|
Getting your Trinity Audio player ready...
|
Welcome to The Geopolity’s What We’re Watching (3W), which is our daily look at the interconnected worlds of Geopolitics, Economics and Energy. Curated from the world’s leading sources of information, our analysis and commentary is designed to help you make sense of the events driving the major developments in the world.
In this roundup, we take a closer look at US president Trump’s weaponization of trade.
Under Trump, bilateral trade agreements no longer revolve around tariffs or market access. They have become political contracts to secure vast foreign investments and military purchases. The scale is striking. Japan has committed $550 billion, South Korea $350 billion and Malaysia $70 billion in US investments, while Southeast Asian partners have agreed to buy American aircraft, weapons and energy products worth tens of billions.
But, by treating allies less as partners than as instruments of leverage, Trump is corroding the foundations of alliance solidarity. His overtly coercive and transactional trade relationships breed resentment and erode the trust that sustains long-term cooperation. Allies begin to see engagement with Washington not as an expression of shared interests but as participation in a protection racket: pay the tribute or face economic retribution. The inevitable consequence is blowback.
In the 3W view, it is all behaviour typical for an emperor in a “End of Life Empire”.
Furthermore, we look at:
- The full awareness in Israel and the US that in their strategy in the War on Gaza entailed war-crimes; including the targeted destruction of Gaza’s education system
- The launch of the Second Phase of the Trump Peace Plan for Gaza; where 3W explains why this plan is “hardcore colonialism”
- The US and China trade moves in response to the Trump – Xi meeting in South Korea
- Why US trade diplomacy under Trump has effectively become an instrument for extracting tribute in the guise of cooperation
- ExxonMobil’s decision to further slow down is spending on the energy transition
- How China’s car industry is overtaking that of Europe, leaving the continent set for a massive economic disruption
- The 30th climate conference, officially the Conference of the Parties, but known less formally as COP30, which is taking place in Belem, Brazil
Geopolitics
As to Gaza, the US gathered intelligence last year that Israel’s military lawyers warned there was evidence that could support war crimes charges against Israel for its military campaign in Gaza – operations reliant on American-supplied weapons, writes Reuters.
The evidence was, in fact, overwhelming, notes 3W. In the two years since the war began inside the Strip, 64,000 children have been killed or maimed, according to Unicef, writes The National. Satellite-based assessments by the Education Cluster/UNRWA show that about 97 per cent of schools sustained damage, and 76.6 per cent of all school buildings were affected by “direct hits”, i.e. targeted Israeli fire. 660,000 children have now been out of school for nearly three years. 88,000 higher education students were forced to put their studies on hold. The only rational explanation for this is that Israel’s destruction of Gaza is not just about levelling buildings where it claims Hamas is hiding. Targeting universities, schools and libraries is designed to ensure the next generation of Palestinians is not educated.
Meanwhile, Reuters writes that the 15-member UN Security Council began negotiations on the text that would mandate a so-called Board of Peace transitional governance administration, giving it the authority to establish operational entities to address issues including the reconstruction of Gaza and of economic recovery programs. This represents the start of the second phase of the Trump Peace Plan for Gaza. 3W has previously noted the plan is hardcore colonialism in action. It is not designed with the interests of the Palestinians in mind, it just targets “security” for Israel. The “redevelopment” of Gaza is supposed to talk place with the parameters defined by this objective. The plan also does not see any role for the Palestinians in reconstruction or ruling. Foreigners are to be imported to take over this role, like the viceroys of old. These foreign rulers will then select the Palestinians who think and act like themselves as future leaders, to ensure that once the viceroys leave, their rule is continued by local hands.
As to Lebanon, the US seeks to take advantage of a “moment” in Lebanon in which it can cut Iranian funding to Hezbollah and press the group to disarm, the US Treasury Department’s top sanctions official said according to Reuters. The US has also offered support to Lebanon’s army to help it disarm Hezbollah, writes Bloomberg. Last week, Israel launched some of its heaviest airstrikes on Lebanon since the US- and French-backed truce came to effect, fueling concerns that the conflict could be reignited. The Israeli army ascribes its post-ceasefire attacks on Lebanon to Hezbollah’s attempts to rebuild its military capabilities, which were greatly degraded during last year’s war. 3W notes that this comment indicates there is bigger plan at play. We previously explained this plan is about establishing a new security infrastructure across the Middle East, one in which Israel militarily dominates to the point that none of the other countries in the region have the potential capability of challenging it. This plan requires establishment of buffer zones in Lebanon, Syria, and the remaining Palestinian Territories; disarmament of all groups resisting Israel in the region, followed by “deradicalization” i.e. a mindset change to accepting Israel as the legitimate regional hegemon; and a complete and regime change in Iran.
Macroeconomics
The US is close to formalizing a one-year suspension of port fees and other maritime policies that were intended to counter China’s shipbuilding dominance, writes Nikkei Asia, which says the move is a key part of the truce US President Donald Trump and Chinese President Xi Jinping struck in South Korea about a week ago. A US investigation earlier determined that China had used unfair subsidies and practices to grow its shipbuilding industry into the world leader. Based on the findings, Washington imposed new docking fees on vessels owned, operated or merely built by Chinese companies, effective October 14.
Meanwhile, China has suspended a ban on exports of “dual-use items” related to gallium, germanium, antimony and super-hard materials to the US, writes Nikkei Asia. China also suspended the stricter end-user and end-use purpose checks for exports of dual-use graphite to the US.
China has also granted exemptions to export controls on Nexperia chips for civilian applications, writes Nikkei Asia, to relieve supply shortages for carmakers and automotive suppliers. China imposed the export curbs imposed after the Dutch government took control of Nexperia, a large manufacturer of basic chips used in automotive electrical systems. The ministry’s statement on Sunday said that China hoped the EU would “further intensify” efforts to urge the Dutch side to revoke its seizure of Nexperia. “China welcomes the EU to continue leveraging its influence to urge the Netherlands to promptly rectify its erroneous actions,” the ministry added.
An analysis over at Nikkei Asia defines the Trump Tariff Wars as part of a broader geopolitical strategy. By weaponizing tariffs, sanctions and investment rules, he has turned trade policy into a tool of coercive statecraft — one that seeks to realign global power relationships in favour of America’s short-term geopolitical goals, it says. Under Trump, bilateral trade agreements no longer revolve around tariffs or market access. They have become political contracts to secure vast foreign investments and military purchases, binding allies into Washington’s orbit and curtailing their policy autonomy. The scale is striking. Japan has committed $550 billion, South Korea $350 billion and Malaysia $70 billion in US investments, while Southeast Asian partners have agreed to buy American aircraft, weapons and energy products worth tens of billions. The Japan deal even allows Trump to decide how Tokyo’s money is invested and grants Washington 90% of profits once Japan recoups its outlay. As U.S. Commerce Secretary Howard Lutnick conceded, Japan would have to “blow up their balance sheet” and borrow money to meet the obligations. Such arrangements amount to economic vassalage disguised as partnership, the author of the analysis rightly notes. Each of Trump’s trade deals shares the same blueprint: partner nations make concrete economic and strategic commitments, while the US retains both significant tariff barriers and the power to adjust or revoke terms unilaterally. The accords extend well beyond traditional trade matters to encompass investment quotas, defense-procurement obligations, critical-minerals cooperation and compliance with American sanctions and export-control policies. But by treating allies less as partners than as instruments of leverage, Trump is corroding the foundations of alliance solidarity. Overtly coercive and transactional trade relationships breed resentment and erode the trust that sustains long-term cooperation. Allies begin to see engagement with Washington not as an expression of shared interests but as participation in a protection racket: pay the tribute or face economic retribution. The inevitable consequence is blowback.
Energy
ExxonMobil says it will “pace” spending on low-carbon projects because of disappointing customer demand and government policies that are failing to provide the right incentives to create viable markets. Company CEO Darren Woods told the Financial Times that assumptions the company made when setting a $30bn capital expenditure budget for “low emissions opportunities” to 2030 last year had not been met. Woods said there are not enough customers willing to buy products such as hydrogen and biofuels and that climate policies designed to support decarbonisation “frankly aren’t working”.
Technology
European carmakers are rapidly losing market share globally as Chinese rivals enter a new phase of expansion and innovation, Lasse Kristoffersen, chief executive of Wallenius Wilhelmsen, the world’s biggest operator of car-carrying ships, told the Financial Times. “The reason why Chinese are winning market shares is because they innovate themselves,” he told analysts on a recent earnings call. “The Chinese producers have gone from being cost leaders to now being technology leaders.” Chinese exports jumped by 23 per cent to 6.4 million passenger vehicles last year, more than 50 per cent higher than second place Japan. European carmakers face a triple whammy of shrinking sales in China, sluggish demand at home and higher US tariffs. “They are challenged in both their home market and in their east and west overseas markets, but we do see that they are taking measures,” Kristoffersen said.
Other
The 30th annual United Nations climate summit, the Conference of the Parties, known less formally as COP30, is taking place in Belém, Brazil. Unlike the Paris Agreement, or even last year when negotiators were trying to get countries to agree on how much rich countries should pay poor countries to adapt to climate change, this year’s talks aren’t expected to end with any ambitious new deal, writes The Associated Press. Organizers and analysts are framing this year’s conference as the “implementation COP.” World leaders will be challenged to provide money for adapting to climate change, and fund billion-dollar efforts to prevent deforestation and land degradation. The host, the government of Brazil, is spearheading a new initiative called the Tropical Forests Forever Facility, a program designed to give nations a monetary reward for protecting forests.
Business attendance at the UN COP30 climate summit in Brazil is expected to be far narrower than in past years, writes The Financial Times. The numbers of top overseas executives is limited both by the logistical constraints of the Belém location, as well as by political pressure on climate action since the election of US President Donald Trump. But generally speaking, in business there is now greater discussion of energy security and affordability, not sustainability alone, notes FT.