Washington has just slapped an extra 25 % duty on Indian exports—lifting effective tariffs to a bruising 50 % on $48 bn worth of goods from textiles to gems—and giving New Delhi three weeks’ grace only for cargo already at sea. (reuters.com, apnews.com)

The move punishes India’s continued bargain-price oil purchases from Russia, but its ripple runs wider: exporter federations warn 55 % of shipments to the US are suddenly unviable, threatening up to 1 m manufacturing jobs and shaving as much as 1 ppt off India’s 2026 GDP growth. Competitors in Vietnam and Bangladesh cheer; bond markets everywhere price in fresh supply-chain churn. (reuters.com, ft.com)

Seen in context, Trump’s tariff shock is the latest salvo in a weaponised-trade era—ratcheting pressure not only on Beijing but on any swing-state narrative that paints “strategic autonomy” as disloyalty. The risk is a self-reinforcing decoupling cycle that leaves the WTO sidelined and the Global South scrambling for alternative alliances. As Dani Rodrik cautions, “When economics becomes a continuation of war by other means, everyone loses the peace.” (Project Syndicate, 2024)

— The Gist AI Editor

Pentagon Deepens Tech Alliances to Counter China

The Pentagon is accelerating its strategy to build a technological coalition aimed at preserving a strategic edge over China. Its Defense Innovation Unit (DIU), a group tasked with quickly harnessing commercial technology for military use, is preparing to place officials in key allied nations, including Japan and Taiwan (FT). This initiative aims to foster deeper collaboration on cutting-edge defense technologies, effectively creating a network of innovation among like-minded nations to counter Beijing’s rapid military modernization. The move signals a pragmatic shift towards leveraging the collective industrial and intellectual power of free-market democracies.

This strategy focuses on creating asymmetric advantages, particularly in areas like artificial intelligence, autonomous systems, and next-generation software. By embedding personnel directly with allies, the DIU aims to shorten development cycles and ensure interoperability—the ability for different military systems to work together seamlessly. This approach recognizes that in the tech sphere, speed and adaptability are paramount. Forcing an authoritarian state like China to contend with a multi-front, collaborative innovation ecosystem presents a more formidable challenge than facing a single competitor.

The core of this policy is a clear-eyed view of geopolitical competition, emphasizing that shared democratic values can fuel superior technological progress. By pooling resources and expertise, the U.S. and its partners can create a more resilient and dynamic defense industrial base. Our view is that such voluntary, interest-aligned cooperation is a far more potent and sustainable model for long-term security than coerced partnerships or state-mandated innovation. It is a tangible application of the principle that open societies are better equipped to out-innovate closed ones.

Stay tuned for the next Gist—your edge in a shifting world.

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Starship’s Perfect Score

SpaceX has achieved a pivotal milestone, with its tenth Starship test concluding in a complete success. For the first time, the private venture met all its objectives: the Super Heavy booster executed a controlled splashdown, and the Starship upper stage deployed eight satellite simulators before its own precise, engine-assisted landing in the Indian Ocean (ANSA). This flawless execution is more than a technical win; it validates a model of rapid, iterative development that starkly contrasts with the slower, more bureaucratic pace of state-funded space programs. By dramatically lowering the cost of access to orbit, this breakthrough accelerates commercial possibilities from interplanetary travel to a truly global internet infrastructure, underscoring the power of market-driven innovation to conquer final frontiers.

The New Currency Battleground

A new front has opened in the US-China rivalry: the architecture of digital money. The contrast is one of core ideology. A US framework is coalescing around privately issued, fully-backed stablecoins, aiming to foster competition within strict regulatory guardrails—a concept dubbed the “stablecoin paradox,” which balances credibility with market dynamism (CEPR). Beijing, meanwhile, is aggressively pushing its state-controlled central bank digital currency (CBDC). This isn’t just a technical debate. It’s a contest over the future of financial liberty versus surveillance. The outcome will determine whether the digital economy is built on principles of open competition or on state-managed platforms that could embed authoritarian control into the global financial system.

China’s Industrial Engine Sputters

The economic headwinds facing Beijing are intensifying. Profits at large industrial firms fell 1.7% in the first seven months of 2025, with July marking the third straight month of decline (ANSA). The data reveals a telling divergence: profits at state-owned enterprises contracted 7.5%, while private firms eked out a 1.8% gain. This isn’t merely a cyclical downturn; it points to the persistent inefficiency of the state-led model. As flagging domestic demand and a crisis of confidence continue to weigh on the economy, the resilience of the private sector offers the only viable engine for a recovery, a fact that challenges the Communist Party’s ideological foundations.

Catch the next Gist for the continent’s moving pieces.

“Wir halten an der Zwei-Staaten-Lösung fest”
— Zdf

The new currency war: The US-China digital rivalry as a test of monetary discipline
— Cepr

Der Ukraine-Krieg im Zeitraffer
— Zdf

VfB gewinnt nach Spektakel in Braunschweig
— Zdf

Cina, -1,7% i profitti industriali nei primi 7 mesi del 2025
— Ansa

Australia: uccide due poliziotti, è caccia a uomo armato
— Ansa