The free trade agreement between the European Union and Mercosur countries should be implemented without delay, Paraguay’s President Santiago Peña told Euronews. He warned that stalling the agreement would be a “mistake” amid rising geopolitical tensions.
The free trade pact was signed last month by the EU and Mercosur members Brazil, Argentina, Paraguay and Uruguay. However, its full ratification by the EU has been frozen after MEPs referred the agreement to the Court of Justice in Luxembourg.
“We already presented the agreement to the Congress of the Paraguayan Nation last week, and we understand that the European Union has the legal tools to implement it temporarily,” Peña said on Euronews’s flagship interview programme The Europe Conversation.
“We are working to make this happen, and we want Paraguay to be the first country to implement it.” The country currently holds the rotating pro tempore presidency of Mercosur.
Despite the judicial review, the European Commission has the prerogative to provisionally apply the deal once one or more Mercosur countries complete national ratification. While Germany, Spain, Portugal and the Nordics are pushing for the next phase, the Commission currently says no decision has yet been made.
‘Opposition rooted in ignorance’
The agreement would create a vast EU–Latin America free-trade zone, slashing tariffs on goods and services. But resistance in Europe remains fierce, with farmers and several capitals, led by Paris, warning of unfair competition from Mercosur imports.
Peña said that European opposition to the deal was rooted in “ignorance” and an outdated and stereotypical view of Latin America.
“Our countries have changed tremendously. They have developed. Human capital has grown,” Peña said. “Europe has to rediscover Latin America.”
In the interview, Peña warned that rejecting the deal would amount to a strategic blunder, as Europe can no longer rely on the United States as its default trade partner due to President Donald Trump’s unpredictable policies.
“If (MEPs) ultimately prefer not to integrate themselves into (new) markets and instead choose to retain their old alliances that today no longer work, it would certainly be a mistake,” he said.
Still, Peña credited Trump with giving the deal “the final push” after 25 years of talks.
“The world was in a state of drowsiness,” he said. “We weren’t moving, and he came along to move us all. He came to challenge what we thought was stable, and that pushed us to leave our comfort zone.”
According to Peña, one of the EU-Mercosur deal’s key advantages is its potential to counter China’s growing presence in the region and dominance of rare earth supplies.
“Europe is losing an enormous opportunity there, because if there is a region that can compete globally, it is Latin America. We have young talent, a predominantly young population, a population (of people who are) already digital natives,” he said.
“We have that tremendous abundance of natural resources, not only food that grows above the ground, but also minerals that are below the earth, which are so critical to this new technological wave. Our region has absolutely everything that Europe and the world need.”
Stephanie Larivière, managing director and global head of Fixed Income, Currencies, and Commodities (FICC) Sales at Scotiabank—which was named the Global winner of Best FX Derivatives Provider—explains how a client-first philosophy and advanced structured solutions enable businesses to proactively manage uncertainty, effectively diversify risk, and maintain agility in fast-moving currency markets.
Global Finance: Last year began with elevated G7 foreign exchange volatility driven by US election results, followed by a spike in volatility tied to the Trump administration’s tariff announcements. Implied volatility eventually subsided. Against this backdrop, how has client demand evolved for structured FX solutions and derivatives that combine FX with interest rate and other exposures?
Stephanie Larivière: Tariffs and the resulting uncertainty around international trade were top of mind for clients throughout 2025. In the first half of the year, the US Dollar Index vaulted back toward the highs we saw during the pandemic, and there were fears that it would be driven even higher as we grappled with the prospect of a global recession, given the US administration’s push for increased global tariffs. We saw increased interest in hedging and the need for structured solutions from clients in these early months as US dollar buyers worried about a sustained surge in the index and the impact on their cash flows.
The outlook for exports to the US remains no less murky moving forward. As a result, client demand for structured FX solutions has only increased. Clients have focused on cost management and have incorporated flexibility into hedging programs via options-based solutions. By protecting existing profit margins while retaining the ability to participate in favorable moves in FX markets, these strategies have allowed clients to remain agile and adapt quickly to changing market conditions.
GF: Have you observed currency diversification strategies or increased activity in non-dollar crosses from your customer base?
Larivière: The uncertain outlook for international trade and dissenting views on the Federal Reserve Open Market Committee have led to increased demand from clients to protect against further potential dollar weakness. As we settle into a lower-volatility regime, we have seen interest in expressing views in non-dollar crosses and some rotation into international and emerging-market equity exposure.
One example was a strengthening Mexican peso as clients returned to expressing views via carry trades. We have also seen a weak Canadian dollar against other majors, driven by uncertainty over Canada’s budget, the size of the Carney government’s deficit, and questions about how the new US and Canadian administrations will work together. That said, the US dollar remains the dominant base currency in most commodities and currency trading.
GF: OTC interest rate derivative volumes have surged, nearly doubling for euro-denominated contracts and rising significantly for yen- and sterling-denominated contracts. How are clients adapting their strategies in response to this increased activity?
Larivière: There are a couple of factors at play here. Greater volatility in rates has caused volumes to surge. Central banks were also more in play over the second half of last year, which further contributed to this phenomenon. Both factors are responses to overexposure to the dollar and a shift to hedge against some of that exposure. We could see this continue to increase as larger institutional names right-size their exposure to the US.
GF: Are clients’ expectations changing around reporting transparency, multi-currency liquidity, and access to customized derivatives products?
Larivière: Clients are seeking bespoke hedging solutions built on a full suite of derivatives products across asset classes. These customized solutions are tailored to their unique company requirements, allowing clients to express market views while hedging underlying exposures. In addition to the increased flexibility these products provide, clients expect proactive advice that leverages expertise from sales, trading, strategy, and structuring teams.
At Scotiabank, we strive to provide thoughtful, well-coordinated ideas that help clients navigate the uncertainty of operating global businesses across borders in an uncertain international trade environment.
GF: What trends do you expect will shape FX and derivatives markets this year, particularly regarding volatility, market structure, and regulation?
Larivière: The Fed has embarked on a cutting cycle, though it remains unclear how deep the cuts will be. If yields continue to decline, we expect increased pressure on the dollar, leading to higher volatility. The FX market typically grows during periods of volatility; the shift away from yield-enhancement strategies toward a pickup in volatility should drive an increase in FX in 2026.
Another theme we are watching is the shifting regulatory landscape for digital assets. Regulatory changes that favor these assets will facilitate more interest and investment in the products.
The world braced for a Washington-made rupture last year. Trade held up, while China flooded many regions with its exports.
The world entered 2025 expecting a trade shock stamped “Made in Washington.” US President Donald Trump vowed to shrink chronic deficits and pledged a tariff-driven reset that would force companies—and trading partners—into new lanes. The shock never fully arrived.
Global commerce kept moving, prices for traded goods didn’t spiral, and exemptions and carve-outs softened the blow. The year still produced a real shift in the trade landscape—just not the one most people were watching for. China’s export engine accelerated, widening its surplus and pushing its cheaper goods deeper into markets in Southeast Asia and Europe, to the concern of those regions.
Meanwhile, the fastest-growing slice of trade wasn’t steel, cars, or containers; it was services. “Trade in services is growing at least twice as fast as trade in goods, and the US is a very important player there,” says Marc Gilbert, who leads the Center for Geopolitics at the Boston Consulting Group (BCG).
The Shock That Wasn’t — And The Shifts Nobody Saw Coming
As the dust begins to settle on a tumultuous 2025, the trade outlook for this year appears calmer. Trump is looking toward the midterm congressional elections, with an electorate fixated on rising prices that his tariffs can only aggravate. Old-fashioned political upheaval could accelerate, though, as the US leader threatens military action in half a dozen countries. “This year should see more economic stability but more geopolitical volatility,” says Cedric Chehab, Singapore-based chief economist at BMI, a subsidiary of Fitch Solutions.
Marc Gilbert, who leads the Center for Geopolitics, Boston Consulting Group
Trump’s 2016 election, followed by the supply chain disruptions of the Covid-19 pandemic, set in motion new megatrends in world trade and international relations: diversification of supply chains to avoid bottlenecks, “China+1” investment—in which companies keep operations in China while expanding production elsewhere—to reduce dependence on Beijing, a US leaning more toward its American neighbors, and South-South trade growing faster than commerce with either of the two superpowers.
All should continue into 2026 unless they don’t: for instance, if Trump decides to tear up the US-Mexico-Canada Agreement (USMCA), which is up for review this year; if China decides the time is ripe to force “reunification” with Taiwan; if Trump reinstates the 10% tariff on Europe that he recently shelved amid European opposition to his Greenland acquisition demands; or if the US Supreme Court, in a case now before it, strikes down the legal strategy underpinning his tariff regime, triggering a torrent of lawsuits by companies seeking refunds of tariffs already paid.
“Every executive in the world is thinking about the balance between efficiency and resilience,” says Drew DeLong, global lead of Geopolitical Dynamics at consulting firm Kearney. “The age of corporate statecraft is beginning.”
Trump turned the world on its head with his April 2 announcement of the eye-popping “Liberation Day” tariffs. By year’s end, the globe was back on its feet, largely because Trump lowered many of his announced duties. The US goods trade deficit fell to multiyear lows in the last few months of the year. But that may have reflected importers drawing down inventories that had swelled ahead of expected tariffs.
For the rest of the world, commerce had a bumper year. According to UN Trade and Development, combined goods and services trade surged by 7% to more than $35 trillion. The price of traded goods rose at a tolerable pace despite rising US levies and actually fell in the fourth quarter. “The rhetoric on trade contraction is way ahead of the data,” says Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics (PIIE).
The US is less important in this picture than it might appear from Washington, accounting for just 16% of global imports, BCG’s Gilbert estimates, although as much as 40% might be “affected” by the No. 1 economy. That includes, for example, components shipped from one Asian country to another for a product ultimately sold in the US.
After US stocks crashed 12% over the week following the April 2 announcement, Trump quickly backpedaled from his Liberation Day targets. Baseline tariffs on major trading partners outside North America—the EU, Japan, and South Korea—settled at 15%-20%. With US manufacturers paying similar rates on imported raw materials or components, the result was something like an even playing field. The Trump administration steadily issued tariff exemptions for irreplaceable imports, including semiconductors and pharmaceuticals as well as coffee and bananas.
China’s Trade Boom
Trump has also made concessions to archrival China, as President Xi Jinping pushed back by threatening to disrupt the flow of essential rare-earth metals. While the US baseline tariff on China remains at 45%, exemptions and carve-outs reduced the effective rate to half that level. “The established trajectory is for the US to end up tariffing other countries as much as China,” says Brad Setser, a senior fellow at the Council on Foreign Relations (CFR) in Washington.
While US policy gyrated, China’s trade trajectory was consistently upward last year. Beijing’s global trade surplus surged by 20% to nearly $1.2 trillion. It offset falling US sales with a more than 10% increase in sales to nations in Southeast Asia, collectively China’s biggest market, and a greater than 8% rise in exports to the EU.
This breakout year capped a decade-long shift in global trade from the US to China. That shift has made export-led growth much more difficult for emerging economies, BMI’s Chehab says. “Ten or 20 years ago, most countries’ largest trading partner was the US, which ran trade deficits,” he says. “Now it is China, which runs surpluses.”
Customers everywhere are seeking instruments to stem the Chinese export tsunami. EU President Ursula von der Leyen has announced a policy of “derisking” from China. Japan is offering “China-exit subsidies” to suppliers who relocate elsewhere. Developing Asian markets are considering sectoral tariffs on steel and strategic products.
Success is unclear. A generation of policy and hard work has made China’s comparative advantage in manufacturing all but unassailable. “Energy prices are quite low, and they can produce on a scale that is incredible,” Chehab says.
China is expanding its dominance into key technologies of the future, particularly those essential for the green-energy transition. Shenzhen-based electric-vehicle champion BYD surpassed US-based Tesla as the global sales leader last year. Total clean-energy exports set new records for the first eight months of 2025, driven by a 75% increase in sales to ASEAN customers, according to industry monitor Ember Energy Research.
The world’s No. 2 economy maintains a lock on other, less flashy but no less essential technologies, from copper alloys to legacy microchips that have become too low-margin to interest Silicon Valley. “Synthetic fibers for apparel, lagging-edge chips: these are the kinds of areas where China says, ‘We are going to win,’” Kearney’s DeLong says.
And then there is the chokehold on rare earths that Xi has already effectively wielded against Trump. “China has got the West over a barrel, as things stand right now,” concludes James Kynge, senior research fellow for China and the World with the Asia-Pacific Programme at the UK think tank Chatham House. “It will take a decade or more to recreate viable parts of the Chinese supply chain in different geographies.”
China could rebalance its trade more effectively through internal policy changes that shift wealth to consumers. Increased purchasing power would boost imports and absorb some excess domestic manufacturing capacity. “The puzzle with China is the absence of imports, whether aircraft or European handbags,” CFR’s Setser says.
The most dramatic effect could come from Beijing instituting pensions and other social-welfare transfers on the model of fully developed economies, PIIE’s Hufbauer says. That does not seem to be on Xi’s agenda. “They do not want to build out a social safety net,” Hufbauer says. “They want to direct resources into frontier technology.”
What Will Happen To The USMCA?
In the US sphere, the main event of 2026 is a review of the USMCA, built into the agreement when Trump signed it during his first term in 2018. The president, true to form, has hinted at annulling the pact, which regulates about 30% of US trade. “We don’t need cars made in Canada. We don’t need cars made in Mexico,” he remarked while touring a Ford Motor factory in Dearborn, Michigan, in January.
Brad Setser, Senior Fellow at the Council on Foreign Relations
But Trump left most USMCA provisions untouched through 2025, and trade watchers are betting the accord will survive with relatively minor changes. US Trade Representative Jamieson Greer struck a more measured tone in congressional testimony in December. “The USMCA has been successful to a certain degree,” he testified. “From the information we have received from interested stakeholders, there is broad support for the agreement.”
“There’s a growing recognition of how important USMCA is,” DeLong says. “The US trade representative received over 1,500 comments from companies. I think it survives with stronger rules of origin and some incentives for specifically US content.”
If so, Mexico could emerge from the current trade upheaval as a big winner, with the North American nearshoring trend accelerating and Mexican President Claudia Sheinbaum toning down her predecessor, Andrés Manuel López Obrador’s, hostility toward business. “This whole story has been great for Mexico,” Hufbauer says. “They’ve improved their position in the US market.”
Over time, the dominance of China and the US in world trade will decline, BCG’s Gilbert predicts. The firm’s 10-year projections show US trade, including services, increasing by 1.5% annually; China’s by 2%; and the rest of the world’s by 2.5%.
One reason is simple arithmetic: India and parts of East Asia are growing faster than China, with explosive potential for both imports and exports. Vietnam’s position as a rising export power seems cemented; its trade volume shrugged off global turmoil, rising nearly 18% last year.
India, so far a domestically focused economy, is the global trade wild card as its economy continues to boom by more than 6% annually and multinational champions like Apple build advanced manufacturing there. “India has improved a lot on infrastructure and the availability of skilled labor,” Gilbert says. “It’s one to watch.”
The EU And Beyond
The world beyond the US and China is also striking back with a wave of diplomacy leaning toward free trade. The EU, sandwiched between Chinese competition and US protectionism, is taking the lead. The EU and India signed a two-way trade agreement on January 27 that slashes tariffs.
Brussels also inked a trade deal with South America’s Mercosur bloc, dominated by Brazil, early this year after a quarter-century of negotiations, although the EU Parliament voted to delay enacting it until it passes a legal review. New Delhi, stung by a 50% tariff Trump imposed as punishment for buying Russian oil, finalized a trade agreement with the UK last year.
London joined the other 11 members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in late 2024, after Trump’s reelection. The United Arab Emirates, a rising power in the Middle East, is pushing for free trade with almost everyplace except Washington and Beijing. “Trade deals are happening in months that would have taken decades,” DeLong summarizes.
None of that means the world can easily return to the free-trading consensus that reigned in the decades following the Cold War. The supply chain shocks of the pandemic, China’s political assertiveness, and the working-class resentment across the developed world that Trump channels are pushing toward a new paradigm, though its details remain fuzzy at best. “There’s a positioning of economic security as national security,” DeLong says.
On the other hand, no one can repeal the law of comparative advantage in an ever more complex global economy. Experts’ discussions focus on how trade between nations might shift or slow, not reverse. “When you look at the data, you don’t see too much evidence of a global trade shock,” CFR’s Setser notes.
Within the US, Trump did not visibly turn any clocks back during the first year of his second term. Ed Gresser, director for trade and global markets at the Progressive Policy Institute in Washington, points out that both manufacturing employment and manufacturing’s share of GDP dipped in 2025.
Discontent with China’s export juggernaut might take a back seat in the coming years to fears that US-based internet and AI providers will control the global digital high ground, particularly if Washington continues to use it for geopolitical leverage. “The real growth areas in international trade are data and digitization, and it’s not lost on any nation that the US is a leading provider,” BCG’s Gilbert says.
All of the above leaves decision-makers at multinational corporations in an unenviable position: knowing the deck of world politics and trade is being reshuffled yet not knowing what hand they will ultimately be dealt. “C-suites are embedding geopolitics into strategic and capital allocation decisions in a much more formalized way,” Gilbert says. “But large capital outlays are still in the domain of planning and preparation.”
Notable exceptions were the so-called hyperscalers in AI and their suppliers, who are shelling out capital everywhere at once.
Gold and silver prices extended last week’s dramatic sell-off on Monday, as investors continued to digest the implications of President Donald Trump’s announcement of Kevin Warsh as the next chair of the US Federal Reserve.
The move has fuelled expectations of a more government pressure on the Fed and prompted a sharp reassessment of positions across precious metals.
Spot gold fell as much as 10% in early trading, while silver plunged up to 16%, following Friday’s rout that marked the largest intraday decline on record for the white metal.
The scale and speed of the move underscored how vulnerable the market had become after months of aggressive buying driven by geopolitical tension and bets on looser US monetary policy.
“The sharp selloff on Friday followed news that US President Donald Trump intends to nominate Kevin Warsh as the next Federal Reserve chair – a development that boosted the US dollar and reinforced expectations of a more hawkish policy stance,” said Ewa Manthey, commodities strategist at ING, and Warren Patterson, head of commodities strategy.
“While a correction was overdue after the intense rally, the scale of Friday’s decline far exceeded most expectations.”
Why the Fed matters for gold
Gold and silver are particularly sensitive to US interest-rate expectations.
Higher rates increase the opportunity cost of holding non-yielding assets such as precious metals, while a stronger dollar makes them more expensive for overseas buyers.
Warsh, a former Fed governor, has voice sentiments supportive of Trump’s vision for the Fed, including regular rate cuts.
That reassessment has been swift. Investor caution has been evident in exchange-traded funds, with silver holdings falling for a seventh consecutive session to their lowest level since November 2025.
Futures data also show speculators cutting back sharply on bullish bets, signalling a broader retreat from the sector.
“CFTC positioning shows a cooling in speculative interest across precious metals,” the ING report continued.
“Managed money net longs in COMEX gold fell by 17,741 lots last week… Speculators also cut net longs in silver… taking positioning to its lowest since February 2024.”
Margins rise, volatility bites
Market stress has been amplified by mechanical factors.
CME Group is set to raise margin requirements on COMEX gold and silver futures after last week’s historic swings, forcing traders to post more collateral or reduce exposure.
Such moves tend to accelerate sell-offs, particularly in heavily leveraged markets.
Attention is now turning to Asia, where Chinese investors have historically provided support during price dips. However, with volatility elevated and the Lunar New Year approaching, participation may be more cautious than usual.
“With volatility spiking and the Lunar New Year approaching, traders are likely to pare back positions and reduce risk,” the ING analysts said.
“Price direction in the near term will hinge on the extent of dip-buying from Chinese investors following Friday’s retreat.”
Outlook remains fragile
For now, the precious metals market remains at the mercy of macro forces, with little clarity on how quickly sentiment will stabilise.
Investors are watching US data closely for clues on real interest rates and the dollar’s next move, both of which will be shaped by expectations around the Fed’s future direction.
“Overall, volatility across precious metals is likely to remain elevated in the near term,” Manthey and Patterson said.
“For gold and silver, macro uncertainty, real rate expectations, and USD direction will continue to dominate sentiment,” the report concluded.
As the Trump administration ploughs forward with its incendiary policies, European trust in the US government is fading.
Amid tariff threats and pledges to conquer Greenland, citizens and politicians in Europe are unsettled — questioning a long-standing alliance.
Marie-Agnes Strack-Zimmermann (FDP), chair of the Defence Committee in the EU Parliament, claims to have an answer that is “worth its weight in gold”. In this case, the expression is more literal than figurative.
Around 1,236 tonnes of German gold, worth more than €100bn, are sitting in vaults in the US. Strack-Zimmermann has now announced that, in view of Trump’s recent political manoeuvres, it’s no longer justifiable to leave them be. This has reignited a fierce debate: to retrieve or not to retrieve?
The demand to bring gold back to Germany has been around for a long time, with some surveys suggesting that many citizens are in favour of the move. Similar debates are happening in Italy, which has the third-largest gold reserves in the world after the US and Germany.
Why does Germany hold gold in the US?
Germany’s gold reserves amount to around 3,350 tonnes. About 36.6% of this is in the US, a legacy of the Bretton Woods system of fixed exchange rates after World War II.
“At the time, all exchange rates were tied to the dollar, and the dollar was tied to gold,” Dr. Demary, senior economist for Monetary Policy and Financial Markets at the German Economic Institute (IW), told Euronews.
“Germany had large export surpluses with the US, so we accumulated a lot of dollars. To keep exchange rates stable, we exchanged those dollars for gold. That’s how these reserves were built up.”
During the Cold War, it was also practical to store gold abroad, as the US was considered a safe place in case of conflict with the Soviet Union. Over the years, some gold has been repatriated. By 2017, 300 tonnes were brought back from New York, 380 tonnes from Paris, and 900 tonnes from London.
This was part of a Bundesbank plan, unveiled in 2013, to store half of Germany’s gold reserves in Germany from 2020 onwards.
Bringing in the gold treasure: What are the risks?
Strack-Zimmermann and other politicians and economists cite Trump’s unpredictable trade and foreign policy as the reason for moving the gold out of the US.
“Of course, there is always some risk when you keep assets abroad,” said Demary. For example, there is a storage risk if a break-in occurs. But this risk exists whether the gold is stored abroad or in Germany.
“Another possible scenario is that the US government, due to tight currency reserves, could prevent the gold from being transferred,” he explained.
To ensure the safety of gold holdings, the Bundesbank has had to make frequent trips to New York in the past to take an inventory.
“It makes sense to leave this gold in the US in case we have a banking crisis here and need to obtain dollars,” said Demary.
Retrieving the gold could not only be logistically complex, but also risky.
“The gold would have to be transported in armoured vehicles onto a ship, which would also need to be guarded, and then brought back to Frankfurt under security,” added Demary. “There could be robberies, the ship could sink, or the cargo could be seized.”
Is Strack-Zimmermann’s demand pure populism?
Is Strack-Zimmermann’s demand pure symbolic politics? “I think so,” said the economist. “Perhaps it was a political move in response to the tariff threats, saying, ‘We’re bringing our gold back now.’”
According to the economist, it is also possible that Strack-Zimmermann estimated the magnitude of this gold value to be somewhat greater than it really is. In any case, the gold is currently safe in New York, even if Trump wanted to use it to exert pressure on Germany.
“The Federal Reserve is actually independent in its monetary policy. The US government cannot simply intervene. They would have to change laws first,” explained Dr Demary.
Even in the absolute worst case, if the US refused to release the gold, there would still be the option to go to court and enforce its return or receive compensation in dollars, said Demary.
“You have to weigh up the pros and cons and I would say the advantages of leaving the gold in the US outweigh the disadvantages,” he told Euronews.
The Trump administration has provided around $300 million to the Rodriguez government after seizing tankers and selling oil stockpiled in the country. The funds are being managed through accounts in Qatar and will be subject to audits by US agencies, Rubio told the Senate on Wednesday.
The idea that the US can somehow remote-control its way into a coherent audit of Venezuelan public spending defies imagination. Venezuela has never been an easy place to follow money. Road construction in Venezuela was for much of the 20th century a famous form of campaign finance that bankrolled politicians through well-greased kickback systems. Even in the country’s more prosperous days, public hospitals were notorious rat’s nests of corruption that allowed suppliers of everything from aspirin to X-ray machines to mark up prices for illicit gain and political financing.
Chavismo put this on steroids. Because there has been no alternation of power since Chávez’s 1998 election, no one in a position to audit government books has ever had an incentive to. The government comptroller’s office, once an institutional check on the ruling party, has for decades been used primarily to disqualify opposition politicians from holding office on the basis of fabricated accounting discrepancies.
The Chávez era saw the wholesale unraveling of basic parliamentary oversight of spending. State oil company PDVSA went from being an internationally respected company to a piggy bank used for everything from food imports to housing development. Multibillion-dollar slush funds with no rules about spending and no reporting requirements to the general public came to manage more than parliament. Bilateral financing agreements with China, Russia, and Iran led to secretive and inscrutable financing arrangements that made the country’s borrowing a black box.
Rampant corruption and damaged financial accountability do not mean that outsiders cannot be involved there. When the war in Ukraine broke out, international agencies famously relaxed what had been stringent standards around Ukrainian corruption. Aid agencies and nonprofits working in Haiti have had to quietly make concessions to the realities of operating there. As did the organizations that worked to reduce hunger in Venezuela during the crisis years. Expecting to maintain Swiss-level accounting standards in these types of environments is a recipe for making sure nothing gets done.
Which is a bit of what Rubio is promising by putting the US Export-Import Bank in charge of following every last dollar that Venezuela receives from US-brokered oil sales. Nobody was able to fully follow the money in Venezuela even when they were trying. After almost 30 years of systematically undermining public transparency, a remote-controlled, third-party audit conducted by foreigners from thousands of miles away doesn’t stand a ghost of a chance.
The inevitable conclusion is that the United States will simply have to start turning a blind eye to what actually happens with the money. With clear marching orders to get the economy up and running and oil production moving as fast as possible, there simply won’t be time to stand on accounting formalities. Ask too many questions and the progress will start to slow down. It seems like an unexpected consequence of a transition under tutelage: the Trump administration will quietly become part of the chavista machine.
José Antonio Kast of the far-right Republican Party was elected president of Chile last month in a 58%-to-42% rout of rival Jeannette Jara, the Communist Party standard-bearer.
Campaigning on a promise to expel undocumented migrants and crack down on crime, Kast finished second to Jara in the first round of elections but dominated the runoff.
“Here, a person didn’t win, a political party didn’t win,” Kast said in his victory speech. “Chile won. The hope of living without fear won. We are going to face very difficult times, where we will have to make important decisions, and that requires a cohesive team.”
Kast, 59, promised to bring order back to the streets.
A member of the Chamber of Deputies for 16 years, he founded the Republican Party in 2019. He ran for president two years prior, receiving 8% of the vote, and collected 44% in 2021, when he ran against Gabriel Boric.
With his election, Chile joins Ecuador and Bolivia in what appears to be a right-wing shift in Latin American politics. Honduras could add a fourth domino to the pile should Honduras’s Nasry Asfura be confirmed as winner of last month’s disputed election.
Along with expelling undocumented immigrants, Kast has promised to increase police resources and deploy the military to violent areas. Public debt was expected to reach 42.2% of GDP by the end of 2025. To bring down that figure, Kast says he will implement austerity measures that include cutting $6 billion in public spending over 18 months.
Kast has also promised to live in the Palacio de La Moneda, the traditional seat of the president—the first time a president will live there since 1958.
Plans to boost investment with lower taxes and fewer regulations aim to improve Chile’s GDP growth to 4% annually, up from 2.6% in 2024. This will require negotiation with Congress, where the right wing holds a majority, but will still require center-left votes, especially in the Senate. “Chile is going to have real change, which you will begin to perceive soon,” Kast predicted. “There are no magic solutions here. Things don’t change overnight. This requires a lot of unity, dedication, and many sacrifices from everyone.”
Gold has risen more than 20% since the start of the year, surpassing the significant $5,500 milestone this week.
The precious metal’s rally, seen alongside a lift in commodities such as silver and platinum, is driven by a number of interlinking factors — including geopolitical tensions, rising government debt, and an uncertain outlook for interest rates and inflation.
Gold’s appeal is linked to the narrative that it is a safe haven asset, acting as a “hedge against inflation”. It typically increases in value when the dollar declines, it’s easily sold, and it’s also a tangible, finite commodity.
These factors are significant at a time when questions are being raised about the dollar, as well as fiat currencies like the Japanese yen. As government debt rises, so do fears around inflation and fiscal stability.
In the US, incendiary policies from the Trump administration are increasing market jitters around the health of the economy, prompting what some analysts view as a “sell America” trade. In recent weeks, the president has threatened to conquer Greenland, hinted at US intervention in Iran, sought to influence policy at the Federal Reserve, and launched an attack on Venezuela. To top that off, he’s also threatened more tariffs on trading partners, bringing back a well-worn tactic from 2025.
Although analysts argue that the dollar will not be unseated as the world’s reserve currency anytime soon, it seems investors are diversifying away from the greenback. The US’ next moves remain uncertain, and no one wants to be caught in the crosshairs. As an alternative to fiat currencies, gold may seem like a strong portfolio option.
“Investors previously bought US Treasuries as they were viewed as being quite risk-free. But especially because of the way that some wealth has been weaponised, certain countries are becoming more careful about how they allocate their capital,” said Simon Popple, managing director at Brookville Capital. “The dollar debasement helps the gold price,” he told Euronews.
Even so, Popple and other analysts stress that a major factor lifting the bullion price is far less complicated. As gold continues to make headlines, investors are caught up in the momentum, sparking a buying frenzy.
“People are naturally drawn to things they see moving and they’ve seen gold have an astonishing rally,” said Chris Beauchamp, chief market analyst at IG. “It’s bound to lead to an ignition of interest.”
He added that while gold has beneficial investment properties, the metal’s ability to hold its value is overstated, particularly in the short term. Gold’s position in the market notably shifted after former US president Richard Nixon decided to end direct dollar convertibility to gold in 1971. Put simply, countries no longer fixed their currencies to a specified amount of the precious metal.
“The gold standard is still invoked to suggest the metal is some kind of totemic asset we should have because it’s a fixed store of value. It’s not,” concluded Beauchamp.
Kenneth Lamont, a principal in Morningstar’s Manager Research Department, reiterated this message, also drawing comparisons between gold and crypto. While both are limited in supply, they are both “incredibly volatile”, he stressed.
“If you’re using either crypto or gold to buy something, it might be 30% less from one day to the next. It’s not actually a good store of value in the short term.”
While gold is much more established than bitcoin, and it has historically performed well over the long term, analysts stress that the unpredictability of both assets means the death knell is not yet ringing for fiat currencies.
Whether bullion’s price will continue to climb in the immediate future is a guessing game. Even so, given the precarious nature of global politics, it seems the metal may still have further to run.
The national debt passed the $36 trillion threshold in November for the first time ever, as the combined debt held by the U.S. public and the federal government grows.
National debt is the total amount of money the U.S. federal government owes its creditors. The American public primarily holds the largest share of federal debt, followed by foreign governments and U.S. banks and investors. The government gathers funds by collecting taxes on personal and corporate income, payroll earnings, and borrowing. The government then spends the money on programs such as Social Security, education, health care, national defense, and more, and takes on debt by borrowing to cover the expenses that accumulate over time.
But which political party has historically added more to the national debt—Democrats or Republicans? The answer depends on how you slice the data.
Key Takeaways
The national debt passed the $36 trillion threshold in November 2024 for the first time ever, as the combined debt held by the U.S. public and the federal government grows.
Republican presidents have added slightly more to the national debt per term than Democratic presidents, according to inflation-adjusted data from the U.S. Treasury Department and the Bureau of Labor Statistics dating back to 1913.
Looking at U.S. presidents since 1913, Republican presidents added about $1.4 trillion per four-year term, compared to $1.2 trillion added by Democrats.
Republican Presidents Have Added More to the National Debt Per Term—But Democratic Presidents Added More Debt Overall
Inflation-adjusted data from the U.S. Treasury Department and the Bureau of Labor Statistics would suggest that per term, Republican presidents have added slightly more debt to the U.S. national debt than Democratic presidents. Looking at U.S. presidents from 1913 through the end of the federal fiscal year 2024, Republican presidents added about $1.4 trillion per four-year term, compared to $1.2 trillion added by Democrats.
However, Democratic presidents added more inflation-adjusted debt overall. That could be because Democratic presidents were in power for nine more years than Republican presidents in the period since 1913. Overall, Democratic presidents have added a total of $18 trillion to the national debt since 1913 (adjusted for inflation), while Republicans have added $17.3 trillion.
How Does a President and Their Administration Affect Debt?
Historically, the way a president has responded to major events has added significantly to the national debt. For example, funding wars and spending on government relief during recessions are some reasons presidents have added to the national debt.
While national debt isn’t entirely in a president’s control, a president and their administration’s fiscal policies do affect it. Federal spending can be out of a president’s control in times of war, natural disasters, or a public health crisis.
During the COVID-19 pandemic in 2020, then-President Trump signed the $2.2 trillion CARES Act stimulus bill into law in response to the sharp rise in unemployment during the pandemic. Later, President Biden signed the $1.9 trillion American Rescue Plan Act to provide more relief to Americans and businesses as they continued to recover from the pandemic.
President Obama signed the American Recovery and Reinvestment Act (ARRA) in 2009 when the economy was experiencing the worst recession since the Great Depression. Former President George W. Bush added significantly to the national debt during his term after launching the invasion of Afghanistan and the War on Terror following the Sept. 11 terror attacks. The Iraq and Afghanistan wars cost an estimated $8 trillion over 20 years, ending in 2021.
How Would the 2024 Election Candidates’ Economic Plans Affect U.S. National Debt?
The national debt was also a leading issue for 2024 presidential election voters. October data from a poll by the Peterson Foundation found that more than nine in 10 voters across seven key swing states said it was important for candidates to have a plan for national debt.
However, a report by the nonpartisan Committee for a Responsible Federal Budget (CRFB) found that both candidates were likely to significantly increase the national debt under their current spending plans. High levels of national debt can slow down the economy, increase interest rates, and generally increase the risk of a fiscal crisis.
Tallying what economic proposals the candidates had made, Harris’ spending plan would increase the national debt by about $3.95 trillion through 2035, while President-elect Trump’s plan would increase the debt by $7.75 trillion, according to an estimate by the CRFB.
Which President Added the Most National Debt Per Term?
Former President Trump added the most national debt per term, adding an estimated $7.1 trillion to the national debt during his term from 2016 to 2020.
The Bottom Line
Looking at U.S. presidential terms since 1913, Republican presidents have added slightly more debt to the U.S. national debt than Democratic presidents per four-year term. However, Democratic presidents added more inflation-adjusted debt overall, though there have also been nine more years of Democratic presidents since 1913 compared to Republican presidents.
Federal Reserve Chair Jerome Powell pushed back against political pressure on the US central bank on Wednesday and defended its independence, urging the next chair to “stay out of elected politics”. Markets, however, appeared unconvinced, accelerating a sell-off in the dollar as gold and silver hit fresh record highs.
“Don’t get pulled into elected politics. Don’t do it,” Powell told reporters.
The reaction followed the Federal Reserve’s latest decision to leave interest rates unchanged in a range between 3.5% and 3.75%.
Asked whether the Fed was drawing any macroeconomic signal from the explosive rally in precious metals, Powell played down its significance.
“We don’t take much message macroeconomically,” Powell said. “The argument that we are losing credibility is simply not the case. If you look at where inflation expectations are, our credibility is right where it needs to be.”
He highlighted that the Fed does not “get spun up over particular asset price changes”, although it continues to monitor markets closely.
Markets react
The market reaction sharply contradicted Powell’s message.
Gold jumped to $5,500 per ounce, setting a new all-time high, while silver climbed above $117 per ounce.
Gold is now up over 20% this month, on track for its strongest monthly performance since January 1980.
Silver’s gains have been even more dramatic, with prices already up around 55% this month — the strongest monthly rise on record.
Meanwhile, the US dollar index, which tracks the greenback against a basket of major currencies, fell to levels last seen four years ago.
“The next couple of days will show whether investors have concluded that the dollar needs to go lower and that today’s bounce is a selling opportunity,” said James Knightley, chief economist at ING.
The dollar is now more than 10% below its 2025 highs, weighed down by persistent macro headwinds, including global central bank diversification away from US assets, widening fiscal deficits, recurring questions over Fed independence, and expectations of further policy easing.
‘Is gold the new bitcoin?’
Veteran Wall Street economist Ed Yardeni linked the rally to politics, suggesting its sustained popularity could make “gold the new bitcoin”.
Yardeni argued that US President Donald Trump, a vocal supporter of cryptocurrencies, appears to be inadvertently fuelling the rise in gold prices.
On Tuesday, Trump said “the dollar is doing great” when asked whether the currency had fallen too much, signalling he is comfortable with a weaker greenback.
“A weaker dollar may put upward pressure on US inflation, which would also boost the price of gold,” Yardeni said.
Commodities surge beyond gold and silver
The rally has spread across the broader commodities market.
Platinum climbed above $2,900 per ounce for the first time on record this week and is already up 33% this month. Palladium, which benefits from stronger industrial demand, rose to a four-year high and is up more than 22% year to date.
Copper also surged, hitting a record $6.30 per pound on Thursday.
Across commodity markets, investors are increasingly positioning for prolonged dollar weakness, amid perceptions that US institutions are willing to tolerate — or quietly accept — the shift.
Euro stronger, equities mixed
In Europe, the euro traded near $1.1950, edging lower after briefly breaking above $1.20 earlier in the week following Trump’s comments.
The single currency has now risen for three consecutive months against the dollar and is up around 15% year on year.
European equities were mixed. France’s CAC 40 and Italy’s FTSE MIB gained around 0.5%, while Germany’s DAX fell over 1%.
Frankfurt’s losses were led by SAP, which slid 16% — its biggest one-day drop since October 2020 — after weaker-than-expected cloud sales and a cut to 2026 revenue guidance outweighed in-line fourth-quarter results.
Oil prices rose on Thursday after US President Donald Trump warned Iran that “time is running out” and said a “massive armada” was heading towards the region if Tehran failed to agree to a nuclear non-proliferation deal.
In a Truth Social post, Trump said a fleet larger than the one sent to Venezuela was ready to “rapidly fulfil its mission, with speed and violence, if necessary” if Iran refused to negotiate a deal guaranteeing “no nuclear weapons”.
Global benchmark Brent rose by about 2.02%, trading at around $68.73 per barrel, while US crude (WTI) hovered around 2.15% higher, at $64.57 per barrel.
Trump previously threatened to attack Iran if it killed protesters during the ongoing protest movement across the country. Estimates of those killed range from around 6,000 to as many as 30,000, according to various reports.
Oil delivery disruptions
If the US were to escalate militarily, it could disrupt oil flows to countries that still trade with Iran.
Iran’s economy is already under heavy pressure from US secondary financial sanctions on its banking and energy sectors, compounded by the reimposition of JCPOA snapback sanctions.
These measures have severely limited Iran’s access to the Western financial system and constrained its ability to trade openly.
As a result, Iranian exports rely heavily on so-called “dark fleets,” ship-to-ship transfers and intermediary routes designed to obscure cargo origins along major maritime corridors.
Yet despite years of sanctions, Iran has retained access to oil markets, underlining the difficulty of fully enforcing restrictions on a high-value global commodity.
“Iran has a number of markets for its oil, despite the Western sanctions regime,” said Dmitry Grozubinski, a senior advisor on international trade policy at Aurora Macro Strategies.
China at centre of enforcement risk
China remains the largest buyer, with reports suggesting Iranian crude is often rebranded as Malaysian or Gulf-origin oil before entering the country.
“Independent refineries are purchasing it using dark fleet vessels, with transactions conducted through small private banks and in renminbi,” Grozubinski said.
Other destinations for Iranian oil and derivatives include Iraq, the UAE and Turkey, further complicating enforcement.
“It’s extremely difficult to maintain comprehensive sanctions on oil,” Grozubinski said, “especially when it requires policing transactions between Iran and states that don’t fully share Western priorities.”
China currently imports an estimated 1.2 to 1.4 million barrels of Iranian oil per day — around 80 to 90% of Iran’s crude exports.
US escalation could provoke Beijing
That dependence makes Beijing the central variable in any escalation. Analysts say China would be the most likely major economy to resist compliance and retaliate.
“Beijing has already signalled it would respond if Trump follows through,” said Dan Alamariu, chief geopolitical strategist at Alpine Macro, warning of renewed US–China trade friction.
One risk raised by analysts is the potential for China to again restrict exports of rare earths — a tool it has previously used during periods of trade tension — although such a move is considered unlikely in the short term.
“It’s not the base case,” Alamariu said, “but it’s not impossible.”
