Meeting Challenges of Trade, War and Peace

 

Meeting Challenges of Trade, War and Peace

Deepak Razdan

Saturday, 10 May, 2025

Uncertainty in world markets should end soon!

The US-UK tariffs deal on Thursday and US-China talks on tariffs later indicate the New World is moving out of its phase of uncertainty on international trade, although trade may not be the only challenge it faces for peace and order.

The world trading system will be inching back towards certainty with each trade agreement concluded between the US and its trading partners, and between those trading partners themselves.

Globalisation was over the day US President Donald Trump announced punitive trade tariffs for the world on 2nd April. Trading was now to be on bilateral terms only, and the first such deal between two major trading nations, the US and the UK, has been signed.

India and the UK, the fifth and the sixth largest economies of the world, signed their Free Trade Agreement on 6th May. India is holding talks with US officials to finalise the first tranche of its deal with the US by this Fall (September-November).

The US-UK and the India-UK deals will be expected to guide future bilateral deals among different nations, although each US deal will ensure US trade with its trading partners is only on balanced and fair terms.

The US President appears eager to sign bilateral trade deals as early as possible, although he maintains it is not the US which wants the deals; it is the rest of the world which wants to have agreements with the US to share a part of its large market.

In fact, it is becoming clear Mr Trump himself wants the uncertainty gripping the world economic order to go. He has made his point on the unfair trading system that had trapped the US, and which he broke with his 2nd April announcements successfully.

Announcing the US-UK deal, he said many more deals will follow soon, including with the European Union (EU). On the eve of the US-China talks in Geneva, he reduced the US tariff on China goods from 145 per cent to 80 per cent. Experts noted it wasn’t enough but was a step in the right direction.

The highest tariff of 145 per cent on China and China’s 125 per cent tariff on US goods had brought trade between the two nations to a standstill.

Mr Trump said “We are going to have a good relationship with China. China has tremendous surplus in trade with the US. China is closed and I would like China to open. Countries are opening up. We can’t compete when you are closed. China is the No 1 example. We were not allowed to go there. They have far more to gain from the deal.”

Expressing satisfaction with the deal with the UK, Mr Trump said "The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come.”

"Because of our long time history and allegiance together, it is a great honour to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow," he posted on the X.

Mr Trump told the White House media that it is a big, conclusive deal with the UK which will provide a base for more openings in the bilateral trade in future.

Trading in the New World has indeed become a bilateral affair. Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent met on Saturday on behalf of their countries in Geneva to end their trade war and explore a mutual tariffs arrangement.

But trade is not the only challenge before the New World now. It has a legacy issue of the Ukraine war which has continued for three years with thousands of casualties every year.

How the New World resolves this issue will show whether multi-nation alliances are working on security matters or not, unlike the trade sector where they have collapsed.

As doubts persisted whether NATO will respond to Ukraine’s plea for help against Russia, the United Kingdom Prime Minister, Mr Keir Starmer, sponsored the formation of a Coalition of the Willing to help Ukraine by raising a multi-nation defence force. In due course, most European nations joined the new group.

Four members of the Coalition including Mr Starmer, French President Emmanuel Macron, German Chancellor Friedrich Merz, and Polish Prime Minister Donald Tusk gathered in Ukrainian Capital Kyiv on Saturday morning on the invitation of Ukrainian President Volodymyr  Zelenskyy.

The leaders jointly called upon Russia to accept an unconditional 30-day ceasefire proposed by US President to end the three-year war. The leaders rejected Russian President Vladimir Putin’s conditions for a ceasefire and said if their call for a ceasefire was not accepted, Russia would face more sanctions. The leaders were unanimous the future of Europe was at stake in the conflict.

From their meeting in Kyiv the Coalition leaders called Mr Trump on phone to keep him informed of the developments which followed the US President’s sustained efforts to end the war which he said was taking lives of 5000 soldiers every week.

The four leaders came to Kyiv despite a reported warning by US intelligence of an impending air attack on Ukraine. In a joint statement, before their summit, they said “Russia must stop its illegal invasion and Ukraine must be able to prosper as a safe, secure and sovereign nation.”

The leaders addressed the media along with Mr Zelenskyy. Mr Starmer said there was absolute unity in what the Coalition members were demanding and it had the support of 30 countries around the world including the United States, Europe, Canada and New Zealand. All countries were speaking with one voice at the same time.

The UK Prime Minister said it was Russia that started “this illegal conflict” and it must be Russia that comes forward and accepts a 30-day unconditional ceasefire.

Mr Starmer said if Mr Putin turns his back to peace, “we will increase the sanctions and our military aid” to Ukraine’s defence.

There must be an unconditional ceasefire for 30 days, he said, “there is the absolute unity on this across a whole range of countries around the world, including the United States, that it must be a 30-day unconditional ceasefire.”

“It means it must be without conditions because Mr Putin’s response to the call for unconditional ceasefire was it is good to have a ceasefire but with conditions on it,” the UK Prime Minister said. Russia has been demanding end of the sanctions against it and stoppage of further military supplies to Ukraine.

Mr Starmer said “We are united in our response to the sanctions. We are very clear that we are rejecting that today. There could be no release of the sanctions already in place until the beginning of the process of the ceasefire. There could be further sanctions,” he said.

“Eighty years after the VE Day which we celebrated on Thursday, the values for which we fought in the Second World War, values of freedom of democracy and sovereignty, are the very same values for which we are fighting today. It is for us to deliver on that for Ukraine and not just Ukraine but for all countries of Europe,” Mr Starmer said.

Mr Zelenskyy said any ceasefire agreement must be enforceable. The Coalition members met in Kyiv a day after leaders of nearly 20 nations, including Chinese President Xi Jinping, attended Russia’s Victory Day celebrations in Moscow on Friday. Russia had declared a unilateral three-day ceasefire for the celebrations.