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Europe
Delegations from France, Germany, Ukraine, the United Kingdom and the USA meet at the Elysee presidential palace in Paris on April 17, 2025.
It’s all Big Smoke and no fire in London, as US Secretary of State Marco Rubio pulled out of Russia-Ukraine peace talks that were scheduled to take place in British capital on Wednesday, right as Ukrainian President Volodymyr Zelensky rebuffed the Americans’ peace plan that involved formally recognizing Crimea as Russian territory. Rubio’s move prompted organizers to downgrade the meeting, which was supposed to include foreign ministers from France, Germany, Ukraine, and the United Kingdom.
Rubio’s not-so-empty threat. The former Florida senator warned last week that the US will “move on” from peace talks if a deal wasn’t eminently “doable.” Vice President JD Vance echoed this sentiment on Wednesday. In skipping the London confab, Rubio appears to be following through, at least with the Europeans. US special envoy Steve Witkoff, who also canceled plans to be in London, is headed to Moscow for his fourth round of talks with Russian President Vladimir Putin.
Terms of the deal. As well as formally handing Crimea to Russia, the US peace proposal would force Zelensky to “de facto” allow Putin to maintain most of the occupied areas of Ukraine. The deal would also preemptively veto Ukraine from joining the North Atlantic Treaty Organization. In turn, Kyiv would receive “a robust security guarantee.” The terms, though, are a non-starter for Zelensky and the rest of Europe.
Would the terms be enough for Russia? It’s unclear, but Putin reportedly offered to pause fighting on Tuesday in an apparent effort to reach a peace deal. On the other hand, the Russian leader’s past comments suggest he wants more.
“Putin last year said he also expects Ukraine to give up control over the parts of the claimed regions that Russia does not yet control,” said Alex Brideau, Russia director at Eurasia Group. “It may also demand new elections, on the assumption that it would lead a government that is friendlier to Russia.”
“Whether that’s realistic,” Brideau added, “Putin appears unwilling to deviate much from these demands.”
Trump’s 4D checkers, China’s opportunity, climate hopes, and more: Your questions, answered
Welcome to another edition of my mailbag, where I attempt to make sense of our increasingly chaotic world, one reader question at a time. If you have a burning question for me before I go back to full-length columns, ask it here and I’ll answer as many as I can in next week’s newsletter.
Let’s dive in (with questions lightly edited for clarity).
Is the US currently a kleptocracy?
The United States is the most structurally kleptocratic of any advanced industrial democracy, with public policy increasingly captured by monied special interests and the rules of the marketplace determined by the highest bidder. The wealthiest Americans not only can fund political campaigns but also buy favorable regulatory and legal treatment and lobby for policies that perpetuate their economic interests. This system is two-tiered alright, but it doesn’t see red and blue – only green.
President Donald Trump is a beneficiary and an accelerant of this disease, but it long predates him. Which is why Trump faced so little pushback from the business world both times he was elected. After all, a system where the connected can buy their preferred policy outcomes is a system much of the private sector is both used to and comfortable with.
Has Trump done to brand USA what Musk did to Tesla?
He’s working on it. The long-term damage to America’s reputational capital has been incalculable (though it hasn’t been as great as the >50% in value Tesla has lost since its mid-December peak). Sometimes you have a personal relationship and someone does something that can’t be unseen. That’s what has happened particularly with Canadians and Europeans of late. I think that damage is permanent. And we are not even 100 days in …
How do other nations view America in light of Trump’s aggressive tariffs, threats, and general disdain for allies?
They all see the United States as the principal driver of geopolitical uncertainty. In the near term, most countries – especially smaller, poorer ones – will look to cut trade deals with Trump relatively quickly because the alternative, direct confrontation with the world’s sole superpower, is too costly to bear. We’re seeing that already with the Japanese, the South Koreans, and many other delegations coming to Washington to try to do everything they can to secure at least functional relations with the US.
At the same time, every country recognizes the longer-term need to hedge away and “de-risk” from the United States as much and as fast as possible to reduce their exposure to Trump-driven disruption. Even those that manage to come away with deals know the president could change his mind. After spending the last decade focusing on the dangers of having too much exposure to Beijing’s opaque, arbitrary, and personalistic decision-making, policymakers, businesses, and investors all over the world now suddenly see de-risking from the US as the more urgent priority. That’s an extraordinary shift when you stop to think about it.
Granted, de-risking from the US is a tall order given America’s asymmetric power advantages and the global embeddedness of so many of the things it provides – defense, advanced technologies, finance – that are hard to substitute (read: to break free from). But many US allies see no choice but to start seriously looking for alternatives. We’re already seeing the European Union and Latin America speed up their conversations to fast-track approval of the EU-Mercosur trade deal. Trump-aligned India is likewise moving to improve its trade relations with the EU, the United Kingdom, Australia, and others. Canada is trying to engage much more closely with the Europeans. Even Vietnam, which has long harbored deep mistrust of China, signed 45 new economic cooperation agreements with Beijing days after Trump trade czar Peter Navarro rebuffed its offer to lower its tariffs on US goods to zero.
Can China capitalize on Trump’s global trade war to peel off US allies?
Xi Jinping just wrapped up a Southeast Asian charm offensive to try to do exactly that. For the first time since the Vietnam War, most Vietnamese are now more well-disposed toward China than the US. That’s not true everywhere (e.g., the Philippines is still about 80% pro-American), but the trend line is clear. China sees the moment as a historic opportunity to move economically closer to many countries and portray itself as a champion of globalization and a force for stability.
But that doesn’t necessarily mean America’s loss will be China’s gain everywhere. The Europeans don’t suddenly trust the Chinese more just because they now trust the Americans less. They still have big issues with Chinese dumping, overcapacity exports (especially in the auto industry), data surveillance, and other beggar-thy-neighbor practices that have not gone away. Europe’s de-risking will be less about tilting to China and more about strengthening its own capabilities and hedging with pretty much everybody else. Plus, as I mentioned above, while Trump has worked hard to alienate US allies, America remains the only game in town for most Western countries in many strategic sectors and critical networks. Going cold turkey is unthinkable.
If everyone thinks tariffs are a bad idea even for the American economy, why is Trump persisting? Do you see a way the US can win on this?
As much as I’d like to believe so, I just can't see any way the US comes out ahead on this. Myself and others have written extensively about why the tariffs (and the massive ongoing uncertainty surrounding US policy) are an economic lose-lose, not only for America’s trade partners but for American consumers and businesses, and not just in the short term but also in the long run. Rather than boost domestic manufacturing, they will accelerate the country’s deindustrialization. And if the administration had really intended to use the tariffs as a cudgel to forge a united front against China (as Treasury Secretary Scott Bessent and others have claimed), it wouldn’t have slapped punishing duties on friendly countries already inclined to join this alliance before asking for their help. I’m afraid there’s no “4D chess” strategy or master plan.
It’d be one thing if the Trump team were only picking this one fight. But it’s going to be much harder to convince the world not to hedge away from the United States when at the same time as they’re hitting everyone with tariffs, they’re also picking all sorts of fights on other fronts. They are directly and indirectly threatening other countries’ sovereignty and territoriality, whether it’s Greenland and Denmark, Panama, Canada, or Ukraine. They are exporting algorithms and disinformation that undermine democracies around the world. They are destroying the transatlantic alliance. They are aligning with Russia over longstanding allies at the United Nations and the G7. They are driving away foreign tourists and international students. And they’re picking fights domestically, trying to weaken checks and balances, undermine the rule of law, and erode state capacity in ways that will make the US a worse place to live, invest, and do business.
I'd love to be proven wrong, but this policy set looks hands down like the most extraordinary geopolitical own goal I’ve ever witnessed.
Is it possible that Trump is purposely upsetting the economy in an effort to lower interest rates, reduce the US government’s debt servicing costs, and shrink the federal deficit?
Nope. That’s another one of those 4D chess stories flying around, and it’s nonsense. It’s true that a tariff-and-uncertainty-induced US recession can make existing US government debt (and mortgages, car loans, credit card debt, etc.) cheaper to refinance by bringing down long-term interest rates. But if long rates decline because the real economy has deteriorated to the point where the Fed has to cut short-term rates to boost aggregate demand, the money saved on debt interest payments probably will be offset by the lower tax revenue collected and the higher unemployment benefits paid out during the recession. The overall deficit will likely be higher than if said recession hadn’t been engineered in the first place – destroying trillions in economic value and hurting millions of real Americans in the process.
And all this assumes that long rates will in fact go down when the US enters a tariff-and-uncertainty-induced recession, which financial markets are currently telling us is not guaranteed in light of growing inflation and default risks. Thus far, Trump’s stagflationary policy mix and erratic policymaking style have made the world’s safe-haven assets relatively less attractive, prompted investors to sell US bonds, and caused long rates to rise rather than fall.
Will Trump succeed in brokering a ceasefire in Ukraine like he promised on the campaign trail?
Only if he’s willing to effectively use both carrots and sticks on Russia and Ukraine alike. So far he hasn’t, deploying mostly sticks (suspending military aid and intelligence sharing) to force the Ukrainians to come to terms and principally only carrots (the promise of sanctions nonenforcement and relief, and even full normalization of relations) to get the Russians to back off their maximalist demands.
Secretary of State Marco Rubio said last week the administration is giving the talks “a matter of days” to make progress or else they’ll walk away from the peace effort altogether. The problem is that Vladimir Putin continues to be uninterested in a durable ceasefire, at least not unless the so-called “root causes” of the conflict are addressed through a permanent settlement. He started this war to change the facts on the ground and is convinced he still has what it takes to win it. What’s more, he’s betting that if he can keep slow rolling the peace talks and convince Trump that it was Kyiv’s intransigence that tanked them, Russia could plausibly get a US rapprochement while it continues to wage war against a Ukraine deprived of US assistance. I’m not a betting man, but at this point, it’s a reasonable wager for Putin to make.
What do you expect from incoming German Chancellor Friedrich Merz?
Less capacity to spend and lead than many people hope, despite having managed to pass a historic fiscal package through the Bundestag lifting the country’s “debt brake” for defense spending and creating a 500 billion euro special fund for infrastructure investments. The incoming coalition is serious but relatively unpopular and divided, facing a stronger-than-ever far-right Alternative for Germany leading the opposition in the new parliament.
This political weakness, combined with the sheer scale of the challenges it faces, will water down the government’s ambitions. Germany is undergoing a severe, decade-long economic crisis. Merz will be under considerable pressure to jumpstart growth quickly amid global trade wars and under tight budget conditions. Just a few weeks ago, he was well-disposed to take on a European leadership role. Now that talk is no longer cheap, his constraints and risk tolerance will change. And if the Germans won’t step up, who in Europe can?
Is climate action possible in a disintegrating world? Have the odds of avoiding catastrophic climate change worsened in the past three months?
I’m more optimistic here. We’ve already broken the back of the most catastrophic climate change scenarios. Economic self-interest – not ideology or idealism – is driving the clean energy revolution as technological innovation and steep learning curves have dramatically reduced the price tag of clean power technologies, making them the cheapest and most profitable option in a lot of markets regardless of politics. Deep-red Texas and Florida lead the US in solar and wind power deployment. China is set to hit its emissions peak several years ahead of schedule. Europe sees renewables as an energy security imperative. Emerging markets from India to Indonesia and Pakistan are eager to develop using cheaper and cleaner domestic energy sources than high-volatility, dirty imported fuels.
I don’t want to be glib. The planet is still heating up faster than we’d like, and the present state of geopolitics – from Trump’s “drill, baby, drill” to the G-Zero vacuum of global climate leadership – will slow the pace of decarbonization. With every fraction of a degree of warming causing bigger and more frequent disasters, lower growth, and more deaths, that’s not good news. But for every environmental regulation repealed, clean energy policy revoked, fossil fuel project approved, and international commitment abandoned, there’s another, much more structural force pulling even harder in the opposite direction. As my colleagues and I put it in Eurasia Group’s 2025 Top Risks report, the global energy transition “has reached escape velocity.”
Would you ride Moose like a jockey if given the opportunity?
I’d train him with a well-disposed toddler first. That would be must-see television. Any volunteers?
Burkina Faso’s junta leader Captain Ibrahim Traore attends the first ordinary summit of heads of state and governments of the Alliance of Sahel States (AES) in Niamey, Niger, on July 6, 2024.
40%: Burkina Faso’s ruling military recently foiled an attempted coup aimed at removing junta leader Cap. Ibrahim Traoré, the country’s security minister said on Monday. The Sahel nation has had to deal with widespread insurgency in recent years, with rebel jihadist groups reportedly controlling around 40% of the country’s land mass.
55: US President Donald Trump made a dent in American democracy almost as soon as he won the 2024 election, according to a survey of 520 political experts. The Bright Line Watch benchmark gave US democracy a rating of 55 in February, down 12 points from where it was on the day of Trump’s election victory and 14 points from where it was in October 2024. It’s the country’s fastest drop since the survey began in 2017.
2%: Our globally minded readers will immediately recognize this figure as the proportion of gross domestic product that NATO member nations are encouraged to spend on defense. Under pressure from the Trump administration and its European allies to expand its military, Spain said Tuesday that it will finally hit that figure again this year, after falling short for over 30 years.
130: Elon Musk is DOGE-ing himself. The Tesla CEO says he will cut back his role in the government after his electric vehicle company reported a massive profit drop. Musk says he will spend just one to two days each week on DOGE following accusations that he has let his focus on Tesla slip. Regardless, temporary government employees like Musk are normally limited to working 130 days a year, which would expire at the end of May.
8: So much for the Great Escape: From January through April, US authorities arrested eight undocumented Dominican migrants in Puerto Rico who were trying to return to their home country. The arrests raise questions over the Trump administration’s stated goal of encouraging undocumented migrants to leave of their own accord.
$20 billion: Trump’s tariffs have Tokyo in a selling mood. Japanese investors said sayonara to more than $20 billion of foreign debt early this month. The selloff shows how Wall Street jitters can ripple across the Pacific. It’s not clear which foreign debt Japanese investors unloaded, though they are the largest holders of US Treasuries of any country worldwide, so their investment choices are observed hawkishly.
26: Outrage is rising after gunmen killed 26 tourists in Indian-administered Kashmir’s Pahalgam on Tuesday. Several other victims remain critically injured. The Resistance Front – believed to be an offshoot of Pakistan-based terrorist group Lashkar-e-Taiba – has claimed responsibility.
Nuns and faithful attend a rosary for Pope Francis, following the death of the pontiff, in St. Peter's square, at the Vatican, April 21, 2025.
Preparations for the funeral of Pope Francis are underway after the Holy Father died from a cerebral stroke early Monday – as are those for the secretive election to choose his successor.
The funeral date has been set for Saturday. Tens of thousands attended the funeral of Francis’ predecessor, Benedict XVI, in 2022, who had retired in 2013. When John Paul II died in 2005, some four million people paid their respects. This time, leaders from around the globe are expected to attend, including Donald Trump, who is set to become the first sitting US president to attend a papal funeral since 2005.
Francis will be dressed in red regalia, and his ring of office will be ceremonially destroyed, but much of the proceedings will break from tradition: He ordered that he be laid to rest in a simple coffin and interred in Santa Maria Maggiore, not the Vatican grottoes.
Choosing a successor. Within 20 days, Catholic cardinals under the age of 80 (135 out of 252) will gather in the Sistine Chapel to choose the next pope. The conclave – from a Latin root meaning “with keys” – is shut off from the wider world, a measure deemed necessary after medieval interregna lasted months or years due to secular political meddling.
There are no guarantees, but the electoral math points to a potentially short contest: 108 of the 135 eligible elector cardinals were appointed by Francis and may quickly assemble the necessary two-thirds consensus around a successor with similarly progressive values.Military chaplain conducts Easter service for Ukrainian service members of the "Khartia" 13th Operational Brigade, near a front line, amid Russia's attack on Ukraine, in Kharkiv region, Ukraine on April 20, 2025.
An Easter ceasefire declared by Russian President Vladimir Putin appears to have collapsed, with both Russia and Ukraine accusing each other of violations. Ukrainian President Volodymyr Zelensky posted to X Sunday afternoon that as of 8 p.m. local time, the Russian army had violated the ceasefire over 2,000 times. Conversely, Russia claimed Ukraine breached the ceasefire by launching hundreds of drone attacks. The 30-hour pause, which began Saturday at 6 p.m., followed intense fighting in the region of Kursk, as well as a 277-person prisoner swap earlier that day.
Could peace talks collapse as well? On Friday, US President Donald Trump and Secretary of State Marco Rubio expressed growing impatience with the pace of negotiations. After Rubio warned that the US might abandon the process within days if no progress is made, Trump remarked that if “for some reason” one of the countries made negotiations very difficult, “We’re just going to say you’re foolish, you’re fools, you’re horrible people, and we’re going to just take a pass.”
Administration officials are reportedly frustrated by Zelensky’s accusation that US envoy Steve Witkoff was “spreading Russian narratives” as well as Russia’s foot-dragging in negotiations. A US official said the parties would meet again in London this week. It is unclear what would happen if the US were to walk away, with Zelensky warning in a “60 Minutes” interview earlier this month that if Putin’s advance is not contained, the conflict “could escalate into a world war.”An employee checks filled capsules inside a Cadila Pharmaceutical company manufacturing unit at Dholka town on the outskirts of Ahmedabad, India, April 12, 2025.
Donald Trump’s administration announced that it is opening investigations into pharmaceutical and semiconductor supply chains, which will likely result in tariffs that will hurt suppliers in Europe, India, and Canada.
The move shows that, despite stiff political and market resistance, Trump still believes tariffs will benefit his country in the long term by rebalancing trade and boosting manufacturing jobs.
The pharma announcement caused headaches for Canadian producers of generic drugs and pharma ingredients, who are warning of dangerous disruptions to supply chains if the US administration acts erratically.
Trump said last week that pharma tariffs would bring a manufacturing boom to the United States: “They will leave other places because they have to sell — most of their product is sold here, and they’re going to be opening up their plants all over the place.”
But, as with other of Trump’s tariffs, the move could boost prices for consumers while offering uncertain benefits for US industry. Trump’s unpredictability itself is a major liability. Because of strict permitting controls, pharma facilities take years to build, and Trump’s frequent reversals may convince companies it’s unwise to make long-term investments.
Economic Revitalization Minister Ryosei Akazawa heads to the United States for negotiations from Tokyo's Haneda airport on April 16, 2025.
As much of the world scrambles to figure out how to avoid Donald Trump’s expansive “reciprocal tariffs,” two big players are in Washington this week to try their hands at negotiating with the self-styled Deal Artist™ himself.
First, Japan. For decades, the world’s fourth-largest economy has run a big trade surplus with the US while also benefiting from American military protection. Trump has been upset about this arrangement for 40 years, and Japan’s import restrictions on US cars and agricultural goods are a particular focus for him. His 25% global tariff on car and steel imports will hit Japan hard, as will the overall 24% “reciprocal” levy against Tokyo that is slated to go into effect in July.
But Japan is also a top foreign investor in the US economy and a key East Asian ally amid Trump’s deepening confrontation with China. Japan’s Economic Revitalization Minister Ryosei Akazawa is looking to reduce tariffs to zero. Observers have already called his case a “guinea pig” for how countries with long-standing ties to the US can work deals with the America First president.
Late on Wednesday, Trump hailed “big progress” in the talks, which he attended personally, but neither he nor Akazawa gave further details. The two sides will meet again later this month.
Second, Italy. Prime Minister Giorgia Meloni, who visits the White House on Thursday, is a pragmatic right-winger whom the US president has described as a “fantastic woman.” She shares Trump’s hardline views on immigration and social issues, and even defended US Vice President JD Vance’s recent blistering attack on the EU’s approach to free speech.
But Meloni also leads a highly export-dependent economy that runs a $40bn surplus with the US. Trump’s “reciprocal tariffs” of 20% on the EU could therefore be a 🤌catastrophe🤌 for Italy.
The EU is warily watching. Can Meloni parlay her good graces with Trump into a deal that avoids a wider transatlantic trade war? Or will her solo visit enable the US president to weaken the overall unity of the bloc?