Latest news with #geoeconomics
Times
5 days ago
- Business
- Times
Welcome to the age of ‘geoeconomics'
A s Europe prepares to watch from the sidelines while the United States and Russia negotiate the future of Ukraine in Alaska, references to geopolitics are, once again, everywhere. The 'geo' buzz has been upon us for a while. According to almost every commentator, we live in the age of 'geoeconomics'. And yet, when real-world great power competition comes knocking, analysts struggle to make sense of it. Nowhere has this been more apparent than in reactions to the recent EU-US trade deal. Commentators have labelled it a humiliating and economically unnecessary climbdown, while berating European negotiators for their lack of strategy. The UK, which struck a deal limiting most tariffs to 10 per cent rather than the EU's 15 per cent, is seen as having achieved a better result.
ABC News
05-08-2025
- Business
- ABC News
Risky bailout or smart geopolitics? Nyrstar smelter rescue divides opinion
Welcome to the frontline of global politics: Hobart and Port Pirie. The two cities — with a combined population of less than Geelong — don't necessarily have much in common. But the fact they are both home to smelters run by multi-metals company Nyrstar mean they are now enmeshed in what has become a global arm-wrestle with China over critical minerals and trade policy. "This is the world arriving on Australia's doorstop," said Edward Cavanough, CEO of progressive think tank, The McKell Institute. The reality Mr Cavanough is referring to is a "sophisticated, geo-economic attempt" by China to consolidate critical minerals production within its own country. These are minerals that are pivotal to manufacturing things like solar panels, wind turbines and weapons. China is subsidising its companies to purchase Australian raw materials at prices Australian smelters cannot afford, according to South Australia's peak body for resources. The country then subsidises the processing of those materials into metals while also placing export controls over the finished product. The result is China now dominates the global market for raw minerals both as an extractor and refiner, while companies like Nyrstar say they are losing tens of millions of dollars a month. It was in that context that the federal, South Australian and Tasmanian governments on Tuesday announced a $135 million bailout for Nyrstar's Port Pirie lead smelter and Hobart zinc refinery. It's the second major industrial intervention the South Australian government has made this year; in February, it placed the Whyalla steelworks into administration and combined with the federal government on a $2.4 billion rescue package. Mr Cavanough said it was notable that the Nyrstar intervention was backed by both a Labor government in SA and a Liberal government in Tasmania. He said the country has entered "almost a post-ideological era of intervention" that was no longer characterised by party politics, ideological purity or free-market adherence. "And I think we're going to see more of that from all types of governments all around the world, including here at home." Mr Cavanough said other countries have responded to China's critical minerals moves with hands-on industrial policies. This includes, he said, the Trump administration's effort earlier this year to take a stake in a US steel manufacturer that was acquired by Japan's Nippon Steel, and the Biden administration's Inflation Reduction Act, which was "basically the largest industrial policy intervention for generations in that economy". "We are seeing around the world a new era of industrial policy and it is largely responding to this phenomenal subsidisation policy we're seeing in the Chinese market," he said. "More close to home, countries like Indonesia, in South Asia, all over Africa, there's more government intervention [and] government control of these industries." Confronting China's critical minerals policy was front and centre as the state and federal governments announced the Nyrstar bailout. Speaking to reporters outside the Port Pirie lead smelter on Tuesday, both federal Industry Minister Tim Ayres and SA Premier Peter Malinauskas brandished a small piece of antimony — a metal used in military weapons and electronics — like it was a Medicare Card during a federal election campaign. China currently dominates global production of antimony, but part of the $135 million Nyrstar package will go towards building an antimony production plant in Port Pirie. The SA Premier pointed to this in his attempt to justify the level of public money going towards Nyrstar's operations. "That's an unacceptable risk, particularly in the current geo-strategic environment." Grattan Institute energy and climate change program director Alison Reeve, who has previously warned about the risks of bailing out Nyrstar, said it was positive that the public money would go towards new critical minerals production. "We're certainly not the only country that is concerned about the Chinese hold on particular parts of these supply chains," she said. "I think ... what is good here is we aren't just focusing on propping up the current operations but also about expanding into areas that are potentially going to be growth areas in the future." Now that Nyrstar has got the public help it's been lobbying for, will it stay competitive in the long run? Mining analyst Tim Treadgold was very sceptical. Asked if the company will survive, he said: "In the short-term, yes, in the long-term, no." "Because it can't compete, because China will continue to produce raw materials cheaper than anything Nyrstar can do," he said. Mr Treadgold said Australian companies were dealing with a "toxic cocktail" of high energy costs and competition with China. "The real point is that China is more competitive, it's got cheaper energy costs than Australia, it's got a bigger manufacturing base," he said. "[China] can knock Australian companies off their perch because it's bigger, faster, better and cheaper." Not only is it unclear whether this bailout will succeed, there is also the question of how many more will be needed. Mining company Glencore has approached the federal government for help over the future of its Mount Isa copper smelter and Townsville copper refinery. Rio Tinto has reportedly done the same due to problems at its Tomago aluminium smelter in New South Wales. In the "new industrial era", taxpayer help might not be far away.
South China Morning Post
03-07-2025
- Politics
- South China Morning Post
Trump's war on everything will lead to his eventual downfall
Those who forget history are bound to repeat it, but history is not something that US President Donald Trump appears to think about very much. Instead, he is more likely to think about the possibility of being awarded the Nobel Peace Prize he has long coveted despite the fact that his primary contribution to peace so far has been to bomb people. Advertisement The energy shown by the second Trump administration during the past six months has been extraordinary. The United States has never seen a presidency so disruptive , but Trump has neglected the crucial lesson forgotten by French emperor Napoleon Bonaparte in 1812 and the Germans in 1941. You can never be so strong that you can open up hostilities on too many fronts. The year so far has largely been successful for Trump and his far-right Project 2025 acolytes , but their dedication to doing too much too fast is an underlying weakness in their efforts to re-gild America in Trump's likeness. Things can break quickly, but fixing them takes much longer. Rather than bringing about any kind of reform, the result will be that Trump's only lasting accomplishment is political and economic damage to the US. Far from being 'America first', many of Trump's initiatives – and certainly the way in which they have been imposed – are likely to undermine the prime position the US holds in geopolitics and geoeconomics. Abroad, he has roiled the global economic system with a series of tariffs , made opponents of America's friends and threatened to annex Canada and Greenland and to take over the Panama Canal. 02:24 Trump dispatches National Guard to contain protesters in Los Angeles Trump dispatches National Guard to contain protesters in Los Angeles Trump is able to do this because his slight majority in the popular vote in the 2024 US presidential election is treated as sufficient to bully and strike when the other side is on the defensive. He pushes through executive orders, supported by loyalists who know that one wrong word means the end of their position in high office. He chickens out when faced with resistance and quickly pivots to attacking another target.
Globe and Mail
13-06-2025
- Business
- Globe and Mail
In this brave new world, the economy is highly political
Christopher Collins is a visiting fellow at the Cascade Institute at Royal Roads University. Jens Hillebrand Pohl is the director of the Helsinki Geoeconomics School. Thirty-five years ago, an American author named Edward Luttwak wrote a landmark essay popularizing the term 'geoeconomics.' Mr. Luttwak, an influential political scientist who has been called 'the Machiavelli of Maryland,' argued that as the Cold War ended, traditional military power would be joined by economics as a way for countries to exert power. We were entering an age where, as Mr. Luttwak wrote, the world order would be shaped by 'the logic of war in the grammar of commerce.' This fusion of economics and geopolitics remained an obscure area of study for years following Mr. Luttwak's essay. Indeed, in the 1990s, the world went in the opposite direction; free trade, open markets and global investment soared in an era of hyperglobalization. Economics appeared increasingly disconnected from geopolitics, and economic activity was focused on maximizing value, rather than on projecting power. Some went so far as to argue the world had reached 'the end of history,' following the 'unabashed victory of economic and political liberalism.' However, recent developments, such as the Russian invasion of Ukraine and escalating U.S.-China tensions, show that the world may be, as the late U.S. secretary of state Henry Kissinger said, 'in the foothills of a new Cold War.' As the IMF warns, increasing trade restrictions, technological decoupling, disrupted capital flows and migration restrictions are fragmenting the global economy, splitting the world into competing 'blocs.' However much we may have wanted to be done with geopolitics, it is not done with us. In this era, economic policies are increasingly driven by political and power dynamics, and geopolitical questions are informed by economic concerns. All the components of the global economy – currencies, supply chains, technology, trade and capital flows, and information networks – have become tools of power and influence. More and more, these instruments serve as expressions of national sovereignty, whether through export licensing, cross-border data regimes, or control over investment standards. And across the world, economic policy is no longer reactive or technocratic: It is being politicized and weaponized. As a resource-rich, trade-dependent middle power, Canada must navigate this increasingly fragmenting world while protecting its core economic interests. To do so, Canada will first need to develop a sophisticated capability to engage in what experts call 'economic statecraft.' This will include developing economic tools to manage both bilateral and multilateral relations with the U.S., China and Europe. Fortunately, as history has shown, this is something at which Canadians are skilled. As Robert Bothwell, one of the leading historians of Canadian foreign policy, once said, when it comes to trade talks, Canadians 'are notoriously tough.' Canada's private sector will also need to adapt to this new reality. Geoeconomic shifts have reshaped how companies do business around the world, leading to what some have called 'a new geography of manufacturing.' In this environment, firms are not just adapting to geopolitics, they are becoming its agents. Global businesses and investors must now align their operational models with geostrategic risks, navigate extraterritorial legal exposure, and anticipate shifts in access to data, talent and capital. Managing all of this will require new ways of thinking, something the CEO of one large global Canadian financial services firm likened to 'swapping out your cross-country skis for downhill skis midslope.' Canadian investors will also be affected. As economist David Skilling has said, 'trade wars are a precursor to capital wars.' In a sign of the times, Larry Fink – the CEO of BlackRock, the world's largest asset manager – has argued that global capital markets are becoming more attuned to national goals in what he calls 'the second draft of globalization.' Canadians invested approximately $2.5-trillion abroad in 2024, and Canadian investors may increasingly find themselves caught between competing political pressures in a fragmenting global investment landscape. Arguably, the most immediate challenge for Canada lies in managing its relationship with the U.S. while preserving economic diversification. Unlike some other middle powers, which can hedge between competing blocs, Canada's geographic position and economic integration with the U.S. make strategic ambiguity nearly impossible. For Canadian investors, a provision in Donald Trump's Big Beautiful Bill Act to increase tax rates on some foreign investors is particularly concerning. It signals a broader shift: the weaponization of access to U.S. capital markets as an instrument of statecraft. As Mr. Luttwak predicted, economics is increasingly becoming a venue for geopolitical competition, especially among the great powers. Meeting this challenge will be tough. But, as we have seen before, Canadians are tough, too.
South China Morning Post
25-05-2025
- Automotive
- South China Morning Post
Job creator or industry killer? Europe's EV sector faces Chinese investment dilemma
Eyebrows raised and brow furrowed into a puzzled smile, French President Emmanuel Macron held a model of a cleanly sculpted, sheer white truck. To his left, Wen Han, a 35-year-old Chinese entrepreneur, beamed through thick, black-rimmed glasses. In Macron's hand was a miniature Windrose electric lorry , its sleek, forward-leaning nose and central driving position evoking science fiction more than the gritty world of road haulage. The Chinese company, founded by Han just three years ago, announced this week that it would build a €175 million (US$199 million) factory in northern France. Bigger investments and flashier names came to last week's Choose France summit, but few were set against a geoeconomic backdrop as charged as Windrose Technology's. The European Union is locked in a trade dispute with China over electric vehicles . It is also wrestling with whether and how to harness Chinese investment in the sector. Around the continent, a debate is being waged on whether China's prowess in the sector can be a job creator or an industry killer. Han is certain it is the former. 'He told me he wants me to bring the whole ecosystem to France,' Han said in an interview, when asked what Macron told him. Although only 30 Windrose trucks are on the roads worldwide, Han is ambitious. He wants to make 4,000 of them a year in France from 2027 and is eyeing an American plant too. He is already planning to float Windrose on a US stock exchange and told Macron he would like a secondary listing in France.
