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📰 Trump and EU reach deal

📰 Trump and EU reach deal

and IMF warns Egypt

Billy Robinson & Ross Crabtree
July 28, 2025

Hello and welcome back to Geopolitics Daily.

Today, Trump strikes a transatlantic trade deal with the European Commission at the Turnberry summit; Beijing proposes a global AI governance body to promote ethical and inclusive development; and the IMF warns that Egypt’s military-dominated economy is choking growth and deterring investment.

Our lead story analyses the erosion of multilateralism and the fragmentation of peace.

Top 5 Stories

1️⃣ 🇹🇭 🇰🇭 🇺🇸 Trump threatens tariffs to force ceasefire between Thailand and Cambodia: Fighting between Thai and Cambodian troops continued Monday as their leaders prepared to meet in Kuala Lumpur to negotiate an end to the deadliest clashes in over a decade. The U.S. dispatched mediators after President Trump warned both sides he would block trade deals unless a ceasefire was reached. Acting Thai Prime Minister Phumtham and Cambodian Prime Minister Hun Manet agreed to talks following calls with Trump, who set an August 1 deadline. Heavy shelling and airstrikes persisted along the 800km border, with both sides accusing the other of civilian attacks. Cambodia signalled openness to an unconditional ceasefire, while Thailand insisted on conditions. Over 30 have died, with more than 150,000 displaced. Trump claimed credit for pushing the talks, likening it to his earlier intervention between India and Pakistan.

2️⃣ 🇪🇨 🇨🇴 Noboa deports Colombian inmates from Ecuador without Bogotá’s consent: Ecuador has unilaterally deported over 600 Colombian nationals from its prisons since July 24, prompting a formal protest from Colombia’s Foreign Ministry. Of those deported, at least 450 have entered Colombia, with 348 reportedly having criminal records. Unlike past repatriations, these individuals will be released upon arrival unless they face charges in Colombia. Bogotá has criticised the move as a breach of international law and an “unfriendly gesture,” accusing Quito of ignoring repeated requests to coordinate a humane and orderly process. The deportations follow President Daniel Noboa’s crackdown on violent prison gangs, part of a broader security campaign launched under a state of “internal armed conflict” that seeks to expel foreign inmates, who comprise around 10% of Ecuador’s prison population.

3️⃣ 🏴󠁧󠁢󠁳󠁣󠁴󠁿 🇺🇸 🇪🇺 Trump strikes transatlantic trade deal with European Commission at Turnberry summit: Donald Trump and EU Commission President Ursula von der Leyen have reached a long-anticipated trade deal, averting a transatlantic trade war and settling months of tense negotiations. The U.S. will impose a 15% tariff on most EU exports—half the previously threatened rate—while Brussels commits to $750bn in energy and tech purchases and $600bn in U.S. investment. Steel tariffs remain at 50%, and key sectors like pharmaceuticals, semiconductors, and aircraft parts are excluded or capped. While welcomed as a stabilising move, EU officials admit the new terms are less favourable than pre-Trump tariffs. Trump hailed the agreement as a "powerful deal" after the intense 40-minute meeting at his Turnberry golf resort in Scotland.

4️⃣ 🇸🇴 Al-Shabaab advances toward Mahas as government forces lose key ground in central Somalia: Al-Shabaab fighters are advancing on Mahas, a strategic town in Somalia’s Hiran region that once symbolised the government’s 2022 offensive against the Salafist group. Militants have captured surrounding villages and are pressing in from multiple fronts, following the fall of nearby Moqokori. The withdrawal of Ethiopian troops under the ATMIS drawdown has left Mahas exposed, prompting evacuations and the black-market sale of diverted weapons. Analysts warn the group has reversed most territorial losses from 2022–2023, retaking much of central Somalia. Mahas’s fall could open the way to Guriel and Dhusamareb. Meanwhile, Al-Shabaab maintains a siege around Mogadishu, holding positions within 40km of the capital and briefly retaking Sabid last week, as Somali and AU forces scramble to secure vulnerable southern routes.

5️⃣ 🇪🇬 IMF warns military dominance cripples Egypt’s economy and deters investment: In its sharpest critique yet, the IMF has condemned Egypt’s military-dominated economy for stifling private sector growth, distorting competition, and undermining investor confidence. The long-delayed staff report highlights how military-run firms benefit from tax exemptions, cheap land, and preferential contracts, creating an uneven playing field that repels investment and drives up debt. Although Egypt has taken steps like subsidy cuts and privatisation pledges, reforms remain slow and opaque. The report warns that unless privileges granted to military and state-run companies are lifted and transparency restored, economic growth will remain sluggish. Military control over sectors like construction and cement continues to crowd out private enterprise, reinforcing a shadow economy and deterring much-needed foreign capital. The IMF has postponed Egypt’s next loan tranche, citing unmet reform targets.

Major Story

🇺🇳 THE EROSION OF MULTILATERALISM AND THE FRAGMENTATION OF PEACE

In the decades following the Cold War, multilateral institutions flourished. The UN, OSCE, OPCW, ICC, and others helped embed norms of conflict mitigation and peace enforcement. But today, this rules-based framework is fraying. Budget cuts—particularly from the U.S.—and intensifying geopolitical rivalries have sapped the UN’s capacity to act decisively, as seen in Gaza, Ukraine, Sudan, and Myanmar. Meanwhile, new players like Türkiye and the Gulf states have emerged as ad hoc mediators, though often with limited success and inconsistent commitment.

Deinstitutionalisation and its Discontents

A trend of “deinstitutionalisation,” where states bypass formal institutions in favour of informal or unilateral action, has taken hold. Crisis Group’s Richard Gowan notes that ad hoc initiatives—from Haiti to the DRC—frequently struggle due to weak follow-through mechanisms. In Gaza, the sidelining of UNRWA has led to operational chaos. These improvised efforts lack the institutional capacity, neutrality, and endurance of established bodies like the UN or OSCE, whose diminished roles leave dangerous governance vacuums.

Even where informal diplomacy yields agreements, their implementation often falters without institutional backing. Peace isn’t self-enforcing—UN-led missions once provided necessary follow-up, from peacekeeping to civilian monitoring. Today, such infrastructure is missing. In the DRC, Qatar and the U.S. brokered a deal, yet with scant enforcement mechanisms. Ironically, guarantors may now turn to the very institutions they had marginalised to ensure the agreement’s survival.

Political Mistrust and the Sidelining of Institutions

Many states and armed actors now reject multilateral involvement altogether. Mali expelled UN peacekeepers over human rights reports; Iran distrusts the IAEA; Israel has systematically undermined the UN system in Gaza. For these actors, international institutions are seen not as neutral platforms but as instruments of foreign interference. This trend reflects not merely institutional weakness, but deliberate efforts by conflict parties to evade oversight and accountability.

While formal institutions are being edged out, they remain latent tools that may yet be reactivated. The UN’s legitimacy, though eroded, still holds symbolic weight. Multilateralism is in retreat, not extinction, Gowan reiterates. As global peace efforts fragment, the value of established institutions may be rediscovered—not out of faith, but out of necessity.

Other News

1️⃣ 🇮🇱 🇵🇸 🇺🇳 Israel strikes Gaza ‘safe zone’ after announcing aid pause, killing 53: Despite declaring a daily “tactical suspension” of operations in parts of Gaza, Israel launched fresh attacks across the strip, killing at least 53 Palestinians, including 32 waiting for aid. According to Al Jazeera, airstrikes hit an Israeli-designated “safe zone” in Gaza City, killing five people at a bakery—a woman and her four children among them. Israel had announced a 10-hour pause in military activity in three areas to allow humanitarian aid to flow, but shelling continued in several zones, including at aid distribution points. Israel resumed controversial airdrops of limited food supplies, drawing criticism from the UN and rights groups who say the practice is unsafe and egregiously insufficient.

2️⃣ 🇩🇿 🇺🇸 Algeria’s Tebboune downplays Trump tariffs as symbolic, avoids confrontation with Washington: Algerian President Abdelmadjid Tebboune has dismissed US President Donald Trump's 30% tariff hike on Algerian exports as a sovereign but inconsequential move, emphasising that such measures affect less than 0.5% of Algeria’s trade. In a national interview, Tebboune framed the tariffs—part of Trump's broader “liberation tariffs” campaign—as symbolic and of minimal economic relevance, since most Algerian exports to the US are energy-related and remain exempt. Despite Trump’s move following Algeria’s surge in gas exports to Europe, Tebboune refrained from criticism. Analysts suggest Algiers treats the US with cautious deference, unlike regional powers France or Spain. Algeria appears reluctant to provoke Washington amid rising pressure to align with Western interests, including potential normalisation with Israel. Tebboune reiterated his preference to stay disengaged from disputes with no direct economic harm.

3️⃣ 🇨🇳 🇺🇳 Beijing proposes global AI body to promote inclusive and ethical development: Chinese Premier Li Qiang has proposed forming a World Artificial Intelligence Cooperation Organization to strengthen international collaboration and shared governance in AI. Speaking at the 2025 World Artificial Intelligence Conference in Shanghai, Li called for joint research, open access to AI technologies, and the creation of a unified global governance framework. Stressing that AI must serve humanity, he echoed President Xi’s call for ethical safeguards. The summit gathered over 1,000 participants from government, academia, and industry. Li cited breakthroughs in large language models and multimodal systems as transformative but cautioned they bring risks alongside benefits. UN Secretary-General Antonio Guterres endorsed the need for robust international cooperation to ensure AI’s safe and inclusive development.