Trump’s stick strategy

Us President Donald Trump is imposing tariffs and removing foreign aid

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Welcome to Balance of Power, bringing you the latest in global politics. If you haven't yet, sign up here. Trade tariffs are President Donald Trump's chosen stick to compel rich governments to do his bidding. Now he's removing the carrots of US foreign assistance to poorer nations as well. The US Agency for International Development is in limbo and its fate uncertain after its website was taken offline and senior leadership put on administrative leave. Trump said yesterday that USAID is run "by a bunch of radical lunatics," while Elon Musk, whose Department of Government Efficiency was involved in a weekend standoff over access to the agency's classified systems, called it a "criminal organization." For many on the ground, the uncertainty is disastrous. A fear of retribution is keeping services from resuming after they stopped last week. A food-assistance operation run by USAID, Catholic Relief Services and the Relief Society of Tigray on in June 2021 in Mekele, Ethiopia.  Photographer: Jemal Countess/Getty Images A memo aimed at clarification put life-saving HIV care and treatment services on an exemption list for now, but the interruption has already done damage. There are more than 222,000 people globally living with the virus that causes AIDS who collect refills of antiretrovirals every day. Getting people back onto treatment after a break in services often isn't easy, and without it they're at risk of becoming infectious again. For more than two decades, US funds from the President's Emergency Plan for Aids Relief, known as Pepfar, have saved millions of lives across Africa. The disruption hits critical areas like surveillance, research, communication and data collection. Dependent on Pepfar grant funding, the Orphans and Vulnerable Children program serves almost 6.5 million children and adolescents annually. The top five countries using this program are all in Africa, which — despite having spawned some of humanity's most devastating diseases ranging from from yellow fever to Ebola — has some of the fewest resources. Freezing US aid worth $72 billion to some of the world's most vulnerable countries risks fueling migration, war and piracy, according to Bloomberg Economics. And Trump has taken things further in South Africa — where about one in five people live with HIV and which depends on Pepfar for almost a fifth of its HIV-AIDS program — saying yesterday that Washington would halt all future funding to Pretoria because of its new land-expropriation law. In pulling back US assistance, Trump risks ceding more ground in the so-called Global South. It's a new reality that surely won't be lost on China. — Janice Kew Trump and Musk watch the launch of the SpaceX Starship rocket on Nov. 19 in Brownsville, Texas.  Photographer: Brandon Bell/Getty Images

Global Must Reads

China offered a muted reaction to Trump's imposition of tariffs, with the Commerce Ministry expressing strong "dissatisfaction" in a statement and vowing "corresponding countermeasures," without elaborating. The European Union has said it will "respond firmly" if the US places tariffs on the bloc and member states will discuss the possibility at a ministerial meeting in Warsaw tomorrow. European governments under political attack from Musk are comparing notes with Brazil, which forced him to comply with demands over hate speech and fake news on his X platform last year. Brazil is heading for a broader showdown with social-media networks as President Luiz Inácio Lula da Silva mounts a crusade against disinformation that he says is undermining democracy. A protest against the country's ban of X in Brazil on Sept. 7. Photographer: Maira Erlich/Bloomberg French Prime Minister François Bayrou faces a make-or-break test today when he plans to get a new budget approved without a parliamentary vote, a risky process that could end up toppling a third government in less than a year. The strategy allows members of parliament to call a no-confidence vote, and far-left lawmakers have already said they would table such a motion. Here's what we know. Greek Prime Minister Kyriakos Mitsotakis called for at least €100 billion ($102 billion) in common EU spending for defense in an opinion piece in the Financial Times, joining a growing number of capitals that want the bloc to take more responsibility for its own security. His UK counterpart, Keir Starmer, is headed to Brussels for a meeting of the European Council and plans to urge leaders to shoulder more of the burden of defending against increased threats from Moscow. Russia's wealthiest are fueling an unlikely rebound in high-end Moscow real estate as they increasingly bring their money home in response to international sanctions over the invasion of Ukraine. Rich Russians are repatriating cash and parking it in the safe haven of domestic property, or using real estate as a hedge against inflation that has surged in Russia since the war began. Panama promised free passage for US warships through the Panama Canal and said it will withdraw from China's signature lending program after Secretary of State Marco Rubio blasted the government during his visit yesterday. WATCH: Rubio addresses embassy staff on the relationship between the US and Panama. Syrian Interim President Ahmed Al-Sharaa held talks in Riyadh with Saudi Crown Prince Mohammed Bin Salman on broad economic cooperation between the two countries during his first official foreign trip. Friedrich Merz will focus his campaign on proposals to revive the struggling German economy after the conservative frontrunner's bruising clash last week over tougher immigration rules.  A group of people who say they were victims of state-sponsored abductions in Kenya asked the International Criminal Court to investigate President William Ruto's administration for human-rights violations.

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Chart of the Day

The Bank of England is expected to deal Rachel Reeves a blow this week by downgrading its growth outlook and warning that her October budget will drive up inflation. It comes just days after the chancellor of the exchequer unveiled a huge package of measures to boost the economy and the forecasts will likely reinforce fears that the UK is in the grip of stagflation.

And Finally

Dubai is adding a new round of ostentatious mansions and penthouses — some fitted with cinemas, spas and private elevators — as developers court millionaires from around the world. These ultra-luxury homes are being priced anywhere from $60 million to more than $120 million as house hunters from Europe, Asia and the Americas swoop in. And the trappings are increasingly extravagant, even by the standards of an emirate renowned for its love of glitz.  Beach front mansions command some of the highest prices in Dubai. Source: Palace Group Thanks to the 38 people who answered the Friday quiz and congratulations to Marc Weinberg, who was the first to correctly identify Nvidia as the company that suffered the biggest one-day market value decline in history last week.

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