everywhere they go in China, so it’s no surprise that a lot are heading there.”

And then, the cost factor strikes again. “I can essentially get two engineers for the price of one in China,” Thomas Derksen says. “Living costs and salaries are just much lower than in the US. There is an abundance of talent, and the Chinese working culture is still ruthless. They can just get more done in a shorter time.”

As businesses seem to favour Chinese AI powered by cheap electricity and abundant talent, it may seem like Beijing is winning this race easily. But there is one constraint China just can’t seem to shake off.

AI Chips: China’s Biggest Weakness

AI developers rely on specially designed computer microchips to train their AI models. They are incredibly hard to manufacture, and having an outdated chip can cost developers significantly more and delay model development for years. “American NVIDIA and Taiwanese TSMC are still the undisputed number one when it comes to making these chips,” Thomas Derksen says, “and they’re not letting the Chinese access them freely. And that is their biggest problem.” 

Over the past few years, Washington has tightened export restrictions on advanced chips and chipmaking equipment, limiting China’s access to the crucial hardware. In December, Deepseek was accused of illegally training its models on NVIDIA’s Blackwell Chips despite the import ban, an accusation the company denies. “The lack of access to state-of-the-art chips remains the biggest AI bottleneck for China,” Grace Shao says. “It’s the only area where they can’t bring the cost down, at least for now.”

Image: The crucially important AI Chips – Flickr via Tim Reckman

To combat this, China has in return long been pouring billions into manufacturing chips domestically, with the government tapping tech giants Huawei and Alibaba to create alternatives. 

And there have been some successes. In September, Chinese State Media reported that a new chip manufactured domestically by Alibaba can match the performance of Nvidia’s semiconductors while using less energy. 

But aside from these success announcements, the key player remain vague as to how much they have actually progressed.  “It’s a black box, they really don’t want people to know what the status is,” Thomas Derksen says. “But it’s clear Alibaba and Huawei are working like crazy to catch up.” But until they can, Lin Junyuan’s 20% chance statement seems to still have some backing.

Anyone in third place?

While China and the US are racing each other for AI dominance, the rest of the world has been busy too. India, for instance, has been pioneering its own sovereign models, most notably BharatGPT, heavily supported by the government. With a massive domestic market and an abundance of tech talent, Prime Minister Modi has repeatedly stressed his ambition for his country to become the world’s number three when it comes to AI.

Image: Prime Minister Narendra Modi at the AI Impact Summit he hosted in February (Narendra Modi Picture Gallery)

In Europe, Mistral AI has made headlines, with the French startup winning sizeable defense contracts in both Germany and France, as the EU pushes for greater AI independence. 

In China’s backyard, the South Korean government has invested heavily in making its own “fully native” model, aiming to create an AI entirely independent from foreign models.

“The more important AI becomes and the more America and China advance, the more a lot of leaders are realising that they can’t be too dependent on either country,” Shao says. “The fear of AI-exploitation, of being a market while the money is made elsewhere is a real concern.”

But compared to China and the US, the industry seems in its infancy across the board. Bloomberg recently labelled India the “AI world’s most valuable unpaid intern” as the country is stellar at using AI models but still very much struggles at making them. In South Korea, three of the five companies shortlisted to make its “fully native” AI were found to still be using some code from foreign models, with executives saying that a fully decoupled model was “unrealistic.” 

Europe seems even worse off: throughout the AI race, the United States have produced 40 foundation models, while China has developed 15. All of Europe combined has created just three. “And even European prestige projects like Mistral are far away from their American or Chinese counterparts,” Grace Shao says. 

Do Countries Really Need Sovereign AI Models?

But does everyone really need to be building their own AI? “So many resources need to be in place locally to build an AI ecosystem from the bottom up,” Grace Shao says. “Trying to catch up to China or the US will take a long, long time for many countries, and it doesn’t make sense for most.” Instead, she says the conversation should not be framed as a race, but as an opportunity where countries can leverage their own strengths to build parts of their own tech stack, while still leaning on infrastructure led by the two superpowers.

Singapore has for example been courting both American and Chinese labs and attracting talent from both countries, who have then been building data centers in the small city state. Malaysia and Thailand are following a similar strategy. In South Korea, the government has invested $1.2 billion to enhance AI literacy in education after the “native model” disaster, aiming to become a talent hub for the technology. 

In the end, Grace Shao says, many countries can find niches in this. “Outside of Asia, industry-heavy countries like Germany can for instance focus on AI-powered robotics or something like that, while countries in the gulf with an abundance of energy can focus more on utilizing that for AI” she says. “Each economy has its own advantages here.” 

Thomas Derksen believes there also needs to be a change of mentality as well, particularly in Europe. “We need to acknowledge the fact that this technology has come to stay,” he says. “It’s a revolution and we’re in the middle of it. So we might as well get on with it and try to adapt.”

In the end, who’s winning this revolution right now depends on what winning means. The US still leads at the mere performance level. China is racing ahead on cost and scale, while the Americans maintain their biggest advantage, the chips. Meanwhile, for much of the world, the real question may not be who comes first- but where they can get a foot in the door.

Featured Image via The White House / Daniel Torok

“Salute!” Japanese Prime Minister Sanae Takaichi smiles across the table to her Italian counterpart, Giorgia Meloni. A few minutes later, she leads her aides, who appear much more hesitant than their boss, in singing “Happy Birthday” for the Italian PM (in Italian, of course). Three days earlier, Takaichi surprised South Korean leader Lee Jae-myung by handing him drumsticks after a summit; the two then jammed to viral K-pop hits. When Donald Trump visited in October, she joined him on stage while he addressed US troops, smiling and waving to the soldiers.

Japan’s first female prime minister has charmed her way onto the world stage, and at home, things are going similarly well. The 64-year-old enjoys a 70% approval rating, as “Sana-mania” grips the country. Takaichi has conquered social media with her sense for viral moments and unique fashion choices, which particularly excite younger voters. According to current polls, she is set to win a two-thirds majority in the lower house on Sunday, giving her LDP party full control of Japan’s legislature. But beneath the excitement, Takaichi faces the job of governing a Japan in turmoil, with crises that charisma alone won’t solve.

A Breath of Fresh Air in a Country in Decline

“Takaichi is atypical of a Japanese politician, not just because she’s a woman but also because of her background,” says Hitoshi Suzuki, Senior Research Fellow at the Tokyo-based Institute of Geoeconomics. Japan’s politics remain largely male-dominated and upper-class, with most Prime Ministers stemming from the same few influential families. Takaichi, meanwhile, grew up middle-class, something she often emphasises when talking about affordability issues, a topic she has had to discuss a lot.

Japan is in the middle of an affordability crisis. Real wages have fallen constantly since 2022 amidst high inflation, and a price spike in 2025 made matters even worse. Japan also has the highest debt burden of any developed economy, and the Yen is losing value as well. “We haven’t had any sufficient growth in Japan since the boom in the 1990s,” Hitoshi Suzuki says. “In the 2000s, people were talking about the ‘lost decade’. Now, we have to face the fact that we’ve lost three decades.”

Image: Prime Minister Sanae Takaichi gives a speech – Trong Khiem Nguyen / Flickr

And that is where Takaichi comes in. “She’s offering a vision of hope for a demoralised nation,” says Jeff Kingston, Professor of Asian Studies at Temple University in Tokyo. “Japan is eager to overcome this era of stagnation and decline, and her upbeat, positive, yet down-to-earth messaging appeals to voters.” Takaichi has indeed tried kickstarting the economy in her relatively short tenure, putting in place a budget in December that included slashing petrol prices and issuing stimulus cheques.

“But except for the messaging, realistically, everyone knows that Takaichi can’t just magically bring about an economic boom,” Hitoshi Suzuki says. “All developed economies are struggling to get any economic growth right now, and despite some prestige projects in the semiconductor industry, we in Japan won’t be an exception.”

The Rise of the Far-Right

Along with the economic downturn, a new force has emerged in Japanese politics. Propagating a “Japan-first” ideology that takes inspiration from Donald Trump, the Sanseito party has been gaining traction in recent years. The party has two core messages: they demand a tougher stance on immigration and a tougher stance on China.

Image: Prime Minister Keir Starmer meets Japanese PM Sanae Takaichi – No 10 Downing Street / Simon Dawson

After having held only one seat in the powerful lower house of parliament for years, Sanseito won a record 26 seats at the last election in July. The success commanded global media attention, in part because Japan had never had a notable far-right force in parliament since the Second World War. “We always thought a resurgence of the far right wouldn’t be possible in Japan,” Hitoshi Suzuki remembers. “It was alarming to a lot of regular Japanese people.”

Most of Sanseito’s support had come from core LDP voters who thought the party had become too liberal under Sanae Takaichi’s predecessor, Shigeru Ishiba. After Ishiba resigned following a string of electoral setbacks, the LDP nominated the more conservative Takaichi in October. Within four months of her government, Sanseito has moved from running an anti-government campaign to actively campaigning for Takaichi to remain Prime Minister. The new PM has largely hijacked their agenda.

Anti-China Rhetoric: Popular but Risky

Nowhere is that clearer than in foreign policy. Takaichi has adopted a hawkish approach to China, angering Beijing by saying that Japan could support Taiwan militarily if China were to invade it. The Chinese responded angrily, cancelling flights, issuing travel warnings, and imposing export restrictions.

Image: President Trump and Japanese Prime Minister Sanae Takaichi watch the World Series before a bilateral meeting – The White House / Daniel Torok

The move sent Takaichi’s approval ratings in Japan skyrocketing. “People like her standing up to Beijing’s browbeating,” Jeff Kingston says. “She was trying to position herself as a kind of Margaret Thatcher of Asia, and it has worked.” Disliking the Chinese government is deeply rooted in Japanese society, where 86% of respondents said they had “unfriendly feelings” towards Beijing in a 2024 poll. “People are tired of decades of our government being too soft on China under Takaichi’s predecessors; this was integral to the rise of Sanseito,” Hitoshi Suzuki says. “Takaichi put an end to this.”

But angering China is also risky. Beijing is Tokyo’s largest trading partner and holds massive leverage over Japanese companies when it comes to rare earths. “Japanese business leaders do not want to see too much anti-China policy, even though they’re not saying so publicly,” Suzuki says. “If Takaichi goes too hardcore anti-China, the business elite will at some point turn against her. But Sanseito will too if she is too soft.”

The Immigration Dilemma

On immigration, another key Sanseito topic, Takaichi is caught between two stools in a similar way.

Only about 3% of Japan’s population is foreign, yet anxiety about uncontrolled migration is widespread. Takaichi has repeatedly tapped into those fears and promised to review the immigration system, something 70% of Japanese support, according to a poll in January. “By acknowledging the issues and appearing like she is on top of it, Takaichi has effectively sidelined this topic, which is remarkable as Sanseito gained so much ground with it just half a year ago,” Jeff Kingston says. “But on the other hand, there is consensus that Japan needs immigration.”

Having seen declining birth rates for decades, Japan’s population is projected to fall by about 30% to 87 million by 2070, when four out of every 10 people will be 65 or older. “If Takaichi fails to start tough immigration policies, she will lose the right wing. But at the same time, Japanese businesses want and need foreign workers,” Hitoshi Suzuki says. “It’s a balancing act again.”

Japan’s Only Partner

Another major uncertainty for Takaichi is Donald Trump, with whom she shares a complicated relationship. Trump was Takaichi’s first guest as Prime Minister, with the President saying afterwards that the meeting had left him “deeply impressed”. But the following weeks were marred by tension as Trump announced, and then repealed, his infamous tariffs against Japan. After Takaichi’s comments on Taiwan angered Beijing, Trump also refused to come to her aid. But on Saturday, he officially endorsed her bid for Prime Minister.

Image: President Trump addresses American soldiers stationed in Japan – The Trump White House Archive / Flickr

“We are really reliant on the United States: Japan has no regional support system like NATO; they are kind of our only ally,” Hitoshi Suzuki says. The two countries closely collaborate when it comes to security, with the US having stationed around 55,000 soldiers in Japan, the country’s only foreign military presence.

But economically, the tariffs have left scars. “Most Japanese businesses see Trump as a geostrategic risk now,” Suzuki says, “but they are very reliant on the US. The strategy is teaming up with the US as long as we can, but also minimising the risk, which is very difficult.”

According to Jeff Kingston, however, Takaichi has her way of pleasing Trump and will put this on display at their next meeting in March. “She will tell him that Japan is ramping up defence spending, which will be music to his ears,” Kingston believes. “He’ll welcome her win in the election, he likes winners anyway, and she will be one.”

If Takaichi does secure the landslide victory expected on Sunday, she will be able to look back at a remarkable first few months in office. She has galvanised voters, turned the far-right from foes into allies, and charmed her way onto the world stage. But what lies ahead will be the real challenge for “Asia’s Margaret Thatcher”. For now, she symbolises hope, but disillusionment is never far away.

Featured Image via The White House / Daniel Torok

Short-term relief on rare earths

In arguably the most significant announcement following the meeting, Trump stated that “all of the rare earths have been settled” and that China had agreed to a one-year free-flow agreement for the essential resource.

China has a near-monopoly on these minerals, which are essential for a variety of products, including semiconductors. It has increasingly leveraged this monopoly as the trade war waged on, choking out manufacturers worldwide as it gradually stepped up export controls throughout the year. Just last week, China announced even stricter new control measures on specific rare earths used for semiconductors and military technology, citing national security concerns.

The Chinese government has now committed to repealing that recent measure, and it has promised not to implement any new measures for a year. However, it appears China is allowed to leave previous export controls enacted before October, which have led to global shortages.

“This is a moment of relief, not a solution,” writes Reed Blakemore, director with the Atlantic Council Global Energy Center. “We can expect China to use these export controls to its advantage again anytime the trade tensions resurface.” Blakemore argues that much of the uncertainty around rare earths remains.

 Trump slightly reduces tariffs

Speaking on Air Force One after the meeting, Trump said he would lower the tariffs on Chinese goods from 57% to 47%. This is a small relief, but the tariffs on Chinese goods remain extremely high. For instance, Trump has only enacted 15% tariffs on most EU exports.

Trump says these tariff reductions were mainly a result of China’s commitment to combat the spread of fentanyl, as the President has accused the Chinese of facilitating the global trade of the drug. After the meeting, Trump said Xi had agreed to work “very hard to stop the flow of fentanyl”.

“The tariff reduction itself does not make much of a difference,” Julian Evans-Pritchard of economics research firm Capital Economics writes. He believes most Chinese exporters shrugged them off anyway, and Trump could increase tariffs again anytime. “But the general de-escalation does help, as it decreases the risk for sudden tariff hikes in the future.”

Image: F. D. Richards/ Flickr

Beijing promises to buy US farm produce

When it comes to agriculture, another central issue in this trade war, Trump announced that China would buy “massive amounts” of American soybeans and sorghum, declaring that American farmers would be “very happy”. In more detail, US Trade Secretary Scott Bessent said China committed to buying soybeans at the same levels as it did pre-trade war, for at least the next three years.

China used to be the biggest buyer of American soybeans, but stopped purchasing the product from the US completely amidst the escalating trade war. This meant American farmers were sitting on large stocks of unbought product, while China instead ordered from Brazil and Argentina.

This agreement would therefore provide much needed relief to the farmers, if the Chinese follow through with their promise. Five years ago, as part of another trade deal between the two countries, China had agreed to buy $200bn worth of US goods, much of which were supposed to be farm produce. But it never followed through, falling far short of the promised targets to this day.

Experts are thus pessimistic about this pledge as well. “It is unlikely that the Chinese will buy as much US soybean as they did before the trade war,” Even Pay, an agriculture expert at research firm Trivium China, told the Washington Post. “China has diversified its soybean supply.”

Image: Nordskov Media/ Flickr

No progress on technology issues

On the issue of AI chips, Trump said he had spoken to Xi about the export of Nvidia chips on Thursday, but shifted much of the responsibility for finding a solution on to Nvidia and the Chinese government. “We’re more of an arbitrator,” he said about his government’s role.

The chips have become a crucial flashpoint of the trade war in recent months, as the US has put restrictions on Nvidia selling its most advanced models in China, citing national security concerns. In return, the Chinese government has since pushed its domestic chipmakers to provide alternatives, now claiming the chips produced by Huawei and other tech giants are more advanced than Nvidia’s chips. 

Even after the US lifted some of its restrictions on the sale of less advanced chip models, the Chinese had directed firms not to buy from Nvidia, effectively freezing it out of the market.

Image: Nvidia CEO Jensen Huang at the Fortune Global Forum San Francisco Dinner – Fortune Global Forum Duy Ho

The meeting delivered even less clarity on the sale of TikTok, the second major tech topic between the two leaders. Despite his treasury secretary Scott Bessent announcing beforehand that the two sides had reached a “final deal” on Tiktok that would be signed off on the summit, Trump did not comment about it after the meeting had ended. A Chinese government spokesperson said China would “properly resolve the issues around TikTok.”

Trump has long had a feud with the social media site, which he sees as a national security threat. Announcing a ban at the beginning of his term, he has since been pushing to transfer ownership of the app to mostly American investors. This would require Chinese approval.

No mention of Taiwan, some of Ukraine

There were other topics the two did not cover in their roughly one-and-a-half-hour meeting as well, most importantly Taiwan. China claims the island as an integral part of its territory, and Xi has made its annexation a top priority; his main opponent in that effort is the US.

Image: President Donald Trump and President Volodomyr Zelenskyy – White House / Juliana Luz

The pair did speak about Russia’s war in Ukraine, with Trump saying that the two countries will work together to end the conflict. China is one of the main buyers of Russian oil, and Xi hosted Putin in Beijing recently. Nevertheless, the Chinese emphasised today that they supported peace talks.

But even as the summit concluded amicably even on foreign policy, experts predict this is unlikely to be the start of a new harmonious age between the two superpowers. “These are all issues that are relatively easy to roll back and accuse the other side of bad faith,” Ja Ian Chong, a professor of political science at the National University of Singapore told the New York Times. “I’ve seen this movie too many times.”

Ian Bremmer, founder of global consultancy Eurasia Group, agrees. “If you look at the totality of the relationship between the U.S. and China, it’s in a significantly more challenging place,” he told the Washington Post. Bremmer is sure: ”Longer term, the trajectory is more toward decoupling.”

This triggered a frantic response in many western capitals, as China holds a near-total monopoly on certain earths.

Scrambling to find alternatives, the few non-Chinese suppliers quickly reached capacity, charging hefty premiums.

Following an agreement with the Trump Government, China gradually reopened the export channels, but having seen the leverage they hold, Beijing has since held back on certain crucial earths it was exporting freely before – with massive implication on the global markets.

How is China choking the manufacturers out?

Take Germany, for instance. The country’s struggling automotive industry is pushing towards electric cars, with giants like Volkswagen aiming for 70 per cent of its vehicles to be electric by 2030. To build batteries for these cars, the Germans need Chinese rare earths – but sourcing them is proving difficult, with affordable materials even more illusive.

Economics paper Handelsblatt quotes German industry sources as saying that the Chinese have been extremely hesitant to give a green light to crucial earth exports recently.

This has dramatic implications: German Economics Minister Katharina Reiche admitted in late June that some companies have had to stop their production entirely as they struggle to obtain enough rare earths from China. Reiche declined to name the companies.

Across the pond, American automotive giant Ford is also struggling to obtain certain earths from China for its EVs. “It’s gotten better since the full rare earth export stop, but it’s still hand-to-mouth,” Lisa Drake, who oversees the industrial planning for electric vehicles at Ford, told the Wall Street Journal. She says Ford has had to “move things around” to avoid having to shut down plants.

Although they were not available for comment on whether their supply chains had been affected, UK automaker Jaguar also requires Chinese rare earths to build its electric cars.

Jaguar employs 11.000 workers in the UK, and is currently transitioning to full-electric by discontinuing its combustion engine models.

Other industries are affected, too. South Korean newspaper Chosun quotes a government official saying that companies there are also currently experiencing massive difficulties because of disruptions in supply from China.

According to the official, this has particularly impacted the electronics and heavy equipment industry, a major economic force in South Korea.

What trade restrictions are in place?

According to Chinese Customs, those wanting to receive rare earth shipments now have to apply for an export license, which can take up to 45 days.

Customs also require proof that the material will not be used for military purposes. China has tried to reassure manufacturers repeatedly that it is trying to make this exporting process as easy as possible, and these difficulties are only aftershocks of the full stop in April – but according to an exclusive investigation by South Korean newspaper The Chosun, there is a system to the delays manufacturers are experiencing.

Chosun reports that the Chinese have put the permits of up to 2,000 rare earth items under review recently, a full revamp of the previously largely limitless exports. This list reportedly includes materials needed for electric vehicles and batteries, precisely the earths European and Korean manufacturers are missing.

Some experts thus call this political maneuvering. “The Chinese realized during the trade war with the US and the full export stop that they can use rare earths to achieve political goals,” Stefan Steinicke of the German Association of Industry told German newspaper Spiegel. “We’re heading for a crisis if they keep doing this,” he adds.

Trying to ease the tensions, on the 14^th of July, the Chinese government released data showing that the value of its rare earth exports in June was up 30 per cent from May. But some call a bluff, as the data released only shows a general number, not broken down by product category.

“It’s likely to simply be a shift in the export mix, where China exports more of the cheaper rare earths but still holds back the crucial expensive ones,” the South China Morning Post quotes Xu Tianchen, senior China economist at the Economist Intelligence Unit.

Why does China hold such a monopoly?

In 1992, the then-president of China Deng Xiaoping, was quoted as saying that “the Middle East has oil, China has rare earths.”

96 per cent of the world supply of some crucial rare earths are sourced from China, with the country having built a monopoly for decades.

The earths are not actually that rare at all, but mining them often comes at the price of massive environmental impact.

This can be observed in Baotou, China’s “rare earth capital”. Mining has created a toxic lake here, which poisons the groundwater in summer and creates toxic winds in winter, with a jarring impact on the health of local residents. All of these are effects the West has conveniently outsourced to China for decades.

Meanwhile, the Chinese have pumped billions into the industry, often being accused of artificially dropping prices to make competitive mining in other countries unprofitable.

With mining deemed a critical industry, the PRC has created so-called “bad banks” where mining companies can obtain seemingly infinite funds, which has further deepened the monopoly.

How can Western manufacturers become less dependent?

Well, they could outsource the mining to other places. Countries where crucial rare earths are found in relatively easily mineable condition would for instance be Chile, Mexico or Bolivia- but amidst the shortage in the West, they can play the long game.

Mexico and Bolivia have long nationalised their crucial reserves, and Chile is planning to do so too. Any deals here go directly through the state, and earth-rich countries can make their demands to Western companies, again creating a dependence.

 There have been efforts to join forces here, with the G7 starting the Minerals Security Partnership with India, South Korea and Estonia, where all involved countries pool funding for strategic rare earth projects, but the supported projects have been few.

Another viable option seems to be domestically mining and processing the crucial earths. The US has some mineable reserves, and is currently trying to expand from its only functioning mine to more across the country. In Australia, the Mount Weld mine has significant capacities, and the mine’s parent company Lynas is expanding globally.

As far as the EU is concerned, meanwhile, the process has been slower. The responsible commission passed the Critical Raw Minerals Act in 2024, which aims to reduce dependence on China, and the Europeans want to mine 10% of their annual needs within the EU by 2030. Mineable rare earths can for instance be found in the Czech Republic- but as of now, all projects are still in the planning stages.

Either way, industry experts say decoupling from China will take a while, even with ambitious projects. “We have to recognize that we’re playing a 30-year catch-up game here,” Lynas CEO Amanda Lacaze said last year.

So is everyone just at China’s mercy for the next decades? Well, not quite.

Myanmar: The thorn in China’s side

The PRC ironically does not mine much of the earths it exports domestically, either. Instead, up to half of Chinese rare earths are mined in the Kachin province in Myanmar by the country’s Military Junta, and then just shipped to China for processing. This provided a relatively secure supply of the rare earths to China for decades.

But these days, Kachin province is one of the hotbeds of fighting in Myanmar’s ongoing civil war, as the Kachin Independence Army (KIA) fights the Junta for control in the area- and the KIA is gaining more and more ground.

The Chinese have gone to great lengths to pressure the rebels to stop their advances against the Junta, trying to safeguard the rare earths supply and retain control of key mines. For instance, China has arrested some KIA leaders to force the handover of cities strategic for the rare earth trade.

As a seemingly last resort, the Chinese have also threatened to stop buying earths from mines now controlled by the rebels. The KIA primarily funds itself through the export of resources, so a stop to the exports would take away a large portion of the militia’s funding. Already, Chinese rare earth imports from Myanmar have halved compared to last year.

But it is a dangerous gamble for the Chinese. Reuters quote a rebel leader as saying that “China, which needs rare earths, can only tolerate this lack of supply for a limited time.“ A big part of the KIA’s ideology is regional autonomy, and the end of what its leaders perceive as an exploitative extraction of the area’s resources.

With the KIA advancing further despite Chinese pressure not to, Beijing will have to strike some kind of deal with the KIA, or stop the imports entirely- which would no doubt trickle down globally, and open up a possibility for other countries to sweep in.

So, China has the world in a rare earth chokehold- but it may have difficulties obtaining its own rare earths soon.

Featured image via Ivan Marc / Shutterstock.

Alongside Runcorn Sarah Pochin MP and Councillor Laila Cuinningham, Farage spoke on the perceived issues facing the UK’s current policing standards.

Farage claimed that his party would half crime within five years of being elected, becoming “the toughest party on law and order this country has ever seen.”

Tackling small crimes with harsher penalties

He plans to focus on smaller crimes like shoplifting and phone theft, with Farage claiming that under Reform, police will follow every traceable device and prosecute as many thefts as possible.

The Reform leader cited former mayor of New York Rudy Giuliani as his main inspiration, describing how he experienced New York becoming much safer under his tenure while there on business, claiming that “London, or any major city in Britain, needs a Giuliani.”

Giuliani has been credited with bringing down crime in New York, but also faced criticism for his harsh policing methods against relatively minor crimes, and discriminatory stop and search practices.

Although he did not refer to “two-tier-policing” in the press conference, Farage has often accused Keir Starmer’s government of being softer on some groups of offenders, and today, he repeatedly made clear that he thinks Starmer’s approach to policing is the direct opposite of his party’s.

On knife crime, Farage said he wants to carry out stop and search in areas where knives are prevalent, “until we drive knives off the street there”. 

However, Stop and Search is already practiced by the police across Britain, and is allowed if officers have “reasonable grounds” to believe someone is carrying a weapon or stolen property. Farage did not specify how he wants to amend the current Stop and Search regulations.

Research has found that stop and search can bring down knife crime in an area, but opponents of the practice say it disproportionately targets minorities while questioning its effectiveness. 

Farage also wants to revamp the police force, pledging to hire over 30,000 new officers over a five-year term. The Reform UK leader repeatedly reiterated that he wants to establish a “physically tougher police force,” one that is “feared by criminals”.

He announced he wanted to cut all diversity and inclusion programmes within the force, although did not suggest specific amendments to officer training or equipment and did not directly answer a journalist’s question on whether there were officers currently in the force who were not “tough” enough to continue serving if his plans were implemented. 

Further reiterating his “tough” approach, he turned to serious crime. “50 per cent of crime is committed by 10 per cent of criminals,” he said, “and when someone has committed more than three offences or a sexual offence, they should serve their full term.”

How would this work in practice?

With the justice system already strained, he was questioned on how it cope with more criminals prosecuted and imprisoned and fewer released.

The case backlog in British courts continues to rise, with many cases experiencing significant delays in prosecution.

Farage announced plans to reopen many magistrates’ courts he says were closed under David Cameron, saying a Reform government would be reaching out to retired magistrates to have them come back and deal with the backlog in sentencing.

Prison facilities in England and Wales are currently massively overcrowded, having reached record levels of occupancy this April.

To solve this, Farage wants to build new prisons holding an extra 12,000 prisoners, which he claims can be done relatively easily in cooperation with the army. More crucially, he also wants to free up 30,000 prison places which are currently occupied.

For that, the he wants to look abroad. He claims that a quarter of UK prisoners are foreigners, while the government maintains the number is actually about 12 per cent.

He argues that deporting criminals will free up space in Britain’s prisons, he has been in conversation with Edi Rama, Prime Minister of Albania, who Farage claims has agreed to take back Albanian nationals currently imprisoned in the UK. Currently, it is estimated that Albanian nationals make up around 10 to 14 per cent of foreign prisoners in the UK.

Farage also floated the idea of holding prisoners abroad entirely. He pointed to Denmark, which has tried to ease overcrowding in its prisons by sending inmates to Kosovo.

He also cited the Trump administration’s deportations to El Salvador as an example of how other countries could help to ease the overcrowding, however both systems have been criticised by human rights experts.

How would this be funded?

According to Farage, the whole plan will cost around £17 billion over five years, but he insisted that if elected into government, Reform would “pay for this without raising taxes.”

He said that he would fund the plan by cutting public spending, for instance scrapping HS2, and abolishing net zero initiatives. He also wants to make prisons more cost-efficient, claiming that the UK is currently paying £51,724 per prisoner annually.

In an immediate reaction, a Conservative Party spokesperson said that Farage had failed to present a sufficient plan on how to fund all this. “He doesn’t have the faintest idea of how to deliver,” the spokesperson said.

Labour Party Chair had similar criticisms, accusing Farage of “headline-chasing” and pointing out that the government already plans to hire 13,000 police officers until the next election.

Featured image via Reform UK / YouTube.

So, how did the election play out? Here are five key takeaways from the vote.

A Conservative victory- but it could have been bigger

First things first- the Conservatives have won this election, and their chairman Friedrich Merz will most likely be Germany’s next chancellor. Merz comes in at almost 30%, well in front of all other parties, and will have a strong mandate to govern: it is not hard to see why. Only 16% of Germans were happy with the last government, and as the biggest opposition party, the Conservatives offered a change. Merz thus ran a campaign heavily focused on his economic expertise.

Yet, simply describing this as a Conservative win does not tell the whole story. It is the second lowest election result in the party’s history, a far cry from the 41% Merz’s predecessor Angela Merkel achieved in 2013. Despite the left-wing government’s incredibly low approval ratings, the Conservatives have only gained about 4% since the last election.Part of the reason is Friedrich Merz’s low approval ratings, as many Germans perceive him as impulsive and old-fashioned. He has also shifted his party to the right, calling for stricter immigration rules amidst the recent terrorist attacks, vowing not to leave the contentious immigration topic to far-right AfD. When elected chairman of the Conservatives, Merz had promised he would “cut AfD in half” at the election. But that did not happen.

Instead, AfD has doubled its share of the vote despite Merz’s tough immigration stances. Voters did not really buy into the Conservatives’ new policies, instead staying loyal to the anti-immigration original, AfD. Even worse, Merz lost votes to the left, as many centrist voters did not appreciate his right-wing rhetoric.

The far-right surge, but have no shot at power

Similar to the Conservatives, the circumstances of this election could hardly have been more in the far-right AfD’s favour. The party profited from the left-wing government’s disastrous approval ratings and the struggling economy, offering radical solutions like a full walk-back on renewable energy, ending support for Ukraine and leaving the EU. 

AfD’s prime topic, immigration, also came to the forefront amidst the recent terrorist attacks, with the party being quick to declare that their immigration policies would have prevented all of the attacks. Globally, Elon Musk’s endorsement was notable, with the richest man on earth promoting the party’s content and calling on Germans to vote AfD. 

Consequently, AfD had a very good election. Doubling their share of the vote to 20%, the party has finished in second place. Since WWII, every German election has seen the two “People’s Parties”, Conservatives and Social Democrats battle out who comes first and second. AfD have shaken up that dynamic- they have become a “People’s Party”. Despite the Conservatives moving to the right on immigration to crush AfD, the party has hardly lost votes to them, either.

Yet, some inside AfD are disappointed. In an election that seemed so perfectly laid out for them, AfD failed to reach their goal of 25%, which would have enabled the right-wingers to block constitutional amendments and lead government audits and investigations. And, despite party chairwoman Weidel saying she is ready to work with the Conservatives on election night, the party knows they will be in opposition until the next election, as the Conservatives have ruled out any cooperation. AfD’s plan of achieving so many votes that a government without them is impossible has failed- and there are rumours some in the party are calling for a change of leadership.

Germany’s Social Democrats are shattered- and will have to regroup

While both the Conservatives and AfD have celebrated gains, one does not have to look far to see where those votes have come from. Chancellor Scholz’s Social Democrats, who won the last election, have seen the lowest result in their history, achieving just 16% of the vote. This humiliating result is the people’s verdict on Scholz’s government, which failed to lead the country out of recession and was consumed by infighting. Scholz has already said he will retire from front-row politics. 

Many Social Democrats wonder why they did not field another candidate. Boris Pistorius, defence minister under Scholz, has been Germany’s most popular politician for a while now, becoming more prominent internationally after delivering an immediate rebuttal to JD Vance at the Munich Security Conference. Pistorius, known as a centrist big on supporting Ukraine, is favoured by many to become the party’s next leader, and lead them back to the top.

Germany moved to the right – but also to the far left

Possibly the biggest surprise of the election is socialist party “Die Linke”. Only making it into parliament because of a technicality at the last election, the party is now at 8%, and will likely gain even more seats, as they are set to win several key Eastern German constituencies. 

This is surprising to many, as the election campaign was marked by a general shift to the right, with AfD gaining traction and the Conservatives toughening up on immigration. Yet, the Socialists, who are against any form of border controls and reject deportations entirely, did well, most notably with young people, coming first amongst under 25-year-olds. The party ran a successful social media campaign, focused on bringing down the cost of living, while reinforcing classic socialist narratives of taxing the rich and “abolishing billionaires”. The new German parliament will thus have a strong far right, but also a sizable far left.

A divisive election- but most likely a centrist government

This election has seen a timid Conservative win, a far-right surge, a far-left comeback and a shattered centre-left. Yet, the outcome of what has arguably been the most divisive election Germany has ever had will most likely be a government that is not divisive at all. Friedrich Merz has finished first, and he has started talks to form a coalition with the weakened Social Democrats. 

This so-called “Great Coalition”, commonly known as “Groko”, has governed Germany throughout much of its history. The two parties agree on many things, such as the need for economic reforms and robust support for Ukraine. As the Social Democrats disagree with some of his immigration stances, Merz signalled on Monday that he was willing to walk back on his more radical proposals, such as closing German borders entirely.

Hence, it is no surprise that recent polls indicate most Germans want a change in government. Friedrich Merz and his Conservatives are polling at 30%, far ahead of all other parties. The 69-year-old former Blackrock executive has made economic reforms the bedrock of his campaign, while also pushing for more German support for Ukraine.

However, he has also moved the Conservatives further to the right, advocating for tougher immigration rules, and making headlines with controversial statements, for instance accusing immigrants of “stealing German’s dentist appointments”, and saying Ukrainian war refugees were engaging in “benefits tourism” while in Germany. He has apologized for some of these quotes. Merz’s supporters say he is reclaiming ground on the right his long-time rival Angela Merkel gave up when she led the Conservatives, while others accuse Merz of simply adopting talking points of the party polling right behind him: AfD.

Right-wing AfD are riding a historic wave of support, polling at 20%, double what they achieved at the last election in 2021. Party leader Alice Weidel has made AfD the second strongest force in German politics, currently predicted to win every single constituency in Eastern Germany. Weidel, a former business consultant who lives in Switzerland with her wife, has been described as “Germany’s Georgia Meloni”, having given AfD a more progressive image, while not abandoning social conservatism, right-wing economic policies, and a hard-right stance on immigration. 

AfD are still in favour of leaving the EU, and against any sort of German support for Ukraine. The party’s youth organization was just disbanded after the Secret Service classified it as right-wing extremist, and Björn Höcke, convicted last year for using a fascist phrase, still leads the AfD chapter in the state of Thuringia.

Meanwhile, current Chancellor Olaf Scholz is far behind the Conservatives and AfD, polling at around 15%. Scholz oversaw a government that had to deal with massive economic challenges, failed to prevent terrorist attacks, and was consumed by infighting between his liberal and green party coalition partners. Adapting an increasingly tough stance on immigration, Scholz has managed to gain some ground in the polls since his government broke up, yet he is far away from the 25% he achieved at the last election in 2021.

Similarly, the Green party is also polling at around 15%. Part of Scholz’s government, party leader and economics minister Robert Habeck often seemed overwhelmed by the crumbling economy, passing several laws he had to later retract and apologize for, with some calling him the “worst economics minister of all time”. An area the Greens have been more steadfast on, however, is supporting Ukraine, pushing for increased arms deliveries and making Habeck the target of Russian smear campaigns.

So, which of these parties will lead Germany soon? Traditionally, the party that wins the most votes on election day-  probably the Conservatives- are the only ones allowed to start looking out for partners to form a government. And Friedrich Merz will likely have the choice of two very different coalition options.

Firstly, there are undeniable similarities between his Conservatives and AfD, on economic policies, social conservatism, and immigration. Together, the parties would have a comfortable majority. All German parties have blocked AfD from any political power during their entire existence, and the Conservatives long participated in this, until voting with AfD on a non-binding law in Parliament last month. Merz’s rivals to the left promptly accused him of testing the waters for a coalition after the election. Social Democrat Rolf Mützenich said Merz had “opened the gates of hell”.

A Conservative-AfD coalition would likely enforce incredibly tough immigration laws, question German support for Ukraine, and possibly have Germany leaving the EU. AfD have proposed mass deportations before, even of people with German citizenship, and Merz’s anti-immigration rhetoric makes some believe he would go along with some of these plans. Could Europe’s biggest economy be cozying up to Trump and his European allies soon? 

After the vote, there were protests in all big German cities, and even Angela Merkel came out of retirement to criticize the cooperation. Under pressure, Merz said he had not wanted AfD to vote for his law, and regretted they had done so. In a vote on another law a few days after, a large swath of conservative MPs refused to vote with AfD again, defying Merz. A coalition with AfD, so it seems, would cause a rebellion inside the Conservative Party, and Merz has since promised he will not enter any sort of coalition talks with AfD. There is much anxiety about whether he will stay true to his word.

But the Conservative chairman has another option: A Conservative-led coalition with the Social Democrats and the Greens, nicknamed the “Kenya coalition”. Greens and Conservatives currently form a coalition together in five German states, and Conservatives and Social Democrats have governed Germany together countless times. 

However, Merz has criticized the Greens and Social Democrats harshly during the election campaign, accusing them of being responsible for Germany’s dire economic situation. Markus Söder, head of a powerful regional outlet of the Conservatives, has said he would not allow Merz to form a coalition with the Greens, whom he refers to as “enemy number one”. Meanwhile, the Greens and Social Democrats condemned Merz’s controversial statements on immigration, and his votes with AfD, with Scholz saying Merz “often talks nonsense.”

It would not be the first time in Germany, however, that campaign rhetoric is quickly buried after the election, and experts say this coalition is very likely. A “Kenya” government would probably adopt a centrist approach to tackling Germany’s economic recession, while Merz will push to toughen up immigration rules. He and the Greens also agree on increasing German support for Ukraine, and the coalition would likely also further beef up the German army, something Merz has called for.

It is safe to say that much is at stake in Germany amidst the election on the 23rd. Whether Merz will decide to break his promise and negotiate with AfD, possibly forming an unprecedentedly right-wing government, or go for the centrist option with the “Kenya” coalition is anyone’s guess. And, in the two weeks until the election, much can still change.

Crucial to the first stage, set to take 42 days, will be a hostage deal. Hamas will free 33 Israeli hostages captured in the October 7th attacks, reportedly women, children, men over the age of 50, and those who are wounded and sick. This includes female soldiers. The two sides have agreed for Hamas to release seven captives a week during the first stage, until all living women, children and older people still held in Gaza are freed.

For every civilian hostage released by Hamas, the Israeli government will then free 30 to 50 Palestinians, mostly women, children and elderly people. For every female soldier released by Hamas, the Israelis will set free 50 Palestinian prisoners- with limitations. Palestinians serving time for deadly attacks on Israelis are to be included, but individuals responsible for the October 7th attacks will not be released. 

Hostages’ families protest (Flickr/ Amir Appel)

During this exchange, the Israeli military would retreat from most of the Gaza Strip, except a buffer zone on Gaza’s border with Israel, and the Philadelphi corridor, which forms the border between Gaza and Egypt. The plan also entails the re-opening of the Rafah crossing between Egypt and Gaza, to allow desperately needed foreign aid to enter. The agreement then also allows the return of displaced Palestinians to their homes in northern Gaza.

The draft ceasefire agreement finally outlines what comes after the first 42-day stage, stating all remaining hostages are to be released in return for a complete Israeli withdrawal from Gaza. Negotiations on how exactly this second stage is going to look will resume during the first one. If this deal is agreed on, however, its first stage would bring peace to Gaza for the first time since October 7th. 

The plan itself has been around for a while, with US President Biden presenting a peace resolution in May 2024, whose three stages almost mirror the current deal. Israel and Hamas have negotiated variations of that plan ever since Biden unveiled it, with talks repeatedly breaking down. So why do they seem ready to agree on it now?

For many, Benjamin Netanyahu was long the main hindrance to peace talks. The Israeli president has had a corruption trial and inquiries over the national security failure on October 7th looming over him: “It was in Netanyahu’s interest to prolong the war, because as long as it goes on there will be no call for accountability,” Oliver McTernan, director of conflict resolution charity Forward Thinking, told the BBC. Additionally, right-wing members of Netanyahu’s government had threatened to resign if he would accept a deal, possibly collapsing his government.

But with pro-ceasefire protests across Israel in the last few weeks, and recent polls showing 72% of Israelis supporting a deal, Netanyahu may have had to give into the pressure. He is also not risking the collapse of his government anymore, having recently added a new party into his coalition, which now has a comfortable majority even if the far right back out. 

Another reason for Netanyahu to soften his position may have been Donald Trump. Keen to start off his tenure in the White House with a foreign policy success, Trump is reported to have pressured Netanyahu to enter negotiations, and the Israeli president may wait for Trump’s first day in office to announce he has accepted the deal.

Hamas was also under increasing pressure to enter ceasefire talks. Decimated by relentless Israeli airstrikes and ground operations, and with its allies Hezbollah and Iran also struggling, Hamas is weakened. Internally, the group has had to fend off criminal gangs in Gaza itself, and confront growing internal friction with Fatah leader Mahmoud Abbas. Israeli envoys have also said the group has been more open to negotiations after the death of its leader Yahya Sinwar, who the Israelis say categorically blocked any kind of hostage deal. 

For both sides, the ceasefire could thus come at a convenient time. But Qatari mediators say the negotiations could still fail- the plan has its weak points.

Firstly, the hostage exchange, the basis of the entire deal, is in question. In their tunnel system below Gaza, Hamas have lost track of where some Israeli hostages are, and whether they are still alive. Multiple Israelis are reportedly also held by other Islamist groups and not by Hamas, making organized releases difficult. The ceasefire could fail in the very first stage, simply because Hamas cannot produce the 33 hostages.

Another issue is that Israeli representatives have maintained they need to have a basis in Gaza itself to make sure Hamas does not rearm. The current draft would not allow that, but it has been discussed Israel may be allowed to have access to the crucial Netzarim corridor in Gaza during the first stage, allowing it to control the strip better. However, Hamas still needs to agree to this.

But even if all issues within the first stage are resolved, the second one might prove the most difficult. With the draft vaguely stating that all remaining hostages have to be released and Israel has to fully retreat from Gaza, both sides appear deadlocked. Hamas has said it will not release all hostages until Israel has left Gaza entirely, while Israeli representatives say they will not leave Gaza before all their hostages are home, and they have guarantees Hamas does not take power there again. 

Speaking to reporters on Tuesday, US foreign secretary Anthony Blinken provided a possible solution, saying the international community should come together in an “international stabilization and security effort”. Blinken also stated some international partners had agreed to contribute troops to maintain order in a self-governing Gaza.

Despite this, Benjamin Netanyahu has reportedly only signaled his support for the first stage of the ceasefire, not the second one. The two sides resuming the hostilities after the first phase is not unlikely. A temporary ceasefire may be close, but long-term peace could be as far as ever.

Instead, Conservative chairman and chancellor Karl Nehammer had tried to form a three-way coalition between his Conservatives, the Liberal Party, and the Social Democrats for months. This weekend the talks broke down, Nehammer resigned, and the Conservatives declared they would now be open to joining a Kickl coalition. Talks will be held this week, and it is not unlikely the two parties will soon form Austria’s next government.

The cooperation itself would not be unprecedented: On a federal level, the right-wingers have been the junior partner in a government five times, mostly with the Conservatives. The most recent Conservative-FPÖ government ended in 2019, during which Kickl was interior minister. But now, for the first time, the right-wingers could actually lead a federal government, with Kickl as chancellor. That would likely have a significant impact, both domestically and abroad. 

At home, his opponents say Kickl has been fond of right-wing extremism and conspiracy theories. He has pushed the idea of mass deportations of foreigners, tried to ban headscarves, and is close to the “Identitäre Bewegung”, a group classed as right-wing extremist in Austria. During the Covid-19 Pandemic, Kickl accused the World Health Organization of establishing a “health dictatorship”, and he has repeatedly said that there are no right-wing extremists in Austria. Asked about Austria’s fascist past, Kickl said the SS “was not to be found entirely guilty” of war crimes. When he was minister of the interior, Kickl’s police force raided the Austrian secret service, and he is accused of having officers destroy files on right-wing extremism that would have damaged his party.

On foreign policy, Kickl has long had to fend off allegations of being pro-Russia. He is an opponent of EU sanctions against the country, also proposing Austria should stop supporting Ukraine, as well as wanting to leave NATO defense programs such as “Skyshield”. When Kickl was minister of the interior, other European countries stopped sharing intelligence with Austria after one of Kickl’s closest affiliates leaked information to Russia. German politician Roderich Kiesewetter called Kickl and his party a “Russian Trojan Horse in the middle of Europe” in a recent interview, and former Austrian minister of the interior Gerhard Karner described him as a “walking security risk.”

The FPÖ are also critical of the EU, and Kickl has openly spoken of Austria leaving the union. He has been described as an “anti-EU chancellor”, and is well connected with like-minded leaders in Europe. The Austrian has referred to Hungarian President Victor Orbán as his “political idol” and the pair have worked together closely. Kickl’s relationship with Slovakian president Robert Fico is reportedly similarly good. 

Last year, Kickl joined Orbán and then Czech president Andrej Babiš in presenting an EU-sceptic  “Patriotic Manifesto” for Europe in Vienna. 

FPÖ has also strengthened its links to the German far-right party AfD under Kickl. AfD call themselves FPÖ’s “sister party”, and are polling similarly well to the Austrians in Germany. Following his idol Orbán, Kickl has also positioned himself as one of the only Trump supporters in Austrian politics. He has compared Trump’s anti-establishment messaging to his own campaign, and often underlined ideological similarities. 

With Kickl, the Alliance of right-wing, Russia-friendly, Trump-aligned populists in the EU would thus certainly gain a new, powerful member. Like Hungary and Slovakia, Austria has a seat in the European Council, which means Kickl could veto important legislation like Orbán has done in the past, paralyzing the Union. Or, he could have Austria leave the EU entirely.

If Kickl manages to actually form the government, his first confrontation with the EU could come very soon. Austria has to send a budget plan to Brussels on the 21st of January, to avoid the EU opening a deficit procedure against them. Kickl has said he is against any involvement of the EU in Austrian financial affairs, but refusing to cooperate in the procedure would break international law and incur sanctions from Brussels. Kickl’s idol, Victor Orban, has just made it through a similar confrontation with the Union, and it is likely he and Fico would back their new friend up.

However, Kickl will not be able to reign as free as he may like, even if he becomes chancellor. Austrian President Alexander van der Bellen has said he will make sure a Kickl government respects the separation of powers and leaves the country’s EU membership untouched. Kickl cannot get rid of the president, but van der Bellen can veto Kickl’s laws and fire his ministers. When Kickl was minister of the interior, he also had issues getting laws past the judiciary, as courts for example struck down his headscarf ban as unconstitutional.

And like his colleague Giorgia Meloni on the other side of the Alps, Kickl may adopt a more timid approach towards the EU once he is in office, for economic reasons. The Austrian economy is in recession, and the country has a 6 billion Euro hole in its national budget. As Kickl has vowed to not raise taxes, he cannot really afford to lose out on EU subsidies, or even pay penalties. 

But first of all, Herbert Kickl now has to form the government- wherever he may then lead it.