It took nearly two years of war, relentless protests demanding the release of hostages, and one energetic and determined American president to achieve what had seemed unachievable. President Donald Trump secured support from key Arab and Muslim countries, including Qatar and Turkey, and then forced an end to the war on both Israel and Hamas. Within days, the IDF withdrew most of its forces from Gaza and all 20 living Israeli hostages were released from captivity. International leaders then headed to a peace summit in Sharm al-Sheikh.

Netanyahu hadn’t been invited to the Sharm summit until he spoke with Egyptian President Abdel Fattah al-Sisi in Trump’s presence. For a second, Netanyahu actually considered sitting at the same table with Palestinian President Mahmoud Abbas to discuss peace, Gaza’s reconstruction, and what now appears to be the inevitable participation of the Palestinian Authority (PA) in this process (though he ultimately decided against attending). Watching these fast-paced events unfold was as surreal as witnessing Netanyahu’s public apology to Qatari leadership last month – with Trump watching carefully.

The prime minister’s position has changed dramatically. But how likely is it that he loses his grip on power?

The end of ‘total victory’

Just weeks ago, Netanyahu angrily dismissed anyone who suggested the war should end with a deal, insisting instead on ‘total victory’ – the promise he’d made from the first days of the Gaza war. He rejected the idea that Hamas’s disarmament should be deferred to the future, to allow the release of the hostages. He said ‘no’ to any PA involvement in Gaza’s reconstruction. And he insisted on providing only limited humanitarian aid through the Israeli-backed GHF, a failed project that has since been dismantled.

Those positions helped sustain the support of his far-right coalition partners, including Bezalel Smotrich and Itamar Ben-Gvir. But they have threatened to quit over Trump’s peace deal and voted against the first stage. The second stage – which includes Hamas disarmament, Gaza reconstruction, the PA’s return to Gaza, and a path toward Palestinian sovereignty – has not even been voted on yet.

In his recent speech, Netanyahu defended and even praised the deal, claiming Israel had received everything it wanted. That may well be true, but this deal also contradicts everything Netanyahu has preached for many years. Within days, the Rafah crossing between Gaza and Egypt will reopen, secured by Palestinian policemen trained in Egypt, according to Palestinian sources. This represents a de facto return of the PA to Gaza and marks the beginning of reunification between Gaza and the West Bank.

The uncertain future for Netanyahu

Since the early 2010s, Netanyahu’s strategy has been ‘divide and rule’ – preventing any opportunity for negotiations and any prospect of Palestinian statehood. This included weakening the PA in the West Bank while keeping Hamas alive in Gaza. Every single move – the pro-settlement policy in the West Bank and the Qatari suitcases of US dollars delivered to Hamas with Israel’s approval – served this goal.

For some time, Netanyahu genuinely believed he could have it all: lucrative peace deals with Arab states while ‘managing the conflict’ with Palestinians. This strategy disintegrated during the 7 October massacres, when 1,200 Israelis, mostly civilians, were slaughtered by Hamas.

The prolonged war that followed and the acute humanitarian crisis and human tragedy it created in Gaza caused the world to turn away from Netanyahu. Indeed, Saudi officials interviewed by Israeli media in recent days made clear that Saudi Arabia will not join the Abraham Accords as long as Netanyahu remains in power.

Ultimately, Netanyahu decided not to participate in the Sharm al-Sheikh peace summit. Nonetheless, the decisions made there will bind him and his government. His coalition members currently prefer to emphasize only the part of the agreement that returned the hostages. But there is clearly much more at stake, as detailed in Trump’s 21-point plan.

The state of the coalition

It remains to be seen how Netanyahu’s coalition partners will react to unfolding events in Gaza. The PA’s influence looks set to grow. The timeline for Hamas disarmament is delayed and indefinite. And the path to Palestinian statehood is now clearly backed by a decisive majority of the international community.

If Bezalel Smotrich and Itamar Ben-Gvir do not resign over these issues, Netanyahu’s government could still survive for several months: elections are scheduled by law for late 2026. However, demands for a committee to investigate the security failures that led to 7 October will loom over the government, especially since the prime minister confirmed such a committee can only be formed after the war ends. Advancing a conscription bill, in order to ensure that the Ultraorthodox men will not serve in the army, will also pose problems in a country that has just lost 915 soldiers – men and women – in combat.

The chances of early elections are significant, though not certain. According to polls, Netanyahu’s Likud party would be unable to form a coalition, even accounting for its recent slight growth in support.

This means the prime minister may try to delay elections until he believes his chances of winning have improved. Prior to Trump’s visit to Israel, Netanyahu had threatened that Israel would return to fighting to eliminate Hamas, if any terms of the deal were violated. It seems now that even his far right wing partners understand that will be impossible for the time being, in light of Trump’s determination to end the war.

Netanyahu’s policies have collapsed, one by one. But the camp of those who still support them remains significant. Also, there is a lot of uncertainty about what will happen next in the West Bank. It is unclear whether the far-right wing partners of Netanyahu will get a free hand there to expand settlements and build new ones.

It is also unclear whether the Israeli opposition – weak and fragmented – will find the courage to call the prime minister’s bluff and offer the nation a different path: one of peace and reconciliation. Only then will the course of Israeli politics, and Israel’s fate, change dramatically – away from endless wars and illusions of ‘total victory’, to dialogue, cooperation and peace.

Source: Chatham House

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US customs authorities began collecting fees from Chinese-built and -operated merchant ships bringing goods into American ports on Tuesday, one more move in a series aimed at curbing China’s economic dominance.

The Trump administration has said the revenue collected would be used to support US shipbuilding resurgence, though there’s no mechanism in place yet for funding the industrial policy. The plan had become one of several points of contention in the US-China trade war, and at the end of last week Beijing announced its own retaliatory proposal to charge vessels with more than 25% US-ownership or control a hefty fee upon entry to Chinese ports.

That announcement — along with China’s threat of further curbs on critical mineral exports among other provocations — saw President Donald Trump kick off the weekend with a threat to slap an additional 100% import duty on goods from China as well as export controls on “any and all critical software” beginning Nov. 1.

The shock announcements sent markets into turmoil, as maritime analysts and commodities traders attempted to parse the implications for the flow of global raw materials and the shipping industry.

While there aren’t many US-headquartered shipping companies left, “there’s a substantial amount of American capital embedded throughout the industry,” said James Lightbourn, founder of Cavalier Shipping.

Beijing’s Response

China’s proposal had the potential to raise prices much more so than the US plan is expected to because most companies have already redeployed any Chinese-made vessels in their fleets to avoid the US — and the fees, said Lightbourn.

“China, on the other hand, is such a major destination for bulk commodity exports — such as crude oil and iron ore — that this type of geographical reshuffling would have been much less of a realistic tactic for US-linked shipping companies,” Lightbourn said in an email to Bloomberg.

The Ministry of Transport has since exempted US-owned ships that were built in China, which Lightbourn called a “clever touch,” he said.

The ship fees are latest in the tit-for-tat, unpredictable trade war of Trump’s second term. And while it’s still early to see the fallout from the highest US tariffs in nearly a century and supply chain uncertainty abounds, data show so far that global trade has held up better than many expected.

A new edition of DHL’s Global Connectedness Tracker, released Tuesday with New York University’s Stern School of Business, shows international flows of trade and capital investment has remained surprisingly resilient despite the quickly changing policy coming out of Trump’s second term.

Trade Resilience

Among the takeaways: In the first half of the year, global goods trade grew faster than any other half-year since 2010, with the exception of the volatile pandemic period. U.S. imports surged earlier in the year as cargo owners frontloaded purchases ahead of tariff hikes. At the same time, China’s export growth remained positive despite steep declines in shipments to the US.

“A key factor behind the expected resilience of trade growth is the relatively modest role the US plays in global trade — accounting for just 13% of global goods imports and 9% of exports in 2024 — and the fact that other countries have not followed the US on its current path of across-the-board tariff increases,” wrote the DHL-NYU study authors.

The tariff impact on consumer prices has also been relatively muted so far, though according to a new analysis from Goldman Sachs, that may be about to change.

US consumers will likely shoulder 55% of tariff costs by the end of the year, with American companies taking on 22%, Goldman Sachs analysts wrote in a note to clients this week. Foreign exporters would absorb 18% by cutting prices for goods, while 5% would be evaded, they wrote. (See Katia Dmitrieva’s full story here.)

Goldman’s latest report doesn’t include Trump’s most recent threats. “We are not assuming any changes to tariff rates on imports from China, but events in recent days suggest large risks,” the analysts wrote.

Indeed, US tariffs on imported timber, lumber, kitchen cabinets, bathroom vanities and upholstered furniture also kicked in on Tuesday, and USTR investigations expected to result in duties on sectors ranging from industrial robots, to semiconductors to medical devices are underway.

Just minutes after the ship fees took effect, Beijing announced curbs on five US units of Hanwha Ocean — one of South Korea’s biggest shipbuilders —in response to the probes of Chinese maritime industries. Meanwhile, the Ministry of Transport also said it was probing the USTR’s investigation into China’s maritime sector and may implement retaliatory measures.

Source: Bloomberg Europe

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Gold has staged a dramatic rally this year as Russia’s war in Ukraine and the US Trump administration’s unorthodox economic policies sent investors and central banks reaching for safe-haven assets. Right now, however, it’s silver that’s stealing the spotlight.A squeeze in supply of the precious metal has catapulted it to a 70% gain on the London market this year, compared with a 55% increase for gold as of mid-October. Both have been experiencing a surge in demand from investors, who value their price stability through periods of political instability, inflation and currency weakness.

Unlike gold, silver isn’t just scarce and beautiful: It also has useful real-world properties that make it a valuable component in a range of products. With inventories at their lowest in years and investors still scrambling for more, there’s a risk of supply shortages that could impact multiple industries.Political and fiscal uncertainty this year in major economies including the US, France and Japan is putting pressure on their currencies, and investors have been hedging their exposure to US dollars, euros and yen by acquiring assets like gold and silver in what’s been termed the “debasement trade.”

Silver is an excellent electrical conductor that’s used in circuit boards and switches, electric vehicles, batteries and solar panels. It’s also used in coatings for medical devices. And like gold, it’s still a popular ingredient for making jewelry and coins. As a tradable asset, it’s cheaper than gold per ounce, making it more accessible to retail investors, and its price tends to move more sharply during precious metal rallies.China and India remain the top buyers of silver, thanks to their vast industrial bases, large populations and the important role that silver jewelry continues to play as a store of value passed down the generations.

Governments and mints also consume large quantities of silver to produce bullion coins and other products.

Silver’s varied uses mean its market price is influenced by a wide array of events including shifts in manufacturing cycles and interest rates and even renewable energy policy. When the global economy accelerates, industrial demand tends to push silver higher. When recessions loom, investors often step in as alternative buyers.The market is thinner than with gold. Daily turnover is smaller, inventories are tighter and liquidity can evaporate quickly. That isn’t because there is less silver than gold available for trading. In fact, it’s the opposite: There are about 790 million ounces of silver in vaults overseen by the London Bullion Market Association, compared with 284 million ounces of gold. But silver is far less valuable per weight. The silver stored in London is worth about $40 billion, while the gold is worth $1.1 trillion.

LBMA data show silver inventories in London — the backbone of the global trade — have dropped by roughly a third since mid-2021, leaving less metal available for lending or delivery. Global demand for silver has outpaced the output from mines for four consecutive years, eroding the supply buffer once held in London. Meanwhile, silver-backed exchange-traded funds have drawn in new investment, forcing custodians to secure physical bars just as available supply was dwindling.

A proposed US tariff on certain imported metals earlier this year added fuel to the fire, spurring speculative buying and depleting inventories even further. Spot prices in London are trading at multi-year premiums to futures in New York.

The result has been strained liquidity and a scramble to secure silver bars.

The country’s festive season, culminating in Diwali on Oct. 20, is traditionally a peak period for precious metal buying. Silver imports have nearly doubled from last year as jewelers rushed to restock amid soaring bullion prices.Indian buyers are now paying premiums of 10% or more over global benchmark prices, underscoring how tight physical supply has become. That demand has siphoned off even more metal from Western vaults, worsening the squeeze.

Some traders have been booking space on transatlantic cargo flights for bulky silver bars — an expensive transport method typically reserved for gold — to capture price differentials between London and New York.For sectors like solar panel manufacturing, in which silver paste is a critical ingredient, sustained high prices could begin to erode profitability and spur efforts to substitute silver components for other metals.

Global mine production has been constrained by declining ore grades and limited new project development. Mexico, Peru, and China — the top three producers — have all faced setbacks ranging from regulatory hurdles to environmental restrictions. Reshuffling inventory from New York to London might solve the immediate crisis, but it won’t fix persistent supply deficits.

Whether the market finds a balance — or faces another bout of panic buying — will depend on how quickly new supply can reach the vaults.

Source: Bloomberg Europe

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