Tag Archives: economy

Nation-Building by Design: The Strategic Nature of Carney’s Infrastructure Agenda

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Canada is entering a new phase of nation-building, one that blends urgent economic needs with longer-term structural transformation. Under Prime Minister Mark Carney, the government has moved decisively to put infrastructure back at the centre of Canadian economic policy. The legislative and programmatic architecture that has been put in place in 2025 reveals not only a desire to build quickly, but also a strategy to re-shape the foundations of trade, energy, housing, and Arctic sovereignty. The pattern of investment and institution-building shows a layered approach: short-term relief to pressing bottlenecks, medium-term positioning of Canada as a reliable trading partner and energy supplier, and long-term steps to reinforce sovereignty, climate resilience, and competitiveness.

At the core lies the One Canadian Economy Act, passed in June 2025, which dismantles federal barriers to interprovincial trade while creating the Building Canada Act. This framework enshrines the ability to designate projects of “national interest” for streamlined approval. The intent is clear: Canada cannot afford to have critical transmission lines, export terminals, or transportation corridors stalled indefinitely in regulatory gridlock. To operationalize this authority, the government launched a Major Projects Office (MPO), with an Indigenous Advisory Council integrated into its structure. The MPO serves as a single-window permitting and financing hub, designed to shepherd nation-building projects through approvals in under two years. The short-term gain is administrative clarity and accelerated approvals; the medium-term payoff is a pipeline of projects that directly enhance trade capacity and energy reliability.

Housing has been treated with equal urgency. The creation of Build Canada Homes, announced in the May Throne Speech and detailed in August, signals a willingness to intervene directly in housing supply. Paired with CMHC’s Housing Design Catalogue, which offers standardized blueprints for gentle density from accessory units to six-plexes, the federal role is shifting from passive funding to active delivery. Short-term gains include faster project approvals and cost savings for small-scale builders. In the medium term, Build Canada Homes intends to scale modular and prefabricated construction to double housing output, stabilizing affordability while anchoring domestic supply chains in Canadian lumber and inputs. The long-term structural effect would be the normalization of higher building rates across the country, a prerequisite for sustaining workforce mobility and economic competitiveness.

Trade and corridor infrastructure forms the third pillar. The Trade Diversification Corridor Fund, budgeted at five billion dollars, is designed to expand port and rail capacity and reduce Canada’s overreliance on U.S. gateways. The High Frequency Rail (HFR) project between Toronto, Ottawa, Montreal, and Quebec City is continuing, promising transformative improvements to the most densely populated corridor. In the short run, HFR stimulates engineering and pre-construction employment. Medium-term gains will appear in reduced congestion, faster business travel, and increased regional integration. The long-term dividends include lower emissions and globally competitive connectivity between Canada’s political and financial capitals.

The expansion of the Port of Churchill in northern Manitoba illustrates how the government is aligning regional development with national strategy. With over $175 million in new federal funding, $36 million from Manitoba, and parallel commitments from Saskatchewan, Churchill is being re-equipped as a trade-enabling Arctic gateway. Recent investments in rail reliability, storage capacity for minerals, and new wharf facilities are positioning it as a potential hub for agricultural exports and critical minerals. The short-term impact is the stabilization of Hudson Bay Railway service, critical for northern communities. The medium-term benefit is expanded shipping capacity during the navigable season. The long-term prize lies in climate-extended Arctic navigation, which could turn Churchill into a permanent transatlantic container port, reshaping Canada’s role in global shipping.

Energy and clean industrial infrastructure represent another strategic frontier. Through the Canada Growth Fund (CGF), Ottawa is deploying $15 billion to de-risk large low-carbon projects, with seven billion earmarked for carbon contracts for difference. This mechanism gives investors certainty that carbon pricing will not collapse, unlocking private capital for carbon capture, hydrogen, and industrial decarbonization. Short-term benefits include early project commitments, such as waste-to-energy facilities in Alberta. Medium-term, these contracts build a domestic market for clean technologies and expand Canada’s share in global green supply chains. Long-term, CGF instruments lay the foundation for a carbon-competitive industrial economy, ensuring Canadian heavy industry remains viable under international climate rules.

The Arctic and defence agenda provides a parallel set of strategic investments. NORAD modernization, including the joint development of over-the-horizon radar with Australia, directly strengthens northern surveillance. The Canadian Patrol Submarine Project, with three bidders shortlisted, will anchor significant industrial activity in Canadian shipyards. In the short run, these procurements inject capital into defence industries. Medium-term gains include jobs, technology transfer, and new capacity in coastal infrastructure. The long-term effect is reinforcement of Arctic sovereignty and continental security at a time of intensifying geopolitical competition.

Underlying all of this is continuity through existing transfers such as the Canada Community-Building Fund, which locks in $26.7 billion for local water, transit, and road projects through 2034. These represent the essential backbone investments that ensure communities can absorb population growth and remain livable, complementing the marquee projects at the national level.

Taken together, these initiatives reveal a strategy that is both defensive and offensive. In the short term, Canadians will see more housing starts, more shovels in the ground for rail and port expansions, and more certainty for clean-tech investors. Over the medium term, the country will gain diversified trade routes, a more mobile workforce, and scaled-up housing supply that cools inflationary pressures. In the long run, the institutional innovations of 2025, the One Canadian Economy Act, the Major Projects Office, and the Canada Growth Fund, may be remembered as the architecture that enabled Canada to hold its ground as a sovereign, competitive, and sustainable economy in a fracturing world.

When the Bully Yells, He’s Losing: What Navarro’s Rhetoric Really Means for Canada

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When Peter Navarro, former White House trade adviser and Trump loyalist, publicly urged Canadians to pressure their government into “negotiating fairly” before U.S. tariffs hit on August 1, the message wasn’t strength, it was panic. Navarro’s over-the-top rhetoric, painting Canada as an obstinate, underpowered negotiator, is less about truth and more about fear. If the United States were truly in control of the trade talks, it wouldn’t need to bluster. It wouldn’t need to insult. And it certainly wouldn’t be begging Canadians to do its dirty work.

Let’s be clear: Canada is not on its knees. We’re not some brittle middle power gasping for access to American markets. We’re a G7 economy with sophisticated supply chains, deep global trade ties, and a well-earned reputation for playing the long game. When Washington starts lashing out with threats and playground-level taunts, it’s a sign we’ve landed a punch.

Navarro’s claim that Canada is being “very challenging” at the negotiating table is revealing. It means our team is doing its job. Canadian trade officials, seasoned, careful, and resolute, have held their ground in defense of fair access, environmental standards, and domestic protections. That makes the Americans nervous. And when Americans get nervous in a Trump-style administration, they yell louder, not smarter.

The proposed 35% tariffs, to be imposed on Canadian goods not covered by the USMCA, are intended as a hammer. But even a hammer needs a target that won’t hit back. And this time, Canada has alternatives: deepening trade with the EU and Asia-Pacific, strengthening regional innovation hubs, and leveraging our vast resources in climate-sensitive sectors that the U.S. increasingly needs but doesn’t yet control.

Navarro also made a critical tactical error. By calling on Canadian citizens to push back against their own government, he misunderstands our national character. Canadians don’t take kindly to being told what to do, especially not by foreign officials acting like economic schoolyard bullies. The effect will likely be the opposite: renewed support for Ottawa’s position and a strengthening of political will across party lines to resist being steamrolled.

Historically, Canada has negotiated from the shadows, careful to avoid open confrontation. But this isn’t 1987. Today’s Canada is assertive, strategically patient, and unafraid of outlasting American tantrums. Navarro’s comments, while aggressive on the surface, are deeply revealing underneath. They betray a U.S. trade team that’s frustrated, boxed in, and afraid of losing leverage.

So yes, when the U.S. starts yelling, Canada should listen, but not to obey. To smile, stand tall, and quietly note: we’ve got them worried.

Sources:
• Bloomberg Law, “Navarro Urges Canada to ‘Negotiate Fairly’ Before August Tariff Deadline,” July 11, 2025.
• AInvest, “Trump Announces 35% Tariff on Canadian Goods,” July 11, 2025.
• Government of Canada, Global Affairs briefings on trade diversification (2023–2025).

Five Things We Learned This Week

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Here’s the latest edition of “Five Things We Learned This Week” for July 5–11, 2025, featuring all-new insights within the past seven days—no repeats from previous lists:

⚖️ 1. Trump Intensifies Trade War with 30–50% Tariffs

  • Between July 7–11, President Trump sent letters threatening 30% tariffs on EU & Mexico (starting Aug 1), 35% on Canada, and 50% on imported copper, along with an extra 10% on BRICS allies  .
  • Global markets responded with caution—stocks dipped, safe-haven assets steadied, and commodity currencies showed volatility  .
  • Trade partners expressed strong concern, calling the moves disruptive amid ongoing negotiations  .

🛢️ 2. Oil Prices Jump Over 2% amid Tight Markets and Tariff Fears

  • On July 11, Brent rose ~2.5% ($1.72/barrel) to $70.36, and WTI climbed 2.8% to $68.45, sparked by IEA warnings of tighter supply, OPEC+ compliance, and trade policy risks  .
  • U.S. rig counts fell for the 11th straight week, intensifying concerns about future output ().

🌍 3. UN Adopts Climate–Human Rights Resolution

  • On July 8, the UN Human Rights Council passed a climate change motion that ties environmental harm to human rights—adopted by consensus after the Marshall Islands withdrew a controversial fossil-fuel phase-out amendment  .
  • The resolution calls for “defossilizing our economies” and sets a benchmark for framing climate action as a global human-rights priority  .

💼 4. BRICS Summit Highlights Climate Funding Demands

  • On July 7, at their Rio meeting, BRICS leaders urged wealthy nations to fund climate transitions in developing countries, while also affirming continued fossil fuel usage in their economies  .
  • Brazil’s President Lula warned against denialism, contrasting BRICS multilateralism with U.S. isolationism ().

🎤 5. Reuters NEXT Asia Summit Tackles Trade, AI & Global Stability

  • July 7, the Reuters NEXT Asia forum in Singapore convened ~350 global leaders to debate pressing issues—covering AI innovation, trade disputes, and geopolitical uncertainty  .
  • Discussions stressed AI’s dual potential for disruption and opportunity, with trade tensions—especially tariffs—looming large.

Each of these five highlights occurred between July 5–11, 2025, and brings fresh, global perspectives to this week’s roundup. Want full article links or deeper analysis? Just say the word!

The BRICS Strategy in 2025: From Dialogue to Direction

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In July 2025, the BRICS nations – Brazil, Russia, India, China, South Africa, and an expanded circle now including Egypt, Ethiopia, Iran, Saudi Arabia, the UAE, and Indonesia, met in Rio de Janeiro for their 17th annual summit. The gathering marked a decisive shift from rhetorical ambition to institutional strategy, as the bloc attempts to redefine global governance, build financial alternatives to the West-led systems, and frame itself as the political voice of the Global South. While the summit was shaped by ongoing geopolitical crises and internal contradictions, it revealed a maturing vision that extends far beyond its original economic coordination mandate.

At the core of this year’s summit was a demand for structural reform in global governance. BRICS leaders called for the United Nations Security Council to be expanded and for the voting structure of institutions such as the International Monetary Fund (IMF) and World Bank to be reweighted to better reflect the global South’s demographic and economic realities. This long-standing frustration with Western-dominated institutions has now sharpened into a diplomatic agenda. What was once a diffuse critique has evolved into coordinated proposals, particularly on the economic front.

One of the summit’s central themes was the steady progress toward de-dollarization. While calls for a BRICS common currency were conspicuously downplayed in Rio, leaders focused instead on more pragmatic steps: local-currency trade settlements, expanded use of central bank digital currencies (CBDCs), and the interoperability of national payment systems through the still-developing BRICS Pay infrastructure. A new cross-border clearing and settlement framework, informally called BRICS CLEAR, was introduced to complement these efforts. These initiatives are designed not only to bypass the U.S. dollar in bilateral and multilateral trade, but also to shield BRICS economies from the volatility and political conditionality associated with Western sanctions and SWIFT-based systems.

To support these ambitions, the New Development Bank (NDB), already capitalized with billions of dollars from member states, is being repurposed. A guarantee facility is in development, modeled loosely on the World Bank’s Multilateral Investment Guarantee Agency (MIGA), to underwrite public and private projects across member states. This is particularly relevant for emerging markets seeking infrastructure finance without the governance conditions typically imposed by the IMF or World Bank. With these tools, the bloc seeks to develop its own version of Bretton Woods-style architecture, updated for multipolar geopolitics.

Climate and sustainability also featured heavily on the summit agenda. Brazil, as host, proposed the “Tropical Forest Forever Facility,” a $125 billion climate financing mechanism aimed at conserving rainforest regions across Latin America, Africa, and Asia. The proposal is a direct challenge to Western narratives that have often placed environmental responsibility solely on the shoulders of developing nations without matching financial commitments. The initiative also serves as a preview of the Global South’s priorities heading into COP30, which will also be hosted by Brazil.

Sustainable development received structural attention beyond climate. The BRICS Business Council and Women’s Business Alliance jointly launched a 2025–2030 action plan focused on strengthening small and medium-sized enterprises (SMEs) across member states. This includes access to digital markets, cross-border licensing, and gender-equity strategies in entrepreneurship. The bloc appears intent on grounding its geopolitical ambitions in concrete developmental outcomes at the community and enterprise level.

Notably, the summit also launched a framework for artificial intelligence governance. Although still in early stages, the agreement seeks to establish common principles around transparency, ethical use, and protection against algorithmic bias. This aligns with recent UN discussions and serves to position BRICS as a rule-setting body rather than just a rule-taking coalition. With China and India both advancing in AI development, and with Brazil and South Africa playing increasing roles in data regulation, this initiative represents an important test of cross-ideological cooperation in technology governance.

Despite these achievements, internal tensions were evident. Neither President Xi Jinping nor President Vladimir Putin attended in person. India’s leadership walked a diplomatic tightrope, supporting reformist language while resisting deeper integration that might conflict with its ties to the West. Brazil, under President Lula, tempered the bloc’s anti-Western tone, particularly around tariffs and NATO criticism, wary of provoking trade retaliation. These divergences underscore the coalition’s central contradiction: it is an alliance of ambition, not ideology.

Nonetheless, BRICS continues to expand. Indonesia became a full member in January 2025, joining Iran, Egypt, Ethiopia, and others admitted in the prior year. Observers note that the group’s size risks diminishing its coherence, yet the appeal of a multipolar forum remains strong. As the G7 struggles with internal disunity and the Western alliance faces political upheaval, BRICS offers a platform that aligns with the aspirations of many developing nations, even if it cannot yet match Western institutions in capacity or cohesion.

Looking ahead, the bloc’s short-term focus will be on operationalizing its financial and development tools, settlement systems, climate funds, SME supports, and asserting diplomatic pressure for reform in global governance bodies. Over the medium term, its success will depend on the extent to which it can balance economic pragmatism with political heterogeneity. While its vision of a multipolar world is not universally embraced, BRICS has matured into a serious force in global affairs, one increasingly capable of setting its own agenda.

Billionaires Shouldn’t Exist – And Here’s Why That’s Not Radical

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When New York State Assemblymember Zohran Mamdani recently declared, “I don’t believe we should have billionaires,” he wasn’t indulging in empty populism, he was articulating a moral position whose time has come. The existence of billionaires, in an era defined by mass homelessness, food insecurity, and climate collapse, is not merely unfortunate, it is an ethical indictment of the systems that allowed them to exist in the first place.

Mamdani joins a growing chorus of progressive thinkers, economists, and ethicists who argue that no individual should have the right, or the capacity, to accumulate and hoard a billion dollars or more. This isn’t about envy or political expediency. It’s about the increasingly clear understanding that billionaire wealth isn’t just excessive, it’s extractive, destabilizing, and morally indefensible.

Billionaire Wealth Is Built on Exploitation
To amass a billion dollars, one must either inherit extreme wealth or systematically profit from the undervalued labour of others. Most billionaires, especially those in tech and finance, profit not through invention or hard work, but through ownership of capital, tax avoidance, and labor suppression. As economist Thomas Piketty demonstrated in Capital in the Twenty-First Century, returns on capital consistently outpace economic growth, meaning that wealth accumulates faster than wages rise, thus enriching the few while immiserating the many (Piketty, 2014).

This is not a bug in capitalism; it’s a feature. While billionaires build personal rockets and collect rare yachts, tens of millions lack clean water, reliable housing, or access to medical care. The wealthiest 1% of the global population now owns nearly half of the world’s wealth, while the bottom 50% hold just 2% (Credit Suisse Global Wealth Report, 2022).

Morality Demands Redistribution, Not Charity
Some argue that billionaires are philanthropists who “give back.” But ethical redistribution is not about generosity, it’s about justice. Charity, even when well-intentioned, is discretionary. It allows the wealthy to decide which causes are “worthy,” often with tax write-offs and public accolades. It is fundamentally undemocratic.

As philosopher Peter Singer wrote in his essay Famine, Affluence, and Morality, if we can prevent something bad from happening without sacrificing anything of comparable moral importance, we are morally obligated to do so (Singer, 1972). Billionaires could eradicate global hunger, fund universal education, and fight climate change many times over. That they do not is a moral failure, one built into the very logic of their class interests.

The Billionaire Class Undermines Democracy
More than just a matter of inequality, billionaires represent a profound threat to democracy. They use their wealth to shape elections, control media narratives, lobby governments, and suppress movements that challenge their power. As Mamdani put it, they spend “millions of dollars” to influence outcomes that serve their continued dominance. That’s not civic participation, it’s oligarchy.

This is evident in the staggering political spending from figures like Elon Musk, Jeff Bezos, and the Koch brothers, whose influence often counters popular will on issues like climate regulation, taxation, and labor rights. When money becomes speech, those with the most money speak loudest, and everyone else is drowned out.

Making Billionaires Illegal Is Not Extremism – It’s Ethics
To say that billionaires should be “illegal” is not to suggest rounding them up and seizing their mansions. It means creating systems in which it is structurally impossible to accumulate wealth beyond a certain point. This might include steeply progressive taxation, strict inheritance limits, and aggressive corporate regulation. As proposed by economists like Gabriel Zucman and Emmanuel Saez, a global wealth tax would not only generate trillions in public funds, but also dismantle the foundations of permanent wealth aristocracy (Zucman & Saez, 2019).

When Mamdani says billionaires “shouldn’t exist,” he invites us to imagine a society where wealth is shared, not hoarded; where innovation is public, not privatized; and where dignity isn’t auctioned to the highest bidder. This vision isn’t utopian, it’s already partly realized in countries with higher levels of equality and lower poverty rates, such as Norway, Denmark, and the Netherlands.

A Future Without Billionaires Is a Future With Hope
We are standing at a crossroads: ecological collapse looms, fascism festers, and inequality grows by the hour. Allowing the existence of billionaires in this context is more than complacent, it’s complicit. As the climate crisis worsens and democratic institutions strain under the weight of elite influence, we must ask: how much longer can we afford billionaires?

The answer, increasingly, is: not one more day.

Sources
• BBC News. (2025). Zohran Mamdani says he doesn’t believe that we should have billionaires. https://www.bbc.com/news/articles/cvge57k5p4yo
• Piketty, T. (2014). Capital in the Twenty-First Century. Harvard University Press.
• Credit Suisse. (2022). Global Wealth Report 2022. https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html
• Singer, P. (1972). Famine, Affluence, and Morality. Philosophy & Public Affairs.
• Zucman, G., & Saez, E. (2019). The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay. W.W. Norton & Company.

Five Things We Learned This Week

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Here’s the latest edition of “Five Things We Learned This Week” for June 28–July 4, 2025, showcasing five entirely new global developments—each occurring in the past seven days:

⸻

🧭 1. Trump Signs Sweeping Tax & Spending Bill

• On July 4, President Trump signed a landmark tax-and-spending package into law, following its narrow passage in Congress  .

• This $3.3 trillion bill includes large tax cuts and federal spending boosts, with analysts warning of significant long-term increases in national debt  .

⸻

🌍 2. Japan Warms for Possible Quakes, Authorities Calm Public

• On July 4, Japan’s disaster agency alerted residents of potential strong aftershocks off the southwest coast, though downplaying doomsday fears  .

• Authorities emphasized preparedness over panic, urging early warning systems remain active.

⸻

🇨🇳 3. China Signals Investment in Brazil‑Led Forest Fund

• At the end of the week, Reuters reported that China plans to back the “Tropical Forests Forever” fund led by Brazil—marking a strategic shift toward joint environmental efforts  .

• This move is viewed as a rare diplomatic gesture amid global climate partnerships.

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📈 4. Global Equity Funds See Largest Inflows in 8 Months

• Global equity funds recorded a massive $43.15 billion inflow for the week ending July 2, driven by U.S. stock highs and surging interest in AI and tech sectors  .

• U.S. equity funds accounted for $31.6 billion, with robust gains also seen in European and Asian markets  .

⸻

🇲🇩 5. Moldova Leaders Emphasize EU Integration Ahead of Election

• On July 4, Moldova’s President Maia Sandu declared that citizens hold the future of the EU bid in their own hands as the country nears parliamentary elections  .

• Her appeal underscores Moldova’s ongoing push for formal European Union membership.

⸻

These five developments span U.S. fiscal policy, earthquake readiness, international environmental funding, global investment trends, and Eastern European geopolitics—all fresh this week. Want source links or deeper insights? Let me know!

Why Canada’s Digital Services Tax Is Poking the Bear – And Why Australia and New Zealand Are Still Holding the Stick

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It was only a matter of time before Canada threw its toque into the ring on the global debate over taxing tech giants. After years of polite patience, Ottawa finally said enough is enough and committed to implementing a Digital Services Tax (DST), retroactively, no less, dating back to January 1, 2022. The goal? To make Big Tech pay its fair share for the billions they earn from Canadians’ online clicks, swipes, and searches. Predictably, this move hasn’t exactly gone down well south of the border, especially with Donald Trump, who’s already threatening retaliatory tariffs faster than you can say “Google it.”

Canada’s DST is a 3% levy on revenues from digital services; think online marketplaces, advertising platforms, and social media, that target Canadian users. The tax only kicks in for companies making over €750 million globally and more than $20 million in Canadian digital revenues. So, yes, this is about Amazon, Google, Meta, and Apple. Not your cousin’s Shopify side hustle.

The reasoning behind the move is, frankly, hard to argue with. For years, digital multinationals have made huge profits in countries where they have lots of users but no physical offices. Since our tax codes were written in the days of rotary phones, these companies have legally side-stepped corporate taxes in places like Canada while hoovering up data and ad dollars with industrial-grade efficiency. The DST is intended as a band-aid solution until a global fix comes together, though that band-aid is now being applied with an increasingly firm hand.

In truth, the global tide may finally be turning on Silicon Valley’s long, tax-free world tour. For over a decade, Big Tech has surfed a wave of international growth, scaling into nearly every market on Earth without paying local dues. Armed with sophisticated tax avoidance schemes, usually routed through Ireland or the Netherlands, the giants of the digital economy have profited handsomely while governments watched domestic retailers struggle to compete. But now, faced with growing public backlash and creaking public coffers, countries from France to India to Canada are drawing a line. The message is clear: if you make money off our citizens, you’re going to help fund the roads, schools, and social programs that keep them clicking.

The global fix in question is the OECD’s “Two-Pillar” solution, a diplomatic marathon attempting to modernize international tax rules. Pillar One aims to reallocate taxing rights to market countries (like Canada), while Pillar Two would establish a global minimum corporate tax of 15%. Canada has said it would delay DST collection if the OECD deal is implemented, but with the U.S. dragging its heels on ratification, Ottawa is preparing to go it alone.

That’s where Trump comes in. Never one to let a perceived slight slide, he’s treating Canada’s DST as a direct assault on U.S. interests. After all, the companies getting dinged are almost entirely American. Trump’s threats to slap retaliatory tariffs on Canadian exports are classic “America First” bluster, but they’re not without precedent. The U.S. already opened Section 301 investigations into several other countries’ DSTs, accusing them of unfairly targeting American firms. Biden’s administration cooled the rhetoric, but the sentiment remains.

Of course, Canada isn’t the only country to stick its neck out on this. France was the pioneer, pushing ahead with a 3% DST despite fierce U.S. pushback. Italy, Spain, and the UK followed suit. Even India got into the act with its “equalisation levy,” predating many Western attempts. Each of these nations, like Canada, grew tired of waiting for multilateral action while Silicon Valley giants dodged their tax nets with Olympic-level agility.

Interestingly, not everyone in the Anglosphere has been quite so bold. Take Australia. A few years back, it flirted with a DST, there were consultations, white papers, and worried glances toward Washington. But ultimately, Canberra decided to give the OECD process a shot and beefed up its anti-avoidance laws instead. Its Multinational Anti-Avoidance Law and Diverted Profits Tax now let the tax office go after digital firms that try to shuffle profits offshore. It’s the equivalent of hiring a tough new accountant rather than inventing a new tax altogether.

New Zealand, meanwhile, has taken a “just in case” approach. Legislation for a 3% DST was passed in 2023, but it’s sitting in a drawer for now, ready to go if the OECD talks collapse. The Kiwis have been clear they don’t want to pull the trigger unless absolutely necessary, probably because they’d prefer not to find themselves on the receiving end of a tweetstorm or tariff tantrum from the next American administration.

So here we are: Canada, gloves off and calculator in hand, is forging ahead, determined to claw back a fair share from the tech titans. Australia and New Zealand, pragmatic as ever, are hedging their bets and keeping trade relationships intact, at least for now. But even their patience has limits. The longer the OECD deal stalls, the more tempting it becomes to follow Canada’s lead.

In the end, this is a fight not about code or commerce, but about fairness in the digital age. The world’s tax systems were built for an era of railroads and oil refineries, not cloud storage and influencer revenue. Until the global rules catch up, expect more countries to test their own digital tax solutions. Whether that means poking the American bear or just poking around in policy drawers remains to be seen. But one thing’s certain: tech giants might finally be running out of places to hide.

A Strategic Reset: Is the UK’s 12-Year Deal with the EU a Trial Run for Rejoining?

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In a move that may mark the beginning of a new chapter, or even a slow reversal, in post-Brexit Britain, Prime Minister Keir Starmer’s government has signed a sweeping 12-year deal with the European Union. Spanning trade, fisheries, defense, energy, and youth mobility, the agreement is being sold as a pragmatic step toward economic stability. Yet, for keen observers of European geopolitics and domestic UK policy, this isn’t just about cutting red tape or smoothing customs formalities. It’s about direction, intent, and trajectory; a trajectory, some might argue subtly, but surely points back toward Brussels.

Let’s be clear – this is not rejoining the EU. The UK retains its formal sovereignty, its independent trade policy, and its seat at the World Trade Organization. Yet, in practical terms, this agreement represents a partial realignment with the European regulatory and political sphere. It’s a détente, but one that many suspect could serve as a trial run for re-entry.

Trade and Regulatory Alignment: Quiet Integration
The most immediate impacts will be felt in trade. The deal includes a new sanitary and phytosanitary (SPS) agreement that significantly eases checks on animal and plant products, long a point of friction for exporters. British sausages and cheeses can once again cross the Channel with ease, and exporters have been granted breathing room after years of customs chaos.

The price? The UK will align dynamically with EU food safety rules and standards. Not only that, but the European Court of Justice (ECJ) will have an oversight role in this domain. It’s a politically delicate concession that the previous Conservative government would have balked at, but it is one that Starmer is positioning as an economic necessity rather than a political capitulation.

This kind of soft alignment, regulatory cooperation without full membership, mirrors the arrangements held by countries like Norway and Switzerland. The UK isn’t there yet, but it’s moving in that direction, and the economic benefits are likely to reinforce the case.

Fisheries: Symbolism and Compromise
Few sectors embody the emotion of Brexit like fisheries. The 2016 Leave campaign made maritime sovereignty a powerful symbol of national self-determination. Now, the UK has agreed to extend EU access to its waters for another 12 years, hardly the full “taking back control” once promised.

However, the government insists that the deal does not grant additional quotas to EU vessels, and preserves the right to annual negotiations. To offset the political fallout, £360 million is being invested into modernizing the UK fishing industry, a sweetener aimed at skeptical coastal communities.

Yet symbolism matters. This agreement effectively freezes the reassertion of full UK control over its fisheries until 2038. That’s long enough for an entire generation of voters to become accustomed to a cooperative status quo.

Energy, Climate, and Economic Integration
Perhaps the most telling element of the deal is its ambition in energy and carbon market integration. The UK and EU will link their Emissions Trading Systems (ETS), smoothing the path for cross-border carbon credit trading, and exempting British companies from the EU’s incoming Carbon Border Adjustment Mechanism (CBAM). This could save UK firms an estimated £800 million annually.

In strategic terms, it brings the UK closer to the EU’s climate governance framework, and represents a quiet, but firm repudiation of the “Global Britain” fantasy that post-Brexit Britain could thrive on deregulated free-market exceptionalism.

Security and Mobility: A Return to Practical Cooperation
Defense is also back on the table. The UK will participate in the EU’s PESCO initiative for military mobility, signifying renewed cooperation on troop and equipment movements. Intelligence sharing and sanctions alignment are also included, moves that suggest an increasingly coordinated foreign policy framework, even outside EU structures.

Meanwhile, UK travelers will soon regain access to EU e-gates, reducing airport queues, and negotiations are underway for a youth mobility scheme. The return to the Erasmus+ student exchange programme, in particular, is a major symbolic step, reconnecting young Britons with continental Europe in a way that had been severed post-2020.

A Trial Run for Rejoining?
Viewed in isolation, each element of the deal appears pragmatic and limited. Viewed together, however, they amount to a re-entangling of the UK within EU institutions and standards. The length of the deal, 12 years, is conspicuous. It places a review just past the midpoint of what could be two Labour governments, opening a window in the 2030s for a possible reapplication for membership.

Critics argue that Starmer is “Brexit in name only,” effectively undoing much of the substance of the 2016 vote. Proponents counter that he is offering economic stability, and international credibility without rekindling the divisive debate of formal re-entry, but no one should be under any illusions: this is a serious recalibration. For a generation of younger voters who never supported Brexit, it might just feel like the first step toward righting a historic wrong.

In this light, the 12-year deal may be best understood as a proving ground. It allows both the UK and the EU to rebuild trust, test cooperation mechanisms, and create the legal and political scaffolding that could one day support full re-accession. Starmer may deny it, and Brussels may downplay it, but history has a way of turning such “interim measures” into new norms.

For now, the UK is not rejoining the EU, but the doors, long thought closed, are no longer locked. And the steps taken in this agreement may well be remembered as the start of the long walk back in.

Sources
• BBC News: https://www.bbc.com/news/articles/czdy3r6q9mgo
• Sky News: https://news.sky.com/story/uk-eu-trade-deal-what-is-in-the-brexit-reset-agreement-13370912
• Al Jazeera: https://www.aljazeera.com/news/2025/5/21/will-eu-deal-make-food-cheaper-add-12bn-to-the-uk-economy
• Financial Times: https://www.ft.com/content/66763def-d141-465d-ba96-31399071bf3b
• The Times: https://www.thetimes.co.uk/article/starmers-done-no-better-with-the-eu-than-may-8l37jm2sf

Five Things We Learned This Week

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Here is the latest edition of “Five Things We Learned This Week” for May 3–9, 2025, highlighting significant global developments across various sectors.

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🌋 1. Volcanic Eruption in Iceland Disrupts Tourism

The Sundhnúkur volcanic system in Iceland erupted this week, leading to increased seismic activity near Grindavík. The Icelandic Meteorological Office reported the eruption and registered accompanying earthquakes. As a precaution, popular tourist destinations like the Blue Lagoon were evacuated, impacting the country’s tourism sector.  

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💰 2. India’s Forex Reserves Decline After Eight Weeks of Gains

India’s foreign exchange reserves fell by $2.07 billion to $686.06 billion as of May 2, 2025, ending an eight-week streak of gains. The decline was primarily due to a decrease in gold reserves, which dropped from $84.37 billion to $81.82 billion. During the same week, the Indian rupee experienced volatility, appreciating by about 1% due to increased foreign inflows and optimism surrounding a potential U.S.-India trade agreement, but later depreciated by 0.9% amid geopolitical tensions between India and Pakistan.  

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🧪 3. Scientists Develop Method to Generate Electricity from Rainwater

Researchers have reported a new method of generating electricity from falling rainwater using plug flow in vertical tubes. This technique converts over 10% of the water’s energy into electricity, producing enough power to light 12 LEDs. The innovation holds promise for sustainable energy solutions, especially in regions with high rainfall.  

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📉 4. Consumer Goods Prices Expected to Rise Amid Tariff Pressures

Following President Trump’s introduction of steep tariffs on imports, notably a 145% tariff on Chinese goods, major consumer goods companies like Procter & Gamble, Nestlé, and Unilever anticipate raising prices. These increases add to consumer strain after three years of inflation and declining confidence, especially in the U.S., where shoppers face job uncertainty and potential recession. While some companies are attempting to pass costs to consumers, retailers and supermarkets are pushing back, warning that consumers are reaching their financial limits.  

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⚔️ 5. Escalation in South China Sea Territorial Disputes

China has seized the disputed Sandy Cay Reef in the Spratly Islands of the South China Sea, intensifying territorial disputes in the region. The move has raised concerns among neighboring countries and the international community about escalating tensions and the potential for conflict in the strategically important area.  

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Stay tuned for next week’s edition as we continue to explore pivotal global developments.

The New Silk Spine: How the INSTC Is Redrawing Global Trade Maps

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A quiet revolution in global logistics is underway, and it’s not coming from Beijing or Washington. It’s emerging from the heart of Eurasia, led by a consortium of countries who have historically occupied the margins of global trade narratives. The International North-South Transport Corridor (INSTC), a sprawling multimodal freight route linking India to Northwest Europe via Iran, Azerbaijan, and Russia, is reshaping both the geography and politics of trade.

The INSTC is more than just a 7,200-kilometre link between Mumbai and St. Petersburg. It’s a strategic recalibration, a corridor of asphalt, rails, and sea routes that bypasses the traditional maritime choke points like the Suez Canaland offers a faster, cheaper, and more resilient alternative. Cargo that once took 40 days to traverse via Suez may now move in under 25 days, with costs slashed by up to 40%. For countries like India, long constrained by maritime dependency and geopolitical roadblocks like Pakistan, the INSTC represents autonomy, reach, and leverage. By anchoring investments in Iran’s Chabahar Port and pushing road and rail links through the Caucasus into Russia, India is not just moving goods, it’s asserting presence.

Russia, reeling from Western sanctions, views the corridor as a vital artery to keep its economy tethered to global markets. With access to Europe constrained and pipelines of trade to Asia opening up, Moscow is embracing the INSTC as part of a broader pivot eastward. Iran, too, has seized its role as a key junction with zeal, positioning its territory as the bridge between warm water ports and the heart of Eurasia. Though battered by sanctions, Tehran is pushing infrastructure upgrades with a clear eye toward regional transit supremacy.

Europe is beginning to take notice. Countries like Germany and Finland are assessing the corridor’s potential to stabilize and diversify their supply chains, especially as global shipping lanes grow riskier and more expensive. Yet as enthusiasm grows in Eurasia, apprehension is mounting in the United States. The INSTC threatens U.S. strategic control over global commerce by undermining the relevance of the Panama and Suez canals, long cornerstones of American naval and economic dominance. It also boosts BRICS, a grouping increasingly seen as a challenger to the Western-led order.

Washington’s response has been twofold: diplomatic containment and competitive investment. The India-Middle East-Europe Corridor (IMEC), announced as part of the G7’s Build Back Better World initiative, is in part a direct counterweight to the INSTC. At the same time, U.S. policymakers are pressuring allies to tread carefully around Iran and Russia’s involvement, while watching closely how India—a key U.S. partner—manages its balancing act between the West and BRICS.

What is unfolding is not just a redrawing of trade routes, but a redrawing of power. The INSTC may not have the headline flash of China’s Belt and Road Initiative, but it is modular, strategic, and increasingly influential. It marks the emergence of a new Eurasian logic, one that connects the Indian Ocean to Northern Europe, not through blue-water naval lanes, but across land and short-sea corridors, driven by the very nations that were once bypassed. If the remaining gaps in infrastructure and policy can be bridged, this corridor will be more than a route, it will be a lasting statement.