Geopolitical radar: The difficulty of making a deal

Overall risk assessment: Elevated/high

We maintain our overall risk assessment to ELEVATED/HIGH. With a very limited and fragile ceasefire in place in Ukraine, and with the ceasefire collapsed in Middle East, the world is not any safer than it was a month ago. Cross-strait tensions have also again flared up around Taiwan. We have not made any changes to the scenarios.

What has surprised us lately?

Trump’s aggressive posture towards friends and foes alike has already led to some rapprochement between China and what have been US-leaning countries. China, South Korea and Japan joined hands recently agreeing to cooperate on a free trade deal. A thaw in China-India relations has also emerged after India’s Prime minister Modi emphasized historical ties between China and that their relationship should remain as strong in the future. Xi stated on 1 April the neighbours should work closer together and find ways to coexist peacefully saying their relationship should take the form of a “Dragon-Elephant tango”. The rapprochement follows years of high tensions.

What to watch in March

• Will Russia give any signal that they are in the ceasefire talks for real? Will we hear about new commitments by the members of the Coalition of the Willing?

• Will tensions in the Taiwan Strait calmdown again?

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