SCO Defense Ministers Meet in China

Against the backdrop of intensifying global conflicts, defense ministers from the ten member states of the Shanghai Cooperation Organization (SCO) convened this week in China’s eastern city of Qingdao, reaffirming their commitment to dialogue, multilateralism, and regional stability.

Hosted by Chinese Defense Minister Dong Jun, the annual SCO Defense Ministers’ Meeting on June 26 emphasized strategic coordination in the face of growing international uncertainty—particularly as tensions escalate in the Middle East and Eastern Europe.

During a bilateral meeting on June 25, Chinese Defense Minister Dong met with his Iranian counterpart Aziz Nasirzadeh, who is in China to attend the SCO gathering. Dong reaffirmed China’s support for Iran’s legitimate position and criticized unilateralism and hegemonic behavior, calling them major sources of global instability.  

“In a world undergoing profound changes, unilateralism, protectionism, and power politics are eroding the international order,” Dong said. “The defense departments of SCO member states must uphold founding principles of the SCO, deepen practical cooperation, and safeguard a peaceful environment for development.”  

In response, Minister Nasirzadeh thanked China for its understanding and support in the face of the recent aggression.  

“Iran has recently come under attack, and we are grateful for China’s just position. We hope China will continue to play a constructive role in preserving the ceasefire and easing regional tensions,” he said.

In a joint statement released on June 23, the SCO expressed serious concern over the recent escalation in the Middle East, strongly condemning the United States' military strike on Iran’s nuclear facilities, which the organization said violated international law, the UN Charter, and the SCO Charter, particularly the principle of non-use of force in international relations.  

“The attack on Iran’s sovereignty and territorial integrity has seriously undermined regional and global peace and stability,” the statement read, calling for the crisis to be resolved through political and diplomatic means.  

The meeting also saw defense chiefs from India and Pakistan share the same table for the first time since a military flare-up in Kashmir last month.

Belarus and Iran, the SCO’s newest full members, participated in the event for the first time in this capacity—highlighting the organization’s growing breadth and influence.  

Dong welcomed all attendees with a call for greater defense coordination under the Global Security Initiative proposed by Chinese President Xi Jinping, which promotes common, comprehensive, cooperative, and sustainable security.  

Xiao Bin, Deputy Secretary-General of the SCO Research Center at the Chinese Academy of Social Sciences, described the SCO as a rare example of a multilateral security platform that emphasizes non-alignment, non-confrontation, and consensus-based cooperation.  

“It plays a unique role in stabilizing the regional landscape, curbing destabilizing factors, and promoting peaceful dialogue in times of conflict,” Xiao said.

As the rotating chair, China has overseen a year of active defense diplomacy. According to Senior Colonel Zhang Xiaogang, spokesperson for China’s Ministry of National Defense, recent SCO events have helped build trust and amplify the organization’s collective voice on global security.  

“These meetings provided a vital platform for dialogue and consensus-building among all member states,” Zhang noted.  

The Qingdao meeting, held in a city symbolic for being where China first proposed the “SCO Community of Shared Destiny” in 2018, delivered a timely reminder of the group’s mission, to uphold peace, sovereignty, and shared development in an increasingly fragmented world.

As tensions mount across multiple regions, the SCO has emerged as a platform where strategic communication, mutual respect, and regional cooperation can still flourish.

 

 

China can continue to purchase Iranian oil

President Donald Trump said on Tuesday that China can continue to purchase Iranian oil after Israel and Iran agreed to a ceasefire, a move that the White House clarified did not indicate a relaxation of US sanctions, reports Reuters.

"China can now continue to purchase Oil from Iran. Hopefully, they will be purchasing plenty from the US, also," Trump said in a post on Truth Social, just days after he ordered US bombings of three Iranian nuclear sites.

Trump was drawing attention to no attempts by Iran so far to close the Strait of Hormuz to oil tankers, as a closure would have been hard for China, the world's top importer of Iranian oil, a senior White House official told Reuters.

"The president continues to call on China and all countries to import our state-of-the-art oil rather than import Iranian oil in violation of US sanctions," the official said.

After the ceasefire announcement, Trump's comments on China were another bearish signal for oil prices, which fell nearly 6%.

Any relaxation of sanctions enforcement on Iran would mark a US policy shift after Trump said in February he was re-imposing maximum pressure on Iran, aiming to drive its oil exports to zero, over its nuclear program and funding of militants across the Middle East.

Trump imposed waves of Iran-related sanctions on several of China's so-called independent "teapot" refineries and port terminal operators for purchases of Iranian oil.

"President Trump's green-light for China to keep buying Iranian oil reflects a return to lax enforcement standards," said Scott Modell, a former CIA officer, now CEO of Rapidan Energy Group.

In addition to not enforcing sanctions, Trump could suspend or waive sanctions imposed by executive order or under authorities a president is granted in laws passed by Congress.

Trump will likely not waive sanctions ahead of coming rounds of US-Iran nuclear talks, Modell said. The measures provide leverage given Tehran's demand that any deal includes lifting them permanently.

Jeremy Paner, a partner at Hughes Hubbard & Reed law firm, said if Trump chooses to suspend Iran oil-related sanctions, it would require lots of work between agencies.

 

Lifting US sanctions on Iran could crush Chinese teapot oil refineries

The possible lifting of US sanctions on Iran's oil exports could deal a fatal blow to independent Chinese refineries that have thrived by processing Tehran’s discounted crude, while also putting further downward pressure on oil prices, reports Reuters.

President Donald Trump has taken a dual-track strategy with Iran, applying a "maximum pressure" campaign of tightening economic sanctions, while simultaneously engaging in direct high-level talks over Tehran’s nuclear program. Last week, Trump indicated the sides were getting very close to a deal.

Of course, nuclear talks between Iran and Western powers have always been extremely complex – full of stops and starts – and Trump’s recent statements surrounding a potential deal include much hedging.

If there is a breakthrough deal, it would almost certainly include a repeal of many US economic restrictions on Iran’s oil industry, which would have a profound impact on global energy markets.

Strict US sanctions on Iran’s oil industry have been in place since Trump pulled out of an UN-backed nuclear deal in 2018. While sanctions have dented Tehran’s exports – the country’s major source of revenue – they have never succeeded in reducing exports to zero, as Trump vowed seven years ago.

Iranian exports reached 2.8 million barrels per day (bpd) in May 2018 and hit a low of just 150,000 bpd in May 2020, before steadily recovering to an average of around 1.65 million bpd so far in 2025, according to analytics firm Kpler.

Chinese privately owned refineries, commonly known as teapots, have been the main buyers of Iranian crude in recent years, attracted by the heavy discounts. Concentrated in the eastern Shandong province, these small independent refineries have capacity of around 4 million bpd, or roughly one-fifth of China’s total refining capacity.

Large volumes of sanctioned crude have made their way into China in recent years through a complex web of shell companies and a so-called "dark fleet" of tankers that transfer oil between different vessels to obscure the origin.

The precise total volumes involved in this trade are unclear as official Chinese customs data suggests the country does not import any Iranian oil. However, Kpler, using ship tracking and satellite technology, estimates that China imported 77% of Iran’s 1.6 million bpd of exports last year.

Iranian production could also likely be ramped up quickly.

Its oil sector has proven surprisingly resilient in the face of mounting Western sanctions, with crude oil production averaging 3.3 million bpd in 2024, according to OPEC data. Production could be ramped up by 500,000 bpd within six months of lifting sanctions.

Not only would the rapid return of Iranian crude to global markets likely put further downward pressure on oil prices that have fallen from a high of US$82 a barrel in January to around US$65 today, but it would also deal a heavy blow to China’s teapot refineries.

These independent outfits typically have very slim profit margins because most run at utilization rates of around 50% or less due to overcapacity in the sector and restrictions on exporting fuels overseas.

Plants have faced fierce competition in recent years, and those that have survived have done so largely because they have been able to generate lucrative profits by processing cheap Iranian as well as Venezuelan feedstock.

The removal of US sanctions on Iranian crude could therefore undermine their business models, meaning many plants would likely have to sharply pare back operations or, in some cases, shut down entirely.

A drop in output from Chinese teapots, in turn, could provide a boost to large state-owned Chinese refineries that will pick up the slack in the domestic market.

More broadly, a decline in global refining capacity should boost the sector at a time of increasing uncertainty over demand for fuels such as gasoline and diesel due to the ongoing trade war and energy transition.

The return of Iran into global oil markets would create headaches for many – not least Saudi Arabia, which is in the middle of a price war – but the biggest losers would likely be the independent Chinese refiners. And the biggest beneficiary, outside of Iran itself, would be the refining industry – whether or not that’s what Trump has in mind.

 

 

Chinese economy remains resilient in April

Chinese economy mostly remained resilient in April, despite feeling the effects of the astronomical tariffs in effect before last week, when Washington and Beijing agreed to remove or pause most of the duties imposed as part of their tempestuous trade war, reports South China Morning Post.

With the new agreement providing a 90-day reprieve in the conflict, last month was the only period where the full force of the triple-digit tariffs could be observed in economic data – at least for now,

Last month, China’s industrial output grew by 6.1% from a year earlier, compared to 7.7% growth in March, according to data released by the National Bureau of Statistics on Monday, higher than the 5.21% growth estimate from a poll of economists by financial data provider Wind.

At a meeting of the country’s Politburo in late April – a Communist Party conclave which typically sets the tone for the country’s economic work in the second quarter – the high-level political body vowed to “resolutely focus on doing our business, steadfastly expand high-level opening up and focus on stabilizing employment, businesses, markets, and expectations” in a statement.

The rhetoric was seen as affirmation of the need to shore up domestic consumption in an environment where the future of global trade is less than certain.

In a research note previewing the data release, investment bank Goldman Sachs said retail growth was driven by strong home appliance and automobile sales, boosted by an ongoing consumer goods trade-in program.

Automobile retail sales volume grew by 14.5%YoY in April, according to data from the China Passenger Car Association.

Official data also showed that during the three-day Ching Ming Festival holiday period, the number of domestic travellers nationwide and domestic tourism revenue were 6.3% and 6.7% higher, respectively, than the same period last year.

China’s overall fixed-asset investment rose by 4% in the first four months of 2025, falling short of Wind’s estimate of 4.26%, following a rise of 4.2% for the period from January to March.

The overall urban unemployment rate for April, meanwhile, stood at 5.1%, compared with 5.2% a month earlier.

 

United States downgraded by Moody’s Ratings

According to Bloomberg, the US was downgraded by Moody’s Ratings on Friday thanks to government debt that’s approaching a mind-numbing US$37 trillion. It was a dramatic move that cast further doubt on the polarized nation’s status as the world’s highest-quality sovereign borrower. Moody’s lowered the US credit score to Aa1 from Aaa, joining Fitch Ratings and S&P Global Ratings in grading the world’s biggest economy below the top, triple-A position.

The one-notch cut comes more than a year after Moody’s changed its outlook on the US rating to negative. The federal budget deficit is running near US$2 trillion a year, or more than 6% of gross domestic product, and Congressional Republicans are pushing through budget legislation that could add trillions of dollars more.

“While we recognize the US’ significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics,” Moody’s wrote in a statement. 

Earlier on Friday, new data showed US consumer sentiment has fallen to the second-lowest level on record, and inflation expectations climbed to multi-decade highs.

The preliminary May sentiment index declined to 50.8 from 52.2 a month earlier, according to the University of Michigan. That was lower than all but one estimate in a Bloomberg survey of economists. The main reason cited was President Donald Trump’s trade war.

Nearly three-fourths of respondents to the Michigan survey spontaneously mentioned tariffs. The topic crosses partisan lines, including a notable share of Republicans bringing it up. The new, sobering survey data comes as inflation data from the Trump administration’s Department of Labor has been unexpectedly upbeat, coming in softer than estimates three months in a row.

 

Can China and Russia end US hegemony?

Ever since Donald Trump has taken over as President of United States, started trade war with China and European allies take custody of Gaza, China and Russia are not only perturbed, but also considering plan to cause dent to the US hegemony in the Middle East and North Africa, to begin with.

We are of the opinion that China and Russia may be serious in ending the US hegemony, but achieving the target is highly unlikely in the near term.

No one can deny that the United States still Holds a strong Position because of:

Military Presence

The US maintains major military bases and alliances in the region (Saudi Arabia, Israel, Qatar, and others).

Energy Security Ties

Despite shifting energy priorities, US influence over global oil markets via relationships with Gulf states remains strong.

Diplomatic Leverage

The US plays a key role in peace negotiations, arms deals, and counterterrorism efforts.

Soft Power

US culture, education, and tech continue to have significant appeal in parts of the region.

Growing Role of China and Russia

China

Economic Influence

China’s Belt and Road Initiative (BRI) has deepened economic ties, particularly through infrastructure investment and oil imports from Gulf states and Iran.

Diplomacy

Recently brokered the Saudi-Iran détente (2023), signaling growing diplomatic credibility.

Non-Interference Model

Appeals to regimes wary of Western pressure on human rights or democratization.

Russia

Military Intervention

Russia has demonstrated staying power in Syria and maintains naval bases in the eastern Mediterranean.

Arms Sales and Security Cooperation

Offers military support without political conditions.

Energy Deals

Competes with and collaborates on energy projects, particularly in gas.

Challenges to Ending US Hegemony

Use of US dollar in international trade

The single largest point that gives the United States unequivocal strength is use of Greenback in international trade and its absolute control over payment and settlement system.

Lack of Unified Strategy

China and Russia do not have a cohesive alliance or unified vision for the region.

Regional Dependence on US

Many MENA states still rely on US military support and arms.

Distrust Toward Russia and China

Some countries remain skeptical of long-term Chinese or Russian motives.

Way Forward

Though, China and Russia are eroding US dominance through economic, diplomatic, and military inroads, but the US retains deep-rooted strategic advantages. A complete end to US hegemony requires a far greater realignment of regional security and political interests.

Unless China and Russia are able to come up with an alternative currency and payment/ settlement system, they just can not cause dent to the US hegemony in any significant manner.

Xi-Putin pledge to stand together against US

Chinese President Xi Jinping told Russia's Vladimir Putin on Thursday their two countries should be "friends of steel", as they pledged to raise cooperation to a new level and "decisively" counter the influence of the United States.

At talks in the Kremlin, the two leaders cast themselves as defenders of a new world order no longer dominated by the US.

In a lengthy joint statement, they said they would deepen relations in all areas, including military ties, and "strengthen coordination in order to decisively counter Washington's course of 'dual containment' of Russia and China.

The two countries said the Ukraine conflict could only be settled by removing its "root causes" - a phrase that Russia has frequently used when arguing that it was forced to go to war to prevent the prospect of Ukraine joining NATO. Ukraine and its Western allies say that was a false pretext for what they call an imperial-style invasion.

Xi is the most powerful of more than two dozen foreign leaders who are visiting Moscow this week to mark Thursday's 80th anniversary of the end of World War Two - a celebration of huge significance for Putin.

Xi's participation - and the joint statement aligning China with Russia's view of the conflict - provide Putin with an important boost as Russia comes under pressure from the United States to end the war.

Russia says it wants to repair relations with Washington, which sank to post-Cold War lows because of the conflict in Ukraine, and that it sees the potential for lucrative business deals. But talks have failed to produce a ceasefire and President Donald Trump has threatened to walk away, unless there is clear progress.

Xi, whose country is currently engaged in a tariff war launched by Trump, said China and Russia should solidify the foundations of their cooperation and "eliminate external interference".

The two countries should "be true friends of steel that have been through a hundred trials by fire", he told Putin.

In another implied reference to the US, Xi said Russia and China would work together to counter "unilateralism and bullying".

Xi and Putin have met dozens of times and signed a "no limits" strategic partnership in February 2022, less than three weeks before Putin sent his army into Ukraine. China is Russia's biggest trading partner and has thrown Moscow an economic lifeline that has helped it navigate Western sanctions.

 

Asia takes step to move away from US dollar?

Asia’s largest economies made a decision that could signal a shift away from the US dollar on Sunday, as they approved a new rapid financing mechanism that will for the first time use regional currencies including the Chinese yuan.

The new scheme has been rapidly approved as countries across East and Southeast Asia look to shield themselves from the financial volatility unleashed by US President Donald Trump’s global tariff war, which has triggered turbulence in the US Treasuries market and an Asian currency rally in recent days.

It may also herald a deeper, longer-term shift towards a regional monetary mechanism that is less reliant on the dollar – and gives China a bigger role.

In this explainer, the South China Morning Post breaks down the details of the new financing mechanism, and what it means for the future of Asia and the dollar-based global financial system.

What is behind this decision?

The new rapid financing mechanism is part of a broader scheme known as the Chiang Mai Initiative Multilateralization (CMIM) – a currency swap arrangement among the 10-member Association of Southeast Asian Nations (Asean), China, Japan and South Korean.

The CMIM has its origins in the aftermath of the Asian Financial Crisis of the 1990s. It is designed to prevent a repeat of that crisis by providing emergency help to countries facing balance-of-payments issues and short-term liquidity difficulties.

The 13 member countries – collectively known as Asean+3 – first began setting up a network of bilateral currency swap arrangements in 2000, then the scheme expanded and evolved into the CMIM a decade later.

The lending capacity of the CMIM has since risen the US$240 billion, with Japan and China each contributing US$76.8 billion, South Korea US$38.4 billion and the 10 Asean countries a combined US$48 billion, according to the Asean+3 Macroeconomic Research Office.

To date, none of the member countries have ever requested CMIM funding.

What was decided on Sunday?

During a meeting of finance ministers and central bank governors from the Asean+3 nations in Milan, Italy, on Sunday, the attendees approved a new tool for providing swift financial help to economies facing urgent balance-of-payments issues called the CMIM Rapid Financing Facility.

Unlike previous mechanisms, which relied on the US dollar, the new facility will use the Chinese yuan and other regional currencies.

The yuan had been approved for use as a transaction currency in the CMIM pool just weeks earlier, during a meeting of the Asean+3 deputy finance ministers and central bank governors in April.

A joint statement released at the Milan meeting noted that the new facility was designed to “enhance regional resilience by offering members timely access to emergency financing during urgent balance of payments needs, in response to sudden exogenous shocks such as pandemics and natural disasters”.

In a press release published on Monday, China’s central bank governor Pan Gongsheng hailed the move as “a breakthrough in diversifying the international monetary system in the region” amid a period of global uncertainty.

In Milan, the financial officials also agreed to explore further improvements to the CMIM in line with the International Monetary Fund framework – a move seen as a step towards institutionalizing the initiative and making it more effective.

What it means for the US dollar?

“Yuan’s inclusion in the CMIM system reflects growing acceptance of the currency on the global stage and marks a step forward in its internationalization,” said Ding Shuang, chief Greater China economist at Standard Chartered Bank.

The move comes as Beijing accelerates its efforts to expand the yuan’s global influence by encouraging the use of the Chinese currency in trade settlement, commodity pricing and foreign exchange reserves.

Chinese authorities have also tried to boost cross-border use of its digital yuan through Project mBridge, a scheme launched in collaboration with the central banks of Hong Kong, Thailand, Saudi Arabia and the United Arab Emirates.

Ding, however, noted that the significance of the yuan’s inclusion in the CMIM was mainly symbolic, given that the mechanism has never before been activated and the member countries already had sufficient foreign exchange reserves.

“At this stage, the inclusion of the yuan is more of a structural move, and we will only see the actual impact when the CMIM funding pool is truly activated,” said Ding.

 

Trump’s First 100 Days: Good, Bad, and Ugly

I posted my review of first 100 says of Donald Trump as President of United States. Many may have ignored it knowing that I am not a US citizen. Today, I am sharing excerpts from an article by *Christopher Calton. He has talked about Trump’s early actions on trade, education, immigration, and more, offering a clear-eyed analysis of what Americans can expect in the years ahead.

On the first day of his second term, Trump issued a record-breaking 26 executive orders, and in the weeks that followed, he added more than 100 additional orders alongside other memorandums and proclamations. Some have been entirely positive, while others have been downright eyeroll-inducing, such as renaming the Gulf of Mexico and declaring the day the order was signed a national holiday.

The trillion-dollar military budget seems consistent with Trump’s hawkish foreign policy. Both of Trump’s electoral victories reflected a mandate to finally stop subsidizing foreign conflicts and end America’s forever wars. Trump has, at least, withheld funding for Ukraine, though his approach seems more an effort to cater to Putin than to achieve peace.

Elsewhere, the president has doubled down on America’s support for Israel’s destruction of Gaza, has threatened war with Iran, and has commenced a horrible bombing campaign against Yemen. Just as in his first term, when he neglected to fulfill his promise to withdraw troops from Afghanistan, Trump is again proving to be a war-happy commander in chief.

President Trump’s second term threatens to be even more of a disaster than his first in many arenas, particularly trade and foreign policy. His immigration measures are consistent with his campaign promises, but his lack of concern for due process and rule of law should be concerning to even the most ardent supporters of border security.

Trump’s approach to spending seems an improvement over his first term, but is nonetheless disappointing after what appeared to be a promising start with DOGE.

The silver lining to Trump’s first 100 days is that he is providing a positive counterweight to the left’s growing radicalism in the culture wars, as demonstrated by his education policies. 

*Christopher J. Calton is the Research Fellow in Housing and Homelessness at the Independent Institute.

 

China urges Vietnam to resist bullying

Chinese President Xi Jinping has called on Vietnam to oppose "unilateral bullying" to upkeep a global system of free trade — though he stopped short of naming the United States, reports Saudi Gazette.

It comes as Xi is on a so-called "charm offensive" trip across South East Asia, which will also see him visit Malaysia and Cambodia.

Though, the trip was long-planned, it has taken on heightened significance in the wake of a mounting trade war between the US and China. Vietnam was facing US tariffs of up to 46% before the Trump administration issued a 90-day pause last week.

US President Donald Trump called Xi's meeting with Vietnamese leaders a ploy to figure out how to "screw the United States of America".

According to state media outlet Xinhua, Xi told Vietnam's Communist Party Secretary-General To Lam to "jointly oppose unilateral bullying".

"We must strengthen strategic resolve... and uphold the stability of the global free trade system as well as industrial and supply chains," he said.

Stephen Olson, a former US trade negotiator, said Xi's comments were "a very shrewd tactical move".

"While Trump seems determined to blow up the trade system, Xi is positioning China as the defender of rules-based trade, while painting the US as a reckless rogue nation," he added.

Speaking to reporters in the Oval office on Monday, Trump said he does not "blame" China or Vietnam but alleged that they were focused on how to harm the US.

"That's a lovely meeting. Meeting like, trying to figure out, how do we screw the United States of America?" said Trump.

The world's two largest economies are locked in an escalating trade battle, with the Trump administration putting tariffs of 145% on most Chinese imports earlier this month. Beijing later responded with its own 125% tariffs on American products coming into China.

On Saturday, a US customs notice revealed smartphones, computers and some other electronic devices would be excluded from the 125% tariff on goods entering the country from China. But Trump later chimed in on social media saying there was no exemption for these products and called such reports about this notice false. Instead, he said that "they are just moving to a different tariff 'bucket'".

Xi arrived in Hanoi on Monday, where he was welcomed by well wishes waving Chinese and Vietnamese flags. He then met top Vietnamese officials including the country's Secretary-General and Prime Minister Pham Minh Chinh.

Earlier on Tuesday, Xi visited the Ho Chi Minh Mausoleum to take part in a wreath laying ceremony at the resting place of the former Vietnamese founder and Communist leader.

Despite Xi's visit, Vietnam will be careful to "manage the perception that it is colluding with China against the United States, as the US is too important a partner to put aside," said Susannah Patton, Director of the Southeast Asia Program at the Lowy Institute think-tank.

"In many ways, China is an economic competitor as well as an economic partner for South East Asian economies," she added.

Xi arrived in Malaysia on Tuesday. He is expected to meet the country's King, as well as its Prime Minister Anwar Ibrahim.

It comes as Malaysian mobile data service company, U Mobile said it will roll out the country's second 5G network by using infrastructure technology from China's Huawei and ZTE.

Ms Patton expects Xi to continue portraying the US as "a partner which is unreliable and protectionist".

Meanwhile, he is likely to "portray China in stark contrast as a partner that is there", she added.

"Now is really a golden opportunity for China to score that narrative win. I think this is how Xi's visit to Vietnam, Cambodia and Malaysia will be seen."

 

How high could gold price go?

Gold prices have been on an upward trajectory in 2025, recently reaching a record high of US$3,244.60 per ounce. Now a question is being asked, how high could gold price go. Several key factors are contributing to this surge, these include:

Geopolitical Tensions

The introduction of sweeping tariffs by President Donald Trump, especially those targeting China with rates up to 145%, created upheaval in global financial markets. These policies have led investors to question the reliability of traditional safe assets like US Treasuries and the dollar, prompting a shift towards gold as a more stable alternative.

Economic Uncertainty

Concerns about a potential US recession have intensified, with Goldman Sachs estimating a 45% probability of such an event within the next year. This economic uncertainty enhances gold’s appeal as a hedge against downturns, contributing to its rising demand and price.

Purchases by Central Banks

Central banks worldwide are increasing their gold reserves, partly as a strategy to reduce reliance on the US dollar. This trend of de-dollarization supports higher gold prices, as nations seek to diversify their holdings amid shifting global economic dynamics.

Currency Depreciation

Persistent inflation is eroding the value of paper currencies, prompting investors to turn to gold as a means of preserving purchasing power. As the US dollar weakens, gold's role as a hedge against inflation becomes increasingly significant.

Safe-Haven Demand

The volatility in global markets, exacerbated by trade tensions and economic uncertainties, has led investors to seek refuge in gold. Its status as a safe-haven asset during turbulent times further drives its demand and price upward.

Way Forward

Analysts remain bullish on gold prospects, with forecasts suggesting prices could touch US$3,500 by June end 2025, US$ 4,000 by end December 2025 and US$5,000 by end December 2026. However, a point to remember is that if the trade war intensifies, the price may rise at a faster pace.

A more disturbing fact is that confidence of people around the world in the US administration – as a trustworthy friend and US$ as a dependable currency is eroding. The talk about an alternate currency to replace US dollar is getting louder.

US imposes China centric global trade war

US President Donald Trump's stunning decision to pause the hefty duties he had just imposed on dozens of countries sent battered global stock markets surging on Thursday, even as he ratcheted up a trade war with China.

Trump's turnabout on Wednesday, which came less than 24 hours after steep new tariffs kicked in on most trading partners, followed the most intense episode of financial market volatility since the early days of the COVID-19 pandemic.

The upheaval erased trillions of dollars from stock markets and led to an unsettling surge in US government bond yields that appeared to catch Trump's attention.

"I thought that people were jumping a little bit out of line, they were getting yippy, you know," Trump told reporters after the announcement, referring to jitters sportspeople sometimes get.

US stock indexes shot higher on the news, with the benchmark S&P 500, opens new tab index closing 9.5% higher, and the relief continued into Asian trading on Thursday with Japan's Nikkei index surging 8%.

European futures also pointed to big gains, but there were already signs the rally may be short-lived with US stock futures trading lower. Oil prices also fell around 1%, extending a grim spell fuelled by fears that the trade tensions could push the global economy towards recession

Since returning to the White House in January, Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives.

US Treasury Secretary Scott Bessent asserted that the pullback had been the plan all along to bring countries to the bargaining table. Trump, though, later indicated that the near-panic in markets that had unfolded since his April 02 announcements had factored in to his thinking.

Despite insisting for days that his policies would never change, he told reporters on Wednesday، "You have to be flexible."

But he kept the pressure on China, the world's second economy and second biggest provider of US imports. Trump immediately hiked the tariff on Chinese imports to 125% from the 104% level that kicked in on Wednesday.

Chinese companies that sell products on Amazon are preparing to hike prices for the US or quit that market due to the "unprecedented blow" from the tariffs, the head of China's largest e-commerce association said.

Beijing may again respond in kind after slapping 84% tariffs on US imports on Wednesday to match Trump's earlier tariff salvo. It has repeatedly vowed to "fight to the end" in the escalating trade war between the world's top two economies.

"The US and China are currently in a powerplay game of brinkmanship," said ING global head of markets Chris Turner.

Beijing said it had held talks with the European Union and Malaysia on strengthening trade in response to the tensions, although Australia said it had rebuffed an offer from China, its top trading partner, to work together to counter the tariffs.

"We are not going to be holding hands with China in respect of any contest that is going on in the world," Deputy Prime Minister Richard Marles told Sky News.

Hopes of state support helped prop up Chinese stocks on Thursday, even as its yuan currency fell to its weakest level since the global financial crisis.

 

 

 

 

China calls for world to unite against Trump's trade tyranny

According to a BBC report, China has called for the world to unite against US President Donald Trump's tariffs as the country's exporter reel from crippling new US levies that have risen to 104%.

"Global unity can triumph over trade tyranny," declared an editorial in the state-run newspaper China Daily, noting Beijing's collaborations with Japan, South Korea and other Asian economies. A separate piece called for the European Union to work with it to "uphold free trade and multilateralism".

Beijing "firmly opposes and will never accept such hegemonic and bullying practices," foregin ministry spokesperson Lin Jian told reporters on Wednesday.

The tariffs come at a difficult time for China's sluggish economy: domestic consumption remains weak and exports are still a major driver of growth.

The sweeping nature of Trump's tariffs has also left Chinese businesses scrambling to adjust their supply chains — with most countries affected, firms say it's hard to find a way out of this uncertainty.

The tariffs will shrink "already razor-thin profit margins", said the owner of a Chinese business that handles cross-border logistics for e-commerce, as well as air and sea freight.

"Higher tariffs raise costs for freight forwarders like us, as well as for factories, companies, and sellers. It just means everyone earns less."

Any tariff upwards of 35% will wipe out all the profits that Chinese businesses make when exporting to the US or South East Asia, said Dan Wang from the Eurasia Group consultancy.

"Growth is going to be much lower since exports contributed to 20% to 50% of growth since the Covid pandemic," she added.

The Chinese government has not announced retaliatory measures but Beijing is reportedly considering banning Hollywood films and suspending fentanyl cooperation with the US, according to Chinese blogger Liu Hong, who is a senior editor at state-run Xinhua news.

But that would offer little comfort to firms like Fuling, a firm that sells disposable tableware to US fast food restaurants like McDonald's and Wendy's, said the additional tariffs will "significantly impact" its business. It noted that nearly two-thirds of the company's revenue in 2023 and the first half of last year came from the US.

To mitigate the impact of tariffs, Fuling, which is headquartered in China's Zhejiang province, started a new factory in Indonesia late last year.

But Trump's new tariffs have introduced more uncertainty for Chinese exports from Indonesia are now subject to a 32% levy, the company said in a corporate filing.

Indonesia was hit along with much of the world in President Trump's announcement of expansive tariffs last week, which he claimed would allow the US economy to flourish.

But economists have warned of a US and global recession. The tariffs have also shaken global markets and drawn criticism from billionaire CEOs, including Trump's ally Elon Musk.

Trump's import taxes include a 10% baseline tariff on almost all foreign imports to the US, and higher custom tariffs for what he calls the "worst offenders". These include Cambodia (49%), Vietnam (46%) and Thailand (36%), developing economies that have benefited from strong exports.

After Beijing announced tit-for-tat tariffs, Trump raised the levies on Chinese imports, more than doubling them to 104%.

Emo told the BBC he is holding out hope that China will be able to negotiate away some of these taxes: "Only when a final decision is made can we plan our next steps."

While China has left the door open for talks, Trump has not spoken to Chinese leader Xi Jinping since returning to the White House.

Such broad, sweeping tariffs will cause more harm than good, the American Chamber of Commerce in China said in a note to its member companies on Wednesday.

"This level of upheaval is unprecedented, and it remains unclear how the current measures will benefit consumers in either nation or the broader economy," read the note signed by Chair Alvin Liu and President Michael Hart.

Some analysts believe the levies will force China to restructure its economy and rely heavily on domestic consumption, which it has been struggling to boost.

Otherwise, the tariffs will not be sustainable for China in the longer term, Tim Waterer from brokerage KCM Trade said.

"The tariffs are aimed at suppressing China," said the manager of a Chinese freight company.

Wu Changchun added that many of the South East Asian countries that have been hit with steep tariffs are "exactly where many Chinese businesses have relocated", such as Vietnam and Cambodia.

The Tianjin-based company plans to negotiate with some of its American clients to share the burden of the tariffs. "Every case is different, but overall, the impact has been quite substantial," he said.

Wu, whose company operates mainly on shipping routes between China and Cambodia, said he is already seeing a fall in freight volume.

Several construction projects in Cambodia have also come to a halt after Trump's tariffs announcement, he said.

"If the tariffs were at 10% or 20%, businesses might still be able to absorb the cost by optimizing supply chains, cutting margins and sharing the burden. Trade could still go on... [But at 104%] that's no longer something trade-offs can fix," said Wu, a general manager at Maritima Maruba.

"That's full-on decoupling. Trade would basically come to a standstill."

Freeing Panama Canal from Chinese influence

The United States will free the Panama Canal from Chinese influence, US Defense Secretary Pete Hegseth said on Tuesday during a visit to the Central American nation.

After talks with Panaman government, Hegseth vowed to deepen security cooperation with Panamanian security forces and said China would not be allowed to "weaponize" the canal by using Chinese firms' commercial relationships for espionage.

"Together, we will take back the Panama Canal from China's influence," Hegseth said, speaking at a pier renovated with U.S. assistance in Panama City.

"China did not build this canal. China does not operate this canal and China will not weaponize this canal. Together with Panama in the lead, we will keep the canal secure and available for all nations."

More than 40% of US container traffic, valued at roughly US$270 billion a year, goes through the Panama Canal, accounting for more than two-thirds of vessels passing each day through the world's second-busiest interoceanic waterway.

Hegseth, the first US defense secretary in decades to visit Panama, flew over the canal in a Black Hawk helicopter after meeting US troops and Panamanian security forces. He also toured the Miraflores lock, waving to sailors passing through on a container ship.

His language appeared fine-tuned, talking tough but offering some assurances to Panamanians still unsettled by Trump’s threats to reclaim the canal.

While Hegseth spoke about removing Chinese influence, Trump has spoken in broader terms and not ruled out using military force.

Hegseth's trip follows reports that the Trump administration has requested options from the US military to ensure access to the canal, which the United States built more than a century ago and handed over to Panama in 1999.

Trump has complained that was a bad deal for the United States.

Given Trump's tough rhetoric, the stakes were high for Hegseth's visit.

"On the whole, this hasn't been a winning issue for the United States in terms of public diplomacy in Panama," said Ryan Berg, director of the Americas Program at the Center for Strategic and International Studies.

Still, current and former US officials and experts say the United States has found a willing partner in tackling Chinese influence in Panama's President Jose Raul Mulino, whom Hegseth met earlier on Tuesday.

In February, Mulino announced Panama's formal move to exit China's Belt and Road Initiative and he has aided Trump's crackdown on migrants.

He has accepted deportation flights of non-Panamanians and worked to stem migration from South America by those crossing through his country's dangerous Darien jungle.

Hegseth praised Mulino, saying his government understood the threat from China, and his remarks about Panama being in the lead on addressing the canal's security concerns appeared to be a nod to Panamanian sensitivities.

During his visits to bases, which once had names including Fort Sherman and Rodman Naval Station before the US exit, Hegseth spoke about the canal as "key terrain" and held out hope for more frequent engagements by US troops, including by revitalizing a jungle survival training center.

"In reality or in perception, the communist Chinese have had designs on more control of this canal, and to that we say Not on our watch," Hegseth told US troops and Panamanian security forces. "We will grow our partnership even more."

Hegseth, a US military veteran and former Fox News host, has enthusiastically backed Trump's southern-focused security agenda, by means such as dispatching U.S. troops to the US border with Mexico, offering space at a base at Guantanamo Bay, Cuba to detain migrants, and military aircraft for deportation flights.

 

Iran: Tangled nuclear dispute with the West

Iran and the United States are scheduled to hold talks on Saturday on Iran's nuclear program, with US President Donald Trump having threatened military action if they cannot agree a deal. Iran's nuclear program has been the subject of a long dispute between it and Western countries that fear it wants to build an atomic bomb, which Tehran denies. Here is a timeline of the dispute:

1957 - Iran and United States signed a nuclear cooperation deal and the United States delivers a research reactor to Iran a decade later.

1970 - Iran ratified the Nuclear Nonproliferation Treaty (NPT), giving it the right to a civilian nuclear program but barring it from seeking an atomic bomb.

1979 - Iran's Islamic revolution upended its ties to major powers, turning former ally the United States into its main foe.

1995 - Russia agreed to finish construction of Iran's planned nuclear power plant at Bushehr, originally started by Germany and shelved after the revolution.

2003 - The UN nuclear watchdog, the International Atomic Energy Agency (IAEA), alleged Iran has not complied with NPT after the revelation it has secretly built a uranium enrichment plant at Natanz and a heavy water plant for plutonium at Arak.

Both can be used to make fuel for nuclear power but they can also be used in atomic warheads.

Iran accepted European proposals for more transparency in its nuclear program including snap IAEA inspections.

2004 - The IAEA said Iran did not provided the transparency it promised. Iran said it would not suspend uranium enrichment activity.

2005 - Russia offered to supply Iran with fuel for Bushehr to stop it developing its own fuel by making enriched uranium or plutonium.

IAEA said Iran was not in compliance with agreements and EU countries halted negotiations.

2006 - Iran resumed work at Natanz, said in April it had enriched uranium for the first time to about 3.5%, far short of the 90% needed for a warhead.

World powers the United States, Russia, China, France, Britain and Germany - later known collectively as the P5+1 offered Iran incentives to halt enrichment.

The United Nations Security Council imposed sanctions on Iran over its enrichment.

2009 - Western countries alleged Iran was building another secret uranium enrichment facility under a mountain at Fordow near Qom.

2010 - Iran started making 20% enriched uranium. The UN Security Council expanded sanctions including an embargo on major weapons systems, as the US and EU tighten their own sanctions.

A computer virus - Stuxnet - deployed aimed at paralyzing the Natanz plant, the start of direct operations against Iranian facilities that Tehran blames on Israel.

2011 - Bushehr nuclear plant started operations. Iran said it was using more advanced centrifuges to expand its 20% enrichment program.

2013 - Former nuclear negotiator Hassan Rouhani was elected Iranian president offering new proposals. He and US President Barack Obama hold a first call between leaders of the countries since 1979.

Iran-P5+1 talks in Geneva resulted in a Joint Plan of Action with steps required by both sides including reducing Iran's enriched uranium stockpile, more IAEA access and some sanctions relief.

2014 - Negotiations on a final deal continued through the year, with Iran halting uranium enrichment to 20% and work at Arak and getting access to oil revenue frozen by sanctions.

US allies in the region, Israel and Saudi Arabia, repeatedly cautioned Washington against a deal, saying Iran could not be trusted and citing its growing sway in the region.

2015 - Iran and the P5+1 agreed the Joint Comprehensive Plan of Action (JCPOA) deal that limits Iran's nuclear work, allowing more inspections and a loosening of sanctions.

2016 - IAEA said Iran had met its commitments under the JCPOA, leading to UN sanctions tied to the nuclear program being lifted.

However, Iran's long-range ballistic missile tests prompt unease despite Tehran saying they could not carry nuclear warheads.

2017 - New US President Donald Trump declared the JCPOA was the "worst deal ever" and unilaterally pulled out. Despite Trump promising a better deal there have been no new talks.

2018 - The US reimposed on Iran.

2019 - With ties between Iran and the West deteriorating, a string of attacks on Gulf oil tankers and other regional energy facilities were blamed by the US on Iran.

2020 - A blast rocks Iran's Natanz plant and a nuclear scientist is assassinated near Tehran with Iran blaming both incidents on Israel.

2021 - With Trump out of the White House, the US and Iran resumed indirect talks but there was little progress.

Iran started enriching uranium to 60% - not too far from 90% needed for a bomb.

There were attacks on Iran's Natanz and a centrifuge factory in Karaj.

2022 - The IAEA accused Iran did not answer questions over uranium traces found at more sites. Iran stopped IAEA inspections and installed more new centrifuges at Natanz.

2025 - Trump returns to the White House and declared Iran must agree to a nuclear deal or there will be bombing.

 

Stocks plunge as Trump initiates trade war

Global stocks sunk, a day after US President Donald Trump announced sweeping new tariffs that are forecast to raise prices and weigh on growth in the United States and around the world, reports the Saudi Gazette.

Stock markets in the Asia-Pacific region fell for a second day, hot on the heels of the S&P 500, which had its worst day since Covid crashed the economy in 2020. Nike, Apple and Target were among big consumer names worst hit, all of them sinking by more than 9%.

At the White House, Trump told reporters the US economy would "boom" thanks to the minimum 10% tariff he plans to slap on global imports in the hope of boosting federal revenues and bringing American manufacturing home.

The Republican president plans to hit products from dozens of other countries with far higher levies, including trade partners such as China and the European Union.

China, which is facing an aggregate 54% tariff, and the EU, which faces duties of 20%, both vowed retaliation on Thursday. French President Emmanuel Macron called for European firms to suspend planned investment in the United States.

Tariffs are taxes on goods imported from other countries, and Trump's plan that he announced on Wednesday would hike such duties to some of the highest levels in more than 100 years.

In morning trading on Friday, Japan's benchmark Nikkei 225 index fell by 2.7% and Australia's ASX 200 was down by 1.6%. The Kospi in South Korea was flat to slightly lower. Markets in mainland China and Hong Kong were closed for the Qingming Festival.

Earlier on Thursday, the S&P 500 — which tracks 500 of the biggest American firms — plunged 4.8%, shedding roughly US$2 trillion in value. The Dow Jones closed about 4% lower, while the Nasdaq tumbled roughly 6%. The US shares sell-off has been going on since mid-February amid trade war fears.

Britain’s FTSE 100 share index dropped 1.5% and other European markets also fell, echoing declines from Japan to Hong Kong.

On Thursday at the White House, Trump doubled down on a high-stakes gambit aimed at reversing decades of US-led liberalization that shaped the global trade order.

"I think it's going very well," he said. "It was an operation like when a patient gets operated on, and it's a big thing. I said this would exactly be the way it is."

He added, "The markets are going to boom. The stock is going to boom. The country is going to boom."

Contradicting White House aides who insisted the new tariffs were not a negotiating tactic, Trump signalled he might be open to a deal with trade partners "if somebody said we're going to give you something that's so phenomenal".

On Thursday, Canada's Prime Minister Mark Carney said that country would retaliate with a 25% levy on vehicles imported from the US.

Trump last month imposed tariffs of 25% on Canada and Mexico, though he did not announce any new duties on Wednesday against the North American trade partners.

Firms now face a choice of swallowing the tariff cost, working with partners to share that burden, or passing it on to consumers — and risking a drop in sales.

That could have a major impact as US consumer spending amounts to about 10% to 15% of the world economy, according to some estimates.

While stocks fell on Thursday, the price of gold, which is seen as a safer asset in times of turbulence, touched a record high of US$3,167.57 an ounce at one point on Thursday, before falling back.

The dollar also weakened against many other currencies.

In Europe, the tariffs could drag down growth by nearly a percentage point, with a further hit if the bloc retaliates, according to analysts at Principal Asset Management.

In the US, a recession is likely to materialize without other changes, such as big tax cuts, which Trump has also promised, warned Seema Shah, chief global strategist at the firm. She said Trump's goals of boosting manufacturing would be a years-long process "if it happens at all".

"In the meantime, the steep tariffs on imports are likely to be an immediate drag on the economy, with limited short-term benefit," she said.

On Thursday, Stellantis, which makes Jeep, Fiat and other brands, said it was temporarily halting production at a factory in Toluca, Mexico and Windsor, Canada. It said the move, a response to Trump's 25% tax on car imports, would also lead to temporary layoffs of 900 people at five plants in the US that supply those factories.

Nike, which makes much of its sportswear in Asia, was among the hardest hit on the S&P, with shares down 14%. Shares in Apple, which relies heavily on China and Taiwan, tumbled 9%. Other retailers also fell, with Target down roughly 10%.

Motorbike maker Harley-Davidson – which was subject of retaliatory tariffs by the EU during Trump's first term as president – fell 10%.

In Europe, shares in sportswear firm Adidas fell more than 10%, while stocks in rival Puma tumbled more than 9%.

"You're seeing retailers get destroyed right now because tariffs extended to countries we did not expect," said Jay Woods, chief global strategy at Freedom Capital Markets, adding that he expected more turbulence ahead.

Who is responsible for the killing of Gazans?

The question of who is responsible for the killing of Gazans is complex and deeply tied to the broader Israeli-Palestinian conflict. Responsibility depends on the context, perspective, and the specific events being referred to. In this post an attempt is being made to understand the present situation and propose a plausible solution:

Humanitarian perspective:

The Israeli military is often held responsible for a significant number of civilian casualties in Gaza, especially during major military operations. Israel says it targets Hamas and other militant groups, but these operations have resulted in many civilian deaths due to the densely populated nature of Gaza

Hamas and other armed groups in Gaza are also accused for operating from within civilian areas, use human shields, or launch rockets indiscriminately into Israeli territory, provoking retaliatory strikes and contributing to the cycle of violence.

International perspective:

International organizations, like the United Nations and human rights groups ‑ Amnesty International, Human Rights Watch ‑ accuse both Israel and Palestinian armed groups for the lingering conflict resulting in huge loss of human lives, particularly women and children.

Israel often accused of disproportionate use of force and blockade policies that severely impact civilians.

Palestinian groups are condemned for indiscriminate rocket attacks and operating in ways that endanger Israeli civilians.

Structural and political responsibility:

Long-term occupation, blockade, and lack of a viable peace process can be termed as structural causes of repeated violence.

Israel controls most of Gaza’s borders, airspace, and resources, while Hamas governs internally but with limited capacity.

International actors, including the United States, Egypt, Iran, and others, also play roles through military aid, political backing, or indirect support.

Crux of the Matter:

Direct military actions causing deaths are typically attributed to the Israeli military or Palestinian armed groups, depending on perspective of on lookers. Broader responsibility lies with political leaders, ongoing occupation, militant governance, and an international community that has often failed to resolve the underlying issues.

Way Forward:

Israel, now fully supported by US President Donald Trump wants complete cleansing/ exit of Gazans. During the ongoing conflict nearly 100,000 Gazans, mostly women and children have been killed. However, Gazans resolve has sustained are they are not ready to desert their homeland.

The other and more civilized option is creation of two states, Israel and Palestine. Saudi Arabia and many other Muslim countries support this.

United States also initiated Abraham Accords paving way for the recognition of Israel. However, many supporters of this initiative want Israel to go back to its original borders and let the Palestinians manage their own state.

Gaza 'Riviera of the Middle East'

Now the real stumbling block is US President Trump's plan to make Gaza 'Riviera of the Middle East' which requires all the 2.2 million residents to vacate the strip. This vision involved the United States taking control of Gaza, relocating its approximately two million Palestinian residents to neighboring countries, and redeveloping the area into a luxury resort destination. Trump suggested that Gaza's coastal location could make it "better than Monaco" if redeveloped appropriately.

This proposal received strong support from Israeli Prime Minister Benjamin Netanyahu and other Israeli officials, who viewed it as a means to disarm Hamas and alter the region's dynamics. However, it faced significant criticism internationally. United Nations Secretary-General António Guterres labeled the plan as "ethnic cleansing," emphasizing that forcibly transferring populations violates international law. Arab nations, including Jordan, also rejected the proposal, with Jordan's King Abdullah II expressing firm opposition to the displacement of Palestinians from Gaza.

The plan also sparked debate within the United States, with bipartisan concerns about its feasibility and ethical implications. Critics argued that it misread the interests of Arab partners and could destabilize the region further. Facing mounting opposition, President Trump later stated that he would "recommend" but not enforce the plan, indicating a step back from the initial proposal.

 

 

 

 

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."