Dear Reader,
The American government's trade policy is the biggest story in geopolitics, and is seen as incoherent, reckless, and rooted more in ego than economics. American moves lack strategic coordination and may provoke retaliation rather than reshoring industry or restoring American manufacturing might.
Australia has an election in May, and America’s impact on their economy is causing anxiety.
AUKUS is a trilateral security pact between Australia, the United Kingdom, and the United States, announced in 2021 to strengthen defense and technological cooperation in the Indo-Pacific region. Its centerpiece is helping Australia acquire nuclear-powered submarines, significantly boosting its naval capabilities. AUKUS was widely viewed as a strategic move to counter China’s growing influence in the region. After American tariffs, however, Australia and the U.K. are both recalibrating in light of potential US unpredictability, as seen in scrutiny of AUKUS commitments. The UK House of Commons is reevaluating but unlikely to ditch the alliance for now, and Australia is also having second thoughts.
The European Union is looking to diversify trade and is afraid of being caught between the US and China in a trade war. Will China seek to flood the world market to make up for loses in the US market?
As The Economist notes, US President Donald Trump’s approach risks entrenching long-term damage, exposing top-tier US firms to foreign countermeasures and souring key alliances. Financial analysts are warning that Trump's tariff-heavy posturing is unsettling bond markets. Investors are wary of higher inflation and economic isolation, prompting fears of long-term structural instability in American economic leadership. Countries may seek to retaliate against American-based tech giants and corporations. Payback is being contemplated.
The Editorial Board of Le Monde says the American administration is practising "strategic arrogance," alienating allies like France and Germany, who see the new tariffs and isolationism as abandoning postwar Atlantic unity in favor of unilateral power plays. They argue that there is only the illusion of stability, and speculation is to new rule of the day.
Shifts in Global Dynamics Beyond Trump
Germany’s Citizenship Reform: The new German coalition government led by the Christian Democratic Union party moves to end the three-year path to German citizenship, but will likely keep the five-year path. They are moving away from the left-libertarian ideas of the Green Party and Freedom Party, which German voters rejected in the last election.
Peace in the Balkans Under Threat…by the Balkans, (again): DW reports rising concerns over military realignments in the Western Balkans, where competing regional and global interests (including Russia’s) threaten fragile peace accords. The US withdrawal from soft-power diplomacy has created vacuums ripe for exploitation. And it looks like the Balkans may not be able to behave without US leadership.
In the Letters section of The Economist, readers underscore a global weariness with populist unpredictability. From concerns over Marine Le Pen's political maneuvers in France to skepticism about Trump’s long-term vision, there’s a rising chorus of voices—left, center, and even moderate right—calling for steadier hands and coherent strategies in an age of geopolitical flux.
I would note that continuing to defend Le Pen risks the “rightwing” in America and other countries losing their association with the “rule of law” as Le Pen is clearly guilty, showed absolutely no contrition when she was in court, was dismissive of the judge, and basically did everything possible to demonstrate a lack of regard for the proceedings. Let us be serious, in any highly developed judicial system in the West, going out of your way to disrespect a judge in their courtroom is going to get the book thrown at you. So no sympathy for Le Pen. Likewise, they will likely punish her by giving her a fast-tracked appeal. Readers, a fast-tracked appeal is not a good thing in this case, because Le Pen’s best chance to stay a presidential candidate in France is if her appeal is pending when the 2027 election happens. But if the appeal is in 2026, she will lose, she will lose because she is guilty, not just beyond a reasonable doubt guilty, she is paper trail “Let’s do the crime, PS, I hope no one reads this” guilty. Defending her or saying this is lawfare reveals that too many who claim to be “conservatives” are actually radical renegade revolutionaries. Likewise, the news of the week is that while the tariffs are “paused,” the world is not going back and will not passively wait on the US. They are continuing to reevaluate exactly where they have ties with the US and are considering that China, despite being a one-party communist dictatorship, may be the more reliable partner. And countries that China geographically threatens are likely to seek accommodation if American support seems fickle.
A final warning: a Europe that reinvests in its military to the extent it can become an American peer is a Europe that can and will act indepently of the US and Americans may not like what that looks like in the Middle East and Africa, which are by proximity to Europe, what the Caribbean and Latin America are to the USA.