Geopolitical Concerns examines how the liberal, rules-based international order is fracturing as authoritarian assertiveness, shifting alliances, and Western disunity reshape global power dynamics.
Geoeconomics explores the rising volatility in global markets as the EU intensifies sanctions on Russia, Argentina battles a currency crisis, and central banks navigate political pressure and inflation, all while retail investors gain ground over institutional players.
Global Junctions dives into global competition over semiconductors and AI as nations invest heavily in chip production and infrastructure to reduce reliance on Taiwan and counter China’s ambitions, while surging AI demand exposes fragile business models and sustainability risks across the tech sector.
Global Trajectories reviews China’s expanding export and financial influence, coupled with the weakening authority of global institutions like the UN, which is driving a more fragmented world order where economic power increasingly replaces collective diplomacy.
Geopolitical Concerns
Europe Is Still Unprepared to Counter Putin’s Hybrid War
Nathalie Tocci, World Politics Review
UK, Canada and Australia recognise Palestine as an independent state and Macron seeks ‘path to peace’ with recognition of Palestine at UN meeting
George Parker and Jame Shotter, Financial Times
Philippe Ricard, Le Monde
China Is Quietly Becoming Its Neighbors’ Biggest Arms Dealer
Joshua Kurlantzick and Annabel Richter, World Politics Review
Stewart Patrick, Foreign Affairs
Trump Makes U-Turn on Ukraine Policy
Sam Skove, Foreign Policy
The erosion of the liberal, rules-based international system was on full display this week. In Europe, suspected Russian jamming of Ursula von der Leyen’s plane highlighted how Moscow’s hybrid tactics are outpacing EU defenses, while Trump’s second term has accelerated the splintering of “the West” into a looser, more civilizational identity. Meanwhile, coordinated recognitions of Palestine by the UK, Canada, Australia, and France marked a historic diplomatic realignment: the first G7 states to break with Washington on the issue, signaling Israel’s growing isolation but also exposing deep fractures within Western unity. Macron’s initiative seeks to salvage the two-state framework even as Israeli Prime Minister Benjamin Netanyahu doubled down on military operations and settlement expansion with Trump’s approval.
In Asia, China is consolidating its position as the dominant regional arms supplier, surpassing Russia and eclipsing U.S. sales to Southeast and South Asian countries. By binding neighbors through weapons platforms and joint exercises, Beijing is cultivating dependencies that complicate any future U.S. coalition, even among countries wary of Chinese power. At the same time, Trump introduced new uncertainty on Ukraine, reversing his earlier skepticism by declaring Kyiv could restore its “original’ borders – perhaps even beyond – while still limiting U.S. support to indirect NATO channels. The combination of assertive authoritarian moves, shifting alliances, and U.S. ambiguity reinforces a world order marked less by shared rules than by transactional alignments and contested spheres of influence.
Geoeconomics
Institutional Investors Are Flashing a Warning for Stocks
Nir Kaissar, Bloomberg
America’s monetary policy risks getting too loose
The Economist
EU’s Russia Clampdown to Hit Third-Country Oil Refiners, Traders
Alaric Nightingale, Ewa Krukowska, and Alberto Nardelli, Boomberg
Argentina spends $1bn to defend peso as President Javier Milei’s crisis spirals
Ciara Nugent, Financial Times
Institutional investors, long considered the “smart money,” appear to be struggling with timing the market, with their equity allocations historically peaking before downturns and contracting during crises, while retail investors have shown increasing resilience by buying dips and capturing a larger share of returns. This divergence has revealed a broader shift in market dynamics, as large-cap equities remain expensive relative to smaller companies, fueled by institutional preference for liquidity and stability. At the same time, the Federal Reserve faces pressures from both political interference and market exuberance. Its recent rate cut, decided by a narrow margin, reflects concerns about a weakening labor market amid declining immigration, yet contrasts with strong retail activity, booming financial markets, and rising inflation from tariffs. Further loosening could risk policy credibility at a moment when the Fed’s independence is already under scrutiny.
Across the Atlantic, the European Union is preparing sanctions that expand pressure on Russia’s energy revenues by targeting refiners, traders, and petrochemical firms in third countries like China and India, alongside new restrictions on Rosneft, Gazprom Neft, and Russia’s shadow tanker fleet. These measures come as the bloc weighs accelerating its ban on Russian liquefied natural gas imports to 2027, though past sanctions have had limited impact on supply. Meanwhile, Argentina is battling a currency crisis as President Javier Milei’s government sold over $1 billion in reserves within three days to defend the peso, raising concerns about the sustainability of his exchange rate band and free-market agenda. Political turmoil, including setbacks in local elections, congressional resistance to austerity, and corruption scandals, has eroded investor confidence, sending bond yields higher and casting doubt on the government’s ability to stabilize markets ahead of October’s midterms.
Global Junctions
Why World Powers Are Battling Over Computer Chips
Ian King and Debby Wu, Bloomberg
US looks to state-backed TSMC model for Intel turnaround
Kosuke Shimizu, Nikkei Asia
The Economist
An $800 Billion Revenue Shortfall Threatens AI Future, Bain Says
Saritha Rai, Bloomberg
Semiconductors remain at the center of global industrial and geopolitical competition. The United States has intensified restrictions on China’s access to advanced chip technology while simultaneously taking a state-backed stake in Intel, aiming to replicate Taiwan’s TSMC model and ensure domestic resilience. These measures reflect broader anxieties about concentrated production capacity in Taiwan and South Korea, as well as China’s ambitions to close the technology gap by building shadow fabrication networks and investing heavily in AI processors. Meanwhile, other countries are also racing to expand capacity: the EU has allocated $46 billion, Japan is funding new TSMC facilities and a local venture to produce 2nm logic chips, India is supporting its first major fabrication plants, and Saudi Arabia is exploring entry into the sector. Yet risks remain acute, as the industry’s reliance on Taiwan leaves the global supply chain vulnerable to political conflict.
Artificial intelligence is both propelling demand for chips and exposing weaknesses in business models. India has emerged as a testing ground for global AI companies, with firms like OpenAI, Microsoft, Google, and Meta making major infrastructure and partnership commitments to tap into the country’s vast user base. Yet while engagement is strong, monetization remains uncertain, echoing Bain & Co.’s warning of an $800 billion revenue shortfall by 2030 relative to projected infrastructure needs. The massive capital outlays required for data centers, energy, and advanced models risk outpacing returns, raising questions about sustainability even as AI adoption accelerates worldwide. This tension between surging demand and fragile business foundations shows the interconnected challenges across the chip and AI sectors, where global competition, national industrial policy, and commercial viability converge.
Global Trajectories
Hong Kong: a comeback with Chinese characteristics
Arjun Neil Alim, William Sandlund, and Chan Ho-him, Financial Times
China Floods the World With Cheap Exports After Trump’s Tariffs
Bloomburg News
Some PE Firms Doomed to Fail as High-Flying Industry Loses Its Way
Allison McNeely, Preeti Singh, and Laura Benitez, Bloomburg
Can the UN save itself from irrelevance?
Alec Russell and Abigail Hauslohner, Financial TImes
China’s renewed strength in exports and finance is reshaping global markets. Even under the weight of steep U.S. tariffs, Beijing has managed to redirect trade flows to India, Africa, Southeast Asia, and Latin America, pushing its surplus toward record levels. Meanwhile, Hong Kong has reemerged as the leading venue for global listings, not as a cosmopolitan bridge between East and West but increasingly as the preferred offshore platform for Chinese firms to raise and hold capital. This “mainlandisation” underscores how China is insulating its financial system from Western pressure while still tapping global liquidity, even as its domestic economy wrestles with deflationary pressures and slowing consumption.
At the same time, institutions meant to moderate power politics are faltering. The UN, approaching its 80th year, is losing relevance amid wars in Ukraine, Gaza, and Sudan, with Secretary-General António Guterres sidelined and the General Assembly fractured. The Security Council in particular has become a byword for paralysis: Russia blocks action on Ukraine, the U.S. shields Israel over Gaza, and China resists reforms that would empower rising states. This deadlock has led middle powers to search for alternative coalitions, while critics warn that the UN is drifting toward the irrelevance once suffered by the League of Nations. The combination of China’s strategic repositioning and the UN’s weakening authority points to a more fragmented international order, where economic leverage increasingly substitutes for collective diplomacy.
