International Trade

The group said it would call for analysis on international supply chain resilience.

Finance ministers and central bank governors from the Group of Seven (G7) democracies have pledged to address “excessive imbalances” in the global economy and said they could increase sanctions on Russia.

The G7 announced the plan on Thursday as the officials, who met in the Canadian Rocky Mountains, said there was a need for a common understanding of how “non-market policies and practices” undermine international economic security.

The document did not name China, but references by the United States and other G7 economies to non-market policies and practices often are targeted at China’s state subsidies and export-driven economic model.

The final communique called for an analysis of market concentration and international supply chain resilience.

“We agree on the importance of a level playing field and taking a broadly coordinated approach to address the harm caused by those who do not abide by the same rules and lack transparency,” it said.

Lowering Russian oil price cap

European Commission Executive Vice President Valdis Dombrovskis said the G7 ministers discussed proposals for further sanctions on Russia to try to end its war in Ukraine. They included lowering the G7-led $60-per-barrel price cap on Russian oil, given that Russian crude is now selling under that level, he said.

The G7 participants condemned what they called Russia’s “continued brutal war” against Ukraine and said that if efforts to achieve a ceasefire failed, they would explore all possible options, including “further ramping up sanctions”.

Russia’s sovereign assets in G7 jurisdictions would remain immobilised until Moscow ended the war and paid for the damage it has caused to Ukraine, the communique said. It did not mention a price cap.

Brent crude currently trades at around $64 per barrel.

A European official said the US is “not convinced” about lowering the Russian oil price cap.

Earlier this week, the US Treasury said Secretary Scott Bessent intended to press G7 allies to focus on rebalancing the global economy to protect workers and companies from China’s “unfair practices”.

The communique also recognised an increase in low-value international “de minimis” package shipments that can overwhelm customs and tax collection systems and be used for smuggling drugs and other illicit goods.

The duty-free de minimis exemption for packages valued below $800 has been exploited by Chinese e-commerce companies including Shein and Temu.

Syrians are hoping sanctions relief will help boost investment, reconstruction after more than a decade of civil war.

Business owners in Syria have welcomed the European Union’s decision this week to lift sanctions on the country, in what observers say is the most significant easing of Western pressure on Damascus in more than a decade.

The EU’s move, which followed a similar announcement by the United States in mid-May, was praised by Syrian Foreign Minister Asaad al-Shaibani as one that would bolster Syria’s security and stability.

For many Syrian entrepreneurs, it also brings the hope of rebuilding their livelihoods after years of economic isolation.

“Companies that were ousted from Syria and stopped dealing with us because of the sanctions are now in contact with us,” Hassan Bandakji, a local business owner, told Al Jazeera.

“Many companies and producers are telling us they are coming back and that they want to reserve a spot in our market.”

The EU and US sanctions had levied wide-ranging sanctions against the government of former Syrian President Bashar al-Assad, who was removed from power in a rebel offensive in December of last year.

The economic curbs had severely limited trade, investment, and financial transactions in Syria, cutting businesses off from supplies and international banking.

“The main obstacle we faced was getting raw materials and automated lines,” said Ali Sheikh Kweider, who manages a factory in the countryside of the Syrian capital, Damascus.

“As for bank accounts, we weren’t able to send or receive any transactions,” Kweider told Al Jazeera.

Syria’s new government, led by ex-rebel leader and interim President Ahmed al-Sharaa, had called for the sanctions to be lifted as it seeks to rebuild the country.

US President Donald Trump said after a meeting with al-Sharaa in Saudi Arabia last week that he planned to order the lifting of American sanctions on Syria.

Reporting from Damascus, Al Jazeera’s Mahmoud Abdelwahed said the government is hoping the sanctions relief will help Syria reintegrate into the international community.

It also views the EU’s announcement as additional “recognition of the new political leadership” in the country, Abdelwahed added.

Target has slashed its annual forecasts amid a pullback in discretionary spending due to tariff-driven uncertainty and a backlash against shifts in its diversity, equity and inclusion (DEI) policy.

The United States big box retailer, which reported its first-quarter earnings on Wednesday, relies on China for 30 percent of its store label goods. While it is on track to reduce its dependency by another 5 percent by the end of the year, tariff-driven uncertainty has caused a slump.

In its forecast, the Minneapolis, Minnesota-based retailer expects a low single-digit decline in annual sales. Wall Street analysts expected a marginal increase of 0.27 percent in annual sales, according to the LSEG. Target previously forecasted net sales growth of about 1 percent.

This comes as Bank of America recently forecasted that consumers have eased up on spending as the most recent report from The Conference Board showed a slowdown in consumer confidence, which hit a 13-year low in April. The US economy also showed the first contraction in three years in the first quarter.

Target’s first-quarter comparable sales fell 3.8 percent compared with analysts’ estimates of a 1.08 percent decline. It expects annual adjusted earnings of $7 to $9 per share, compared with its prior forecast of $8.80 to $9.80. Analysts were expecting $8.40.

“Expectations were very low for Target’s first quarter. Even against that, Target’s results came in light,” Michael Baker, a DA Davidson analyst, told the news agency Reuters. Target’s stock has performed poorly, down nearly 28 percent this year, in contrast to Walmart’s 9 percent gain and Home Depot’s 2.3 percent decline.

Target’s stock is tumbling on the news of its disappointing earnings report. As of 11am in New York (15:00 GMT), it was down 2.91 percent from the market open although it is up more than 1 percent over the past five days.

DEI boycotts weigh on sales 

Target also said its first-quarter performance was impacted by changes made to its DEI policies in January.

Target ended many of its DEI policies, drawing condemnation as some of its critics noted that its commitment to inclusiveness had helped attract younger, more diverse consumers. The decision generated more attention as it coincided with US President Donald Trump’s executive order to eliminate DEI policies in federal agencies and schools.

The backlash led to economic boycotts, notably from Reverend Jamal-Harrison Bryant, a Georgia pastor who organised a 40-day “fast” of Target stores. He has since called for those efforts to continue in recognition of the fifth anniversary of George Floyd’s murder by police in Minneapolis, Target’s headquarters.

CEO Brian Cornell said the reversal of some DEI policies played a role in first-quarter performance but he couldn’t quantify the impact.

Worse than competitors 

“Target’s [results] do nothing to restore confidence in the company. On the contrary, they are emblematic of a business that has made too many mistakes and has lost its way on several fronts,” GlobalData Managing Director Neil Saunders told Reuters, pointing to issues including poor inventory management and a lack of exciting merchandise.

Target’s forecast contrasts with its bigger rival Walmart, which maintained its annual forecasts last week but said it would need to pass on higher prices due to tariffs. That has drawn the ire of Trump, who said Walmart should “eat the tariffs” on imported goods instead of passing on the costs.

Unlike Walmart, which generates the bulk of its revenues by selling groceries like bananas, milk, toilet paper and shampoo, a majority of what Target sells falls in the nonessential category – largely apparel, home furnishings and beauty products, which it sources from China.

TJX, the parent company of retailer TJ Maxx, also reported its earnings on Wednesday, and while tariffs loom, the company is set to maintain its forecasts. The Massachusetts-based big box retailer expects comparable sales to grow 2 percent to 3 percent during the current quarter.

Unlike Target and Walmart, TJ Maxx, relies on expansive sourcing from middlemen in the US, which limits the impact of any new tariffs on China.

Looming price hike 

On a media call, Target executives declined to provide details on potential price increases due to tariffs. Most tariff-related increases could be offset, they said, but acknowledged that raising prices could be a “last resort”.

Cornell said pricing decisions will largely depend on ongoing efforts to source more products from the US and reduce reliance on China.

“That is going to play a very important role,” he said.

Rick Gomez, the company’s chief commercial officer, said Target is working on negotiating with suppliers, expanding sourcing to other Asian countries beyond China, re-evaluating its product assortment, and adjusting the timing and quantity of orders.

“These efforts are expected to offset the vast majority of the incremental tariff exposure,” Gomez said.

Johannesburg, South Africa – When the millionaire mining magnate-turned-president of South Africa landed in Washington to meet the billionaire real estate tycoon-turned-president of the United States, it was with a deal in mind.

Tensions have been escalating between the US and its African trade ally since Donald Trump took office this year, cut off aid to South Africa, repeated false accusations that a “white genocide” is taking place there and began welcoming Afrikaners as refugees.

At the meeting between Trump and Cyril Ramaphosa in the White House on Wednesday, the South African president began by focusing heavily on trade and investments, highlighting the two countries’ years of cooperation, in keeping with statements made by South Africa’s presidency that Ramaphosa would present a trade deal to the US.

But Trump responded with a well-prepared redirect that South African media and analysts described as an “ambush” and a move that “blindsided” Ramaphosa.

Ready with printouts of news articles about alleged white victims of killings in South Africa and a video of firebrand opposition politician Julius Malema singing Kill the Boer, Trump insisted that white farmers were being targeted and murdered – an assertion Ramaphosa politely yet firmly denied, saying criminality was a problem for all South Africans regardless of race.

The team Ramaphosa assembled to join him on his working visit – which included four white South Africans: two golf legends, the wealthiest man in the country and the agriculture minister – all reaffirmed Ramaphosa’s facts that while violence was widespread, white people were not specifically being targeted.

“We have a real safety problem in South Africa, and I don’t think anyone wants to candy-coat that,” said John Steenhuisen, the agriculture minister and a member of the Democratic Alliance party, which is part of South Africa’s governing coalition.

“Certainly, the majority of South Africa’s commercial and smallholder farmers really do want to stay in South Africa and make it work,” the minister, who is himself an Afrikaner, said. Trump claimed that “thousands” of white farmers were fleeing South Africa.

Steenhuisen added that the people in the video Trump showed were leaders of opposition minority parties and his party had joined forces with Ramaphosa “precisely to keep those people out of power”.

‘The lion’s den’

The meeting began cordially where Trump complimented South African golfers, including well-known Ernie Els and Retief Goosen, who were part of the delegation. They both implored Trump for enhanced trade to uplift South Africa’s economy.

Also in the delegation was South Africa’s richest man, Johann Rupert, a luxury-goods mogul and an Afrikaner. He countered claims of racial persecution against the white minority, saying that while criminality was rife, Black people were more often the victims.

“We have too many deaths, but it’s across the board. It is not only white farmers,” Rupert said to Trump.

Ramaphosa kept his cool, local media and observers said, noting that the South African president chose to remain calm, patient and light-hearted even in light of Trump’s attack.

He steered talks back to trade, saying South Africa needed economic investment from its allies, and mostly sat expressionless while the video was played, occasionally stretching his neck to look at it.

Ramaphosa went into “the lion’s den” and was met with an ambush but he remained calm, South African political analyst Sanusha Naidu said.

“Ramaphosa and the delegation did not allow themselves to be baited into an emotional response. That’s critical. They made Trump feel like he had the upper hand in the meeting,” she told Al Jazeera, adding that given the narrative from Trump before Ramaphosa’s arrival, it “could have gone worse”.

When asked by a reporter whether he wanted the impasse between the US and South Africa resolved, Trump said he was open to it.

“I hope it has to be resolved. It should be resolved,” he said, adding that if it were not resolved, it would be “the end of the country”.

‘Reset’ relations

Before the two leaders met on Wednesday, Ramaphosa’s office said the aim was to “reset” relations, especially as the US is South Africa’s second largest trading partner after China.

“Whether we like it or not, we are joined at the hip, and we need to be talking to them,” the South African president said before his trip.

Christopher Isike, a political scientist at the University of Pretoria, told Al Jazeera that direct engagement between the leaders was important, given the tense relations between their countries.

“This is an opportunity for South Africa to correct misinformation peddled by President Trump and try to reset trade relations between the two countries,” he said.

Isike noted that both presidents’ backgrounds as businesspeople could provide common ground for discussing mutually advantageous deals.

“Rich friends of Ramaphosa are also rich friends of Trump, and that may have helped facilitate the meeting,” Isike added.

Common ground and level heads would be useful as the leaders continued private talks away from the media on Wednesday, observers said.

Before the visit, Ramaphosa maintained that while Trump was a dealmaker, he too was adept at making deals and even joked about the possibility of playing a round of golf with his US counterpart.

Washington, however, has criticised Pretoria for a host of matters since Trump took office. This continued in the meeting on Wednesday.

Trump focused on the white farmers, particularly Afrikaners – the descendants of mainly Dutch settlers who instituted apartheid. He alleged they are being killed because of their race despite evidence showing that attacks and killings are common across all groups in the country.

Trump also mentioned South Africa’s land reform law that allows land in the public interest to be taken without compensation in exceptional circumstances in an effort to redress apartheid injustices. Pretoria said no white land has been taken, but the US said the law unfairly targets minority white South Africans who are the majority landholders.

Despite Pretoria consistently seeking to rectify false assertions, the Trump administration has pushed ahead with a plan to take in Afrikaners as refugees. The first group arrived last week. He has also cut aid, including vital support for life-saving HIV programmes, to South Africa.

Additionally, there are worries that Trump may not attend the Group of 20 summit being held in South Africa in November and his government may not renew the African Growth and Opportunity Act (AGOA), key US trade legislation that assists economies in sub-Saharan Africa. It expires in September.

Trade and investments

Before Wednesday’s meetings, Ramaphosa said strengthening trade relations between the two countries was his primary motivation for travelling to Washington, DC.

“We want to come out of the United States with a really good trade deal, investment promotion. We invest in the United States, and they invest in us. We want to strengthen those relations. We want to consolidate relations between the two countries,” he said.

This week, South Africa’s ministers of trade and agriculture, Parks Tau and Steenhuisen, met with US Trade Representative Jamieson Greer to present the first draft of a trade deal.

In 2024, total goods trade between the US and South Africa amounted to $20.5bn. This included $5.8bn in US exports to South Africa and $14.7bn in South African exports to the US.

However, some observers said that at the heart of the potential trade deal is what South Africa could offer billionaire and close Trump ally, Elon Musk, given his ongoing claims about obstacles he allegedly faces in operating Starlink, his satellite internet company, in the country where he was born due to its transformation laws.

These laws seek to redress past injustices that kept Black people destitute and require businesses over a certain size to have a 30 percent equity stake held by members of previously disadvantaged groups.

Speaking at the Doha Economic Forum on Tuesday, Musk reiterated his assertions about laws he claimed were biased against white people despite experts explaining that most of those only seek to promote racial justice.

“All races must be on equal footing in South Africa. That is the right thing to do. Do not replace one set of racist laws with another set of racist laws, which is utterly wrong and improper,” Musk said.

“I am in an absurd situation where I was born in South Africa but cannot get a licence to operate Starlink because I am not Black,” he claimed.

Before Wednesday’s meeting, a White House official told the Reuters news agency Trump is likely to tell Ramaphosa that all US companies in South Africa should be exempt from “racial requirements”.

Opposition figure Malema’s party, the Economic Freedom Fighters (EFF), threatened legal action after news that the government was considering offering regulatory assurances to Musk’s Starlink. The EFF said the move would be unconstitutional and shows Ramaphosa is willing to compromise the country’s sovereignty to “massage the inflated ego of Musk and Trump”.

Isike said that while trade concessions would be discussed, he doubted the South African government would give up its laws to appease Musk.

“I will be surprised if Starlink gets its way by refusing to follow South African transformation laws, which require 30 percent Black ownership of a foreign company,” he said.

‘Genocide’ claims

Meanwhile, in private talks, Ramaphosa and Trump were also expected to discuss foreign policy issues, including peace prospects between Russia and Ukraine and South Africa’s support for Palestine and its genocide case against Israel at the International Court of Justice (ICJ).

Some political observers said Pretoria is in the US crosshairs partly because of its actions against the key Washington ally.

Patrick Bond, a sociology professor at the University of Johannesburg, predicted before the talks that the US might offer to retract claims of “white genocide” in exchange for South Africa dropping its case at the ICJ.

South Africa is seeking to hold Israel accountable for its assault on Gaza, which has killed more than 53,000 Palestinians since October 2023. The US is Israel’s strongest ally and arms supplier.

“We are very rational when it comes to discussing global and geopolitical matters. We will put South African positions first, and our foreign policy positions will be clarified,” Ramaphosa said before the meeting.

As the Gaza genocide case against Israel continues in The Hague, US allegations of a widely discredited “white genocide” in South Africa continue to follow the country’s leadership.

Before Trump and Ramaphosa retreated to private meetings on Wednesday, a reporter asked the US president if he had decided whether genocide was being committed in South Africa. “I haven’t made up my mind,” he replied.

The unfounded claim of white genocide has “taken on a life of its own”, analyst Paolo von Schirach, president of the Global Policy Institute in Washington, DC, told Al Jazeera.

It will be difficult for Ramaphosa and Trump to rebound after the Oval Office “ambush”, he said.

“We know that Elon Musk certainly fanned this story [about a white genocide], and he’s probably not the only one,” von Schirach said. “It’s going to be hard for Trump to say, ‘Oh, so sorry. I was misinformed.’”

UK Prime Minister Keir Starmer has announced a “landmark deal” with the EU that lays the ground for closer collaboration with the bloc.

Nearly nine years after the United Kingdom voted to leave the European Union, the new agreement includes a new security and defence pact, fewer restrictions on British food exporters and visitors, and a controversial new fishing agreement.

Britain said the reset with its biggest trading partner would reduce red tape for agricultural producers, making food cheaper. The deal would also improve energy security and, by 2040, add nearly 9 billion pounds ($12.1bn) to the economy.

While Starmer sold the deal as a “win-win”, attacks immediately emerged from the opposition Conservative Party, which said the deal would make the UK a “rule-taker” from Brussels.

Nigel Farage, head of the hard-right, pro-Brexit Reform UK party, called the deal an “abject surrender”.

What are the terms of the deal?

As part of Monday’s defence-and-security agreement, the UK and the EU will work more closely on information sharing, maritime issues and cybersecurity.

Crucially for Britain, the bloc committed to exploring ways for the UK to access EU procurement defence funds.

British weapons manufacturers can now take part in a 150-billion-euro ($169bn) programme to rearm Europe – part of United States President Donald Trump’s push for Brussels to spend more on defence.

Meanwhile, both sides have agreed to work on a joint agrifood agreement to remove Brexit-era trade barriers like safety checks on animals, paperwork and bans on certain products.

In 2023, UK food and drink exports to the EU were worth 14 billion pounds ($18.7bn), accounting for 57 percent of all the sector’s overseas sales. Monday’s agreement should raise that.

In exchange, the UK will need to follow EU food standards – a system known as “dynamic alignment” – and accept the European Court of Justice’s oversight in this area.

There have been talks on linking up the UK and EU’s carbon markets (i.e., a tradable price on CO2 emission) and on a joint electricity market.

The deal also paves the way for the UK’s return to the Erasmus student exchange programme, as well as granting young people access to the EU through work and travel.

In a symbolic gesture to please tourists, Britons will be allowed to use border e-gates at most EU airports, reducing queues at passport controls.

Finally, the UK will grant EU fishers access to British waters for an additional 12 years, an eleventh-hour concession from the UK – three times longer than it had originally offered.

Does this amount to backtracking on Brexit?

Critics from the Conservative Party and Reform UK quickly denounced the deal as a betrayal of Brexit, arguing that the price of the trade agreement was excessive.

The fisheries deal drew fierce disapproval, with opposition politicians saying it meant handing over Britain’s fishing waters to European fishers for an extra decade.

Fishing is a key issue in the UK, despite making up just 0.04 percent of gross domestic product (GDP). And Starmer’s deal appears to have reignited tensions last seen during Brexit negotiations.

Offering “12 years access to British waters is three times longer than the govt wanted,” Conservative leader Kemi Badenoch wrote on X. “We’re becoming a rule-taker from Brussels once again.”

Reform’s leader, Farage, told Bloomberg that Starmer’s deal on fisheries “will be the end of the industry”. The Scottish Fishermen’s Federation called it a “horror show”.

Elsewhere, there were complaints about Britain having to submit itself to the jurisdiction of the European Court of Justice on agrifood policies.

For their part, the Conservatives vowed to reverse all these changes if they got back into power.

Still, Starmer stuck firmly to his election promise of not re-joining the European single market (in which goods and people can move freely) or the customs union (which eliminates tariffs on goods traded between EU countries).

What were the costs of Brexit?

According to the Office for Budget Responsibility (OBR), the Ministry of Finance’s independent forecaster, the UK’s decision to leave the EU will shrink trade flows by 15 percent.

The OBR also that calculated Brexit will lower GDP by 4 percent over the long term. That’s the equivalent of costing the economy 100 billion pounds ($134bn) per year.

For starters, Brexit involved erecting significant trade barriers with Europe. In 2024, UK goods exports to the EU were 18 percent below their 2019 level, in real terms.

The decision to leave the EU also triggered business uncertainty. Lacking clarity over the UK’s future economic relationship with the EU, business investment softened.

The National Institute of Economic and Social Research estimates that business investment was 13 percent lower in 2023 than under a remain scenario.

Brexiteers promised that leaving the EU would allow Westminster to sign global free trade agreements and break away from the EU’s demanding regulatory regime.

“The argument was that doing business at home and abroad would be simplified,” says Gaurav Ganguly, head of EMEA Economic Research at Moody’s Analytics.

“And while the UK has signed several trade deals since 2020, Brexit has not unleashed the potential that was talked about [by its advocates].”

In recent weeks, the UK has signed up to trade agreements with India and the US. But Britain’s average GDP growth was just 0.64 percent between 2020 and 2024.

Elsewhere, public support for Brexit has fallen since the 52-48 percent leave vote in the 2016 referendum.

Earlier this year, polling by YouGov found only 30 percent of Britons now think it was right for the UK to vote to leave the EU, versus 55 percent who say it was wrong.

Roughly 60 percent of people believe Brexit has gone badly, including one-third of leave voters. A majority also believe that leaving the EU has damaged Britain’s economy.

Are the economic benefits from the new agreement?

Ever since last year’s election, the Labour government has pledged to improve Britain’s anaemic levels of growth. It sees lower trade barriers with the EU as crucial to that goal.

Acknowledging the damage inflicted to Britain’s trade by Brexit, Starmer said the deal to remove restrictions on food would give 9 billion pounds ($12bn) boost to the UK economy by 2040.

In a government briefing, Downing Street said it would redress the 21 percent drop in exports and 7 percent drop in imports seen since Brexit.

That said, 9 billion pounds ($12bn) would amount to just 0.2 percent of the UK’s national output. As such, this week’s agreement deal has dismantled only a fraction of the trade barriers erected post-Brexit.

“Yesterday’s deal may lift growth,” Ganguly told Al Jazeera. “But the UK economy continues to struggle from structural weaknesses, including low productivity and limited fiscal space.”

The Centre for European Reform, a London-based think tank, recently calculated that the UK-EU reset would boost Britain’s GDP by between 0.3 percent and 0.7 percent.

Ganguly said he is “not inclined to change my forecast in the short term”, adding “In addition, it’s clear that yesterday’s agreements won’t completely reverse the economic hit from Brexit.”

The upshot is that Ganguly expects modest GDP growth of around 1-2 percent between now and the next election cycle, in 2029.

Despite slowdown, data points to reliance of Chinese economy in the face of Donald Trump’s tariffs.

China’s industrial output and retail sales growth have slowed amid trade tensions with the United States.

Factory output grew 6.1 percent year-on-year in April, down from a 7.7 percent rise in March, data released by China’s National Bureau of Statistics showed on Monday.

While down compared with the previous month, the figure beat analysts’ expectations.

Analysts polled by the Reuters and Bloomberg news agencies had respectively forecast growth of 5.5 percent and 5.7 percent.

Retail sales grew 5.1 percent year-on-year, slower than the 5.9 percent growth recorded in March and below analysts’ forecasts.

Fixed-asset investment, which includes property and infrastructure investment, rose 4 percent.

Unemployment fell slightly, from 5.2 percent to 5.1 percent.

The latest data is likely to bolster hopes of China’s economy remaining resilient in the face of US President Donald Trump’s tariffs, after gross domestic product expanded a better-than-expected 5.4 percent in the January-March period.

The National Bureau of Statistics said the economy maintained “new and positive development momentum” due to Beijing’s economic policies, despite the “increasing impact of external shocks”.

“However, we should be aware that there are still many unstable and uncertain factors in external environment, and the foundation for sustained economic recovery needs to be further consolidated,” the statistics agency said in a statement.

The economic figures are the first to be released since Washington and Beijing last week agreed to dramatically reduce tariffs on each other’s goods for 90 days.

Under the deal reached in Geneva, the US lowered its tariff on Chinese goods from 145 percent to 30 percent, while China slashed its rate from 125 percent to 10 percent.

“The risk is that tariffs remain in place for a long time, and eventually, we see production offshored,” Lynn Song, chief economist for Greater China at ING, said in a note on Monday.

“But amid tariff unpredictability, not just for China but across the world, few companies will be rushing to commit resources to set up offshore manufacturing facilities. This could mean that a decent portion of China’s manufacturing and exports will be less impacted than originally feared.”

Washington, DC – Three days, three countries, hundreds of billions of dollars in investments and a geopolitical shift in the United States’s approach to the region: Donald Trump’s trip to the Middle East has been eventful.

This week, the United States president visited Saudi Arabia, Qatar and the United Arab Emirates in the first planned trip of his second presidency, after attending Pope Francis’s funeral last month.

Trump was visibly gleeful throughout the trip as he secured investments, criticised domestic political rivals and heaped praise on Gulf leaders. The word “historic” was used more than a few times by US officials to describe the visits.

With Trump returning to the White House, here are five key takeaways from his trip:

A rebuke of interventionism

Addressing an investment summit in Riyadh, Trump promoted a realist approach to the Middle East — one in which the US does not intervene in the affairs of other countries.

He took a swipe at neoconservatives who oversaw the US wars in Iraq and Afghanistan, as he lauded Gulf leaders for developing the region.

“This great transformation has not come from Western intervention or flying people in beautiful planes, giving you lectures on how to live and how to govern your own affairs,” he said.

“The gleaming marbles of Riyadh and Abu Dhabi were not created by the so-called nation-builders, neo-cons or liberal nonprofits like those who spent trillions and trillions of dollars failing to develop Kabul, Baghdad, so many other cities.”

Trump built his political brand with his “America First” slogan, calling for the US to focus on its own issues instead of helping — or bombing — foreign countries.

But his words at the investment summit marked a stern rebuke of the neo-cons who dominated Trump’s Republican Party a decade ago.

“In the end, the so-called nation-builders wrecked far more nations than they built, and the interventionists were intervening in complex societies that they did not even understand themselves,” Trump said.

Israel sidelined, but no Gaza solution

It is rare for US presidents to travel to the Middle East and not visit Israel, but Trump omitted the US ally from his itinerary as he toured the region.

Skipping Israel was seen as a reflection of the deteriorating ties between the US administration and the government of Israeli Prime Minister Benjamin Netanyahu.

This week’s trip also came in the context of several moves perceived as evidence of the US marginalising Israel. The US has continued to hold talks with Israel’s rival Iran, announced a ceasefire with the Houthis in Yemen, and conducted unilateral negotiations to release Israeli soldier Edan Alexander, a US citizen, from Hamas captivity.

Moreover, while touring the Gulf, Trump did not use his remarks to prioritise the establishment of formal diplomatic ties between Saudi Arabia and Israel, which had been a top goal during his first term.

It remains unclear how Trump’s decisions will affect the “special relationship” between the two allies, but experts say it is becoming increasingly apparent that the US no longer views the Middle East solely through the lens of Israel.

“Is it a tactical problem for Netanyahu and the entire pro-Israel lobby? I think it is,” Khaled Elgindy, a visiting scholar at Georgetown University, said of Trump’s shift.

“It does throw a wrench in the machinery because it is a president who is showing openly daylight with Israeli decision-making, and not just in rhetoric, but acting on it — leaving Israel out of the process.”

With that chasm emerging, some Palestinian rights advocates had hoped that the US president’s trip to the region would see Washington pursue a deal to end Israel’s war on Gaza.

But as Trump marvelled at the luxurious buildings in the Gulf, Israel intensified its bombardment to destroy what’s left of the Palestinian territory.

No ceasefire was announced, despite reports of continuing talks in Doha. And Israel appears to be pushing forward with its plan to expand its assault on Gaza as it continues to block aid for the nearly two million people in the enclave, leading to fears of famine.

United Nations experts and rights groups have described the situation as a genocide.

But despite preaching “peace and prosperity” for both Israelis and Palestinians, Trump made no strong push to end the war during this week’s trip.

On Thursday, Trump suggested that he has not given up on the idea of depopulating Gaza and turning it over to the US — a proposal that legal experts say amounts to ethnic cleansing.

“I have concepts for Gaza that I think are very good. Make it a freedom zone,” he said. “Let the United States get involved, and make it just a freedom zone.”

Lifting Syria sanctions

In a move that surprised many observers, Trump announced from Riyadh that he will offer sanction relief to Syria, as the country emerges from a decade-plus civil war.

Trump also met with interim Syrian President Ahmad al-Sharaa and described him as a “young, attractive guy”.

A wholesale lifting of sanctions was not expected, in part because of Israel’s hostility to the new authorities in Syria. Israeli officials often describe al-Sharaa, who led al-Qaeda’s branch in Syria before severing ties with the group, as a “terrorist”.

But Trump said he made the decision to lift the economic penalties against Syria at the request of Saudi Arabia’s Crown Prince Mohammed bin Salman and Turkiye’s President Recep Tayyip Erdogan.

“I will be ordering the cessation of sanctions against Syria in order to give them a chance at greatness,” the US president said.

The White House said on Wednesday that Trump had a list of requests for al-Sharaa, including establishing diplomatic relations with Israel and deporting “Palestinian terrorists”.

Removing US sanctions, which had been imposed on the government of former President Bashar al-Assad, is likely to be a boost for the new Syrian authorities, who are grappling with an ailing economy after years of conflict.

“Lifting sanctions on Syria represents a fundamental turning point,” Ibrahim Nafi Qushji, an economist, told Al Jazeera.

“The Syrian economy will transition from interacting with developing economies to integrating with more developed ones, potentially significantly reshaping trade and investment relations.”

A carrot and a stick for Iran

In Saudi Arabia, Trump declared that he wants a deal with Iran — and he wants it done quickly.

“We really want them to be a successful country,” the US president said of Iran.

“We want them to be a wonderful, safe, great country, but they cannot have a nuclear weapon. This is an offer that will not last forever. The time is right now for them to choose.”

Trump warned Iran that, if it rejects his “olive branch”, he would impose a “massive maximum pressure” against Tehran and choke off its oil exports.

Notably, Trump did not threaten explicit military action against Iran, a departure from his previous rhetoric. In late March, for instance, he told NBC News, “If they don’t make a deal, there will be bombing.”

Iran says it is not seeking nuclear weapons and would welcome a stringent monitoring programme of its nuclear facilities.

But Israel and some hawks want the Iranian nuclear programme completely dismantled, not just scaled back.

US and Iranian officials have held multiple rounds of talks this year, but Tehran says it has not received an official offer from Washington. And Trump officials have not explicitly indicated what the endgame of the talks is.

US envoy Steve Witkoff said last month that Iran “must stop and eliminate” uranium enrichment, but days earlier, he had suggested that enrichment should be brought down to civilian energy levels.

Several Gulf countries, including the three that Trump visited this week, have welcomed the nuclear negotiations, as relations between Iran and its Arab neighbours have grown more stable in recent years.

Investments, investments and more investments

Before entering politics, Trump was a real estate mogul who played up his celebrity persona as a mega-rich dealmaker. He appears to have brought that business mindset to the White House.

While in the wealthy Gulf region, Trump was in his element. He announced deals that would see Saudi Arabia, Qatar and the UAE buy US arms and invest in American firms. According to the White House, Trump secured a total of $2 trillion in investments from the Middle East during the trip.

And his administration is framing the deals as a major political and economic victory for Trump.

“While it took President Biden nearly four years to secure $1 trillion in investments, President Trump achieved this in his first month, with additional investment commitments continuing to roll in,” the White House said.

“President Trump is accelerating investment in America and securing fair trade deals around the world, paving the way for a new Golden Age of lasting prosperity for generations to come.”

US president claims he has sealed deals worth $10 trillion during visits to Saudi Arabia, Qatar and UAE.

President Donald Trump has hailed deepening ties between the United States and the United Arab Emirates and said that the latter will invest $1.4 trillion in the former’s artificial intelligence sector over the next decade.

“I have absolutely no doubt that the relationship will only get bigger and better,” Trump said on Thursday at a meeting with UAE President Sheikh Mohamed bin Zayed Al Nahyan, on the final leg of his three-country tour of the Gulf region that saw him strike a series of lucrative tech, business and military deals that he said amounted to $10 trillion.

Sheikh Mohammed said the UAE remained “committed to working with the United States to advance peace and stability in our region and globally”.

The deal with UAE is expected to enable the Gulf country to build data centres vital to developing artificial intelligence models. The countries did not say which AI chips could be included in UAE data centres. Nvidia CEO Jensen Huang had earlier been seen in conversation with Sheikh Mohamed and Trump.

The AI agreement “includes the UAE committing to invest in, build, or finance U.S. data centres that are at least as large and as powerful as those in the UAE,” the White House said.

Reporting from Doha in Qatar, Al Jazeera’s Hashem Ahelbarra said such a deal had been “a national security concern” for Washington in the past. “But then they decided to change their mind under Trump, particularly when the UAE said that it was willing to invest $1.4 trillion,” he said.

Ahelbarra said the deal was a “significant step” for the UAE, positioning it as “the most important player in artificial intelligence, followed by Saudi Arabia”.

Before his departure for the UAE, Trump said in a speech to US troops at the Al Udeid Air Base southwest of Doha in Qatar that defence purchases signed by Qatar on Wednesday were worth $42bn.

Other agreements signed during Trump’s four-day swing through the Gulf include a deal for Qatar Airways to purchase up to 210 Boeing widebody jets, and a commitment from Saudi Arabia to invest $600bn in the US and to buy $142bn worth of US arms.

The tour also brought a flurry of diplomacy, with Trump saying in Qatar on Thursday that the US was getting close to securing a nuclear deal with Iran. On Tuesday, he said the US would remove longstanding sanctions on Syria.

Trump said he would probably return to Washington on Friday, although he said it was “almost destination unknown because they’ll be getting calls ‘Could you be here? Could you be there?’”

Trump had previously hinted that he could stop in Istanbul for talks on the Russia-Ukraine war.

Walmart, the world’s largest retailer, will have to start raising prices later this month due to the high cost of tariffs, executives have warned in a clear signal that United States President Donald Trump’s trade war is filtering through to the US economy.

As a bellwether of US consumer health, Walmart’s explicit statement on Thursday is also a signpost for how the trade war is affecting companies as Walmart is noted for its ability to manage costs more aggressively than other companies to keep prices low.

Walmart’s shares fell 2.3 percent in morning trading after it also declined to provide a profit forecast for the second quarter, even as the company’s US comparable sales surpassed expectations in the first quarter.

Net sales rose 2.5 percent to $165.6bn, a hair shy of estimates, while same-store sales were up 4.5 percent. Walmart’s quarterly adjusted profit was 61 cents per share, ahead of the analyst consensus for 58 cents per share.

Many US companies have either slashed or pulled their full-year expectations in the wake of the trade war, as consumers stretch their budgets to buy everything from groceries to essentials at cheaper prices. But Walmart’s statement will resonate nationwide, as roughly 255 million people shop in its stores and online weekly around the world, and 90 percent of the US population lives within 10 miles of a Walmart.

US shoppers will start to see prices rise at the end of May and certainly in June, Walmart’s Chief Financial Officer John David Rainey said in a CNBC interview. On a post-earnings call with analysts, he said the retailer would also have to cut back on orders as it considers price elasticity.

As the largest importer of container goods in the US, Walmart is heavily exposed to tariffs, and even though the US and China reached a truce that lowered levies for imports on Chinese goods to 30 percent, that’s still a high cost to bear, executives said.

“We’re very pleased and appreciative of the progress that has been made by the administration to bring tariffs down … but let me emphasise we still think that’s too high,” Rainey said on the call, referring to the tariff cuts negotiated over the weekend.

“There are certain items, certain categories of merchandise that we’re dependent upon to import from other countries and the prices of those things are likely going to go up, and that’s not good for consumers,” he added.

Other retailers also said they would be boosting prices. German sandal maker Birkenstock on Thursday said it plans to raise prices globally to fully offset the impact of the US tariff of 10 percent on European Union-made goods.

US consumer sentiment ebbed for a fourth straight month in April, signaling watchful purchasing, while the country’s gross domestic product (GDP) contracted for the first time in three years during the first quarter, fanning worries of a recession.

Narrow margins

Walmart’s CEO Doug McMillon said the retailer would not be able to absorb all the tariffs’ costs because of narrow retail margins, but was committed to ensuring that tariff-related costs on general merchandise – which primarily come from China – do not drive food prices higher.

To mitigate the impact, Walmart is working with suppliers to substitute tariff-affected components, such as replacing aluminium with fibreglass, which is not subject to tariffs.

Despite these efforts, McMillon noted that adjusting costs is more challenging in cases where Walmart imports food items like bananas, avocados, coffee, and roses from countries such as Costa Rica, Peru, and Colombia.

Analysts said Walmart was better positioned than rivals, as its scale enables it to lean on its suppliers and squeeze out efficiencies to shield customers from tariffs, but only so much.

“There will likely be some demand destruction from tariffs; a complete wreck is unlikely,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Walmart on Thursday kept its annual sales and profit forecast intact for fiscal 2026, but withheld second-quarter operating income growth and earnings per share forecasts, citing a “fluid operating environment … [which] makes the very near term exceedingly difficult to forecast at the level and speed at which tariffs could go up”.

Brussels is drawing up plans to use trade tariffs and capital controls to maintain financial pressure on Russia, even if Hungary decides to use its veto to block an extension of the European Union’s sanctions regime, which lapses in July of this year.

The European Commission has told ministers that a large part of the EU’s sanctions, which included freezing 200 billion euros ($224bn) of Russian assets, could be adapted to a new legal framework to bypass Budapest’s veto, according to the United Kingdom’s Financial Times newspaper.

Viktor Orban, Hungary’s prime minister, has repeatedly held up EU boycotts on Moscow as the central European country gets 85 percent of its natural gas from Russia. Orban’s nationalist government is also one of the most friendly to Moscow in all of Europe.

In any event, the EU’s recent proposals have emerged as Moscow and Kyiv hold their first direct peace talks since Russia’s full-scale invasion of Ukraine in February 2022.

Ukrainian and Russian representatives are convening today in Istanbul, Turkiye. However, Vladimir Putin will not travel to Istanbul for face-to-face talks with Volodymyr Zelenskyy.

Last weekend, European leaders held talks in Ukraine to put pressure on Russia to agree to a 30-day ceasefire in the run-up to the Istanbul talks. Ukraine agreed to it. Russia did not.

What sanctions does the EU currently have in place against Russia?

The EU adopted its 17th sanctions package against Moscow, designed to stifle Russia’s economy and force President Vladimir Putin to end the war in Ukraine, on Wednesday. This package has been signed off by Budapest and will be formally ratified by the European Commission next week.

Brussels has progressively expanded sanctions against Moscow since 2022, introducing import bans on Russian oil, a price cap on Russian fuel and the freezing of Russian central bank assets held in European financial institutions.

Vast swaths of Russia’s economy – from media organisations to aviation and telecommunications – are now under EU restrictions, in addition to trade bans and measures targeting oligarchs and politicians.

Under the 17th package, some 200 “shadow fleet” tankers have been sanctioned. These are ships with opaque ownership and no Western ties in terms of finance or insurance, allowing them to bypass financial sanctions.

The latest sanctions will also target Chinese and Turkish entities that the EU says are helping Russia to evade embargoes. New restrictions will be imposed on 30 companies involved in the trade of dual-use goods – products with potential military applications.

“Russia has found ways to circumvent the blockage imposed by Europe and the United States, so closing the tap would grab Russia by the throat,” France’s foreign minister, Jean-Noel Barrot, told BFM TV.

How effective are sanctions?

Alongside military support for Kyiv, sanctions have been the EU’s main response to Russia’s war on Ukraine. But sanctions have so far failed to stop the war. What’s more, due to high oil prices and elevated military spending, Russia’s economy has outperformed expectations since the start of 2022.

Barrot acknowledged on Wednesday that the impact of sanctions has been insufficient. “We will need to go further because the sanctions so far have not dissuaded Vladimir Putin from continuing his war of aggression … we must prepare to expand devastating sanctions that could suffocate, once and for all, Russia’s economy,” said Barrot.

What new measures are being proposed?

While the 17th round of sanctions was only agreed on Wednesday, EU ministers are already considering what more might be done to undermine Putin’s political clout if the war in Ukraine persists.

Capital controls, which would be aimed at restricting money flowing in and out of Russia, and trade measures such as tariffs, are two options that have been mentioned by the European Commission in recent weeks. Capital controls can take a variety of forms, including restrictions on foreign investment, limiting currency exchange or imposing taxes on the movement of capital.

The commission also aims to share proposals next month that would allow Brussels to implement a ban on new Russian gas spot market contracts – deals for immediate delivery and payment – with European companies in 2025, and a total phase-out by 2027.

Despite oil export restrictions, Russia still earns billions of euros from natural gas sales into the EU through liquefied natural gas (LNG) and TurkStream (a pipeline connecting Russia to southeastern Europe via the Black Sea). Banning spot market contracts would lower Moscow’s revenue from these sources.

Brussels may also propose tariffs on enriched uranium as part of its effort to cut EU reliance on Russian fuels.

According to The Financial Times, the EU insists that these measures would not amount to sanctions and therefore would not need the unanimous backing of all 27 EU countries, which is normally required to extend sanctions.

“I think the EU cooked up these potential punishments to try and get Russia to agree to the 30-day ceasefire … it was the stick they were brandishing,” said an analyst familiar with the matter who asked not to be named.

Will the US impose more sanctions?

It may. On May 1, Senator Lindsey Graham, a South Carolina Republican, said he had the commitment of 72 colleagues for a bill that would enact “bone-crushing” sanctions on Russia.

Graham, a close ally of President Donald Trump, is spearheading a draft bill that seeks to impose a 500 percent tariff on imports from countries that buy Russian oil and fossil fuels.

Trump himself, who seemingly welcomes the possibility of a rapprochement with Russia, said in March that he was “considering” imposing sanctions and tariffs on Russia until a peace agreement is reached with Ukraine.

Could such measures force Putin to the negotiating table?

“Most Russian people want life to return to normal and business owners are getting tired of war-related costs,” the anonymous analyst told Al Jazeera. “There is a growing sense of unease.”

She said she doubted whether the EU’s touted measures would bring Putin any closer to signing a peace agreement, however. “Only because sanctions haven’t been able to do that,” she said, “and there’s already a maze of them.”

According to Castellum.AI, a global risk platform, Russia has been slapped with 21,692 sanctions since the start of the war – the majority of them against individuals.

“On past performance, it’s hard to see how even more sanctions and additional punishments will stop the fighting,” the analyst said.

She estimated a 60 percent chance that Russia and Ukraine would still be at war by the end of this year.

On Monday, the United States and China reached an agreement to slash sky-high tariffs for 90 days. Though both sides claimed they could withstand a long trade war, they reached a truce quicker than many analysts expected.

The breakthrough marked a dramatic ratcheting down of trade tensions following the tariff war launched by US President Donald Trump during his “liberation day” announcement on April 2.

Trump initially unveiled so-called reciprocal tariffs on dozens of countries before pausing them just one week later. China, however, did not get off the hook and Beijing soon retaliated with tariffs of its own.

Tit-for-tat exchanges quickly snowballed into eye-watering sums. By April 11, tariffs on Chinese goods entering the US had reached 145 percent and levies on US products going to China had swelled to 125 percent.

Tensions were already at boiling point last weekend when US Treasury Secretary Scott Bessent and He Lifeng, China’s vice-premier, agreed a ceasefire that would slash respective tariffs by 115 percentage points for three months.

US duties on Chinese products will now fall to 30 percent, while China’s tariffs on US goods will drop to 10 percent. Stock Markets rallied on the news, with the Nasdaq Composite climbing 4.3 percent on Monday and gaining 20 percent over its April low.

But one key question has significant implications for trade talks to come: Did Washington or Beijing flinch first?

What did the two countries say?

The tariff suspension, which was sharper than analysts expected, came after two days of trade talks in Geneva, Switzerland. On Monday, the US and China released a joint statement announcing the deal.

The two countries acknowledged the importance of their “bilateral economic and trade relationship” as well as the importance of a “sustainable, long-term, and mutually beneficial economic and trade relationship”.

The US and China agreed to establish a mechanism to continue discussing trade relations. China also agreed to “suspend or cancel” non-tariff measures against the US, but did not provide any details.

Speaking to reporters in Geneva last weekend, China’s Vice Premier He described the talks as “candid, in-depth and constructive”.

For his part, US Treasury Secretary Bessent told Bloomberg Television on Monday that “both sides agree we do not want a generalised decoupling.”

“The US is going to do a strategic decoupling in terms of the items that we discovered during COVID were of national security interests – whether it’s semiconductors, medicine, steel,” Bessent said.

After the talks concluded, Trump praised negotiations as a “great trade deal”, adding “we’re not looking to hurt China.” He then claimed a personal win, saying he had engineered a “total reset” with Beijing.

Elsewhere, Hu Xijin, former editor of the Chinese state-run Global Times publication, said on social media that the deal was “a great victory for China”.

What are the terms of the pause?

After the tariff pause had been announced, Bessent said it’s “implausible” that reciprocal tariffs on China will fall below 10 percent. However, he said the April 2 level – set by President Trump at 34 percent – “would be a ceiling”.

He also said “we could see some amount of the fentanyl tariffs… come off.” Earlier this year, Trump put a 20 percent tariff on China, accusing it of not doing enough to stop the flow of fentanyl, a highly addictive and deadly opioid, into the US.

For now, Chinese goods will continue face a 30 percent tariff. In addition, specific products from China, such as electric vehicles, steel and aluminium, are subject to even higher, separate tariffs imposed in recent years.

On Monday, the White House also issued an executive order lowering duties on low-value packages – items costing up to $800 – from China from 120 to 54 percent.

And while a minimum $100 fee on packages from e-commerce sites Temu and Shein will remain in place, the increase to $200 planned for June 1 was dropped.

On the flip side, Beijing pledged to suspend non-tariff forms of retaliation imposed since April 2, such as export restrictions on critical minerals that US manufacturers use in high-tech equipment and clean energy technology.

Notably, the deal does not include concessions from Beijing on several US sticking points, like its huge trade surplus with the US or its exchange rate policy, China is accused of keeping its renminbi artificially low in order to boost export sales.

Tariff suspensions will be in place for 90 days. They will be subject to reviews based on broad negotiations in the coming weeks and months.

Who conceded more ground?

The speed with which the US and China unwound their tariffs, taking many analysts by surprise, suggests the trade war was inflicting pain on both sides.

The tariffs were threatening job losses for Chinese factory workers and higher inflation and empty shelves for American consumers.

But for Piergiuseppe Fortunato, an adjunct professor of economics at the University of Neuchatel in Switzerland, it is clear who wanted the deal more badly.

“First of all, America made more concessions than China. Second, America’s economy, which is unsteady at the moment, is more reliant on China’s than the other way around.”

In April, the International Monetary Fund (IMF) warned that the US economy was facing an increased risk of recession as Trump’s trade war – and the accompanying increase in consumer prices – could unleash a “significant slowdown”.

Fortunato told Al Jazeera that “Beijing is not in such a precarious position. Take, for example, its latest export figures.”

China’s exports grew sharply in April. The strong performance, an 8.2 percent increase from the year before, came as Chinese firms diverted trade flows to Southeast Asia, Europe and other destinations.

“I think that Washington overplayed its hand with Beijing,” says Fortunato.

“The White House overestimated the importance of the US market, and underestimated China’s success in diversifying its exports away from the US since the first Trump trade war” in 2018.

What will happen next?

“It could take a long time to reach a detailed agreement, if one is even possible,” notes Fortunato.

In 2018, the US backed away from a potential trade deal following talks with Beijing. The next 18 months saw tariff exchanges before a Phase One deal was signed in January 2020.

However, China did not meet all the terms of that purchase agreement. It fell some 43 percent short of the $200bn worth of goods it agreed to buy from the US by 2021.

Then, the US trade deficit with China jumped up during the COVID-19 pandemic, setting the stage for the current trade war.

Earlier this week, Bessent once again hinted that Washington might be looking for the type of “purchase agreements” that characterised the Phase One deal.

“The US has made noises that it may be going for more purchase agreements. But the American economy took a hit last time from similar arrangements,” says Fortunato.

During Trump’s first trade war with China, the US-China Business Council estimated that 245,000 US jobs were lost.

As the scope of tariffs is greater today, even after last weekend’s announcement, it’s fair to assume that even more jobs will be shed.

In the future, Fortunato suspects the US will “land at an average tariff rate of 15-20 percent, and even higher for China. That’s five times greater than what it was in January… a massive change.”

Lilongwe, Malawi – Since he was young, Enock Dayton has made a living from bananas. The 30-year-old was born and raised in Molele, in the southern Malawian district of Thyolo, which was at the heart of local banana production until a plant virus devastated crops more than a decade ago.

At his stall at Mchesi market, in Malawi’s capital Lilongwe, Dayton serves customers from the bunches of green bananas that he has. “I started this business when I was young, and we had farms where we were growing bananas and we would take trucks and bring them here and sell them to individuals,” he told Al Jazeera.

But in 2013, the deadly banana bunchy top disease wiped out almost all the crops in the country. Farmers were asked to uproot their banana plants to avoid the spread of the virus; hundreds of thousands of people were affected.

Bananas are Malawi’s fourth biggest staple crop, after maize, rice and cassava, according to the Food and Agriculture Organization (FAO).

The United Nations body – which is working with other organisations to help revive banana farming in the country – said in 2023 that with “the right investments and strategic support, the banana sector has the potential to provide greater benefits in food and nutrition security and commercial value for growers, transporters, consumers and food processors”.

But in the meantime, to maintain their businesses in the absence of sufficient local produce, farmers and fruit-sellers like Dayton turned to neighbouring Tanzania to import the crop and complement their own meagre local supplies. In 2023 alone, for instance, Malawi imported more than $491,000 worth of bananas, with the majority of that – 5,564,180kg (12,266,920lb) – coming primarily from Tanzania. The remainder came from South Africa and Mozambique.

But this year, that arrangement came to a sudden halt. In March, Malawi said it was temporarily banning the import of some farm produce, including bananas, from Tanzania and other countries. The government said this was to help support local industries and stabilise the country’s foreign exchange shortage, which has led to challenges that include the inability to import some necessities, like pharmaceuticals.

But Malawi might have underestimated the effect of its bold move, observers say.

In retaliation, in April, Tanzania banned the entry of all agricultural imports from Malawi, responding to what it described as restrictions on some of its exports. That ban also extended to South Africa, which for years prohibited the entry of bananas from Tanzania.

This was bad news for Malawi, observers say, as it is more on the receiving end of trade between the neighbours. According to data from the Observatory of Economic Complexity (OEC), Malawi exports less than $50m worth of products to Tanzania, including soybean meal, soybeans and dried legumes, while it imports hundreds of millions of dollars in the form of mineral fuels, oil, distilled products, soaps, lubricants, cement and glassware, among other products.

In its response, Dar es Salaam went a step further, extending its trade ban to the export of fertiliser from Tanzania to landlocked Malawi. It also threatened to stop goods en route to Malawi from passing through Tanzania.

By land, Malawi depends on Tanzania, Zambia and Mozambique for the import of goods. As it lacks direct access to the sea, Malawi utilises seaports in Tanzania and Mozambique. But the instability of the Mozambique route – due to insecurity caused by conflict, recent post-election violence and truck drivers facing harassment – made the deadlock with Tanzania a bigger challenge for industry. Businesses that rely on the import of farm produce started crying foul as their trucks of groundnuts and other produce stood in line at the Songwe border.

Malawi also found itself in a tricky situation as it depends on Tanzania for its harbours to import fuel.

Soon, even Kenya found itself entangled in the conflict as cargo from Malawi, which has to travel through Tanzania, was also stopped en route.

The ensuing row shone a light on Malawi’s precarious geographical location, as well as regional agreements aimed at facilitating trade, the efforts by individual nations to follow the rules, and the macroeconomic imbalances in a nation designated as one of the poorest in the world.

After weeks of tensions, this month, a high-level meeting between Malawi and Tanzania appeared to have brokered the differences, paving the way for the lifting of the bans between the two countries, according to a spokesperson for Malawi’s Ministry of Foreign Affairs.

‘Symptom of a huge challenge’

For Ernest Thindwa, a political commentator based at the University of Malawi, the recent trade dispute does not exist in isolation – and should also be viewed from a political lens.

Both countries are heading for polls this year, first Malawi in September and then Tanzania in November. Within an election environment, the dispute says something about the attempts by both countries’ leaders to display patriotism and a sense of empowerment to their citizens, the analyst said.

“The current administration [in Malawi] wants to be seen to be delivering and they want to be seen to be responding to people’s concerns,” Thindwa told Al Jazeera. “And certainly they need to make sure that local producers are protected, which has become more urgent as we go towards elections.”

Thindwa said that both Malawi and Tanzania are signatories to regional and international trade agreements, the frameworks of which entitle them to take measures to protect their trade interests when they deem necessary.

However, he questioned the timing of these moves, asking why the initiatives by Malawi were not implemented earlier if they were indeed to protect local industries.

Answering his own question, he said, “Because then it might have not been an agent in terms of attracting votes.”

“What you would call subsistence or smallholder producers … would be significant for the government in terms of trying to win votes from such social groups,” he observed.

Meanwhile, in Tanzania, something similar was at play in its decision to retaliate, Thindwa said.

“The incumbent administration in Tanzania wants to be seen to be responding to the needs and interests of its citizens. So the administration in that country, in Tanzania, also wanted to project an image that it cares for its people. That’s why it responded rather quickly.”

Broadly speaking, Thindwa noted that the trade dispute points to overall challenges African countries face – in terms of promoting internal trade, and trading more within Africa than with other continents.

Citing the example of Angola, he said that despite it having oil, countries within the Southern African Development Community (SADC) bloc continue to import oil from the Middle East.

“There is Angola there,” he said. “Why can’t they put together a regional project, for instance, and invest in the capabilities to make sure that the end product is being produced in Angola and Angola serves the region, to be much cheaper for the region? And it will make sure that the resources of the region remain within the region.”

Such examples show that “in spite of these trade protocols, Africa still struggles to encourage trade between member states”, he said.

“So the case of Tanzania and Malawi is just a symptom of a huge challenge Africa faces in terms of promoting internal trade.”

Tensions eased

In a statement on May 9, Malawi’s Ministry of Trade said Malawi and Tanzania had held bilateral discussions in Tanzania regarding the implementation and resolution of its prohibition order.

After that, a letter from the ministry, addressed to Malawi’s Revenue Authority, read: “In this regard, I wish to advise that you facilitate the clearance of exports and imports of goods between the Republic of Malawi and the Republic of Tanzania. This, however, does not exempt importers from complying with legal and regulatory requirements, including obtaining the relevant licences and certifications from regulatory bodies.”

After the talks, Charles Nkhalamba, Malawi’s Ministry of Foreign Affairs spokesperson, told Al Jazeera the neighbours had signed “a joint communique” to resolve the dispute between them.

The “high-level discussions” were a result of “robust diplomatic efforts” by the foreign ministries of both countries, he said in a message on WhatsApp, adding that Tanzania also “acknowledg[ed] the economic circumstances that necessitated the import restrictions”.

During the meeting, both parties agreed in principle on the importance of continuous engagement and communication on all matters impacting their bilateral trade relations, Nkhalamba added.

Weeks earlier, Tanzania’s Ministry of Agriculture also released a statement acknowledging that Lilongwe had reached out to Dar es Salaam to resolve the problem and stating that “Tanzania is lifting a ban on export and import of agricultural produce to and from Malawi”.

In principle, the trade war between the neighbours appears to have stalled for now.

But experts told Al Jazeera that practically speaking, it will take time for the logistics to be sorted out and for things to return to normal for sellers left in limbo when their supplies dried up.

At the market in Lilongwe, Dayton is eagerly awaiting the trucks of sweet bananas from across the border, so he has enough to sell to his customers.

He is grateful for the cross-border trade, and the arrangement that has over the years helped business people like him make money selling the crop from their neighbours.

But he also had mixed feelings as he reminisced about their lost opportunity to grow their own crops.

“The amount of money we used to have when we grew our own bananas is different from what we’re earning now,” Dayton said. “While we were growing and buying them at a cheap price … we were making a lot of money, apart from the transport [costs]. The ones from Tanzania are quite expensive.

“We need our bananas back.”

A decade ago, Dayton was a casualty of a natural disaster that made his garden back in the village dormant. Now, he feels that he is a casualty of the decisions made by authorities in offices far away.

“What we want is a stable supply of bananas in this market,” he said. “It’s good because it provides for our families and the customers as well.”