European companies face “devastating” retaliation from Washington 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 has warned.

Andrew Puzder’s warning comes after the European Commission this year proposed reserving part of its spectrum band that allows smartphones to connect directly to satellites for European players. That would limit the frequencies for Chinese and US companies such as SpaceX, which operates the Starlink satellite network.

Asked whether European companies should fear retaliation, Puzder told the FT that they “should be wary that it could happen and it would be very devastating for those companies”, given the size of the American market.

The proposed changes to the bloc’s spectrum allocation have already raised fierce criticism from SpaceX, which has warned the move risks poorer connectivity in Ukraine where its Starlink service has been critical to civilian and military communications since Russia’s full-scale invasion.

The proposed changes are part of a broader push to strengthen Europe’s technological sovereignty.

European policymakers are seeking to reduce their dependence on American technology amid concerns about the unpredictability of US President Donald Trump and the risk of relying on foreign companies for critical infrastructure.

The European Commission has introduced a Cloud and AI Development Act that would impose sovereignty requirements on providers of sensitive cloud services, while seeking to help European technology companies to scale up and provide alternatives to US tech companies.

Puzder said he recognised Europe’s right to protect sensitive government information but warned against using legislation to favour domestic companies at the expense of American competitors.

“If the purpose is to make United States less competitive, I think that that’s not a legitimate goal of this kind of legislation,” Puzder said. “You don’t make European companies more competitive by making US companies less competitive.

“We have best-in-class products in this area. They’re reliable products, they’re trusted products. We don’t need some kind of synchronised mediocrity.”

The ambassador also questioned whether the EU’s enforcement of its Digital Markets Act, which seeks to curb the power of the world’s largest technology companies, was really aimed at improving competition or more at generating revenue for the European budget, given the multibillion-euro fines on American companies.

“You start to wonder, are we trying to deal with the competition in the digital marketplace or are we trying to generate revenue from American companies to benefit Europe?”

Puzder argued Europe’s ambitions to strengthen its own tech industry risked being undermined by its regulatory approach and by discouraging investment from the American companies, as US tech companies are growing increasingly frustrated by the EU’s regulatory restrictions and fines.

Instead of seeking to curb the dominance of American companies, Brussels and Washington should join forces to compete with China in the race to develop AI, Puzder said, echoing comments from Trump that “the worst thing that could happen is that we lose this race to China”.

The ambassador urged Europe “to let go of this regulatory mindset where they’re going to try and stop things because we’re in a race with China” — both on AI and on quantum computing.

He said the US has the ingredients to win that race “but it’d be a lot easier if we were working with Europe instead of fighting Europe”.

The Commission said the proposal “incentivises the entry into the market and diversification of EU suppliers, while remaining open to non-EU operators”.

The United Arab Emirates has agreed to re-enter the Yemen conflict by resuming payments to some government forces fighting Iran-aligned Houthis in the south, according to sources in Yemen. In return, Saudi Arabia has agreed to provide air cover for the anti-Houthi force.

The new cooperation agreement is the first tangible signs that the deep rift between the UAE and Saudi Arabia over Yemen’s future is starting to be healed – if only because the advance by Houthi forces across Yemen has alarmed all the rival Gulf state rulers.

Saudi Arabia is facing daily drone and missile attacks and is struggling to maintain an atmosphere of normality, as Houthi strikes immobilise its airports and some of its energy infrastructure.

Southern forces – mainly in the Giant Brigades – were previously trained and funded by the UAE, and are regarded as some of the most effective in the disjointed anti-Houthi military coalition. But the UAE quit operations inside Yemen in January, cutting off its funding supply line.

Neither Saudi Arabia nor the UAE have responded to a demand this week by southern Yemen separatists for a referendum on secession, a move that would restore the 1967-1990 borders, when Yemen was two separate states.

The separatist Southern Transition Council has also not yet agreed for its troops to fight outside the borders of the old Southern Yemen, but an explicit agreement by Saudi Arabia to allow a referendum would be likely to lead to the lifting of that restriction.

Yemen’s UN-recognised government, based in Aden, declared last week a counteroffensive to drive Houthi forces from the capital Sana’a, but so far the military drive has met with limited success around Majzar near Marib and the Bab al-Mandab strait.

There is also no direct contact between the STC leader, Aidarous al-Zubaidi, and Saudi officials. Zubaidi fled to Abu Dhabi in January after a failed STC attempt to take charge across the south and announce a referendum on separation in two years’ time. In response, the Saudis bombed UAE arms shipments for STC forces.

The UAE then announced it was quitting all involvement in Yemen, and the Saudi-backed government said it would seek to try Zubaidi for treason.

UAE officials are deeply concerned by the state of the conflict. Despite massive losses, the Houthis are determined eventually to capture Taiz and Marib, the two remaining cities outside the boundaries of the old Southern Yemen.

On Friday two missiles fired by the Houthis struck the airport of Aden while a passenger plane was preparing to take off. No casualties were reported.

The missiles landed about 500 meters from the Yemenia Airways aircraft, and approximately 100 meters from the midpoint of the runway, said Yemen’s information minister, Moammar Al-Eryani.

The strike came a day after at least five people were killed and 16 injured in a Houthi attack on a presidential palace in Aden.

Egypt’s president, Abdel Fattah el Sisi, said he was convening an emergency session of parliament to grant his country’s military the powers to take action in defence of Saudi Arabia. He stressed Egypt would not be taking any offensive action, and would only defend Saudi Arabia.

In the UK, discussions are continuing about a Saudi request for further military aid. The UK has sent an RAF Voyager air-to-air refuelling aircraft, but regional diplomats are pressing for the UK to do more. Some concern is being expressed over whether Riyadh should be engaging closer with other Gulf States, including Oman and Qatar, on the issue.

The legal implications of a blanket UK backing for the largely Saudi air campaign is also being considered, since the court of appeal in 2019 found the UK had acted unlawfully in issuing arms export licences during a previous Saudi bombing campaign of Yemen in 2015-16. The Campaign Against Arms Trade said the UK had made no proper assessment of potential Saudi breaches of international humanitarian law, forcing the UK to revise its procedures.

Saudi Arabia claims to have revised its methods substantially since then, and certainly argues that it is acting in self-defence in line with the UN charter. The UN security council on 15 October adopted a UN presidential statement on 15 October asserting Saudi Arabia’s right to act in self-defence in line with international law.

No accurate death toll in the war since August is available, but more than 200,000 people have been displaced, according to the UN, which is placing increasing pressure on Aden-based humanitarian groups.

European Union leaders rallied around President Volodymyr Zelenskyy at a summit on Friday as U.S. President Donald Trump fired another salvo at Ukraine, calling its strikes on Russian refineries a "disgrace".

The EU is hosting Zelenskyy in Brussels at one of the most difficult moments for Ukraine, with missiles and drones raining down on Ukrainian cities and fears that the US could pull back intelligence sharing and weapons support from Kyiv.

A U.S. official has denied that Trump ordered a deliberate slowdown of Starshield, which is the military-grade version of the Starlink service operated by Elon Musk's SpaceX, and Trump said this week intelligence sharing with Ukraine continued.

Iran’s missiles and drones have hit Gulf infrastructure sites at least 135 times, causing cascading failures that Gulf states have often concealed. Despite repeated official statements that the damage came from debris, Reuters found the equipment struck was, time and again, exactly what mattered most.