EU-Mercosur trade deal is on the chopping block
The trade deal between the European Union and South America’s Mercosur bloc is on the chopping block, facing an end-of-year deadline to be approved or shelved until 2028. The agreement would remove duties on over 90% of exports between the two trade unions, alarming European farmers who worry about competition from cheaper imports and prompting Italy to threaten to block the bill. However, proponents in Germany and Spain say it's necessary to decrease reliance on China and cushion the impact of US tariffs. To try and win over skeptics, the EU has added an amendment with a $7.3 billion emergency fund for farmers who could be negatively impacted. European Commission President Ursula von der Leyen is expected to fly to Brazil at the end of the week, initially with hopes to sign the deal, which has been 25 years in the making.
US armada ordered to surround Venezuela
On Tuesday, US President Donald Trump ordered – in an all-caps Truth Social post – a “total and complete” blockade of sanctioned oil tankers leaving Venezuela, vowing to surround the country with the “largest Armada ever assembled in the History of South America.” The move could economically strangle Venezuela’s President Nicolás Maduro’s regime, which depends on oil exports for 17% of its GDP. It could also hit Cuba, which heavily relies on Venezuela for oil and grappled with widespread power outages after Venezuela reduced supplies earlier this year. China is the largest importer of Venezuelan oil, followed by the US and the EU, which have carved out certain companies from sanctions. Russia and Iran, meanwhile, have been receiving deliveries from the sanctioned ships. Oil markets ticked up 1% on Wednesday, after falling to their lowest level since 2021 early this week. Traders will be watching to see how the blockade will be enforced, particularly whether it will be limited to only sanctioned vehicles, as Trump said, or all of Venezuela’s ships.
The US eyes Pakistan as provider of stabilizing forces in Gaza
Until now, the Trump administration has been struggling to find countries that are willing to lend soldiers to be part of Gaza’s peacekeeping forces, a key part of the second phase of the Israel-Hamas ceasefire deal. There might be a solution, though: The White House is pressing Pakistani army leader Asim Munir to send troops from his sizable army to the enclave. Munir may have good reason to do so: he wants to build links with the US in order to sell them rare-earth minerals, Pakistan’s struggling economy could do with some extra cash, and it has exported its security services before – notably at the 2022 FIFA World Cup in Qatar. There is one issue: providing security forces may spark a domestic backlash in Pakistan, amid deep opposition among Islamist parties to the US and Israel. Munir is set to visit Washington, DC, in the coming weeks to discuss the matter with US leaders.
