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한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Last week, the Trump administration signed a deal with Ukraine that gives it privileged access to Ukraine’s natural resources. Some news outlets described the deal as Ukrainian President Volodymyr Zelensky “caving” to US President Donald Trump’s demands. But we see the agreement as the result of clever bargaining on the part of Ukraine’s war-time president. So, what does the deal mean for Ukraine? And will this help strengthen America’s mineral supply chains? Ukraine’s natural resource wealth Ukraine is home to 5% of the world’s critical mineral wealth, including 22 of the 34 minerals identified by the European Union as vital for defence, construction and high-tech manufacturing. However, there’s a big difference between resources (what’s in the ground) and reserves (what can be commercially exploited). Ukraine’s proven mineral reserves are limited. Further, Ukraine has an estimated mineral wealth of around US$14.8 trillion (A$23 trillion), but more than half of this is in territories currently occupied by Russia. What does the new deal mean for Ukraine? American support for overseas conflict is usually about securing US economic interests — often in the form of resource exploitation. From the Middle East to Asia, US interventions abroad have enabled access for American firms to other countries’ oil, gas and minerals. But the first iteration of the Ukraine mineral deal, which Zelensky rejected in February, had been an especially brazen resource grab by Trump’s government. It required Ukraine to cede sovereignty over its land and resources to one country (the US), in order to defend itself from attacks by another (Russia). These terms were highly exploitative of a country fighting against a years-long military occupation. In addition, they violated Ukraine’s constitution, which puts the ownership of Ukraine’s natural resources in the hands of the Ukrainian people. Were Zelensky to accept this, he would have faced a tremendous backlash from the public. In comparison, the new deal sounds like a strategic and (potentially) commercial win for Ukraine. First, this agreement is more just, and it’s aligned with Ukraine’s short- and medium-term interests. Zelenksy describes it as an “equal partnership” that will modernise Ukraine. Under the terms, Ukraine will set up a United States–Ukraine Reconstruction Investment Fund for foreign investments into the country’s economy, which will be jointly governed by both countries. Ukraine will contribute 50% of the income from royalties and licenses to develop critical minerals, oil and gas reserves, while the US can make its contributions in-kind, such as through military assistance or technology transfers. Ukraine maintains ownership over its natural resources and state enterprises. And the licensing agreements will not require substantial changes to the country’s laws, or disrupt its future integration with Europe. Importantly, there is no mention of retroactive debts for the US military assistance already received by Ukraine. This would have created a dangerous precedent, allowing other nations to seek to claim similar debts from Ukraine. Finally, the deal also signals the Trump administration’s commitment to “a free, sovereign and prosperous Ukraine” – albeit, still without any security guarantees. Profits may be a long time coming Unsurprisingly, the Trump administration and conservative media in the US are framing the deal as a win. For too long, Trump argues, Ukraine has enjoyed US taxpayer-funded military assistance, and such assistance now has a price tag. The administration has described the deal to Americans as a profit-making endeavour that can recoup monies spent defending Ukrainian interests. But in reality, profits are a long way off. The terms of the agreement clearly state the fund’s investment will be directed at new resource projects. Existing operations and state-owned projects will fall outside the terms of the agreement. Mining projects typically work within long time frames. The move from exploration to production is a slow, high-risk and enormously expensive process. It can often take over a decade. Add to this complexity the fact that some experts are sceptical Ukraine even has enormously valuable reserves. And to bring any promising deposits to market will require major investments. What’s perhaps more important It’s possible, however, that profits are a secondary calculation for the US. Boxing out China is likely to be as – if not more – important. Like other Western nations, the US is desperate to diversify its critical mineral supply chains. China controls not just a large proportion of the world’s known rare earths deposits, it also has a monopoly on the processing of most critical minerals used in green energy and defence technologies. The US fears China will weaponise its market dominance against strategic rivals. This is why Western governments increasingly make mineral supply chain resilience central to their foreign policy and defence strategies. Given Beijing’s closeness to Moscow and their deepening cooperation on natural resources, the US-Ukraine deal may prevent Russia — and, by extension, China — from accessing Ukrainian minerals. The terms of the agreement are explicit: “states and persons who have acted adversely towards Ukraine must not benefit from its reconstruction”. Finally, the performance of “the deal” matters just as much to Trump. Getting Zelensky to sign on the dotted line is progress in itself, plays well to Trump’s base at home, and puts pressure on Russian President Vladimir Putin to come to the table. So, the deal is a win for Zelensky because it gives the US a stake in an independent Ukraine. But even if Ukraine’s critical mineral reserves turn out to be less valuable than expected, it may not matter to Trump.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском The agreement was an acknowledgment of the significance of their trade for mutual economic development and the health of the global economy, the joint statement says. China and the US agreed to roll back high tariffs imposed on one another last month for a period of 90 days. The agreement was announced in a joint statement issued on Monday, May 12. The agreement was a result of a high-level meeting on trade and economic affairs held between Chinese and US delegations in Geneva, Switzerland over the weekend. As described in a press conference on Monday by the US Treasury Secretary Scott Bessent who was part of the US delegation, both sides have agreed to reduce the tariffs by 115%. That would mean that the US will reduce its tariffs on China to 30% from its present 145% while the Chinese will lower their tariffs to 10% from its present 125%. These new tariff rates would be effective from Wednesday for the next 90 days. Both the countries also agreed to explore a more stable arrangement in the interim period. China also agreed to reverse additional measures imposed in response to US President Donald Trump’s tariff war, such as putting various US companies on the sanctions list and placing export controls on rare earth minerals. The parties committed to taking these measures as an acknowledgment of the mutual significance of their bilateral trade and its importance for the global economy and for “moving forward in the spirit of mutual opening, continued communication, cooperation and mutual respect,” a joint statement says. The 30% US tariff includes a 10% baseline tariff imposed on all imports by Trump in April after suspending his reciprocal tariff regime for 90 days, and a 20% tariff imposed by the Trump administration before April in the name of stopping the illegal flow of the drug fentanyl. Answering a question on the cooperation between both the countries over fentanyl, the spokesperson of the Chinese Foreign Ministry Lin Jian criticized “the wrongly slapped tariffs on Chinese imports” by citing the issue and claiming that “if the US truly wants to cooperate with China, it should stop vilifying and shifting the blame.” Jian also advised the US “to seek dialogue with China based on equality, respect and mutual benefit.” Relief for the global economy  Trump announced a reciprocal tariff regime on April 2 against all those countries which had a trade surplus with the US, including China. After global backlash, Trump later postponed the implementation of the regime for 90 days, inviting countries to seek bilateral agreements to avoid high tariffs while imposing a 10% common tariff. The Trump administration had claimed that reciprocal tariffs were required in order to lower the US trade deficit, which is over a trillion dollars. China, the third largest trade partner of the US, faced the highest tariff rates under Trump’s tariff war and chose to retaliate. It also called the policy a violation of international law and an attempt by the US to weaponize trade. On Tuesday, Chinese President Xi Jinping reiterated his country’s position that there are no winners in trade and tariff wars, claiming bullying and hegemony will only result in self-isolation. He was addressing the fourth ministerial meeting of the China-CELAC (Community of Latin American and Caribbean States) forum in Beijing. The tariff war between the world’s leading economies was seen as a disaster for the global economy and trade. A large number of US businesses had also opposed Trump’s tariff war. They had claimed high tariffs may lead to a rise in prices which harm both the consumer and domestic production. Several businesses filed lawsuits in the US claiming Trump’s reciprocal tariff regime was illegal and harmful for their ability to do business. US trade representative Jamieson Greer, who was part of the negotiating team in Geneva, claimed that the talks with various countries, including China, is the first step to reducing the US trade deficit and ending the national emergency declared by Trump to authorize the reciprocal tariff decrees, South China Morning Post reported. The Chinese Ministry of Commerce also hailed the agreement as “substantive progress” for mutual economic development. It expressed hope that “the US side will build on the meeting, continue to work with China in the same direction, completely rectify its wrong practices of unilateral tariff hikes, and keep strengthening mutually beneficial cooperation.” Acknowledging that “high levels of tariffs were equivalent to an embargo and neither side wanted that,” Bessent declared on Monday that the US wants a trade relationship with China, though a balanced one. The Chinese Ministry of Commerce also hoped that the US would pursue the matter much more seriously and “inject more certainty and stability into the world economy.” Both the countries have agreed to establish “a joint mechanism” to continue their trade and economic negotiations in future. Text under Creative Commons Attribution-ShareAlike 4.0 (CC BY-SA) license

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском India and Pakistan have seen the scenario play out before: a terror attack in which Indians are killed leads to a succession of escalatory tit-fot-tat measures that put South Asia on the brink of all-out war. And then there is a de-escalation. The broad contours of that pattern have played out in the most recent crisis, with the latest step being the announcement of a ceasefire on May 10, 2025. But in another important way, the flare-up – which began on April 22 with a deadly attack in Indian-controlled Kashmir, in which 26 people were killed – represents significant departures from the past. It involved direct missile exchanges targeting sites inside both territories and the use of advanced missile systems and drones by the two nuclear rivals for the first time. As a scholar of nuclear rivalries, especially between India and Pakistan, I have long been concerned that the erosion of international sovereignty norms, diminished U.S. interest and influence in the region and the stockpiling of advanced military and digital technologies have significantly raised the risk of rapid and uncontrolled escalation in the event of a trigger in South Asia. These changes have coincided with domestic political shifts in both countries. The pro-Hindu nationalism of Indian Prime Minister Narendra Modi’s government has heightened communal tensions in the country. Meanwhile Pakistan’s powerful army chief, Gen. Syed Asim Munir, has embraced the “two-nation theory,” which holds that Pakistan is a homeland for the subcontinent’s Muslims and India for Hindus. This religious framing was even seen in the naming of the two countries’ military operations. For India, it is “Operation Sindoor” – a reference to the red vermilion used by married Hindu women, and a provocative nod to the widows of the Kashmir attack. Pakistan called its counter-operation “Bunyan-un-Marsoos” – an Arabic phrase from the Quran meaning “a solid structure.” The role of Washington The India-Pakistan rivalry has cost tens of thousands of lives across multiple wars in 1947-48, 1965 and 1971. But since the late 1990s, whenever India and Pakistan approached the brink of war, a familiar de-escalation playbook unfolded: intense diplomacy, often led by the United States, would help defuse tensions. In 1999, President Bill Clinton’s direct mediation ended the Kargil conflict – a limited war triggered by Pakistani forces crossing the Line of Control into Indian-administered Kashmir – by pressing Pakistan for a withdrawal. Similarly, after the 2001 attack inside the Indian Parliament by terrorists allegedly linked to Pakistan-based groups Lashkar-e-Taiba and Jaish-e-Mohammed, U.S. Deputy Secretary of State Richard Armitage engaged in intense shuttle diplomacy between Islamabad and New Delhi, averting war. And after the 2008 Mumbai attacks, which saw 166 people killed by terrorists linked to Lashkar-e-Taiba, rapid and high-level American diplomatic involvement helped restrain India’s response and reduced the risk of an escalating conflict. As recently as 2019, during the Balakot crisis – which followed a suicide bombing in Pulwama, Kashmir, that killed 40 Indian security personnel – it was American diplomatic pressure that helped contain hostilities. Former Secretary of State Mike Pompeo later wrote in his memoirs, “I do not think the world properly knows just how close the India-Pakistan rivalry came to spilling over into a nuclear conflagration in February 2019.” Where is Kashmir?  A diplomatic void? Washington as peacemaker made sense: It had influence and a vested interest. During the Cold War, the U.S. formed a close alliance with Pakistan to counter India’s links with the Soviet Union. And after the 9/11 terror attacks, the U.S. poured tens of billions of dollars in military assistance into Pakistan as a frontline partner in the “war on terror.” Simultaneously, beginning in the early 2000s, the U.S. began cultivating India as a strategic partner. A stable Pakistan was a crucial partner in the U.S. war in Afghanistan; a friendly India was a strategic counterbalance to China. And this gave the U.S. both the motivation and credibility to act as an effective mediator during moments of India-Pakistan crisis. Today, however, America’s diplomatic attention has shifted significantly away from South Asia. The process began with the end of the Cold War, but accelerated dramatically after the U.S. withdrawal from Afghanistan in 2021. More recently, the wars in Ukraine and the Middle East have consumed Washington’s diplomatic efforts. Since President Donald Trump took office in January 2025, the U.S. has not appointed an ambassador in New Delhi or Islamabad, nor confirmed an assistant secretary of state for South and Central Asian Affairs – factors that must have hampered any mediating role for the United States. And while Trump said the May 10 ceasefire followed a “long night of talks mediated by the United States,” statements from India and Pakistan appeared to downplay U.S. involvement, focusing instead on the direct bilateral nature of negotiations. Should it transpire that Washington’s role as a mediator between Pakistan and India has been diminished, it is not immediately obvious who, if anyone, will fill the void. China, which has been trying to cultivate a role of mediator elsewhere, is not seen as a neutral mediator due to its close alliance with Pakistan and past border conflicts with India. Other regional powers like Iran and Saudi Arabia tried to step in during the latest crisis, but both lack the power clout of the U.S. or China. This absence of external mediation is not, of course, a problem in itself. Historically, foreign interference – particularly U.S. support for Pakistan during the Cold War – often complicated dynamics in South Asia by creating military imbalances and reinforcing hardline positions. But the past has shown external pressure – especially from Washington – can be effective. Breaking the norms The recent escalation unfolded against the backdrop of another dynamic: the erosion of international norms since the end of the Cold War and accelerating after 2001. America’s “war on terror” fundamentally challenged international legal frameworks through practices such as preemptive strikes against sovereign states, targeted drone killings and the “enhanced interrogation techniques” of detainees that many legal scholars classify as torture. More recently, Israel’s operations in Gaza, Lebanon and Syria have drawn widespread criticism for violations of international humanitarian law – but have resulted in limited consequences. In short, geopolitical norms have been ebbed away and military actions that were once deemed red lines are crossed with little accountability. For India and Pakistan, this environment creates both opportunity and risk. Both can point to behaviors elsewhere to justify assertive actions that they have undertaken that, in previous years, would have been deemed a step too far – such as attacks on places of worship and sovereignty violations. Multi-domain warfare But what truly distinguished the latest crisis from those of the past is, I believe, its multi-domain nature. The conflict is no longer confined to conventional military exchanges along the line of control – as it was for the first five decades of the Kashmir question. Both countries largely respected the line of control as a de facto boundary for military operations until the 2019 crisis. Since then, there has been a dangerous progression: first to cross-border airstrikes into each other’s territories, and now to a conflict that spans conventional military, cyber and information spheres simultaneously. Reports indicate Chinese-made Pakistani J-10 fighter jets shot down multiple Indian aircraft, including advanced French Rafale jets. This confrontation between Chinese and Western weapons represents not just a bilateral conflict but a proxy test of rival global military technologies – adding another layer of great-power competition to the crisis. In addition, the use of loitering drones designed to attack radar systems represents a significant escalation in the technological sophistication of cross-border attacks compared to years past. The conflict has also expanded dramatically into the cyber domain. Pakistani hackers, claiming to be the “Pakistan Cyber Force,” report breaching several Indian defense institutions, potentially compromising personnel data and login credentials. Simultaneously, social media and a new right-wing media in India have become a critical battlefront. Ultranationalist voices in India incited violence against Muslims and Kashmiris; in Pakistan, anti-India rhetoric similarly intensified online. Cooler voices prevailing … for now These shifts have created multiple escalation pathways that traditional crisis management approaches weren’t designed to address. Particularly concerning is the nuclear dimension. Pakistan’s nuclear doctrine is that it will use nuclear weapons if its existence is threatened, and it has developed short-range tactical nuclear weapons intended to counter Indian conventional advantages. Meanwhile, India has informally dialed back its historic no-first-use stance, creating ambiguity about its operational doctrine. Thankfully, as the ceasefire announcement indicates, mediating voices appear to have prevailed this time around. But eroding norms, diminished great power diplomacy and the advent of multi-domain warfare, I argue, made this latest flare-up a dangerous turning point. What happens next will tell us much about how nuclear rivals manage, or fail to manage, the spiral of conflict in this dangerous new landscape.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Fourteen years after the Fukushima incident, faced with an energy crisis, geopolitical tensions and decarbonization goals, Japan launches nuclear power once again. The incident at the Fukushima Daiichi power plant on March 11, 2011 seems like a distant memory. From now on, Japan is committed to “maximum utilization” of nuclear power, as stated in substance in the 7ᵉ Strategic Energy Plan, adopted on February 18, 2025 by the Japanese government. This is a 180-degree turn from the previous 2021 plan, which aimed to significantly reduce reliance on the atom. Japan, an Asian pioneer in this field, first connected a nuclear power plant to its electricity grid in 1966 (11 years before South Korea and 35 years before China!). So why is Tokyo turning back to nuclear power? In addition to the goal of reducing greenhouse gas emissions, soaring gas prices due to the war in Ukraine make nuclear power a more attractive option for Japan, a country that imports 90% of its energy needs. Nuclear-generated electricity will reach record levels in 2025, accounting for just under 10% of global production, according to the International Energy Agency (IEA) in a report published in January 2025. This growth is driven by the electrification of uses and sectors such as electric vehicles and data centers. With the rise of artificial intelligence, the IEA predicts that the electricity needs of data centers could double by 2030, partly justifying Japan's decision to revive nuclear power. On a domestic scale, public opinion and changes in the Japanese political landscape offer further clues to understanding this reorientation. Japan is also banking on nuclear power to stay in the global geo-economic competition for energy. Government reassurances The release of contaminated water from the Fukushima nuclear power plant into the Pacific Ocean on August 24, 2023 has aggravated neighborly relations in East Asia. Although the project was approved by the International Atomic Energy Agency, the release of over 1.3 million cubic meters of tritiated water provoked a furor in South Korea and a strong reaction from China, which suspended all imports of Japanese seafood for over a year. Are these contaminated waters really safe? Immediately after the meltdown of the three reactors, the most urgent objective was to cool the corium, a mixture of fuel and molten metal, with seawater. However, chemical treatment of the recovered water eliminates almost all radionuclides, with the exception of tritium. Since 2011, the Japanese government has been investigating the health repercussions of the accident, the results of which are being monitored by the Institute for Radiation Protection and Nuclear Safety. Of the millions of samples taken between 2011 and 2019, less than 1% exceeded the limit of 1,000 Bq/kg, in line with World Health Organization standards. The Ministry of the Environment has also set up an interim storage site for the most contaminated waste, at Okuma and Futaba, scheduled to operate until 2045. Understanding nuclear risk The power plant accidents at Three Mile Island (1979) and Chernobyl (1986) were the result of human error, characteristic of what Ulrich Beck describes as the risk society. Fukushima, however, was the result of an earthquake followed by a tsunami. Despite the construction of anti-tsunami walls, the threat of natural disasters remains, as the Noto earthquake on January 1, 2024 reminded us. In one of the world's most seismically active countries, public opinion on nuclear risk has evolved considerably over the last ten years. Whereas in 2013 only 22% of Japanese supported the restarting of power plants, the most recent poll carried out in February 2023 by the leading national daily, Asahi Shimbun, showed that 51% of Japanese are now in favor of a return to nuclear power. An unprecedented political scene The early parliamentary elections of October 2024 forced the parties to clarify their positions on the role of the atom in the archipelago's power generation. Prime Minister Shigeru Ishiba, hoping to strengthen the influence of the Liberal Democratic Party (LDP), called the elections, but they led to an electoral debacle. For the first time since 2009, the LDP and its center-right ally Komei no longer represent the main ruling coalition. This political crisis revealed the differences within the LDP-Komei on energy strategy. The conservative PLD advocates “maximizing the use” of nuclear power plants and the development of new reactors, while its ally advocates a non-atom-dependent society. Prior to the elections, the race for the LDP nomination had highlighted the reversals of Shigeru Ishiba's previously anti-nuclear rivals. The main opposition group, the Constitutional Democratic Party, led by popular former Prime Minister Yoshihiko Noda, recognizes the need to maintain some nuclear capacity in the short term, but rules out the construction of new power plants. Other groups, such as the People's Party and the Japan Innovation Party, advocate restarting power plants and modernizing the nuclear fleet. Finally, the Japanese Communist Party and several small environmentalist groups remain firmly anti-nuclear. Behind this ideological fragmentation within the Diet, however, all agree on the imperative of Japan's energy transition. Decarbonizing while remaining competitive In addition to the goal of reducing greenhouse gas emissions by 73% in 2024 compared to 2013, Japan has also set an ambitious target of 20% to 22% nuclear power within the energy mix by 2030. However, with a fleet of 14 reactors currently in service, the country does not have the capacity to meet this target. It takes decades to build new power plants, and many years to restart existing reactors. Far from the Bataan nuclear power plant in the Philippines, and its "ghost" image, Southeast Asia represents a fast-growing market for nuclear power. Indonesia, for example, has unveiled plans to build 20 new power plants by 2036, focusing on small modular reactors that are safer, cheaper and quicker to build. Vietnam has also signed agreements with Japan. These projects are reshaping the energy landscape in Southeast Asia, and underscore the growing geo-economic competition. In addition to electricity production, Japan sees nuclear power as a vector of technological innovation, and therefore a lever of influence for its companies in this high-potential region. In July 2023, for example, Mitsubishi Heavy Industries was appointed to lead a program on sodium-cooled fast reactors. Let's avoid any “sensationalism” about the return of the atom to Japan, as the energy mix remains largely carbon-based (oil: 38%; coal: 26%; natural gas: 21%; nuclear: 5.8%). This reversal is not a paradigm shift, but part of a worldwide trend, particularly in Asia, where three-quarters of the reactors under construction are located. The challenges facing the archipelago are numerous: geographical constraints, an energy-intensive economic model and an unfavorable geopolitical context that increases energy insecurity. As a result, the Japanese government's decision to revive nuclear power reflects a form of pragmatism.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском By assuming that trade relations are a zero-sum game in which one party must lose for the other to win, and that a trade deficit represents a loss while a surplus represents a win, President Trump reveals a simplistic view far removed from the dynamics of international trade. Let’s imagine that the global economy is Central America, that Costa Rica imports more goods than it exports, and that other countries accept paper printed by its Central Bank — bills in colones — as payment for their exports. Furthermore, let’s assume that a good portion of their trade surpluses are used to buy Costa Rican government bonds and make deposits in its banks, accepting — due to confidence in the strength of its economy — lower interest rates than they might obtain in other markets, and that those debts can be paid with the same printed paper. Trade deficits arise because a significant share of Costa Rican consumers and investors prefer to source final, intermediate, and capital goods from other Central American countries where prices are lower than at home. In other words, those deficits are the result of a national choice to enjoy a higher quality of life and greater productivity than what its economy would otherwise allow. Under these circumstances, Costa Rica, far from being a victim of other countries’ policies, would actually be enjoying levels of consumption above its means and economic growth beyond what its productivity would justify. The willingness of those countries to hold the colones derived from their trade surpluses in Costa Rican government bonds and bank deposits results in lower interest rates in Costa Rica. This enables a higher sustainable level of public debt, greater investment at low cost to improve infrastructure and service quality, and lower interest rates for private investment — all of which contribute to a higher rate of economic growth without endangering macroeconomic stability. In such a scenario, making imports more expensive through tariffs to boost local production competitiveness and eliminate trade deficits would, one by one, remove these advantages — amounting to nothing more than an own goal. This remains true even if Central American countries did not retaliate by restoring relative competitiveness to its starting point, and even if Costa Rican investors were not left uncertain about whether a future government might remove the tariffs. The U.S. economy faces the world in a situation identical to that hypothetical scenario of Costa Rica. It takes advantage of the fact that with paper printed by its central bank — the dollar — can pay for the real production of other countries, allowing it to live far beyond its means. Far from being “cheated” by other nations, as Trump claims, the United States enjoys a standard of living well above its capacity precisely because of this. That does not mean the U.S. is cheating anyone, since it is thanks to its economic strength that the rest of the world accepts that paper as a means of payment and trusts in its government bonds and banking system. Thus, by assuming that trade relations are a “zero-sum game” — where one must lose for the other to win — and that a trade deficit signals losing while a surplus signals winning, President Trump ignores these realities. He reveals a board-game level of simplification, detached from the complex chessboard that defines international trade dynamics. It is nothing less than a massive own goal. Trade deficits are an economic problem for countries like Costa Rica, which must pay for their imports using foreign currency, often requiring them to take on debt and/or attract foreign investment through subsidies and tax exemptions. This combination of factors permanently threatens macroeconomic stability and forces governments to limit spending on infrastructure and social services to free up resources to cover interest payments and the growing fiscal costs of structuring an economy based on incentives to foreign companies. Adding to the absurdity of Trump’s proposals, his goal is to achieve trade surpluses with every country in the world. However, the United States does not produce coffee or cocoa; thus, with some of the countries that export these products, running trade deficits is not only inevitable but also beneficial for the U.S. Many countries in the region, even without the advantages the United States enjoys, are unlikely to avoid trade deficits — for example, with oil-producing countries or those manufacturing goods that incorporate cutting-edge technologies. In such cases, raising tariffs could severely damage their economies. Trump boasts that the countries affected by the tariffs are lining up to renegotiate, claiming that this was his goal. If so, it marks the beginning of an uncertain period, contaminated by threats and blackmail, with China standing by to benefit from the resentment against the United States. This scenario will severely affect private sector investment plans, employment, and economic growth — not only in the United States but around the world. Far from "Making America Great Again" (MAGA), Trump is diminishing both his country and the world while violating every rule of international trade, both global ones under the WTO framework and those contained in free trade agreements like CAFTA-DR. This, of course, validates the concerns of those of us who argued that such treaties did not guarantee protected access to the U.S. market against political or geopolitical shifts. In international relations, the historical rule has been that decisions are not based on any moral or legal absolutes but rather on the exercise of power from unequal positions ("might is right"). This is why we always doubted that a free trade agreement with weaker countries would truly guide the behavior of the United States. But Trump's overwhelming violations of international law (surprisingly and disappointingly supported by more than half of his country’s political establishment) strip the United States of any moral authority to criticize countries that do not act according to the rules. This imposing attitude, reaffirmed by Trump when he paraphrases emperors and tyrants — enemies of any democratic principle — who claimed that "those who save their country violate no law," leads us to a world where anything is permitted for those who hold power. From the perspective of the definition of civilization, a world where anything goes loses its value. It takes us back to the law of the jungle — the rule of the strongest, of violence and war, or of peace imposed by one over others, not through harmony and goodwill. This is not a new “Washington Consensus”, now guided by the mercantilism typical of the 18th and 19th centuries, because in this case neither multilateral organizations like the World Bank or the International Monetary Fund nor other Western powers share Trump’s decisions. Far from consensus, today the most frequently heard word in those circles is “retaliation”. Latin America will be affected by the potential decline in global GDP growth, the tariffs imposed on our exports, and the rise in interest rates resulting from inflation that could be triggered by higher import taxes in the United States. However, the region could benefit from the U.S. confrontation with its developed-world allies by strengthening economic ties with Europe, China, Japan, India, and other powers of the Global South — without, of course, abandoning the U.S. market. To achieve this, our governments must stop meekly following Trump’s directives, such as preventing Huawei from competing to sell us 5G technology, participating in a shameful deportation policy that violates fundamental human rights, or undermining Panama’s absolute sovereignty over the Canal. What is needed is to build and implement a foreign policy with dignity, one that best serves the interests of each of our countries — not the whims of a single power.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском In December 2024, Cambodia reached a key point in its foreign policy. Japan delivered a group of patrol boats to Cambodia as part of the "Free and Open Indo-Pacific" (FOIP) regional initiative. This clearly showed that security cooperation between the two countries is growing stronger. In April 2025, Japan is expected to take another big step by becoming the first foreign country allowed access to Cambodia’s strategically important Ream Naval Base — a facility that has been upgraded by China since 2022.These events, happening just months apart, seem to show Cambodia’s effort to expand its foreign partnerships after relying on China for a long time. The handover of Japanese vessels, while China is leading the base's modernization, is more than just a friendly act from Tokyo. It is a smart move by Cambodia, showing how it is trying to use the rivalry between big powers to strengthen its own security and independence. But can Cambodia really protect its sovereignty by trying to balance the interests of powerful countries? Or is this idea of multiple partnerships just an illusion — hiding the fact that Chinese influence continues to grow? The answers to these questions may shape the future of regional security in Indochina. In August 2023, Hun Manet became Cambodia’s new Prime Minister, replacing his father Hun Sen, who had ruled for nearly 40 years. Unlike his father, Hun Manet has a Western education — he graduated from the U.S. Military Academy at West Point and earned a PhD in economics from the University of Bristol. His background gave some hope to Western diplomats that Cambodia’s foreign policy might move in a direction closer to their values. These hopes were partially fulfilled when Hun Manet’s first major foreign policy statement reaffirmed Cambodia’s commitment to diversifying its international relationships while strictly adhering to the principle of neutrality. This stance was particularly significant, given Cambodia’s longstanding perception among Western analysts as a pro-China state. For years, the Khmer elites have consistently voiced support for the PRC on the international stage, receiving in return substantial investment and infrastructure aid. However, these actions have occasionally strained Cambodia’s ties with neighboring countries — a dynamic noted by officials within the Association of Southeast Asian Nations (ASEAN), of which Cambodia has been a member since 1999. A striking example is the discord surrounding the South China Sea territorial disputes. When affected countries sought to use ASEAN as a platform to pressure Beijing, Cambodia opposed the effort, effectively blocking the adoption of a joint statement in autumn 2024 — something unprecedented in ASEAN’s 45-year history. With a few exceptions, the Khmer elites traditionally supported a policy of non-alignment during the Cold War and, afterward, a neutral stance on foreign affairs. Former Prime Minister Hun Sen himself emphasized that Cambodia seeks ties not only with China, but with all countries, considering this the most beneficial foreign policy path for a developing nation. Among Phnom Penh’s close partners is Japan, which conducts an active foreign policy in the region and stands as one of the Kingdom’s largest economic donors. At the same time, it is important to note that Hun Sen described relations with China as "unbreakable" and consistently rejected external criticism, highlighting only the positive aspects of Cambodia’s deepening ties with Beijing. In the first half of December 2024, Cambodia and Japan signed an agreement on the transfer of military patrol boats to Phnom Penh as part of Japan’s FOIP (Free and Open Indo-Pacific) initiative. Cambodia became the first ASEAN country to receive such assistance. However, the Kingdom has no intention of turning its back on China. The principle of neutrality, which underpins the country’s foreign policy, means that partnership with Japan does not contradict friendship with the PRC. Rather, the combination of the two reflects a strategy of multi-vector diplomacy, enabling Cambodia to benefit from relationships with a variety of partners. This approach is supported by several factors. First, Prime Minister Hun Manet has repeatedly affirmed his commitment to an "independent and neutral foreign policy based on the rule of law, mutual respect, and adherence to the principles of the UN Charter." In his words, this policy aims "to promote national interests, strengthen existing friendships, and build more solid ties." Second, Phnom Penh consistently accepts aid from all willing donors, including Australia through the Cambodia-Australia Partnership for Resilient Economic Development (CAPRED), the United States, Japan, and, of course, China. In 2023, marking the 70th anniversary of diplomatic relations with Japan, Cambodia elevated bilateral cooperation to the level of a Comprehensive Strategic Partnership. With this move, Japan joined a narrow circle of Phnom Penh’s strategic allies — a status previously held solely by China between 2010 and 2023 — advancing from basic diplomatic engagement and standard strategic partnership. Although China surpassed Japan in aid volume back in 2007, Tokyo remains a vital partner for Phnom Penh. Between 1994 and 2021, Japan implemented 210 investment projects in Cambodia totaling $3.1 billion. In 2024, bilateral trade between Japan and Cambodia reached $40.94 billion, placing Tokyo as the Kingdom’s fifth-largest trading partner. This robust economic cooperation underscores Japan’s strategic importance to Cambodia and highlights Phnom Penh’s efforts to diversify its international relationships, avoiding overreliance on any single partner. Despite Japan’s recent delivery of patrol boats to Cambodia, Phnom Penh’s most robust military cooperation remains with China. Between 2016 and 2024, China and Cambodia conducted six joint military exercises under the name “Golden Dragon” (នាគមាស), with each iteration featuring an increase in the number of troops, weaponry, and military equipment involved. Even amid the global threat of the COVID-19 pandemic in 2020, Phnom Penh proceeded with the fourth iteration of these drills, involving nearly 3,000 soldiers — ten times more than in 2016. [1]. The drills also included dozens of combat helicopters, armored vehicles, and various transport assets. This continuous military support from Beijing underscores Cambodia’s growing reliance on Chinese involvement in strengthening its armed forces. Meanwhile, after seven years of joint military exercises with the United States, Cambodia suspended this cooperation in 2017, officially citing scheduling conflicts due to national elections. However, in June 2024, during a meeting between Hun Sen and U.S. Secretary of Defense Lloyd Austin, Cambodia announced the resumption of military cooperation with Washington. Furthermore, the U.S. agreed to revive joint military drills and to once again accept Cambodian cadets for training at the U.S. Military Academy at West Point. For the United States, the primary point of contention has been the Chinese-built Ream Naval Base in Cambodia, despite Phnom Penh’s repeated assurances that the facility is intended solely for use by the Royal Cambodian Navy. Rumors about the base’s development first surfaced in 2018, sparking increased tensions between Phnom Penh and Washington. At the time, however, the U.S. lacked concrete evidence to formally accuse Cambodia of intending to host Chinese military forces on its territory, and American officials limited their response to diplomatic messages expressing concern. In August 2018, then-Secretary of State Mike Pompeo stated that he trusted Cambodia’s assurances that the base would be used exclusively by its own navy, and he praised the Kingdom for its “firm defense of national sovereignty.” In early December 2024, a U.S. Navy vessel arrived in Cambodia in the first port call in eight years — a visit made possible after a prolonged period of strained relations due to sustained American criticism of Cambodia’s human rights record. Cambodia’s Ministry of National Defense stated that the visit was arranged following a request from the United States and would help to “strengthen and expand the bonds of friendship, as well as enhance bilateral cooperation” between the two countries. *** In recent years, the Asia-Pacific region has become a stage for intensifying geopolitical competition, directly impacting Cambodia’s security environment and foreign policy choices. The strategic interests of major powers such as the United States and China increasingly intersect in the region, prompting smaller states — including Cambodia — to explore new pathways for safeguarding their independence and national security. In response to these shifts, Phnom Penh has sought to strengthen its defense capabilities and diversify international partnerships, as reflected in the agreement with Japan on the transfer of military vessels. This move not only enhances bilateral relations with Tokyo but also signals Cambodia’s intent to play a more active role in regional security affairs. Such involvement could enable Cambodia to navigate between competing global powers and maintain its independence amid mounting pressure from both China and the United States.Russia, as one of Cambodia’s traditional partners, may also seek to bolster its regional presence by intensifying diplomatic engagement and offering avenues for cooperation in defense, security, and military technology. This would help Phnom Penh better balance its external relations and maneuver between great powers more effectively. For Moscow, it presents an opportunity not only to deepen ties with Cambodia, but also to expand its influence in Southeast Asia and counter the growing presence of Western actors in the region. 1. Phan Thi Hai Yen. (2024). Cambodia's Strategic Embrace of China: Military Cooperation and Its Implications. ISRG Journal of Arts Humanities & Social Sciences (ISRGJAHSS), II(V), 191–198.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском I. Introduction U.S. trade with China has significantly grown in recent decades and is crucial for both countries. Today, China is one of the largest export markets for U.S. goods and services (second to Mexico), and the United States is the top export market for China. As Figure 1 shows, this trade—much of which increased after China joined the World Trade Organization (WTO) in 2001—has brought lower prices to U.S. consumers and higher profits for American companies. But it also comes with costs, notably the loss of American jobs because of import competition, automation, and multinational companies moving manufacturing overseas.   Figure 1: US-China Trade over the 20 years Source: U.S. Bureau of Economic Analysis. After President Donald Trump began a so-called trade war with China in 2018, economic tensions between China and the U.S. have been on the rise. Chinese officials have warned that there are “no winners” in a trade war, but the second Trump administration embarked on a new and more aggressive tariff policy. In the first months of his second administration, Trump has threatened tariffs as high as 145 percent on all Chinese goods, while China’s latest retaliatory tariffs on U.S. imports are as high as 125 percent. The Trump administration claims the levies attempt to punish China for unfair trade practices, including Chinese subsidies that hurt U.S. workers and the long-standing accusation that China pressures American companies to hand over their technology and intellectual property, as well as China’s role in illicit fentanyl trafficking. Some economists doubt, however, that Trump’s aggressive approach will achieve its desired goals and raise concerns that tariffs will drive up inflation and the costs of goods, hurting American consumers and exports. This paper attempts to examine the economic effects of the U.S.-China trade war. It first shows the economic effects of the U.S.-China trade war under the first Trump administration and then forecasts for the second Trump administration. II. Trade War between the U.S. and China As Figure 2 shows, the US trade deficit with China has increased as trade between both countries expanded. Therefore, the first Trump administration started the trade war by imposing higher tariffs on Chinese goods. Figure 2: US-China Goods Trade (2001-2024) Figures 3-1, 3-2, and 4 show U.S. and Chinese tariff rates for each other’s goods. As Figure 3-1 shows, the US tariffs on Chinese goods were less than 5 per cent when the first Trump administration began on January 20, 2018. Then the tariff continued to rise. As Figure 3-2 shows, the average US tariffs on China goods were 20.8 percent when the second Trump administration began on January 20, 2025. As Figure 4 shows, after the second Trump administration took office, US tariffs of 10 percent were imposed on all imports from China under the International Emergency Economic Powers Act (IEEPA) on February 1, 2025. Then the Trump administration increased tariffs on Chinese goods to 20 percent on March 3 and to 34 percent on April 2. US tariffs of 10 percent were imposed on nearly all countries under IEEPA, but with some sector carve-outs on April 5. China retaliated against US tariffs by increasing tariffs on U.S. products to 34 percent on April 4 and to 84 percent on April 10. US tariffs ranging from 1 percent to 74 percent were imposed on nearly all countries with a trade surplus with the US, including China (74 percent). US tariff on Chinese goods included an additional 50 percent tariff as counter-retaliation for China’s retaliation announcement on April 10. Then again China faced an additional 41 percent tariff increase under IEEPA (to 125 percent total). However, Trump instituted a broad 90-day pause on steep Liberation Day tariffs, aiming to give time for negotiators to work out new deals. But Trump has not provided a pause for China. In response, China has raised its duties on imports of US goods to 125 percent from 84 percent on April 12, while US tariffs on Chinese imports have increased to 145 percent by adding a 20 percent tariff in relation to the fentanyl. Figure 3-1: US–China tariff rates toward each other and the rest of the world (ROW) before 2025 Source: MacroMicro. https://en.macromicro.me/charts/130548/china-us-tariff-rates  Figure 3-2: US–China tariff rates toward each other and rest of world, 2018-2025  Figure 4: US–China tariff rates toward each other in 2025 Source: Reuters, April 11, 2025. III. Economic Effects of the Trade War between the U.S. and China A.  The first Trump administration Chad Bowen (2023) at the Peterson Institute for International Economics raised a question “was the trade war between U.S. and China worth it for US exporters”? And his answer so far is no. In the middle of the trade war, the United States and China signed a historic trade agreement on a ‘Phase One trade deal’ on January 15, 2020. Bowen supposes that in 2018–21, US goods exports to China of phase one products had grown at the same pace as China’s imports of those products from the world and that US services exports to China had grown at the rate of US services exports to the world. Cumulative US goods and services exports to China in 2018–21 were about 19 percent lower with the trade war and phase one agreement between the two countries (see Figure 5). His estimates suggest that the United States would have avoided export losses of $24 billion (16 percent) in 2018 and $30 billion (20 percent) in 2019 resulting from the trade war. Exports would also have been $27 billion (18 percent) higher in 2020 and $40 billion (23 percent) higher in 2021 than under phase one agreement.   Figure 5: US exports to China would be higher with no trade war. i. US manufacturing exports suffered in the trade war and did not recover. As Figure 6 shows, China purchased only 59 percent of the full commitment of US manufactured products in 2020–21 under Phase One trade deal. Manufacturing was the most economically significant part of the trade deal, making up 44 percent of covered US exports in 2017. Autos and aircraft dominated US exports before the trade war. Both did poorly during the period of 2020–2021. US auto exports reached only 39 percent of the target over 2020–21. The sector’s suffering is a trade war warning. In July 2018, Trump’s tariffs on Chinese imports included auto parts; China’s tariff retaliation hit US car exports. US car exports decreased sharply in 2018, as car makers like Tesla and BMW reacted to the higher costs by moving production destined for the Chinese market out of the United States. (Ford, another major car exporter, including through its Lincoln brand, complained in 2018 that Trump’s separate steel and aluminum tariffs raised the cost of its US-based manufacturing by $1 billion.) Even when China lifted the retaliatory tariffs in early 2019, US exports did not recover. Sales of US aircraft, engines, and parts to China did even worse, reaching just 18 percent of the 2020–21 target. Though the industry was less directly impacted by trade war tariffs, US sales to China plummeted in 2019 after the two crashes of the Boeing 737 MAX. Between March 2019 and late 2020, the airplane model was grounded, with Boeing shutting down production in early 2020. China cancelled orders in April 2020, and though the legal text allows credit for aircraft “orders and deliveries”, additional orders had not been publicly announced by the end of 2021, despite complaints by the Biden administration that China's trade policy was holding back sales. (Exports of the 737 MAX might eventually resume, as Chinese regulators instructed airlines in December 2021 to implement the changes needed to allow the model to fly again in China.) Not all manufactured exports performed poorly during the period of 2020–21. Medical supplies needed to treat Covid-19 significantly increased. US exports of semiconductors and manufacturing equipment also boomed – thanks to a combination of stockpiling by Chinese companies as US export controls in 2019-20 threatened to cut off Chinese firms like SMIC and Huawei as well as increased demand for chips needed for consumer electronics and data servers brought on by the Covid-19 pandemic shift to remote work, schooling, and leisure.  Figure 6: US-China war battered hard US manufacturing exports to China ii.  US agricultural exports suffered in the trade war, received subsidies, and then recovered. To the Trump administration, agriculture was a very politically important part of the trade deal in 2020, despite accounting for only 14 percent of covered exports. As Figure 7-1 shows, when China's retaliatory tariffs hurt US farm exports during the period of 2018–19, the Trump administration awarded the sector tens of billions of dollars in federal subsidies. In the days leading up to the 2020 presidential election, the Trump administration released a report that touted resuming farm sales to China—ignoring the continued troubles facing US manufacturing, energy, and service exports. US farm exports did get back to 2017 pre-trade war levels and ultimately reached 83 percent of the 2020–21 commitment under Phase One deal (see Figure 7-1 & 7-2).  Figure 7-1: US agricultural exports to China Soybeans made up approximately 60 percent of US agricultural exports to China in 2017. As Figure 7-2 shows, exports of US soybeans to China were devastated by the trade war, falling from $12 billion to $3 billion in 2018, because China imposed retaliatory tariffs. Though soybean exports managed to reach their pre-trade war levels during the period of 2020–21, they still fell over 30 percent short of their target under Phase One deal. Products like pork, corn, wheat, and sorghum exceeded expectations, though not necessarily because of the trade deal in January 2020. The outbreak of African swine fever led China to increase pork imports from the U.S. in 2019 before the deal was agreed. (In 2020–21, China's pigmeat imports from the rest of the world also averaged five times 2017 levels.) Wheat and corn imports increased after China began to comply with a 2019 WTO dispute settlement ruling against its unfilled tariff rate quotas. (Compared with 2017, China's imports from the rest of the world in 2020–21 were about 200 percent higher for wheat and 350 percent higher for corn.) Some farm exports also benefitted less from the Chinese purchase commitments under the trade deal in January 2020. Seafood and farm products did not rebound from the effects of the trade war. After being hit with Chinese tariffs, US lobster exports re-achieved about half of their target in 2020–21. US exports of raw hides and skins ended up at less than one-third (see Figure 7-2).  Figure 7-2: US agricultural exports to China (sub-category) iii. U.S. Imports from China: Total US imports from China were down with the beginning of the trade war. For 15 months beginning in July 2018, the Trump administration imposed higher tariffs on Chinese products. The Trump administration began the trade war by imposing tariffs of 25 percent on products covering roughly $34 billion of US imports from China in July 2018 (List 1) and on $16 billion of imports in August (List 2). When China retaliated against the U.S., the trade war continued with Trump imposing 10 percent tariffs on an additional $200 billion of imports in September 2018 (List 3), increasing the tariff rate of those duties to 25 percent in June 2019. In September 2019, Trump hit another $102 billion of imports (List 4A) with 15 percent tariffs, later reducing them to 7.5 percent upon implementation of the US-China Phase One trade agreement in February 2020. (The administration identified another set of products covering most of the rest of US imports from China of more than $160 billion—List 4B—for which it scheduled tariffs to take effect on December 15, 2019 but was cancelled on December 13, 2019.) As a result, as Figure 8-1 & 8-2 show, overall, the trade war reduced US imports from China. Then US imports recovered only slowly, starting in mid-2020. In January 2022, when the term of the first Trump administration ended, US imports from China (red line) remained well below the pre-trade war trend (dashed line), while US imports from the rest of the world (blue line) returned to pre-trade war levels of June 2018. China was the source of only 18 percent of total US goods imports in 2022, down from 22 percent at the beginning of the trade war.  Figure 8-1: Value of US goods imports from China and the rest of the world, 2016–2022 (June 2018 = 100)  Figure 8-2: Value of US imports from China and the rest of the world by trade war tariff list, 2018–2022 (June 2018 = 100) B.  The second Trump administration As of April 12, 2025, U.S. tariffs on Chinese goods are 145 percent, but this tariff rate is not sustainable over a long period of time because it is way too high and because U.S. President Donald Trump and Chinese leader Xi Jinping want to negotiate. In fact, Trump signalled on April 23 that he would cut his 145 percent tariff on Chinese goods substantially. Therefore, it is not reasonable to explore the effects of Trump’s tariffs of 145 percent. Last year, McKibbin, Hogan, and Noland at the Peterson Institute for International Economics (PIIE) examined the impact of now-President Trump’s proposed tariffs based on Trump’s campaign promises that would impose 60 percent additional tariffs on imports from China. They explored the impacts of a 60 percent additional tariff on China with and without other countries’ retaliating in kind by imposing steeper tariffs on imports from the United States. Figures 9 through 14 show the results from their analyses. Figure 9 shows that China experiences the most significant GDP losses (0.9% below baseline by 2026), while the U.S. also experiences a negative GDP growth rate (0.2% below baseline by 2027).  Figure 9: Projected change in real GDP of selected economies from an additional 60 percent increase in US tariffs on imports of goods from China, 2025-40 Figure 10 shows that the direct impact of the U.S. tariff of 60 percent on Chinese employment is initially negative (-2.25% in 2025), but a gradual decline in Chinese real wages eventually restores employment to the baseline after a decade. US employment will fall 0.23% below baseline by 2027.  Figure 10: Projected change in employment (hours worked) in selected economies from an additional 60 percent increase in US tariffs on imports of goods from China, 2025-40 Figure 11 shows that US inflation rises by 0.4% in 2025, with the higher cost of imports due to tariffs not offset by the stronger US dollar lowering prices of imports from other countries. The tariffs on US imports from China are mildly deflationary in other countries (see Figure 11).  Figure 11: Projected change in inflation in selected economies from an additional 60 percent increase in US tariffs on imports of goods from China, 2025-40 The slowdown in the Chinese economy causes capital to flow out of China and into other economies. This is initially a financial capital flow responding to a fall in financial rates of return in China and a rise in expected profits in countries like Canada and Mexico. That financial inflow becomes physical investment over time, which increases production capacity in these economies. Countries that receive the capital experience a trade deficit (see figure 12). This additional production enables the rise in exports to the US economy. While the US trade deficit with China shrinks, the overall US trade deficit increases (figure 12) as the partial relocation of production back into the US economy causes the dollar to appreciate.  Figure 12: Projected change in the trade balance of selected economies from an additional 60 percent increase in US tariffs on imports of goods from China, 2025-40 So far, figures have focused on the unilateral imposition of US tariffs on Chinese products. In figure 13, McKibbin, Hogan, and Noland compare projected changes in US GDP from the unilateral imposition of tariffs with a scenario where China retaliates by imposing a 60% tariff on US goods and services. By 2026, US GDP losses from Trump’s tariff policy more than double if China retaliates against the US (see Figure 13). The impact on US inflation in 2025 yields a similar result (see Figure 14). With Chinese retaliation, US inflation rises 0.7% above baseline compared with 0.4% without retaliation.  Figure 13: Projected change in US GDP from an additional 60 percent increase in US tariffs on imports of goods from China, with and without retaliation by China, 2025-40  Figure 14: Projected change in US inflation from an additional 60 percent increase in US tariffs on imports of goods from China, with and without retaliation by China, 2025-40 IV. Conclusion This paper showed that U.S. tariffs on Chinese goods imposed by the first Trump administration mainly had negative impacts on U.S. exports, although they reduced U.S. imports from China over a short period of time. The analysis by McKibbin, Hogan, Noland (2024) for the second Trump administration also shows that U.S. tariffs on Chinese goods will have negative impacts on US GDP, inflation, employment, and trade balance. This paper also showed that U.S. tariffs on Chinese goods will have larger negative impacts on U.S. GDP and inflation if China retaliates. Then a question arises: “Why does Trump attempt to impose extremely high tariffs on products from China?” Larisa Kapustina,  Ľudmila Lipková, Yakov Silin and Andrei Drevalev (2020) identify four main reasons that led the U.S. to the greatest trade war between the U.S. and China: a) to reduce the U.S. deficit of bilateral trade and increase the number of U.S. jobs; b) to limit access of Chinese companies to American technologies and prevent digital modernisation of the industry in China; c) to prevent the growth of China’s military strength; and d) to reduce the U.S. federal budget deficit. References Bown, Chad, “China bought none of the extra $200 billion of US exports in Trump's trade deal.” Peterson Institute for International Economics, Working Paper. July 19, 2022.Bown, Chad, “Four years into the trade war, are the US and China decoupling?” Peterson Institute for International Economics, Working Paper. October 20, 2022.Bown, Chad, “US imports from China are both decoupling and reaching new highs. Here's how.” Peterson Institute for International Economics, Working Paper. March 31, 2023. Kapustina, Larisa, Ľudmila Lipková, Yakov Silin and Andrei Drevalev, “US-China Trade War: Causes and Consequences.” SHS Web Conference. Volume 73, 2020: 1-13.McKibbin, W., M. Hogan and M. Noland (2024), “The International Economic Implications of a Second Trump Presidency.” Peterson Institute for International Economics, Working Paper 24-20. 

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском My analysis of South Korean relations with Egypt and a comparison with China, my academic and research specialty, comes as Egypt and South Korea celebrate the 30th anniversary of the establishment of diplomatic relations on April 14, 2025. Relations between the two countries have witnessed continuous development, encompassing various political, economic, cultural, and educational fields over the past three decades. Egyptian-Korean relations date back to 1948, when Egypt officially recognized the independence of the Republic of South Korea. Egyptian-South Korean cooperation currently extends to development cooperation for the next five years to meet development requirements, promote the transition to a green economy, and expand sustainable infrastructure projects.  Especially with South Korea's selection of Egypt as a strategic partner in its development cooperation plans for the period 2022-2026. While China is investing in its massive Belt and Road Initiative, and Russia is using its security arms to strengthen its presence in Africa, South Korea is focusing on a different kind of belt related to food security. The South Korea-led Rice Belt Initiative, particularly within the African continent, aims to boost rice production in African countries by introducing high-yielding rice varieties, providing seeds, providing training, and supporting irrigation systems. Through partnerships with eight African countries, most notably Cameroon, Gambia, Ghana, Guinea-Bissau, Kenya, Senegal, and Uganda, South Korea is investing in agricultural capacity building and promoting rice cultivation and distribution in these and other African countries to enhance food security through partnerships between South Korea and African countries.  Through major South Korean initiatives, such as official development assistance, capacity building programs, technology transfer, and the Rice Belt, South Korea aims to bridge the development gap and strengthen its role as a pivotal global power. With the arrival of US President “Trump” in his second term, following a series of trade wars against China during his first term and his increase in tariffs on China by more than 100%, relations between the United States and China have become fraught with tension, especially with China's firm response to the US administration with a policy of reciprocal retaliation, Beijing's reciprocal increase in tariffs imposed on US goods and products, and even China's imposition of trade restrictions on US companies operating within its territory, particularly those owned by the well-known American businessman “Elon Musk”. Here we see the extent to which South Korea currently benefits from the tensions between the Chinese and American superpowers, as it is a smaller player in managing relations between the major powers.  This is precisely what Keun Lee, former vice chairman of the National Economic Advisory Council to the South Korean president, winner of the 2014 Schumpeter Prize, and author of “China: Technological Leapfrogging and Economic Catch-Up: A Schumpeterian Perspective”, which is issued by: (Oxford University Press, 2022), in this aforementioned book, Keun Lee analyzes the situation for South Korea and the nature of the dispute between China and the United States, emphasizing that South Korean companies are reaping significant benefits from the trade and technological restrictions imposed by the United States on China, which have at least slowed the “Sinicization” of manufacturing and global value chains. Since South Korea and China produce a large number of the same goods and types, such as: (consumer electronics, batteries, cars, ships), and more, according to Keun Lee’s analysis, the less China’s share of the American and Western market diminishes, the more South Korea will have. Indeed, Western and American sanctions, in particular, imposed on the Chinese tech giant Huawei, have given a boost.  Strong sales of wireless systems produced by Samsung. Similarly, if Chinese industry has less access to Western technology, it is likely to turn to South Korean companies. South Korea is attempting to capitalize on this by adopting a new development strategy for partnerships with Egypt and other African countries, and holding the first South Korea-Africa summit in June 2024. Here, we can draw a simple comparison between the development roles of China and South Korea within the African continent. China primarily focuses on its massive financial power through its Belt and Road Initiative, as well as its efforts to fundamentally change the nature of African countries. What is interesting is that South Korea, which possesses significant strengths, has decided to join the bandwagon to win in Africa. South Korea is keen to move away from following the Chinese model in Africa. As noted during the first South Korea-Africa summit in June 2024, South Korea is serving as a bridge or communication channel in the international community as a responsible middle power, based on its own development experience compared to China.  Noting South Korea's keenness to avoid presenting itself as a strong competitor to China or others within the African continent The modern history of South Korean relations with Africa begins with the Korean War on June 25, 1950, with the participation of units from the Ethiopian and South African armies within the United Nations forces. This included the “Mehal Sevare Unit”, the bodyguard unit of the Ethiopian emperor, which was sent to support South Korea, despite Ethiopia being one of the poorest countries in the world at the time. This Ethiopian aid contributed to building friendly and special relations between the two countries after the war ended. As a result, an African Union office in South Korea was established within the Ethiopian embassy, and the South Korean government established a memorial garden in honor of the Ethiopian soldiers who participated in the war in support of South Korea. Given the importance of the partnership with South Korea, President El-Sisi's keenness during his visit to South Korea was to enhance the Egyptian state's efforts to localize South Korean industry in Egypt, reflecting the promising prospects for diverse and anticipated Egyptian partnerships with South Korea. Here, we find President El-Sisi's commitment to localizing South Korean technology in Egypt, which was clearly demonstrated by the localization of the South Korean railway car industry in Egypt in the Suez Canal Economic Zone. This aims to gradually enhance Egyptian local content and bolster Egyptian supply efforts to markets in the Arab region and Africa, through Egyptian partnerships between the public and private sectors in South Korea. Therefore, we find President Sisi keen to benefit from South Korean expertise in localizing technology and attracting foreign investment, which contributes to the creation of approximately 5,000 job opportunities for Egyptian youth in the Suez Canal Economic Zone, achieving social and economic progress in the region. On the development front, South Korea is keen to provide development grants to Egypt and all African countries, through the “Korea International Cooperation Agency” (KOICA), especially in the fields of higher education, intellectual property, vocational training, information technology, establishing an electronic system for government procurement, women's economic empowerment, and combating violence. Meanwhile, South Korea's concessional development financing is diversified, covering (railways, subway car manufacturing, knowledge transfer programs, and government capacity building programs). Egyptian-South Korean cooperation has increased in light of the strategic partnership between the two countries, particularly in light of South Korea's selection of Egypt as its strategic partner in development cooperation for the next five years.  Many South Korean projects in Egypt are being financed through the concessional financing window provided by the Korea Economic Development Cooperation Fund (KEDCF), a subsidiary of the Export-Import Bank of Korea. This was evident in a $460 million South Korean development financing agreement with Egypt to implement the project to manufacture and supply 40 train units (320 cars) for the second and third lines of the Greater Cairo Metro. South Korean companies also have a significant presence in the New Administrative Capital and the Suez Canal Development Corridor, most notably Hyundai Rotem in the Suez Canal Economic Zone. The Hyundai Rotem Group includes more than 14 South Korean companies operating in three main sectors: trains and railway equipment, military industries related to land weapons, heavy machinery and equipment, energy infrastructure, and iron and steel. It is also a leading company in modern technologies related to the use of hydrogen fuel in vehicles and equipments. Egyptian-South Korean relations are diverse across several fields, not limited to development cooperation efforts between the two countries, but also extend to trade, investment, and culture, with many South Korean companies investing in Egypt in various fields, such as technology, communications, electronics, and others. During his recent visit to South Korea, the Egyptian government and Egyptian President Abdel Fattah el-Sisi were keen to advance cooperation with the South Korean side and provide full support for South Korean investments in Egypt, encompassing a wide variety of fields. Korea is one of Egypt's most important trading partners in East Asia. South Korea is also an important source for the transfer of industrial expertise and technology to Egypt.  There are many areas of potential cooperation between South Korea and Egypt in the Dabaa nuclear power plant projects, the most prominent of which, are: (joint manufacturing in the electronics sector, where Korean products for Samsung and LG are manufactured by Egyptians). Furthermore, 90% of Egypt's electronics exports are conducted in cooperation with South Korea. In addition, there is fruitful cooperation between the two countries in electric vehicle projects, seawater desalination, and railway development projects. In 2022, South Korea announced a $1 billion loan to Egypt from the South Korean Development Cooperation Fund. This comes as part of South Korea's efforts to build a cooperative partnership with Egypt and promote sustainable development between the two countries. This agreement also aims to conclude trade agreements and expand the scope of South Korean cooperation with Egypt in the environmentally friendly transportation, maritime, and space development sectors. At the same time, both countries agree on the importance of overcoming the climate crisis, especially after Egypt hosted the (COP27 international climate conference) in Sharm El-Sheikh. In recent years, South Korea has been seeking to create a state of rapprochement with the African continent, especially Egypt. The first Korea-Africa summit, held in early June 2024, marked a historic milestone, as South Korean ex-President “Yoon Suk-yeol” and leaders from 48 African countries met to deepen trade and economic cooperation. This led to the convening of the Korea-Africa Summit, a new initiative launched by South Korea to support cooperation with African countries in light of the challenges facing countries worldwide, particularly food security, climate challenges, and supply chain issues. Given Egypt's prominent position in Africa, South Korea sought to establish a strategic partnership with Africa, particularly Egypt, based on three axes: promoting trade and investment to achieve economic development and confronting global challenges, such as: (climate change and food security, and promoting peace, security, and cooperation in international forums). During the first Africa-South Korea summit, South Korean ex-President Yoon announced South Korea's commitment to increasing development assistance to Africa, pledging $10 billion over the next six years. This significant financial support underscores South Korea's interest in Africa's vast mineral wealth and its potential as a major export market. In his closing remarks, ex-President “Yoon” stated that: “the important Minerals Dialogue launched by South Korea and Africa sets an example for a stable supply chain through mutually beneficial cooperation and contributes to the sustainable development of mineral resources worldwide”. On the Chinese side, given the Chinese government's commitment to holding China-Africa summits, known as “FOCAC”, since 2002, which bring together most African leaders, these China-Africa summits hold significant significance for Western governments and the US administration. While Washington maintains its primary military alliance in East Asia through U.S. Forces Korea—stationing approximately 28,500 troops in South Korea—its growing concern also extends to Africa, where China’s expanding influence, exemplified by the China-Africa summits, represents a new source of geopolitical friction and tension in U.S.-China relations. Through its advanced economic ties with African countries, China provides significant assistance to African regimes that the United States and Europe are seeking to pressure to review their records on human rights, good governance, monopoly policy, and other issues. Sino-African relations have also witnessed rapid development, especially in the economic field, which China prefers as an easy and acceptable path in its dealings with developing countries, whether in the form of trade exchange, loans, grants, or investment gifts. These are characterized by the absence of political conditionality, which distinguishes them from their Western counterparts and makes them acceptable to poor African societies, both at the official and opular levels. This facilitates the task of the Chinese actor in penetrating these societies until Beijing became the main trading partner of the African continent, as Beijing considers its relations with Africans an important part of its strategy to enhance its economic and political influence at the global level and to be the center of the circle for these countries within the concept of its soft and quiet power, within the framework of the policy of relations between the countries of the South-South.  To this end, China seeks to increase its political position within the African continent and address African sensitivities, which are burdened with negative perceptions of Western colonialism. This is achieved by talking about reforming international institutions and glorifying national sovereignty, which was rediscovered after the Western colonial withdrawal from Africa. China also declares its solidarity with the countries of the South through economic positions and development promises. This is the same kind of talk that Africans hear from major powers like Beijing, in the face of Western ambitions. Based on this, we understand the extent of competition between China and South Korea in Egypt and other African countries, and their adoption of African summit policies through solidarity and development cooperation with Egypt and across the African continent, with African countries' ambitions to diversify their businesses, they are pushing both Beijing and Seoul to embrace their vision of building a multipolar world, the right of Africans to a permanent seat on the Security Council after UN reform, opposition to colonialism in all its new forms and manifestations, and the depoliticization of domestic issues such as human rights and democracy, among others.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Bukele appears to have the green light from the United States to deepen his authoritarian project with the help of Beijing. Recently, the ruling Salvadoran party, Nuevas Ideas, inaugurated a political training school in Nuevo Cuscatlán. The event was headlined by Félix Ulloa, Vice President of the Central American country, and China’s ambassador to El Salvador, Zhang Yanhui. According to the Central American news portal Expediente Público, the institute was reportedly sponsored by the Chinese Communist Party (CCP), following a previous visit to Beijing by Ulloa and Xavier Zablah Bukele – leader of Nuevas Ideas and cousin of the Salvadoran president – during which several interparty cooperation agreements were finalized. This event highlights the diversified strategies China employs to expand its influence in the Western Hemisphere. While public attention toward the Asian giant typically focuses on intergovernmental diplomacy, trade relations, or the Belt and Road Initiative (BRI), less consideration is given to the forms of cooperation carried out by various international outreach bodies tied to the CCP in Latin America. The Czech think tank Sinopsis, which specializes in Chinese studies, notes: “Unlike many other countries, China’s foreign affairs extend beyond the jurisdiction of the Ministry of Foreign Affairs (MoFA) and transcend official state-to-state diplomacy […] This system consists of various bodies and operates under the overarching concept of total diplomacy.” The CCP behind the scenes According to Central American and Chinese-language media, Zablah Bukele and Félix Ulloa held a meeting in April 2024 with Liu Jianchao, Minister of the International Liaison Department (ILD) of the CCP. On that occasion, representatives of bukelismo signed an agreement with the CCP’s cadre school, securing Chinese sponsorship for the newly inaugurated Political Training Institute of Nuevas Ideas. The ILD was established in 1951 to promote ties between the CCP and other communist parties across Asia, the Middle East, Africa, and Eastern Europe. Following the Sino-Soviet split in the 1960s, the organization turned its focus to cultivating relationships with leftist groups of all kinds, from European social democrats to liberation movements in the Global South. Under Hu Jintao’s leadership, the ILD began adopting a pragmatic approach, fostering good relations with both left- and right-wing parties. For instance, center-right organizations like Argentina’s Republican Proposal (PRO) have maintained ties with the CCP since 2009. Xi Jinping, while maintaining this approach, has made the ILD’s operations more assertive, turning it into a key instrument of Chinese foreign influence. Various think tanks and scholars of Chinese foreign policy have noted the quiet diplomacy exercised by the Asian giant through the ILD and other bodies. These include the United Front Work Department and the Chinese People’s Association for Friendship with Foreign Countries, which function as parallel bureaucracies to the MoFA and are characterized by opaque activities and a purported autonomy from Beijing. However, these organizations aim to connect various sectors of foreign politics and civil society with the CCP. In particular, the ILD builds influence networks by training foreign politicians. Beyond offering training courses funded in China, the department has promoted the construction of training centers in countries such as Tanzania. In this way, the ILD seeks to forge close ties with foreign elites who, in addition to promoting Chinese soft power narratives – such as the superiority of the one-party model or the primacy of development over democracy and civil liberties – can lobby on Beijing’s behalf in agencies, cabinets, and parliaments. In this sense, Chinese support for Nuevas Ideas’ Political Training Institute marks a significant step forward in cooperation between the CCP and El Salvador’s ruling party. The ILD’s training programs have also become spaces for transmitting authoritarian know-how. Researchers such as Lina Benabdallah and Christine Hackenesch point out that the CCP promotes the Chinese governance model to foreign elites – a model based on mass surveillance technologies, personal data storage, and internet censorship, typically provided by state-owned enterprises like Huawei. These practices are presented as alternatives for strengthening public security and internal stability, but in practice, they reinforce state control and restrict civil liberties in adopting countries. The paradoxes of Bukelismo The link between Nuevas Ideas and the CCP raises questions about the ideological leanings of Nayib Bukele. Just a few weeks ago, the Salvadoran president hosted U.S. Secretary of State Marco Rubio in San Salvador to seal, in Rubio’s words, “a historic agreement, the most extraordinary in the world” on migration. Suppose this event signaled El Salvador’s intent to become one of the United States’ most important regional partners. How should we now interpret the growing political cooperation with China, the U.S.’s main strategic rival? On one hand, it is understandable that El Salvador’s ruling party seeks alignment with the CCP. The inauguration of Nuevas Ideas’ Political Training Institute, with ILD’s blessing, is another episode of authoritarian cooperation in Latin America, where a regime well-versed in repression and control transfers knowledge and resources to another with similar aims. Similar patterns have been observed in the region with Cuba, Venezuela, and Nicaragua, which collaborate among themselves and with extra-regional autocracies like Russia, Iran, and China itself. Given this, it is not surprising that a self-proclaimed socialist regime and another linked to the Conservative Political Action Conference (CPAC) would cooperate beyond ideological differences. In fact, this has been the ILD’s hallmark in the 21st century: pragmatism in engaging with parties across the spectrum, ensuring long-term ties with various governments. This phenomenon reflects a central feature of our times: the erosion of the left-right divide in favor of a new tension between democracies and autocracies. On the other hand, the indoctrination of Nuevas Ideas’ cadres might even be tolerable to Trump, given that some CCP perspectives align with his political agenda. The pursuit of a multipolar order that secures spheres of influence for major powers – such as the South China Sea or Greenland – as well as the promotion of illiberal models of democracy – like China’s “whole-process democracy” or the unitary executive without checks and balances – are not foreign concepts to Make America Great Again. Based on this, Bukele may seem to have the green light to deepen his authoritarian project with Beijing’s help. As long as the PRC does not interfere with U.S. strategic interests in El Salvador – such as migration management or control of critical infrastructure – the 47th American president might remain content, regardless of China’s growing soft power in the hemisphere.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском In 1995, World Bank Vice President Ismail Serageldin warned that whereas the conflicts of the previous 100 years had been over oil, “the wars of the next century will be fought over water.” Thirty years on, that prediction is being tested in one of the world’s most volatile regions: Kashmir. On April 24, 2025, the government of India announced that it would downgrade diplomatic ties with its neighbor Pakistan over an attack by militants in Kashmir that killed 26 tourists. As part of that cooling of relations, India said it would immediately suspend the Indus Waters Treaty – a decades-old agreement that allowed both countries to share water use from the rivers that flow from India into Pakistan. Pakistan has promised reciprocal moves and warned that any disruption to its water supply would be considered “an act of war.” The current flareup escalated quickly, but has a long history. At the Indus Basin Water Project at the Ohio State University, we are engaged in a multiyear project investigating the transboundary water dispute between Pakistan and India. I am currently in Pakistan conducting fieldwork in Kashmir and across the Indus Basin. Geopolitical tensions in the region, which have been worsened by the recent attack in Pahalgam, Indian-administered Kashmir, do pose a major threat to the water treaty. So too does another factor that is helping escalate the tensions: climate change A fair solution to water disputes The Indus River has supported life for thousands of years since the Harappan civilization, which flourished around 2600 to 1900 B.C.E. in what is now Pakistan and northwest India. After the partition of India in 1947, control of the Indus River system became a major source of tension between the two nations that emerged from partition: India and Pakistan. Disputes arose almost immediately, particularly when India temporarily halted water flow to Pakistan in 1948, prompting fears over agricultural collapse. These early confrontations led to years of negotiations, culminating in the signing of the Indus Waters Treaty in 1960.   Brokered by the World Bank, the Indus Waters Treaty has long been hailed as one of the most successful transboundary water agreements. It divided the Indus Basin between the two countries, giving India control over the eastern rivers – Ravi, Beas and Sutlej – and Pakistan control over the western rivers: Indus, Jhelum and Chenab. At the time, this was seen as a fair solution. But the treaty was designed for a very different world. Back then, India and Pakistan were newly independent countries working to establish themselves amid a world divided by the Cold War. When it was signed, Pakistan’s population was 46 million, and India’s was 436 million. Today, those numbers have surged to over 240 million and 1.4 billion, respectively. Today, more than 300 million people rely on the Indus River Basin for their survival. This has put increased pressure on the precious source of water that sits between the two nuclear rivals. The effects of global warming, and the continued fighting over the disputed region of Kashmir, has only added to those tensions. Impact of melting glaciers Many of the problems of today are down to what wasn’t included in the treaty, rather than what was. At the time of signing, there was a lack of comprehensive studies on glacier mass balance. The assumption was that the Himalayan glaciers, which feed the Indus River system, were relatively stable. This lack of detailed measurements meant that future changes due to climate variability and glacial melt were not factored into the treaty’s design, nor were factors such as groundwater depletion, water pollution from pesticides, fertilizer use and industrial waste. Similarly, the potential for large-scale hydraulic development of the region through dams, reservoirs, canals and hydroelectricity were largely ignored in the treaty. Reflecting contemporary assumptions about the stability of glaciers, the negotiators assumed that hydrological patterns would remain persistent with the historic flows. Instead, the glaciers feeding the Indus Basin began to melt. In fact, they are now melting at record rates. The World Meteorological Organization reported that 2023 was globally the driest year in over three decades, with below-normal river flows disrupting agriculture and ecosystems. Global glaciers also saw their largest mass loss in 50 years, releasing over 600 gigatons of water into rivers and oceans. The Himalayan glaciers, which supply 60-70% of the Indus River’s summer flow, are shrinking rapidly. A 2019 study estimates they are losing 8 billion tons of ice annually. And a study by the International Center for Integrated Mountain Development found that Hindu Kush-Karakoram-Himalayan glaciers melted 65% faster in 2011–2020 compared with the previous decade. The rate of glacier melt poses a significant challenge to the treaty’s long-term effectiveness to ensure essential water for all the people who rely on the Indus River Basin. While it may temporarily increase river flow, it threatens the long-term availability of water. Indeed, if this trend continues, water shortages will intensify, particularly for Pakistan, which depends heavily on the Indus during dry seasons. Another failing of the Indus Waters Treaty is that it only addresses surface water distribution and does not include provisions for managing groundwater extraction, which has become a significant issue in both India and Pakistan. In the Punjab region – often referred to as the breadbasket of both nations – heavy reliance on groundwater is leading to overexploitation and depletion. Groundwater now contributes a large portion – about 48% – of water withdrawals in the Indus Basin, particularly during dry seasons. Yet there is no transboundary framework to oversee the shared management of this resource as reported by the World Bank. A disputed region It wasn’t just climate change and groundwater that were ignored by the drafters of the Indus Waters Treaty. Indian and Pakistan negotiators also neglected the issue and status of Kashmir. Kashmir has been at the heart of India-Pakistan tensions since Partition in 1947. At the time of independence, the princely state of Jammu and Kashmir was given the option to accede to either India or Pakistan. Though the region had a Muslim majority, the Hindu ruler chose to accede to India, triggering the first India-Pakistan war. This led to a U.N.-mediated ceasefire in 1949 and the creation of the Line of Control, effectively dividing the territory between Indian-administered and Pakistani-administered Kashmir. Since then, Kashmir has remained a disputed territory, claimed in full by both countries and serving as the flashpoint for two additional wars in 1965 and 1999, and numerous skirmishes. Despite being the primary source of water for the basin, Kashmiris have had no role in negotiations or decision-making under the treaty. The region’s agricultural and hydropower potential has been limited due to restrictions on the use of its water resources, with only 19.8% of hydropower potential utilized. This means that Kashmiris on both sides — despite living in a water-rich region — have been unable to fully benefit from the resources flowing through their land, as water infrastructure has primarily served downstream users and broader national interests rather than local development. Some scholars argue that the treaty intentionally facilitated hydraulic development in Jammu and Kashmir, but not necessarily in ways that served local interests. India’s hydropower projects in Kashmir — such as the Baglihar and Kishanganga dams — have been a major point of contention. Pakistan has repeatedly raised concerns that these projects could alter water flows, particularly during crucial agricultural seasons. However, the Indus Waters Treaty does not provide explicit mechanisms for resolving such regional disputes, leaving Kashmir’s hydrological and political concerns unaddressed. Tensions over hydropower projects in Kashmir were bringing India and Pakistan toward diplomatic deadlock long before the recent attack. The Kishanganga and Ratle dam disputes, now under arbitration in The Hague, exposed the treaty’s growing inability to manage transboundary water conflicts. Then in September 2024, India formally called for a review of the Indus Waters Treaty, citing demographic shifts, energy needs and security concerns over Kashmir. The treaty now exists in a state of limbo. While it technically remains in force, India’s formal notice for review has introduced uncertainty, halting key cooperative mechanisms and casting doubt on the treaty’s long-term durability. An equitable and sustainable treaty? Moving forward, I argue, any reform or renegotiation of the Indus Waters Treaty will, if it is to have lasting success, need to acknowledge the hydrological significance of Kashmir while engaging voices from across the region. Excluding Kashmir from future discussions – and neither India nor Pakistan has formally proposed including Kashmiri stakeholders – would only reinforce a long-standing pattern of marginalization, where decisions about its resources are made without considering the needs of its people. As debates on “climate-proofing” the treaty continue, ensuring Kashmiri perspectives are included will be critical for building a more equitable and sustainable transboundary water framework.