Global Risks Weekly Roundup #14/2025: Chinese military exercises, French 2027 election front-runner banned, stock market fall
Executive summary
China carried out more aggressive live-fire military exercises around Taiwan. The US relocated missile batteries from the Pacific into the Middle East, raising some concerns that it was leaving the Pacific region vulnerable.
Le Pen, the frontrunner for the 2027 French elections, was barred from running in those elections after being found guilty of embezzlement.
Global stock markets have been falling sharply since Trump announced new tariffs on April 2; these new tariffs are larger than those imposed by the Smoot-Hawley Tariff Act in 1930. Crude oil prices have been falling as well, in another sign of economic weakening. Sentinel forecasters estimate that there is a 63% chance of a global recession this year.
Meta started releasing distilled models from their Llama 4 series.
Global Economy
The Trump administration announced more tariffs on April 2. They involve an initial round of 10% on all imported goods that started on April 5th, followed by an increase on April 9th, to, e.g., 20% on the European Union, 34% on China, or as high as 50% for Lesotho. Russia, Belarus, North Korea and Cuba will face a 10% tariff.
The announced US tariffs are larger than those imposed by the Smoot-Hawley Tariff Act of 1930 – which aimed to bolster domestic production but worsened the Great Depression. The Trump administration’s method of calculating tariffs doesn’t allow countries to make quick changes, either ([US trade deficit/exports]/2, or 10% if that formula yields a number below 10%).
These tariffs upend decades of low effective tariff rates on US imports and have initiated a trade war between the US and the rest of the world. JP Morgan projects a 60% chance of a global recession before the end of the year, Goldman-Sachs projects a 45% chance, and other brokerages are projecting substantial risks as well.
Global stock markets have been falling sharply since these tariffs were announced. The S&P 500 has lost about 10-12% of its value in the last five days. Circuit breakers tripped in multiple Asian markets on Monday. Gold prices also fell slightly as investors scrambled to cover stock market losses. Investors flocked to US government bonds, abandoning US stocks and the dollar. Crude oil fell close to $60 per barrel, ironically, a level at which US domestic production will fall.
Sentinel forecasters estimate a 63% chance of a global recession this year (range: 55% to 70%), with a global recession defined as world GDP growing more slowly than the world population. This has happened 5 times since WW2: 1975, 1982, 1991, 2009 and 2020.
A larger number of Samotsvety forecasters discussed tariffs this week and estimated that there is an 18% chance (range: 11% to 33%) that the average volume-weighted tariff rate would be lower than 12% by July 5th. We also forecast a 63% chance (range: 48.5% to 85%) that tariffs on India, specifically, will be higher than 20% a month from now.
Geopolitics
US
The Trump administration has asked the IRS to provide tax data to locate up to 7 million undocumented immigrants in the US. While the administration and the IRS are still negotiating how much data will be shared, the acting IRS Commissioner has previously told subordinates that the agency will likely eventually comply with the administration's request.
To deport large numbers of undocumented immigrants, the Trump administration would need a larger force than ICE. Such a force could be drawn from the military, a newly deputized private force, or both. An executive order issued on January 20 requires a recommendation to be made within 90 days, i.e., by April 20, about whether the Insurrection Act should be invoked in order to use the military to address "a national emergency at the southern border." Thus, we may soon see a call to invoke the Insurrection Act. However, the Pentagon is also considering cutting 30K-90K active-duty soldiers from the Army in response to upcoming budget cuts. Alternatively, several military contractors, including Erik Prince, the former CEO of Blackwater, have proposed the creation of a "small army" of private citizens deputized to make arrests, and of “processing camps” to hold immigration detainees.
Musk said that he expects that DOGE will largely have completed its goal of reducing government expenditures by $1T within 130 days, i.e., around the end of May or early June. Trump has also told members of the Cabinet and others that Musk will be stepping down in several weeks. Per Congressional regulations for special government employees, Musk can only remain a special government employee (with weaker ethical constraints that allow him to retain control of his business empire) for up to 130 days in any 365-day period, but DOGE itself has until July 4th 2026 to complete its goals.
Laura Loomer, a far-right influencer, spoke with Trump in the Oval Office, and soon after, the president publicly said that he listened to her advice and fired 6 members of the National Security Council. The head of the NSA and US Cyber Command was also removed from his position at her instigation.
The Trump administration is pressuring Harvard University to change policies around demonstrations that the administration considers "antisemitic." If the university does not comply, it is at risk of losing $9B in federal funding. Dozens of research grants were also cut at Princeton University. Columbia University, which recently lost $400M in federal funding, has acceded to the administration's requests. If these leading universities accede to the administration's requests, then others will likely follow as well, thereby giving the administration some measure of control over speech on campuses and university policies.
The US Department of Health and Human Services (DHHS), which includes the CDC, the NIH, and the FDA, among other divisions, cut about 10,000 employees. The Trump administration is also requiring DHHS to cut spending on contracts by 35%, across all divisions. The NIH has been ordered to cut $2.6B of its contracts.
Europe
An NYT investigation (summarized here) reveals that the US has been far more involved in Ukraine’s war effort than has been widely realized. US personnel have shaped Ukrainian battle strategies, and US intelligence has been used to direct enemy targeting on the battlefield. The investigation also tells a story of envious Ukrainian generals directing incompetent counteroffensives.
Frontrunner Le Pen was barred from running in French elections after an embezzlement conviction. One of our forecasters sees a worrying pattern, with similar situations in Romania, which is redoing elections after banning the winner of its first round, and Germany, which is enacting policies that are far from the median voter’s preferences after excluding the AfD from coalitions. Others see this as the rule of law working as intended, and point out that previous French presidents, prime ministers and candidates, like Jacques Chirac, Nicolas Sarkozy, Alain Juppé and Francois Fillon, were also convicted and suspended from running for political office for up to a decade.
In Ukraine, an energy infrastructure ceasefire has not held. Trump is “pissed off at Putin” but also mad at Zelensky for not yet agreeing to a deal on minerals and other resources.
Middle East
Patriot missile defense batteries are reportedly being moved from South Korea to the Middle East, as part of a growing accumulation of US military assets in the Middle East, amid ongoing tensions with Iran. A Terminal High Altitude Area Defense (THAAD) system is also being relocated from INDOPACOM to CENTCOM.
While ongoing US strikes against the Houthis have damaged their command and control structures, members of the Trump administration have expressed concerns that the strikes have not succeeded in destroying the group's underground weapon storage sites.
On the other hand, Iran may be recalling its forces from Yemen (in part to avoid any escalation if they are killed by US strikes, they say), and one Iranian official said that the Houthis may only have months left. The Houthis, though, are reportedly "laughing out loud" at these reports, in part because they claim there are no Iranian forces to speak of in Yemen in the first place. Saudi Arabia and Iran also held talks, and Iran’s president says the country is open to full nuclear verification.
Israel issued a wide-ranging evacuation order for southern Gaza. Netanyahu said that the army will establish a new security corridor in Gaza, and Israel is in talks with countries to take in Palestinians from Gaza. An Israeli official said, “What we would like to see is that we rescue the hostages, eliminate Hamas, and that there is a large-scale opportunity for voluntary migration.”
The UN World Food Program closed its remaining Gaza bakeries because of Israel’s blockade of aid. Muslim scholars issued a fatwa calling for jihad against Israel.
Asia
China carried out live-fire exercises in the Taiwan Strait to simulate strikes on key ports and energy facilities. Chinese drills around Taiwan are becoming increasingly frequent and elaborate. The military drills last week were a “response to separatism”, a mainland official said. The military released two posters for the exercises:
The US opposed China’s military exercises around Taiwan and warned against ‘destabilizing behavior’. Back in the day, the US might have done a freedom of navigation exercise. Recent
Chinese military exercises are now complete and demonstrate how a war could start.
Some contingency planners in the Pentagon are concerned about Navy stocks and the level of US readiness for an attempted Chinese invasion of Taiwan, because of the use of so many precision munitions, especially advanced long-range ones, against the Houthis.
Africa
The foreign ministers of Mali, Burkina Faso, and Niger are due in Moscow for talks. Russia has committed to helping military governments in Mali, Burkina Faso and Niger acquire arms and training for a planned 5,000-strong force to deploy in the central Sahel region.
Congo and the M23 rebels will hold their first direct talks in Qatar on April 9, since the rebels took over parts of the eastern Democratic Republic of Congo.
Biorisk
A 3-year-old child in the state of Durango in Mexico is hospitalized with a confirmed case of H5N1 bird flu. A 2-year-old girl who had eaten raw chicken died of H5N1 in the state of Andhra Pradesh in India.
Artificial Intelligence
Google Deepmind published an AGI safety and security strategy.
A research team led by former OpenAI researcher Daniel Kokotajlo, and also including a friend of this newsletter, Eli Lifland, released a detailed scenario on the trajectory of AI development, AI 2027. It estimates that 2027 is the most likely year that superintelligence would arrive, conditional on no global catastrophe, no regulatory or self-imposed slowdown, and no major disruption to supply chains that might result from geopolitical or trade events.
ChatGPT-4.5 passed a five minute Turing Test. “When prompted to adopt a humanlike persona, GPT-4.5 was judged to be the human 73% of the time; significantly more often than interrogators selected the real human participant.”
Meta released two distilled models from its new Llama 4 series. They are now available publicly e.g., on Hugging Face. The bigger model, Llama 4 Behemoth, is still training. Meta is also planning a $1 billion data center project in Wisconsin. Powerful open-weight AI models are potentially dangerous, as safety mitigations can be removed reasonably easily, and usage by threat actors cannot be monitored or revoked. Open-sourcing powerful AI models may also lead to a tightening of an AI race, which some, such as Leopold Achenbrenner, in Situational Awareness, have argued is a more dangerous race dynamic than one in which there is a clear leader. OpenAI will also release o3 and o4-mini and an open-weight LLM.
ChatGPT weekly active users hit 150 million. OpenAI closed their $40 billion funding round, led by SoftBank. $30 billion will come from SoftBank, and the remainder, from other investors. It’s the largest amount of funding ever raised by a private tech company. Notably, SoftBank has said that their investment could be cut to $20 billion if OpenAI doesn’t convert to a for-profit company by the end of the year. OpenAI’s attempted conversion to a for-profit corporation has faced significant criticism.
Elon Musk and OpenAI’s jury trial will begin next spring, and a bill was introduced to the California State Assembly in an attempt to block the move, which received support in a recent open letter. It appears that the bill was subsequently mysteriously amended and completely changed into a bill about aircraft liens.
Commercial autonomous flying taxis have started to operate in China.