Global economic landscapes are changing at an unprecedented pace. In Asia, geopolitical tensions are escalating, most recently and sharply with the sudden eruption of a new military clash between India and Pakistan. This conflict lays bare a new age of uncertainty in global affairs. Major tectonic shifts are radically reconfiguring the international financial system, complicating matters even further.
Nearly 90% of all foreign exchange transactions around the world every day trade in U.S. dollars, showing just how dominant the dollar is in global finance. In fact, the USD holds more than 50% of international payments! Close to 60% of official central bank reserves are in this currency. The dollar has historically been one of the pillars of U.S. economic hegemony. New economic coalitions are beginning to upend this decades-old status quo.
BRICS+ has taken a notable step. This alliance of nations — Brazil, Russia, India, China, and South Africa — has been lobbying hard for what is called a multipolar world. Collectively, this bloc accounts for nearly 40% of global GDP and almost half the world’s people. One of BRICS+’s key goals is to diminish the U.S. dollar’s influence in global finance. Member countries aren’t just talking; they’re already working toward alternative currencies for trade and holding reserves.
Amid these economic shifts, trade talks between the United States and China are set to begin, signifying a potential thaw in tensions between the two largest economies. The Trump administration has suspended Liberation Day-associated tariffs indefinitely. We hope this action will lead to further positive conversation. As both countries still grapple with complicated trade waters, uncertainty continues to loom.
The international community has been watching closely as the military conflict between India and Pakistan has resumed with increased intensity and frequency. The historical rivalry has consequences not just for regional order, but for global geopolitics as well. Whatever happens next, observatories and trade policy analysts are on the lookout for repercussions, not least on the fate of the UK’s own trade deal with India.
At the same time, the ongoing and rapidly changing situation in Sudan rages on under the radar. As proxy conflicts erupt, including in the recent Israel-Hamas war, we’ve seen how these emerging tensions can shape wider MENA regional geopolitics. The instability in Sudan could have ripple effects across neighboring countries and beyond.
In a rare and welcome geostrategic move, the Trump administration has stymied Israeli plans to bomb Iranian nuclear sites. Instead, they’re taking the arc of diplomacy. This big change is part of a larger effort to calm increasing tensions in the Middle East. It largely addresses challenges posed by Iran’s nuclear aspirations as well.
At the same time, Israel has significantly escalated its military attacks outside of Gaza, extending their operations into Syria, fueling fears of broader conflict in the region. The international community is closely monitoring how these developments will play out, especially having regard to Israel’s strategic role in Middle Eastern geopolitics.
China is trying to improve its relationship with the EU. Early reactions from EU officials indicate a strong interest in continuing the conversation and collaboration. This evolving relationship could have an even deeper effect on global economic and hard power relations, offering a counterweight to U.S.-led alliances.