A Korean-style armistice for Ukraine? – Asia Times

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​The New York Times reports that US officials are planning to propose an “armistice ” for Ukraine, allegedly similar to how the Korean War ended in 1953. Nevertheless, an Armistice Partnership like the Asian one does not coincide with Russia’s targets and perhaps can’t be achieved if limited to a ceasefire.

The 1953 agreement was reached after hard discussions that involved the United States, North Korea, South Korea, China, the former Soviet Union and United Nations troops. Its key rules were:

  1. ​suspending opened conflicts;
  2. withdrawing all military forces and products from a 4,000-meter-wide area, establishing the Demilitarized Area as a cushion between the troops;
  3. ​ ​ both sides ​w​ill not enter the air, ground or sea areas under control of the other;
  4. ​a​n design for the release and resettlement of prisoners of war and displaced persons; and
  5. ​a​ Military Armistice Commission ( MAC ) and other agencies to discuss any violations and to ensure adherence to the truce terms.

T​he Asian ceasefire is then 72 years older. For the most part, it has prevented opened conflict involving North and South Korea.

​The demilitarized area, or DMZ, in Korea is around 160 km long and 2. 5 yards broad. Running through the DMZ is a Military Demarcation Line ( MDL ) which is where the opposing forces were when an armistice was reached.

The DMZ does not expand to the Yellow Sea which was not included in the ceasefire. The DMZ itself does not follow the 38th parallel northeast which was the limit agreed by the US and the USSR at the end of World War II, although sections of the DMZ follow the 38 horizontal.

Other than the Yellow Sea issue ( including a number of islands that are heavily militarized ), the DMZ is reasonably close to a final border should North and South Korea ever normalize their relations and sign a peace treaty.

The North Koreans have hinted, from time to time, that they are seeking a peace agreement ( and especially US recognition and US security assurances ), while the issue in South Korea is far more divisive and uncertain, fearing that normalization could undermine stability in South Korea and lead to a deal where US and allied forces would be withdrawn.

President Donald Trump and North Korean leader Kim Jong Un walk on the North Korean part in the Demilitarized Zone, June 30, 2019, at Panmunjom.

The Ukraine problem is regional, military and political. Russia annexed Donetsk, Luhansk, Zaporizhzhia and Kherson regions in September 2022 and Crimea in 2014. While the edges of Crimea are usually well recognized, the edges of the four regions are not so obvious.

Based on the official Ukrainian Oblast names, Russia does not completely handle any of these lands and battle is going on as the Russian army appears to be aiming at occupying as many place as possible before negotiations start. Assuming that a deal may be made on territories, there are a number of concerns that are more complicated.

Among them are the rights of citizens on both sides of any boundary line, deal between Ukraine and Russia, whether important utilities can be restored and utilized such as the Zaporizhzhia Nuclear Power advanced, water supply to Crimea from Ukraine, the status of ports and port and storage facilities on the Black Sea, the status of military ports on the Black Sea and Sea of Azov, the location of long-range weapons and the presence of NATO forces on Ukraine’s soil.

More problems include the position of Ukraine’s military forces, Ukraine’s membership in the EU and NATO, types of security offers, oil and gas transport and associated sanctions on Russia.

An armistice would need to cover the presence of Ukrainian forces in the Kursk area ( Russia has liberated about 50 % of the Kursk incursion, but it could take months before the Ukrainians are finally pushed out if the war continues ).

When the Korean Armistice was signed in 1953, United Nations Forces were stationed in South Korea, and Chinese “volunteers ” were in the North. Ukraine is different: officially there are no NATO forces ( strictly defined ) in Ukraine, although the Russian army is in Ukraine.

Numerous reports say that a number of NATO countries ( UK, France and even Germany ) are preparing to send troops to Ukraine when an Armistice is agreed and to offer Ukraine security guarantees. One concern is that an Armistice tracking pressure and an Armistice military rollout that would provide security guarantees to Ukraine are not the same thing.

Under the original Minsk agreements ( 2014, 2015 ) the OSCE ( Organization for Security and Cooperation in Europe ) was supposed to monitor the Minsk agreements. OSCE sent spectators, hardly an army. OSCE therefore had 57 people including Russia and Ukraine. Essentially the bargain was to finish conflicts and to give freedom to Luhansk and Donetsk ( although both may be lands inside Ukraine ). The package was not implemented.

Russia’s battle objectives, as we understand them, include not only acknowledgment of the conquered areas but the disarmament of Ukraine and an arrangement that Ukraine will not become a NATO part. Whether this includes security guarantees with major NATO countries is not clear. It is hard to see how an Armistice Agreement could be concluded without addressing these issues.

The US view is that Russia is hurting enough economically and its losses in the Ukraine war serious enough to incentivize the Russians to accept an Armistice, that would include some sort of buffer zone, essentially freezing the conflict and conceding some Ukrainian territory on a de facto, but not de jure basis. In this context, such a deal on these broad terms would be similar to the 1953 Korean Armistice.

After signing annexation treaties, Vladimir Putin joined hands with the four men Russia put in charge of the occupied regions.

Obviously, the Russian outlook does not align with the one under development in Washington. Russia is not looking for an armistice but for a comprehensive deal with the US and NATO.

A temporary Armistice Agreement (essentially a ceasefire in place ) might be possible if it was linked to agreed political steps, but it seems unlikely to be accepted as any long-term solution. Biden administration informants have hinted at a 10-year or even 20-year pause, but that idea does not have much traction for Russia as it would allow Ukraine to rebuild its army and its weapon stockpile.

President Trump has some cards to play. He could send more aid to Ukraine to prolong the conflict but it is doubtful this is Trump’s aim. He can offer sanctions relief to the Russians, even some accommodation with NATO.

At the same time, the new administration knows how fragile Ukraine itself is, with its military losing one battle after another, short on manpower, encountering popular resistance to the enforced draft, and suffering high casualties.

It is hard to predict where any of this will go but President Trump has signaled his desire to speak to Russian President Vladimir Putin, starting with a phone call in the days ahead. Trump will table the idea of an Armistice Agreement: the Russians will demand considerably more.

Stephen Bryen is a special correspondent to Asia Times and former US deputy undersecretary of defense for policy. This  article, which originally appeared on his Substack newsletter  Weapons and Strategy, is republished with permission.

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Hungary’s demographic exceptionalism – Asia Times

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Academic demographers have shown that family-friendly state policies can lessen or even change the fertility reduction that has taken birthrates in the business earth well below alternative. Fertility is extremely resistant to common investing, but targeted spending—for case on youth education and family housing—makes a difference.

Hungary is one of the world’s some statistical success stories, and its Corvinus Institute for Advanced Studies next month hosted a conference with prominent international researchers to examine the fall of world fertility and consider remedies.

There is no easy relationship between overall public spending on home rewards and the total fertility rate among the people of the high-income team, the Organization for Economic Cooperation and Development.

Graphic: Asia Times

Nonetheless, countries with higher fertility mostly spend more to support families, and countries with lower fertility tend to spend less. Shown below are 2019 data from the Organization for Economic Cooperation and Development.

Graphic: Asia Times

The higher-fertility countries – France, Scandinavia, and Hungary – spend about 3 % of GDP on family subsidies, while the low-fertility countries –Italy, South Korea, Japan, and Spain– spend around 1. 5 % of GDP. There are some standout exceptions: Poland, with its fertility rate of just 1. 3 children per female, is a high spender on families, while the United States, with an above-average fertility rate, spends just 1 % of GDP on families.

These anomalies rule out a simple correlation between family spending and fertility, but they point to important conclusions. Japan and South Korea have n’t tried hard enough to direct public policy to reverse extremely low birth rates. Spain and Italy, with some of the lowest fertility rates in the OECD, should be doing more.

Public spending should be targeted to the factors that determine fertility behavior, Nobel Laureate James Heckman argued in a December lecture at Budapest’s Corvinus University, where he received an honorary doctorate. After the great demographic transition from mainly rural traditional society to industrial economies, the needs of women and families have changed radically. The cost of educating children has soared, while women’s choices have expanded.

Heckman cited five key drivers of fertility decline, including the costs of higher education and career aspirations delaying or discouraging parenthood, shifting social norms reflecting parenthood as a personal choice rather than a societal expectation, economic challenges such as housing costs and job insecurity, cultural and media influences, and environmental concerns like climate change.

Government spending on early childhood education, Heckman observed, tends to increase both female workforce participation as well as the total fertility rate. The chart below is reproduced from Heckman’s presentation.

Lack of housing for young families, Heckman added, depresses family formation and fertility. The highest proportion of young adults living with their parents is found in low-fertility countries, including Korea, Italy, Greece, Spain, Portugal, and Poland, while the lowest proportion is found in Scandinavia, where fertility rates have been among the highest in the industrial world.

Graphic: Asia Times

Hungary’s fertility rate by some measures has had the strongest performance in the world. The Scandinavian countries until recently were the poster children for public policy success, with strong public support for families and fertility rates.

The Nordic Statistics Database reports that “the whole region reported sharp declines in fertility rates in 2022. Finland had the lowest fertility rate of all Nordic countries, 1. 32 children. This is also the lowest Finnish rate since 1776 when monitoring of fertility rates first started. ”

Graphic: Asia Times

Hungary’s fertility rate looks even stronger on a normalized scale ( where data are displayed relative to their past range ).

Graphic: Asia Times

Especially impressive is Hungary’s marriage rate, now the highest in the OECD. That is a strong predictor of future fertility.

Graphic: Asia Times

What explains the sudden drop in Scandinavian fertility? The childbearing behavior of immigrants might play a role. Like France, the Scandinavian countries do not report separately births to immigrants and to native-born Swedes, so demographers have to piece together the puzzle from partial data.

A 2024 study concluded, “For most migrants who arrived in Sweden as adults, we found elevated first birth rates shortly after arrival. First birth rates among the second generation were generally close to but lower than the rates observed among native Swedes. ”

It’s possible that immigrants from countries with high birth rates account in part for the relatively high Scandinavian fertility rates during the 2010s, and that the transition from first-generation to second-generation immigrants explains part of the dropoff in fertility rates during the past several years.

If that is true, Hungary’s fertility performance would be all the more exceptional, since Hungary, unlike Sweden ,  has refused to accept significant numbers of immigrants from Muslim countries.

Hungary’s family support may be more effective because it is direct: Couples to have or pledge to have children are eligible for a grant of 10 million Forints, or about US$ 25,000, equal to five years ’ minimum wage. Couples with three or more children pay virtually no taxes.

And the subsidies are directed to married couples, which helps explain why Hungary has the highest marriage rate in the industrial world. Married couples are more likely to have many children than single parents. Hungary’s approach may succeed because it is not only a fertility policy but also a family policy.

Prime Minister Viktor Orban exhorts his constituents to have children and keep the Hungarian nation alive. But rhetoric alone has n’t proven effective elsewhere. Turkey’s President Recep Erdogan has called on his people to have more children for years, but Turkstat, the country ’s statistics agency, estimates the total fertility rate for 2023 at only 1. 53 children per female.

Total fertility includes assumptions about future childbearing, so estimates may vary. But data at the provincial level show core Turkish provinces like Istanbul and Ankara at around 1. 2 children per female, while the Kurdish southeast of the country has over 2. 5 children per female.

Demographers might pay more attention to Hungary’s exceptional success. For East Asian countries with dangerously low fertility rates, Hungary might offer some important insights.

Follow David P Goldman on X at @davidpgoldman

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US Navy betting big on next-gen DDG(X) destroyer – Asia Times

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This month, multiple media outlets reported on the US Navy’s evolving plans for the next-generation DDG( X ) destroyer, emphasizing its advanced capabilities and challenges. But while the US Navy bets on the DDG( X )’s futuristic concept to outpace China ’s naval surge with advanced tech, logistical and industrial hurdles loom large.

Notable design changes for the DDG( X ) include removing the traditional Mark 45 main gun, which implies integrating directed-energy weapons like lasers and microwaves and a new vertical launch system (VLS ) layout.

Designed to replace the aging Arleigh Burke-class destroyers, the DDG( X ) will incorporate state-of-the-art weapons, radar systems and a powerful Integrated Power System ( IPS) to meet the high-energy demands of next-generation combat. But, steep costs, technical uncertainties and technological limitations present fierce obstacles to the program’s success.

The DDG( X ) will feature hypersonic and directed-energy weapons, the AN/SPY-6 radar, enhanced stealth and increased payload capacity. This technological step is critical for countering evolving challenges like robots, hypersonic weapons and advanced naval platforms. The ship’s IPS, adapted from the Zumwalt-class ships, promises unparalleled power generation essential for supporting its high-powered techniques.

However, these advancements come with a significant price tag: the DDG( X ) is estimated to cost US$ 4. 4 billion per fleet, far exceeding its forebears. Structure will begin in 2032, with a three-year overlap alongside continued Arleigh Burke-class production to maintain business continuity.

Directed-energy weaponry promise infinite magazine level, low-cost engagements and rapid strikes against different threats ranging from drones to fast weapons. Nevertheless, they require significant storage, power and heating. Also, atmospheric disturbances and collection restrictions pose challenges to light tool success.

The US Navy’s aging Ticonderoga-class cruisers and maxed-out Arleigh Burke-class destroyers cannot meet these demands, underscoring the importance of the DDG( X ) in the US Navy’s future surface fleet. Directed-energy weapons may also alleviate the US Navy’s rely on expensive fighter missiles, freeing area for anti-ship missiles essential for high-end conflicts, particularly against China.

China ’s marine development poses a major challenge to US sea dominance. According to the US Department of Defense’s ( DOD ) 2024 China Military Power report, China now fields over 370 ships and submarines, including 140 major surface combatants, outpacing the US fleet numerically.

Moreover, China ’s People’s Liberation Army-Navy ( PLAN ) has achieved over 50 % of the US Navy’s vertical launch system (VLS ) capacity, with nearly 4,300 VLS cells on 84 principal surface combatants, compared to the US Navy’s 8,400 cells on 85 ships.

In an article for the International Institute of Strategic Studies ( IISS), Johannes Fischbach highlights that China ’s construction of high-end platforms, such as Type 052D destroyers and Type 055 cruisers, further narrows the VLS gap.

The Type 052D battleship has 64 Vocabulary, while the Model 055 ship has 112 VLS. In contrast, the Journey IIA and later Arleigh Burke-class warships have 96 Vocabulary, while the Ticonderoga-class ships have 122 VLS.

Despite that power gap, the PLAN’s quick shipbuilding—producing 3. 1 Model 052D ships every compared to the US’s 1. 6 Arleigh Burke destroyers—illustrates the size of China ’s business benefits.

The DDG( X ) is designed to address this disparity, offering greater operational range and reduced logistical needs, vital for countering the “tyranny of distance ” in Pacific operations.

US Navy Secretary Carlos Del Toro has emphasized the critical need for the Transferrable Reload At-Sea Method ( TRAM ), which enables at-sea VLS reloading. Properly tested in October 2024, The War Zone information Metro addresses a major logistical challenge by minimizing the moment warships spend out of action for disarming.

This ability is essential for sustaining a ahead existence during conflicts, especially with China, where rearming at distant foundations like Guam may become impractical and dangerous. By integrating TRAM with the DDG( X )’s design, the US Navy aims to bolster combat readiness and mitigate the presence gap created by extended resupply periods.

Despite its promise, the DDG( X ) program is hampered by systemic challenges hounding US shipbuilding. Post-Cold War expenditure cuts significantly reduced the number of naval architects and engineers, creating obstacles in both design and production.

Over 60 % of US Navy ship repairs are not completed on time, reflecting inadequate infrastructure and outdated practices. Also, US factories cannot match China ’s industrial production.

China ’s civil-military fusion strategy—which combines military and civilian shipbuilding facilities —has enabled unmatched efficiency and surge capacity. In comparison, the US’s scattered approach and selection of big ships over smaller, cost-effective vessels slow development efforts.

US politicians, including Representative John Moolenaar, warn that without striking policy changes and important investments, the US cannot hinder or succeed in a possible conflict with China, as quoted by the Associated Press.

Representative Raja Krishnamoorthi underscores the disparity, noting that China can produce 359 ships for every US ship made annually. He has emphasized the need to revitalize the US defense industrial base to maintain global stability.

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Trump’s executive orders all about power and theater – Asia Times

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In a piece of real social theatre, Donald Trump began his next president by signing a host of professional requests before a euphoric crowd of 20,000 in Washington on Monday.

The directions immediately reversed expanses of Biden administration policy and basically began what Trump christened a “golden years of America ” in his inaugural address.

But there are limits to what Trump may reach through for purchases. And they face a deeper necessity for the new supervision over how to deal with possible Republican in-fighting and a frantic people frightened for change.

What did Trump get?

Executive purchases are commonly used by US president at the beginning of their terms to immediately start implementing their plan.

Important orders signed on Trump’s second time included:

Here’s a summary of the remainder.

Because they are legally bound, professional orders are a powerful tool. Democratic and Republican leaders everywhere have been accused of despotic goal over their usage.

However, executive orders remain constrained by the authorities, Congress and public view. Birthright citizen, in specific, is protected by the 14th Amendment to the Constitution, but Trump’s get will undoubtedly encounter legal challenge.

Perhaps most important, executive orders can be swept away by a leader. Trump did this in dramatic fashion by revoking 78 Biden-era commands, many of which dealt with national diversity, equity and inclusion activities.

The limits of executive orders have been tested in recent years and surely will be repeatedly by Trump.

But there is political worth in issuing orders to show action, even if they are inevitably ineffective, reduced in scope or reversed. That was the situation with the legal wrangling over Trump’s travel restrictions on citizens of Muslim-majority places in 2017 and Biden’s student loan debt forgiveness plan.

Trump presumably recognized this in the dance of his executive commands on Monday. For example, the order aiming to “restore freedom of speech and end federal censorship ” is heavy on political rhetoric, but may have little practical effect.

Is the honeymoon next?

Trump is relishing his highest preference assessments and the usual post-election getaway enjoyed by most leaders.

But this aid was easily vanish if his followers ’ high expectations are not met rapidly. In this context, the executive orders were the fastest way to indicate progress on vital interests to an anxious state.

Across much of the US, fears over prices and failing facilities remain high. Less than 20 % of the land is satisfied with the direction of the country.

For a country hungry for change, there was tremendous appeal in Trump’s election promises to promptly stop foreign wars, curb rising inflation and tackle illegal immigration. But for campaign promises have frequently been short on details from Trump so far.

Half of Americans expect the price of everyday things to occur down during his administration– including almost nine in ten of his followers. Three-quarters even expect him to carry out large arrests.

However, the public remains divided on other parts of the Trump plan or does n’t know them.

The rapid and serious nature of professional orders are, therefore, an appealing option for Trump. He may show he is taking steps to meet his election promises while buying himself time to figure out thornier problems.

However, he runs the risk of losing people assist if the orders do not generate substantial shift. For this, he may have major legislative actions from Congress.

Uncomfortable alliance with Congress

Republicans power both chambers of Congress, as well as the White House. But the previously narrow margin of Republican power in the House of Representatives and the persistent thorns of the Senate filibuster could harm Trump’s legislative plan.

Until three intended jobs are filled in the House, the Republicans may not be able to obtain a second diplomat in a party-line voting. House Speaker Mike Johnson is now encountering barriers in consolidating help behind an all-encompassing “MAGA bill”, which he hopes to offer to Congress later this year.

In 2017, when Trump had a similarly pleasant Congress with a far more pleasant ratio, Republicans still struggled to unite behind a parliamentary plan. Big tax breaks were passed, but modifications to Obamacare and other objectives failed amid celebration bickering.

This paved the way for sweeping Democrat increases in the 2018 midterm elections — a pattern that could be repeated in 2026 depending on Republicans ’ progress in the next two years.

Like Barack Obama before him, Trump does turn to professional requests to avoid Congress, especially if Democrats lose control of the House in 2026. However, his executive order to halt the TikTok restrictions bypasses a bipartisan law passed by Congress last year and just upheld by the traditional Supreme Court.

For moves can produce friction with legislators– even those in his own party.

As late as Sunday, Johnson insisted the US “will enforce the law ” against TikTok. And two Democratic lawmakers warned against offering TikTok any type of improvement, which they claimed may include “no constitutional basis. ”

Groups between Republicans are also apparent over the possibility of taxes and the future of Trump’s immigration scheme.

For today, these tensions may get put off amid the ongoing opening euphoria. But they will eventually reemerge and could also result in a returning to congressional gridlock and inaction. Such delays could find much patience among Americans troubled for quick solutions to insurmountable problems.

Samuel Garrett is exploration affiliate, United States Studies Centre, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original post.

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Latin America can and must resist Donald Trump – Asia Times

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President Donald Trump begins a second word that promises to become important for Latin America. Much has been said about his 2024 victory, his probable international policy and his unconventional individual characteristics. Most specialists in the United States and the place predict a pretty stormy sky, warning about the incredibly delicate condition that may develop.

Throughout history, there have been difficult times – also significant ones—regarding the relations between the United States and Latin America. The latest is Trump’s danger to seize the Panama Canal, which he said he would do while criticizing China ’s part in managing the trade route in his January 20 annual address.

I aim ok to point out what Latin America has done to solve these challenges despite the existing imbalance of energy and Washington ’s repeated practice of employing “sticks. ”

At the beginning of the 1980s, President Ronald Reagan launched his “low-intensity conflict ” in Central America, in response to which, by 1983, governments in Colombia, Mexico, Panama and Venezuela created the Contadora Group ( which was later joined by Argentina, Brazil, Peru, and Uruguay as a Support grouping ).

Contadora, which had the support of the European Community of the time, contributed quickly to peace in Central America.

In 1996, the US Congress approved the Helms-Burton Act, whose concept of independence sought to prevent Cuba’s economic relations with international businesses and investments. The recently created Rio Group ( the four from Contadora, the four from the Support group, plus Chile, Ecuador, Paraguay, Bolivia, a representative from Central America, and another from the Caribbean ) requested that the Inter-American Juridical Committee of the Organization of American States examine the Act. The Committee noted that the Helms-Burton was not in accordance with international law.

On September 11, 2001, in response to the terrorist attacks in the United States, Undersecretary of Defense Douglas Feith proposed in a September 20 draft memo a surprise attack in South America ( allegedly, the Argentine-Brazilian-Paraguayan Triple Frontier ). In response to this, in 2002, with the active role of Buenos Aires, the “3 ( Argentina, Brazil and Paraguay ) plus 1 ( United States ) ” format was designed: the intelligence findings of the three countries would be shared with Washington.

The main problem was to avoid the tri-border place from becoming a phase for the “war on terrorism, ” to maintain a margin of freedom, and to ensure the trust of the United States.

In 2003, at the UN Security Council, Chile and Mexico, with various controlling partnerships, maintained a principled place based on their respective national attention in the face of the United States attempting to use a 1991 decision to start a subsequent invasion of Iraq.

Finally, Washington eluded a defeat at the Council and organized the so-called “coalition of the willing ” to attack Iraq. In the end, there was no retaliation from Washington, as the Executive finally signed an Investment Incentive Agreement with Mexico that year and Congress approved the Chile-United States free trade agreement.

In April 2008, the Pentagon decided to relaunch the Fourth Fleet, which had been deactivated in 1950. In response, at the initiative of Brazil, the South American Defense Council was created in 2008 to establish a regional security community and to curtail a US military expansion of forward operation locations in South America.

These examples show how, under difficult conditions and amid highly challenging issues, the region acted; it gave concrete answers to US declarations, laws and measures.

The use of institutionalized multilateral and ad hoc minilateral ( the multilateralism of the few ) fora was fruitful. The different ideological nature of the governments did not affect the possibility of identifying common interests, whether for altruistic or instrumental reasons.

By now it looks like the incoming Trump administration will focus the inter-American agenda on issues such as tariffs, migration, drug trafficking and the use of force. Perhaps on the tariff question, Latin American action could be taken with Europe, China, and India at the World Trade Organization to restrict Washington ’s arbitrariness.

Regarding migration, the rules of international law, the record of decisions by the Inter-American Commission on Human Rights and the resolutions by the Inter-American Court of Human Rights that prohibit mass expulsions could be invoked, as well as recourse to the International Organization for Migration, the International Court of Justice and the Inter-American Juridical Committee to prevent and condemn the abuses of Trump’s announced “mass deportation. ”

In 2025, on the 25th anniversary of the UN Convention against Transnational Organized Crime, some countries in the region could call a summit to address the issue that affects the entire continent and, at the same time, urge the United States to ratify the 1997 Inter-American Convention on Firearms given the lethality generated in Latin America by the trade in small arms from the US.

Finally, there is the issue of the use of force. It is essential not to attract international conflicts or tolerate violent pronouncements about the region by senior US officials: the long inter-state peace period in Latin America is an asset that has been achieved and there is no excuse for putting it at risk.

In addition, most nations in the region have managed their bilateral relations with China both prudently and pragmatically. Washington ’s fixation with Beijing is due to a traditional conundrum of great powers: the dilemma between resources and commitments.

During the Cold War, the United States deployed multiple resources ( investment, aid, trade ) in the area and thus claimed anti-Soviet Union and anti-communist commitments at the diplomatic, military and material levels.

Today, and in relation to China, the US provides quite fewer resources while demanding more commitments.

As the countries in the area are unwilling to break trade, financial and assistance ties with China, one of the region’s top foreign investors, Trump’s second administration only dangles threats and sanctions. His latest threat concerns taking control of the Panama Canal.

Preceding experiences should help conceive actions for the future. There will be nations that want to act together, sometimes many, other times few. But President Trump will most probably encounter less resignation and more resistance from Latin America if he tries to coerce the region with such a negative agenda.    

Juan Gabriel Takatlian is professor of international relations and former provost ( 2019-2023 ) at Universidad Torcuato Di Tella, Buenos Aires, Argentina.

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Trump has few good options to stop Iran from getting the bomb – Asia Times

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The management of novel US President Donald Trump is reportedly considering different options to stop Iran from being able to develop a nuclear weapon.

These include renegotiating a second atomic package, pursuing a policy of “maximum force ” against Tehran by ramping up sanctions and conducting strikes on Iranian nuclear facilities.

These discussions follow a report released in November 2024 by the UN’s nuclear watchdog, the International Atomic Energy Agency ( IAEA ), which found Iran was dangerously close to enriching uranium to weapons-grade levels.

The statement also said that Iran was planning to fit more than 6,000 new centrifuges to enrich more uranium. There are, nevertheless, problems associated with each of the three options available to Trump.

1. Renegotiating the radioactive offer

The Joint Comprehensive Plan of Action (JCPOA ), also known as the Iran nuclear deal, was negotiated under the administration of Barack Obama in 2015. Signed by Iran and several world powers, the offer placed limits on Iran’s nuclear programme in exchange for sanctions relief.

Iran was required to minimize its uranium stash by 98 % and maintain its levels of uranium enrichment at 3. 67 %. This is substantially below the amount needed to create a weapon.

However, Trump withdrew from the Iran deal during his first term as president, saying it was “horrible ” and “one-sided. ” He argued it lacked identification steps and did much to suppress Iran’s support for extremist groups. He also remarked that it failed to address the regime’s growth of nuclear weapons capable of delivering nuclear weapons.

There is help for a renegotiated deal within several policy lines in Washington. But there has been a sharp increase in anti-American attitude in Iran over recent decades, which has reduced the likelihood of Tehran returning to the negotiating table.

Opinion surveys released after Trump’s departure from the Iran deal in 2018 showed that 70 % of Iranians thought Tehran does not make any more concessions to the US for a potential nuclear deal.

The death of Iranian military chief General Qasem Soleimani in January 2020 has more eroded Trump’s picture in Tehran. Soleimani, who the Pentagon said was “responsible for the deaths of thousands of American and coalition company members”, was killed by an American drone attack near Baghdad International Airport in Iraq.

This anti-American attitude has been exacerbated through blazing remarks from Iran’s supreme leader, Ayatollah Ali Khamenei. He vowed “severe revenge ” on those responsible for Soleimani’s death and pronounced the US as “criminals. ” In the past, Khamenei has even labeled Trump’s behaviour as “ugly and nasty. ”

2. Ramping up punishment

Iran has a deep-rooted historic dislike to Western and, more particularly, American identity. Since the Islamic Revolution of 1979, Iran has cemented a foreign legislation view of viewing the “American-led imperial order ” in terms of “global pride. ”

This concept has been reflected by the Atomic Energy Organization of Iran, which controls Iran’s nuclear programme. In a social media post in 2020, it said Iranian nuclear experts were “ready to experience the force and unilateralism of the US federal relating to the use of atomic energy. ”

Trump’s plan of highest pressure on Iran during his first term only strengthened Tehran’s thinking on American hegemony. Various Iranian officials condemned the US-led sanctions as “economic terrorism ” and criticized Washington ’s “thirst for war. ”

The Iranian government has also frequently used the punishment to attract public assistance for its authority. In April 2024, Khamenei urged the Persian people to view sanctions as an attempt to force Iran to cooperate with “colonizing, imperial plans ” and submit to “tyrannical needs. ”

There are some indications that this communications has worked. In a 2024 survey of 2,280 Iranian citizens, more than 69 % of respondents expressed support for Iran’s pursuit of nuclear weapons. Imposing additional sanctions is likely to strengthen Iran’s antagonism to the US, complicating efforts to revise a nuclear deal.

The plan will probably be undeterred by the returning of Trump’s maximum-pressure strategy, even if it leads to new restrictions from other countries. Iran’s nuclear programme has demonstrated extraordinary endurance over the years.

Tehran now has more than five kilograms of improved uranium at its disposal. And the US Secretary of State, Antony Blinken, estimated in July 2024 that Iran is now capable of producing “one bomb’s fair of fissile material ” in “about 12 weeks. ”

3. Dramatic Persian services

The last option being considered by Trump’s group is proactive strikes on Iranian nuclear services. This option may reflect a departure from the historic US scheme of containing Tehran through financial coercion. It would also likely result in a major escalation of conflicts between the two countries.

To understand the risks associated with US defense activity in Iran, consider the events of the past several decades. In October 2024, Israel carried out a series of attacks on Iran in retribution for a storm of Egyptian attacks on its place. This involved a hit on a nuclear arms research center near Tehran known as Taleghan 2.

The Egyptian rulers were quick to respond with some aggressive political claims. Ayatollah Khamenei vowed “a tooth-breaking response ” against Israel and its ally, the US. His assistant, Kamal Kharrazi, stated that “if an philosophical risk arises, Iran may modify its nuclear theory. ” Khamenei issued a fatwa, or spiritual judgement, against the use of nuclear weapons in 2003.

US strikes on Iranian earth are definitely not out of the problem. In October 2024, Trump expressed aid for Jewish retaliation against Iran. He urged Israel to attack Iran’s nuclear system first and “worry about the rest later. ” Scares like these simply encourage Iran to tear from its spiritual order of no producing and using nuclear arms.

More than debating hardline policies to prevent Iran’s nuclear programme, America’s approach should be to watch and wait. This would be important in assessing whether Iran, whose business has been crippled by sanctions, leans towards China and Russia for business or comes up to the negotiating table for a minute nuclear deal.

Aniruddha Saha is young research fellow in Politicians, University of Oxford

This article is republished from The Conversation under a Creative Commons license. Read the original post.

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Friend or foe? Trump’s threats against ‘free-riding’ allies could backfire – Asia Times

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Donald Trump is an unexpected United States president in that he may be the second to reach greater anxiety in friends than in enemies.

Take the replies to his pre-inauguration remarks about buying Greenland, for example, which placed US alliance Denmark at the center of the international foreign legislation radar screen and caused the Swedish government – which retains control of the territory’s foreign and security policies — to proclaim Greenland is n’t for sale.

Canada is also in Trump’s sights with trade tariff threats and claims it should be the 51st US state. Its government has vociferously opposed Trump’s comments, begun back-channel lobbying in Washington and prepared for trade retaliation.

Both cases highlight the coming challenges for management of the global US alliance network in an era of increased great power rivalry– not least for NATO, of which Denmark and Canada are member states.

Members of that network saw off the Soviet Union’s formidable Cold War challenge and are now crucial to addressing China ’s complex challenge to contemporary international order. They might be excused for asking themselves the question: with allies like this, who needs adversaries?

Oversimplifying complex relationships

Trump’s longstanding critique is that allies have taken advantage of the US by under-spending on defense and “free-riding ” on the security provided by Washington ’s global network.

In an intuitive sense, it is hard to deny this. To varying degrees, all states in the international system– including US allies, partners and even adversaries – are free-riding on the benefits of the global international order the US constructed after the Cold War.

But is Trump, therefore, justified in seeking a greater return on past US investment?

Since alliance commitments involve a complex mix of interests, perception, domestic politics and bargaining, Trump would n’t be the deal-maker he says he is if he did n’t seek a redistribution of the alliance burden.

The general problem with his recent foreign policy rhetoric, however, is that a grain of truth is not a stable basis for a sweeping change in US foreign policy.

Specifically, Trump’s “free-riding ” claims are an oversimplification of a complex reality. And there are potentially substantial political and strategic costs associated with the US using coercive diplomacy against what Trump calls “delinquent ” alliance partners.

US tanks in a parade with US flag flying
US military on parade in Warsaw in 2022: force projection is about more than money. Image: Getty Images via The Conversation

Free riding or burden sharing?

The inconvenient truth for Trump is that “free-riding ” by allies is hard to differentiate from standard alliance “burden sharing, ” where the US is in a  quid pro quo  relationship: it subsidizes its allies ’ security in exchange for benefits they provide the US.

And whatever concept we use to characterise US alliance policy, it was developed in a deliberate and methodical manner over decades.

US subsidization of its allies ’ security is a longstanding choice underpinned by a strategic logic: it gives Washington power projection against adversaries and leverage in relations with its allies.

To the degree there may have been free-riding aspects in the foreign policies of US allies, this pales next to their overall contribution to US foreign policy.

Allies were an essential part in the US victory in its Cold War competition with the Soviet-led communist bloc and are integral in the current era of strategic competition with China.

Overblown claims of free-riding overlook the fact that when US interests differ from its allies, it has either vetoed their actions or acted decisively itself, with the expectation reluctant allies will eventually follow.

During the Cold War, the US maintained a de facto veto over which allies could acquire nuclear weapons ( the UK and France ) and which ones could not ( Germany, Taiwan, South Korea ).

In 1972, the US established a close relationship with China to contain the Soviet Union– despite protestations from Taiwan, and the security concerns of Japan and South Korea.

In the 1980s, Washington proceeded with the deployment of US missiles on the soil of some very reluctant NATO states and their even more reluctant populations. The same pattern has occurred in the post-Cold War era, with key allies backing the US in its interventions in Afghanistan and Iraq.

The problems with coercion

Trump’s recent comments on Greenland and Canada suggest he will take an even more assertive approach toward allies than during his first term. But the line between a reasonable US policy response and a coercive one is hard to draw.

It is not just that US policymakers have the challenging task of determining that line. In pursuing such a policy, the US also risks eroding the hard-earned credit it earned from decades of investment in its alliance network.

There’s also the obvious point that it takes two to tango in an alliance relationship. US allies are not mere pawns in Trump’s strategic chessboard. Allies have agency.

They will have been strategizing how to deal with Trump since before the presidential campaign in 2024. Their options range from withholding cooperation to various forms of defection from an alliance relationship.

Are the benefits associated with a disruption of established alliances worth the cost? It is hard to see how they might be. In which case, it is an experiment the Trump administration might be well advised to avoid.

Nicholas Khoo is associate professor of international politics and principal research fellow, Institute for Indo-Pacific Affairs ( Christchurch ), University of Otago

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Rhetorics of refusal deny America’s deep decline – Asia Times

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Societies survive and grow when they successfully manage their inconsistencies. Gradually, however, accumulating conflicts overwhelm existing methods of navigating them.

Therefore social problems arise that endure or worsen inside for societies because they are repeatedly navigated or go unsecured. Often, the strong conscious response to such cultural problems is rejection, a refusal to discover them.

Denial of domestic social problems consumes navigating the inconsistencies that produce them. The resulting cultural drop, like the set of internal conflicts it reflects, is denied and ignored. Instead, stories or rhetorics can occur that position for cultures as victims of abuse by foreigners.

The United States in 2025 illustrates this approach: its rhetorics of rejection aim to stop its abuse.

In today’s United States, one for speech refuses to permit continued abuse by immigrants “threatening our national security. ” This language blames poor US political management for its failure to set America first and thus make it excellent again.

Another rhetoric demands that “we ” refuse to allow “our democracy ” to be destroyed by foreign enemies ( and their domestic equivalents ): people who are said to hate, not understand, or undervalue “our democracy. ”

Still another rhetoric of refusal sees foreigners “cheating ” the United States in trade and migration processes. Most Americans embrace one or more of like rhetorics. However, as we propose to display here, for rhetorics are actually less effective.

One conservative rhetoric, Trump’s, movements toward previous greatness by absolutely renewing American imperialism. He threatens to recapture the Panama Canal, shift Canada into the 51st of the United States, win Greenland from Denmark, and possibly enter Mexico.

All those foreigners are said to harm national security or otherwise “cheat” the United States. Trump’s common bloviating off, this is amazing expansionism. For repeated colonial gestures serve broader conceptions of making America greater repeatedly.

Colonization consistently helped Western capitalism understand its internal conflicts (temporarily escaping the cultural problems it caused ). Later, however, it could no more do so. After World War II, anti-colonialism limited that leave.

The following European neo-colonialisms and the casual colonization of the American empire had shorter career encompasses. China and the rest of the BRICS nations are now outside closing that leave. Thus the disappointed hatred of Trump’s emphasis on refusing that ending by consciously reopening the idea of an exit hatch of imperial expansions.

It resembles Netanyahu’s idea ( if not yet his violence ) in trying to reopen that hatch for Israel by driving Palestinians out of Gaza. United States assistance for Netanyahu also associates the US with colonial violence in a world increasingly committed to finish colonialism and its undesirable legacy.

The United States boasts the world’s strongest defense formation. The strong language in the United States casts all it does as self-defense necessitated by foreign rivals.

That justifies the government paying much more on defence than on the few domestic social problems that speech yet recognizes. Yet the United States lost the war in Vietnam, Afghanistan, Iraq, and presently Ukraine, and these places ’ military enterprises were far from the world’s strongest. It turns out that the development of nuclear weapons and professional rivals among nuclear power have changed military accounts around the world.

The United States’ total neglects of Russia’s war powers in 2022 illustrate the change quite significantly. They even illustrate that a speech stressing a unwillingness to get victimized by international army outbid or displaced calm assessments of a militarily changed world.

Today the world observes not only changed world military combinations but also the costly protestations of them by US frontrunners. Political and economic leaders anywhere else are now rethinking their techniques correctly. Rhetorics of rejection to be victimized can be self-destructive.

Another cause those officials are redesigning their expansion plans follows from the entangled drops of the US dynasty and the US capitalist system. What US officials deny, some foreign leaders have opportunities to observe, evaluate and take advantage of.

The BRICS members ( 9 ) and partners ( 9 ), as of January 2025, account for nearly half the world’s population and 41 % of the world’s GDP ( in purchasing power parity terms ). Four other nations have been invited and are likely to join in 2025: Vietnam, Turkey, Algeria, and Nigeria.

Indonesia just joined as a full BRICS partner adding its roughly 280 million population. In contrast, the G7—the world’s second-largest economic bloc—accounts for about 10 % of the world’s population and 30 % of its GDP ( also in purchasing power parity terms ).

Moreover, as data from the International Monetary Fund documents, recent years show a widening gap between the annual GDP growth rates of the G7-leading United States and the BRICS-leading China and India.

Across the history of capitalism from its earlier times in England through the American empire’s peak early in the 21st century, most nations focused chiefly on the G7 in strategizing economic growth, debt, trade, investments, currency exchange rates, and balances of payments. Large- and medium-sized enterprises did likewise.

Yet over the last 15–20 years, countries and enterprises have faced an altogether new, different global situation. China, India, and the rest of the BRICS countries offer an alternative possible focus. Everyone can now play the two blocs off against one another.

Moreover, in this play, the BRICS now hold better, richer cards than the G7. Rhetorics of refusal spin these changes in the world economy as the evil intentions of foreign others—who likely hate democracy.

The United States should righteously refuse and thereby frustrate those intentions, they argue. In contrast, far less attention is paid to how internal US social problems both shape and are shaped by a changing global economy.

The changing world economy and the relative decline of the G7 within it have turned US capitalism away from neoliberal globalization toward economic nationalism. Tariffs, trade wars, and “America first ” ideological pronouncements are concurrent forms of such turning inward.

Another form is the call to bring parts of the outside of the United States inside: Trump’s unsubtle imperialistic threats directed at Canada, Mexico, Denmark and Panama. Yet another form is the advisory many major US colleges and universities are sending to enrolled students from other countries ( over a million last year ).

It suggests they consider the likelihood of great visa difficulties in completing their degrees amid increasing US government hostility toward foreigners. A reduced foreign student presence will undercut US influence abroad for years to come ( much as it fostered that influence in the past ).

US higher education institutions, already facing serious financial difficulties, will find them deepening as paying foreign students choose other nations for their degrees. “America first ” rhetoric risks the self-destruction of the United States’ global position.

Politically, the U. S. strategy since World War II was to contain perceived foreign threats by a combination of “hard ” and “soft ” power. They would enable the United States to eliminate communism, socialism, and, after the Soviet implosion of 1989, terrorism, wherever possible, overtly or covertly.

Hard power would be deployed by the US military via hundreds of foreign military bases surrounding nations perceived to be threatening and via invasions if, when, and where deemed necessary.

Hard power also took the form of implicit threats of nuclear warfare ( made credible by the US atomic bombings of Hiroshima and Nagasaki ) and by total US arms race expenditures on nuclear and non-nuclear weapons that no other countries, alone or in groups, could match.

“Soft power ” would serve globally to project particular definitions of democracy, civil liberties, higher education, scientific achievement, and popular culture. These definitions were presented as best and most exemplified by what actually existed in the United States.

In this way, the United States could be exalted as the global peak of civilized human achievement: a kind of partner discourse to other discourses that denied internal social problems. Enemies could then readily be demonized as inferior.

US soft power was and remains a kind of political advertising. The usual commercial advertiser promotes only everything positive ( real or plausible ) about his client’s product. Typically, everything negative ( real or plausible ) is associated by that same advertiser only with his client’s competitor’s product. One might call this “advertising communication. ”

In the 20th century ’s Cold War, US soft power entailed an application of advertising communication where the United States and its supporters, public and private, functioned as both client and advertiser.

The United States advertised itself as “democracy ” and the USSR as its negative opposite or “dictatorship. ” Cold War advertising communication continues today in the slightly changed form of “democracy ” versus “authoritarianism. ” But, like advertising, after too many repetitions, its influence lessens.

Unfortunately for the United States, economic problems now besetting its capitalist system—both those caused by accumulated internal contradictions and those caused by its declining position within the world economy—directly undercut its soft power projections. Brandishing tariffs and repeatedly threatening to increase them reflect the need for governmental protection for decreasingly competitive US-based firms.

US rhetorics that instead blame foreigners for “cheating ” sound increasingly hollow. Deporting millions of immigrants signals an economy no longer strong and growing enough to absorb them productively ( what once “made America great ” and showed that greatness to the world ). US rhetorics denouncing “foreign invasions ” of immigrants encounter growing skepticism and even ridicule inside as well as outside the United States.

The gross inequality of wealth and income in the United States and the global exposure of billionaires ’ power over government ( Musk over Trump, CEOs donating millions of dollars to Trump’s inauguration celebration ) replace perceptions of the United States as exceptional in its vast middle class.

The record levels of government, corporate, and household debt alongside abundant signs that such indebtedness is worsening do not help project the United States as an economic model. The year 2024’s experience with a dominant US strategy denying social problems while rhetorically stressing the dangers of evil foreign forces suggests it may be approaching exhaustion.

The year 2025 may then provide conditions for a profound challenge to that strategy matching the challenges confronting the global position of US capitalism.

Richard D Wolff is professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor in the Graduate Program in International Affairs of the New School University, in New York.

Wolff’s weekly show, “Economic Update, ” is syndicated by more than 100 radio stations and goes to millions via several TV networks and YouTube. His most recent book with Democracy at Work is “ Understanding Capitalism ” ( 2024 ), which responds to requests from readers of his earlier books: “ Understanding Socialism ” and “ Understanding Marxism. ”

This article was produced by Economy for All, a project of the Independent Media Institute. It is republished with kind permission.

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Why China probably isn’t panicking over Trump – Asia Times

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As Donald Trump arrives for a second round of shaking up the global market — particularly China— he does end up doing far more harm at home than worldwide.

Though this argument has been made here and there since the US president-elect’s win  on November 5, the image the International Monetary Fund is painting about the next four years is worth considering.

On the eve of Trump’s January 20 opening, the IMF’s chief economist, Pierre-Olivier Gourinchas, counts the way taxes, trade restrictions and blunt force reactions to waning US profitability could backfire on the biggest market.

The bottom line: the second wave of taxes Trump 2. 0 threatens may produce business dislocations worse, reduce purchase, distort market pricing mechanics, undermine supply chains and spook global markets in disorganized and wasteful ways.

The taxes only, Gourinchas concerns, “are likely to drive prices higher in the near term. ”

Big tax breaks in an business at or near full employment was promote America’s journey toward overheating. Trump’s large imprisonment hopes would produce yet greater disruptions for restaurants, structure and many other businesses already short of workers. Labor costs could surge as a result, intensifying inflation pressures.

Even Trump’s promised deregulatory Big Bang might not go as Treasury Secretary-nominee Scott Bessent argues. Yes, the US might “boost potential growth in the medium term if they remove red tape and stimulate innovation, ” Gourinchas says.

But, he adds, “excessive deregulation could also weaken financial safeguards and increase financial vulnerabilities, putting the US economy on a dangerous boom-bust path. ”

When “we look at the risk for the US, we see an upside risk on inflation, ”  Gourinchas notes.

As Gourinchas ’ institution points out, Trump is fortunate to inherit a US economy that ’s recovered from the Covid-19 crisis better than peers. The IMF expects 2. 7 % US growth in 2025, faster than the 2. 2 % it predicted back in October.

That has n’t stopped Trump from signaling a fresh stimulus boom to come. On top of making permanent the Republican Party’s US$ 1. 7 trillion 2017 tax cut, Trump promises additional corporate tax cuts. Trump also has hinted at reprising his 2017-2021 role as Federal Reserve-basher-in-chief.

Back then, Trump cajoled his handpicked Fed chairman, Jerome Powell, into cutting interest rates at a moment when the buoyant US economy did n’t need it. Trump attacked the Fed  in speeches, press conferences and on social media.   Trump  even mulled firing Powell. By 2018 ,  the  Fed  surprised world markets by suddenly adding liquidity, ending efforts to normalize rates post-Lehman Brothers crisis.

On the campaign trail last October ,  Trump  mocked Powell’s policymaking team. “ I think it ’s  the  greatest job in government, ”  Trump  told  Bloomberg. “You show up to  the  office once a month and you say, ‘let’s say flip a coin’ and everybody talks about you like you’re a god. ”

Team Trump  also argues that presidents have   the  right to demand that the central bank do their bidding. In August ,  Trump  said the “Federal Reserve is a very interesting thing and it ’s sort of gotten it wrong a lot. ”

He added “ I feel  the  president should have at least stayed there, yeah. I feel that strongly. I think that, in my case, I made a lot of money. I was very successful. And I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman. ”

One motivation may be paying for Trump’s fiscal plans. The lower US rates go, the more latitude Trump may believe his administration has to add to the$ 36 trillion national debt.

This raises obvious threats to Asia’s vast holdings of US Treasury securities. China is the second-biggest holder of Treasuries with about$ 770 billion worth. Japan is Washington ’s top banker, with US$ 1. 1 trillion of US debt. Altogether, Asia’s largest holders of dollars are sitting on about$ 3 trillion worth of exposure.

Yet it also means that policy mistakes in Washington could be transmitted Asia’s way at blistering speed.

Beyond the risk of financial shocks from the US, China is very much on Trump’s mind as Beijing’s nearly$ 1 trillion trade surplus angers his administration. At more than 5 % of gross domestic product ( GDP ), China ’s surplus is the most since 2015.

This speaks to how Trump 1. 0 failed to alter global trade dynamics. Eight years after Trump entered the White House for the first time, China is, by some measures, more reliant on exports today. Yet this reliance puts China directly in harm’s way as Trump 2. 0 makes good on its 60 % tariff threat.

That could exacerbate the domestic challenges Xi Jinping’s Communist Party faces, including deflationary currents, weak retail sales, slumping property prices and a yuan under downward pressure. As a result, mainland bond yields are at record lows.

Some economists think the IMF is missing the point.

“The IMF really needs to find a way to talk about global trade that includes the risks coming from China ’s industrial policies and unbalanced pattern of growth, not just the risks from the US ,” says Brad  Setser, senior fellow at the Council on Foreign Relations.

Setser argues that “it’s totally reasonable to talk about the risks coming from the US. But it is n’t reasonable to ignore the risks from China just because China does n’t use tariffs to bring its imports down … and the IMF does n’t mention Chinese imports at all here. ”

Yes, Setser concludes, “Trump’s tariffs will have an impact – but right now the main factor slowing global trade is the fact that China ’s imports — in volume terms — aren’t growing. And the IMF should care about the gap between China ’s export volume and import volume growth. ”

Economist Katrina Ell at Moody’s Analytics notes that a “lift in government spending helped to hide some of the economy ’s weaknesses. As China ’s economic woes mounted in the second half of the year, local governments were instructed to offer more support. And that they did, with government expenditure growth rising in each month since June. ”

Despite the extra spending helping the economy record its fastest quarterly expansion since March 2023, EIl says, “it was n’t enough to break the shackles of deflation. The GDP deflator fell 1. 2 % in 2024, marking the second consecutive year of falls. ”

Overall, Ell says, “China ended the year strongly. But much of that came from temporary sugar hits. Under the hood, China ’s problems have n’t gone away. We expect growth to slow to 4. 3 % in 2025 as tariffs drag down exports and investment. ”

Odds are, more Chinese stimulus is on the way, says Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

“The shift of policy stance in September last year helped the economy to stabilize in Q4, but it requires large and persistent policy stimulus to boost economic momentum and sustain the recovery, ” Zhang says.

For now, China ’s exports will probably remain strong in the near term as companies try to “front-run” higher tariffs, says Zichun Huang of Capital Economics.   “Outbound shipments are likely to stay resilient in the near-term, supported by further gains in global market share thanks to a weak real effective exchange rate, ” Huang notes.

Yet China ’s priority should be to stop its run of seven straight deflationary quarters, says Larry Hu, chief China economist at Macquarie Bank.

“We don’t bet against policymakers’ will and ability to deliver 5 % real GDP growth in 2025, but can they achieve higher inflation? ” Hu reckons. “It will largely depend on the fiscal and housing stimulus, which is key to boosting domestic demand. ”

Here, Trump’s policies won’t help. There’s hope the “ Tariff Man” act is meant to conifer China into a huge trade deal.   Bessent is perceived to be a proponent of this plan.

Other Trump advisers, not so much. These include Peter  Navarro, who co-wrote a book titled “Death By China. ” And trade czar Robert  Lighthizer, who’s hinted at Trump 2. 0 considering its own  currency devaluation gambit.

But the tariff threats also could blow up on Washington in ways US lawmakers might not appreciate.

Take the risk of China hitting back in a variety of ways, warns Takatoshi  Ito, a Columbia University  economist who served as Japan’s deputy vice minister of finance. “If other countries adopt retaliatory tariffs, total exports from the US — and global trade overall — may well decline, ” Ito says.

“Moreover, high US tariffs would fuel  domestic inflation, forcing the Federal Reserve to raise interest rates, which would probably cause the US dollar to appreciate, causing exports to fall and imports to rise. ”

This has economists doubting if the Fed will cut rates at all in 2025. “Inflation is above target and the  Fed  was primarily cutting to ensure a strong labor market, which has been met, ” write Bank of America economists. “This means no further cuts needed, ” adding they “see risks for the next  Fed  move more skewed to a hike versus cut. ”

Others are more sanguine about overheating risks. “Core inflation is n’t accelerating, and that ’s the story, ” says Jamie Cox, a managing partner at Harris Financial Group.

“The market may have had its hair on fire about inflation running away again, but the data do not support that conclusion. What we are seeing is the typical ebb and flow of the data as inflation is being pushed out of the system, ” Cox says.

But Trump’s policies could exacerbate inflation risks in short order – and further threaten the dollar’s status as the global reserve currency.

In recent testimony to Congress, Bessent said keeping the dollar at the very center of global trade and finance is a top Trump 2. 0 priority. That might be easier said than done as Washington ’s fiscal excesses collide with a new Trump team spoiling for fights everywhere.

Follow William Pesek on X at @WilliamPesek

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High time for a US-China reset – Asia Times

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The scattered authority of the 21st centuries sees the two remaining big power, China and the United States, at pains to establish not only their own roles as for but their roles in relation to each other. And in doing so, they represent a threat both to each other and to the global order.

From a historical perspective, both China and the United States are discrepancies. Imperial China, which goes back some 2,000 ages, stands out as the longest continuous culture in history, and except for a one-hundred-year-long break, is reemerging as a main power.

Likewise, notwithstanding a community of some 1. 4 billion citizens and the world’s second-largest market, its ordinary GDP per capita of just US$ 26,000 puts it far below that of the average American business world.

Nonetheless, this does not detract from the fact that within its business cosmos China has heights of superiority, which puts it on line if not ahead of its European rivals.

Compared to China, the United States is at the other end of the spectrum. Among the family of countries, it is one of the most recent with less than 300 years as a condition. Although of Anglo-Saxon origin it is, unlike China, which is 95 % cultural Han, developing into a multi-ethnic object.

While China is an over-regulated world in terms of cultures and social norms, and finally subject to the whims of its ruling creation, the United States is the same.

Unfettered by custom, it is basically underregulated. And while in China the status is expected to ensure the welfare of the people, in the United States the condition comes a distant second with the focus on the individual and civic culture rather than on the governing formation.

Last but not least, one is a one-party method in which the power creation exercises its manage absolutely without counterweight on the whole of society including the economy, while the other is a multi-party system based on the rule of law and centered on private property and personal initiative.

For both, coexisting with another major power while occupying its own space is not the problem. This already happened during the Cold War when the Soviet Union and the United States ran two parallel systems. And while there was some intercourse between the two, this was relatively minor as the two systems did not interrelate.

The irruption of China some 20 years ago in the international system ushered not so much a change as a revolution of the global order. Whatever the power and global ambitions of the Soviet Union, its model or its end products never represented an existential threat to the United States and its allies.

Conversely, China is in a different league. First, there is size: 1. 4 billion people in a country covering some 9. 6 million square kilometers ( 3,7000,000   square miles ) cannot be ignored.

Second, there is history: the country has an incredibly strong cultural identity that befits an empire that lived by its own rules and for which all foreigners were considered barbarians.

Third, there is governance: the country is ruled by a  system in which the state apparatus and the economy are ultimately subject to the authority of one ruling party.

Thus, when a foreign entity enters into a relationship with a Chinese one, even if the latter is not legally state-owned, it enters, for all practical purposes, into a relationship with the Chinese Imperial State, not to say the entity which controls the state, namely the Chinese Communist party.

Fourth, there is economic weight: In 2024, China had a trade surplus of close to one trillion dollars, a performance that reflects the resiliency of its economy. These fundamental realities are a given that cannot be sidestepped. But they were, and the world is now paying the price.

China ’s decision to open its economy to the outside world was predicated on the fact that its internal market was simply not prosperous enough to ensure the nation’s development.

Thus, for the Chinese Communist Party, the opening up of China was not an end in itself. It was a means for the ruling class to stay in power by providing its population with the prosperity it aspired to.

At the other end of the spectrum, and more specifically for the United States, integrating China in the world economy provided one major benefit: access to a relatively cheap and good quality manufacturing capacity.

In parallel, a significant segment of the American political establishment also believed that becoming part of the world economy would also erode the Chinese Communist Party’s power and bring about “regime change. ”

The end result was that the same phenomenon, namely the opening of China, when viewed through American eyes, meant one thing while it meant another when viewed through Chinese eyes.

American hegemony is currently unquestionable. It has the world’s strongest armed forces; its currency, the dollar, reigns supreme; its language, English, is the world’s lingua franca; and it has fashioned the international system, from the United Nations to the global economic order, to serve its interests.

Granted not all of its undertakings met with success. The Vietnam and Afghanistan wars were abject failures. But in relation to the international supremacy of the United States, they were of little consequence. But China ’s challenge to American supremacy today is of potential consequence.

China ’s challenge to American supremacy is substantiated by three veracities. The first is size. The second is environment.

Unlike relations between the United States and the Soviet Union, which operated two parallel orders which largely did not overlap during the Cold War, China is part of the global production system and its economic convulsions are liable to have an impact that extends far beyond its borders.

The third is existentialist. China is a latecomer to the international system, which has been fashioned by the United States essentially to serve its own interests. As a latecomer, China had no alternative but to abide, or to pretend to abide, by the prevailing system. This raises two other questions.

The first is that, from a Chinese perspective, the system was alien, not to say a foreign imposition in the structuring of which China had not participated. This, in turn, raised another question, namely, how can a state-run economy coexist with a private-sector economy?

The answer to these queries, if there is one, hinges on one historical consideration that applies to both parties. Compromise, power-sharing and dealing with an equal is not in their DNA.

The Chinese empire traditionally dealt with “barbarians. ” The American empire was the leader of a coalition in which its power was so overwhelming that it could essentially do as it pleased. These days are now over.

China is no longer surrounded by “barbarians. ” The United States, while still reigning supreme, cannot impose its power at will. Both will have to learn how to compromise.

Assuming that the political will to do so exists, this would require that the two sides embark on a negotiating process with the intent of getting the best deal that would suit them both.

This should entail raising a number of basic questions, including how the two systems can operate in parallel without coming into conflict with each other.

One example is the car industry. Twenty years ago, China was not a player. Today, it produces the world’s best electric cars at a cost that, if unregulated, would risk wiping out the Western and Japanese car industries.

From the perspective of the Western car user, this might not be a bad proposition except that the collapse of the Western car production sector would have social consequences that Western governments are not politically willing to entertain.

While there is no ready-made answer to this conundrum, the issues it raises should be the subject of discussions between both parties extending far beyond tariffs or quotas.

A thorough reevaluation of the overall relations between the United States and China should best be undertaken outside the political limelight by an American foundation working with a credible but discreet Chinese counterpart.

Not only should it be practical and concrete, but, above all, it should be based on a genuine effort at mutual understanding – which makes it imperative that it be kept well away from the political and confrontational process that currently bedevils the two superpowers ’ relations.

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