Trade War

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The central bank’s cut comes amid a cooling labour market, which has stalled economic growth.

The United States Federal Reserve will cut interest rates by a quarter of a percentage point, so they will now be between 4.00 percent and 4.25 percent, as a slowing labour market stalls economic growth.

The Fed, the US central bank, announced its decision on Wednesday afternoon.

Economists had widely expected a 25 basis point cut, with CME FedWatch — a group that tracks probability of monetary policy decisions — putting the odds at 96 percent. One basis point is one-hundredth of one percentage point.

Before Wednesday, the Fed had last cut rates in December by 25 basis points, the third cut last year, taking its benchmark rate to between 4.25 percent and 4.50 percent, where it had held steady since.

Federal Reserve Chairman Jerome Powell has emphasised that uncertainty in the economy has kept the Fed cautious, arguing that maintaining rates gave policymakers flexibility as conditions shifted.

The cut comes as a response to shifting economic conditions, following a slew of weak jobs reports showing a slowdown in growth in the labour market and a slight uptick in inflationary pressures.

“Recent indicators suggest that growth of economic activity moderated in the first half of the year. Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated,” the central bank said in a press release.

“Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen.”

Investors are also waiting for indications from the central bank on whether it will cut interest rates two or three times for the rest of the year as economic uncertainty weighs on the US labour market and the broader economy while the costs of goods and services increase under tariff-driven pressures.

Political pressure

The latest cut comes at a time of heightened scrutiny and pressure on the Fed, which has long emphasised its independence from political pressure. But for months, US President Donald Trump has publicly attacked the central bank, mocking Powell as “too late Powell” over his cautious approach to cutting rates.

At the same time, the Republican-led White House has sought to oust Fed Governor Lisa Cook, who was appointed by former US President Joe Biden, a Democrat, citing alleged mortgage fraud.

On Monday, a US appeals court blocked Trump from removing her. The administration has said it will challenge the ruling.

“The president lawfully removed Lisa Cook for cause. The administration will appeal this decision and looks forward to ultimate victory on the issue,” White House spokesman Kush Desai said on Tuesday.

That same day, Stephen Miran, chair of Trump’s Council of Economic Advisors, was sworn in to fill a temporary Fed seat left vacant by Adriana Kugler until January, while the White House searches for a permanent replacement.

Miran pledged to act independently, but his close ties to the Trump administration — and his work as a fellow at the conservative Manhattan Institute — have raised doubts. His Senate confirmation fell largely along party lines, 47–48, and Senator Lisa Murkowski of Alaska was the only Republican to oppose him.

On Monday, Senate Minority Leader Chuck Schumer called Miran “nothing more than Donald Trump’s mouthpiece at the Fed”.

Markets respond

As of 2pm in New York (18:00 GMT), US markets are trending upwards. The Nasdaq is about even with the market open, the S&P 500 is up 0.2, and the Dow Jones Industrial Average is up by 1 percent.

Great Britain is set to roll out the red carpet for Donald Trump this week, honouring the president of the United States with something no other American leader has ever received: a second state visit.

Trump is set to arrive in London late on Tuesday for a visit that coincides with tough trade negotiations between the US and many of its key trading partners, including the United Kingdom. During his stay, both countries plan to announce several deals on technology and civil nuclear energy, and British leaders hope to finalise an agreement on metal tariffs.

Trump and his wife, Melania, will be treated to royal pageantry throughout their two-day stay, including a ceremonial welcome from King Charles at Windsor Castle. The British government is confident that royal soft power will appeal to Trump’s sense of flamboyance.

Before setting off on Tuesday, Trump said he was looking forward to meeting with his friend, King Charles III, whom he described as an “elegant gentleman”.

The president said being welcomed for a second state visit was a first, and noted how it was planned for Windsor Castle, rather than Buckingham Palace.

“I don’t want to say one is better than the other, but they say Windsor Castle is the ultimate,” the president added, noting that much of his trip will be focused on trade.

The state visit will include a glittering banquet and a procession in a horse-drawn carriage. For his part, British Prime Minister Keir Starmer hopes Trump’s visit will offer a measure of distraction from simmering speculation about his leadership amid plummeting approval ratings and high-profile resignations.

Lord Mandelson’s recent sacking as UK ambassador to the US, following new revelations concerning his friendship with child sex offender Jeffrey Epstein, has already cast a diplomatic pall over Trump’s visit. The president’s own links to Epstein have also generated plenty of headlines in recent weeks.

When and where

Trump will officially be welcomed to the UK on Tuesday evening by US Ambassador Warren Stephens, British Foreign Secretary Yvette Cooper and Viscount Hood, the king’s lord-in-waiting. On Wednesday morning, the royal activities will begin, with a formal greeting by the king and Queen Camilla, along with Prince William and Princess Catherine, at Windsor Castle. Later that day, he will enjoy a royal salute at the castle and a flypast from the Red Arrows and the carriage procession.

The president will then be treated to lunch with the extended royal family before laying a wreath at Queen Elizabeth II’s tomb in St George’s Chapel.

On Wednesday night, Trump will be the guest of honour at a formal state banquet at the castle.

The president will bid farewell to the royals on Thursday morning before he meets Starmer.

Trade tops agenda

Starmer will host Trump at Chequers, his country residence, on Thursday to discuss various matters, including security in Ukraine. Starmer’s ultimate aim, however, is to ensure that Trump makes good on his promise to lower tariffs on steel and aluminium.

The UK was the first country to sign a bilateral trade agreement with the Trump administration in May. Under that deal, the US planned to reduce tariffs on aluminium and steel from 25 percent to zero, but that has not happened yet.

“When it comes to steel, we will make sure that we have an announcement as soon as possible,” Business Secretary Peter Kyle told the BBC on Sunday. Other ministers have expressed optimism that a deal on base metals can be secured during Trump’s visit.

The two countries are also expected to sign a multibillion-dollar deal to develop small nuclear projects, which could, in some cases, help to power new artificial intelligence data centres. On Monday, Starmer announced a joint US-UK project to build a fleet of small modular reactors.

“The UK-US relationship is the strongest in the world,” a representative from Starmer’s office told reporters. “This week, we are delivering a step change in that relationship.”

Investment deals?

A major talking point will be a new potential technology partnership, involving enhanced US investment in the UK and greater British cooperation with Silicon Valley on AI and quantum computing.

That had been Lord Mandelson’s priority and something he described in his outgoing letter to embassy staff last week as his “personal pride and joy” that he claimed would “help write the next chapter of the special relationship” between the US and the UK. Mandelson’s permanent replacement has yet to be named, but James Roscoe is serving as interim ambassador to the US.

Nvidia, OpenAI and Google are expected to announce investment deals as part of the partnership, according to the Reuters news agency. Meanwhile, the British government recently secured 1.25 billion pounds ($1.7bn) in private investment pledges from PayPal and Bank of America.

Elsewhere, private equity firm Blackstone plans to invest 100 billion pounds ($136bn) into British assets over the next decade, with a focus on physical infrastructure. The investment will be part of a previously announced $500bn package of investment into Europe.

Why is this trip significant?

This is Trump’s second visit to the UK in the last two months, following his trip to Scotland in July, but this week marks his second state visit, which no other US president has ever enjoyed. In 2019, Trump was hosted for a state visit by Queen Elizabeth II.

The timing is not ideal. Mandelson was sacked as the UK’s ambassador to the US on September 11, after emails were published that revealed he urged Epstein to fight for early release from prison in 2008.

Trump’s friendship with Epstein has also exposed him to damaging scrutiny, including from his support base. Democrats in the House of Representatives recently released a birthday letter he allegedly wrote to Epstein in 2003, which Trump has denied writing.

For his part, Starmer hopes the pomp of a state visit will offer cover for his own domestic challenges, including criticism about him proscribing the Palestine Action group as a “terror organisation”.

Following missteps on welfare reform, a slapdash cabinet reshuffle and poor economic growth, several lawmakers are increasingly questioning Starmer’s judgement, especially with Nigel Farage’s populist Reform UK party surging ahead in the polls.

Starmer’s main goal will be to champion any wins secured during Trump’s visit.

But the president’s stay will also face challenges as local protests are expected in opposition to Trump’s stay at Windsor Castle.

The prime minister will also try to convince Trump that Russia’s incursion of 20 drones into Polish airspace last Wednesday was not an accident, as Trump has suggested.

Polish Foreign Minister Radoslaw Sikorski rejected that theory on September 12 during a news conference in Kyiv. “We don’t believe in 20 mistakes at the same time,” he said.

Finally, Starmer’s spokesperson said there would also be announcements on deepening cultural ties, including promoting basketball in the UK and developing partnerships between heritage and art institutions.

The United States and China have reached a framework agreement to transfer TikTok’s ownership to US control.

Officials from both countries made the announcement on Monday.

The short-form video app was set to be banned in the US by Wednesday if its owner ByteDance did not agree to sell the company to a US-based operation or if the US did not extend a pause of the ban, which the White House has already done three times, most recently in June. 

US President Donald Trump applauded the deal, which will be confirmed when he discusses it with his Chinese counterpart President Xi Jinping on Friday.

“A deal was also reached on a “certain” company that young people in our Country very much wanted to save,” Trump wrote on his social media platform Truth Social on Monday.

“The relationship remains a very strong one!!!”

The White House declined to outline the terms of the deal, which was negotiated during trade talks between the two countries in Madrid. The two-day meeting, which wrapped up on Monday, was the latest in a slew of negotiations that began in May.

“We’re not going to talk about the commercial terms of the deal. It’s between two private parties, but the commercial terms have been agreed upon,” US Treasury Secretary Scott Bessent told reporters.

Bessent and US Trade Representative Jamieson Greer, who was also part of the trade delegation in Madrid, said China wanted concessions on trade and technology in exchange for agreeing to divest from the popular social media app.

“Our Chinese counterparts have come with a very aggressive ask,” Bessent said, adding, “We are not willing to sacrifice national security for a social media app.”

“TikTok’s divestment agreement not only keeps the app running in the US, but is also expected to help de-escalate a tense trade standoff and lay groundwork for further trade talks between the US and China,” Maria Pechurina, director of international trade at Peacock Tariff Consulting, told Al Jazeera. “Both US and Chinese delegations explicitly linked the fate of TikTok to progress on tariff reductions and related trade concessions during their conversations in Madrid.”

The deal comes despite the US pushing other nations to impose tariffs on China over purchases of Russian oil, which Bessent said was discussed briefly with the US’s Chinese counterparts.

Experts warn to be wary of the deal being set until Xi and Trump speak on Friday.

“It’s important to note that the Chinese often see the signing of a deal as the beginning, and not the end, of any negotiations. The devil would lie in the details behind the optics. Also expect much haggling on important details that may take years,” Usha Hayley, a professor of international business at Wichita State University who specialises in Chinese industry, told Al Jazeera.

“The deal, when reached, would reflect the convergence of technology, national security, and geopolitics,” said Hayley. “TikTok sits at the centre of US concerns about data access, influence over public discourse, and Beijing’s reach into global tech. Washington is stating that the US views digital platforms as strategic assets, not private businesses.”

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

The looming ban

Trump proposed banning TikTok during his first term as US president, signing two executive orders in August 2020 that were aimed at restricting the app.

In April 2024, under then-President Joe Biden, the White House signed a law formally banning TikTok unless it sold its US operations. The ban was supposed to take effect on January 19, the last day of the Biden administration. Biden said he would not enforce the ban and said that he would leave that decision to the next administration.

Two days before the January deadline, on January 17, the Supreme Court stepped in to weigh in on TikTok’s challenge to the law and upheld the law. The app went dark briefly before the ban was paused during the early days of Trump’s subsequent presidency.

The pause was initially for 90 days and was later extended multiple times throughout the year.

The cultural importance to Trump

TikTok’s cultural relevance has grown significantly in recent years, serving both as a tool for organising and activism, and as a platform to reach the public, particularly young voters. In April 2024, the pro-Trump videos on TikTok were nearly double those supporting Biden, who was then the Democratic nominee, the New York Times reported, citing TikTok’s internal data.

Trump’s broader use of newer media was widely cited as a factor in his 2024 election victory. His campaign regularly engaged with right-leaning podcasts and influencers — such as Joe Rogan and Theo Von — to reach conservative audiences. It also targeted disillusioned men, who were drawn to influencers promoting traditional notions of masculinity, often conflated with conservative viewpoints.

A Pew Research Center study from November found that news influencers — defined as those who discuss “current events and civic issues” and have at least 100,000 followers across any social media platform – are more likely to lean conservative. A separate report from Pew in February found that news influencers posted more content supporting Trump than former Vice President Kamala Harris, Trump’s 2024 election opponent: 28 percent for Trump versus 24 percent for Harris.

TikTok’s role in spreading far-right narratives is not limited to US politics. The platform has reportedly influenced German state elections, contributing to the rise of far-right leaders, and has similarly affected far-right candidates in Poland, Sweden, and France.

New York, USA – Next week, the United States Federal Reserve will hold a two-day policy meeting to decide whether to lower interest rates.

The meeting follows a months-long pause in rates and comes amid heightened pressure on the central bank.

US President Donald Trump recently dismissed Federal Reserve Governor Lisa Cook on allegations of mortgage fraud, which she is contesting in court, and has escalated his loud and repeated criticism of Fed Chair Jerome Powell.

The Fed, which emphasises its independence from political influence, will weigh new economic data as it considers its next move. The benchmark interest rate has remained at 4.25 percent – 4.50 percent since December.

So far, the Fed has held rates steady, saying the stance preserves flexibility to respond to economic shocks tied to shifting trade policy. But many economists now believe a rate cut is imminent.

They point to signs of a cooling labour market and tariff-related pressure on inflation as factors that could support lowering rates, not political pressure.

“I think that the Fed has made it pretty clear that they’re going to cut rates in September, and the market certainly expects that,” Daniel Hornung, policy fellow at Stanford Institute of Economic Policy Research and former deputy director of the National Economic Council, told Al Jazeera.

CME FedWatch, which tracks the probability of Fed policy moves, puts the likelihood of a quarter of one percentage point cut at 94.5 percent, echoing research from JPMorgan last month.

“For Fed Chair Jerome Powell, the risk management considerations may go beyond balancing employment and inflation risks, and we now see the path of least resistance is to pull forward the next cut of 25 basis points to the September meeting,” Michael Feroli, chief US economist at JP Morgan, said at the time.

Prices jump

Consumer prices rose 0.4 percent in August from the previous month, the sharpest increase in seven months, according to the Labor Department’s consumer price index (CPI) report released on Thursday.

The gain followed a 0.2 percent rise in July. Economists surveyed by Reuters had forecast a 0.3 percent monthly increase in core CPI.

Energy costs climbed 0.7 percent, fueled by a 1.9 percent jump in gasoline. Airfares climbed 5.9 percent, apparel prices rose 0.5 percent, shelter increased 0.4 percent, grocery prices were up 0.6 percent, and restaurant meals rose 0.3 percent.

Some goods saw particularly steep increases. Coffee prices jumped 3.6 percent on the month as Brazil, the world’s top coffee exporter, redirected shipments away from the US following new tariffs.

The Producer Price Index (PPI), which tracks prices businesses receive for goods and services, showed coffee up nearly 7 percent from July and more than 33 percent over the past year.

There is a comparable phenomenon with beef, for which the US relies heavily on Brazil.  CPI data showed a 2.7 percent increase, while the PPI measured a 6 percent monthly rise and a 21 percent yearly increase.

Overall, the PPI slipped 0.1 percent, suggesting some businesses are absorbing tariff costs rather than passing them to consumers. Service prices fell 1.7 percent, driven by a 3.9 percent decline in margins for machinery and vehicle wholesalers, which offset a 0.1 percent increase in goods prices. That came after wholesale inflation was revised higher to 0.7 percent in July, which was well above economists’ forecasts.

Even so, companies are beginning to warn that they cannot continue absorbing higher costs. In recent weeks, Campbell’s Co, which makes Campbell’s Soup and Goldfish crackers, and Procter & Gamble have both said they plan to raise prices on consumer goods in the months ahead as tariff pressures persist.

Labour market tumbles

The US labour market, a key factor in the Federal Reserve’s interest rate decisions, has cooled sharply.

Approximately 263,000 people submitted initial jobless claims last week, the most in four years, Department of Labor data released on Thursday showed.

On Tuesday, the Bureau of Labor Statistics also revised down job gains over the past few months, as well as between April 2024 and March 2025, when the US economy added 911,000 fewer jobs than had been previously reported.

All of that is echoed by poor jobs numbers last week. In August, the economy added only 22,000 jobs, with gains concentrated in healthcare (which added 31,000 jobs) and social assistance (which added 16,000). The unemployment rate climbed to 4.3 percent, the Labor Department reported.

Revisions showed July job growth slightly stronger at 79,000, up from 73,000, while June was cut from a modest gain to a loss of 13,000.

“The recent job numbers were really, especially the revision of the earlier numbers, were really kind of problematic for the economy,” Michael Klein, professor of International Economic Affairs at the Fletcher School at Tufts University, told Al Jazeera.

Job openings and turnover also declined, leaving more unemployed workers than available positions for the first time since April 2021.

A report from Challenger, Gray & Christmas highlighted the strain, noting a 39 percent jump in job cuts between July and August. Private payroll growth slowed as well, according to the ADP National Employment Report, which showed just 54,000 jobs added, down from 106,000 the prior month.

Competing forces

Typically, high inflation prompts higher interest rates, which discourage borrowing and spending and help rein in prices.

“The Fed is in a very difficult position right now because there is both a weakening labour market and evidence of higher inflation. Typically, if the Fed is facing a weaker labour market, it would want to lower interest rates. And if it’s facing higher inflation, it would want to raise interest rates. But we’re in a situation now where there are countervailing forces,” Klein said.

The labour market is already weighing on consumer spending. Rising layoffs and slower hiring have made shoppers cautious, and the latest consumer confidence index shows plans to buy big-ticket and discretionary items are slipping.

With Trump’s shifting tariffs and hardline immigration policies, businesses are stuck in a “wait-and-see” mode, increasing uncertainty.

“We are seeing immigration and tariff policies that have the simultaneous effect of raising prices and slowing growth in the labour market,” Hornung said.

The Supreme Court has scheduled to hear the case in November, lightning fast by its typical standards.

The United States Supreme Court has granted an unusually quick hearing on whether President Donald Trump has the power to impose sweeping tariffs under federal law.

The justices said on Tuesday that they will hear arguments in November, which is lightning fast by the typical standards of the nation’s highest court.

The small businesses and states that challenged the tariffs in court also agreed to the accelerated timetable. They say Trump illegally used emergency powers to set import taxes on goods from almost every country in the world, nearly driving their businesses to bankruptcy.

The justices also agreed to hear a separate challenge to Trump’s tariffs brought by a family-owned toy company, Learning Resources.

Two lower courts have found that most of the tariffs were illegally imposed, though a 7-4 appeals court has left them in place for now.

The levies are part of a trade war instigated by Trump since he returned to the presidency in January, which has alienated trading partners, increased volatility in financial markets and driven global economic uncertainty.

Trump has made tariffs a key foreign policy tool, using them to renegotiate trade deals, extract concessions and exert political pressure on countries. Revenue from tariffs totalled $159bn by late August, more than double what it was at the same point a year earlier.

The Trump administration asked the justices to intervene quickly, arguing the law gives him the power to regulate imports and that the country would be on “the brink of economic catastrophe” if the president were barred from exercising unilateral tariff authority.

The case will come before a court that has been reluctant to check Trump’s extraordinary flex of executive power. One big question is whether the justices’ own expansive view of presidential authority allows for Trump’s tariffs without the explicit approval of Congress, which the US Constitution endows with the power to levy tariffs.

Three of the justices on the conservative-majority court were nominated by Trump in his first term.

Impact on trade negotiations

US Solicitor General D John Sauer has argued that the lower court rulings are already impacting those trade negotiations. Treasury might take a hit by having to refund some of the import taxes it has collected, Trump administration officials have said. A ruling against the tariffs could even hamper the nation’s ability to reduce the flow of fentanyl and efforts to end Russia’s war against Ukraine, Sauer argued.

The administration did win over four appeals court judges who found the 1977 International Emergency Economic Powers Act, or IEEPA, lets the president regulate importation during emergencies without explicit limitations. In recent decades, Congress has ceded some tariff authority to the president, and Trump has made the most of the power vacuum.

The case involves two sets of import taxes, both of which Trump justified by declaring a national emergency: the tariffs first announced in April and the ones from February on imports from Canada, China and Mexico.

It does not include his levies on foreign steel, aluminium and autos, or the tariffs Trump imposed on China in his first term that were kept by former President Joe Biden, a Democrat.

Trump can impose tariffs under other laws, but those have more limitations on the speed and severity with which he could act.

Canadian PM Carney also announced a fund of $5 billion in Canadian dollars ($3.6bn US) to help firms in all sectors hurt by tariffs.

Canada will waive a requirement that 20 percent of all vehicles sold next year be emissions-free, part of an aid package designed to help companies deal with damage done by tariffs from United States President Donald Trump.

Prime Minister Mark Carney made the announcement on Friday.

The 20 percent target was mandated by the Liberal government of then-Prime Minister Justin Trudeau in 2023.

Carney, Trudeau’s successor, said waiving the rule would help the industry deal with punitive US measures that are also targeting the steel and aluminium sectors.

“This will provide immediate financial relief to automakers at a time of increased pressures on economic competitiveness,” Carney told a televised press conference.

Ottawa will also launch an immediate 60-day review to reduce costs linked to the EV sales requirement.

The Canadian Vehicle Manufacturers’ Association welcomed the move, saying the push for mandates imposed unsustainable costs on companies and threatened investment.

Carney said it was too soon to draw any conclusions about whether Ottawa should lift the 100 percent tariffs it imposed on Chinese-made electric vehicles last year. China on Friday prolonged a probe into imports of canola from Canada, one of the world’s leading suppliers.

Carney, who won an April election on the need to diversify the economy away from the US, said Ottawa would set up a new fund worth $5 billion Canadian dollars ($3.6bn US) with flexible terms to help firms in all sectors affected by tariffs.

The US measures are “causing extreme uncertainty that is holding back massive amounts of investment”, he said.

Ottawa will introduce a new policy to ensure the federal government buys from Canadian suppliers and is also introducing a new biofuel production incentive, with more than $370 million Canadian dollars ($267m US) for farmers to address immediate competitiveness challenges.

Carney did not mention specific new aid for the steel and aluminium sectors. When pressed, he said companies could apply for help from existing funds.

Chinese President Xi Jinping outlines plans for new development bank and financing options for SCO members.

China and Russia presented their vision of a new international order at the Shanghai Cooperation Organisation (SCO) summit, where Beijing offered new financial incentives to countries aligned with the Beijing-led economic and security group.

“Global governance has reached a new crossroads,” Chinese President Xi Jinping told the summit on Monday, in remarks that were widely seen as a critique of the United States.

“We must continue to take a clear stand against hegemonism and power politics, and practise true multilateralism,” Xi said.

Xi’s remarks were echoed by those of Russian President Vladimir Putin, who said the SCO would revive “genuine multilateralism” as it laid “the political and socioeconomic groundwork for the formation of a new system of stability and security in Eurasia”.

Xi and Putin spoke to more than 20 leaders, primarily from the Middle East and Asia, who had gathered on Sunday and Monday for the summit in the northern Chinese city of Tianjin.

Seen as an alternative power structure to most US-led international institutions, the 10-member SCO includes much of Central Asia, Russia, China, India, Iran, Pakistan, and Belarus, with more than a dozen permanent dialogue partner countries, including Saudi Arabia, Cambodia, Qatar, and Turkiye.

Though the work of the SCO has been largely symbolic since its founding in 2001, Xi outlined grander ambitions for the bloc at the summit.

Xi called for the creation of a new SCO development bank, and announced 2 billion RMB ($280m) in grants plus another 10 billion RMB ($1.4bn) in loans for SCO members.

The pivot into international finance marks a major turning point for the institution, said Eric Olander, the editor-in-chief of The China-Global South Project.

“Since the SCO’s founding 24 years ago, it has been a largely ineffective body with very few notable accomplishments. I think that’s going to change as the membership expands and Xi backs the SCO with development finance money, which is something we haven’t seen before,” he told Al Jazeera.

Xi also outlined a new “Global Governance Initiative” (GGI).

While light on details beyond espousing values such as “multilateralism” and “sovereign equality”, Olander said Xi’s speech offers insight into Beijing’s global ambitions.

“With the GGI, Xi is basically saying the quiet part out loud, that China is seeking to create a parallel global governance system outside the US and European-led order, something that would have been inconceivable a decade ago,” Olander said.

He attributed the shift to changing perceptions of the US in world affairs and demand from the Global South for a greater say in international affairs.

China’s push for multilateralism also comes at a time of growing distrust with the US under the leadership of President Donald Trump, whose trade war has provided SCO members and sometimes-rivals – such as China and India – with common grievances.

Ties between New Delhi and China plummeted in 2020 following skirmishes along their joint border in the Himalayas.

While relations began to normalise last year following a border agreement, Trump’s trade war has helped to speed up thawing diplomatic ties between the countries, according to analysts.

Xi and Indian Prime Minister Narendra Modi pledged to resolve their differences at the summit, which came just days after Trump imposed a punitive 50 percent tariff on Indian goods and blasted the country for its purchase of Russian energy exports.

Xi, Modi, and Putin were also photographed talking and walking together, in another sign of diplomatic unity.

Most of the world leaders attending the SCO are expected to remain in China this week to attend a huge military parade in Beijing on Wednesday, commemorating the end of World War II in Asia.

They will be joined by North Korean leader Kim Jong Un, who is expected to have a prominent position at the parade alongside Xi and Putin.

Russian President Vladimir Putin and Indian Prime Minister Narendra Modi are among the more than 20 world leaders attending the Shanghai Cooperation Organisation summit, which is now the world’s largest regional grouping by population.

The Beijing-backed bloc will convene on Sunday and Monday in the northern Chinese city of Tianjin, bringing together a diverse range of power brokers from across Asia, Europe and the Middle East.

Founded by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan in 2001, the summit has shifted focus over the past two decades from Central Asian concerns to global matters.

More significantly, the SCO has become an essential part of China’s “parallel international governance architecture”, said Eric Olander, editor-in-chief of the China-Global South Project.

As Beijing assumes the mantle of the world’s second-largest superpower, the SCO has created spaces for dialogue and cooperation outside “the US-led international system”, Olander told Al Jazeera.

While the summit in Tianjin is largely symbolic, it is a valuable chance to bring together global leaders and bureaucrats in a forum where they can share “common grievances”, Olander said.

With the gathering set to be overshadowed by United States President Donald Trump’s trade war against much of the world – including many traditional allies of Washington – attendees are likely to have even more common ground.

Guests range from Putin, who is wanted for war crimes by the International Criminal Court, to Belarus’s authoritarian leader Alexander Lukashenko and the likes of United Nations Secretary-General Antonio Guterres.

Many of the attendees also have longrunning rivalries and border disputes, such as India with Pakistan, India with China, Saudi Arabia with Iran, and Central Asia with both China and Russia.

“There are complex dynamics at play here,” Olander said.

“Underneath the happy family photo is a lot of looking over shoulders,” he said.

‘Swing states’

The SCO has expanded its membership in recent years to include such political heavyweights as India, Pakistan, Iran and Belarus as full members, with Afghanistan and Mongolia joining as observers.

Official “dialogue partners” have also grown to 14 countries, including the United Arab Emirates, Saudi Arabia, Turkiye, Qatar, Cambodia, Myanmar and Sri Lanka.

The summit will also notably feature Southeast Asia, a region that Olander likened to the “swing states” in the great power competition between the US and China.

Five heads of state will attend from the region, including Malaysia’s Anwar Ibrahim and Indonesia’s Prabowo Subianto, as well as ASEAN Secretary-General Kao Kim Hourn.

Observers will be closely watching the dynamics between Chinese President Xi Jinping and India’s Modi, who have not met in seven years, said Claus Soong, an analyst at Germany’s Mercator Institute for China Studies who specialises in China’s global strategy.

India has traditionally been an ally of Washington, but it was hit this week by Trump’s 50 percent tariffs as punishment for its ongoing purchase of Russian oil.

The White House says India’s trade is helping to keep Russia’s economy afloat despite international sanctions, and with it, Russia’s war on Ukraine.

But the shared threat of US tariffs has helped improve relations between New Delhi and Beijing, which had plummeted in 2020 over a deadly skirmish between border forces in the Himalayas.

The two sides reached a deal on their remote frontier in 2024, but their relationship has remained frosty.

Analysts say China sees Trump’s trade war as a chance to ease India away from US-led political and military blocs such as the QUAD, a strategic security forum that includes Japan and Australia in addition to India and the US.

“The key is to look at how China [characterises] its relationship with India after the visit and how the relationship improves between China and India,” Soong told Al Jazeera.

Even subtle changes in language by Beijing carry important diplomatic signals, he said.

The SCO summit will also mark the first meeting between Putin and Xi since the Russian leader met with President Trump in Alaska earlier this month to discuss the Ukraine war.

Analysts will be listening for similar changes in language for how the two leaders describe the China-Russia relationship.

In 2022, just weeks before Moscow invaded Ukraine, China and Russia signed a “no limits partnership”, and Xi has played a vital role in propping up Russia’s economy since then.

This is a point of contention for New Delhi, as China has done far more to support Russia economically since the war started, but has not faced similar sanctions from Trump.

With so many dynamics at play behind the scenes, Daniel Balazs, a research fellow at the China Programme at Singapore’s S. Rajaratnam School of International Studies, said the most likely outcome of the SCO will be a joint statement from all attendees.

China and Russia are expected to push talking points such as their opposition to “unilateralism” – a coded reference to the US – but most of the language will be watered down to make it palatable to all.

“The symbolism of actually achieving a joint statement is more important than the content of the statement itself,” Balazs said.

“What I would expect is to have a statement which is a very non-controversial one, in order to get everybody on board,” he said.

“Security and stability, comments about improving economic cooperation, and a couple of comments about the importance of multilateralism,” Balazs said.

Police officers stand guard in front of the Tiananmen Gate, in an area temporarily closed to visitors due to construction, in advance of a military parade marking the 80th anniversary of the end of World War II, in Beijing, China, on August 20, 2025 [Florence Lo/Reuters]

Following the summit, guests will have a full day in China before travelling to Beijing for a massive military parade on September 3 marking 80 years since the end of World War II in Asia.

That extra day – September 2 – will be prime time for bilateral meetings, the China-Global South Project’s Olander said.

“Who will meet who on the second of September – that’s something to pay attention to,” he said.

More heads of state are due to attend the parade the next day, with additions said to include North Korean leader Kim Jong Un, Serbian President Aleksandar Vucic, and Slovakian Prime Minister Robert Fico.

India’s Modi is not expected to stay for the parade, although analysts say he may send a representative, such as his foreign minister.

The Mercator Institute’s Soong said the expansive guest list for the summit and the military parade will give Beijing a boost to its public image, especially among the Global South.

“This is how China demonstrates its friend circle – who can be China’s friend and who is willing to endorse China’s narrative,” he said.

A United States appeals court has declared President Donald Trump’s blanket tariff policy illegal, but it stopped short of pausing the wide-ranging import taxes altogether.

On Friday, the Court of Appeals for the Federal Circuit in Washington, DC, largely upheld a decision in May that found Trump had overstepped his authority in imposing universal tariffs on all US trading partners.

Trump had invoked the International Emergency Economic Powers Act (IEEPA) to justify the move, claiming that trade deficits with other countries constituted a “national emergency”.

But the appeals court questioned that logic in Friday’s ruling, ruling seven to four against the blanket tariffs.

“The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency,” the court wrote.

“But none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax.”

The Trump administration is expected to appeal to the Supreme Court, and the appeals court therefore said his tariff policy could remain in place until October 14.

That was a departure from the May ruling, which included an injunction to immediately halt the tariffs from taking effect.

What is this case about?

The initial May decision was rendered by the New York-based US Court of International Trade, a specialised court that looks exclusively at civil actions pertaining to cross-border trade.

That case was one of at least eight challenges against Trump’s sweeping tariff policies.

Trump has long maintained that the US’s trading partners have taken advantage of the world’s largest economy, and he has depicted trade deficits – when the US imports more than it exports – as an existential threat to the economy.

But experts have warned that trade deficits are not necessarily a bad thing: They could be a sign of a strong consumer base, or the result of differences in currency values.

Still, on April 2, Trump invoked the IEEPA to impose 10-percent tariffs on all countries, plus individualised “reciprocal” tariffs on specific trading partners.

He called the occasion “Liberation Day“, but critics noted that the global markets responded to the tariff announcements by stumbling downward.

A few days later, as the “reciprocal” tariffs were slated to take effect, the Trump administration announced a pause for nearly every country, save China. In the meantime, Trump and his officials said they would seek to negotiate trade deals with global partners.

A new slate of individualised, country-specific tariffs was unveiled in July in the form of letters Trump posted to his social media account. Many of them took effect on August 1, including a 50-percent tariff on Brazil for its prosecution of a Trump ally, former President Jair Bolsonaro.

Just this week, on August 27, India was also slapped with a 50-percent tariff as a result of its purchase of oil from Russia.

Mexico, Canada and China, meanwhile, have faced Trump’s tariff threats since February, with Trump leveraging the import taxes to ensure compliance with his policies on border security and the drug fentanyl.

What are the arguments?

US presidents do have limited power to issue tariffs in order to protect specific domestic industries, and Trump has exercised that power in the case of imported steel, aluminium and automobile products.

But in general, the US Constitution places the power to issue taxes, including tariffs, under Congress, not the presidency.

Lawsuits like Friday’s have therefore argued that Trump has exceeded his presidential authority in levying blanket tariffs.

The appeals court decision also pointed out that the IEEPA does not give the presidency unchecked power.

“It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs,” the ruling said.

The decision came in response to two lawsuits: one filed by the nonpartisan Liberty Justice Center, on behalf of five US small businesses, and the other by 12 US states.

Still, on his social media platform Truth Social, Trump appeared defiant, emphasising that his tariffs would remain in place despite the appeals court’s decision.

“ALL TARIFFS ARE STILL IN EFFECT! Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end,” he wrote.

He added that it was his view that tariffs “are the best tool to help our Workers”. He also implied he expected the Supreme Court to back him up in his appeal.

“If these Tariffs ever went away, it would be a total disaster for the Country. It would make us financially weak, and we have to be strong,” Trump said.

“Tariffs were allowed to be used against us by our uncaring and unwise Politicians. Now, with the help of the United States Supreme Court, we will use them to the benefit of our Nation.”