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What you need to know

The Trump administration has announced a sweeping new round of tariffs set to take effect on 7 August.

The measures impose some of the steepest rates to date, with Laos and Myanmar facing the highest level at 40%. Switzerland has been hit with a 39% rate, followed by Canada (whose tariff was raised from 25% to 35% just hours before the announcement). South Africa will face a 30% tariff, while Taiwan, Sri Lanka, and Vietnam have been grouped at 20%. Several Southeast Asian economies including Cambodia, Indonesia, and Malaysia were assigned a 19% rate.

Other affected countries include New Zealand, Türkiye, South Korea, Venezuela, and Israel, each subject to a 15% tariff. A broader 15% tariff will also apply to the European Union, Japan, South Korea again (under a separate provision), and 33 other countries including Angola and Botswana. Nicaragua faces an 18% rate, while Bangladesh joins Sri Lanka, Taiwan, and Vietnam at 20%. A 25% tariff has been set for Brunei, India, Kazakhstan, Moldova, and Tunisia. Meanwhile, Algeria, Bosnia and Herzegovina, Libya, and South Africa (again under a separate listing) are included in the 30% category, and Iraq and Serbia at 35%. Syria tops the list with the highest individual country rate of 41%.

As of 1 August 2025, most Chinese exports to the United States are subject to a 10% baseline reciprocal tariff, following a temporary easing of trade tensions. However, due to overlapping levies and sector-specific surcharges, the effective tariff on many Chinese goods hovers around 30% or higher. Earlier in the year, tariffs had spiked to as much as 135–145% under the "Liberation Day" measures announced by the White House, though these were later reduced as part of a 90-day pause in hostilities. This truce is set to expire on 12 August, after which tariffs could automatically revert to the default 34% rate for Chinese goods, or rise even further, if a new agreement is not reached. Talks are ongoing, but with no deal yet in place, Chinese exporters face a precarious outlook as the deadline looms.

Birth pangs in the birthplace of civilization

Israel strikes Hezbollah missile sites as Lebanese President calls for Hezbollah disarmament

Israel announced on Thursday that it had carried out air strikes on what it described as Hezbollah’s largest precision missile manufacturing facility, along with other targets in southern Lebanon and the Bekaa Valley.

Israeli Defense Minister Israel Katz said the strikes were intended to degrade Hezbollah’s strategic weapons capabilities. The announcement came shortly after a speech by Lebanese President Joseph Aoun, who directly urged Hezbollah to disarm, warning that failure to do so would result in Lebanon's self-destruction.

Speaking at an event marking the 80th anniversary of the Lebanese Army, Aoun laid out Lebanon’s negotiating position in talks with the United States. The demands include an end to Israeli military operations and the withdrawal of Israeli forces, an annual American aid package worth $1 billion for ten years, and the convening of an international donors’ conference to finance Lebanon’s reconstruction.

Increasing numbers of analysts and security experts are now predicting that Israel will launch a new wave of strikes on Lebanon during the month of August unless there are tangible signs that Hezbollah is disarming (which it has publicly refused to do).

Hamas cuts off contact as U.S. sanctions Palestinian leadership

Negotiations between Hamas and international mediators appear to have collapsed, with no talks currently under way. The breakdown increases the likelihood of an imminent escalation of Israeli military operations in Gaza.

Palestinian Islamic Jihad released a video on Thursday showing Rom Braslavski, a visibly emaciated and severely ill hostage, underscoring the deepening humanitarian crisis.

In response to what it described as violations of long-standing peace commitments, the United States also announced sanctions on the Palestinian Authority (PA) and the Palestine Liberation Organization (PLO), which serves as the internationally recognized representative of the Palestinian people.

The U.S. State Department said it would deny visas to officials from both bodies, accusing them of undermining peace efforts with Israel. A statement issued on Thursday cited alleged incitement and glorification of violence in school curricula and financial support for convicted terrorists and their families. It also condemned the pursuit of legal action against Israel in the International Criminal Court (ICC) and International Court of Justice (ICJ), accusing the Palestinian leadership of attempting to "internationalize" its conflict with Israel.

According to the statement, the measures were enacted under Section 604(a)(1) of the Middle East Peace Commitments Act of 2002 (MEPCA), with further references to the PLO Commitments Compliance Act of 1989 and U.N. Security Council Resolutions 242 and 338. “It is in our national security interests to impose consequences and hold the PLO and PA accountable for not complying with their commitments and undermining the prospects for peace,” the department said.

The timing and tone of the sanctions suggest that the administration of President Donald Trump is responding to a recent United Nations conference co-sponsored by France and Saudi Arabia. The meeting aimed to build support for a future two-state solution, and several participants—including France, the United Kingdom, and Canada—pledged to recognize an independent, demilitarized Palestinian state later this year, in some cases with conditions attached.

The U.S. had privately warned of diplomatic consequences if participants at the U.N. conference issued what it viewed as “anti-Israel” declarations. In its sanctions statement, the State Department echoed longstanding concerns raised by both Washington and Tel Aviv regarding what they consider the PA and PLO’s continued support for terrorism—including incitement in textbooks and direct financial payments to the families of attackers.

Earlier this year, the Trump administration lifted sanctions on several violent Israeli settlers accused of killing Palestinians in the occupied West Bank, prompting criticism from human rights groups.

A senior Palestinian official described the latest U.S. sanctions as an act of “revenge” for growing international recognition of Palestinian statehood. The Palestinian Authority echoed that view in a statement released on Thursday, claiming that the sanctions were “a response to the significant and successive achievements of Palestinian diplomacy, particularly the recent recognitions of the State of Palestine by key countries, the successful United Nations conference in New York, and the historic declaration issued therein.”

It remains unclear whether the sanctions will apply to Palestinian representatives at the United Nations in New York. The current Palestinian ambassador and his deputy are both U.S. citizens.

Israel withdraws diplomats from UAE amid rising tensions

Following a travel advisory issued by Israeli authorities for the United Arab Emirates (UAE), Israel has begun evacuating most of its diplomatic personnel from the country. The move comes amid a quiet but noticeable deterioration in bilateral ties between the two countries, which had normalized relations in 2020 under the U.S.-brokered Abraham Accords.

The withdrawal follows a formal complaint lodged by Emirati officials concerning the behavior of Israel’s ambassador to the UAE in a bar, though the exact nature of the misconduct has not been made public. Emirati media have refrained from covering the incident in detail, and neither government has provided specifics, but the timing of the complaint (closely followed by the Israeli travel warning and the evacuation order) suggests that Abu Dhabi may be signaling its disapproval of Israel’s current regional posture or the actions of its diplomatic corps.

The incident adds strain to a relationship that, while economically fruitful in recent years, has been tested by Israel’s ongoing war in Gaza and the mounting civilian toll there. The UAE has been under pressure domestically and regionally to distance itself from Israel, even as its leadership attempts to preserve commercial and security ties with Tel Aviv. The quiet recall of Israeli personnel may reflect a mutual desire to de-escalate tensions behind the scenes, or it may be a prelude to a deeper diplomatic rift if the issues remain unresolved.

This comes at a time when other Arab signatories to the Abraham Accords, such as Bahrain and Morocco, are also facing internal criticism over their ties with Israel. The ongoing conflict in Gaza is undermining the goodwill created by the Abraham Accords.

El Salvador ends presidential term limits as Bukele consolidates power

Lawmakers in El Salvador have approved sweeping constitutional reforms that abolish presidential term limits, extend the term of office from five to six years, and eliminate runoff voting in presidential elections. The changes also shorten the current presidential term by two years to align all elections—presidential, legislative, and municipal—starting in 2027. The reform passed with the backing of President Nayib Bukele’s 57 supporters in the Legislative Assembly, with only three opposition members voting against it.

Bukele's enduring popularity rests on his aggressive anti-crime campaign. Under emergency powers that have been extended multiple times, an estimated 75,000 people have been arrested. Crime has plummeted since he assumed office. In 2025, the country has recorded an average of just 0.19 homicides per day, or 1.16 homicides per 100,000 people. El Salvador has also achieved 175 murder-free days so far this year—its lowest homicide rate in more than half a century, and currently the lowest in Latin America. A decade ago, in 2015, it had the highest murder rate of any country in the world.

The opposition, as well as officials from the former Biden administration, have accused the Bukele government of cutting secret deals with criminal gangs to achieve these results.

Bukele has closely aligned himself with President Donald Trump and his administration. He has also accepted deportees from the U.S. and detained them in his maximum-security prison built to house suspected gang members.

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