China
Trump Inflames The US-China Battle For Global Hegemony
Published
1 week agoon
By
Andrea Rizzi
The battle between the United States and China for global hegemony has entered uncharted territory. In recent decades, rising tensions between the two powers were tempered by a deep economic interdependence that helped mitigate the risks of open rivalry, and by a global alliance structure largely favorable to Washington. Both of these stabilizing factors are now being radically reshaped by Donald Trump’s actions, pushing the competition toward a new paradigm marked by heightened instability and new dangers.
At the forefront is Trump’s sweeping tariff offensive, which has triggered an abrupt decoupling of the two economies. The U.S. and China exchange nearly $600 billion in goods and close to $70 billion in services annually — flows that have long formed a vast network of shared interests and served as a powerful brake on escalation. This economic interconnection has been the key factor distinguishing the current U.S.–China rivalry from that of the Cold War.
Second, the White House’s actions are sowing the seeds of distrust, even indignation, among many traditional U.S. allies. This shift is changing the strategic calculus of several partners in both Europe and Asia, casting doubt on their willingness to align with Washington in its campaign to contain Beijing. The European Union’s moves exemplify its determination to chart its own course and increase its strategic autonomy, or even independence, to use the term used by future German Chancellor Friedrich Merz.
In this way, both the bilateral relationship and the broader international framework of the 21st century’s great struggle for power are entering a turbulent and transformative phase — one whose consequences will inevitably ripple across the globe on multiple levels.
The heart of the matter is clear. Rafael Dezcallar, who served as Spain’s ambassador to China from 2018 to 2024, sums up the core of the issue: “The United States is trying to contain China’s rise, and China is trying to do everything in its power to prevent the United States from succeeding in that endeavor. Structural rivalry is inevitable. The question is how it will develop at different levels: political, military, commercial, economic, technological, and also ideological,” says Dezcallar, author of The Rise of China, an in-depth book that addresses, among other things, the competition between Washington and Beijing.
And that question becomes even more unsettling in light of Trump’s recent actions. Experts consulted agree that economic interdependence was a critical factor in tempering tensions, and its unraveling destabilizes the rivalry betweeen the two powers.
“The economic distancing between the two didn’t begin now. It’s not something Trump started. But, at least for the moment, Trump is clearly accelerating it. We seem to be heading into an ugly economic war. Does this mean we’re entering a more dangerous phase of the U.S.-China relationship? I think so,” says Robin Niblett, a distinguished fellow at Chatham House think tank — of which he was director — and author of The New Cold War.
“As decoupling continues to advance, the situation will also become more unstable because the shared interests that served as guardrails will disappear,” Dezcallar agrees.
Both experts also offer a note of caution. These ties won’t vanish overnight. Political shifts could emerge to temper the current trajectory toward outright conflict. In fact, Trump is increasingly showing signs of wanting to seek agreements — and, according to Dezcallar, China remains open to dialogue as well, though never in terms that resemble capitulation. Niblett adds that different forms of economic interconnection could persist through third countries — less visible and robust than direct ties, but still meaningful in this new paradigm of globalization.
However, even in the best-case scenario, the current escalation signals a political rupture — one that marks a before and after. It seems clear that, after such a dramatic break, there will be no shred of trust left, and both countries will proceed to accelerate all necessary efforts to minimize their dependence on each other. Whether this realignment unfolds abruptly or gradually, it’s clear that the relationship is decisively entering a new phase. After years of relatively contained reconfiguration, there is now an enormous political incentive to proceed at maximum speed with a profound readjustment.
“I don’t think we’re going to move into a phase of armed conflict; we’ll continue in a dynamic of competition, but this shift is undoubtedly generating more tension,” says Miguel Otero, senior researcher at the Elcano Royal Institute, who studies, among other areas, the power triangle between China, the U.S., and Europe, with a special focus on the monetary sector. “I think it’s in some ways a demonstration of the U.S.’s weakness, of its desperation. For more than two decades, it has tried to change China’s macroeconomic policy, and it’s not succeeding. The yuan, for example, has devalued by 17% in recent years, something very striking in a country that has had historical surpluses.”
Otero points out that, unlike in the 1980s — when the U.S. was able to contain the risks of economic competition from countries like Japan or West Germany by leveraging their sensitivity as recipients of military protection — and by forcing an exchange rate adjustment through the 1985 Plaza Accord — Washington now lacks the levers it needs to win the standoff with China.
The balance of power underlying this escalating battle is complex. The United States still has a higher GDP than China, and the recent slowdown of the Chinese economy has dimmed the prospect of it overtaking the U.S. in the near future. However, if GDP is measured in terms of purchasing power parity — a key metric for assessing a country’s real capacity to produce and act on a national scale — China has already pulled ahead.
Washington still holds an edge in military strength and benefits from the momentum of its extraordinary tech companies. Yet Beijing has demonstrated, at times unexpectedly, its own formidable capacity for progress — both militarily, with developments like hypersonic weapons, and technologically, with innovations such as the DeepSeek AI model. Taken as a whole, there is no doubt that China possesses the immense driving force of a country with colossal productive capacity.
The Biden administration attempted to contain China’s rise by restricting its access to certain cutting-edge technologies and rallying allies around that objective. A clear example is the agreement between major companies in the Netherlands and Japan to restrict Chinese access to high-capacity semiconductors. To achieve this, Biden worked to reinforce the alliance network — with strong support for Europe in the face of Russian aggression and multiple initiatives across the Asia-Pacific region. His aim was to earn the gratitude — and, ideally, the dependency — of partner nations, thereby encouraging their willingness to back containment efforts.
The emergence of China’s DeepSeek has called into question the effectiveness of that strategy. And now, Trump’s policies are triggering a widespread wave of distrust toward Washington among its long-standing allies.
Mikko Huotari, executive director of the Mercator Institute for China Studies, highlights the paradox of the current situation: “There may never have been a better time for a joint G7 and EU tariff policy toward China. But there may also never have been so much distrust between the U.S. and its allies. The U.S. no longer appears to be a reliable actor, and the only leverage it holds is brute power and coercion,” he says.
The tone of Spanish Prime Minister Pedro Sánchez’s visit to Beijing clearly embodies the reality that Washington will hardly be able to count on docile compliance from its traditional European partners.
Naturally, this isn’t a black-and-white shift. It’s a nuanced turn. Europeans still have an interest in ensuring the U.S. doesn’t abruptly withdraw its security umbrella. And the United States’ Asia-Pacific allies have an even more pronounced interest in the face of the Chinese challenge. But everyone has calculated that it is best to reduce their dependence on the U.S. as soon as possible, which will reduce Washington’s leverage.
There is no doubt that the tariff war could inflict enormous damage on China, a nation whose economy relies heavily on exports and faces depressed domestic consumption. If Washington is the one waging the offensive, others will no doubt move to prevent China from redirecting its surpluses into their markets and flooding them. The EU has already sent clear signals in this regard. This is a complex situation for a country grappling with demographic challenges, a burst and still-unresolved real estate bubble, and other structural problems.
Nevertheless, the tools at China’s disposal lead many experts to believe that the conflict triggered by Trump could ultimately give Beijing a comparative advantage. Not only because the U.S. risks inflationary flare-ups, product and component shortages, and a decline in competitiveness as direct consequences of its tariff war. China holds potent weapons across multiple fronts, prompting several analysts to argue that it possesses what is known in strategic jargon as “escalation dominance” — the ability to maintain control in a prolonged standoff.
This is due to several factors, the most central of which is that although China would undoubtedly suffer immense economic damage if the tariff war persists, the U.S. could also face shortages of essential goods it is currently unable to produce domestically or source from elsewhere in the short term. The risk of such a supply chain breakdown is considerable. Trump’s recent decision to roll back tariffs on a wide range of technological products may be a symptom of the difficulties the U.S. faces in sustaining its offensive.
“I think the trade war Trump has proposed and the way he has presented it is a very serious mistake,” saus Dezcaller. “If the standoff continues, there is a risk that China will resort to the leverage it has on the United States; for example, its near-monopoly control of rare earths or its position as a major holder of U.S. debt.”
These represent two significant vulnerabilities for the U.S. The first relates to strategic raw materials, a sector in which China holds a dominant position — an advantage that helps explain Trump’s overt interest in resource-rich regions like Greenland and Ukraine. The second involves the debt market tremors. The U.S. is a heavily indebted country. An increase in interest rates on U.S. debt could have massive repercussions, while the alternative — default — would undermine its central role and authority in the global financial system.
But there are other reasons why China may have the upper hand in escalation.
“This isn’t a battle you win, but one that requires a balance between who loses the least,” says Huotari. “And that’s a game Beijing can play quite well. This has to do with political systems. The U.S. is becoming more authoritarian, but it has significant internal forces that are difficult to control. China is better positioned. That doesn’t mean the net suffering is less, but there’s probably a greater capacity to withstand the pressure.”
China is a society of 1.4 billion people subjected to increasingly tight control by the country’s authoritarian regime.
The chaos and suffering tied to this escalation could, in turn, accelerate the erosion of one of the U.S.’s key assets: its alliances. “It seems plausible that the U.S. is losing the scale of its global alliances and relationships. And, if that proves true, it will be a victory for China,” says Huotari.
“The U.S. has been unique as a great power in terms of committing to alliances. It decided to protect its interests by investing in alliances. Now we have a huge shift. An administration that questions that premise, that believes alliances are a burden,” Niblett remarks. “However,” he continues, “that shift must be interpreted in light of two considerations.” “The first is that this is an extreme position, and it’s not shared by many, including the Republican establishment. We shouldn’t dismiss the idea that, within five years, this dynamic could change. The second is that China is a country that doesn’t believe in alliances. The U.S. will lose influence and credibility, but I’m skeptical that others could take advantage of that loss to gain a significant advantage.”
Dezcallar agrees there are limits to China’s ability to capitalize on a potential vacuum. He points out that a formal alliance with Europe is unthinkable, given their differing values, and that democratic countries in Asia have a structural interest in maintaining a relationship with Washington to balance the giant next door. Still, he believes Beijing may find new opportunities. “I am convinced that Washington’s actions open up new spaces for China,” he argues, pointing, for example, to possibilities for increased influence in the Global South, which Trump neglected during his first term.
“I think we’re heading toward a decoupling of the two powers, which will be accompanied by the development of spheres of influence. These will not be geographical, as in the Cold War, but rather much more liquid, more volatile spheres of influence. We’ll see them within societies, with supporters of one type of relationship with one or the other,” says Otero.
For the rest of the world, this intensifying rivalry could open up space to exploit the competition between superpowers through strategic triangulation — seeking concessions from both sides.
That may be a tactic that Putin’s Russia will try to pursue. Although the reasons for Trump’s soft stance toward Moscow are unclear, some believe it is an attempt to drive a wedge between Russia and China. However, most experts consulted believe that a true strategic separation between Beijing and Moscow is inconceivable. In their view, all Trump accomplishes by giving Putin some breathing room is to release him from the awkward position of overdependence on Beijing. Once out of that corner, Putin is likely to maintain a close — though not formal — alliance with China, trying to gain a better position by playing both sides.
The current deterioration in China-U.S. relations does not necessarily have to lead to military repercussions. However, the rising economic tension could produce destabilizing effects. Taiwan remains the most volatile flashpoint.
“The situation is dynamic,” says Huotari. “We have seen a significant increase in the number, quality, and intensity of Chinese military maneuvers around Taiwan. It’s massive, very frequent, leading to an almost permanent presence of Chinese naval forces around Taiwan, which reduces reaction times for anyone willing and able to react. So the level of tension is quite high. Meanwhile, the Taiwanese leadership has taken measures that have angered the Chinese side. So here, too, the situation is deteriorating.”
“I think the trade dispute is a separate story from military affairs,” Huotari continues. “But in a situation where both sides are on high alert, it only takes a drop to escalate. So I see significant risks of trade tensions spilling over into the broader issue of regional security.”
Niblett, generally cautious about projecting apocalyptic scenarios, nevertheless warns: “The more time passes, the more Taiwan becomes an issue, the stronger China becomes militarily, and the greater the risk of some kind of conflict.”
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NASA Astronaut Kathryn Thornton: ‘All The Progress We’ve Made Over The Past 70 Years Is In Peril’
Published
15 hours agoon
April 22, 2025
Alabama-born physicist Kathryn Thornton, 72, embodies a historic shift in space exploration. Born into a working-class family, her first job was washing dishes in the restaurant run by her parents, who wanted their children to be the first in their family to go to college. Thornton not only achieved that, but also became one of the first female astronauts, embodying the new face of space exploration at NASA, which until then was dominated by white men with military training.
Thornton traveled to space four times between 1989 and 1995, and is the woman who has spent the second-longest time outside a spacecraft, performing spacewalks. In 1993, she was the only woman to participate in one of the most complicated spacewalks in history to repair the Hubble Space Telescope, an observatory that had cost around $2 billion and was returning blurry images due to a flaw in its optics. The mission was successful and restored the instrument for science, which has since helped make some of the greatest discoveries in the history of astronomy. Many years later, Thornton’s eldest daughter, who was 11 years old when her mother helped repair Hubble, earned a PhD in astrophysics using images taken by the very same telescope.
This week, Thornton will visit Spain to give a talk at the Starmus Festival, which kicks off Friday on the Canary Island of La Palma. In this interview with EL PAÍS, the astronaut reflects on how much space exploration has changed, especially in the current era, which she views with some dismay. She expresses astonishment at Elon Musk’s power and his influence over NASA, as well as concern about Donald Trump’s attacks on science in the U.S.
Question. How would you explain to someone what it would feel like to go into space for a spacewalk?
Answer. You train in the water tank and other simulators, but you find out when you first go out that all simulators lie to you in one way or another. And so you get pretty smart in the first 20 minutes about how to move around and maintain control of your body. Because when there’s no gravity, and you stop moving your hands, for example, the rest of your body still has momentum unless you apply an opposite torque to keep your rear end behind your front end. I’d say it’s like moving a refrigerator on ice, while wearing skates. It’s hard to get moving, but much harder to stop.

Q. What is your most vivid memory from your trips to space?
A. One of them was definitely letting go of the solar array from the Hubble we repaired. I just took my hands off of it, didn’t push it anywhere, and it floated away. I could see it flapping like a giant bird flying through space, right above Saudi Arabia, which is a beautiful part of Earth seen from space. It was mesmerizing.
Q. Do you have any bad memories from traveling to space?
A. On my second mission, I had a rather frustrating experience. We had to capture a satellite and strap a new booster motor on it. But it turned out to be much more difficult than expected. The predictions about how it would behave when interacted with were pretty far off. It weighed about 4,000 kilograms, and half of that mass was liquid propellant. And the satellite was rotating, which gave it gyroscopic stability, but since it wasn’t a solid mass, it didn’t behave exactly like we thought. The method we had intended to capture it with didn’t work. So we did the first and only three-person spacewalk. I was inside, guiding everything and making sure they got into the airlock. They went out and grabbed it with their hands.
Q. You were one of the first female astronauts, and you were at NASA for 12 years, what was that experience like?
A. I wouldn’t say it was terribly challenging. The fit of some things, particularly the spacesuit, was probably the biggest challenge because it wasn’t custom-made. It’s made up of various parts. So they give you a shorter upper arm than some of the guys would wear, a shorter lower arm, but they don’t change the diameter. When you try to bend your elbow, you start interfering this piece with this piece, which restricts your movement enormously. When you’re training in the water, you’re flopping around inside that suit. If I were to get positioned on my back in the tank, I would fall into the back of the suit and I couldn’t reach the gloves because my arms couldn’t reach. There were a lot of things like that. It’s not really a gender thing; it’s more a build thing, which of course is correlated with gender. In the end, you can either complain and make someone else do it, or work really hard to make it work. And that’s what I did.

Q. What do you think about current space exploration?
A. There have been many changes. My NASA was completely different to that of the Mercury, Gemini, and Apollo programs. At the NASA I came into in the shuttle program, we were flying a lot of people, and we were flying a lot. I myself had four flights in six years, which is unheard of now. With the retirement of the shuttle and the arrival of the space station, everything changed. I don’t think we’ll ever see that rate or that number of flights again. Crewed missions to recover satellites or repair Hubble are no longer possible. I don’t know that that’s a bad thing if we go off and do something even more spectacular. I would love to see people walk on Mars, but I don’t think it’s going to happen.
Q. Do you support going to Mars instead of the Moon?
A. Yes, I’m on the Mars side. If we need to go to the Moon sooner to make the journey safer, then I support that too. But I worry that if we establish a permanent base on the Moon, that we will have sunk an anchor in there and have a hard time moving past that.
Q. Why?
A. After the end of the Apollo program in the 1970s, our next goal was to have a permanent presence in space: a space station. That was the focus for over 25 years, until we finally achieved it in 2000. Since then, there’s always been somebody in space. But we haven’t done much else: just orbited the Earth over and over again. We won’t be able to move forward until we end that. We have to decommission the space station, and NASA will hand over the baton to commercial space stations. Only then can NASA move on to the Moon and, hopefully, develop something beyond.
Q. Did you ever imagine that the richest man in the world would be a space entrepreneur sitting to the right of the president of the United States?
A. I’m completely flummoxed by that whole concept. Every day we’re surprised by something new, and we have no idea what’s going to happen next. Unfortunately, I have no factual information. I can only blather my thoughts, which aren’t necessarily based in fact, but rather on what I read or hear.
Q. Are you concerned about a wave of layoffs and cancellation of projects like the new Nancy Roman Space Telescope?
A. Yes, some of the science missions are probably in danger. It’s heartbreaking. Not just for NASA, but for the other space agencies.
Q. Could the mission to land the first woman and person of color on the moon also be in jeopardy?
A. Yes, of course. All the progress we’ve made over the past 70 years is in peril.
Q. What do you think of China as a new space power?
A. China is already our biggest competitor. Before that, it was the Soviet Union, and that competition is what got us to the Moon. I don’t see competition as a bad thing. In the past, even with ballistic missiles pointed at each other, we collaborated with the Soviets in space. We’ve worked with the Russians for 25 years on the space station. I think we could do that with China, if we chose to. But right now, we’re in a competition.
Q. What current space technology do you find most promising?
A. There’s a lot of potential in high-specific-impulse, low-thrust engines, like plasma engines. When I was teaching orbital mechanics, I asked my students to design a trajectory to Mars, and they unwittingly proposed an idea very similar to the Gateway [the lunar outpost]: take multiple components out of Earth’s gravity, assemble them in space, and, at least for cargo, use low-thrust, continuously operating thrusters — like a “slow boat” like the ones that go to Antarctica. You can send cargo to the Gateway, and from there, slowly to Mars. For people, we would use a different system, but for materials, it’s a possibility.
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China
The ‘chain Of Favors’ That Keeps Cubans Afloat In The Face Of State Abandonment
Published
3 days agoon
April 20, 2025
Vicente Borrero has sunburned skin and wears a hole-ridden tuxedo, a dirty old cap and faded shorts. His eyes appear to always be looking away, always on the verge of tears.
Vicente looks like the last survivor from the village of Jicotea, in Santiago de Cuba, a post-war man who saw it all and lived it all. In his house, built with a zinc roof and plank walls, through which any torrential rain can penetrate, Vicente has been waiting for someone for a long time. The day that Yasser Sosa traveled more than 90 miles to find him, Vicente couldn’t believe it. He looked at the visitor and told him that he was probably just like all the others, who had passed by the village for years, promising to help him.
Vicente doesn’t know it yet, but, in a few days, he’ll have a new home. He will leave the space where he’s lived for 77 years and move to a cement house that’s not far away. It has a garden and a front porch.
Vicente doesn’t walk like other people. Due to a congenital defect, he’s learned to move nimbly, using the strength of his arms and feet to traverse rocky paths on a daily basis. A few days ago, someone saw him crawling through a local park and notified Guillermo Rodríguez, a 34-year-old journalist from Ciego de Ávila. For at least three years, Guillermo has been raising money from Cubans on and off the island to buy houses for the homeless. The country currently has a deficit of 862,000 properties, according to data from the National Statistics Office (ONEI). However, unofficial figures suggest that there are some 1.2 million homeless Cubans, while thousands more reside in overcrowded or almost-marginal conditions.
Rodríguez asked Sosa, his right-hand man in Santiago de Cuba, to locate Vicente immediately. After finding him, he turned to his Facebook followers and told them who Vicente was: a disabled, unmarried man with no children, who had been in a wheelchair for more than 10 years. Vicente’s parents — his only support system — died a long time ago. He lives on a monthly pension of 1,500 Cuban pesos (a little over $5) from the state, enough to eat just once every two days.
It took three days to raise 210,000 Cuban pesos ($583). Rodríguez subsequently allocated 180,000 pesos ($500) to purchase the house. With the rest of the funds, he’ll furnish it with appliances that Vicente has never had. Rodríguez did the same thing over a month ago for Benito, a single father living in the center of the island, in a house made of planks with a dirt floor, and his 10-month-old baby. With 1.6 million pesos (more than $4,400), the volunteers acquired a two-story home and everything the father needed to start over.
There are days when Rodríguez searches for medicine for a mother, who is frightened by her daughter’s scabies. Sometimes he tries to get a wheelchair for a sick person, or a rice cooker for a housewife. He and his team are the ones who show up with a bar of soap or a package of spaghetti to give away, or they offer to carry a donated mattress for an elderly man who has nowhere to sleep.
It’s a silent solidarity movement. “A chain of favors,” Rodríguez notes. “Yesterday, two people went to pick up donated nebulizers for their children with asthma: they arrived with medicines to give to someone else, in case they needed them. The number of vulnerable, abandoned people is numerous. In Cuba, a network of support and empathy has been created […] in a country so devastated, people cling to that. In Cuba, only neighbors can help each other out.”

For several years now, Cubans haven’t waited around for their government. The state has left them orphaned, deprived of everything. Some say they feel betrayed, as if the authorities have turned their backs on them. Those who receive remittances from abroad are freed from depending on the increasingly scarce rationed food that the government barely guarantees. Those who manage to get into business are navigating shortages of all kinds, in a country with a collapsed, dependent economy that ended 2024 with an inflation rate of 24.88%. Tourism is increasingly depressed due to the lack of travel, while the private sector is impeded from growing. Today, in Cuba, according to studies, around 89% of families live in extreme poverty. In many cases, activists or civil society organizations fill the gaps in the ever-increasing space left by the government. And, after stepping in, almost all of them end up targeted by the political police, or are forced to abandon their work.
“The help I give is a way of denouncing the system”
“I need Clonazepam for my daughter,” says a desperate mother, in a WhatsApp group named Manos a la Obra (“Let’s get to work”). Soon, someone offers to share theirs. Groups of this type are increasingly popping up on social media. In these online forums, Cubans often share, distribute and exchange medicines. On the island — as the government itself has acknowledged — more than 460 medications are in short supply in the state pharmacies. Some people, faced with the possibility of death due to lack of treatment or surgery, launch GoFundMe campaigns to request humanitarian visas, or financial donations to cover a patient’s transfer to a hospital beyond the island.
Art historian and activist Yamilka Lafita — who has helped launch some of the most visible campaigns in recent years — asserts that, without knowing how or since when, it’s Cuban civil society that has united to survive. “In Cuba today, there are no supplies, treatments, reagents… there aren’t even doctors to perform operations. And these campaigns are a way to denounce the public health system, which is just another cog in the wheel of this failed state,” Lafita laments. She has helped transport children with cancer or in need of transplants to hospitals in Spain or the United States, so that they can receive treatment and surgeries. “Some people tell me: ‘You’re putting Band-Aids on the dictatorship.’ But I’m not putting Band-Aids on it, because my help denounces the system. Every contribution you make — whether it’s getting a humanitarian visa, or donating two syringes — helps a Cuban survive in poverty.”
Some Cubans attest that this is the greatest crisis of all time, even worse than the so-called Special Period (1991-2000), which began following the collapse of the Soviet Union. They base their testimony on the lack of hope people have for immediate change, but mostly on what can be seen on the street: an emigration of almost two million Cubans in about three years; people dying without medical care; retirees whose pensions are insufficient; or people seen sleeping on the streets, something they say was unheard of in the 1990s. The Cuban authorities acknowledge some 3,690 people “displaying wandering behavior,” but this is believed to be an undercount. José Daniel Ferrer, a renowned political leader from the eastern part of the island, knows this firsthand. Since his release from prison at the beginning of the year (following negotiations between the Cuban government and the Vatican), he’s been feeding hundreds of people. Every day, they come to his house, looking for food. With aid that he receives from abroad, Ferrer and his family distribute more than a thousand hot meals each afternoon, handing them out to people who don’t receive state support. The difference, according to the opposition leader, is that Cuba, today, is a place where there’s food for those who have money.
“In the early 1990s, the situation was such that, even if you had money, you couldn’t get much. You couldn’t move from one place to another, because the roads were deserted and there were barely any vehicles moving,” he recalls. “Now, if you have money, you can’t go to bed without eating, because there are products in dollars — very expensive — and there are MSMEs (micro, small and medium-sized private enterprises). But for those elderly people who live on a thousand-something pesos in retirement, the hunger is as terrible, even worse than what we suffered from during the Special Period. They depend on what arrives at the grocery store… and almost nothing ever arrives. So, some people are faring worse.”

In Cuba, there’s also talk of the “new rich.” This is in stark contrast to what the Cuban government denied for years: social classes in a country where everyone was supposedly “equal.” These are people who come and go from the island; they often run businesses. Many of them can be seen in the increasingly common luxury cars — such as Mercedes-Benzes, Audis, or Chevrolets — that roll through Havana’s streets. However, what nobody is spared from, what affects everyone across the board, are the blackouts, the almost-daily power outages across the country. This electricity crisis is due to the lack of maintenance at the aging thermoelectric plants, as well as the reduction in fuel arriving from allied nations, such as Venezuela.
This is something that Cubans have also tried to take control of: in the absence of a state to resolve the energy crisis that has worsened since last year, some in the diaspora send light generators, small solar panels, candles and flashlights from abroad. But the truth is that these, too, are running out. Life becomes dark for everyone, equally. In this case, it’s the Cuban government that has sought help from abroad. And, once again, it’s relying on Russia to finally pull the country out of its massive energy crisis. But that, according to economists, won’t be enough, so long as the government persists in its centralized economic model.
“Cubans have remained stuck in the Cold War view of trade relations. They believe that Russia, China and others should help them, because they’re confronting the United States and are an important player for the great powers,” says economist Ricardo Torres, a former researcher at the Center for the Study of the Cuban Economy at the University of Havana and a professor at American University in Washington, D.C. “I’m not sure the Russians see it that way. Such support would be very important for Cuba, but [the Cuban government] has never been interested in doing what it needs to do with its economic model to become a more reliable counterpart.”
More than six decades after the triumph of the Cuban Revolution, it seems clear that it won’t be Russia that saves the country, nor activists who will heal the sick and provide housing for all the homeless Cubans. According to the Cuban Constitution, the state is responsible for ensuring the well-being of the population. But people believe there’s one thing that the government — which has stopped taking charge of almost everything — does handle perfectly: control. It maintains a heavy level of repression, allocating all kinds of reinforcements to ensure this. In a country that’s unable to guarantee food, electricity, or medical care, more than 1,000 political prisoners are held in its jails.
“In Cuba, if a person suffers from a medical emergency, it’s likely that an ambulance will take hours to come, if it arrives at all,” activist Carolina Barrero sighs. “But, if that same person shouts ‘Down with Raúl Castro!’ in the street, police patrols and state security agents will appear within minutes to detain and interrogate them. This shows that the regime’s inability to provide basic services isn’t simply due to scarcity, but to a deliberate political will. Castroism has always been in the hands of an extractive elite, who are more interested in maintaining [Cuba’s] international facade than in the well-being of the people.”
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Ajay Banga
Extreme Uncertainty Sends Tremors Through Central Banks And Multilateral Organizations
Published
5 days agoon
April 18, 2025
The ramping up of global trade tensions has ceased to be a peripheral concern and has become a central issue for the decision-making boards of central banks and multilateral organizations. What began as a threat by the Trump administration quickly turned into an escalation of levies between the U.S. and China that has led to a spiral that could well change the world order: a trade war with systemic effects, capable of altering capital flows, supply chains, and inflationary forecasts.
Faced with this new scenario, institutions such as the International Monetary Fund (IMF), the World Bank, the World Trade Organization (WTO) and central banks have begun to revise their growth projections, and also to redesign policies and plans that seemed untouchable until a few weeks ago. The international economic playbook now has less predictable rules, making it necessary to recalibrate strategies in real time. Even the WTO, traditionally distanced from monetary dynamics, is warning of an increasingly fragmented environment that threatens to blur the frameworks of global cooperation and to undermine the exchange of goods and economic growth.
In a prelude to the meeting to be held by the IMF next week in which macroeconomic forecasts will also be revised, the organization announced on April 17 that there would be a wave of “significant downgrades” in the growth projections of many countries. For the time being, the fund rules out a recession, but does insist there will be hikes in inflation forecasts.
“Uncertainty over trade policies has reached unprecedented levels,” explained the managing director of the IMF, Kristalina Georgieva, in a speech foreshadowing the organization’s official position. The Bulgarian politician and economist warned that prolonged uncertainty raises the risk of tensions in financial markets, as has been seen with the dollar and U.S. Treasury bonds. “These shifts should be taken as a warning,” she said. “If financial conditions get worse, everyone suffers.” She added that the longer the uncertainty persists, the greater the cost to the global economy, although she avoided any specific mention of U.S. president Donald Trump.
Speaking at the organization’s headquarters in Washington, World Bank president Ajay Banga recently warned that greater uncertainty and economic instability will weigh down the world economy. “Trade tension is causing economic agents to be more cautious, which can slow down investments and the purchasing decisions of companies and households,” he said after calling on countries to sit down and negotiate as soon as possible to establish a clear and lasting trade framework.
The situation is alarming and may yet escalate further. After declaring a universal general tariff of 10% and a melting pot of additional rates for countries with which the U.S. has a larger trade deficit, Trump announced a 90-day pause in order to negotiate with nearly 70 governments and reach an agreed solution. The only one not spared from the armistice is China, which has retaliated in kind.
So far, meetings with the other countries can be counted on the fingers of one hand. Spain’s Economy Minister Carlos Cuerpo has just met with his U.S. counterpart, Treasury Secretary Scott Bessent. There was also a meeting between Japan and the U.S., in which no agreement was reached. And April 17 saw Trump hobnob with Italian Prime Minister Giorgia Meloni — the first meeting with an EU leader since the beginning of the trade offensive, with a vague promise of some kind of deal down the line.
With no clear rules and constantly shifting policies, multilateral organizations and central banks are walking on eggshells, adopting a wait-and-see approach, though they have already begun to project scenarios and redirect monetary policy.
Monetary policy
The U.S. protectionist stance has prompted the European Central Bank (ECB) to cut rates for the sixth consecutive time, to 2.25%, in an attempt to counteract the negative economic impact of the tariffs. It is a clear signal that the eurozone is facing a period of stagnant growth, in line with the IMF’s general forecasts. The president of the organization, Christine Lagarde, has acknowledged that the overall picture is being shaped by “exceptional uncertainty” and that the increase in tariff disputes threatens to further dampen exports, one of the main drivers of the European economy, so that “growth prospects have deteriorated.”
The IMF’s glum tone has overshadowed any positive impact that the rate cut might have had on the stock markets. Contrary to the typical response to a more lax monetary policy, all markets fell. The Ibex 35 closed 0.19% down, the German Dax fell by 0.53%, while the French stock market and the Euro Stoxx 50 fell by more than 0.6%. The Italian Mib, for its part, limited losses to 0.24%.
Although the rate cut has not boosted the stock markets, it has reinforced the difference between the monetary policies of Europe and the U.S., where the Federal Reserve is being much more cautious with rate cuts. Its chairman, Jerome Powell, has just insisted on the inflationary risks of the tariffs imposed by the White House and has shown himself in favor of waiting for greater “clarity” from Trump before moving the price of money. His words have been taken by analysts as confirmation that the entity will not make a move at the next meeting scheduled for May and that a 0.25 point cut will not happen until June at the earliest.
While the ECB has cut rates by 1.75 percentage points since last June, the Fed has only applied a one percentage point cut since September and has maintained a more contained stance since December. This divergence is mainly due to the fact that Trump’s protectionist proposals bring with them an inflationary risk. By contrast, Europe is grappling with the impact of the war in Ukraine and a greater dependence on foreign trade. The recent strengthening of the euro and falling oil prices are also contributing to a slowdown in inflation in the eurozone. With the tariffs already imposed, the bloc faces significant levies, such as 25% on steel, aluminum, and the auto industry.
The WTO, which regulates trade rules, has also reassessed the economic landscape. The institution chaired by Nigeria’s Ngozi Okonjo-Iweala has cut its growth forecast for trade in goods by almost three points, from an initial increase of 2.7% to a fall of 0.2% by 2025. This is based on the current scenario. In other words, if the tariff offensive intensifies, the decline would be 1.5% this year and the global economy could fall by 7% in the long term.
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