Trending Now
We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
{{ subpage.title }}
Is American capitalism still capitalism?
Ian explains why “free market capitalism” looks very different today than in decades past. Recent news that the US government is taking a 10% equity stake in Intel is just one example of Washington moving toward a more state-driven economic model.
While government subsidies for strategic industries like semiconductors may make sense, Ian warns that other industrial policies, like trying to re-shore large-scale manufacturing, risk being backward looking. Ian also argues that much of what passes for capitalism in the US is really oligarchy: corporations using lobbying to secure entrenched advantages and offloading the costs of their business models onto the public.
Meanwhile, China has thrived with state capitalism for 50 years, and the US is increasingly trying to compete by playing the same game. But Ian raises concerns that America’s short political cycles and policy whiplash make it poorly suited for long-term state-led planning, and that the benefits often flow disproportionately to the wealthy.
The bottom line: Ian believes the US needs more capitalism, not less, but it has to be, “capitalism that runs in a competitive environment, where no one gets to capture the political process, and where losses are seen as responsibilities of corporations, just as profits are.”
Crowds gather in Times Square to celebrate the surrender of Japan, V-J Day, New York City, New York, USA, U.S. Army Signal Corps, August 15, 1945
Hard Numbers: 80th anniversary of V-J day, Trump wants a stake in Intel, ICE eyes detention expansion, South Korean producers win “Baby Shark” lawsuit
80: Today marks the 80th anniversary of Victory over Japan Day, or “V-J Day”, the day that Imperial Japan surrendered to the Allied forces, bringing an end to World War Two. We’ve previously covered how Japan and the US’ relationship have since evolved.
7%: Intel shares rose by 7% on Thursday after reports emerged that the White House was considering purchasing an ownership stake in the US-based chipmaker. The reports highlight Trump’s increasing willingness to intervene in private chip companies, with Nvidia and AMD agreeing to hand the White House 15% of their Chinese revenues earlier this week.
107,000: US President Donald Trump has reportedly ordered a major expansion of ICE’s detention facilities – raising the number of beds by over 41,000 to 107,000. While the Department of Homeland Security has not confirmed details, the project is being funded by Trump’s Big Beautiful Bill passed in congress last month.
6: Fear not, the hit children’s song “Baby Shark” is here to stay. After a grueling six-year legal battle, South Korea’s Supreme Court ruled against US composer Jonathan Wright, who filed a lawsuit accusing the producers of the song of plagiarism. You can listen to Wright’s version here and decide for yourself.
FFM Mogami at the Yokosuka Naval Base on April 8, 2025.
Hard Numbers: Japan wins huge Oz carrier contract, Migrant boat sinks off Yemen, US to require bonds from visa-seekers, Taiwan arrests chip snoops
$6.5 billion: Japan won a $6.5 billion defense contract to build 11 new warships for Australia’s navy on Tuesday. The deal comes as Australia undertakes a major defense overhaul in order to counter China’s expanding presence in the Indo-Pacific.
68: At least 68 African migrants have died after a boat capsized off the coast of Yemen on Sunday. Yemen is a major transit route for migrants from the Horn of Africa – which includes Ethiopia, Somalia, Djibouti, and Eritrea – who go to the Gulf monarchies in search of work. The overall death toll is feared to be greater than 140.
15,000: The US is planning to require some visa applicants to pay bonds of up to $15,000, as President Donald Trump continues his crackdown on immigration. The State Department said the measure will target countries whose citizens overstay their visas most often: looking at you, Colombia, Mexico, Canada, Haiti, Venezuela, and Spain.
6: Taiwanese authorities have arrested six people suspected of stealing trade secrets from TSMC, the world’s most advanced semiconductor manufacturer. While their nationalities haven’t been made public yet, China’s Huawei and Semiconductor Manufacturing International Corp (SMIC) and the US’s Intel trail far behind TSMC, which supplies chips to Nvidia and Apple.A demonstrator burns mock dollar bills with the face of US President Donald Trump during a protest against the US tariffs imposed on Brazilian products, in front of the United States Embassy in Brasilia, Brazil, on August 1, 2025.
What We’re Watching: Another US tariff announcement, El Salvador leader can now rule indefinitely, Indonesian president pardons opponents
US hits the world with fresh wave of tariffs
US President Donald Trump slapped new tariffs on 92 countries, including key allies. Canada, the US’s number two trade partner, was hit with a 35% rate. Taiwan, a critical semiconductor supplier, also faces fresh levies that could ripple through global tech supply chains, and India now faces a 25% rate. For some countries, Trump’s latest threats are actually a reprieve, as he lowered previously threatened rates: tiny Lesotho, which Trump once said “nobody has ever heard of,” will now face a 15% duty, down from 50%. The new levies take effect on Aug. 9, but Mexico, the US’s largest trade partner, won a 90-day extension. Trump reached a deal with the EU earlier this week, and is still negotiating with China.
El Salvador’s Bukele can now stay in power forever
El Salvador’s legislature has voted to scrap presidential term limits, clearing the way for President Nayib Bukele to run for a third term, and potentially to stay in power indefinitely. Bukele – who once called himself the “world’s coolest dictator” – remains wildly popular after jailing thousands in a gang crackdown, but critics warn he’s dismantling a fragile democracy. Analysts say that the move may have spurred backlash from the US under previous administrations, but that Bukele is emboldened because of his close relationship with Trump.
Indonesia’s president pardons pair of political opponents
Indonesian President Prabowo Subianto granted clemency on Thursday to two opposition figures who were recently convicted of corruption. He framed the move as a bid to increase national unity ahead of the country’s 80th anniversary later this month, but critics say it undermines the justice system. Some observers have also suggested it may signal a rift between Prabowo and his predecessor, two-term president Joko Widodo, a one-time rival who backed Prabowo in last year’s election and remains hugely influential.
The US, China, and the critical minerals question
In this Quick Take, Ian Bremmer analyzes a significant shift in US–China relations: Donald Trump’s decision to ease key technology restrictions on Beijing in an effort to secure access to critical minerals.
This move has stunned America’s national security community. Ian explains that members of the military-industrial complex are “horrified that the Chinese now no longer have a constraint on being able to compete with and potentially dominate the Americans in this most important space.”
“This is giving away the store,” Ian adds, emphasizing that the decision ultimately hands China a significant strategic advantage.
Shipping containers from China are seen at the Port of Los Angeles, in San Pedro, California, U.S., May 1, 2025.
Trump says he might back off on China tariffs – but Beijing holds firm
With US-China trade grinding to a halt, President Donald Trump told ABC News on Sunday that he would lower the 145% tariff imposed on China “at some point,” explaining that “otherwise you could never do business with them.” Beijing has expressed willingness to start talks if Washington is “prepared to … cancel its unilateral tariffs.” So China is playing a game of chicken, and Trump hasn’t quite swerved out of the way.
“There’s no clarity around what Trump wants from China,” says Eurasia Group’s Lauren Gloudeman. “It’s been a huge source of frustration for the Chinese side because since November they have been seeking to get that question answered.”
Beijing isn’t playing ball like Canada or Mexico, which made superficial concessions to Trump to postpone tariffs. China retaliated with 125% tariffs of its own and then moved to protect vulnerable parts of its economy by quietly issuing a series of exemptions on important US imports like aircraft engines, semiconductors, and pharmaceuticals.
“China’s leadership cannot be seen as being coerced into giving in to Trump’s tactics,” says Gloudeman, explaining that Beijing is already facing the worst-case scenario for bilateral trade. “It’s quite insulting and humiliating, and the broader strategy for China is counting on Trump to back down first.”
An aerial photo shows the Kumamoto factory of Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), the largest semiconductor contract manufacturer, in Kikuyo Town, Kumamoto Prefecture, Japan, on March 14, 2025.
Trump prepares to slap tariffs on semiconductors and pharma
The topsy-turvy-tariff tale continued to swing this week, as the Trump administration advanced a plan on Monday that could result in new levies on semiconductors and pharmaceuticals. The news came days after US President Donald Trump announced that smartphones would be exempt from the 145% duty that he had slapped on China.
Officially, the plan involves a first step of investigating the national security implications of importing pharma and semiconductors. The next step would be to invoke Section 232 of the 1962 Trade Expansion Act, which allows a president to impose tariffs in the interests of protecting national security. As such, the means for this latest slate of levies would be different from the widescale duties announced on “liberation day.”
Countries affected. The United States relies heavily on Taiwan in particular for semiconductors — one plant there crafts 92% of the world’s advanced chips. As for pharmaceuticals, the US imports many from China, Ireland, and India.
All that and a bag of CHIPS. Former President Joe Biden tried to spark the US’s own semiconductor industry with the 2022 CHIPS and Science Act, which allocated $53 billion for domestic semiconductor manufacturing. Trump said last month he wanted to “get rid of” the CHIPS Act, yet his more recent actions suggest he’s interested in leveraging the law to further his plan to reduce US reliance on foreign chips.The flag of China is displayed on a smartphone with a NVIDIA chip in the background in this photo illustration.
Nvidia delays could slow down China at a crucial time
Chinese tech giants like Tencent, Alibaba, and ByteDance are buying chips as they race to build AI systems that can compete with American companies like OpenAI and Google. The shortage means these companies might face serious delays in launching their own AI projects, some of which are based on the promising Chinese AI startup DeepSeek’s open-source models.
It also comes at a critical time when China is pouring resources into developing its own AI industry despite having limited access to the most advanced computing technology due to US trade restrictions. New shipments are expected by mid-April, though it could mean months of waiting for Chinese firms to go through the proper channels.