Pakistan: Navigating an Uncertain Global Order

The world is undergoing a profound shift toward protectionism and unpredictability. Global institutions are weakening, long-standing norms are eroding, and power dynamics are replacing cooperative frameworks. In this volatile environment, Pakistan must stay alert and prepare for the challenges ahead.

This transformation is already in motion. US President Donald Trump’s imposition of tariffs signaled a move away from multilateralism. The shift toward unilateralism and economic nationalism has been ushered in. The rules-based global order, which once promoted free trade and transparency, is on the decline.

For decades, the US championed institutions like the WTO, enabling developing countries, including Pakistan, to engage in global trade under shared rules. Now, the rise of "reciprocal tariffs" and deal-making based on narrow self-interest marks a rejection of that system. In such an environment, even close allies are vulnerable.

This shift is especially alarming for countries like Pakistan. Larger powers may use economic tools or coercion to advance their agendas, sidelining smaller economies. A coordinated international backlash to protectionist policies is likely. While Pakistan may avoid retaliation, others might not, raising the specter of a global trade war.

Trade wars have historically led to severe economic disruptions. Pakistan, with low foreign exchange reserves and heavy reliance on institutions like the IMF, lacks the resilience to absorb such shocks. Unlike wealthier nations, it cannot offer major stimulus measures or safety nets.

Thus, Pakistani policymakers must proactively engage with global powers, diversify trade relationships, and strengthen internal governance. Strategic partnerships with like-minded nations and regional initiatives like CPEC are essential, but overreliance on any one partner is risky. A multi-vector foreign policy is key.

Domestically, political stability and unity are crucial. A fragmented leadership weakens Pakistan’s ability to respond to global shifts. The world order we knew is unlikely to return soon. Only countries that are agile, united, and forward-looking will succeed.

Pakistan must not be passive. With vigilance, decisive leadership, and strategic focus, it can navigate this turbulent global landscape and secure a stable future.

US dollar faces crisis of confidence

In times of market panic investors tend to rush to the safety of greenback, but when stocks swooned in response to US tariffs this week, they ran away from it. Investors say it's a sign that the greenback’s global standing may be eroding.

There is perception that greenback has an inherent competitive advantage. It's backed by the world's largest economy, the deepest capital markets and an established rule of law. There is no real alternative in the near term. However, after the trade war initiated by Donald Trump the creation of an alternative currency seems certain.

The dollar, for decades a safe haven, on Thursday fell about 1.7% in its biggest daily drop since November 2022, after President Donald Trump imposed tariffs on imports at levels not seen since the early 1900s. Stock markets also tanked, as tariffs ignited recession worries.

In interviews and published markets commentaries, many investors and analysts pointed to the Trump administration for the anomaly. Its protectionist policies, upending of the global economic order in place since World War II, and a growing US debt pile have been chipping away at the dollar's appeal, they say. Left unchecked, a crisis of confidence in the dollar could also undermine its position as the world's reserve currency, they added.

"What we're seeing today is a further indication that the structure and nature of the US dollar’s relationship to global markets has changed," said Thierry Wizman, global foreign exchange and rates strategist at Macquarie in New York.

"There's an underlying basis for this, which is the changing role of the US in the world."

Any erosion of the dollar's standing as a safe-haven is bad news for investors and policymakers - at least in the near term.

For investors, who have piled trillions of dollars into buoyant US markets in recent decades, a sharp dollar fall could result in higher interest rates for longer. That's because price pressures at home could make it harder for the Federal Reserve to cut rates.

A rapid strengthening of currencies against the dollar is a headache for other central banks navigating a weaker economic outlook, as it makes their exports more expensive and potentially harder for them to revive growth. The euro, for example, just had its best day against the greenback in more than two years.

The recent depreciation in the dollar showed that concerns about the currency's status had "left footprints in financial markets already," Sweden's central bank deputy governor Per Jansson said at an event in London on Tuesday.

"If the dollar's status would change, that would be a big change for the world economy ... and would basically create a mess," he told Reuters afterwards. "I really do not hope the US goes there."

 

 

US imposes sanctions on entities and individuals from China and UAE

The United States on Tuesday imposed sanctions on entities and individuals in Iran, the United Arab Emirates (UAE) and China whom it accused of being part of an Iranian weapons procurement network, as President Donald Trump seeks to ramp up pressure on Tehran.

The US Treasury Department announced sanctions on six entities and two individuals in action taken in coordination with the Department of Justice, accusing them of responsibility for procurement of unmanned aerial vehicle (UAV) components on behalf of a leading manufacturer for Iran's drone program.

"Iran’s proliferation of UAVs and missiles - both to its terrorist proxies in the region and to Russia for its use against Ukraine - continues to threaten civilians, US personnel, and our allies and partners," Treasury Secretary Scott Bessent said in a statement.

"Treasury will continue to disrupt Iran’s military-industrial complex and its proliferation of UAVs, missiles and conventional weapons that often end up in the hands of destabilizing actors, including terrorist proxies."

Tuesday's action targeted one Iranian-based entity and two people based in Iran, one entity based in China and four UAE-based entities, according to the Treasury statement.

The Treasury said it was the second round of sanctions targeting "Iranian weapons proliferators" since Trump restored his "maximum pressure" campaign on Iran, which includes efforts to drive its oil exports down to zero in order to help prevent Tehran from developing a nuclear weapon.

Trump's February memo, among other things, ordered Bessent to impose "maximum pressure" on Iran, including sanctions and enforcement mechanisms on those violating existing sanctions.

Trump threatened Iran on Sunday with bombing and secondary tariffs if Tehran did not come to an agreement with Washington over its nuclear program.

 

China and Russia reject US maximum pressure

Lately, China, Iran, and Russia held talks in Beijing, urging diplomacy over “pressure and threats” and calling for an end to “illegal unilateral sanctions” on Iran.

The meeting, led by deputy foreign ministers from the three nations, comes as China positions itself as a key player in resolving Iran’s nuclear issue.

This follows US President Donald Trump’s statement that Iran faces two options: a deal or military action.

China’s Executive Vice Foreign Minister Ma Zhaoxu emphasized eliminating the root causes of the crisis, rejecting sanctions and force.

The joint statement called for avoiding escalation and fostering a diplomatic resolution. The urgency grows as the UN nuclear watchdog warns of Iran’s expanding uranium stockpile, though Iran maintains its program is peaceful.

Beijing opposes US sanctions and the Trump administration’s “maximum pressure” campaign, which began after the US withdrew from the 2015 Iran nuclear deal — the Joint Comprehensive Plan of Action (JCPOA).

The deal’s looming October deadline could trigger a “snapback” of UN sanctions unless a new agreement is reached.

China, alongside European powers, hopes to salvage the JCPOA or craft a new deal. Trump remains open to negotiation but maintains pressure through sanctions, while Iran’s leadership rejects talks under US duress.

China’s diplomatic push aligns with its goal of emerging as a global leader, especially as Trump’s "America First" policy shifts US foreign strategies. The Beijing meeting also showcased non-Western approaches to global issues.

For Iran, the talks offered a chance to reinforce ties with China and Russia — key allies amid Western sanctions. Tehran and Moscow have deepened cooperation, particularly through military support in Ukraine, while China remains a vital economic and diplomatic partner.

China seeks to balance its relationships across the Middle East, including ties with Saudi Arabia, and mitigate potential risks to its businesses from US pressure on Iran.

Analysts note that China’s limited experience in Middle Eastern diplomacy and Iran’s independent stance could restrict its role as a deal broker. Despite this, China’s efforts signal growing influence and alignment with Russia and Iran against Western pressure.

West Asia can ensure its security, claims Iranian commander

Iran's Navy Commander, Rear Admiral Shahram Irani, stated that countries in West Asia are capable of handling their own security and urged external actors to rethink their involvement in the region. 

Speaking to Al Jazeera, he emphasized that regional nations are no longer as vulnerable as they once were and possess the means to protect themselves.

“The region is no longer what it used to be, and its countries are equipped to ensure their safety; therefore, foes must change their policies and respect regional nations,” The commander stressed.

Admiral Irani also asserted that Iran rejects isolation and will operate within international legal frameworks.

“The behavior of Iranians, particularly in the current regional context, aligns with international laws,” he noted. 

“Regional instability will harm the global economy,” Admiral Iravani said, adding that Iran is offering expertise to West Asian regional countries. 

The statement came as Iran, Russia, and China wrapped up a joint maritime exercise dubbed “Maritime Security Belt 2025” in the Indian Ocean on Wednesday, alongside observers from several other nations.

In related remarks on Tuesday, Foreign Minister Abbas Araghchi congratulated Admiral Irani on the successful execution of the exercises, emphasizing the Navy's strength and international dominance.

The top diplomat said the drills, beginning on March 10, demonstrated the Navy's decisive attitude and global operational capabilities.

He also stressed the importance of an assertive presence in expansive oceanic areas for maritime security and development.

“Iran has an unwavering determination to maintain and enhance the security of the strategic and sensitive Persian Gulf region, the strategically crucial Strait of Hormuz within it, the Sea of Oman, and beyond. These exercises were a reflection of that resolve.” Araghchi noted. 

 

Pakistan: 27 people die in rescue operation

According to CNN, nearly 350 hostages have been rescued at the end of a deadly standoff between Pakistan’s military and armed militants who hijacked a train in the southwestern Pakistani province of Baluchistan. The incident, which began Tuesday left dozens dead.

The Baloch Liberation Army (BLA), a militant separatist group active in the restive and mineral-rich Baluchistan province, claimed responsibility for the attack.

A total of 27 hostages were killed by the BLA, the security source said, as well as one soldier. At least 35 militants were killed in the rescue operation, the security source added.

Around 450 passengers were on the Jaffer Express enroute from Baluchistan’s capital Quetta to Peshawar in the north, when militants opened “intense gunfire” as the train traveled through a tunnel early in its journey, according to officials.

Pakistan’s military then launched an operation to confront the attackers who used “women and children as shields,” according to security sources not authorized to speak to CNN.

One rescued woman described scenes of chaos following the attack, likening it to the “Day of Judgement.” She told CNN she fled gunfire and walked for two hours to reach safety.

Passenger Mohammad Ashraf told CNN he saw more than 100 armed individuals on the train and that no harm was inflicted on women and children.

The security sources accused the militants of being in contact with handlers in Afghanistan.

Pakistan’s military and government have long accused Afghanistan of providing sanctuary to militant groups, something its Taliban leaders have denied.

Tuesday’s kidnapping is an audacious moment for a separatist insurgency that seeks greater political autonomy and economic development in the strategically important and mineral-rich mountainous region.

But it also highlights the ever-deteriorating security situation there – one that Pakistan’s government has been grappling with for decades.

Baluchistan’s population – made up mostly of the ethnic Baloch group – is deeply disenfranchised, impoverished, and has been growing increasingly alienated from the federal government by decades of policies widely seen as discriminatory.

An insurgency there has been ongoing for decades but has gained traction in recent years since the province’s deep-water Gwadar port was leased to China, the jewel in the crown of Beijing’s “Belt and Road” infrastructure push in Pakistan.

The port, often touted as “the next Dubai,” has become a security nightmare with persistent bombings of vehicles carrying Chinese workers, resulting in many deaths.

Some analysts said Tuesday’s attack marked an escalation in the sophistication of attacks by the insurgents.

The “larger point that the Pakistani state is not grasping ... is that it’s not business as usual anymore,” said Abdul Basit, a Senior Associate Fellow at the S. Rajaratnam School of International Studies in Singapore.

“The insurgency has evolved both in its strategy and scale,” he added, saying Pakistan’s approach to tackle the Baloch militants’ “seem to have run its course.”

“Instead of revising its counterproductive policies, it is persisting with them, resulting in recurrent security and intelligence failures,” Basit said.

The BLA has been responsible for the deadliest attacks in Pakistan in the past year.

A suicide bombing by the BLA at a train station in Quetta killed more than two dozen people last November. The previous month, it claimed responsibility for an attack on a convoy of Chinese engineers, resulting in two deaths.

In the wake of Tuesday’s attack, Pakistan’s Prime Minister Shehbaz Sharif vowed to “continue to fight against the monster of terrorism until it is completely eradicated from the country.”

In a statement, he said the “terrorists’ targeting of innocent passengers during the peaceful and blessed month of Ramadan is a clear reflection that these terrorists have no connection with the religion of Islam, Pakistan and Baluchistan.”

Analysts say such attacks need urgent attention from the federal government.

“Tuesday’s attack has gained global attention and it will worry China, which has its investments in the province – more than any other state,” said Basit. “A major reset of existing security paradigm is required in Baluchistan.”

Iran showcases prowess with China and Russia

Iran has reaffirmed its pivotal role in regional security by leading the seventh iteration of the Maritime Security Belt-2025 joint naval exercises alongside China and Russia, being held March 10–13 near the strategic port of Chabahar, reports the Tehran Times.

The drills, marked by advanced tactical operations and aerial maneuvers, underscored Tehran’s commitment to safeguarding vital maritime routes while strengthening alliances with global powers in the face of shifting geopolitical dynamics.  

The exercises featured synchronized day and night aerial target shooting, tactical formations, mock rescue missions, and a grand naval parade, demonstrating heightened interoperability among the three nations.

Rear Admiral Mostafa Tajeddini, deputy operations commander of Iran’s Navy, hailed the drills as a testament to Iran’s technical sophistication and leadership.

“The execution of these operations demands precise coordination and step-by-step orders,” he stated, emphasizing the seamless integration of the Iranian Navy and Islamic Revolution Guards Corps Navy with Chinese and Russian fleets.

Notably, this year’s drills expanded operational scope, deploying helicopters and fixed-wing aircraft in deeper waters—a strategic leap from prior iterations.

Tajeddini underscored the significance of such advancements, describing them as critical to countering “external threats” and ensuring regional stability.

Rear Admiral Tajeddini also reiterated Iran’s uncompromising stance: “We will not tolerate any threats or incursions into the nation’s maritime borders.”

“Unity at sea today ensures stability onshore tomorrow,” he added.

Since their inception in 2019, the Maritime Security Belt drills have evolved in scale and complexity, mirroring Iran’s geopolitical ambitions.

The 2025 edition coincides with heightened tensions in the Red Sea and Arabian Sea, where Western-led coalitions have increased patrols.

By contrast, Iran’s collaboration with Beijing and Moscow offers an alternative security framework, prioritizing regional sovereignty over external intervention.

The choice of Chabahar as the drills’ focal point highlights its unparalleled strategic value. Situated on the Gulf of Oman, Iran’s sole oceanic port bypasses the congested Strait of Hormuz, through which 20% of global oil transits.

Chabahar’s direct access to the Indian Ocean positions it as a gateway for the International North-South Transport Corridor (INSTC), a 7,200-km trade artery linking India to Central Asia and Europe via Iran.  

Historically, US sanctions somewhat complicated Chabahar’s development, yet partnerships with Eastern allies have helped improve its outlook.

India’s initial investments in the port’s infrastructure, aimed at accessing Afghanistan and Central Asia, have been complemented by China’s Belt and Road Initiative (BRI), weaving Chabahar into broader Eurasian connectivity projects.

The port now serves as a military and economic nexus, enabling Iran to project influence while mitigating reliance on Western-dominated trade routes.

The 2025 drills signal a deepening alignment among Iran, China, and Russia, reflecting shared opposition to unilateralism.

Analysts note that the exercises, occurring near the Strait of Hormuz and Chabahar, symbolize a collective resolve to secure energy corridors and trade lanes critical to the Global South.

Some experts view these exercises as more than just defensive actions; they are seen as opportunities to create a unified vision for maritime security.

This partnership also counters Western isolation efforts. By anchoring military cooperation in the Indian Ocean, 
Furthermore, the inclusion of aerial units and night operations—a first in the tripartite drills—signals Iran’s growing confidence in asymmetric warfare capabilities, crucial in deterring adversarial naval presence.

 

Nasdaq sees biggest one-day drop since 2022

US stocks plunged on Monday as relentless tariff wrangling and mounting anxieties from a possible federal government shutdown gave rise to fears that the US economy could be careening into recession.

The previous week's steep selloff resumed, gathering momentum as the session progressed, with all three major US indexes suffering sharp declines.

The S&P 500 had its biggest one-day drop since December 18 and the tech-loaded Nasdaq slid 4.0%, its biggest single-day percentage drop since September 2022.

The S&P 500, coming off of its biggest weekly percentage drop since September, is 8.6% below its record closing high reached less than a month ago.

On Thursday, the tech-loaded Nasdaq dipped more than 10% below its record closing high touched on December 19, confirming that it has been in a correction since then.

The bellwether S&P 500 closed below its 200-day moving average, a closely watched support level, for the first time since November 2023.

"It's a material drop for one day but we're seeing the normal sort of drawdown that you see in an upmarket," said Tom Hainlin, national investment strategist at US Bank Wealth Management in Minneapolis. "Concerns are mounting and investors are moving to the sidelines, but we haven't seen growth worries manifest in data yet."

On Sunday, Trump declined to comment on the negative market reaction to his on-again, off-again tariff actions against the biggest US trading partners, and whether anxieties related to his erratic policy shifts could nudge a softening economy into recession.

HSBC downgraded US stocks, citing uncertainty around tariffs.

A Reuters poll of economists reflected the growing risks of recession for the United States, Canada and Mexico.

Tech stocks are under pressure from a stronger Japanese yen and a spike in sovereign bond yields, as investors unwind yen carry trades on expectations of an upcoming interest rate hike in Japan.

The carry trades involve borrowing yen at a low cost to invest in other currencies and assets offering higher yields, and that unwinding is at least partially responsible for the selloff in tech stocks such as the "Magnificent 7" group of artificial intelligence-related megacaps.

 

 

Iran, Russia and China to participate in naval drill in Indian Ocean

Iran, Russia, and China are set to conduct a large-scale joint naval exercise in the northern Indian Ocean, focusing on maritime security operations and strategic military coordination.

The drill, named Security Belt-2025, will take place in early and mid-March near Iran’s southeastern Chabahar Port, involving various branches of the three nations' naval forces.  

The Chinese Defense Ministry announced the exercise on Sunday via its official Weibo account, detailing that the drill will include multiple training operations such as maritime target strikes, VBSS (visit, board, search, and seizure), damage control, and joint search and rescue missions.  

According to the ministry, the primary goal of Security Belt-2025 is to enhance military trust and strengthen practical cooperation between the participating forces. China’s People’s Liberation Army (PLA) Navy is set to deploy a destroyer and a replenishment ship for the exercise.  

A Chinese military analyst emphasized that the drill will contribute to safeguarding security in a strategically critical region, particularly one that serves as a key transit route for global energy shipments.  

Security Belt-2025 marks the fifth joint naval exercise between Iran, China, and Russia since 2019.

Over the past few years, the three nations have conducted multiple military drills to reinforce regional maritime stability and safeguard international trade routes.  

In addition to countering piracy and maritime terrorism, these exercises have facilitated intelligence sharing on naval rescue operations and the exchange of tactical and operational expertise.  

In March 2024, the Iranian Navy, along with Chinese and Russian naval and airborne units, participated in the Maritime Security Belt-2024 drills.

Observers from Azerbaijan, Kazakhstan, Oman, Pakistan, and South Africa attended the exercises, reflecting the growing interest in multilateral maritime cooperation.  

The joint maneuvers were designed to strengthen maritime security, bolster international trade protection, combat piracy, and enhance operational coordination among naval forces.

The drills also served as a demonstration of the participants' collective commitment to global peace and stability at sea.  

As part of the upcoming exercises, the Islamic Revolution Guard Corps Navy (IRGCN) will deploy two advanced vessels: the Shahid Nazeri and the Shahid Sayyad Shirazi.  

Commissioned into the IRGC Navy in September 2016, the Shahid Nazeri is a high-speed patrol and reconnaissance vessel designed for extended operational reach. With a length of 55 meters, a width of 14 meters, and a height of 13 meters, the vessel significantly enhances the IRGCN’s maritime capabilities, extending its operational range up to 10,000 kilometers.  

The Shahid Nazeri features a specialized twin-hull (SWATH – Small Waterplane Area Twin Hull) design, providing enhanced stability in high-speed operations and rough seas. Its design ensures that it remains steady even at high speeds, reducing the risk of capsizing.  

Equipped with a helicopter landing pad, the vessel can conduct surveillance and reconnaissance missions across various maritime zones, making it a valuable asset for intelligence gathering and patrol operations.  

The Shahid Sayyad Shirazi is a newly commissioned stealth warship from the Shahid Soleimani class, officially joining the IRGC Navy in February 2024. This catamaran-style ocean-going vessel is designed for high-speed operations, with a maximum speed of 45 knots.  

Armed with a wide array of offensive and defensive missile systems, the Shahid Sayyad Shirazi is equipped with vertical-launch Nawab air defense missiles and Sayyad cruise missiles with a strike range of 700 kilometers.  

With a length of 67 meters, a width of 20 meters, and a displacement of 600 tons, the vessel is powered by four engines, enabling long-distance operations. It has an operational range of 5,500 nautical miles and is capable of carrying three missile-launching fast attack boats along with an armed combat helicopter.  

 

What gives the US authority to impose sanctions on other countries?

It is believed that the United States has the legal authority to impose sanctions based on a combination of constitutional powers, legislative acts, executive orders, and national security considerations. Sanctions can be imposed for a range of reasons, from counterterrorism efforts to enforcing international law or responding to violations of human rights or international norms. However, the time has come to reject these power, which cause difficulties for the nations the US does not like.

Sanctions are often imposed for reasons related to US national security. This could include targeting foreign governments or groups that support terrorism, are involved in weapons proliferation, or engage in activities that harm US foreign policy objectives.

While US sanctions are often unilateral, they can also be part of multilateral efforts. The US may align its sanctions with those of international organizations, such as the United Nations or the European Union, especially when it comes to issues like nuclear proliferation, terrorism, and human rights violations. In this context, sanctions are seen as part of broader international diplomatic efforts.

The President has the authority to issue executive orders to implement sanctions without needing Congressional approval. These orders often cite national security concerns, international obligations, or the need to enforce specific laws (like the IEEPA) to restrict economic relations with certain countries or individuals.

 

Here's a breakdown of the key legal and institutional bases for US sanctions:

1. US Constitution

• Executive Powers (Article II): The President of the United States, as the head of the executive branch, has the authority to conduct foreign policy and engage in international relations. This includes the power to implement sanctions as a tool of diplomacy and national security.
• Congressional Powers (Article I): Congress has the power to regulate commerce with foreign nations and declare war. This allows it to pass laws that authorize sanctions, and the executive branch often implements those laws.

2. Specific Legislation

Several US laws grant the authority to impose sanctions, including:

• International Emergency Economic Powers Act (IEEPA) (1977): This law grants the President broad powers to regulate international trade and economic transactions in response to national emergencies. Under this act, the President can block financial transactions, freeze assets, and prohibit trade with foreign governments or entities that pose a threat to U.S. interests.
• Trading with the Enemy Act (1917): Initially passed during World War I, this law allows the President to regulate or prohibit trade with foreign nations deemed enemies during wartime or national emergencies.
• The USA PATRIOT Act (2001): This law expanded the President's powers to combat terrorism and the financing of terrorist activities, enabling sanctions targeting individuals and entities linked to terrorism.
• Magnitsky Act (2012): This law allows the U.S. government to impose sanctions on individuals involved in human rights violations and corruption, even if they are not from countries officially designated as threats to U.S. security.
• Countering America's Adversaries Through Sanctions Act (CAATSA) (2017): This law specifically targets countries like Russia, Iran, and North Korea, providing a legal framework for imposing sanctions against foreign governments and individuals involved in activities that threaten U.S. security or foreign policy.

 

 

US mulls plan to disrupt Iranian oil movement

President Donald Trump's administration is considering a plan to stop and inspect Iranian oil tankers at sea under an international accord aimed at countering the spread of weapons of mass destruction, sources familiar with the matter told Reuters.

Trump has vowed to restore a "maximum pressure" campaign to isolate Iran from the global economy and drive its oil exports to zero, in order to stop the country from obtaining a nuclear weapon.

Trump hit Iran with two waves of fresh sanctions in the first weeks of his second-term, targeting companies and the so-called shadow fleet of ageing oil tankers that sail without Western insurance and transport crude from sanctioned countries.

Those moves have largely been in line with the limited measures implemented during former President Joe Biden's administration, during which Iran succeeded in ramping up oil exports through complex smuggling networks.

Trump officials are now looking at ways for allied countries to stop and inspect ships sailing through critical chokepoints such as the Malacca Strait in Asia and other sea lanes.

Previous attempts to seize Iranian oil cargoes have triggered retaliation by Iran.

The US tried to interdict at least two cargoes of Iranian oil in 2023, under Biden. This prompted Iran to seize foreign ships - including one chartered by Chevron Corp, which sent crude prices higher.

The current low oil price environment gives Trump more options to block Iranian oil flows, from sanctions on tanker companies to seizing ships, according to Ben Cahill, an energy analyst at the Center for Energy and Environmental Systems at the University of Texas.

"I think if prices stay below US$75 a barrel, the White House has more latitude to look at sanctions that would affect, you know, supply from Iran and other countries. It would be much harder to do this in a US$92 per barrel environment," Cahill said.

Aggressive US action could cut Iran exports by some 750,000 barrels per day in the short term, he said, but the longer the sanctions are in place, the less effective they are as Iran and buyers figure out ways around them.

A speedy resumption of oil exports from Iraq's semi-autonomous Kurdistan region would help offset any fall in Iranian exports.

Reuters previously reported that the White House is piling pressure on Iraq to allow Kurdish oil exports to restart or face sanctions alongside Iran.

Despite US sanctions in recent years, Tehran's oil exports brought in US$53 billion in 2023 and US$54 billion a year earlier, largely in trades with China, according to US Energy Information Administration estimates.

Iran relies on oil exports to China for vital revenue. Russia, which faces restrictions on oil exports and broader Western sanctions, is similarly focused on shipping oil to buyers in China and India.

Finland and other Nordic countries have warned in recent months of the dangers of ships sailing close to their shores and the environmental risks they pose to their shores in oil spills if there is an accident.

While European countries have spoken about inspections of ships transporting Russian oil suspected of not having valid insurance, little action has been taken and none mooted for vessels hauling Iranian oil.

 

Improving Pakistan-Bangladesh Relations

Bangladesh’s foreign affairs adviser, Touhid Hossain, recently stated that there is no longer any reason for strained relations with Pakistan. This shift in sentiment is underscored by the announcement of Pakistan Deputy Prime Minister Ishaq Dar’s planned visit to Dhaka in April, signaling a thaw in decades of frosty relations.

The change can be traced to August, when Bangladesh's former Prime Minister Sheikh Hasina was ousted after 15 years in power. Her tenure was marked by a strong alliance with India, seen in bilateral agreements, trade, and security collaborations. However, her removal created a diplomatic shift, leading to a cooling of ties with New Delhi and an opening for improved relations with Pakistan.

This shift is significant given the historical grievances stemming from the 1971 Liberation War, which have long impacted relations. Despite this, recent months have seen several high-level engagements between Bangladesh and Pakistan, indicating a thaw. Notably, Nobel laureate Muhammad Yunus, an adviser to Bangladesh’s interim government, met with Pakistani Prime Minister Shehbaz Sharif twice, highlighting the growing importance of ties with Pakistan over India.

Trade is emerging as a key area of cooperation. From August to December 2024, bilateral trade grew by 27%, and both countries signed an MOU in January to establish a joint business council. Similarly, in the defense sector, several high-level meetings between military officials from both countries have focused on regional security, joint military exercises, and arms trading. The term "brotherly countries" used by Pakistan’s military further signals a potential shift in South Asia’s security dynamics.

China also plays a strategic role, being a key partner to both nations. India’s concerns are rising, especially with Bangladesh’s interest in acquiring JF-17 Thunder fighter jets from Pakistan, which could alter the regional balance of power. This development has the potential to deepen the trilateral ties between Bangladesh, Pakistan, and China, prompting India to reassess its diplomatic and military strategies.

India must adapt to the changing dynamics by adopting a pragmatic approach that acknowledges Bangladesh’s evolving priorities while reinforcing historical ties. This will ensure India remains a key player in South Asia’s shifting landscape. Managing these relationships is crucial for all three nations. Bangladesh must balance its new ties with Pakistan and its economic dependence on India, while Pakistan must recognize its economic limitations. India, in turn, must address Bangladesh’s grievances to avoid further alienation.

Handled carefully, this evolving relationship could reshape South Asia, proving that diplomacy can overcome even the most entrenched divides. This moment presents an opportunity for Pakistan, Bangladesh, and India to redefine their futures in a geopolitically complex region.

South Asia: More of a meow than a roar

In the bubble years of the late 1980s, the appreciation of the Japanese yen sent a flood of investment from corporate Japan to the fast-growing economies of Southeast Asia. That was before the rise of China as a manufacturing powerhouse in the 1990s. But today, the optimism accompanying China's ascent has waned ‑ China is more likely to compete with ASEAN economies than support them.

According to Nikkei Asia, such diverse national circumstances suggest that, sadly, Southeast Asia remains less than the sum of its parts -- its once-promising Tiger economies have mostly lost their roar.

Nowhere is this reversal in ASEAN's economic fortunes more apparent than in Thailand, where auto sales have collapsed. Indonesia, which has vast natural and mineral resources, should also be doing better than it is.

While Vietnam is struggling in finding enough workers, not all of Southeast Asia has lost its "Tiger" dynamism.

Laos sells hydropower to its neighbors at a time when cheap power is an increasingly valuable competitive advantage.

Malaysia has benefited from its proximity to Singapore.

Trump policy rattles European allies

Vice President Vance and Defense Secretary Pete Hegseth on Friday made separate speeches that rattled European leaders. US officials said Europeans cannot expect American troops to be on the continent forever.

Speaking at a press conference in Warsaw, Poland, Hegseth said that US force levels in Europe are important but must be scrutinized.

"What happens five, 10, 15 years from now is part of a larger discussion that reflects the threat level, America’s posture, our needs around the globe, but most importantly the capability of European countries to step up," he said.

"That’s why our message is so stark to our European allies — now is the time to invest because you can’t make an assumption that America’s presence will last forever."

His comments come on the end of a week-long trip through Europe that included stops in Germany to visit US Africa Command and Brussels for a two-day meeting of NATO defense ministers. While at the alliance headquarters, he hinted that Europeans would have to step up conventional deterrence against Russia.

Hegseth also sparked fears as to whether the US would largely abandon investment in NATO moving forward after he expressed “that stark strategic realities prevent the United States of America from being primarily focused on the security of Europe.”

No decision has yet been made on changing US force presence in Europe, though the Trump administration has said it is reviewing where it puts troops globally.

Vance, meanwhile, in remarks at the Munich Security Conference, argued the biggest threats facing Europe were not China or Russia, but the issue of mass migration and laws that restrict free speech.

“While the Trump administration is very concerned with European security and believes we can come to a reasonable settlement between Russia and Ukraine … the threat that I worry the most about vis-à-vis Europe is not Russia, it’s not China, it’s not any other external actor,” Vance said.

“And what I worry about is the threat from within,” he continued. “The retreat of Europe from some of its most fundamental values, values shared with the United States of America.”

Vance’s remarks did not delve into the conflict in Ukraine, where the Trump administration is pushing for a ceasefire negotiation, nor did he discuss at length President Trump’s desire for Europe to commit more to defense spending.

Instead, Vance accused European officials of using laws meant to minimize misinformation and disinformation to marginalize populist voices and voters, which garnered a tepid reception in the room. 

 

Can Trump impose tariffs on Chinese drugs?

According to The Hill, President Trump’s tariffs on China are in place and hitting all products imported from the country — including a number of pharmaceuticals that Americans rely upon.

Chinese imports account for a significant proportion of US prescriptions and over the counter drugs. Many of the Chinese-produced medicines are generics, which account for 91 percent of prescriptions dispensed in the United States.

“The Chinese market is a key supplier for key starting materials and Active Pharmaceutical Ingredient (API) to the generic supply chain,” said John Murphy, president and CEO of the Association for Accessible Medicines (AAM). 

“I will say they’re sort of less important any longer for the actual finished fill and final manufacturing,” Murphy noted. “But really, it’s the rare minerals, the key starting materials which are obviously critical to the supply chain.” 

Stakeholders were hopeful that medications would be spared from tariffs. Some noted that the US is a signatory to the World Trade Organization’s (WTO) 1994 Agreement on Trade in Pharmaceutical Products which calls for the elimination of tariffs on many pharmaceutical products. China has vowed to sue over the 10 percent tariffs, which it says are in violation of WTO rules. 

But a White House official said no exceptions are planned, and the administration will not be recognizing the WTO agreement. 

The country’s dependence on China to maintain pharmaceutical supply chains has long been an issue that lawmakers on both sides of the aisle have sought to address.

In 2018, the US-China Economic and Security Review Commission noted that the country was “heavily dependent” on drugs and API originating from China.

A 2023 analysis from the Atlantic Council found that the value of Chinese-imported APIs has continued to grow in recent years. 

According to Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, the US isn’t unique in its dependence on China for drugs, noting that the European Union is similarly reliant.   

De Bolle said China’s dominance in the market grew as it sought to enhance its drug producing capacity while US pharmaceutical companies turned to other manufacturing pursuits. 

“What happened is that we developed this huge biotech sector where we have a lot of stuff going on,” said de Bolle. “The manufacturing market just turned to producing these more sophisticated drugs; the stuff that’s used in treatments, the stuff that’s going through clinical trials.” 

“That’s why we went from, you know, producing a lot of these things to not producing many of these things and buying them from elsewhere. And elsewhere eventually became China,” she added. 

The margins for manufacturing generic drugs are razor-thin, and any disruptions to the supply chain are apt to cause shortages or delays. 

“That additional 10 percent tariff is going to have a fairly significant impact on the cost of goods for the generic and by a similar supply chain,” said Murphy. “We don’t hold massive stockpiles of generic drugs in the United States. It’s a fairly just-in-time inventory.” 

According to Murphy, some manufacturers may find it economically unviable to produce generic drugs, resulting in shortages. 

Across all industries, analysts have warned that increased costs brought on by tariffs will be passed to consumers. But some manufacturers may instead drop out of the market entirely rather than pass on costs, partly due to a key provision in the Inflation Reduction Act (IRA).

As part of its cost-cutting measures, the IRA included a provision that requires drug makers to pay Medicaid a rebate if the price of their drugs rises faster than the rate of inflation.  

Tom Kraus, vice president of government relations at the American Society of Health-System Pharmacists, said incurring that penalty on top of tariffs could mean more than just shortages. 

“You’ve got to sort of factor in paying that penalty, which is going to make you less profitable or you’re going to have to drop out of the market,” said Kraus. 

He noted that group purchasing organizations, companies that help hospitals and pharmacies buy drugs and save money, may decide that manufacturers whose products originate from China are too expensive and turn away from them entirely. 

 

 

Pakistan on a path of implosion

It was what one may safely describe as a ‘memorable’ occasion. Exactly a year ago today, adult-aged Pakistanis from all faiths, cultures, ethnicities, and socioeconomic classes had headed to their assigned polling stations to cast their ballots in a much-delayed general election.

 was remarkable how many expectations they ended up defying that day. One recalls the unannounced blackout of all mobile communication services, enforced by the authorities shortly before polls opened, which had left people without access to vital election-related information and unable to contact their friends and families.

It was not enough to deter the over 59 million citizens’ intent on having their voices heard that day. One also recalls the smug predictions of television pundits and the surveys fed to the media in the run-up to Election Day. None of them prepared the nation for the coup ordinary Pakistanis pulled off merely with the help of a stamp and a ballot paper.

No observer can honestly deny that the last election’s results were highly unexpected.

Considerable effort was made to keep one party out of the race. The party’s leadership was jailed, its workers picked up, its electoral symbol withdrawn, and its candidates, even after being forced to declare themselves independents, not allowed to campaign.

If the previous elections were manipulated — perhaps by the same elements — to bring the PTI to power, they went out of their way to ensure that it did not have any chance this time around.

Despite all their machinations, however, the PTI ended up winning an unexpectedly large chunk of the popular vote.

The results announced two things: one, that Pakistan’s youth had finally arrived on the political scene, and two, that ordinary voters had overwhelmingly rejected the narratives set by the powers of the day. In this sense, the 2024 election was indeed a historic one.

Much went wrong after February 08, 2024, mainly because responsible individuals within the Pakistani state refused to come to terms with the country’s changed realities.

However, though the injustices that followed the last general election cannot be forgotten, it is equally important to start thinking about what must now be done to mitigate their effects.

The country has continued to march on a path of implosion, unable to contain the dissonance created by a conflict between what those controlling the state want and what the people want for themselves. Unless this fundamental conflict is resolved, the country will not be at peace with itself.

A war of egos has been fought between a handfuls of individuals at the cost of the well-being of millions of ordinary Pakistanis. This unnecessary war must be called to an end. The people of Pakistan have been wronged for too long. They need a change.

Dawn Editorial, February 08, 2025

Aman-25 focuses regional cooperation

The picturesque seafront of the Pakistan Navy Dockyard with windsurfers, sailboats and Navy boats painted a beautiful backdrop for the flagpoles from which fluttered the flags of 60 nations participating in the ninth Multinational Maritime Exercise ‘Aman-25’ on Friday morning.

The biennial exercise commenced with a formal flag-hoisting ceremony, followed by the cutting of a cake by senior representatives of the participating navies.

A message from the Chief of Naval Staff, Admiral Naveed Ashraf, was read by Commodore Omar Farooq during the ceremony.

The naval chief welcomed the participants and highlighted that the exercise, which began in 2007, has now become a regular biennial feature, bringing together regional and ex­tra-regional navies to foster a secure and conducive maritime environment.

He emphasized the Pakistan Navy’s role as a key stakeholder in the Arabian Sea and its initiatives to enhance regional maritime security, including Regional Maritime Security Patrols.

He further stated that in recognition of the international community’s trust in its efforts to promote peace and stability at sea, Pakistan Navy has introduced the Aman Dialogue this year as an adjunct to the exercise.

Speaking on the occasion, Pakistan Fleet Commander Rear Admiral Abdul Munib underscored the force’s contributions to collaborative maritime security and the exercise’s significance in enhancing interoperability among the participants.

Rear Admiral Munib praised the participating countries for supporting Pakistan’s commitment to peace and maritime security and expressed the hope that the friendships fostered during the exercise would continue and grow.

The ninth edition of the exercise will see the participation of 12 naval ships, some of which have already arrived at the Karachi port while others are on their way.

China, with its Plans Baotou-133 and Plans Gaoyouhu, and the Kingdom of Saudi Arabia, with its HMS Jazan and HMS Hail ships, are the nations participating with two vessels each.

The other vessels include UAE’s Abu Dhabi (CVT) P-191, Malaysia’s KD Terengganu-174, Japan’s JS Murasame, Sri Lanka’s SLNS Vijayabahu, Indonesia’s KRI Bung Tomo-357, Iran’s Jamaran, Bangladesh’s BNS Somdura Joy, USA’s Lewis B. Puller and Oman’s RNOV Sadh. Meanwhile, Turkiye is participating with one aircraft.

There are also a number of special operation forces and observers taking part in the inaugural Aman Dialogue scheduled for February 09 to 10.

Bangladesh’s Chief of Naval Staff Admiral Nazmul Hassan, who arrived with his naval fleet, held meetings with Pakistan’s top military leadership on Friday in another sign of the improved bilateral ties between the two nations.

Admiral Hassan, who will also attend the inaugural Aman Dialogue on maritime security, called on the chairman of the Joint Chiefs of Staff Committee, Gen Sahir Shamshad Mirza and Chief of Army Staff Gen Asim Munir.

He also held a bilateral meeting with Admiral Ashraf at the Naval Headquarters in Islamabad.

The meetings focused on the evolving regional security landscape and mutual strategic interests, particularly in maritime collaboration.

Both militaries explored avenues to strengthen defence ties, including joint naval exercises, training programs, and exchange visits.

Adm Hassan’s visit marks the second high-level engagement between the Bangladeshi Armed Forces and Pakistani military leadership in recent months.

On January 14, Lt Gen S.M. Kamrul Hassan, the principal staff officer of Bangladesh’s Armed Forces Division, led a military delegation to Pakistan, where both sides agreed to bolster defence cooperation and collaborate on regional peace efforts.

Observers see these developments as a shift in Bangladesh-Pakistan relations after years of estrangement.

Bangladesh’s participation in Pakistan’s multilateral naval exercise is considered a major step forward in military cooperation.

 

New tariffs on Mexico, Canada, and China

According to Saudi Gazette, US President Donald Trump will impose new tariffs on imports from Mexico, Canada, and China starting Saturday, marking a significant escalation in global trade tensions.

The tariffs will include a 25% duty on Mexican and Canadian imports and a 10% tariff on Chinese goods.

However, Trump stated on Friday that Canadian oil would face a reduced tariff of 10%, set to take effect on February 18.

Trump also signaled potential future tariffs on the European Union, accusing the bloc of unfair treatment toward the United States.

"These are promises made and promises kept by the President," White House Press Secretary Karoline Leavitt said, justifying the Mexico and Canada tariffs as a response to what she described as their role in the distribution of illegal fentanyl in the United States.

The president has frequently cited undocumented migration and trade imbalances with neighboring countries as key reasons for the tariffs.

During his campaign, Trump had threatened to impose tariffs of up to 60% on Chinese goods but has so far held off on immediate action, instead directing his administration to conduct further analysis.

US imports from China have remained flat since 2018, following a series of tariffs imposed during Trump’s first term.

However, concerns are mounting that renewed trade restrictions could trigger a wider trade conflict and drive up costs for American consumers.

In response to the tariffs, Canadian Prime Minister Justin Trudeau warned that Canada would retaliate if the US moves forward with the new levies.

"It's not what we want, but if he moves forward, we will also act," Trudeau said.

Both Canada and Mexico have indicated they will implement countermeasures while also working to reassure Washington that they are addressing US border concerns.

Chinese officials have also urged against protectionist measures, with Vice Premier Ding Xuexiang calling for a "win-win" approach to trade during a speech at the World Economic Forum in Davos. While he did not mention the US by name, his comments underscored China's concerns about a renewed trade war under Trump's presidency.

The new tariffs come as the US relies heavily on imports from Canada, Mexico, and China, which together accounted for 40% of all goods brought into the country last year. If tariffs on Canadian and Mexican oil imports are enforced, they could undermine Trump’s promise to lower the cost of living, potentially raising prices on fuel and consumer goods.

Trump acknowledged on Friday that tariffs could lead to short-term economic disruption, as costs are often passed along to businesses and consumers. 

Trump can’t take Panama Canal on his own

Teddy Roosevelt once declared the Panama Canal “one of the feats to which the people of this republic will look back with the highest pride.” More than a century later, Donald Trump is threatening to take back the waterway for the same republic.

The president-elect is decrying increased fees Panama has imposed to use the waterway linking the Atlantic and Pacific oceans. He says if things don’t change after he takes office next month, “We will demand that the Panama Canal be returned to the United States of America, in full, quickly and without question.”

Trump has long threatened allies with punitive action in hopes of winning concessions. But experts in both countries are clear, unless he goes to war with Panama, Trump can’t reassert control over a canal the US agreed to cede in the 1970s.

What is the canal?

It is a man-made waterway that uses a series of locks and reservoirs over 51 miles (82 kilometers) to cut through the middle of Panama and connect the Atlantic and Pacific. It spares ships having to go an additional roughly 7,000 miles (more than 11,000 kilometers) to sail around Cape Horn at South America’s southern tip.

The US International Trade Administration says the canal saves American business interests “considerable time and fuel costs” and enables faster delivery of goods, which is “particularly significant for time sensitive cargoes, perishable goods, and industries with just-in-time supply chains.”

Who built it?

An effort to establish a canal through Panama led by Ferdinand de Lesseps, who built Egypt’s Suez Canal, began in 1880 but progressed little over nine years before going bankrupt.

Malaria, yellow fever and other tropical diseases devastated a workforce already struggling with especially dangerous terrain and harsh working conditions in the jungle, eventually costing more than 20,000 lives, by some estimates.

Panama was then a province of Colombia, which refused to ratify a subsequent 1901 treaty licensing US interests to build the canal. Roosevelt responded by dispatching US warships to Panama’s Atlantic and Pacific coasts. The US also prewrote a constitution that would be ready after Panamanian independence, giving American forces “the right to intervene in any part of Panama, to re-establish public peace and constitutional order.”

In part because Colombian troops were unable to traverse harsh jungles, Panama declared an effectively bloodless independence within hours in November 1903. It soon signed a treaty allowing a US-led team to begin construction.

Some 5,600 workers died later during the US-led construction project, according to one study.

Why doesn’t the US control the canal anymore?

The waterway opened in 1914, but almost immediately some Panamanians began questioning the validity of US control, leading to what became known in the country as the “generational struggle” to take it over.

The US abrogated its right to intervene in Panama in the 1930s. By the 1970s, with its administrative costs sharply increasing, Washington spent years negotiating with Panama to cede control of the waterway.

The Carter administration worked with the government of Omar Torrijos. The two sides eventually decided that their best chance for ratification was to submit two treaties to the US Senate, the “Permanent Neutrality Treaty” and the “Panama Canal Treaty.”

The first, which continues in perpetuity, gives the US the right to act to ensure the canal remains open and secure. The second stated that the US would turn over the canal to Panama on December 31, 1999, and was terminated then.

Both were signed in 1977 and ratified the following year. The agreements held even after 1989, when President George H.W. Bush invaded Panama to remove Panamanian leader Manuel Noriega.

In the late 1970s, as the handover treaties were being discussed and ratified, polls found that about half of Americans opposed the decision to cede canal control to Panama. However, by the time ownership actually changed in 1999, public opinion had shifted, with about half of Americans in favor.

What’s happened since then?

Administration of the canal has been more efficient under Panama than during the US era, with traffic increasing 17% between fiscal years 1999 and 2004. Panama’s voters approved a 2006 referendum authorizing a major expansion of the canal to accommodate larger modern cargo ships. The expansion took until 2016 and cost more than US$5.2 billion.

Panamanian President José Raúl Mulino said in a video Sunday, “Every square meter of the canal belongs to Panama and will continue to.” He added that, while his country’s people are divided on some key issues, when it comes to our canal, and our sovereignty, we will all unite under our Panamanian flag.

Shipping prices have increased because of droughts last year affecting the canal locks, forcing Panama to drastically cut shipping traffic through the canal and raise rates to use it. Though the rains have mostly returned, Panama says future fee increases might be necessary as it undertakes improvements to accommodate modern shipping needs.

Mulino said fees to use the canal are “not set on a whim.”

Jorge Luis Quijano, who served as the waterway’s administrator from 2014 to 2019, said all canal users are subject to the same fees, though they vary by ship size and other factors.

“I can accept that the canal’s customers may complain about any price increase,” Quijano said. “But that does not give them reason to consider taking it back.”

Why has Trump raised this?

The president-elect says the US is getting “ripped off” and “I’m not going to stand for it.”

“It was given to Panama and to the people of Panama, but it has provisions — you’ve got to treat us fairly. And they haven’t treated us fairly,” Trump said of the 1977 treaty that he said “foolishly” gave the canal away.

The neutrality treaty does give the US the right to act if the canal’s operation is threatened due to military conflict — but not to reassert control.

“There’s no clause of any kind in the neutrality agreement that allows for the taking back of the canal,” Quijano said. “Legally, there’s no way, under normal circumstances, to recover territory that was used previously.”

Trump, meanwhile, hasn’t said how he might make good on his threat.

“There’s very little wiggle room, absent a second US invasion of Panama, to retake control of the Panama Canal in practical terms,” said Benjamin Gedan, director of the Latin America Program at the Woodrow Wilson International Center for Scholars in Washington.

Gedan said Trump’s stance is especially baffling given that Mulino is a pro-business conservative who has “made lots of other overtures to show that he would prefer a special relationship with the United States.” He also noted that Panama in recent years has moved closer to China, meaning the US has strategic reasons to keep its relationship with the Central American nation friendly.

Panama is also a US partner on stopping illegal immigration from South America — perhaps Trump’s biggest policy priority.

“If you’re going to pick a fight with Panama on an issue,” Gedan said, “you could not find a worse one than the canal.”

Courtesy: Associated Press

How would WTO brace Donald Trump?

The World Trade Organization (WTO) held the last of its 2024 meetings this week, and for anyone rooting for the institution to conclude long-discussed agreements just ahead of its 30th anniversary, the results were a little hard to watch. Here’s a recap of what came out of gatherings of the WTO’s General Council and its Dispute Settlement Body.

Here’s a recap of what came out of gatherings of the WTO’s General Council and its Dispute Settlement Body:

·        Dispute settlement reform was unresolved and there was a pledge to continue talking next year

·        On the second fisheries agreement, India and Indonesia were granted more time to air their concerns. “Fish 2” was at the decision stage but was demoted to a “discussion” item

·        India, South Africa and Turkey blocked a deal known as Investment Facilitation for Development. That left it short of the needed consensus, even though 126 members backed its incorporation into WTO bylaws

·        Progress was made on two administrative issues: picking dates for the next ministerial conference (March 26-29, 2026, in Cameroon) and approval of WTO Secretariat pension reforms

Newly re-appointed Director General Ngozi Okonjo-Iweala tried to maintain a positive outlook, saying she hopes members return in the new year with a “spirit of compromise, ready to do deals.”

For an organization that needs everyone to agree, that’s going to be a challenge when US President-elect Donald Trump takes office January 20, 2025. His threatened tariffs and “America First” trade agenda run counter to the mission of the Geneva based WTO.

Trump promised 60% duties on Chinese imports and at least 10% for the rest of the world. In November, he threatened to impose further 10% tariffs on Beijing and 25% on Mexico and Canada if they fail to stop the flow of fentanyl and undocumented migrants to the US.

All of that violates the commitments that more than 160 nations make to join the WTO, said Bill Reinsch, a Commerce Department official during the Clinton administration and now a senior adviser at the Center for Strategic and International Studies.

Trump is known to dislike multilateral institutions, having withdrawn the US from a trade deal for the Indo-Pacific, the Paris Climate Agreement and the World Health Organization in his first term.

He could quit the WTO, too. Or he could stay in it, heap more scorn on the rules-based international order and ignore other countries complaining about Washington’s protectionism.

In Trump’s first term, US Trade Representative Robert Lighthizer watched the WTO’s appellate body grind to a standstill by preventing the appointment of new judges as terms expired, leaving it short of the number needed to function.

This week Biden administration delegates blocked a move by 130 WTO member countries that called for a restart of the process to fill vacancies on the appellate body — the 82nd time that that proposal failed.

The outlook for the WTO to free itself of paralysis under the incoming Trump administration isn’t favorable. 

Jamieson Greer, Trump’s nominee for USTR, was a close adviser to Lighthizer. His views on WTO relevancy are unclear, but he did say in testimony in May that “efforts to hold China accountable under WTO dispute mechanisms were largely unfruitful.”

The WTO also irked some Trump allies by accelerating the process this year of approving Okonjo-Iweala for another four-year term at its helm.

That was “almost certainly designed to prevent the incoming Trump administration from having a say in the matter,” said Dennis Shea, Trump’s ambassador to the WTO in his first term.

“The WTO already has diminished reputation in the United States,” he said. “This unprecedented action only diminishes it further.”

According to a Geneva-based trade source, Trump’s name wasn’t mentioned during this week’s General Council session.

Courtesy: Bloomberg