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The contest to stay on the leading edge of AI is rapidly taking center stage in America’s strategic competition with China. But what does it actually mean to beat China in AI? Does the United States have the right strategy for navigating this contest? Are policymakers overstating the threats posed by China, or by artificial intelligence itself? And can Washington and Beijing cooperate on areas of high risk even as they compete intensely elsewhere?

In this episode of Pivotal States, Christopher S. Chivvis speaks with Colin H. Kahl, Director of the Freeman Spogli Institute for International Studies and former Under Secretary of Defense for Policy in the Biden administration, to unpack the peril and the promise of U.S.–China competition in AI.

As above, EUR/USD seems to have survived what could have been a tricky week. Today’s focus will be on the flash PMIs for the region. These have been a source of comfort to the euro in that business sentiment has stayed relatively constructive, suggesting businesses are finding workarounds for the new tariff environment. As an aside, export numbers for November (Korea) and October (Japan) seem to be holding up quite well. A decent set of PMIs today could give the euro a modest lift. We should also see the European Central Bank’s survey of negotiated wages for the third quarter. These are expected at 2.45% quarter-on-quarter annualised versus 3.95% in the previous quarter. This should be welcome news to the ECB, but also a reminder that real wages are rising in the eurozone and, with a high savings rate, eurozone consumption could be a positive surprise for 2026.

Away from the data, we have several central bank speakers today. ECB President Christine Lagarde speaks this morning at the Frankfurt European Banking Congress. The tone of the conference is very much about the benefits of investing in Europe, and we might see references again to the notion of a global euro. Here, we’ve seen reports overnight in Politico that the ECB is thinking of expanding its EUREP repo lines to other central banks outside the euro area. This is an effort to increase comfort in euro invoicing – copying the People’s Bank of China’s playbook for the renminbi – and is something we discussed in our global euro paper earlier this year.

If EUR/USD can somehow make it back above 1.1560/65 today, it will have had a good week.

Elsewhere, we have a Swiss National Bank Watchers conference this afternoon, with plenty of SNB speakers. Expect a similar message along the lines of ‘we have all our options open’ to address Swiss franc strength, when in reality its ability to cut rates and intervene is sorely limited. We see EUR/CHF staying offered near 0.92 into year-end as investors prefer to hold Swiss francs as a hedge against a loss of confidence in government bond markets and fiat currencies.

Chris Turner

Only battery or fuel-cell electric vehicles eliminate tailpipe emissions

Flex-fuel cars comprise the majority of the fleet in Brazil, but they cannot deliver the same air quality benefits as electrification. Flex-fuel vehicles have no significant benefits over ICE gasoline vehicles in terms of air pollutants that harm human health. Hybrids may reduce these emissions but don’t eliminate them. In contrast, battery and fuel-cell EVs entirely remove tailpipe pollution from city streets—and all places where Brazilians live, work, and breathe

In addition to their air quality benefits, battery electric cars in Brazil produce substantially lower life-cycle greenhouse gas emissions than flex-fuel, hybrid, or improved ICE vehicles, delivering dual benefits of cleaner air and reduced climate impact. For example, battery electric cars emit about one third of the life-cycle emissions of gasoline-ethanol flex-fuel ICE vehicles.

Yet despite the advantages of battery electric vehicles for both air quality and climate, a recent ICCT study found that the lack of strong EV policies in Brazil has allowed automakers to prioritize flex-fuel and ICE vehicles. This is in stark contrast with other major markets where policies have driven rapid EV deployment, such as China and the United Kingdom, and risks further delaying the health and climate benefits of the EV transition in Brazil.

The choice ahead

The evidence is clear: accelerated EV adoption could deliver billions in health savings through 2040. Behind these figures are children who will breathe easier, families kept whole, and lives extended.

With vehicle electrification, Brazil can secure a win-win for both health and climate. Every electric vehicle replacing an ICE vehicle delivers immediate air quality improvements while cutting greenhouse gas emissions. The global transition to EVs is accelerating. With its clean electricity grid and growing domestic auto industry, Brazil is positioned to lead the way.

Vehicle electrification is underway in Brazil—what remains uncertain is the pace. With automakers increasingly able to supply EVs globally and costs declining steadily, policy choices will determine whether Brazil captures the full health, climate, and economic benefits of this transition, or continues bearing the costs of delaying action.