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The two day summit between America and China has ended without a trade deal, although China has agreed to continue to supply crucial rare earth minerals for the time being.

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Center of Gravity

What you need to know

U.S. & Chinese negotiators conclude two-day talks in Stockholm without deal

Trade representatives from the United States and China completed two days of high-level discussions in Stockholm on yesterday, aimed at resolving tensions over tariffs and technology restrictions.

  • While no comprehensive agreement was finalized, both delegations reportedly agreed to continue working toward an extension of the current tariff pause, which is due to expire on 12 August.

One of the key outcomes was an unilateral assurance from China that it will continue to export rare-earth magnets, a class of critical materials essential to American sectors such as defense, aerospace, renewable energy, and electric vehicles. Rare-earth exports had recently been subject to internal Chinese review, raising concerns in Washington and prompting the U.S. to raise the issue as a priority item in Stockholm.

The Stockholm meetings mark the first structured trade dialogue between the two sides since the White House imposed a series of on-again, off-again, tariffs earlier this year, targeting Chinese-made electric vehicles, solar panels, and medical devices.

Both sides are now expected to continue behind-the-scenes work in the run-up to potential face-to-face negotiations in Geneva or at the APEC summit Seoul in October, where Trump and Chinese President Xi Jinping might meet. No date for the next round of formal talks has been announced.

The uneasy status quo continues for now.

Known Unknowns: The impact of U.S. tariffs on international trade & especially the U.S. bond market. Whether the U.S. and Iran will restart nuke talks. Relations of new Syrian government with Israel, international community & ability to maintain stability inside Syria. China’s triggers for military action against Taiwan. U.S. responses to China’s ‘grey zone’ warfare in the South China Sea and north Asia. Ukraine’s ability to withstand Russia’s war of attrition. The potential for the jihadist insurgency in Africa’s Sahel region to consolidate and spread.

The Middle East

Birth pangs in the birthplace of civilization

Arab declaration on Gaza shifts regional tone

Following the French declaration that it would recognize a Palestinian state in September, Prime Minister Keir Starmer yesterday announced that the U.K. would also recognize a Palestinian state in September unless Israel agreed to a ceasefire in Gaza and moved toward a peace settlement.

  • German Chancellor Friedrich Merz, however, yesterday stated bluntly that recognizing the state of Palestine “at this time is not the right step.”

As part of the two-state solution conference that France has been trying to bring together, several Arab nations have signed a declaration that contains clauses of unusual weight for Western policymakers. Chief among them is the condemnation of the October 7 attacks and hostage-taking, which the declaration labels illegal, and a demand that Hamas both disarm and relinquish control of the Gaza Strip to facilitate a transitional period.

  • The statement also calls for the establishment of an international mission in Gaza after hostilities end, administered through a United Nations Security Council resolution, to govern the territory until the Palestinian Authority returns to control.

What is striking is that, despite the reference to the Palestinian Authority and the ever-distant two-state solution, both European and Arab countries are publicly calling for Hamas to disarm and withdraw from Gaza. This marks a notable change in tone.

The current moment offers an opportunity for the U.S., European governments, Israel, and international actors to capitalize on this shift, leveraging Arab governments’ willingness to hold Hamas accountable, condemn its October 7 attacks, and demand the release of hostages.

However, the French and British calls for the recognition of a Palestinian state have caused Israel to respond with its own declaration.

Yesterday Israeli Prime Minister Benjamin Netanyahu said that within 48 hours, his government would decide whether to annex parts of Gaza if Hamas fails to release hostages.

The legal situation in the case of an annexation would differ sharply from the Israel Defense Forces (IDF) simply occupying territory in the strip.

  • Annexation would carry legal and political weight that military occupation does not.

  • Under Israeli law, relinquishing annexed territory requires either the approval of 80 members of the 120-seat Knesset or a nationwide referendum.

Given how divisive territorial issues remain in Israel, and the lingering trauma of the 2005 withdrawal from Gaza, it is difficult to imagine a scenario where two-thirds of the Knesset or a majority of the public would support giving up land once annexed.

If Prime Minister Benjamin Netanyahu’s government decides to proceed (a move it can make even during the Knesset recess), Hamas will face a new strategic dilemma.

Foreign Minister Gideon Sa’ar said earlier that international diplomatic pressure on Israel “caused Hamas to harden its position, directly sabotaging the chances for a ceasefire and hostage deal.”

In other words, a combination of pressure from President Emmanuel Macron and others has pushed Israel toward considering permanent annexation of Gaza territory as a means of intensifying pressure on Hamas. While the group might negotiate IDF withdrawals, it cannot negotiate the return of annexed land that Israel incorporates into its territory under Israeli law.

Cold War 2.0

It’s the U.S. vs China, everyone needs to pick a side

President Trump tightens ultimatum on Russia over Ukraine

President Donald Trump has significantly shortened the timeline for Moscow to demonstrate meaningful progress toward a negotiated settlement in Ukraine, reducing the previous 50-day window to a mere 10 days. According to administration officials, the revised deadline was communicated through diplomatic backchannels late on 29 July and is intended to force the Kremlin into an accelerated posture at upcoming ceasefire talks.

  • However, it remains unclear what, exactly, the White House expects from the Russians. How, exactly, would Russia demonstrate that it is seriously interested in peace?

The White House emphasized that if Russia fails to meet this condensed timetable, secondary sanctions, particularly targeting third-party countries and financial institutions aiding Russia’s war effort, will be imposed. These would build on existing Treasury measures and expand to include non-Russian entities involved in arms transshipment, dual-use goods, or energy trade that bypasses current sanctions architecture.

While the Kremlin has yet to issue a formal response, Russian media downplayed the ultimatum as "bluster" and suggested that no change in military posture or diplomatic scheduling is expected. Ukrainian officials, for their part, welcomed the U.S. pressure, though Kyiv has expressed skepticism over whether Washington’s time frame is politically enforceable or meaningful.

African Tinderbox

Instability from Sahel to Horn of Africa amid state fragility, Russian interference, & Islamist insurgencies

African Union appoints new leadership to mission in Somalia

The African Union has appointed new leadership to oversee its stabilization mission in Somalia (AUSSOM), reflecting rising concern over the country’s deteriorating security landscape. Senegalese diplomat El Hadji Ibrahima Diene, commonly known as “Boly,” has been named head of mission, with Djibouti’s Mouktar Osman Karie selected as deputy.

  • Their appointments come amid persistent operational hurdles and funding constraints, as well as renewed pressure from a resurgent Al-Shabaab insurgency.

Since the start of 2025, Al-Shabaab has mounted one of its most determined offensives in recent years, retaking territory across central and southern Somalia. The group has captured several towns and military positions previously held by the government, including Adan Yabaal in Hiraan region and Wargaadhi in Middle Shabelle. Both locations had served as strategic nodes for federal military operations and logistics.

In the past few days, Al-Shabaab fighters overran the town of Mahaas, a long-standing government bastion, following a coordinated assault involving suicide bombers and heavy weaponry. Somali federal troops and allied militias retreated, allowing the militants to establish full control.

These advances illustrate the group’s growing capacity to reverse earlier losses, posing renewed challenges to both Somalia’s federal forces and international stabilization efforts.

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What happened today:

762 – Baghdad founded. 1912 – Japan and Russia sign a secret treaty dividing Manchuria and Mongolia into spheres of influence. 1965 – President Lyndon B. Johnson signs Medicare and Medicaid into U.S. law, reshaping domestic policy. 1971 – Apollo 15 lands on the Moon, strengthening U.S. dominance in the space race. 1980 – Israeli Knesset passes Jerusalem Law declaring Jerusalem as Israel’s unified capital

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