US ambassador to the EU Andrew Puzder warned that Brussels could face retaliation if it restricts American firms like SpaceX. Puzder said, "It's in the United States' best interest that Europe be prosperous." He argued that Europe should focus on fixing its own high energy costs instead of targeting US companies.

Also in this newsletter: EU turns to New Caledonia for nickel in bid to loosen China's grip

Good morning. I'm stepping in for Henry this week as he enjoys a short break. News to start: European companies could face "devastating" retaliation if Brussels presses ahead with plans to restrict American rivals such as Elon Musk's SpaceX from parts of the European market, the US ambassador to the EU warned.

Today, I report on the US envoy's comments on how to make the bloc more competitive, while our trade correspondent reports on a new initiative to diversify away from China.

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Helping hand

The US wants Europe to become more competitive, but Brussels needs to stop regulating companies out of its market, Washington's ambassador to the EU has warned.

Context: Two years after Mario Draghi's landmark report on Europe's competitiveness, Brussels is struggling to turn its ambitions into reality. The European Commission has made boosting the bloc's economic growth a priority, including by reducing its dependence on American technology companies and building up domestic alternatives.

The US ambassador to the EU, Andrew Puzder, said Washington wanted a prosperous Europe, arguing that a stronger European economy would benefit the US through increased trade and a more capable security partner.

"It's in the United States' best interest that Europe be prosperous," he said. "A prosperous Europe is a better trade partner. It is able to defend itself, it can help us in parts of the world where we could use some help."

But the envoy argued Europe was going about it the wrong way.

"You don't make European companies more competitive by making US companies less competitive," he said, criticising efforts to favour European technology providers and impose restrictions on their American rivals.

Puzder argued that Europe's biggest obstacles were homegrown: burdensome regulations, high energy costs and insufficient access to capital, which were preventing companies from scaling up and discouraging investment.

"We're not trying to hurt Europe or compete them out of the economic markets or capital markets, but they're regulating themselves out of them. And we're making every effort we can to get them to stop."

Chart du jour: Mars' trip

Japan is preparing to launch the first return trip to Mars' orbit, aiming to retrieve physical samples from the moon Phobos. It will also deploy a small European-built rover to explore the surface.

Nickel diplomacy

The EU is stepping up efforts to diversify its supply of critical raw materials away from China in a deal with New Caledonia to be signed tomorrow, writes Andy Bounds.

Context: The French overseas territory is a vital source of nickel and cobalt for green technologies but its mines have been struggling after prices fell because of surging production in Indonesia. Chinese companies control 75 per cent of nickel refining capacity in the country, the world's largest producer.

Stéphane Séjourné, the EU's industry commissioner, will sign a memorandum of understanding with the island's government pledging support and investment.

The MoU, seen by the FT, pledges to develop "an internationally competitive and sustainable mineral resources industry in New Caledonia, in particular on nickel and cobalt, for prospecting, exploration, extraction, processing and refining of raw materials".

The EU could provide financing from its Global Gateway programme or the European Investment Bank, as well as help attract private money.

"Securing a reliable supply of battery-grade nickel is a strategic priority for Europe," said an EU official. "In New Caledonia we have European citizens with decades of industrial expertise, the resources and the knowhow to become a strategic supplier for our industries."

The need is urgent. The French state is upping its stake in nickel miner Eramet after it needed a cash injection. And the Koniambo mine has been mothballed since 2024.

Tensions between indigenous Kanaks and settlers remain on the Pacific island of 290,000 people after deadly riots in 2024. Many Kanaks want independence, which would end any European influence over who owns the mines and where they sell their output.

What to watch today

* European Commission president Ursula von der Leyen meets with President of the European parliament Roberta Metsola in Strasbourg.

* European Migration Commissioner Magnus Brunner meets UK Home Secretary Shabana Mahmood in London.

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