Weekly briefing 108

The Week in Brief

The old-world order isn't just collapsing into a vacuum; it’s being replaced in real-time by parallel systems. This issue shows how the war of attrition in the Gulf is accelerating this trend. While Europe cuts its security ties to Washington and loosens regulations to stay competitive, parts of Asia and Africa are building trade architectures that bypass the dollar, and China continues to challenge traditional supply chains. At the same time, the way the U.S. is using humanitarian aid and refugees as cynical bargaining chips sends a chilling message to its allies: the old guarantees have expired. In this era of chronic friction, the real "hard currency" for any nation or organization is economic and technological independence, built on a foundation of carefully hedged alliances.

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Geopolitical Dynamics

A. Europe Fortifies Strategic Autonomy: Following the removal of political barriers (and Orbán’s defeat in Hungary), the EU is set to provide Ukraine with a massive $105 billion loan. At the same time, the UK announced it’s sending 120,000 drones to Kyiv. Europe is clearly signaling that it is building a defense shield far removed from the political volatility in Washington.

B. The China-Russia Axis & De-dollarization: While the Lavrov-Xi summit in Beijing calls for a new level of strategic coordination, the pan-African bank Ecobank is pushing for transactions to be settled in Yuan to reduce reliance on the dollar. It seems African and Asian nations are using the West's focus on the Middle East to build their own independent financial alternatives.

C. A Global Front Against the "Deep Right": Leaders from Spain and Brazil are convening a summit of leftist leaders (including Mexico and South Africa) to form a united front against the rise of the far-right in Europe. The "Global Left" now views populist right-wing movements as a coordinated global network and is looking to respond in kind.

D. Desperate Measures in Donbas: In a move clearly designed to win over the U.S. President, Ukraine is reportedly considering renaming a region in the Donbas "Donnieland" (after Trump) to prevent it from being handed over to Russia.

Security and Threats

A. The Chokepoint Strategy: Despite temporary "ceasefires," the U.S. is maintaining its blockade of the Strait of Hormuz, while Iran responds by attacking merchant ships and continuing its own embargo. Tehran’s threat to paralyze Red Sea shipping routes proves it can hold global supply chains hostage—and shows how unprepared the world is for a threat that has been obvious for a long time.

B. Japan Ends its Pacifist Era: Tokyo has officially ditched its long-standing pacifist policy, now allowing the export of lethal weapons to allied nations and participating in military drills in the Philippines for the first time. This is a clear sign that Japan is openly preparing for what it sees as a growing Chinese threat in the region.

C. Proxy Wars in Sudan: Sudan is becoming a shadow battlefield for Gulf powers. While Saudi Arabia abruptly cut $1.5 billion in funding for Pakistani arms destined for the Sudanese army, Colombian mercenaries have been spotted fighting alongside the UAE-backed rebel forces (RSF).

D. U.S. Pressure on Cuba and Iraq: The Pentagon is accelerating offensive military planning for Cuba in case of a White House order. Simultaneously, Washington is freezing aid and dollar flows to Iraq to force the government to dismantle Iranian-backed militias.

Economy and Trade

A. European Aviation at Risk: The Middle East blockade is draining Europe’s jet fuel supplies (with only six weeks of stock left, according to the IEA). Airlines like KLM are already bracing for cancellations, highlighting just how fragile the global shipping system is when hit by a real crisis.

B. Nationalizing Critical Minerals: The DRC has started diverting 10% of its cobalt exports into a strategic reserve. The move is designed to control battery industry bottlenecks and influence global pricing. Meanwhile, a U.S. government-backed firm is buying a Brazilian mineral corporation for $2.8 billion in a direct attempt to weaken China's monopoly.

C. "Trade Over Aid": The U.S. Secretary of State is pushing a new doctrine for developing nations: trade instead of aid. The argument is that humanitarian aid has created pockets of corruption. This marks a major shift in U.S. foreign policy—moving from buying influence with cash to building business relationships based on cold commercial interests.

D. Venezuela’s Return to the IMF: The IMF and World Bank are renewing ties with Caracas, which could unlock $5 billion for the country. This shows how flexible U.S. sanctions can be when there’s a desperate need to boost global oil production during an energy crisis.

E. The EU Cuts Red Tape: In an effort to compete with China and the U.S., Brussels is pushing the biggest regulatory rollbacks in decades to allow for massive corporate mergers. The goal is to create European "conglomerates" in tech, comms, and industry that can actually go toe-to-toe with American Big Tech and Chinese state-owned giants.

Crises and Upheavals

A. Threats to the Fed: Trump is openly threatening to fire Fed Chair Jerome Powell. This direct attack on the central bank’s independence is sending shockwaves through the markets at a time when inflation and high interest rates are already major concerns.

B. Bulgaria’s Political Turmoil: Bulgaria is heading into its eighth election in five years. Brussels is worried that a win for former President Radev could create a new pro-Russian voice inside the EU—one that opposes aid to Ukraine—just as Orbán has been sidelined.

C. The Weaponization of Refugees: The Trump administration has issued an ultimatum to 1,100 Afghan allies (currently in Qatar): either move to crisis-torn Congo or be deported back to the Taliban. This isn't just an extreme move in "outsourcing" migration; it sends a chilling message to U.S. allies everywhere. Abandoning partners on the ground shows that U.S. security guarantees are subject to domestic politics, which fundamentally changes the risk assessment for anyone considering working with Washington.

D. The Collapse of Gulf "Sports Diplomacy": The consequences of the war are hitting Riyadh hard. The Saudi sovereign wealth fund is halting its $5 billion investment in LIV Golf, and Formula 1 is canceling races. The vision of diversifying the Saudi economy is taking a massive financial and reputational hit as the crisis drags on.

“Surely goodness and mercy shall follow” (Psalm 23).

The Geopolitics Lab Team