On Point: The Day of Tariff Judgment
The headlines: Trade tensions have frequently dominated front pages since Trump began his second presidential term. Washington regularly, arbitrarily, and unpredictably draws its tariff weapon. Brussels and Beijing are on high alert. The EU imposes import duties on Chinese electric vehicles and steel; China retaliates with taxes on European agricultural exports and restrictions on critical raw materials.
The facts: Since spring, a 10% base tariff has been in effect in the US, with higher “reciprocal” duties on countries running large trade surpluses with America. For China this now means an effective tariff rate of nearly 58%.
On November 5, 2025, the Supreme Court will rule on whether the president may impose such sweeping tariffs via the IEEPA emergency law. The case has been expedited after a federal appeals court declared the law too broadly interpreted. Meanwhile, an EU–US deal caps most EU goods tariffs at 15%, and later this month Xi Jinping and Trump may attempt to ease tensions in a meeting in South Korea.
The weighing: Tariffs and threats have become a routine American tool to squeeze not only rivals but also allies into concessions across a broad policy spectrum. Even if the Supreme Court strikes down the current legal justification, the Trump administration has plenty of other avenues to push tariffs through—avenues it will almost certainly not hesitate to pursue. Still, ruling out the IEEPA path would trigger months of renegotiations and carve-outs.
Whatever the outcome, this genie won’t go back into the bottle. If upheld, a structural legal foundation will be laid for a protectionist America. If rejected, a long period of transitional regimes and exemptions follows, breeding uncertainty.
Doomsday scenarios have not materialized—yet—but optimism is hardly warranted. A full-blown trade war is not under way; the thunderous gong strike has not sounded. Instead, a series of smaller blows combine into constant, grating noise for investors and companies alike.
Undersold: The Invisible Arteries of the World Economy
Undersold: The Invisible Arteries of the World Economy
The headlines: Occasional short reports about damaged undersea cables.
The facts: In early September, several undersea cables in the Red Sea were damaged. For millions of users in Asia, Africa, and the Middle East, this meant delays and rerouting of data traffic. The likely cause: an accidental anchor incident or something similar. But the vulnerability has been laid bare. This was not an isolated case: Western security services also keep a close eye on Russian activity near European cable junctions.
The weighing: More than 95% of global data traffic flows through undersea cables; a single choke point can disrupt cloud services, payments, and digital trade. The Red Sea incident disrupted an estimated 17% of traffic between Europe, Asia, and the Middle East. Alternatives exist but are limited in capacity, and repair ships are scarce. Repairs can take weeks.
These cables are the arteries of the global economy, whose importance only becomes visible when cut. Governments and tech giants alike should accelerate investments in redundancy: extra routes, their own laying fleets, faster repair capabilities. Each incident exposes just how dependent modern economies are on this invisible infrastructure. And with geopolitical tensions rising worldwide, the risk of sabotage looms like a dark cloud over markets.
Oversold: De-Dollarization
The headlines: Columns, expert panels, and podcasts increasingly proclaim the world is rapidly “de-dollarizing”: central banks supposedly scaling back dollars, trade shifting to alternative currencies, and new payment systems undermining the dollar’s supremacy. The image: the power shift has begun and could accelerate any day.
The facts: Reality is less dramatic. In July 2025, for example, the renminbi accounted for just 2–3% of all SWIFT payments, ranking sixth. The dollar made up 48% of global payment flows, the euro roughly half of “King Dollar.” Excluding intra-eurozone payments, the dollar’s share rises to 60% and the euro falls to 13%.
Reserves tell a similar story: in Q2 2025, the dollar held a 56% share, the euro 21%. Moreover, 92% of the small decline in dollar share can be explained by exchange-rate effects.
On FX markets the dollar remains the undisputed champion. Recent data show USD is one side of 89% of all transactions; the euro stands at 29%, the RMB has risen to 8.5%. This underlines the depth, liquidity, and entrenched network effect of the dollar.
The weighing: De-dollarization remains background noise; an actual regime shift is nowhere in sight. For now, the dollar possesses the infrastructure, depth, and rule of law that truly make a currency global. The euro is the clear number two, but at a distance. The renminbi is growing steadily, but from a very low base.
For investors and companies, the takeaway is: keep an eye on the theme—sanction risks, governance shifts under Trump II, and new Chinese payment initiatives could bring surprises—but a sudden dethroning is not on the cards. The dollar will remain both workhorse and showpiece for a long time to come, with the euro as the best-placed runner-up.
Take a look at my latest extra update: U.S. Government shutdown: will no. 14 be different? (1st October 2025)
