This week, global trade tensions and market uncertainty persisted despite the U.S. pause on reciprocal tariffs, while a first round of targeted countries reached out to Washington. In the Indo-Pacific, Chinese President Xi Jinping embarked on a multistage tour of Southeast Asia, signing cooperation deals with the leaders of Vietnam, Malaysia, and Cambodia. Bilateral trade escalations continued with the U.S., which imposed new sanctions on China. In the Middle East, U.S. and Iranian officials continued direct negotiations on a nuclear deal, and Israel announced its troops would remain in Gaza, Lebanon, and Syria “indefinitely.” U.S., Ukrainian, and European officials met in Paris to discuss ongoing peace efforts in the Russia-Ukraine conflict, as the U.S. extended sanctions on Russian ships and Russia continued bombing Ukrainian cities.
Weekly Forecast Monitor: April 18, 2025
The Geopolitical Hotspots Monitor examines the outlook for key geopolitical hotspots around the world.
1 Russia/Ukraine Conflict
Summary
The Russia-Ukraine war trended toward diplomatic de-escalation as the U.S. and Ukraine signed a memorandum of intent on a deal that will grant the U.S. privileged access to Ukrainian minerals. U.S. and Ukrainian officials are scheduled to meet in Washington on April 24 to negotiate technical details of the deal. French President Emmanuel Macron hosted a meeting in Paris with U.S. Secretary of State Marco Rubio, U.S. Special Envoy to the Middle East Steve Witkoff, and senior officials from Ukraine, the U.K., and other European countries, to discuss peace efforts. After the meeting, Rubio said the U.S. will abandon its peace efforts if significant progress is not made within days. Kremlin spokesman Dmitry Peskov said that there are “no clear outlines” between Washington and Moscow of an peace deal but emphasized that there was strong political will to achieve one. Meanwhile, Russia continued missile and drone bombardment of Ukrainian cities, including an attack in Sumy that killed at least 35. U.S. President Donald Trump ordered a one-year extension of sanctions against Russian ships, preventing their entry to American ports.
2 Middle East
Summary
Conflicts in the Middle East trended toward diplomatic de-escalation as U.S. and Iranian diplomats were expected to meet April 19 in Rome for a second round of nuclear negotiations after Iran described the initial round of talks with the U.S. in Oman as “positive.” In response to Witkoff’s call for Iran to halt uranium enrichment, Iranian Foreign Minister Abbas Araghchi said that issue is “not negotiable.” Meanwhile, Israeli Defense Minister Israel Katz declared that Israel will occupy territory it has seized in Lebanon, Syria, and Gaza indefinitely. Katz also stated that Israel will continue to prevent humanitarian aid from entering Gaza. Israeli airstrikes killed dozens of Palestinians in the territory, and Hamas rejected an Israeli offer for a 45-day ceasefire, dismissing the possibility of disarmament as a condition. Israel conducted strikes against Hezbollah in Lebanon, and the U.S. continued its air campaign against al-Houthi rebels, as the aircraft carrier USS Carl Vinson has joined the USS Harry S. Truman in supporting combat operations from waters near Yemen.
3 U.S./China/Indo-Pacific
Summary
Tensions in the Indo-Pacific trended toward hybrid escalation, as the U.S. imposed new sanctions against a Chinese oil refinery for its purchase of Iranian oil. Washington also launched a probe into potential new tariffs on critical minerals imports while ordering the creation of a U.S. deep-sea minerals stockpile, following China’s suspension of exports of rare-earth magnets and certain critical minerals. Representatives from Taiwan and Japan engaged in a first round of trade negotiations with the U.S. on tariffs. Xi held separate talks with leaders from Vietnam, Malaysia, and Cambodia during a tour of the region, seeking to deepen cooperation on trade and infrastructure, while urging a united response in dealing with U.S. tariffs.
4 Other Hotspots
United States/El Salvador
Trump held a press conference with President Nayib Bukele in Washington, where both leaders rejected the idea of retrieving Maryland resident Kilmar Abrego Garcia, who was deported to El Salvador due to an administrative error. This comes as a federal judge has said he found probable cause to hold the administration in criminal contempt for refusing to comply with a court order demanding the return of flights carrying deportees out of the U.S. under the Alien Enemies Act. The administration has until April 23 to explain what steps have been taken to remedy the situation. Forecast – political destabilization scenario
Sudan
A series of attacks in the Zamzam refugee camp in Sudan’s western Darfur region left at least 100 civilians dead, while the Rapid Support Forces declared the formation of an alternative government for Sudan. Forecast – security destabilization scenario
European Union
The European Central Bank cut interest rates to 2.25% as the bloc prepared for escalating trade tensions with the United States. Forecast – hybrid escalation scenario
The Global Connectivity Tracker examines the impact of geopolitical dynamics on key themes like trade, technology, and energy/climate.
U.S./Ukraine
Natural Gas
As part of the potential minerals agreement, the United States would be responsible for overseeing an investment fund to be used for Ukraine’s recovery from the war. Depending on whether a final agreement can be reached and the details of the pact, the eventual critical minerals and associated energy deals could benefit both countries.
What Happened
Ukraine’s natural gas transmission infrastructure connecting Russian suppliers with Europe is reportedly included in its draft minerals deal with the United States.
Significance/Outlook
As the United States and Ukraine close in on the deal giving the U.S. access to Ukrainian critical minerals, one point of negotiation apparently includes the pipeline network that transported Russian gas to Europe via Ukraine before Ukraine declined to renew the transit deal with Russia after it expired in January. The minerals proposal would use income from Ukraine’s resources to repay U.S. financial aid to Ukraine since the start of the conflict.
U.S./Saudi Arabia/ UAE/Qatar
Energy
What Happened
U.S. Secretary of Energy Chris Wright visited the United Arab Emirates, Saudi Arabia, and Qatar on his first official trip abroad.
Significance/Outlook
The tour of the Gulf countries aimed to strengthen energy partnerships and discuss investment frameworks with key allies in the region. While each stop underscored growing U.S. engagement there, the most notable outcome emerged from Saudi Arabia, where Wright met with Energy Minister Prince Abdulaziz bin Salman to explore deeper cooperation in the energy sector. A key outcome was the announcement that the United States and Saudi Arabia are on a “pathway” toward signing a preliminary civil nuclear cooperation agreement to support Saudi Arabia’s nuclear energy ambitions under Vision 2030. A formal 1-2-3 agreement, which would include U.S.-mandated nonproliferation safeguards, remains under negotiation, as Saudi Arabia has yet to accept restrictions on uranium enrichment and fuel reprocessing. If finalized, the agreement could transform Saudi Arabia’s energy landscape and advance its broader economic diversification goals by reducing reliance on oil.
France
Rare Earths
What Happened
French chemical conglomerate Solvay, once one of the world’s leading processors of rare earth elements, has announced plans to expand its capacity to refine neodymium and praseodymium, both crucial inputs for permanent magnets needed to manufacture wind turbines and electric vehicle motors.
Significance/Outlook
With the expansion, Solvay hopes to eventually supply about 30 percent of European demand for the two rare earth oxides by 2030, but meeting that target will depend on attracting sufficient buyers. The company said it would not be able to undercut Chinese prices and would depend on customers willing to pay a premium for the metals to diversify their supply chains away from China.
UAE/U.S.
Natural Gas/LNG
What Happened
Mubadala Energy, a subsidiary of the UAE’s Mubadala Investment Company, acquired a 24% stake in SoTex HoldCo LLC, a U.S.-based holding company focused on upstream shale gas production and liquefied natural gas (LNG) infrastructure development.
Significance/Outlook
The deal marks Mubadala’s first major entry into the U.S. natural gas sector, reflecting the UAE’s broader strategy to expand its presence in global energy markets through long-term investments in LNG. Through this deal, Mubadala gains exposure to Kimmeridge Texas Gas and the Commonwealth LNG project in Louisiana. While Kimmeridge retains majority ownership and operational control of its shale gas business and LNG infrastructure, Mubadala enters as a strategic partner. This deal is part of the UAE’s wider $1.4 trillion commitment to U.S. investments over the next decade, including in sectors such as advanced manufacturing, energy, semiconductors, and emerging technologies. The transaction remains subject to regulatory approvals, and financial terms have not been publicly disclosed.
China
Critical Minerals
The U.S. relies on imports of rare earth elements from China. The availability of these elements will be significantly affected by more stringent export controls or an outright ban, possibly causing serious repercussions for U.S. companies, particularly defense contractors, if their stocks of raw materials run low.
What Happened
The Chinese government has suspended all global shipments of critical minerals and rare earth magnets as it drafts a new regulatory framework for their export.
Significance/Outlook
This decision will affect the supply of critical minerals vital for the assembly of a wide variety of products, including automobiles, aircraft, robots, semiconductors, and missiles. Following its implementation, the new regulatory framework may halt or restrict shipments of critical minerals to certain U.S. corporations, including military contractors, in response to Trump’s decision to increase tariffs on Chinese imports. The rare earth metals covered by the export suspension are essential in the production of electric motors used in electric vehicles and other high-tech applications. These metals are also essential to capacitors that power artificial intelligence servers and smartphones.