This week in Geopolitical Concerns, we examine how Mark Carney’s election victory in Canada and growing unease in Asia signal an international backlash to Trump’s second-term policies, as well as Germany potentially charting a path away from U.S. dependence. In Geoeconomics, we trace how new U.S. tariffs and a weakening dollar are reshaping global trade patterns, lowering freight volumes, and fueling economic nationalism on both sides of the Pacific. Global Junctions turns to China’s robot-driven manufacturing surge, India’s escalating conflict with Pakistan, and the intensifying global race for EV dominance—revealing how power struggles are now fought with data, drones, and electric drivetrains. Finally, in Global Trajectories, we explore the fraying of U.S. influence in Asia, a looming financial hangover sparked by protectionism, and how Africa’s demographic ascent could redraw the global economic map.
Geopolitical Concerns
Mark Carney’s Liberals win pivotal Canadian election
Ilya Gridneff, The Financial Times
Trump’s first 100 days spark anxiety across Asia: 4 things to know
Ken Moriyasu, Pak Yiu, and Yifan Yu, Nikkei
Germany’s Reaction to Trump Is Another Paradigm Shift
Sophia Besch, Carnegie Endowment for International Peace
In Canada, Mark Carney’s Liberal Party won the April 28, 2025 election, securing or leading in 168 of 343 seats, compared to the Conservatives’ 144. The result, tighter than expected, reflected voter shifts from smaller parties and a patriotic backlash against Donald Trump’s tariffs and jabs about Canada as the “51st state.” Carney centered his campaign on resisting U.S. pressure, declaring in his victory speech that the era of deepening integration with the U.S. is “over.” The win marks a Liberal rebound after Justin Trudeau’s resignation and Carney’s March appointment as leader. Conservative leader Pierre Poilievre lost his Ontario seat and conceded, calling it a “razor-thin minority.” The NDP, which backed Trudeau’s prior government, suffered major losses; leader Jagmeet Singh lost his seat and resigned, though the party may still support a Carney minority. Meanwhile, Germany sees Trump’s return as a blow to trade, security, and shared values. With U.S. exports accounting for 4% of GDP, Germany is vulnerable to tariffs and disturbed by Trump’s moves on Ukraine and Russia. Vice President JD Vance’s speech in Munich and secret meeting with AfD leader Alice Weidel inflamed tensions. In response, incoming Chancellor Friedrich Merz proposed a step-by-step break from U.S. dependence, exempting defense spending above 1% of GDP from debt limits and launching a $547 billion infrastructure plan. Germany now seeks lower tariffs and multilateralism while remaining cautious, amid a stagnant economy and reluctance to lead alone.
In Asia, Trump’s second term has sparked anxiety among investors, students, and governments. His early actions reshaped trade, immigration, and tech. Sweeping tariffs include Section 232 levies (25% on steel, autos, potentially semiconductors), a universal 10% baseline, and reciprocal tariffs targeting surplus countries. China faces a 145% tariff without the 90-day pause applied to others; Vietnam may see a 46% hike. Trump’s reshoring push may benefit U.S. exporters but could raise costs for consumers. Foreign policy now leans toward a “strategy of denial” to counter China, shaped by internal power shifts and National Security Council purges. Immigration crackdowns—175 executive actions—have led to 4,300 deportations in February and legal fears after arrests like that of green card holder Mahmoud Khalil. Asian students have faced arbitrary visa revocations, some later reversed, dampening international interest.
Geoeconomics
The dollar has further to fall
Jan Hatzius, The Financial Times
Demand slump fueled by Trump tariffs hits US ports and air freight
Peter Foster, Chan Ho-him, Patricia Nilsson, Rafe Uddin, and Patrick Temple-West, The Financial Times
Xi Is Ratcheting Up China’s Pain Threshold for a Long Fight With Trump
Josh Chin, Wall Street Journal
The future of the U.S. dollar, combined with trade disruptions from new tariffs, is reshaping global trade and logistics. Experts expect the recent 5% depreciation of the dollar (on a trade-weighted basis) to continue, as Fed data shows its real value remains nearly two standard deviations above its post-1973 average. Historically, such overvaluations in the mid-1980s and early 2000s were followed by 25–30% declines. A weaker dollar would help finance the $1.1 trillion annual net capital inflow needed to fund the U.S. current account deficit. Economic forecasts are dimming—Goldman Sachs cut its Q4 2024–Q4 2025 U.S. GDP growth estimate from 1% to 0.5% due to the tariff shock—reducing foreign appetite for U.S. assets. While dollar depreciation suggests American consumers will absorb much of the tariff burden, it could also narrow the trade deficit by lowering export prices. Meanwhile, President Trump’s trade war with China has sharply curtailed goods flows. Following the 145% tariff on Chinese imports, container bookings from China to the U.S. fell 45% year-on-year by mid-April. The Port of Los Angeles forecast a one-third drop in arrivals for the week of May 4 and projected 20 blank sailings in May—up from six in April—representing over 250,000 containers. Across Asia–North America routes, nearly 400,000 fewer containers are booked for the four weeks after May 5, a 25% drop from March. Airfreight is down about 30%. Companies are delaying shipments, hoping for tariff relief or diverting to countries like Vietnam, where container prices are up 15%, while prices on China–U.S. routes have fallen 27%. The end of the U.S. “de minimis” tariff exemption for Chinese goods under $800 on May 2 is expected to further hit e-commerce and freight volumes.
In turn, Xi Jinping is preparing China for a protracted confrontation, portraying the Communist Party as more resilient than U.S. politics, which he paints as reactive to voter swings. Since the previous trade war, Xi has entrenched his rule—abolishing term limits in 2018 and consolidating power to a degree unseen since Mao. His leadership now prioritizes political control and internal security, placing experienced propagandists and security officials in top posts. Embracing “extreme scenario thinking,” China has expanded its surveillance and censorship infrastructure, budgeting $209 billion for domestic security in 2023 and allocating $110 billion for national strategies and capacity-building. This apparatus, scaled after the 1989 Tiananmen crackdown, uses AI and human monitoring to suppress dissent. Tools tested during the COVID lockdowns—such as facial recognition and mobile tracking—were redeployed during the 2022 protests, when authorities detained protesters and trained censors to neutralize symbols like blank white paper. Xi is doubling down on citizen surveillance with the “Fengqiao model,” growing AI tools that assess crowd threats in real time. Although GDP growth slowed to 5% in 2024 (down from around 7% in Trump’s first term) and new tariffs could eliminate half or more of China’s exports to the U.S., jeopardizing 20 million jobs, Beijing is responding with fiscal stimulus, targeted subsidies, and direct aid to laid-off workers. While labor unrest poses the biggest threat, China’s vast control infrastructure is calibrated for precisely this crisis, allowing the regime to endure economic pain and commit to a long game against U.S. pressure.
Global Junctions
An Army of Robots Is China’s Weapon in Trump’s Tariff War
Keith Bradsher, New York Times
How China dominates the car industry, leading Western manufacturers to imitate it
Harold Thibault, Le Monde
India Seems to Be Building Its Case for Striking Pakistan
Mujib Mashal, New York Times
China is rapidly reshaping global manufacturing through AI-driven automation, with factories like Zeekr’s electric car plant in Ningbo replacing human labor with intelligent robots. Backed by $1.9 trillion in industrial lending and a new $137 billion venture capital fund, even small workshops are adopting robotic arms once considered cost-prohibitive. This shift is central to the “Made in China 2025” strategy, aimed at maintaining industrial dominance despite an aging workforce. Meanwhile, at the 2025 Shanghai Auto Show, Chinese automakers such as BYD, Geely, and Xiaomi showcased their growing dominance in electric and smart vehicles. With BYD unveiling a five-minute battery charge for a 470-km range and CATL controlling nearly 38% of the global battery market, China’s rapid innovation is leaving Western automakers struggling to compete. U.S. and EU tariffs have followed, intensifying economic tensions over industrial policy and market access.
In South Asia, India is on edge following a deadly terrorist attack in Kashmir that killed 26 civilians. Prime Minister Narendra Modi has blamed Pakistan-based groups, citing technical intelligence like facial recognition, and vowed to eliminate terror safe havens. His government has expelled Pakistani diplomats, threatened water access, and arrested hundreds in Kashmir, while cross-border gunfire has resumed. A group believed to be a proxy for Lashkar-e-Taiba claimed responsibility, but major global powers have largely stayed silent. With memories of past retaliatory strikes in 2016 and 2019, analysts warn of rising escalation risks, though some suggest the two nuclear-armed neighbors may continue their strategy of “managed hostility.”
Global Trajectories
Emigration from Africa will change the world
The Economist
Opinion: ‘Bond king’ Jeffrey Gundlach predicts our next financial hangover — and it’s sobering
Charlie Garcie, Market Watch
Robert A. Manning, Foreign Policy
In the latest shifts in global geopolitics, Robert A. Manning’s article in Foreign Policy highlights the accelerating rise of China in Asia, driven in part by U.S. President Donald Trump’s isolationist and protectionist policies. Trump’s aggressive tariffs and withdrawal from trade agreements like the CPTPP have undermined U.S. influence, driving U.S. allies such as Japan and South Korea to consider closer economic ties with China. Meanwhile, China has positioned itself as a stabilizing force in the region, launching a diplomatic charm offensive to expand its influence. This ongoing erosion of U.S. credibility is reshaping regional alliances and supply chains, with countries increasingly leaning toward Beijing.
In economic developments, Jeffrey Gundlach and Jim Bianco of Bianco Research discussed the risks posed by Trump’s tariffs and the growing threat of stagflation. Gundlach warned that these tariffs, akin to stealth taxes, are disproportionately affecting working-class Americans, while also noting that Europe’s unexpected economic rebound, fueled by the war in Ukraine, is reshaping global markets. They forecast modest returns in the near future, urging investors to diversify into commodities and European industrials. Meanwhile, Africa’s growing population could transform the global labor market, as it is projected to account for roughly half of the new workers entering the global labor force by 2030. As countries like the U.S. and Europe face aging demographics, African migration is emerging as a key solution to labor shortages, despite challenges and abuse faced by migrants, particularly in the Gulf states.
