October 17, 2025 — Hosts Dhruva Jaishankar and Rachel Rizzo discuss the recent ceasefire agreement in the Middle East, the ongoing U.S.-China trade war, and political turmoil in France in the premiere episode of Around the World with Dhruva Jaishankar and Rachel Rizzo.
Available on Spotify.
Transcript
Introduction
Rachel Rizzo: I think that there's two sides here. There's this question of Hamas disarming, whether it's willing to do that or not, big questions about the political future of Gaza, rival factions within the Gaza Strip, and also how Israel decides to respond to this and how the U.S. decides to respond as well.
Dhruva Jaishankar: Hi, I'm Dhruva Jaishankar.
Rachel Rizzo: And I'm Rachel Rizzo. Welcome to the Around the World podcast. Your essential guide to understanding the forces shaping our world today. Every week, we cut through the noise to bring you clear, insightful analysis of the most important developments in geopolitics.
Dhruva Jaishankar: Whether it's security challenges across Europe, shifting power dynamics in Asia, domestic updates from the United States, or regional updates from Latin America or the Middle East, we make sure you're up to speed on what's happening and more importantly, why it matters.
Rachel Rizzo: Thanks for tuning in.
Developments in the Middle East
Dhruva Jaishankar: The big news story over the past seven days or so has been President Trump's whirlwind trip to the Middle East and a landmark announcement then.
Rachel Rizzo: Yep.
Dhruva Jaishankar: Of which he made, is the first step towards what seems to be something much more broad, a sort more durable solution to what has been a two-year conflict. Maybe to start us off by talking about what exactly we saw happen between Hamas and Israel, a really quite significant development over the past few days.
Rachel Rizzo: Yeah, I mean, it's hugely significant, but I think we have to give it some time to see actually how it develops. Now, of course, Trump is already taking a huge victory lap saying things like this is transformative and it's a new dawn for the Middle East. But, you know, he's not the first president to say this about the region. And so I think we have to just take that in stride. But you're totally right. It's been a big week. There was a ceasefire agreement brokered by Trump in Egypt.
And he's declared that the war is over. And on Monday, the final 20 living Israeli hostages that were held by Hamas since October 7th, 2023 were released and returned to Israeli medical staff. And in exchange for the hostages, Israel released about 1,700 Palestinian detainees held without charge and about 250 Palestinian prisoners. So big developments here, but I think there's still, It's still tenuous and we're not exactly sure where it's gonna go.
Dhruva Jaishankar: And that's actually, you know. It's interesting. On the one hand, was really significant just seeing the footage and the videos of families being reunited on both sides. This has obviously been a really terrible few years for them. But yet, I think there are still a lot of questions that remain, including about still the continuing exchange of those hostages. There's still, I think, a few who haven't been identified and some bodies that are difficult to reclaim.
Rachel Rizzo: Yeah, and this is where we're already starting to see the potential fractures in this very delicate ceasefire. Hamas was supposed to return all living and deceased hostages within the first 72 hours, but they've handed over only about a third of the remaining 28 deceased hostages at this time. And basically Hamas is saying that it needs special equipment to access the remaining remains because they're buried under rubble. And you can already see the Israelis starting to say that this is Hamas trying to sidestep the ceasefire agreement. At the same time, what we've also seen is Israel restricting humanitarian aid entering Gaza. So there's only about 300 aid trucks entering instead of the agreed upon 600 and the Rafah border with Egypt remains closed due to the dispute over deceased hostages.
Dhruva Jaishankar: So, still, I mean, already a few challenges. And it seems like in Gaza, there's been some violence not involving Israel that has erupted between different factions. the Israeli military preparations also seem to be continuing. Is that correct?
Rachel Rizzo: Yeah, it is. And I think this is something to watch really closely. mean, part of this 20-point plan that Donald Trump and his team, Jared Kushner, Steve Witkoff came up with, one of the points of that was that Hamas has to de-arm itself. And now I think the big question is, is it willing to do that? Who else would be the governing body in Gaza if not Hamas?
If they did de-arm, who would they de-arm to? mean, where are all these weapons going to go? And what is really the driving force behind Hamas making that decision? And so I think there's a lot of questions that are left on the table. President Trump has also said that Israeli forces could resume fighting in Gaza, “soon as he says the word”, if Hamas doesn't uphold the ceasefire.
So I think that there's two sides here. There's this question of Hamas disarming, whether it's willing to do that or not, big questions about the political future of Gaza, rival factions within the Gaza Strip, and also how Israel decides to respond to this and how the United States decides to respond as well. So I think that we can have delicate celebrations at the moment, but understand that this is just the start of a very long road ahead.
Dhruva Jaishankar: And what are we to make of the meeting, I think it was in Sharm el-Sheikh in Egypt, where Trump's Netanyahu wasn't there. Trump presided over a number of leaders, European leaders. Macron, Keir Starmer came for that. A number of Arab leaders came for that. And what are we to make of that ceremony as well?
Rachel Rizzo: Well, I think, you know, we're on the heels of a major meeting in September, which was the UN General Assembly. And we have seen multiple European countries recognize Palestinian statehood. This has been a huge, not just geopolitical issue, but it has stepped into domestic politics around Europe as well. So we see a lot of support from leaders like Macron, like Keir Starmer, like Friedrich Merz in Germany, who really want to be a part of this potential ceasefire and potential future peace for this region. Now, again, I think that Donald Trump really sees himself as the center of these discussions. And in many ways, I think he is. I I think that he and his team deserve credit here. But again, as I've said before, this is only the framework. This is only the start. And it's going to take agreements and it's going to take effort on many sides, not just Israel and Gaza, but the U.S. and European leaders as well to really bring this forward. lots to watch and we'll keep an eye on it over certainly the next few weeks and the next few months. But another, know, shifting the topic a little bit, I that's sort of what's going on in the Middle East and it's taking up a lot of the new space. But we're here based in Washington and a big conversation for us has also been on the economic front. All these geopolitical developments in the Middle East are happening at the same time as this U.S.-China trade war seems to be resuming. So maybe we can shift gears a little bit and extrapolate sort of what those geopolitical tensions have meant for this U.S.-China trade war and what you're watching on that front economically.
Dhruva Jaishankar: Yeah, no the two conflicts obviously that have continued to preoccupy a lot of people's time and attention, which is the Middle East war between Israel Gaza. But that has now spread across the region in various ways, affecting Israeli strikes on Iran and Yemen, has had wider implications. And then, of course, the Ukraine war that continues. But I think the big geostrategic trend to be watching, which doesn't get the front pages, obviously, is really what's taking place between the United States and China.
The two largest economies, largest militaries, or most potent militaries in some ways around the world, that are jostling for power internationally. And yet, what's somewhat ironic is that the bilateral trade volume between the United States and China is huge. It's a trillion dollars, massive bilateral trade. It is also very unbalanced trade. And this is important because this is something that Trump has really made an issue, which is the United States has a large trade deficit, goods trade deficit with China.
Because of the competition between them, growing competition between them, both are trying to, in their own ways, decouple from each other and de-risk in critical areas where they realize that they have vulnerabilities on each other. China has certain vulnerabilities. They need certain items from China, from the United States. They need market access in certain areas. And then similarly, the United States has some critical vulnerabilities. And just to give a sense of how complex these interdependencies are, the integrated supply chains, we're talking you buy an electronic item in the United States or anywhere in the world today, or advanced machinery of any kind. And it's quite likely, just to give examples, that this has been precision manufactured in or assembled in a place like Taiwan or Korea, which in turn is based on equipment made in Germany or the Netherlands or Japan, which in turn relies on raw materials that are processed in China. Or Ukraine or the United States, but which is then mined in Chile or Congo or Japan or China. And all of this relies on software that's sometimes designed by U.S. headquartered firms or encoded by coders in India. So this is a very complex integrated global supply chain that results in certain items that are critically needed, whether it's an average consumer or whether it's a sort of advanced military or otherwise sensitive equipment. So this is, think, the backdrop to the decoupling we're starting to see.
Rachel Rizzo: Well, just to follow up on that, I think it was Treasury Secretary Scott Bessent this week who was doing an interview. Obviously, it's the IMF-World Bank annual meetings here in D.C. this week, and he was doing an interview. And he said this economic competition, this is not China versus the United States or the United States versus China. This is China against the world. Is that accurate or like how are you viewing comments like that that are coming out of the Trump administration?
Dhruva Jaishankar: Well, know, that best in common represent a slight change in tenor over what we've seen over the past few months, which is in some ways the United States was trying to take on the world. But I think I'm just going try and contextualize this a little bit. You know, in some ways, what he says is right, which is China today has the manufacturing power, which is disproportionate to its share of the global economy. It is in many ways the factory of the world. So many supply chains run at least partially through China today that it's very hard for anyone, not just the United States, to disentangle themselves. with the exception of some component manufacturers in East Asia, Japan, South Korea, Taiwan, and raw material exporters, almost every other major economy has a massive trade deficit with China. So in that sense, he's not off. let me just take this back. When the Trump administration came in earlier this year, they decided to use a pretty blunt instrument, tariffs, to try and renegotiate economic terms of engagement with much of the world.
At one point in time, tariffs on China exceeded 100%. Now, China did something quite clever in some ways, which is they decided to cut off supplies for rare earths, or threatened to cut off supplies. That led to a reconsideration within Trump's economic team, where they realized that certain critical items, were really operating, they had a few weeks of supply, and in certain really crucial areas. They realized there was this really key vulnerability that China was exploiting and using as leverage. There were then talks in the spring and summer between U.S and Chinese delegations at the cabinet level in Geneva, in London, in Stockholm, extending into the summer. And the tariffs came down as part of these negotiations, the tariffs came down, U.S tariffs on China, to 30 % average. The United States also resumed advanced semiconductor exports to China, which was something that was quite controversial, even amongst many Republicans in the United States.
In September, there were a round of talks in Madrid, and what appears to have happened is the two sides agreed to a kind of ceasefire until Trump and Xi met in person, and they were expected to meet in Seoul on the sidelines of the APEC summit that's coming up soon. And the two sides appeared to believe that they had an understanding on a few critical areas of contention, on rare earth exports from China, on advanced chips from the United States, on the sale of TikTok in the United States, and on tariffs. China was hoping for this pause until Xi and Trump met. And then a couple of things happened quickly, which was one, the U.S. Commerce Department expanded its entity list, which is a list of countries that require license for export companies. then the other thing is they separately, they were looking at increasing and applying this fee on it.
On Chinese ships docking at U.S. ports. China believes that this was kind of a violation of this understanding that they had brokered and has now tried to exert leverage on rare earths and in a pretty sweeping potential restrictions. So Beijing believes it has the upper hand here and this is, I think why tensions have kind of escalated in the past week or so.
Rachel Rizzo: So just to bring us back to basics for a little bit for those who might be listening that don't follow the economic relationship between China and the United States as closely as you've been following it. These debates around tariffs, around the Chinese export of rare earths, decreasing those exports. I mean, does this all just come down to who has the ability to make semiconductors and make the most powerful semiconductors, which then go into making the most powerful technologies, which in turn feed into this global so-called competition between the United States and China. Like, is that really what we're talking about here? Is it that easy or is it a little bit more complicated than that?
Dhruva Jaishankar: So think semiconductors are the most visible and immediate area of contention. It's something that is really so integral to your smartphone, laptop, television. It's integral to military applications. Any advanced military equipment has chips in them. It's integral to AI and growth and competition in the AI sector. I think that that's one that just speaks to a lot of people it is so. But it is actually representative of a deeper, more underlying issue, which is to what extent and what ways can the United States continue to depend on Chinese manufacturing and supply chain, know, again, it's completely down the supply chain in certain areas, there are these vulnerabilities. And similarly, China is asking the same question, where can we, where are we vulnerable to the United States? And so the challenge is that de-risking and, de-risking is, there's a slight nuance here, de-risking would involve identifying, you know, of certain key areas and focusing on them, whereas decoupling is a sort of more ambitious widespread not trading with each other in various ways. And I think now there's a realization that de-risking is more probable. Both sides are going to be much more focused rather than trying to completely decouple from each other. But doing it isn't sometimes much harder because it requires very high capital costs. somebody has to front. The United States is sitting on a lot of rare earths, but processing it requires environmental clearances. It requires buyers to commit to buying beforehand. It requires very high capital costs and is therefore very risky for an investor, a private investor. So it's much easier said than done and that's what I think everyone's finding.
Rachel Rizzo: Before we move on to the next topic, I mean, it's interesting to have watched this debate develop over the last 10 or so years in Washington, you know? The big pivot to Asia was a huge part of the Obama administration and every administration since then. Trump 1, Biden, Trump 2, has really focused on China and the Indo-Pacific and has culminated in this real geo-economic competition between the two sides. And Europe is also at the center of it because they rely so much on Chinese exports. They rely on exporting to China as part of their markets. Germany's car industry, for example, is a huge part of this. So I think it's something that we'll obviously be watching closely, talking about more in depth in the coming months. It's an issue that is at the center stage of U.S politics and European politics as well.
Dhruva Jaishankar: And actually, just to wrap up, I think this week, a quick question for you on European politics. We've seen some turmoil in France, particularly, where you had a prime minister resign and then get reappointed, it appears, and then barely survive and no conference. What's going on there?
Rachel Rizzo: Okay, so French politics are messy, so we can just like lay that down as the baseline. The French government has fallen a couple times in the last year or so, and this all stems from this decision back in summer of 2024, where Macron decided to dissolve parliament. And this was after a really poor showing of his party.
in the European parliamentary election. So he thought he wanted to dissolve Parliament and give voters a chance to make their voices heard, potentially put the far right into Parliament and see if they could govern. This has really backfired because it's just created an era of instability for Macron and for the government. So Sébastien Lecornu, who was the prime minister, his government fell. He was reappointed as prime minister by President Macron just days after resigning. He unveiled yet another cabinet on October 12th. This is France's fifth prime minister in under two years. I mean, it's pretty crazy. But I think what we need to watch closely going forward is does this government hold, does the cabinet hold? They're supposed to be presenting a 2026 draft budget next week.
Let's see if that goes forward. And let's see how the fractured parliament split between three ideological blocks holds over the coming weeks and months. it's probably worth like a full episode. It's probably worth a full deep dive sometime in the next couple of weeks. But something worth watching and we'll be taking a close look at it in the next few days to see what happens with this new government and whether it holds or not.
Dhruva Jaishankar: Thanks again, Rachel. It was great talking to you and thanks for joining us on Around the World this week.
Rachel Rizzo: Absolutely. Thanks, Dhruva, and thanks to all of our listeners. See you next week.