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The United States is #winning.
At least that’s how it looks if you’re tracking the economy, market indices, or the parade of countries lining up to cut deals with President Donald Trump. Asian and Gulf countries have pledged trillions of dollars in foreign direct investment in the US during the Trump presidency. The United Kingdom, the European Union, and several Southeast Asian nations have offered non-reciprocal trade deals. Canada folded on its plan to impose a digital services tax. Japan made unilateral concessions on automotive tariffs and Nippon Steel. European pharmaceutical companies are relocating production stateside to avoid punitive tariffs. Consumer confidence may be in the doldrums, but spending remains resilient (driven by the wealthiest Americans). Combined with an artificial intelligence spending boom and massive deficit spending – enabled by the dollar’s ongoing status as the global reserve currency – markets continue betting on American liquidity and growth.
It’s a heady moment. But while the short-term picture looks strong, the United States is systematically trading long-term strategic advantages for immediate tactical gains, with the accumulating costs hiding in plain sight.
Start with immigration. For decades, the cornerstone of America’s technological, economic, and soft-power dominance has been its ability to attract the best and brightest from around the world. Talented engineers, scientists, and entrepreneurs long chose the US because it promised opportunity, freedom, openness, and meritocracy – a fair shot at the American Dream. Now, the welcome mat is fraying. The Trump administration is increasingly hostile to immigrants (whether legal or illegal, skilled or unskilled), nativist sentiment among Americans is growing, and civil liberties (especially for non-white immigrants) feel increasingly uncertain. The numbers speak for themselves: International student arrivals to the US have declined by nearly 20% relative to last year. Meanwhile, China is rolling out new visas explicitly designed to poach high-skilled workers from the United States, and Canada is plastering airports with recruitment pitches. As America becomes a less attractive destination for top global talent relative to its competitors, the long-term economic damage will compound.
Then there are the universities. Yes, many humanities departments had grown intellectually insular and politically captured. Taking on these echo chambers for fringe woke ideology was long overdue. But the Trump administration has gone much further, slashing research infrastructure at America’s (and the world’s) finest universities. These institutions are what keep America at the cutting edge of advanced science and technology and draw the most talented students globally – the ones who become tomorrow’s leading researchers, inventors, and entrepreneurs. Undermining that ecosystem will erode one of the most important pillars of the US economy at a time when public trust in science itself is declining. Growing vaccine skepticism, embrace of conspiracy theories, reflexive rejection of expertise – these aren’t just cultural quirks, they’re a structural disadvantage when competing against countries where faith in science remains strong. They’re making Americans less capable of driving the next wave of technological advances, and therefore less likely to dominate the commanding heights of the world economy and geopolitics.
Consider artificial intelligence. The United States is racing ahead in consumer-facing AI – chatbots, engagement-maximizing social media algorithms, generative tools to produce yet-more-addictive slop, ever-larger language models that claim to be one step closer to superintelligence – because that’s where the money is. But these technologies are also fragmenting society, amplifying misinformation, and possibly contributing to a kind of collective psychosis. China, by contrast, has channeled AI development away from consumer applications in favor of defense and industrial uses, which carry less risk of social fragmentation and more strategic upside.
It’s a similar story when it comes to energy. The United States has become the world’s most powerful petrostate, producing more oil, gas, and coal than any other country. That’s not inherently a problem – fossil fuels will continue to power data centers, agriculture, and heavy industry for decades to come. But the US has effectively ceded leadership on post-carbon energy to China, which already dominates battery technology, solar power, next-generation nuclear, and supply chains for critical minerals. Washington is doubling down on hydrocarbons while letting the future of energy pass it by.
Or take trade policy. The Trump administration is imposing the highest US tariffs in a century – including on major allies, on countries with no bilateral trade imbalances, and on sectors where America lacks capacity to ramp up domestic production quickly enough to avoid shortages or inflation. Following Trump’s Oct. 30 meeting with Chinese President Xi Jinping – which put escalation on hold for a year and lowered fentanyl tariffs on China from 20% to 10% in exchange for politically-sensitive soybean purchases – the effective US tariff rate on Chinese imports now sits at 32%, close to the rate on ASEAN countries and lower than on its strategic partner India and South America’s largest economy, Brazil, which actually runs a trade surplus with the United States.
The cumulative result is a roughly 17% regressive tax on American businesses and consumers, which are forced to pay more for intermediate inputs and final goods. Paired with a sharp turn toward industrial policy and state capitalism, the US is moving away from the free-market principles that made its economy so competitive in the first place. Targeted government intervention in select sectors (e.g., semiconductors, banking) can sometimes be justified on specific grounds (e.g., national security, financial stability), but history shows that broad protectionism and state direction tend to make economies less, not more, dynamic over time.
This short-term thinking extends to geopolitics. As I wrote last week, most countries are prepared to give the US wins – some pyrrhic, some significant – to avoid open conflict. But these same countries are also working to ensure they’re never in that position again. The EU has finalized trade agreements with Mexico, Indonesia, and the South American trading bloc Mercosur. Brazil is deepening economic ties with Europe, China, and Canada. India is working to stabilize relations with China while accelerating infrastructure projects that reduce its dependence on US markets. Saudi Arabia has signed a nuclear deal with Pakistan to hedge against future security neglect from Washington.
These moves aren’t costless – they require years of political capital, billions in investment, and new institutional architecture. Once built, they’re hard to reverse. But countries have learned the hard way that US policy can change course every election cycle with little in the way of policy continuity or long-term strategic planning, and they’re building alternatives now while accommodating Washington in the short run. Every four years, there’s a 50/50 chance that everything – not just the winners and losers but the rules of the road – shifts. Gone are the days when politics ended at water’s edge. That structural volatility reduces American leverage over time, even as it delivers wins for the world’s largest economy.
So when asking whether the United States will retain its lead over its allies and adversaries, the answer depends on the time horizon. Short-term? Absolutely. America remains by far the world’s most powerful country, so there’s a lot of room for damage before structural decline sets in. Moreover, artificial intelligence is about to change everything, and the US is one of only two games in town (China being the other) and still the preferred partner for most of the West and parts of the Global South.
But long term, the trajectory is troubling. The historical advantages the United States enjoyed over its peers – better physical and institutional infrastructure, superior demographics driven partly by immigration, public tolerance for inequality undergirded by perception of meritocracy, greater capacity for deficit spending – are all heading in the wrong direction, arguably unsustainably so. China, despite being in a weaker overall position, is doing what it can to exploit these shifts. And while Beijing faces severe structural challenges of its own, it benefits from the increasingly accurate perception that it takes the long view while America chases the next election.
Perhaps most worrying is the one thing everyone in a deeply divided America now agrees on: that the country’s biggest threat is domestic. They just disagree on who that threat is. That kind of inward turn ensures the bulk of the national energy and focus will remain on fighting internecine political battles rather than making the deeper, patient investments – in people, institutions, research, and infrastructure – required to keep the United States competitive a generation from now.
America is giving up long-term leadership in exchange for short-term wins. The question isn’t whether the United States will pay for this addiction to immediate gratification. It's only when the bill will come due – and how much it will cost.
Hard Numbers: Typhoon rips through the Philippines, Europe wants more rail, Israel returns bodies to Gaza, Canada’s Carney unveils first budget
85: A typhoon ripped through the Philippines on Tuesday, killing at least 85 people and forcing roughly 400,000 people to flee their homes – many of which are now flooded. The typhoon is set to continue through other parts of Southeast Asia, including Vietnam, Laos, and Thailand.
€345 billion: Europe may be tightening its internal borders, but it’s still pushing its trains: The European Union on Wednesday laid out a €345-billion ($396-billion) plan to slash train times between major European cities over the next 10-15 years. Under the plan, there will be trains that run at 200 kilometers per hour (roughly 125 mph) between each major EU city.
15: Israel returned the bodies of 15 Palestinians to Gaza on Wednesday, as part of ongoing exchanges required by last month’s ceasefire deal. Israeli authorities have now returned 285 bodies since the deal was signed, though it is not clear how many more they are holding. Hamas still holds the remains of seven Israeli hostages.
CA$78 billion: Canadian Prime Minister Mark Carney unveiled his first budget on Tuesday, which includes new infrastructure spending, funds for the military, and major immigration cuts. However, the budget shows a deficit of $78 billion, the second-largest in the country’s history.
Democratic nominee for New York City mayor Zohran Mamdani getsures on stage after winning the 2025 New York City mayoral race, at an election night rally in the Brooklyn borough of New York City, New York, USA, on November 4, 2025.
By Zohran Mamdani’s own telling, his campaign for mayor began roughly a year ago, when he stood on a street corner in the Bronx, the New York City borough that is home to some of the country’s poorest and most diverse congressional districts – typically the backbone of the Democratic coalition – asking voters why they voted for US President Donald Trump.
Mamdani, a democratic socialist, interviewed them for his social media account. He listened – these voters were upset about rising costs. And so he focused his own campaign on affordability, pledging to make New York City, the capital of global finance, a more affordable place for the working poor and middle classes. It worked. Yesterday, the residents of the United States’ largest city elected him to be their mayor.
When he takes office on Jan. 1, the real work will begin – and there is much of it.
Mamdani has promised a lot. Among his campaign pledges are: free universal childcare, free bus services, and city-run grocery stores. He also wants to deploy mental health workers to work alongside police officers. He says he will freeze the rent for rent-stabilized homes as part of a bid to lower housing costs.
So how is Mamdani going to pay for this? He wants to raise taxes. Specifically, he wants to increase state corporate tax from 7.25% to 11.5%, and introduce a flat 2% tax on the 34,000 people in New York City who earn $1 million or more annually. He also wants to boost tax collection and reform procurement procedures. These policies, he says, will raise $10 billion, enough to pay for the $6-billion cost of universal childcare and the $800-million price tag of free bus rides.
To do that he will need to look beyond the city itself. Firstly, increasing the state corporate tax will require approval from the New York State Legislature and Gov. Kathy Hochul – this will be especially challenging with Hochul up for reelection next year. Secondly, the City Council as well as the State Legislature will have to approve the additional tax for those earning over a million. Finally, these measures will face major opposition from the city’s financial establishment, most of whom supported Mamdani’s main opponent, former New York Gov. Andrew Cuomo.
Then there’s another major issue in New York City: public safety. Mamdani’s rivals – including Cuomo – relentlessly tried to paint him as being soft-on-crime, highlighting his previous advocacy for defunding the police. Mamdani has also raised fears among some of the city’s million-plus Jewish residents, in part over his refusal to denounce the use of the term “Globalize the Intifada.” To alleviate some of these fears, Mamdani said he will keep Jessica Tisch, a widely-respected technocrat, as police commissioner, who has presided over a significant drop in crime since being appointed by outgoing Mayor Eric Adams last year.
The Trump challenge. Mamdani will immediately be in conflict with the president over a range of issues: immigration enforcement, infrastructure financing, and public safety. The president has several powerful tools at his disposal – he can cut infrastructure funding to the city, as he did for a proposed tunnel across the Hudson River, and could send in the National Guard to quell protests and arrest undocumented migrants.
Trump and Mamdani, both populist New Yorkers from radically opposite points of the political and generational spectrum, seem to openly want this confrontation.
“Donald Trump, since I know you’re watching, I have four words for you,” Mamdani said during his victory speech last night. “Turn the volume up.”
Trump responded on social media last night: “…AND SO IT BEGINS!”
What We’re Watching: Venezuela clamps down on dissidents, Democrats celebrate election successes, Leading economist warns of triple bubble
Venezuela's President Nicolas Maduro reacts after shooting an arrow during a rally on the Day of Indigenous Resistance, his first public appearance after opposition leader Maria Corina Machado was awarded the Nobel Peace Prize, in Caracas, Venezuela, on October 12, 2025.
Venezuela’s Maduro turns the screws as Trump ponders regime change
Amid intensifying US attacks on alleged Venezuela-linked drug trafficking boats in the Caribbean, Venezuelan strongman Nicolás Maduro is cracking down on dissent at home. The largest US military buildup in the Caribbean in decades has raised concerns that US President Donald Trump may seek to knock Maduro out of power altogether. Maduro — who remains deeply unpopular after evidently rigging last year’s presidential election — has deployed loyalist vigilantes to police dissent and arrested dozens more critics. (For more on this see our latest “Debrief” with Eurasia Group’s Venezuela expert Risa Grais-Targow here.)
Democrats celebrate a good election night
As Democrats plot a path back to power in next year’s midterms, last night’s local election results give them much to chew over. First, voters in California authorized a redistricting that gives Dems a shot to overturn five GOP-held seats. Second, centrist Democrats comfortably won the gubernatorial races in New Jersey and Virginia, while voters in swing-state Pennsylvania re-elected three liberal state Supreme Court justices. A key factor in VA and NJ was that voters of color who had voted for Trump in 2024 swung back to the Democrats. Lastly, of course, democratic socialist Zohran Mamdani’s victory in the New York mayoral race will intensify internal party debates about whether to double down on centrism or populism.
Leading economist warns of three big bubbles
Is the world economy about to take a bubble bath? The head of the World Economic Forum has warned of three potentially crippling financial market bubbles: in crypto, in AI, and in public debt. If any of the three bursts — that is, if a critical mass of investors think they are overvalued and start a mass sell 0ff – we could be in for a world of hurt. Goldman Sachs CEO David Solomon and JP Morgan Chase CEO Jamie Dimon have both recently warned of a coming market correction. The WEF comments came amid a brief selloff yesterday in tech stocks over concerns about over-investment in AI.
What We’re Watching: Some Americans head to the polls, German U-turn on Syrian asylum policy, Russia may have to find new oil buyers
Democratic candidate for New York City mayor, Zohran Mamdani, votes in the New York City mayoral election at a polling site at the Frank Sinatra School of the Arts High School in Astoria, Queens borough of New York City, USA, on November 4, 2025.
It’s Election Day in the United States
It’s the first Tuesday after Nov. 1, which means it’s US election day. Key ballots to watch include the mayoral race in New York City – where democratic socialist Zohran Mamdani is poised to pull off an upset that will echo into national level politics – as well as state Supreme Court races in Pennsylvania, and ballot initiatives on gerrymandering in California. Don’t forget about the New Jersey governor election either, where GOP nominee Jack Ciattarelli is looking to eke out a victory against Democratic nominee Mikie Sherrill. New Jersey was once reliably blue but has been getting more purple in recent years: in 2020 Joe Biden won it by 17 points, but Donald Trump lost by just four last year.
Germany to end asylum for Syrians
German Chancellor Friedrich Merz says Syrians no longer have grounds for political asylum in his country now that the Syrian civil war is over. Merz called for a repatriation program to ease burdens on Germany and accelerate the rebuilding of Syria, though the United Nations warns Syria still isn’t ready to absorb a large population of returnees. It was exactly ten years ago that Chancellor Angela Merkel declared “Wir schaffen das” (we can do it), establishing a generous asylum policy that welcomed in more than a million Syrians fleeing their country’s horrific civil war. A decade later, with the war over and the far right surging on anti-immigrant backlash, Merz is now saying, “Wir schaffen das nicht.”
Is India buying less Russian oil?
Last month, Trump announced sanctions on Russia’s top two oil companies, in a bid to squeeze the Kremlin’s war effort by scaring off major crude buyers like India and China. Is it working? Preliminary data show India’s imports of Russian oil actually increased slightly in October compared to September. But wait, there’s more: India’s purchases in the second half of October plummeted compared to the first half. That may have something to do with the fact that Trump announced the sanctions on Oct. 23. They don’t take effect until later this month, so we’ll be watching to see what the November data tell us. With Chinese firms now also reportedly exploring alternative sources of oil, Russia may in fact start feeling the effects of US sanctions (for more on this, and whether it would change his approach to Ukraine, read here).
People gather at a petrol station in Bamako, Mali, on November 1, 2025, amid ongoing fuel shortages caused by a blockade imposed by al Qaeda-linked insurgents.
One of the most expansive countries in West Africa is on the precipice of falling to an Islamist group that has pledged to transform the country into a pre-modern caliphate.
Jama’at Nusrat al-Islam al-Muslimin (JNIM), a militant group that has pledged allegiance to al-Qaeda, has surrounded Mali’s capital Bamako, blocking fuel from entering the city of four million people, with the aim of bringing down the government.
If that happens, it could be a catastrophe for the 25 million people of Mali – particularly the country’s women.
“It would be the end of secular governance and a shift to a theocratic system and sharia law, the abolition of democracy, lots of violence and repression, massive displacements, terrible for women’s rights and deepening ethnic divides,” said Eurasia Group’s West Africa analyst Jeanne Ramier.
And it would be a geopolitical setback for the ruling military junta’s backers in Moscow.. But the damage could also, Ramier says, spread beyond Mali itself.
“It would be very bad for everyone,” Ramier said of JNIM’s potential takeover. “It would definitely affect countries beyond the Sahel and the whole West Africa region.”
Violent extremism has been a major issue across the Sahel for some time – an estimated 51% of all terrorism-related deaths in the world last year were in the region, per the Council on Foreign Relations. JNIM’s success in Mali has prompted similar uprisings in neighboring Burkina Faso and Niger. The most populous country in the region, Nigeria, has faced jihadist insurgencies from Boko Haram and West African offshoots of ISIS for 16 years. Even countries like Cote d’Ivoire, which has been relatively stable in recent years, hasn’t escaped the violence over the last decade, most notably in 2016 when militants murdered 16 people at a beach resort in Grand Bassam.
So what’s happening in Mali? Once a paragon of democracy in the region, Mali has been going through an internal conflict since 2012 when, in the middle of the Arab Spring, a US-trained Malian colonel overthrew the government.
The country has been under military rule and in flux ever since. A French invasion in 2013, welcomed by many Malians, was initially successful in knocking back Islamist groups that became active around the 2012 coup. But it quickly went awry, as militants reasserted themselves and a military junta that seized power in 2020 severed ties with the French, prompting Paris to withdraw troops later that year and abort the operation altogether in 2022. Russian mercenaries filled the power vacuum when the French left, backing the incumbent military regime which is now on the brink of collapse.
Which other countries are affected? JNIM also has a major presence in neighboring Burkina Faso, where it already controls 40% of the country amid a long running conflict that saw two coups in 2022 alone. Experts believe the momentum that the group has gathered in Mali will only make matters worse there.
Completing the so-called “coup belt” of Sahel countries run by military juntas is Niger, to Mali’s east. The military government there, which seized power in 2023, has also struggled to contain JNIM forces. Like Mali, Niger once had the help of a major outside player in tackling terrorism: the United States had a military presence there in a bid to boost the country’s counterterrorism efforts. US-Niger relations soured after the coup, though, and Washington withdrew all its soldiers from the country last year.
Where else could the jihadist insurgencies spread? Mauritania, Senegal, and even Côte d’Ivoire – all of which border Mali – could be the next targets for radicalization, said Ramier. Coastal states that don’t border Mali, like Ghana and Nigeria, may also be impacted.
Governments in these countries will seek to shore up security to prevent the insurgency spreading. They will deploy soldiers in areas where the militants are rampant. They will beef up border security. They may even seek help from western nations that would want to mitigate a potential migration crisis.
But the question will be whether they can work together to stem the spread. Ramier isn’t hopeful.
“I think the Economic Community of West African States [ECOWAS] will try to act and take a strong stance, but I think they will probably fail to turn the tide.”
Hard Numbers: Dick Cheney dies, China sentences Myanmar scammers to death, Jamaica town left in ruins, OpenAI splashes cash on computing power
Then-Republican vice presidential candidate Dick Cheney points out something to then-Republican presidential candidate George W. Bush during a campaign stop in Casper, Wyoming, on July 26, 2000.
84: Former US Vice President Dick Cheney, a powerful and controversial leader who had outsized influence as President George W. Bush’s second-in-command, died on Monday at 84. Cheney was best known for pushing the 2003 invasion of Iraq, using flawed intelligence to justify the decision. His critics would later call him a war criminal. A stalwart of Wyoming and Republican politics, Cheney came to reject his own party after the rise of Donald Trump.
90%: As Jamaica continues to assess the damage from Hurricane Melissa, one town has found itself hit especially hard. In Black River, a town on the south of the Caribbean island, 90% of the homes have been destroyed. The power is still out in the town, phones are down, and food supplies are running out.
5: A Chinese court handed down death sentences to five members of a major Myanmar mafia as part of a larger crackdown on scamming in Southeast Asia. The convicts had run schemes worth billions of dollars involving human trafficking, fraud, sexual slavery and murder of Chinese citizens. Myanmar had extradited the scam leaders to Beijing early last year.
$38 billion: As part of its tireless, and expensive, race to to secure computing power, OpenAI signed a $38-billion deal with Amazon Web Services (AWS) that will allow the loss-making AI firm to use AWS infrastructure to run its products. OpenAI has now committed to spending an eye-watering $1.5 trillion on computing resources.