In Geopolitical Concerns, Trump’s return to power is reshaping U.S. global security posture, as his administration signals a retreat from Europe’s defense and courts Gulf monarchies with promises of détente, even as Gaza reels from devastation and Europe faces a stark call to rearm.
In Geoeconomics, ballooning U.S. debt and Trump’s deficit-heavy agenda are rattling global bond markets, driving yields to alarming levels from Tokyo to Frankfurt, while looming tariffs on EU goods threaten the transatlantic trade architecture.
Global Junctions explores how AI, rare earths, and critical minerals are redrawing the map of global power, from Google’s race to reclaim search dominance to a minerals-for-peace deal in Congo and China’s strategic patience in the tech wars.
Finally, in Global Trajectories, we track how nuclear tensions in South Asia, U.S. disengagement from Africa, and Eurozone climate fragility are reshaping the foundations of global order, testing diplomacy, development, and ecological resilience all at once.
Geopolitical Concerns
Trump’s Middle East Trip Was Quietly About Resetting U.S. Regional Policy
Paul Poast, World Politics Review
Radosław Sikorski, Project Syndicate
Samuel Forey and Clothilde Mraffko, Le Monde
U.S. President Donald Trump’s return to the political arena is prompting a significant shift in the U.S. approach to global security, particularly concerning Europe. U.S. officials, including Secretary of State Marco Rubio and Defense Secretary Pete Hegseth, who made announcements in Brussels in February, are openly communicating that the United States cannot remain primarily focused on European security issues due to other global priorities. Vice President J.D. Vance has also stated that Europe’s security infrastructure has been heavily subsidized by the U.S., suggesting this is not in either party’s long-term interest. Trump himself has repeatedly accused European nations of “freeloading”. This stark strategic reality presents Europe with an “existential choice”, compelling the continent to enhance its own defense capabilities. Since 2016, prior to Trump’s first term, NATO members excluding the U.S. have increased their annual defense spending by 98%, rising from $255 billion to $506 billion. Public opinion within the European Union strongly supports this shift, with 71% of citizens believing the bloc must strengthen its military equipment production ability and 77% supporting a common defense and security policy. The EU and its member states have also committed substantial support to Ukraine following Russia’s invasion, providing over $165 billion, although this amount is less than 1% of the EU’s combined GDP of some $19 trillion. Developing a revitalized European defense posture and taking on a fair share of the security burden is seen not as undermining transatlantic relations, but as necessary to improve them and enable Europe to help the U.S. defend its allies.
Turning to the Middle East, President Donald Trump embarked on a four-day tour of three Gulf monarchies – Saudi Arabia, Qatar, and the United Arab Emirates – starting on May 15, 2025. While Israel was notably absent from the itinerary, Israeli Prime Minister Benjamin Netanyahu was the first leader to visit Trump at the White House after his return. The trip’s primary intention appeared to be a reset of U.S. policy toward Muslim countries in the Middle East. During an address in Riyadh, Trump offered an “olive branch” to Iran, expressing willingness to end past conflicts and forge new partnerships. He also met with Ahmed al-Sharaa, the interim president of Syria, in Riyadh, and called for the end of U.S. sanctions against that nation. This regional recalibration occurs against the backdrop of extreme devastation in Gaza, described using the concept of “futuricide” – a violence aimed at uprooting the population and destroying any possibility of a future. Since the war began following Hamas’s massacre on October 7, 2023, the destruction is immense: satellite imagery shows 68% of Rafah’s buildings have been leveled, and over 90% of homes across Gaza have been partially or completely destroyed. According to local health authorities whose figures are deemed reliable by the UN, nearly 53,000 Palestinians have been killed, mostly women and children. The education system is decimated, with 95% of 564 schools unusable and all 12 universities destroyed. Compounding the crisis, the Rafah crossing, the sole gateway to Egypt, has been shut since Israeli armored vehicles entered the city in May 2024. Trump’s “Riviera” plan for Gaza, presented in February, which openly assumes the expulsion of Gazans, has been officially added to Prime Minister Netanyahu’s war aims on May 21.
Geoeconomics
Trump and the Risk of a US Debt Default
William L. Silber, Project Syndicate
Soaring bond yields threaten trouble
The Economist
The Japanese government bond market is in trouble
Ajay Rajadhyaksha, The Financial Times
Trade Between the U.S. and EU Is Massive. We Break It Down.
Konrad Putzier, Alana Pipe, and Inti Pacheco, Wall Street Journal
Drawing on a history of business reorganizations due to excessive debt—such as Trump Taj Mahal (1991), Trump Plaza Hotel (1992), Trump Hotels and Casino Resorts (2004), and Trump Entertainment Resorts (2009)—President Donald Trump’s political return coincides with heightened concern over U.S. government debt. The U.S. borrowed $2 trillion (6.9% of GDP) in the past year, and recent “chaotic policymaking” has led investors to question the safe-haven status of Treasuries. Given the U.S. economy’s global weight (26% of world output), its fiscal imbalance is raising global capital costs. Since May 21st, 30-year Treasury yields have hovered above 5%, just before Trump’s budget—expected to widen the deficit—passed the House on May 22nd. Bond yields are rising across advanced economies, and trade frictions add pressure. In 2024, the U.S. had a $235.6 billion goods trade deficit with the EU, narrowed to $161 billion when services are included. EU trade made up 4.9% of U.S. GDP. Trump has threatened 50% tariffs on EU goods, delaying implementation from June 1 to July 9. Major U.S. imports from Europe include pharmaceuticals ($127B), cars ($45.2B), and machinery; exports include airplanes ($32.3B), vehicles ($12.4B), and blood products ($5.2B).
Global bond market stress extends beyond the U.S., fueling what analysts call a “broad-based duration crash.” Britain’s 30-year borrowing costs reached 5.5%, and Germany’s hit 3.1%, nearing eurozone crisis levels. Japan’s market is under exceptional strain: 30-year bond yields hit 3.2% on May 21st, a record, and the 40-year yield climbed to 3.7%. Losses on long-duration Japanese bonds have approached 20% in weeks. Yield distortions—like the 35-year bond yielding over 4.6%, nearly a point more than the 40-year—signal evaporating demand. Inflation at 3.6%, solvency rule changes, defense spending pressures, and the Bank of Japan’s shift to quantitative tightening (after years as the dominant buyer) are driving yields higher. With the BoJ now letting bonds mature, global investors are shedding long-dated paper, pushing up yields elsewhere, including in the U.S. Analysts cite Japan as a key driver of rising Treasury yields. Without decisive action, Japan risks losing control of its yield curve—already contributing to U.S. mortgage rates rising back above 7%.
Global Junctions
DR Congo eyes US minerals deal tied to peace in rebel-hit east by end of June
William Wallis and Camilla Hodgson, The Financial Times
China’s rare-earth gambit with Trump echoes Mao’s ‘protracted war’
Shunsuke Tabeta, Nikkei Asia
Can Google still dominate search in the age of AI chatbots?
Stephen Morris, Melissa Heikkilä, and Cristina Criddle; The Financial Times
As global competition over AI and minerals intensifies, Google made major announcements at its May 2025 developer conference, where co-founder Sergey Brin revealed he now works daily in Google’s AI lab. CEO Sundar Pichai unveiled an overhauled Google Search featuring “AI mode” powered by the Gemini model, positioning Google against OpenAI’s ChatGPT, which currently leads with 600 million users to Gemini’s 400 million. With the launch of premium AI subscriptions, new AI shopping tools, and real-world agent prototypes like Project Astra, Google aims to protect its $198 billion ad business and 90% search market share. However, rising competitors like Perplexity and increasing regulatory pressure could pose significant challenges, even as Alphabet shares rose 3% following the event.
Meanwhile, the geopolitical scramble for critical minerals is reshaping diplomacy. On May 25, The Financial Times reported that the U.S. is negotiating a deal with the Democratic Republic of Congo (DRC) to gain access to key minerals like cobalt and coltan—contingent on resolving conflict in the DRC’s eastern provinces. This effort comes as the U.S. seeks to counter China’s dominance in the sector, amplified by Beijing’s recent export controls on rare earth metals and its strategic posture in the ongoing trade war. A 90-day U.S.-China trade truce this month, celebrated in Chinese state media as a “huge victory,” saw major tariff reductions but underscored China’s long-term strategy of economic endurance. Together, these developments highlight how AI, minerals, and global alliances are converging in the race for technological and geopolitical advantage.
Global Trajectories
Droughts are major threat to Eurozone economy, warns ECB
Martin Arnold and Kenza Bryan, The Financial Times
Short-Term Thinking Is Driving the US’s Pivot Away From Africa
Antony Sguazzin, Bloomberg
The India-Pakistan Conflict Is Testing the Threshold for Nuclear War
Daniel Ten Kate, Bloomberg
In the past month three major developments have highlighted the mounting challenges to global stability—from nuclear brinkmanship in South Asia to strategic disengagement in Africa and escalating climate risks in Europe. On May 12, President Donald Trump brokered a ceasefire between India and Pakistan, defusing a veiled nuclear threat following the April 22 Kashmir massacre. Trump claimed the intervention averted a catastrophic war that could have killed millions, invoking the Stability-Instability Paradox: nuclear deterrence discourages full-scale war while enabling limited conflicts. India, frustrated by perceived U.S. favoritism toward Pakistan, has adopted a more aggressive doctrine, warning of future retaliations across the border. With over 12,300 nuclear warheads worldwide—5,000 each in the U.S. and Russia—the crisis underscored persistent dangers in an increasingly volatile geopolitical landscape.
Meanwhile, President Trump’s reversal of U.S. engagement in Africa has drawn sharp criticism. Since January 2025, the administration has slashed billions in aid, withdrawn pledges to the African Development Bank, and imposed steep tariffs, especially after a controversial Oval Office meeting with South Africa’s President Cyril Ramaphosa on May 21. The shift has accelerated China’s growing influence, with its 2024 trade with Africa reaching $213 billion, dwarfing America’s $53 billion. Simultaneously, the European Central Bank warned on May 22 that worsening droughts could cut Eurozone economic output by nearly 15%, citing €1.3 trillion in loans to water-vulnerable sectors and unprecedented dryness in regions like the Netherlands’ Bollenstreek. With ecological degradation now threatening global GDP, European and African leaders alike face hard choices amid Washington’s retreat from climate and development leadership.
