Originally, the heart of this article centered around a nascent policy strategy by the Biden administration in regards to its lesser known allies and trade partners on the African continent. That policy, in my opinion, was likely to be continued under his chosen successor, Kamala Harris. However, due to a recent shift in the political agenda of the White House from Liberalism to Trumpism, the future relationship of the United States with the global south is now in question. Joseph Biden, despite his expansion of Trump-Era tariffs to protect domestic industry, was the furthest thing from an isolationist — in fact, it could be said that he is part of a fading generation of Democrat politicians who placed international cooperation and trade at the forefront of their political agenda, rather than focusing strictly on domestic politics. Still, both the African Union (AU) and Caribbean Community (CARICOM) have agency in regards to their trade and development strategies, and so despite a shift in U.S. interest in these projects, they may continue regardless.

On Sept. 7, 2024, Dr. Carla Bennett, chairman of the Caribbean Community, made a speech before Barbadian leaders and the press  in the capitol, Bridgetown. Dr. Bennett’s words, espousing the “vibrant pan-Africanism” and warm feelings between the Caribbean and African continent, at first seemed to be fairly standard pandering by an international leader. Amid the group of government officials and reporters, however, was an outlier — Okechukwu Ihejirika, chief operating officer of the African Export-Import Bank’s (Afreximbank) Caribbean office. 

Dr. Bennett’s words and Ihejirika’s attendance reflects a noteworthy trend of increasing political, economic, and social integration between the Caribbean Community (CARICOM) and the African Union (AU). The year prior to Dr. Bennett’s speech, Afreximbank constructed a representative office in Barbados with the purpose of helping facilitate Africa-Caribbean trade. African and Caribbean leaders have met consistently since 2020 with the goal of Caribbean nations diversifying their export portfolio and to becoming closer with their neighbors across the Atlantic Ocean. That being said,  CARICOM is primarily an insular organization, akin to the European Union. The primary goal is to coordinate foreign and economic policies among member states, as well as economic integration and relative freedom of movement. To that end, much of CARICOM trade is with other members, and the majority of external trade still goes to larger powers such as the United States and China. Though Caribbean trade with Africa is minimal at the moment, it is clear that this is a developing relationship that may take years or decades to fully coalesce.

While the Caribbean may be best known for its idyllic beaches, rich culture and luxury crops such as nutmeg and indigo, it should start to be considered as a hotspot for a changing global economic order. Although some may overlook its assets, CARICOM has 15 votes at the UN and sits on a vital trade route between the United States, Mexico, South America and West Africa. CARICOM also rests quite comfortably within the U.S. sphere of economic and political influence, with a number of military bases and multilateral trade agreements made between the two actors. The United States wishes to keep CARICOM friendly towards it, as a trade and security partner to bolster the economy, combat the illicit drug trade from South America and project naval power into the southern oceans. How then, does this new strategy of economic development through trade diversification fit into the American agenda?

Under the Biden administration, Democratic leaders were committed to continued trade liberalization in line with neoliberal values. However,  it was abundantly clear that the United States had competition, primarily from an ascendant China who reached out to the global south through a flood of public and private investments, trade agreements and land purchases for the purpose of trade and security. 

This strategy, known as the Belt and Road initiative, sought to tie nations of the global south to China through a mix of debt trap diplomacy and circular trade relationships, blocking the United States out of the region economically. The old trade order, in which U.S. economic dominance relied on open markets, is now in danger of fracturing under the pressure of increased regional integration, potentially shutting the United States out of a Chinese-led trade order. 

Fearing this, the United States has ramped up its own investments, particularly in the African continent. Biden’s cabinet directly named Kenya as a potential trade partner and a major non-NATO ally, a country that has recently become disillusioned with the Belt and Road after a disastrous railway project halted last year. On the Southern cone of the continent, U.S. and European governments have elected to help fund a railway that connects the coast of Angola with the African interior, rich in minerals integral to electric vehicle battery manufacturing. The potential for this project is enormous: Joe Biden already wants to bolster the U.S. EV industry, and diminish Chinese influence in a hotly contested region, rich in UN votes as much as minerals and luxury items, effectively killing two birds with one stone.

The Caribbean could serve as an excellent proxy for this continued United States-Africa partnership. Already kindred in identity (with founding visions based on the ideals of pan-Africanism and decolonization), CARICOM could become the source of a linkage for U.S. foreign policy toward Africa – increased cooperation with one region could coincide with increased cooperation in the other. Rather than being directly managed by the United States, this trilateral relationship grows under tacit approval from Washington, justified as part of an existing history of trade liberalization. Given proper attention and encouragement, a pro-United States trade bloc could have formed among Caribbean and African states, trading with each other as much as they traded with the United States. However, just this last month a bomb was thrown into these plans. Newly elected 47th President Donald J. Trump, a vehement isolationist and staunch anti-China politician, is ambiguous as to his policy regarding trade and investment to either region. For starters, these developments are marginal in the minds of the American people, with domestic matters and the wars in Ukraine and Gaza being the primary foreign issues of interest. Trump’s strategy may be unshackled by commitments to his constituency and may continue under different leadership, in the same way that Trump-era tariffs toward China were maintained under Biden. However, that may also mean a U.S. withdrawal of direct involvement in the growing Caribbean-Africa relationship. The Lobito corridor may lose funding, and the HOPE and HELP acts (which give preferential textile trading rights toward Haiti) may disappear in a tide of protectionism, a policy that seeks to protect domestic industries by shutting out competition via tariffs. However, the CARICOM-AU partnership is not necessarily dead in the water. 

Ignoring the economic incentives to continue working together, there are a number of security and political benefits for the Caribbean and Africa to reap from a continued partnership. A renewed Trump presidency brings the future of trade with the United States as a whole into question – shaking a dependency on American goods and services may lessen the blow should tariffs be implemented. Similarly, African exports are primarily oriented towards advanced industrialized countries such as China, the EU and the United States, often not focusing on developing nations overseas or even other African states. Afreximbank is already focused on developing inter-African trade, and developing a more diverse portfolio only helps to achieve further independence from the northern capital. In addition to these benefits toward sovereignty, unifying policy agendas in international institutions makes a CARICOM-AU bloc a formidable force to reckon with. Leaders have already cooperated on social issues such as petitioning for a formal program to institute reparations for African slavery, a feat that could potentially be replicated on other issues, ranging from civil conflict to economic development. 

Despite a potential setback in what could have been a geopolitical boon for the United States, CARICOM and the AU have no real incentives to end their burgeoning alliance. From trade to development to security to social issues, the two blocs have more similarities than differences, and it is in their best interests to continue cooperation through bilateral agreements and negotiations. Perhaps, this new dynamic may represent a shift toward coordination among developing nations rather than clamoring toward the world hegemons, as it becomes evident that the free trade order is more threatened than ever by protectionists in both Europe and the United States. What remains to be seen is how the new Trump administration wishes to engage with the winds of change.

The post Shifting Alliances: The Future of CARICOM-AU Relations in a Changing U.S. Trade Order appeared first on Glimpse from the Globe.

At present, Taiwan is the leader in semiconductor manufacturing. Taiwanese state-owned company Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s leading manufacturer by a large margin. TSMC alone produces almost 70% of the world’s microchips and over 90% of the most advanced semiconductors. In America, Congress reports that only 12% of the global market share of semiconductors is manufactured domestically, a decline from 37% in 1990. This results in significant American dependence on Taiwan.

Due to the production of the Taiwanese semiconductor industry, China, which has threatened Taiwan with invasion for decades, has yet to fulfill its threats. This production of microchips has created an impenetrable utilitarian forcefield, making Taiwan untouchable to China, as China needs the advanced chips Taiwan produces. As China continues to make threats of invasion against Taiwan, the United States has stood by Taiwan, promising to protect it from China and pledging U.S. troops to be on Taiwanese soil in the event of an invasion. Through this, the diplomatic bond between Taiwan and the United States has grown significantly, with Speaker of the House, Nancy Pelosi, visiting Taiwan in Aug 2022. 

It is important to note that despite the United States promising military protection to Taiwan, this is not the United States’ official foreign policy stance. Officially, the United States recognizes China’s One-China policy, agreeing that Taiwan is a part of mainland China and that China has sole legal control over Taiwan for geopolitical reasons. Officially, the United States and Taiwan do not have diplomatic relations. 

On May 15, 2022, TSMC announced that it would be building a fab, a semiconductor manufacturing center, in Arizona. This was a big win for the U.S. semiconductor industry. With a $40 billion investment and the expertise that TSMC will bring, U.S. production of semiconductors is expected to increase considerably. Furthermore, the Arizona TSMC fab is projected to produce three-nanometer semiconductors by 2026, the second most advanced type of semiconductor currently available. TSMC’s fabs in Arizona have several implications on a global scale that may only be realized after a period of time.  

The most obvious implication is that creating a fab in Arizona would naturally strengthen the relationship between Taiwan and the United States. With a decreased cost in transportation, increased opportunity for trade and improved connections between business leaders in the United States, TSMC and the United States would be expected to develop closer ties. Closer ties between TSMC and the United States could mean that the United States would be more likely to protect Taiwan from a potential Chinese invasion given the value of the semiconductors to the United States. However, it is doubtful that the United States would change its official foreign policy status.

Second, a less obvious implication of the creation of an Arizona fab would be the negative effect on the Taiwanese-American relationship. The fab in Arizona is expected to mostly influence the American semiconductor industry. With an estimated annual revenue of $10 billion, TSMC would make back its initial $40 billion investment in only about four to five years. Furthermore, the American semiconductor industry would gain invaluable expertise that might take years or decades without TSMC. 

While this sounds like a win-win situation for both TSMC and the United States, one aspect is easily forgotten. One of the main reasons why Taiwan has U.S. protection is due to Taiwan’s unparalleled semiconductor industry which produces a large majority of the semiconductors used around the world. If Taiwan’s semiconductor industry were to stop producing semiconductors, “no other company will be able to fill the gap in the short term” according to the Council on Foreign Relations.

If the U.S. semiconductor industry were to compete with Taiwan’s after the U.S. industry gained expertise and understanding of TSMC’s methods, then the Taiwanese industry would lose some value as consumers could simply buy from the United States instead of Taiwan. If Taiwan loses this global competitive advantage, it might also lose its bargaining power on the world stage. With a producer that could produce a semiconductor competitive with or better than TSMC’s, global consumers would quickly shift their consumption away from TSMC and towards the new producer. 

The potential unravelings of these trends could have negative implications for Taiwan. Without their utilitarian forcefield of the semiconductor industry, the United States may not find a reason to spend resources and risk U.S. lives protecting Taiwan. 

Militarily, Taiwan is severely outmatched against China. China’s military budget of $225 billion in 2023 dwarfs Taiwan’s budget of $19 billion. On water, China’s 86 naval ships and 59 submarines would dominate the Taiwan Strait against Taiwan’s 26 naval ships and four submarines. In the air, China operates almost 3,000 aircraft compared to Taiwan’s 500. On land, China operates over 4,000 tanks more than Taiwan and has two million active military personnel compared to Taiwan’s 200,000. Without the U.S. and allies’ protection, Taiwan would be defenseless to a Chinese invasion. 

Although it is known that China has wanted to forcefully annex Taiwan for decades, it has stopped short of doing so due to the threat of triggering U.S. protection and the destruction of Taiwan’s valuable semiconductor industry.

However, if the United States were to create a competitive semiconductor industry, it may lose some of its incentive to protect Taiwan. Meanwhile, if China were to believe that the United States would not defend Taiwan and that it could successfully invade Taiwan, China would be more likely to invade Taiwan. 

To this end, some experts expect an invasion as soon as 2025. However, Taiwan’s foreign minister predicts conflict in 2027 — marking the 100-year anniversary of the foundation of the People’s Liberation Army with an invasion of Taiwan.

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While it is true that the Panama Canal was economically revolutionary for the Americas, its construction came at great expense to those who built it and to the nation of Panama. During construction, thousands of workers died under untenably harsh working conditions, with Black Caribbean workers being four times more likely to die than their white counterparts. Additionally, the canal remained a holdout of what arguably constitutes American imperialism for many decades: insistent on pocketing the toll money for itself as long for as long as possible, the United States did not hand back ownership of the watercourse to Panama until 1999. 

Since 1999, the canal has been of great benefit to Panama and remains the largest contributor to the country’s GDP. However, Panama’s being denied ownership of the canal for nearly a century is an all-too-familiar tale of US economic interests curtailing the development of Latin American economies, from the era of banana republics in the early 20th century to American support for regime change across the region throughout the Cold War to keep leaders aligned with the United States in power. Estimates suggest that at Panama’s expense the canal made the U.S.’ economy 4% larger by 1940. This suppression of the nation’s economic potential is one historical factor to blame for the country’s regionally high income inequality, as without control of the largest economic asset within its borders for decades, structures for sharing economic gains broadly amongst Panama’s populus were not developed. 

While Panama is the current and rightful owner of the canal, it inherited the environmentally precarious project at a time when the impacts of climate change on rainfall patterns began to threaten waterways worldwide. In August 2023, the canal faced a severe emergency when a backlog of over 150 ships accumulated due to the canal dropping to concerningly low water levels. While news coverage of the issue peaked in September when its effects were only beginning to show, low rainfall has continued to impact the Panama Canal, as climate change has increased the volatility of El Niño, a routine weather phenomenon that affects water patterns and rainfall levels in the Pacific and adjacent Latin American countries.

In response to these changes, officials have had to take drastic measures. Due to persisting droughts, by Feb. 1, 2024, the Panama Canal Authority will cut the number of ships allowed to pass through the canal by half. Levels of water this low are unprecedented. 2023 marked the first year the PCA had ever been forced to cut the number of ships passing through.

The crisis in Panama is poised to cause major global economic repercussions. Holiday shopping has been cited by articles among major news outlets in the United States as a key victim of delays. However, that stands as negligible compared to upheaval in global trade capacity and potential rises in commodity costs engendered by delays among the canal’s largest users, especially grain and oil. Volatile commodity costs tend to hurt poorer consumers and low-income countries more severely. 

Especially given the most recent increases in grain and energy prices due to the Russia-Ukraine war, a delay-stricken Panama Canal has the potential to exacerbate already-difficult global economic circumstances. Higher shipping costs could also worsen inflation initially caused by shipping delays to the COVID-19 pandemic, further increasing global economic woes. 

The Panama Canal is not the only major global waterway that has been challenged by environmental hindrances. Egypt’s Suez Canal was faced with similar troubles in March 2021, when low visibility from particularly strong dust storms and high winds caused the super-large cargo ship Ever Given to veer off course and run aground for six days, delaying billions of dollars worth of trade. Although unusually high spring tides aided refloating teams in ungrounding the vessel, future ships may not experience such strokes of luck and could be stuck for longer periods of time. While dust storms are endemic to the desert region around the Suez Canal, climate change is intensifying their severity and frequency. As such, these emergencies illustrate that climate patterns are posing an increasingly severe risk to global shipping routes. 

These canals are indispensable for modern global shipping and the economy at large, as well as the economic vitality of Panama and Egypt and their citizens via billions of dollars in governmental revenue. While these countries were able to take control of the massive assets and economic benefits reaped from the canals successfully back from exploitative Western control, the same economically hubristic and dangerous instincts that built them have come back to haunt their host countries in the form of climate disaster. Not only do cargo ships have a drastic environmental impact, as they are estimated to emit more greenhouse gas than all but five of the world’s nations, but their increasingly larger production sizes compound the likelihood of crossings through these precarious waterways becoming more susceptible to environmentally-induced delays. 

The only solution is to stop the negatively reinforcing cycle that is challenging these waterways in the first place, which means completely reforming global shipping patterns and the shipping industry to become more sustainable, such as building more environmentally friendly ships. This is but one part of the puzzle of how modern trade and excessive goods production comes at the expense of the environment and lower-income countries. Focusing on meeting the basic needs of the world’s population, rather than driving unfettered goods production at the expense of the global climate, is essential in regards to reforming the global economy. Otherwise, consumers, canal-hosting countries, and the global economy risk facing massive economic upheaval in the face of these emerging challenges to major canals. 

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As the United States recalibrates its international alliances and economic dependencies, India emerges as a pivotal player that could help shape the future of this crucial geopolitical theater.

The world has witnessed a significant shift in the dynamics of international relations. The declining relationship between the United States and China, coupled with concerns over human rights abuses and regional tensions, is prompting a reassessment of the economic and strategic ties between the two nations. 

This is not to say that India is without its own democratic flaws. 

However, the over-dependence of a consumer America on Chinese imports, with a staggering trade deficit of $382.92 billion as of 2022, underscores the urgency of diversifying trade partners.

There is no exact substitute for China. But there is a way for the U.S. to diversify its dependence — India. 

The world’s largest democracy, and now most populated, shares fundamental values with the United States, such as democracy (while questionable), commitment to counterterrorism and engagement with international institutions. These shared principles provide a solid foundation for a deeper strategic partnership. 

Here are some compelling reasons why the United States should consider India as a significant ally:

Democratic Values: For namesake — The alignment of the world’s largest democracy (India) with the world’s oldest democracy (the United States) offers opportunities for collaboration on defense, security, economics and global cooperation. 

Strategic Location: India’s location in the Indo-Pacific region is pivotal for global trade and security. Its rapidly developing infrastructure, including ports, highways and railways, positions India as an essential hub for international trade, countering China’s influence.

Indo-Chinese Strains: The strained relationship between India and China, exacerbated by disputes over initiatives like the Belt and Road Initiative (BRI) and border clashes, creates an opening for the United States to foster stronger economic ties with India.

While the benefits of a closer U.S.-India partnership are evident, certain challenges must be acknowledged and addressed:

India’s Relationship with Russia: India’s reliance on Russia for defense procurement and oil purchases may not align perfectly with American interests. Nevertheless, aligning with India in the context of its non-support for the war in Ukraine is crucial for U.S. security.

The Pakistan Question: Closer economic ties between the United States and India could be perceived as a threat by Pakistan, potentially leading to stronger ties with China or other U.S. rivals. Careful diplomatic efforts must be made to navigate this complex situation.

Domestic Policies: India’s protectionist policies aimed at safeguarding domestic industries could pose challenges for U.S. businesses. Incentives such as tax breaks or subsidies can help mitigate these obstacles.

The Way Forward — A marriage of future economic convenience? 

The United States could prioritize discussions with India to establish an exclusive trade agreement through a Trade Policy Forum (TPF) and renew the Generalized System of Preference (GSP) Program. These actions can lead to increased Foreign Direct Investment (FDI), diversified investment portfolios and more favorable tariff treatments for Indian products.

Additionally, engaging in mega-regional trade agreements that involve India but exclude China, such as the Indo-Pacific Economic Framework (IPEF) and the India-Korea Comprehensive Economic Partnership Agreement (CEPA), could be explored. These agreements align with the US policy of “friendshoring” and promote multilateralism, helping maintain U.S. influence in the Indo-Pacific region.

To protect America’s national security and economic interests, a trilateral trade agreement involving India, the United States and South Korea might be a strategic move to counter a growing Chinese influence. 

India’s strategic significance in the Indo-Pacific region cannot be underestimated. The potential benefits far outweigh the challenges, making India a key partner in navigating the complex geopolitical landscape of the 21st century.

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