International Trade

CK Hutchison says the Panamanian government has taken ‘administrative and operational control’ of its two ports on the canal.

The government of Panama has seized control of two ports on either end of the Panama Canal from a Hong Kong conglomerate following a recent ruling by the country’s Supreme Court.

Hong Kong’s CK Hutchison said on Tuesday that Panama’s government had “made direct physical entry into the terminals at Balboa and Cristobal” and assumed “administrative and operational control” over the two ports on the Panama Canal.

The company said the “unlawful” takeover reflects the culmination of a campaign by the Panamanian state against its subsidiary, Panama Ports, following the Supreme Court ruling last month.

According to a government decree, the Panama Maritime Authority has been authorised to occupy the ports for “reasons of urgent social interest”, according to The Associated Press (AP) news agency.

The maritime authority also has the right to take over port property, including computer systems and cranes, according to the decree.

The state takeover marks the latest twist in a yearlong saga for CK Hutchison, which has been caught in a three-way fight between China, the United States, and Panama following US President Donald Trump’s return to the White House last year.

Starting in December 2024, Trump began to allege that the Panama Canal was being operated by China and promised to “take it back” – using military force if necessary – as part of a greater effort to reassert US dominance over the Western Hemisphere.

Last month, Panama’s Supreme Court ruled that CK Hutchison’s concession to operate the two ports was “unconstitutional” despite the company renewing its concession in 2021 for another 25 years.

The Chinese government’s Hong Kong and Macao Affairs Office (HKMAO) weighed in on the controversy, describing the ruling as “absurd” and “shameful”, while warning that the Latin American country would pay “heavy prices both politically and economically”.

Panama’s President Jose Raul Mulino responded, saying he “strongly” rejected China’s threat against his country and that Panama was a country that upholds the rule of law “and respects the decisions of the judiciary, which is independent of the central government”.

The White House is set to impose a 15 percent tariff through Section 122 of the Trade Act of 1974 after the US Supreme Court ruled against Donald Trump’s use of the International Emergency Economic Powers Act of 1977.

United States President Donald Trump has ramped up tariff threats following last week’s US Supreme Court decision that ruled that Trump’s sweeping global tariffs, imposed under the International Emergency Economic Powers Act, were unlawful.

On Monday, Trump said that any countries that wanted to “play games” after the high court’s ruling would be hit “with a much higher tariff ” in a post on his social media platform Truth Social.

In a separate post on the platform, Trump claimed that he does not need the approval of the US Congress for tariffs.

“As President, I do not have to go back to Congress to get approval of Tariffs . It has already been gotten, in many forms, a long time ago! They were also just reaffirmed by the ridiculous and poorly crafted supreme court decision!” Trump said in the post.

Trump does have some authority to impose other tariffs, but they are much more limited.

Following the court’s 6–3 decision on Friday, the president said he would introduce a 10 percent tariff, raising it to 15 percent by Saturday under Section 122 of the 1974 Trade Act, the maximum limit under the statute that enables the White House to impose tariffs for 150 days.

The statute only requires a presidential declaration and does not require further investigation. Section 122 is only temporary; the tariffs would then expire unless Congress extends them.

Trump’s tariffs are overwhelmingly unpopular. A new Washington Post-ABC News-Ipsos poll found that 64 percent of Americans disapprove of the president’s handling of tariffs.

Looming uncertainty

Experts warn that Trump’s newly imposed tariffs will fuel further economic uncertainty.

“What we do know is that it would continue to require all those parties affected to continue to live in uncertainty and, as many have already pointed out, such uncertainty is not good for our economy and has negative impacts on American consumers,” Max Kulyk, partner and CEO of Chicory Wealth, a private wealth advisory firm, told Al Jazeera.

“It’s impossible to plan. You hear that tariffs are off, and you are considering how to get refunds. Then a few hours later, it’s 10 percent. Then it’s 15 percent the next day…. Not having that stable framework is hurtful for activity, hiring, investment,” Gregory Daco, chief economist at EY-Parthenon, told the Reuters news agency.

Gold, which is considered a safe investment in times of economic uncertainty, surged by 2 percent on Monday, hitting a three-week high as tariff pressures remain unclear.

US markets are also taking a hit. The tech-heavy Nasdaq is down 1.1 percent in midday trading. The S&P 500 is also down by 1 percent, and the Dow Jones Industrial Average slumped by 1.5 percent since the market opened on Monday.

Stalling trade deals

Trump’s erratic approach has also deterred movement on looming trade deals.

On Monday, the European Parliament opted to postpone voting on a trade deal with the US. It is the second time the bloc has pushed back the vote. The first was in protest against Trump’s unsolicited attempts to acquire Greenland.

The assembly had been considering removing several European Union import duties on US goods. Committee chair Bernd Lange said the new temporary US tariff could mean increased levies for some EU exports, and no one knew what would happen after they expire in 150 days. EU lawmakers will reconvene on March 4 to assess if the US has clarified the situation and confirmed its commitment to last year’s deal.

New Delhi, India – As Indian Prime Minister Narendra Modi emerged from his plane at Ben Gurion airport outside Tel Aviv on July 4, 2017, his Israeli counterpart, Benjamin Netanyahu, waited for him at the other end of the red carpet laid out on the tarmac.

Minutes later, the leaders hugged. Speaking at the airport, Modi said his visit was a “path-breaking journey” – it was the first time an Indian prime minister had visited Israel. Netanyahu recalled their first meeting in New York in 2014, where, he said, “we agreed to break down the remaining walls between India and Israel”.

Nine years later, as Modi prepares to fly to Israel on February 25 for his second visit, he can largely claim to have accomplished that mission, analysts say. A relationship that was once frowned upon in India, and then carried out clandestinely, is now one of New Delhi’s most public friendships. Modi has frequently described Netanyahu as a “dear friend”, despite the International Criminal Court having issued an arrest warrant in late 2024 for the Israeli premier over alleged war crimes carried out during Israel’s genocidal war on Gaza.

Indian diplomats and officials have justified the country’s pivot towards Israel as a “pragmatic approach” – Israel, with its tech and military expertise, has too much to offer to be ignored, they argue – balanced by efforts from New Delhi to strengthen ties with its Arab allies.

Yet, it has come at a cost, analysts say: to Palestine, and India’s relationship with it, and, according to some experts, to India’s moral credibility.

“The so-called realist turn of India has cost its moral power, which it used to enjoy in the Global South,” said Anwar Alam, a senior fellow with the Policy Perspectives Foundation think tank in New Delhi.

Amid an ongoing war in the Palestinian territory, Modi’s visit “amounts to legitimising the apartheid Israeli state”, Alam told Al Jazeera.

An ideological alliance

India was a staunch advocate for Palestine in the post-colonial world order, with major leaders backing Palestinian independence. In 1947, India opposed the United Nations plan to partition Palestine. And four decades later, in 1988, India became one of the first non-Arab states to recognise Palestine.

The end of the Cold War – India leaned towards the Soviet Union despite officially being non-aligned – forced a change in New Delhi’s calculations. Alongside an outreach to the United States, India also established diplomatic relations with Israel in January 1992.

Since then, defence ties have anchored the relationship, which has also expanded on other fronts in recent years.

Modi’s rise to power in India in 2014 proved to be the catalyst for the biggest shift in relations. Modi’s Hindu nationalist Bharatiya Janata Party (BJP) has an ideology rooted in the vision of making India a Hindu nation, a natural homeland for Hindus anywhere in the world – an approach that mirrors, in many ways, Israel’s view of itself as a Jewish homeland. Both Modi and Israel view “Islamic terrorism”, which critics say is also shorthand for justifications needed to pursue broader anti-Muslim policies, as major threats.

Under Modi, India has become Israel’s largest weapons buyer. And in 2024, as Israel waged its war on Gaza, Indian weapons firms sold Israel rockets and explosives, according to an Al Jazeera investigation.

Ahead of Modi’s upcoming visit, the two countries signed a memorandum of understanding that aims to further deepen defence ties, with India exploring the joint development of anti-ballistic missile defence with Israel. In Jerusalem, Modi is scheduled to address the Knesset, Israel’s parliament.

“Modi’s address is special because of how it underlines the scale of the shift in relations under the Bharatiya Janata Party towards an overtly pro-Israel policy,” Max Rodenbeck, project director at the Washington-based Crisis Group’s Israel-Palestine department, told Al Jazeera.

But Modi’s visit is also personal for Netanyahu, Rodenbeck said. Israel is months away from a national election that is, in effect, a referendum on Netanyahu’s government – from the intelligence failures that enabled the October 7 attack by Palestinian groups to the war on Gaza that followed, as well as his attempts to weaken judicial independence through reforms.

The visit appears “as almost a personal favour to Netanyahu by boosting his image as an international statesman just as Israeli election campaigning is getting underway”, Rodenbeck said.

While several Western leaders have visited Israel since it began its genocidal war on Gaza in October 2023, few leaders from the Global South have made the trip.

At a time when the Gaza war has shrunk the set of countries willing to be seen as Israel’s friends, especially among emerging economies, Modi’s visit is significant.

Israel does not “have many friends” globally at the moment, said Kabir Taneja, the executive director of the Middle East office at the Observer Research Foundation, a New Delhi-based think tank. “So India is playing that role,” he added. “[Modi’s visit] sort of shows that Israel is not fully isolated.”

The July 2017 visit

In many ways, Modi’s visit to Israel this week will look to build on his July 2017 trip, which was a watershed moment in the bilateral ties, analysts note.

No Indian Prime Minister had previously visited Israel, but even lower-level diplomats would, until then, pair their Israel visits with parallel engagements in the Palestinian territory.

Modi broke with that policy. He did not visit Palestine in 2017, only making a trip there in 2018, by which time he had already also hosted Netanyahu in New Delhi. It had also been the first visit by an Israeli premier to India.

The 2017 Modi visit has been under scrutiny recently. An email released by the US Justice Department as part of the Jeffrey Epstein files showed that the late disgraced financier had advised a billionaire close to Modi during his trip.

After the visit on July 6, Epstein, a convicted sex offender, had emailed an unidentified individual he referred to as “Jabor Y”, saying: “The Indian Prime minister modi took advice. and danced and sang in israel for the benefit of the US president. they had met a few weeks ago.. IT WORKED. !”

India’s Ministry of External Affairs has dismissed these claims as the “trashy ruminations” of a convicted criminal.

Nonetheless, Modi’s visit to Israel solidified the bilateral relationship. Trade between the two nations has grown from $200m in 1992 to more than $6bn in 2024.

India is still Israel’s second-largest Asian trading partner after China in goods, dominated by diamonds, petroleum, and chemicals. India and Israel signed a Bilateral Investment Treaty (BIT) in September last year and have both been looking to close negotiations on a free trade deal.

At the same time, people-to-people ties have grown as well. After Israel banned Palestinians from working in the country following the Hamas-led attack on October 7, 2023, thousands of Indians lined up to work in Israeli construction companies.

“India and Israel have a fairly deep strategic and economic relationship that has been flourishing since Prime Minister Modi came to office,” said the Observer Research Foundation’s Taneja.

Modi was also among the first world leaders to condemn the Hamas-led attack and throw India’s support behind Israel.

“It really, really feeds into India’s posture against terrorism,” Taneja said about the India-Israel ties. “Israel is a country that India sees facing similar crisis when it comes to terrorism.”

India accuses Pakistan of sponsoring armed attacks on its territory and in Indian-administered Kashmir. Pakistan has accepted that its nationals have, in some instances, been behind these attacks, but has rejected accusations that it has trained or financed the attackers.

Over the horizon, a different Middle East?

Despite its close ties with Israel, New Delhi under Modi has not completely abandoned its position on the Palestinian cause, calling for a two-state solution and peace through dialogue. But it has been increasingly hesitant to criticise Israel over its war crimes in the occupied Palestinian territory.

India’s historical support for the Palestinian cause is rooted in its pivotal role in the non-alignment movement, the Cold War-era neutrality posture adopted by several developing nations. Even before India gained independence, the leader of its freedom struggle, Mahatma Gandhi, decried the “imposition of Jews over Arabs” through the creation of Israel.

India now no longer calls its approach non-alignment, instead referring to it as “strategic autonomy”.

“The Middle East is the only geography where this policy actually functions, and also provide[s] dividend[s],” Taneja told Al Jazeera. “India has good relations with Israel, Arab powers and Iran alike. One of the reasons [it works is] because India does not step into regional conflicts and confrontations.”

But under pressure from US President Donald Trump, India has stopped buying oil from Iran and taken steps to end its work on developing the strategically significant Chabahar port, which New Delhi viewed as a gateway into landlocked Central Asia and Afghanistan.

Now, Trump is threatening to attack Iran. The US has amassed warships and jets near Iran, even as Washington and Tehran continue to engage in diplomatic talks.

“I suspect India may be looking over the horizon to a Middle East where Iran has suffered heavy attack from the US and Israel, and no longer projects power in the region. In these circumstances, Israel will emerge as something of a regional hegemon,” said the Crisis Group’s Rodenbeck.

“India is perhaps positioning itself to benefit. Also, Modi sees Israel as influential in Washington, and may hope that friendliness to Israel wins points with Congress and Trump, which India badly needs.”

The United States Supreme Court ruling against the administration of US President Donald Trump’s sweeping global tariffs has left a question unanswered on what is the refund process for the funds collected over the past several months through the tariffs that had been imposed on most US trading partners .

In a 6–3 decision issued on Friday, Chief Justice John Roberts upheld a lower court ruling that found the president’s use of the International Emergency Economic Powers Act (IEEPA) exceeded his authority.

The high court did not specify how the federal government would refund the estimated $175bn collected under the tariffs. In his dissent, Justice Brett Kavanaugh warned that issuing refunds would present practical challenges and said it would be “a mess”.

The case will now return to the Court of International Trade to oversee the refund process.

More than 1,000 lawsuits have already been filed by importers in the trade court seeking refunds, and a wave of new cases is expected. Legal experts say the administration will likely require importers to apply for refunds individually. That process could disproportionately burden smaller businesses affected by the tariffs.

“The government is probably not going to voluntarily pay back the money it unlawfully took. Rather, the government is going to make everyone request a refund through different procedures by filing formal protests. They’re going to delay things procedurally as long as they can. Hiring lawyers and going through these procedures costs money and time,” Greg Shaffer, a law professor at Georgetown University, told Al Jazeera.

“I imagine the largest companies, who have been prepared for this eventuality, will eventually get their money back. But smaller importers, it’s a cost-benefit analysis where they might shrug their shoulders and say it’s not worth going through the hassle to get the unlawfully imposed taxes paid back to them.”

Trump’s path forward

Despite Friday’s ruling, other sweeping levies remain in place. Trump had invoked Section 232 of the 1962 Trade Expansion Act to impose sector-specific tariffs on steel and aluminium, cars, copper, lumber, and other products, such as kitchen cabinets, worldwide.

On Friday, Trump said he would impose a 10 percent global tariff for 150 days to replace some of his emergency duties that were struck down. The order would be made under Section 122 of the Trade Act of 1974, and the duties would be over and above tariffs that are currently in place, Trump said.

The statute allows the president to impose duties of up to 15 percent for up to 150 days on any and all countries related to “large and serious” balance of payments issues. It does not require investigations or impose other procedural limits.

The president also has other legal avenues available to continue taxing imports aggressively.

“Our trading partners were well aware of the risks the President faced in using IEEPA as the basis for reciprocal and other tariffs. Nevertheless, they chose to conclude deals with Washington, convinced by Washington that other statutes would be utilised to keep the tariffs in place,” Wendy Cutler, vice president of the Asia Society Policy Institute, told Al Jazeera in a statement.

“With respect to China, USTR [United States trade representative] still has an active Section 301 investigation on China’s compliance with the Phase One agreement, which could be a major feature of the back-up plan for Beijing.”

The president is expected to travel to Beijing next month to meet his Chinese counterpart, Xi Jinping, to discuss trade.

“The two main options include Section 301 of the Trade Act of 1974, the traditional mechanism for imposing tariffs in response to unfair trade practices by other countries. It requires an investigation and a report, but ultimately gives the president considerable discretion to impose tariffs. It has been used in the past and will likely be the most frequently used measure going forward,” Shaffer, the law professor, said.

He noted, however, that the administration’s tariff options could not be applied retroactively, meaning any new tariffs would apply only to future imports rather than covering duties already paid.

Raj Bhala, professor of law at The University of Kansas School of Law, argues there are remedies at the president’s disposal in addition to Section 122. Bhala said that Trump could use Section 338 of the Tariff Act of 1930 (also known as the Smoot-Hawley Act). That allows the president to impose a 50 percent tariff to challenge discriminatory trade practices from other countries.

“Each option involves procedural hurdles,” Bhala said.

Congressional pressure

Roberts wrote that the president must “point to clear congressional authorization” to impose tariffs. The ruling has increased pressure on both Trump’s allies and critics in Congress to clarify the scope of executive trade authority.

“What a fantastic ruling for a feckless branch of government. While its current tendency is to abdicate, the court has told Congress to do its job,” a former official in the White House Office of Management and Budget told Al Jazeera in response to the decision.

“Congress must either act with specific legislation, or declare war, which would grant the President the emergency powers to levy tariffs.”

“Congress and the Administration will determine the best path forward in the coming weeks,” House Speaker Mike Johnson said in a post on the social media platform X.

Senate Democratic Leader Chuck Schumer, by contrast, welcomed the ruling, saying it will “finally give families and small businesses the relief they deserve” and that Trump should end “this reckless trade war for good.”

But how that money will get paid back, and if it was already spent, will require Congress to step in.

“If it has been spent, the money will have to be reallocated by Congress. Congress will have to determine how much is owed to importers, pass a law to fund it, and create a mechanism for repayment. There’s also the question of who is entitled to it. Is it only the importer, or does it extend to the end consumer? Where does the line stop?” Babak Hafezi, professor of international business at American University, told Al Jazeera.

“This is not something that will be fixed in 24 hours. It will most likely take years, possibly even a decade, to resolve all the issues this less-than-a-year-old law has imposed on Americans.”

The second straight monthly deterioration in the United States’ trade deficit occurred as US firms boosted imports of computer chips and other tech goods.

The United States trade deficit has widened sharply in December amid a surge in imports, and the goods shortfall in 2025 was the highest on record despite US President Donald Trump’s tariffs on foreign-manufactured merchandise.

The second straight monthly deterioration in the trade deficit reported by the US Commerce Department on Thursday suggested that trade made little or no contribution to gross domestic product (GDP) in the fourth quarter.

Exports rose 6 percent last year, and imports rose nearly 5 percent.

The US deficit in the trade of goods widened 2 percent to a record $1.24 trillion last year as American companies boosted imports of computer chips and other tech goods from Taiwan to support massive investments in artificial intelligence.

Amid continuing tensions with Beijing, the deficit in the goods trade with China plunged nearly 32 percent to $202bn in 2025 on a sharp drop in both exports to and imports from the world’s second-biggest economy. But trade was diverted away from China. The goods gap with Taiwan doubled to $147bn and shot up 44 percent, to $178bn, with Vietnam.

Trump last year unleashed a barrage of tariffs against trading partners with the aim, among other things, of addressing trade imbalances and protecting US industries. But the punitive duties have not yielded a manufacturing renaissance, with factory employment declining by 83,000 jobs from January 2025 through January 2026.

“There just isn’t any evidence out there in the economic research literature to suggest that tariffs have materially impacted trade deficits historically when countries have implemented them,” said Chad Bown, senior fellow at the Peterson Institute for International Economics.

The trade gap ballooned by 32.6 percent to a five-month high of $70.3bn, the Commerce Department’s Bureau of Economic Analysis and the US Census Bureau said. Economists polled by Reuters forecast the trade deficit would contract to $55.5bn.

The report was delayed because of last year’s government shutdown.

Imports increased 3.6 percent to $357.6bn in December. Goods imports surged 3.8 percent to $280.2bn, boosted by a $7bn increase in industrial supplies and materials, mostly non-monetary gold, copper and crude oil. Capital goods imports increased by $5.6bn, lifted by computer accessories and telecommunications equipment. That rise is likely related to the construction of data centres to support artificial intelligence.

But consumer goods imports fell, pulled down by pharmaceutical preparations. There have been large swings in imports of pharmaceutical preparations because of tariffs.

“But strong imports should also imply strength in details like inventories or business investment,” said Veronica Clark, an economist at Citigroup. “Surging computer imports in particular should correspond with stronger business equipment investment and could remain strong due to AI-related demand.”

Exports fell 1.7 percent to $287.3bn in December. But capital goods exports increased, boosted by semiconductors. There were increases in exports of consumer goods, including pharmaceutical preparations.

United States Treasury Secretary Scott Bessent has claimed that Washington engineered a dollar shortage in Iran to send the rial into freefall and cause protests on the streets.

In December and January, Iran was faced with one of the biggest antigovernment protests the country has seen since the Islamic revolution of 1979, prompted by the severe economic crisis.

Protests over soaring prices in Iran began with shopkeepers in Tehran who shuttered their shops and began demonstrating on December 28, 2025, after the rial plunged to a record low against the US dollar in late December. The protests then spread to other provinces of Iran.

Supreme Leader Ayatollah Ali Khamenei’s government responded with force. More than 6,800 protesters, including at least 150 children, are thought to have been killed in a sweeping crackdown by the government on the protest movement.

So, how did Washington create a “dollar shortage” in Iran, ultimately causing the rial to tank? And what effect has that had on the Iranian people?

What is a ‘dollar shortage’?

A “dollar shortage” refers to when a country does not have enough US dollars to pay for things it needs from the rest of the world.

The US dollar is the main currency used in global trade, especially for oil, machinery and loan repayments, which means countries need a steady supply of it.

If exports fall and sanctions block access to the US financial system, dollars can become scarce. As a result, the local currency weakens, prices of imported goods rise, and inflation worsens.

In Iran, a “dollar shortage” was engineered by simultaneously blocking the two main channels of foreign exchange (FX) inflow: Oil exports and international banking access, said Mohammad Reza Farzanegan, an economist at Germany’s Marburg University. The US did this by imposing sanctions on Iranian oil, meaning anyone buying or selling it would be subject to punitive measures.

Given Iran’s dependence on oil for revenue, economic sanctions on its oil can create a severe FX constraint.

“By using secondary sanctions to threaten any global entity trading in dollars with Iran, the US traps Iran’s existing reserves abroad and prevents new dollars from entering the domestic market,” Farzanegan told Al Jazeera.

What has US Treasury Secretary Scott Bessent said?

Replying to a query about dealing with Iran at a Congressional hearing last week, Treasury Secretary Bessent described the US strategy to send the Iranian currency plunging.

“What we [have done] at Treasury is created a dollar shortage in the country,” Bessent said, adding that the strategy came to a “grand culmination in December, when one of the largest banks in Iran went under … the Iranian currency went into freefall, inflation exploded, and hence, we have seen the Iranian people out on the street.

“We have seen the Iranian leadership wiring money out of the country like crazy,” Bessent added. “So the rats are leaving the ship, and that is a good sign that they know the end may be near.”

Before this, speaking with Fox News at the World Economic Forum last month in Davos, Bessent explained the role US sanctions played in driving the recent nationwide protests.

“President Trump ordered Treasury … to put maximum pressure on Iran, and it’s worked,” he said. “Because in December, their economy collapsed. They are not able to get imports, and this is why the people took to the streets.”

In both instances, Bessent referred to his earlier remarks at the Economic Club of New York, in March last year, when he outlined how the White House would leverage President Donald Trump’s “maximum pressure” campaign to collapse Iran’s economy.

In his address there, Bessent said the US “elevated a sanctions campaign against [Iran’s] export infrastructure, targeting all stages of Iran’s oil supply chain”, coupled with “vigorous government engagement and private sector outreach” to “close off Iran’s access to the international financial system”.

What effect did the dollar shortage have in Iran?

In January, the Iranian rial was trading at 1.5 million to the dollar – a sharp decline from about 700,000 a year earlier in January 2025 and about 900,000 in mid-2025. The plummeting currency triggered steep inflation, with food prices an average of 72 percent higher than last year.

In 2018, during his first presidency, Trump withdrew from the 2015 Joint Comprehensive Plan of Action, a deal between Iran and global powers limiting Tehran’s nuclear programme in return for sanctions relief.

Since re-election last January, President Trump has doubled down on his so-called “maximum pressure” to cripple Iran’s economy and corner Tehran to renegotiate its nuclear and regional policies. Last month, Trump threatened a 25 percent tariff on countries doing business with Iran.

Through the rigorous blocking of Iran from the global financial system by creating a dollar shortage, the US pushed Tehran towards a severe “import compression, [and as a result, Iran] cannot pay for the intermediate goods and machinery required for domestic production”, said Farzanegan, the economist.

The US strategy, he said, “is particularly devastating because it leverages commercial risk management against humanitarian needs”. In short, Washington’s strategy “makes the small Iranian market a commercial liability” for any company, even if they are only dealing with medicine, for instance, Farzanegan added.

A research paper published by Farzanegan and Iranian American economist Nader Habibi last year found that the size of Iran’s middle class would have expanded by an annual average of approximately 17 percentage points, between 2012 and 2019, if it were not for US action.

In 2019, the estimated size of loss in the middle-class share of the population in Iran was 28 percentage points, the research found.

“People lost their purchasing power, and savings were wiped out,” the economist told Al Jazeera. “This is a long-term destruction of the country’s human capital.”

Besides the US action is the existing vulnerability of Iran’s economic structure, with factors like long-term mismanagement, high rates of corruption and over-reliance on oil revenues making it fragile.

While the US sanctions created external shock, a lack of domestic structural reforms left the government with “no fiscal space to cushion the blow”.

What is the US’s endgame here – and will it succeed?

Bessent’s admission that Washington deliberately created a “dollar shortage” signals the US’s shift towards a total economic warfare narrative.

“This is economic statecraft; no shots fired,” Bessent said at the WEF in Davos last month.

“This admission may complicate the US’s diplomatic standing, as it confirms that the humanitarian channels for food and medicine are often rendered useless if the entire banking system is being targeted for collapse,” Farzanegan said.

Bruce Fein, a former US associate deputy attorney general who specialises in constitutional and international law, told Al Jazeera that this type of economic coercion is “as common as the sun rising in the east and setting in the west”, pointing to economic sanctions against Russia, Cuba, North Korea, China and Myanmar.

However, unlike in other cases where the US has applied economic pressure, Farzanegan said Iran’s case is “a unique experiment due to the duration and intensity of the pressure”.

Unlike Russia, which has a more diversified export base and larger reserves, Iran has been facing varied forms of sanctions for decades since the supreme leader took power in 1979.

“Iran has a sophisticated internal mechanism for sanctions circumvention that makes the ‘dollar shortage’ a game of cat-and-mouse rather than a one-time shock,” the economist said.

With a US armada currently stationed in the Arabian Sea, the US and Iran are in talks to defuse tensions. The US wants three key things from Iran: To stop enriching uranium as part of its nuclear programme, to get rid of its ballistic missiles and to stop arming non-state actors in the region.

Ultimately, observers say, the US wants regime change in Iran.

But Fein said his experience shows that economic sanctions alone “seldom, if ever, topple regimes … Regime change comes externally only with the use of military force.

“Iran’s dollar shortage will not oust the mullahs or Revolutionary Guard,” he said, referring to Iran’s current administrative structure.

The impoverishment of Iranians will diminish, Fein told Al Jazeera, “rather than promote the likelihood of a successful revolution because day-to-day survival will be the priority”.

Taipei agrees to buy some $85bn of US energy, aircraft and equipment in exchange for 15 percent tariff rate.

The United States and Taiwan have finalised a trade deal to reduce tariffs on Taiwanese exports and facilitate billions of dollars of spending on US goods.

The agreement announced on Thursday lowers the general tariff on Taiwanese goods from 20 percent to 15 percent, the same level as Asian trade partners South Korea and Japan, in exchange for Taipei agreeing to buy about $85bn of US energy, aircraft and equipment.

Under the deal, Taiwan will eliminate or reduce 99 percent of tariff barriers and provide preferential market access to numerous US goods, including auto parts, chemicals, machinery, health products, dairy products and pork, the office of the US trade envoy said in a statement.

The US will, in turn, exempt a large range of Taiwanese goods from tariffs, including chalk, castor oil, pineapples and ginseng.

Taiwanese President William Lai Ching-te said Taipei had secured tariff exemptions for some 2,000 Taiwanese products, hailing the agreement as a “pivotal” moment for the self-governing island’s economy.

Lai said the deal, when various carve-outs are included, would take the average tariff rate on Taiwanese goods to 12.3 percent.

“From familiar items such as Phalaenopsis orchids, tea, bubble tea ingredients (tapioca starch), and coffee, to pineapple cakes, taro, pineapples, and mangoes – these products that represent Taiwan will become more price-competitive in the US market,” Lai said in a statement on social media.

“We aim not only to sell Taiwan’s great flavors overseas, but also to ensure Taiwanese brands truly enter international markets,” he said.

Lai made no mention of Taiwan’s chip industry, a crucial driver of the island’s economy that is estimated to account for up to 20 percent of gross domestic product (GDP).

Taiwan’s exports rose by 35 percent in 2025 on the back of furious demand for its AI chips, hitting a record $640.75bn.

Thursday’s agreement notably does not include specific commitments from Taiwan to invest in the US chip industry, despite an announcement by US President Donald Trump’s administration last month that Taiwanese firms would pour $250bn into the sector.

A fact sheet released by the Office of the US Trade Representative said the two sides “take note” of the January deal, which included a prior commitment by chip giant Taiwan Semiconductor Manufacturing to invest $100bn in the US.

US Trade Representative Jamieson Greer said Thursday’s agreement built on the longstanding trade relations between Taiwan and the US and would “significantly enhance the resilience of our supply chains, particularly in high-technology sectors”.

“President Trump’s leadership in the Asia Pacific region continues to generate prosperous trade ties for the United States with important partners across Asia, while further advancing the economic and national security interests of the American people,” Greer said.

Nearly one-third of Taiwan’s exports went to the US in 2025, making the country the island’s biggest market for the first time since 2000.

The nonpartisan Congressional Budget Office’s 10-year outlook projects worsening long-term United States federal deficits and rising debt, driven largely by increased spending, notably on Social Security, Medicare, and debt service payments.

Compared with the CBO’s analysis this time last year, the fiscal outlook, which was released on Wednesday, has deteriorated modestly.

The CBO said that the deficit for fiscal 2026 – President Donald Trump’s first full fiscal year in office – will be about 5.8 percent of GDP, about where it was in fiscal 2025, when the deficit was $1.775 trillion.

But the US deficit-to-GDP ratio will average 6.1 percent over the next decade, reaching 6.7 percent in fiscal 2036 – far above US Treasury Secretary Scott Bessent’s goal to shrink it to about 3 percent of economic output.

Major developments over the last year are factored into the latest report, including Republicans’ tax and spending measure known as the “One Big Beautiful Bill Act,” higher tariffs, and the Trump administration’s crackdown on immigration, which includes deporting millions of immigrants from the US mainland.

As a result of these changes, the projected 2026 deficit is about $100bn higher, and total deficits from 2026 to 2035 are $1.4 trillion larger, while debt held by the public is projected to rise from 101 percent of GDP to 120 percent — exceeding historical highs.

Notably, the CBO says higher tariffs partially offset some of those increases by raising federal revenue by $3 trillion, but that also comes with higher inflation from 2026 to 2029.

Rising debt and debt service are important because repaying investors for borrowed money crowds out government spending on basic needs such as roads, infrastructure and education, which enable investments in future economic growth.

CBO projections also indicate that inflation does not hit the Federal Reserve’s 2 percent target rate until 2030.

A major difference is that the CBO forecasts rely on significantly lower economic growth projections than the Trump administration, pegging 2026 real GDP growth at 2.2 percent on a fourth-quarter comparison basis, fading to an average of about 1.8 percent for the rest of the decade.

Trump administration officials in recent weeks have projected robust growth in the 3-4 percent range for 2026, with recent predictions that first-quarter growth could top 6 percent amid rising investments in factories and artificial intelligence data centres.

CBO’s forecasts assume that tax and spending laws and tariff policies in early December remain in place for a decade. The government’s fiscal year starts on October 1.

While revived investment tax incentives and bigger individual tax refunds provide a boost in 2026, the CBO said that this is attenuated by the drag from larger fiscal deficits and reduced immigration that slows the growth of the labour force.

Jonathan Burks, executive vice president of economic and health policy at the Bipartisan Policy Center said “large deficits are unprecedented for a growing, peacetime economy”, though “the good news is there is still time for policymakers to correct course.”

‘Urgent warning’

Lawmakers have recently addressed rising federal debt and deficits primarily through targeted spending caps and debt limit suspensions, as well as deploying “extraordinary measures” when the US is close to hitting its statutory spending limit, though these measures have often been accompanied by new, large-scale spending or tax policies that maintain high deficit levels.

And Trump, at the start of his second term, deployed a new “Department of Government Efficiency”, which set a goal to balance the budget by cutting $2 trillion in waste, fraud and abuse; however, budget analysts estimate that DOGE cut anywhere between $1.4bn to $7bn, largely through workforce firings.

Michael Peterson, CEO of the Peterson Foundation, said the CBO’s latest budget projection “is an urgent warning to our leaders about America’s costly fiscal path.”

“This election year, voters understand the connection between rising debt and their personal economic condition. And the financial markets are watching. Stabilising our debt is an essential part of improving affordability, and must be a core component of the 2026 campaign conversation.”

Walmart has reached a $1 trillion market valuation, a first for the big-box retailer.

The company’s shares hit a high on Tuesday morning trade as the stock continues to soar on the news of a new CEO and looming trade negotiations with India, where the Arkansas-based company maintains a large presence both in supply chain and domestic markets within India. The stock was up 2.1 percent from the market open in midday trading.

Walmart, which has 11,000 stores in 19 countries, joins a slate of nine corporate giants in the so-called trillion dollar club, including Nvidia, Apple, Alphabet, and Microsoft, among others. Amazon is the only other retailer that has broken the barrier and is now valued at $2.6 trillion.

Trade deal bump

On Monday, United States President Donald Trump announced a trade deal with India that would slash tariffs to 18 percent from 50 percent and that impacts Walmart, which has strategically shifted supply chain operations to India and away from China.

On Tuesday, in an interview with CNBC, US Trade Representative Jamieson Greer said that the White House is still ironing out the details of the deal, but that still hasn’t slowed Walmart’s stock from popping on the looming deal.

“We have an announcement of an India deal, but still no timeline about when it comes into effect and whether the secondary tariffs, the 25 percent linked to India’s purchase of Russian oil, when those would be removed, so I think there’s still a lot of questions,” economist Rachel Ziemba, founder of Ziemba Insights, told Al Jazeera.

While there are limited details on the specifics of the deal, markets are responding to tariffs likely to come down.

“Markets are, of course, forward-looking. I think this sort of reinforces a view in the marketplace that incremental tariffs will be less this year,” Ziemba said.

The big box retailer jumped from 2 percent of its global exports coming from India in 2018 to 25 percent in 2023, according to a Reuters review of import data in 2023. Walmart hopes to source $10bn in goods from India by next year.

At the time, the company also decreased its percentage of goods from China to 60 percent from 80 percent.

Walmart did not respond to Al Jazeera’s request for comment.

The Federation of Indian Export Organisations (FIEO), a lobby for exporters, said the cut in US tariffs will significantly boost Indian exports, including textiles and apparel, putting them on par with Asian peers, such as Vietnam and Bangladesh.

According to data from ImportYeti, a platform that tracks import contracts for major companies, Walmart’s biggest import areas are in home fabrics, apparel and toys.

“Those are the products facing the highest tariffs, while consumer electronics and other categories have largely been shielded. If the India–US deal becomes a reality, it would put tariffs on Indian goods entering the US at roughly the same level as those from Southeast Asia, making that supply-chain realignment more attractive. You also highlight the importance of the Indian market,” Ziemba added.

While the trade deal is in focus, Walmart has also invested significantly in India domestically, as well, and holds an 80 percent stake in India’s e-commerce giant Flipkart.

C-suite changes

The surge also comes concurrently with a shake-up in the C-suite. On Monday, John Furner took over as Walmart’s chief executive, succeeding longtime CEO Doug McMillion who announced his retirement late last year.

Furner, who started at the company in a job stocking shelves, has climbed up the ladder. Most recently, he served as the CEO of Walmart US, where he focused on key initiatives driving growth, including curbside pick-up. Prior to that, he served as the CEO of Sam’s Club, Walmart’s wholesale chain.

Furner’s appointment comes as the company grows as an e-commerce giant and intends to double down in AI tech, healthcare services, e-commerce, and hybrid options with its brick-and-mortar footprint.

“As AI rapidly reshapes retail, we are centralizing our platforms to accelerate shared capabilities, freeing up our operating segments to be more focused on and closer to our customers and members,” Walmart said in a statement last month.

“Walmart is masterful at brick-and-mortar retail and remains highly competitive with Amazon. I love that because it shows consumerism is still alive and well. Five years ago, the narrative was the fall of the mall and the decline of retail. This confirms the opposite. Walmart also has a clear strategy for retaining consumers and managing the customer experience,” Brett Rose, CEO and founder of United National Consumer Suppliers (UNCS), a distributor that focuses on excess inventories, which it provides to more budget-friendly retailers, told Al Jazeera.

The tech-centric focus comes as e-commerce has grown for the company, which reported a 28 percent jump in e-commerce sales compared with the previous quarter. Walmart is slated to release its next earnings report on February 19.

“What you need to look at is that Walmart has successfully become a marketplace, not as big as Amazon, but big enough to give it a run for its money,” said Rose.

United States President Donald Trump has announced the launch of a strategic minerals stockpile.

The stockpile, called Project Vault, was announced on Monday. It will combine $2bn of private capital with a $10bn loan from the US Export-Import Bank.

It is the latest move by the White House to invest in rare-earth minerals needed in the production of key goods, including semiconductor chips, smartphones and electric car batteries.

The aim is to “ensure that American businesses and workers are never harmed by any shortage”, Trump said at the White House.

The move to develop a strategic stockpile is the latest in a slew of efforts by the Trump administration to take control of the means of production for critical rare-earth materials to limit reliance on other countries, particularly China, which has held up its exports to gain leverage in negotiations with Trump.

Here’s a look at some of the investments the US government has made in this space.

What are the investments?

In 2025, the Trump administration acquired equity stakes in seven companies by converting federal grants into ownership positions. Among the investments is a 10 percent stake in USA Rare Earth, which plans to build rare-earth element and magnet production facilities in the US.

The project is supported by $1.6bn in funding allocated under the CHIPS Act, legislation passed during the administration of former Democratic President Joe Biden, aimed at reducing dependence on China for semiconductor manufacturing.

USA Rare Earth announced the investment last week and expects commercial production to begin in 2028.

The US government also acquired a roughly 10 percent stake, valued at about $1.9bn, in Korea Zinc to help fund a $7.4bn smelter in Tennessee through a joint venture controlled by the US government and unnamed US-based strategic investors, who would then control about 10 percent of the South Korean firm.

The venture will operate a mining complex anchored by two mines and the only operational zinc smelter in the US. Construction is set to begin this year, with commercial operations expected to start in 2029.

In October, the government announced a $35.6m investment to acquire a 10 percent stake in Canadian-based Trilogy Metals to support the Upper Kobuk Mineral Projects (UKMP) in Alaska. The investment backs the development of critical minerals, including copper, zinc, gold, and silver, in Alaska’s mineral-rich northwest Ambler mining district.

Also in October, the US announced a 5 percent stake in Lithium Americas as part of a joint venture with General Motors (GM) to fund operations at the Thacker Pass lithium mine in Nevada. The project will supply lithium for electric vehicles and has attracted significant interest from the Detroit-based automaker.

In August, the White House acquired an almost 10 percent stake in Intel. The government’s investment in the semiconductor chip giant was an effort to help fund the construction and expansion of the company’s domestic manufacturing capabilities.

In July, the White House announced a 15 percent investment in MP Materials, which operates the only currently active rare-earth mine in the US, located in California. The largest federal stakeholder in the investment is the Department of War, then called the Department of Defense, which committed $400m.

The US is also reportedly exploring an 8 percent share in Critical Minerals for a stake in the Tranbreez rare-earths deposit in Greenland, underscoring Trump’s unsolicited attempts to acquire the Danish self-governed territory, the Reuters news agency reported.

Amid news of Trump’s stockpile plan, sector stocks are mixed. MP Materials and Intel are up 0.6 percent and 5 percent, respectively. Others finished out the day trending downwards. Lithium Americas is down 2.2 percent. Trilogy metals is down almost 2 percent, USA Rare Earth is down by 1.3 percent, and Korean Zinc finished down 12.6 percent.

Is this unusual?

The government buying equity stakes in large companies is unusual in US history, but not unprecedented.

During the 2008 financial crisis, the US government temporarily acquired equity stakes in several major companies through the Troubled Asset Relief Programme (TARP). In 2009, TARP provided federal assistance to General Motors, ultimately leaving the government with a more than 60 percent ownership share. This intervention began in the final months of the administration of former President George W Bush. The government fully sold its stake in GM in 2013.

Through TARP, the government also acquired a 9.9 percent stake in Chrysler, which it exited in 2011.

The programme extended beyond car makers to the financial sector. The US government took a more than 73 percent stake in GMAC (General Motors Acceptance Corporation, now Ally Financial), exiting its ownership in 2014. It also acquired nearly 74 percent of the financial services insurance giant AIG, selling its remaining stake in 2012, and took a 34 percent stake in Citigroup, which it fully exited by 2010.

“This isn’t like 2008, when there was an urgent need to shore up critical companies. There’s a much more measured approach here. They [the US government] want these investments to generate returns, and they need to be seen as good investments in order to attract other forms of capital,” Nick Giles, senior equity research analyst at B Riley Securities, an investment banking and capital markets firm, told Al Jazeera.

During the Great Depression, the government bought stakes in several large banks. Before that, at the turn of the 20th century, it bought an equity stake in the Panama Railroad Company, which was responsible for building the railway that would be used during the construction of the Panama Canal. That equity stake was attached to a specific project rather than a more open-ended challenge, such as foreign dependence on critical minerals.

“There may not be a defined end date, but they’re clearly looking to make a return, and it sends an important signal that more is coming. I don’t think they [the government] are going to let this fail,” Giles added.

Political divide on the approach

Interest in providing funds to critical mineral projects was shared by Trump’s predecessor, Biden, who brought in the CHIPS Act for that purpose. Biden was focused on providing grants for projects rather than buying equity stakes.

Trump’s approach to buy stakes is actually more aligned with progressive Democrats than with members of his own party. Vermont Senator Bernie Sanders has long been a proponent of the US government buying equity stakes in companies.

In August, after the White House bought an equity stake in Intel, Sanders applauded the move.

“Taxpayers should not be providing billions of dollars in corporate welfare to large, profitable corporations like Intel without getting anything in return,” Sanders said at the time.

Kentucky Senator Rand Paul, a Republican known for his libertarian stances, called ownership a “terrible idea” and referred to it as a “step towards socialism” on CNBC. North Carolina’s Thom Tillis likened the Intel investment to something that countries like China or Russia would do.

For Babak Hafezi, professor of international business at the American University, the investments are a step to remove any reliance on China.

“Without domestic control and resiliency in both extraction and production, we are dependent on China, which extracts nearly 60 percent of global rare-earth minerals and produces 90 percent of it. This creates a major global chokepoint, and China can use this chokepoint as a means to dictate American Foreign policy via supply chain limitations,” he said.

“Thus, establishing free and open markets for US consumption is critical to remove any dependency.”

Modi’s government presents annual budget, focusing on sustaining growth despite volatile financial markets and trade uncertainty.

Indian Prime Minister Narendra Modi’s government has unveiled its annual budget, aiming for steady growth in an uncertain global economy rocked by recent tariff wars.

Finance Minister Nirmala Sitharaman presented the budget for the 2026-2027 financial year in Parliament on Sunday, prioritising infrastructure and domestic manufacturing, with a total expenditure estimated at $583bn.

India’s economy has so far weathered punitive tariffs of 50 percent imposed by United States President Donald Trump over New Delhi’s imports of Russian oil. The government has sought to offset the impact of those duties by striking deals, such as its trade agreement with the European Union.

Despite the past year’s challenges, the Indian economy has remained one of the world’s fastest growing.

The budget for the new financial year, which starts on April 1, projects gross domestic product (GDP) growth in the range of 6.8 to 7.2 percent, according to the government’s annual Economic Survey presented in Parliament. It is a shade softer than this year’s projected 7.4 percent but still outpaces estimates by global institutions such as the World Bank.

To keep growth strong, the government said it will spend 12.2 trillion rupees ($133bn) on infrastructure in the new fiscal year, compared with 11.2 trillion rupees ($122bn) last year. It will also aim to boost manufacturing in seven strategic sectors, including pharmaceuticals, semiconductors, rare-earth magnets, chemicals, capital goods, textiles and sports goods while stepping up investments in niche industries like artificial intelligence.

Despite plans to prop up growth with state spending, the government is aiming to bring down the federal government debt-to-GDP ratio from 56.1 percent to 55.6 percent in the next financial year and the fiscal deficit from its current projected level of 4.4 percent of GDP to 4.3 percent.

Sitharaman offered no populist giveaways, saying New Delhi would focus on building resilience at home while strengthening its position in global supply chains, marking a departure from last year’s budget, which wooed the salaried middle class with steep tax cuts.

Before the budget presentation, Modi on Thursday said the nation was “moving away from long-term problems to tread the path of long-term solutions”.

“Long term solutions provide predictability that fosters trust in the world,” he said.

Modi’s government has struggled to raise manufacturing from its current level of contributing under 20 percent of India’s GDP to 25 percent to generate jobs for the millions of people entering the nation’s workforce each year.

It has also seen a sharp decline in the value of the rupee, which has recently weakened to all-time lows after foreign investors sold a record amount of Indian equities. Those sales have added up to $22bn since January last year.

“Overall, this is a budget without fireworks – not a big positive, not a big negative,” Aishvarya Dadheech, founder and chief investment officer at Mumbai-based Fident Asset Management, told the Reuters news agency.

Danish company will replace Hong Kong-based firm, CK Hutchison, after Trump claimed strategic waterway was controlled by China.

Danish firm Maersk will temporarily operate two ports on the Panama Canal after a court ruled that contracts given to a Hong Kong firm were unconstitutional.

The Panama Maritime Authority (AMP) announced the changes on Friday, a day after the Central American country’s Supreme Court invalidated port contracts held by Hong Kong-based firm CK Hutchison.

The court ruling followed repeated threats from United States President Donald Trump that his country would seek to take over the waterway he claimed was effectively being controlled by China.

According to the court ruling that annulled the deal, CK Hutchison’s contract to operate the ports had “disproportionate bias” towards the Hong Kong-based company.

On Friday, the AMP said port operator APM Terminals, part of the Maersk Group, would take over as the “temporary administrator” of the Balboa and Cristobal ports on either end of the canal.

Maersk takes over from the Panama Ports Company (PPC) – a subsidiary of CK Hutchison Holdings – which has managed the ports since 1997 under a concession renewed in 2021 for 25 years.

The canal, an artificial waterway, handles about 40 percent of US container shipping traffic and 5 percent of world trade. It has been controlled by Panama since 1999, when the US, which funded the building of the canal between 1904 and 1914, ceded control.

Washington on Friday welcomed the decision, but China’s Foreign Ministry spokesman Guo Jiakun said Beijing “will take all measures necessary to firmly protect the legitimate and lawful rights and interests of Chinese companies”.

For its part, PPC said the ruling “lacks legal basis and endangers … the welfare and stability of thousands of Panamanian families” who depend on its operations.

Tens of thousands of workers dug the 82km- (51-mile-) passageway that became the Panama Canal, allowing ships to pass from the Pacific Ocean to the Atlantic without having to travel around the northernmost or southernmost ends of the Americas.

Panama has always denied Chinese control of the canal, which is used mainly by the US and China.

British Prime Minister Keir Starmer arrived in China this week with a large delegation of businesspeople and cultural figures.

He received a warm welcome from Chinese President Xi Jinping.

But the visit got a frosty reception from the White House, with United States President Donald Trump calling Starmer’s trip “dangerous”.

What prompted Trump’s remarks? And how important was the British prime minister’s visit?

Presenter: Adrian Finighan

Guests:

Will Hutton – Political economist

Andy Mok – Senior research fellow at the Center for China and Globalization

Steve Tsang – Director of the China Institute at SOAS University of London

Canadian Prime Minister Mark Carney has hailed several new trade agreements, pledging to further diversify Ottawa’s partners while saying he “expects” the United States to respect his country’s sovereignty.

Carney discussed the trade deals during a meeting on Thursday with provincial and territorial leaders.

“Our country is more united, ambitious and determined than it has been in decades, and it’s incumbent on all of us to seize this moment, build big things together,” Carney said, as he hailed 12 new economic and security accords reached over the last six months.

His comments come amid ongoing frictions with the administration of US President Donald Trump, which has previously pushed to make Canada a “51st state”.

Carney highlighted in particular a new agreement with China to lower trade levies. That deal prompted a rebuke last week from Trump, who threatened to impose a 100 percent tariff on Canada.

In the face of Trump’s accusations that Canada would serve as a “drop-off port” for Chinese goods, Carney clarified that Ottawa was not seeking a free-trade agreement with Beijing.

But on Thursday, he nevertheless played up the perks he said the agreement would offer to Canada’s agriculture sector.

“Part of that agreement unlocks more than $7bn in export markets for Canadian farmers, ranchers, fish harvesters and workers across our country,” Carney said.

Carney added that Ottawa would soon seek to advance “trading relationships with global giants” including India, the Association of Southeast Asian Nations (ASEAN), and the South American trade bloc Mercosur.

“And we will work to renew our most important economic and security relationship with the United States through the joint review of the Canada-United States-Mexico agreement later this year,” he said, referring to the regional free trade agreement, which expires in July.

‘Respect Canadian sovereignty’

Carney’s pledge to diversify Canada’s portfolio of trade and security partners comes just eight days after he delivered an attention-grabbing speech at the World Economic Forum in Davos, Switzerland.

During the address, Carney warned that the “rules-based” international order was a fiction that was fading, replaced by “an era of great power rivalry”, where might makes right.

“We knew the story of the international rules-based order was partially false, that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically,” Carney told the audience in Davos.

“We knew that international law applied with varying rigour depending on the identity of the accused or the victim.”

He ultimately called for the so-called “middle powers” of the world to rally together in these unpredictable times.

The speech was widely seen as a rebuke to Trump, who has launched an aggressive tariff campaign on global trading partners, including Canada.

In early January, Trump also abducted the leader of Venezuela, Nicolas Maduro, in what critics describe as a violation of international law.

His pledge to “run” Venezuela was followed by a series of aggressive statements towards the self-governing Danish territory of Greenland, which he threatened to seize.

Those threats have sent shudders through the NATO alliance, which counts both the US and Denmark as members.

Since before the start of his second term, Trump has also pushed to expand US control into Canada, repeatedly calling the country a “state” and its prime minister a “governor”.

In response to Carney’s speech at Davos, Trump withdrew Carney’s invitation to join his so-called Board of Peace.

Carney, however, has publicly stood by his statements, dismissing US Treasury Secretary Scott Bessent’s claims that he “aggressively” walked back his position during a private call with Trump.

In a separate exchange on Thursday, Carney was asked about reports that US officials had met with separatists seeking independence for the oil-wealthy province of Alberta.

The Financial Times reported that State Department officials have held three meetings ​with the Alberta Prosperity Project, a group that pushes for a referendum on whether the energy-producing western province should break away from Canada.

“We expect the US administration to respect Canadian sovereignty,” Carney replied.

“I’m always clear in my conversations with President Trump to that effect.”

It was built on democracy, open markets and cooperation – with America at the helm.

But the rules-based global order created after World War II is now under strain. Conflicts are rising. International rules are being tested. Trade tensions are escalating. And alliances are shifting.

At the centre of it all is US President Donald Trump.

In just a few short weeks, he’s captured Venezuela’s president, vowed to take control of Greenland, and threatened to slap tariffs on those who oppose him.

Meanwhile, China is presenting itself as a stable partner.

Many warn that the global order is starting to break apart.

British PM Keir Starmer’s China visit is the first by a UK leader in eight years and marks a thaw in frosty relations.

The United Kingdom’s Prime Minister Keir Starmer has met with Chinese President Xi Jinping in Beijing in the first trip of its kind by a British leader in eight years.

Starmer said before his trip that doing business with China was the pragmatic choice and it was time for a “mature” relationship with the world’s second-largest economy.

“I have long been clear that the UK and China need a long-term, consistent and comprehensive strategic partnership,” Starmer said on Thursday.

During their meeting, Starmer told Xi that he hopes the two leaders can “identify opportunities to collaborate, but also allow a meaningful dialogue on areas where we disagree”.

Xi stressed the need for more “dialogue and cooperation” amid a “complex and intertwined” international situation.

The meeting between the two leaders in Beijing’s Great Hall of the People on Thursday was due to last about 40 minutes, and will be followed by another meeting between Starmer and Chinese Premier Li Qiang later in the day.

Starmer is in China for three days and is accompanied by a delegation representing nearly 50 UK businesses and cultural organisations, including HSBC, British Airways, AstraZeneca and GSK.

The last trip by a UK prime minister was in 2018, when Theresa May visited Beijing.

Strengthening economic and security cooperation was at the top of the agenda during the Xi-Starmer meeting, according to Al Jazeera correspondent Katrina Yu.

“[Starmer] has the very big task of bringing this diplomatic relationship out of years of deep freeze, so the focus when he talks to Xi Jinping will be finding areas of common ground,” Yu said from Beijing.

China was the UK’s fourth-largest trading partner in 2025, with bilateral trade worth $137bn, according to UK government data.

Starmer is seeking to deepen those ties with Xi despite criticism at home around China’s human rights record and its status as a potential national security threat.

Besides business dealings, Starmer and Xi are also expected to announce further cooperation in the area of law enforcement to reduce the trafficking of undocumented immigrants into the UK by criminal gangs.

Relations between the UK and China have been frosty since Beijing launched a political crackdown in Hong Kong, a former British colony, following months of antigovernment protests in 2019.

London has also criticised the prosecution in Hong Kong of the pro-democracy media tycoon Jimmy Lai, who is also a British citizen, on national security charges.

Starmer’s trip to China comes as both Beijing and London’s relationship with the United States is under strain from President Donald Trump’s tariff war.

Trump’s recent threats to annex Greenland have also raised alarm among NATO members, including the UK.

One of the biggest trade deals in history has been struck by India and the European Union, months after United States President Donald Trump hit both with tariffs.

What’s in the agreement – and how much is driven by Washington’s unpredictable measures?

Presenter: Tom McRae

Guests:

Brahma Chellaney – Professor emeritus of strategic studies at the Centre for Policy Research in New Delhi

Remi Bourgeot – Associate fellow at the French Institute for International and Strategic Affairs in Paris

Dhananjay Tripathi – Senior associate professor in the Department of International Relations at South Asian University in New Delhi

China is showcasing itself as a solid business and trading partner to traditional allies of the United States and others who have been alienated by President Donald Trump’s politics, and some of them appear ready for a reset.

Since the start of 2026, Chinese President Xi Jinping has received South Korean President Lee Jae Myung, Canadian Prime Minister Mark Carney, Finnish Prime Minister Petteri Orpo and Irish leader Micheal Martin.

This week, United Kingdom Prime Minister Keir Starmer is on a three-day visit to Beijing, while German Chancellor Friedrich Merz is expected to visit China for the first time in late February.

Among these visitors, five are treaty allies of the US, but all have been hit over the past year by the Trump administration’s “reciprocal” trade tariffs, as well as additional duties on key exports like steel, aluminium, autos and auto parts.

Canada, Finland, Germany and the UK found themselves in a NATO standoff with Trump this month over his desire to annex Greenland and threats that he would impose additional tariffs on eight European countries he said were standing in his way, including the UK and Finland. Trump has since backed down from this threat.

China’s renewed sales pitch

While China has long sought to present itself as a viable alternative to the post-war US-led international order, its sales pitch took on renewed energy at the World Economic Forum‘s (WEF) annual summit in Davos, Switzerland, earlier this month.

As Trump told world leaders that the US had become “the hottest country, anywhere in the world” thanks to surging investment and tariff revenues, and Europe would “do much better” to follow the US lead, Chinese Vice Premier Li Hefeng’s speech emphasised China’s ongoing support for multilateralism and free trade.

“While economic globalisation is not perfect and may cause some problems, we cannot completely reject it and retreat to self-imposed isolation,” Li said.

“The right approach should be, and can only be, to find solutions together through dialogue.”

Li also criticised the “unilateral acts and trade deals of certain countries” – a reference to Trump’s trade war – that “clearly violate the fundamental principles and principles of the [World Trade Organization] and severely impact the global economic and trade order”.

Li also told the WEF that “every country is entitled to defend its legitimate rights and interests”, a point that could be understood to apply as much to China’s claims over places like Taiwan as to Denmark’s dominion over Greenland.

“In many ways, China has chosen to cast itself in the role of a stable and responsible global actor in the midst of the disruption that we are seeing from the US. Reiterating its support for the United Nations system and global rules has often been quite enough to bolster China’s standing, especially among countries of the Global South,” Bjorn Cappelin, an analyst at the Swedish National China Centre, told Al Jazeera.

The West is listening

John Gong, a professor of economics at the University of International Business and Economics in Beijing, told Al Jazeera that the recent series of trips by European leaders to China shows that the Global North is listening, too. Other notable signs include the UK’s approval of a Chinese “mega embassy” in London, Gong said, and progress in a years-long trade dispute over Chinese exports of electric vehicles (EVs) to Europe.

Starmer is also expected to pursue more trade and investment deals with Beijing this week, according to UK media.

“A series of events happening in Europe seems to suggest an adjustment of Europe’s China policy – for the better, of course – against the backdrop of what is emanating from Washington against Europe,” Gong told Al Jazeera.

The shifting diplomatic calculations are also clear in Canada, which has shown a renewed willingness to deepen economic ties with China after several spats with Trump over the past year.

Carney’s is the first visit to Beijing by a Canadian prime minister since Justin Trudeau went in 2017, and he came away with a deal that saw Beijing agree to ease tariffs on Canadian agricultural exports and Ottawa to ease tariffs on Chinese EVs.

Trump lashed out at news of the deal, threatening 100 percent trade tariffs on Canada if the deal goes ahead.

In a statement last weekend on his Truth Social platform, Trump wrote that Carney was “sorely mistaken” if he thought Canada could become a “‘Drop Off Port’ for China to send goods and products into the United States”.

The meeting between Carney and Xi this month also thawed years of frosty relations after Canada arrested Huawei executive Meng Wanzhou in late 2018 at the behest of the US. Beijing subsequently arrested two Canadians in a move that was widely seen as retaliation. They were released in 2021 after Meng reached a deferred agreement with prosecutors in New York.

In Davos, Carney told world leaders that there had been a “rupture in the world order” in a clear reference to Trump, followed by remarks this week to the Canadian House of Commons that “almost nothing was normal now” in the US, according to the CBC.

Carney also said this week in a call with Trump that Ottawa should continue to diversify its trade deals with countries beyond the US, although it had no plans in place yet for a free-trade agreement with China.

Filling the void

Hanscom Smith, a former US diplomat and senior fellow at Yale’s Jackson School of International Affairs, told Al Jazeera that Beijing’s appeal could be tempered by other factors, however.

“When the United States becomes more transactional, that creates a vacuum, and it’s not clear the extent to which China or Russia, or any other power, is going to be able to fill the void. It’s not necessarily a zero-sum game,” he told Al Jazeera. “Many countries want to have a good relationship with both the United States and China, and don’t want to choose.”

One glaring concern with China, despite its offer of more reliable business dealings, is its massive global trade surplus, which surged to $1.2 trillion last year.

Much of this was gained in the fallout from Trump’s trade war as China’s manufacturers – facing a slew of tariffs from the US and declining demand at home – expanded their supply chains into places like Southeast Asia and found new markets beyond the US.

China’s record trade surplus has alarmed some European leaders, such as French President Emmanuel Macron, who, in Davos, called for more foreign direct investment from China but not its “massive excess capacities and distortive practices” in the form of export dumping.

Li tried to address such concerns head-on in his Davos speech. “We never seek trade surplus; on top of being the world’s factory, we hope to be the world’s market too. However, in many cases, when China wants to buy, others don’t want to sell. Trade issues often become security hurdles,” he said.

India and the European Union have agreed on a huge trade deal creating a free trade zone of two ‌billion people, European ​Commission President Ursula ‍von der Leyen and Indian Prime Minister Narendra Modi have said.

In a post on X during her visit to New Delhi on Tuesday, von der Leyen said the two parties were “making history today”.

“We have concluded the mother of all ​deals. ‌We have created a free trade zone of two ‌billion people, with ‌both sides ⁠set to benefit,” she added.

Modi said the landmark agreement, following nearly two decades of on-and-off ​negotiations, had been reached, hailing its benefits before a meeting with von der Leyen and European Council President Antonio Costa.

“This deal will bring many opportunities for India’s 1.4 billion and many millions of people of the EU,” he said.

The deal will cover about 25 percent of the global gross domestic product (GDP), Modi said, adding that India will get a boost in sectors including textiles, gems and jewellery, and leather goods.

The trade pact comes amid a push by Brussels and New Delhi to open up new markets in the face of tariffs imposed by the United States and Chinese export controls.

It will pave the way for ‍India, the world’s most populous nation, to open up its huge, protected market to free trade with the 27-nation EU, its biggest trading partner.

The EU views India as an important market for the future, while New Delhi sees Europe as an important potential source of technology and investment.

The formal signing of the deal will take ‌place after legal vetting, expected to last five to six months, the Reuters news agency reported, quoting an Indian government official aware of the matter. The official said the deal was expected to be implemented within a year.

EU exports ‘expected to double’

The EU said it expected its exports to India to double by 2032 as a result of the deal.

Bilateral trade between India and the EU in goods has already grown by nearly 90 percent over the past decade, reaching 120 billion euros ($139bn) in 2024, according to EU figures. Trade in services accounts for a further 60 billion euros ($69bn), EU data shows.

Under the agreement, tariffs on 96.6 percent of EU goods exports to India would be eliminated or reduced, EU officials said. The deal would save up to 4 billion euros ($4.74bn) a year in duties on European products, officials said.

Among the products that would have tariffs all or mostly eliminated were machinery, chemicals and pharmaceuticals.

Tariffs on cars would gradually reduce to 10 percent with a quota of 250,000 vehicles a year, officials said, while EU service providers would gain privileged access to India in key areas such as financial and maritime services. Tariffs on EU aircraft and spacecraft would be eliminated for almost all products.

Tariffs would be cut to 20-30 percent on EU wine, 40 percent on spirits, and 50 percent on beer, while tariffs on fruit juices and processed food would be eliminated.

“The EU stands to gain the highest level of access ever granted to a trade partner in the traditionally protected Indian market,” von der Leyen said on Sunday. “We will gain a significant competitive advantage in key industrial and agri-good sectors.”

Last-minute talks on Monday had focused on several sticking points, including the impact of the EU’s carbon border tax on steel, sources familiar with the discussions told the AFP news agency.

Talks on the India-EU trade deal were launched in 2007, but for many years made little progress. However, Russia’s full-scale invasion of Ukraine led to the relaunch of talks in 2022, while United States President Donald Trump’s aggressive tariff policy spurred rapid progress in negotiations.

India and the EU also announced the launch of a security and defence partnership, similar to partnerships the EU has with Japan and South Korea, as von der Leyen said Brussels and New Delhi would grow their strategic partnership further.

The moves come as India, which has relied on Russia for key military hardware for decades, has tried to reduce its dependence on Moscow by diversifying imports and pushing its domestic manufacturing base, while Europe is doing the same with regard to Washington.

The EU-India deal comes days after Brussels signed a key pact with the South American bloc Mercosur, following deals last year with Indonesia, Mexico and Switzerland. During the same period, New Delhi ​finalised pacts with the United Kingdom, New Zealand and ‌Oman.

Carney has been under pressure from the opposition to lower prices of food and other essentials for lower-income people.

Canadian Prime Minister Mark Carney has announced a multibillion-dollar package as part of a series of measures aimed at lowering the costs of food and other essentials for low-income families.

On Monday, Carney announced a five-year 25 percent boost to the Goods and Services Tax (GST) credit that starts this year.

The GST credit, which is being renamed the Canada Groceries and Essentials Benefit, will provide additional, significant support for more than 12 million Canadians, Carney said in a statement.

The government will also provide a one-time top-up equivalent to a 50 percent increase this year to eligible residents.

“We’re bringing in new measures to lower costs and make sure Canadians have the support they need now,” Carney said.

The measures would cost the government 3.1 billion Canadian dollars ($2.26bn) in the first year and between 1.3 billion Canadian dollars ($950m) and 1.8 billion Canadian dollars ($1.3bn) in each of the following four years, he told reporters at a news conference, according to the Reuters news agency.

While overall consumer price inflation in Canada has eased and came in at 2.4 percent for December, “food price inflation remains high due to global and domestic factors, including supply chain disruptions, higher US tariffs from the trade war and climate change/extreme weather”, Tony Stillo, director of Canada Economics at Oxford Economics, told Al Jazeera.

The government is also setting aside 500 million Canadian dollars ($365m) from the Strategic Response Fund to help businesses address the costs of supply chain disruptions without passing those costs on to Canadians, and will create a 150 million Canadian dollar ($110m) Food Security Fund under the existing Regional Tariff Response Initiative for small and medium enterprises and the organisations that support them.

Changing landscape

“The global landscape is rapidly changing, leaving economies, businesses, and workers under a cloud of uncertainty. In response, Canada’s new government is focused on what we can control: building a stronger economy to make life more affordable for Canadians,” Carney said.

The new measures were unveiled on the day Parliament resumes after its winter break.

Opposition parties have urged Carney to reduce prices of daily goods, especially as sections of the economy have come under pressure from United States President Donald Trump, who has slapped 35 percent tariffs on the country as well as separate tariffs on steel, aluminium and lumber, leading to job losses in those sectors.

Over the weekend, Trump escalated his threats and said he would impose a 100 percent tariff on Canada if it makes a trade deal with China. Carney has been working on diversifying Canada’s exports away from the US, its biggest trading partner and to which nearly 80 percent of its exports went last year, including by increasing business with other markets like China.