Global Trade and Geopolitics - Newspaper Summary

 The sources paint a picture of a volatile global landscape in October 2025, dominated by persistent geopolitical tensions, economic fragmentation, and technological rivalries, particularly between the US and China. These dynamics profoundly influence global trade flows, energy markets, and the race for technological supremacy.

Geopolitical Tensions and Trade Dynamics

The ongoing rivalry between major global powers, particularly the US and China, is the central theme shaping global trade and policy.

US-China Trade Tensions:

• The trade war between the US and China continues, marked by cycles of rapid escalation and de-escalation.
• The most recent escalation involved China issuing controls over its rare earth exports, which led to the US threatening a new 100% tariff on Beijing in retaliation.
• Despite this, officials from both nations reached an agreement to postpone new US tariffs and delay China’s rare earth controls on October 27. US President Donald Trump stated that the two nations were close to a trade deal, and he was expected to meet Chinese leader Xi Jinping soon, keeping hopes for a deal alive.
• However, the sources caution that given the history of quick escalations and de-escalations, the situation remains uncertain until a deal is finalized.

The Rare Earth Mineral Weapon:

• Rare earth minerals are crucial for the automobile and electronic device industries. China has gained near dominance in this market, accounting for 70% of rare earth mining and 90% of processing globally.
• China has started to "weaponize this dominance" by restricting both the supply of rare earth metals and the necessary technology and machinery for extraction and processing.
• The US is actively seeking to diversify its critical minerals supply chain to end China’s near monopoly. In the past week, the US signed agreements with Australia, Thailand, and Malaysia to source these minerals.
• Despite US optimism, experts believe that breaking China’s grip will take time, possibly until 2030, given China's decade-long investment and significant cost advantage. China leverages this cost advantage by restricting technology transfer, thereby keeping new capacities in other nations unviable.
• India, which lacks sufficient domestic supply, is looking for minerals in South America and Africa, but faces a major stumbling block due to China’s restriction on technology transfer.

Russia and the Energy/Sanctions Environment:

• Western sanctions aimed at crippling Russia’s fossil fuel revenue have been in place since the 2022 invasion of Ukraine. The latest US sanctions target Russia’s two largest oil exporters, Rosneft and Lukoil.
• Despite multiple rounds of sanctions, Russia's fossil fuel exports have remained resilient due to three primary factors: China and India continuing to buy large quantities of Russian oil; European nations struggling to fully eliminate Russian oil and gas due to lack of suitable alternatives; and Russia successfully employing intermediaries, alternative payment systems, and shadow fleets to evade sanctions.
• The latest US sanctions on Rosneft and Lukoil are expected to affect Indian refiners, who purchase about 1 million barrels per day of Russian oil. State-run Indian Oil Corporation (IOC) confirmed it would abide by all sanctions, which will likely force Indian refiners to seek costlier alternatives from West Asian and other sources.
• China has become a key loophole for sanctioned Russian energy. Russia has been sending Liquefied Natural Gas (LNG) from the sanctioned Arctic LNG 2 project to China’s port of Beihai. This discounted Russian gas is seen by China as both an opportunity and a "signal of defiance" in its trade war with the US. The Chinese trade further deepens Russia-China ties.

Global Trade Implications for India:

• India's economy, while showing healthy domestic demand, remains vulnerable to global uncertainties and external demand shocks. Export success is deemed vital for India's fast economic expansion.
• The sources show India deepening trade ties with Russia despite sanctions, most visibly through discounted crude oil and now discounted steel. Russia is back among India’s top five sources for finished steel, exporting 127,800 tonnes to India in the six months ended September, making it the fourth-largest source. This Russian steel is offered at least 20% lower than Chinese offerings.
• Conversely, India is using anti-dumping investigations to counter unfair trade practices, such as the advanced probe into Ethambutol Hydrochloride imports from China and Thailand.

Global Economic Shifts and Risks:

• China’s Economic Slowdown: China’s GDP growth declined to 4.8% in July-September, falling below its 5% target due to trade tensions and property market issues.
• A major concern is China’s sustained deflation, which allows it to "dump cheaper goods into other markets," potentially hurting the competitiveness of other economies, including India's.
• Divergent Monetary Policies: Central banks globally are pursuing divergent monetary policies. The US Federal Reserve is expected to cut rates by another 25 basis points due to a weak job market, despite inflation being above target. In contrast, the Bank of England and the European Central Bank, having already cut rates, are expected to pause.

Technology and the Geopolitical Balance of Power

The geopolitical rivalry is intensely focused on achieving supremacy in cutting-edge technologies, primarily AI and quantum computing.

The Quantum Supremacy Race:

• The race for quantum technology supremacy is considered potentially more profound than the AI contest in shaping the geopolitical balance of power.
• While the US currently leads, China is rapidly narrowing the gap. Patent data, a key foreshadowing tool for future trends, forecasts that China could overtake the US as early as 2027 in the strength of its quantum computing patent portfolios.
• China's momentum is driven by massive government funding: Beijing has pledged $15.3 billion in public funds for quantum computing, significantly outpacing the $1.9 billion pledged by the US.
• The US position is considered fragile, and experts urge a coordinated national strategy, stressing the need to rebuild the STEM pipeline and welcome international expertise to remain competitive.

AI and the Global Corporate Model:

• AI is impacting the global workforce, particularly in large American corporations. Companies like JPMorgan Chase, Walmart, and Airbnb are adopting an "ultra-lean model of staffing," betting that AI and automation will increase productivity enough to sustain growth without adding or even by reducing headcount.
• This caution in global hiring, driven by the anticipated productivity gains from AI, forces companies to justify backfilling any open role.

Digital Financial Architecture:

• The global financial architecture is evolving through digital innovation. Regulators worldwide are converging on an approach to integrate stablecoins (digital tokens pegged to a currency) within existing banking frameworks, requiring full-reserve backing and strict compliance.
• India's institutional ecosystem (RBI, NPCI, FIU) is positioned to "lead their responsible adoption," viewing stablecoins as a complement to traditional banking infrastructure that could accelerate tokenized credit and financial assets, particularly useful for global remittance channels.

Climate Change and Policy Integrity (COP30):

• Global leaders are preparing for the 30th Conference of the Parties (COP30). A critical geopolitical concern is the credibility of climate governance, particularly concerning the influence of the fossil fuel industry.
• COP-28 and COP-29 saw large numbers of accredited fossil fuel lobbyists, leading to arguments that their presence creates an "irreconcilable conflict" of interest.
• Experts argue that these interests manipulate negotiations to slow climate action, suggesting that exclusion is necessary to prevent special interests from delaying the required transition. They point to precedents in the tobacco and chemical industries where integrity was restored by limiting conflicts of interest in policy-making.