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After the Busan summit, can China and the US overcome the challenges?

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On October 30, Chinese President Xi Jinping held a landmark meeting with U.S. President Donald Trump in Busan, South Korea, recalibrating and setting the tone again for the development of bilateral relations. Both sides agreed to strengthen cooperation in trade, energy, and other fields and to promote cultural exchanges; they also agreed that the heads of state would maintain regular contact. Trump expressed his hope to visit China early next year and invited President Xi to visit the United States. At the same time, the two sides’ economic and trade teams announced several breakthrough advances from the latest round of negotiations.

Observers believe that the successful breakthrough of the China-U.S. trade negotiations in Kuala Lumpur laid a good foundation and created a harmonious atmosphere for the Busan Summit; the summit itself and the consensus reached undoubtedly established a new direction and tone for stabilizing and advancing China-U.S. relations, bringing encouraging optimism to the international community and injecting stability and vitality into the global geopolitical and economic systems. In short, from the Kuala Lumpur negotiations to the Busan Summit, China-U.S. relations have basically bid farewell to the long-term turbulence, twists, and crises that began after 2018. It seems that “the light boat has passed ten thousand mountains,” and is sailing toward a new world conducive to the development and prosperity of both countries and to global stability and peace. However, considering the complexity of major-power relations, a rational assessment of current China-U.S. relations should be that “the heavy ship is still crossing a thousand ridges.”

The 100-minute Busan Summit marked the first meeting between Xi Jinping and Donald Trump in six years, and the first China-U.S. summit in Trump’s new term, coinciding with the completion of the fourth round of China-U.S. trade talks. Thus, not only did both sides attach great importance to it, but the international community also watched closely. The China-U.S. relationship is the most important in the world; its trajectory determines not only the future of both nations but also global security and destiny. It can be said that mainstream international opinion hopes that the two great ships of China and the United States will move toward each other, coexist peacefully, advance harmoniously, and work together in unity.

According to Xinhua News Agency, Xi Jinping emphasized during the talks that the heads of state play the role of steering and guiding bilateral relations; as the world’s two largest economies with different national conditions, differences and even frictions are natural and normal; China has adhered to one blueprint for more than 70 years, focusing on doing its own work well and sharing development opportunities with the world, with no intention of challenging or replacing anyone; China’s development and revitalization are not in conflict with Trump’s call to “Make America Great Again” and can complement each other for shared prosperity; China and the United States should take a broad view, focusing on the long-term benefits of cooperation rather than falling into a vicious cycle of mutual retaliation; both countries have the will and responsibility to promote peaceful solutions to regional hotspots and can jointly demonstrate major-power responsibility, working together on significant, practical, and beneficial undertakings for both nations and the world.

Trump said, “It is an honor to meet President Xi. China is a great country, and President Xi is a respected great leader and my good friend for many years. We have a very pleasant relationship. U.S.-China relations have always been good and will be better in the future. I hope both China and the United States will have an even better future. China is the United States’ greatest partner, and the two countries working together can accomplish many great things in the world. Future U.S.-China cooperation will achieve even greater results.”

At the Busan Summit, both heads of state stated that China would host the 2026 APEC Economic Leaders’ Informal Meeting and that the United States would host the G20 Summit, expressing satisfaction with each other’s success. They also agreed to exchange visits next year.

During Trump’s first presidency, he paid a state visit to China. After his re-election in 2024, he repeatedly expressed his desire to visit China again as soon as possible. However, for well-known reasons, his second visit to China had long remained uncertain. The Busan Summit confirmed that Trump would visit China early next year and that President Xi would later pay a return visit to the United States, a major positive development eagerly anticipated by both countries and the international community. It indicates that the stability of China-U.S. relations in the coming year, or even several years, is within reach, and further improvement is the shared will of both leaders and the trend of the times and the global situation.

Observers also noted that during the Busan summit talks, neither the Chinese nor U.S. heads of state mentioned the Taiwan issue, indicating that this matter—China’s internal affair that has always obstructed China-U.S. relations—seems no longer on the two sides’ topic list, in stark contrast to their meeting in Osaka, Japan six years ago. On September 19 this year, when Xi Jinping and Donald Trump held a phone consultation, the Taiwan topic did not appear in news reports either. Therefore, the two most recent instances of direct communication between the Chinese and U.S. leaders released an extraordinary signal externally, and are undoubtedly a major step forward in overcoming the “Taiwan obstacle” in China-U.S. relations. Recently, the well-known American think tank Rand Corporation suggested that the U.S. government “support China’s gradual unification,” which can be described as a new line of thinking in U.S. think tanks’ approach to relations with China. Considered together, these signs clearly show that China-U.S. relations differ from the past.

After the China-U.S. leaders’ meeting in Busan, the consensus results of the Kuala Lumpur consultations by the two countries’ economic and trade teams were made public. The good news spread rapidly across the world and was encouraging, mainly including the following aspects:

1.The U.S. side will cancel the additional 10% so-called “fentanyl tariff” on Chinese goods (including goods from the Hong Kong Special Administrative Region and the Macao Special Administrative Region). The additional 24% reciprocal tariff on Chinese goods (including goods from the HKSAR and the MSAR) will continue to be suspended for one year. The Chinese side will correspondingly adjust countermeasures against the above U.S. tariffs. Both sides agreed to continue extending certain tariff-exclusion measures.

2.The U.S. side will suspend for one year implementation of the “50%” de minimis rule in the export-control measures it announced on September 29. The Chinese side will suspend for one year implementation of relevant export-control and other measures it announced on October 9, and will study and refine specific plans.

3.The U.S. side will suspend for one year its Section 301 investigative measures regarding China’s maritime, logistics, and shipbuilding industries. After the U.S. side suspends the relevant measures, the Chinese side will correspondingly suspend for one year its countermeasures against the U.S. side.

In addition, the two sides also reached consensus on cooperation in fentanyl counter-narcotics, expanding trade in agricultural products, and handling certain individual corporate cases. The two sides further confirmed the outcomes of the Madrid economic and trade consultations; the U.S. side made positive commitments in fields such as investment, and the Chinese side will properly resolve issues related to TikTok with the U.S. side.

Economic and trade cooperation is the ballast stone of China-U.S. relations. Although Donald Trump’s second-term policy toward China “started low and moved low,” the posture is commendable and the momentum is good. However, in April of this year he launched a global tariff war, beginning with attacks on neighboring countries and allies and soon pointing the sword at China. China came prepared, quickly launching a “combination punch of eleven arrows” to counter, and promoted the completion of four rounds of marathon trade negotiations between China and the United States:

— May 10–11 this year, Geneva, Switzerland: China and the United States reached a consensus on tariff reductions;
— July 28–29, Stockholm, Sweden: China and the United States agreed to extend the tariff-suspension period;
— September 14–17, Madrid, Spain: China and the United States focused on tariffs and export controls;
— October 24–27, Kuala Lumpur, Malaysia: China and the United States reached the above package consensus.

The harvest from the half-year series of China-U.S. trade negotiations, especially the major outcomes recently achieved, paved the way for the smooth holding of the China-U.S. Busan summit; and the new consensus reached by the two heads of state at the Busan summit has in turn provided driving force and top-level guarantees for follow-up negotiations to thoroughly resolve economic and trade disputes, and will provide new expectations and clarify a new direction for expanding China-U.S. economic and trade and energy cooperation, as well as people-to-people exchanges.

From the four rounds of China-U.S. trade negotiations to the China-U.S. summit in Busan, we can draw major insights for handling China-U.S. relations:

First, “Let him be strong, the clear breeze brushes the mountain ridge; let him be overbearing, the bright moon shines on the great river.” As a major country in the world, China must unswervingly follow the path of peaceful development, strive around the dream of building a strong country and national rejuvenation, and avoid all external interference; it must always “bite the green mountain and not let go,” using strong economic development, great comprehensive strength, and sustained social stability to respond to a world where change and turmoil intertwine.

Second, “A train runs fast because the locomotive leads.” The healthy and stable development of China-U.S. relations relies on the strategic judgment, strategic mutual trust, personal friendship, and frequent communication of the two countries’ leaders. President Xi Jinping not only has a far-reaching view of the overall, strategic, and key essential characteristics of China-U.S. relations, but has also repeatedly stressed: “We have a thousand reasons to get China-U.S. relations right, and not a single reason to wreck them”; “China never bets on the United States to lose, never interferes in U.S. internal affairs, and has no intention of challenging or replacing the United States; we are pleased to see a confident, open, developing, and prosperous United States.” These assertions set the general policy for China in handling relations with the United States. From his campaign for a second term, Donald Trump no longer listed China as a main topic, nor did he promise armed support for “Taiwan independence.” After taking office he released a large amount of positive and healthy information toward China, restrained his subordinates in managing statements regarding China, and held three phone calls with President Xi Jinping. The positive guidance, steady steering, and command of the overall situation by the Chinese and U.S. heads of state have played an irreplaceable navigational role in stabilizing and recovering the bilateral relationship.

Third, be reasonable, advantageous, and measured; talk business when discussing business; contend without breaking. China and the United States are the two largest economies in the world and important trading partners for each other. In the 53 years since normalization of relations, they have achieved many major and mutually beneficial outcomes, while also accumulating many political differences, economic problems, and trade frictions. However, as long as both sides adhere to the principle of avoiding the politicization of economic and trade issues, avoiding the economization of political issues, and avoiding the instrumentalization of the economic and trade relationship, they will certainly find proper solutions and reach a new consensus and a new realm of mutual benefit, win–win cooperation, and mutual achievement.

Fourth, “When elephants fight, the lawn suffers.” China and the United States are, respectively, a world-class power and a major power; their bilateral relationship is vital, a tug on one hair moves the whole body, and it concerns global stability and peace. The China–U.S. trade war has seriously affected the world’s industrial, supply, and value chains, and has impacted the future and destiny of the world trade system, the economic system, and globalization. If China and the United States fight viciously, both will be hurt and defeated and the world will suffer; if China and the United States reconcile, both countries will profit and the world will benefit. This has become a highly shared understanding and a basic consensus of international public opinion. Therefore, in line with the responsibility and mission of seeking the well-being of the two peoples and safeguarding world peace and development, China and the United States must properly handle their bilateral relations, must assume major-power responsibilities, and abide by major-power obligations.

The China–U.S. summit in Busan is a high point of a “V-shaped” reversal after a cliff-like deterioration of relations lasting seven years, but the bilateral relationship has still not returned to its best historical state, nor has a new normal of stable development yet formed. Although the leaders of the two countries stress “to be partners and to be friends,” this prospect is still far from the ideal state of being “true partners and true friends,” let alone “good partners and good friends.”

Given the huge differences between China and the United States—especially the United States’ political system, social system, and national positioning, which lead to continued uncertainty in its domestic and foreign affairs—even if the great ship of China–U.S. relations sails into safe waters with calm seas and bright sunshine, it will inevitably encounter sudden changes of weather, high winds and rough waves, and even the test of stormy seas. However, for China, it must always maintain strong strategic confidence, strategic composure, strategic direction, strategic will, and strategic wisdom, and, with the posture of a great and powerful country of “let the winds blow from the east, south, west, and north; I remain unmoved,” meet changes in the situation and changes in the world.

Prof. Ma is the Dean of the Institute of Mediterranean Studies (ISMR) at Zhejiang International Studies University in Hangzhou. He specializes in international politics, particularly Islam and Middle Eastern affairs. He previously worked as a senior Xinhua correspondent in Kuwait, Palestine, and Iraq.

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Macroeconomic consequences of asymmetric UAV attacks in Russia

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Today, the nature of asymmetric threats is undergoing a profound transformation, with their focus shifting increasingly toward economic centers. By mid-2026, the nature of asymmetric warfare within the borders of the Russian Federation entered a qualitatively new and critical phase.

An analysis of the Ukrainian unmanned aerial vehicle (UAV) strikes carried out in July 2026 reveals a deliberate shift in targeting. Moving beyond military installations and fuel-energy infrastructure, these attacks directly targeted civilian logistics networks and critical nodes of the macroeconomic infrastructure.

The primary objective of this strategic shift is to deplete the country’s internal resources, induce insurmountable disruptions in supply chains, and exert intense psychological pressure on the civilian population.

Large-scale, coordinated strikes on the distribution centers of Wildberries—Russia’s largest e-commerce platform and part of the RVB joint venture (formed by the 2024 merger of Wildberries and Russ)—became the symbol of this new phase of home-front vulnerability. The geographic scope of these attacks, spanning an unprecedented area from the Northwestern Federal District to Southern Russia and Crimea, exposed critical gaps in national industrial risk insurance mechanisms. Furthermore, this situation sparked severe legal disputes between platform economy giants and small businesses, compelling immediate intervention from both corporate executives and senior state officials.

Tracing the multi-layered consequences of the kinetic impacts resulting from these July attacks on the state’s digital and physical economy will shape the new architecture of civilian sector security.

The zenith of the logistical terror waged by Ukraine was recorded on the night of July 24, 2026, marking the most technically complex UAV attack inflicted on Russian Federation territory since the beginning of the year. According to data from the Ministry of Defense of the Russian Federation, domestic air defense systems detected and destroyed 571 fixed-wing Ukrainian UAVs that night.

Two points have become exceptionally critical here: saturating radar fields and the military “swarm” effect. In short, this event is the clearest indication that the enemy has transitioned to a tactic of overwhelming radar systems. At the same time, the “swarm” effect generated across a vast geographic expanse aims to rapidly deplete the ammunition of anti-aircraft missile systems and expose air defense positions deep behind the front lines.

The breadth of the targeted geography attests to the unprecedented scale of the operation. UAVs were neutralized over the Belgorod, Bryansk, Kaluga, Kursk, Leningrad, Novgorod, Oryol, Pskov, Ryazan, Smolensk, Tver, Tula, and Vladimir regions, as well as over Moscow, Krasnodar, the Republic of Crimea, and the waters of the Azov and Black Seas.

Such a dense dispersion of targets across a vast territory points to an attempt to paralyze transportation and logistics arteries within Russia’s European landmass.

In parallel with the mass deployment of UAVs, missile strikes were also conducted against civilian industrial enterprises. During the same period, a missile attack on a local enterprise in the Fileyka district of Kirov resulted in outright catastrophe, leaving 6 people dead and 32 employees injured with varying degrees of severity.

Following the incident, Regional Governor Aleksandr Sokolov stated that the situation required not only the evacuation of the wounded, but also large-scale interventions such as restoring water and power supplies and auditing the security of neighboring settlements. This combined approach—employing inexpensive kamikaze drones to degrade air defenses followed immediately by missile strikes on unprotected industrial zones—presents an entirely new threat paradigm for the civilian economy.

Systematic and sequential attacks directed at the facilities of a single commercial entity completely eliminate the possibility of coincidence. The strategic, macroeconomic, and psychological factors turning civilian commercial warehouses into critical vulnerabilities for an entire state rest upon four pillars:

  1. Role as the central circulatory system of domestic trade: Wildberries plays a critical role in the architecture of the modern Russian economy, connecting millions of consumers with tens of thousands of SMEs. Damage to distribution centers severe supply chains, triggering localized shortages of essential consumer goods and regional inflationary spikes. The primary goal is to destabilize the domestic market and create an artificial supply vacuum.
  2. Immense facility footprints and defense complexity: Spanning hundreds of thousands of square meters across the nation, these hangars constitute massive targets with high radar contrast. Unlike military bases, these commercial warehouses cannot possess their own air defense systems; placing every such facility under an air defense umbrella is physically impossible without compromising frontline systems.
  3. Social and psychological impact: In the eyes of the public, logistics centers symbolize daily economic stability. Black plumes of smoke visible from miles away, massive fires, and civilian casualties represent a hybrid terror tactic designed to transport an atmosphere of fear deep into peaceful cities and shake the internal socio-political climate.
  4. Magnified radius of economic impact: Inventory consumed by flames in these warehouses generally consists of stock purchased by merchants on credit. The destruction of commodity inventories holds the potential to cause mass vendor bankruptcies, bank loan defaults, and cascading layoffs across small businesses.

The events of July 2026 mark an irreversible shift in the threat landscape facing Russian commerce and macroeconomics. Attacks directed at Wildberries hubs in regions such as St. Petersburg, Moscow, and Tambov exposed the utter vulnerability of civilian logistics infrastructure.

Deploying relatively inexpensive unmanned aerial vehicles, the enemy is capable of inflicting tens of billions of rubles in direct damage, paralyzing the supply of essential goods, and triggering an acute social crisis in which hundreds of thousands of entrepreneurs face the threat of bankruptcy. According to Russian experts, the total cost of a single fire—similar to the Kotovsk incident on July 18—can range between 50 and 100 billion Rubles ($630 million – $1.2 billion USD).

Despite its massive capital reserves, corporate business was caught unprepared for military threats. The medium-term survival of the e-commerce economy depends on the state and the private sector uniting to engineer unprecedented systemic solutions. Establishing compensation funds and introducing mandatory risk-distribution mechanisms are critical steps that must be taken.

Logistics hubs will remain open targets unless a “state program for subsidized reinsurance of military risks” is established for the critical nodes of the civilian economy. In the future, it will not suffice for large enterprises merely to pour capital into the physical protection of infrastructure; they must also deeply decentralize their logistics networks to prevent the concentration of goods and capital at single points of failure.

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Egypt Under Fire: What Does the Damietta Strike Mean for Global Energy Markets?

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Dr. Ahmed Moustafa, Director & Founder, Asia Center for Studies & Translation, Egypt

For the first time since successive waves of escalation between Washington and Tehran began in recent months, an Egyptian liquefied natural gas (LNG) export facility has become a direct target.

In the early hours of Wednesday, 29 July 2026, at least one drone struck the floating storage unit Energos Winter, owned and operated by a U.S. company and sailing under the Marshall Islands flag, while it was moored at the Mediterranean port of Damietta. The impact ignited a fire that spread to a neighboring LNG carrier, GasLog Salem. Egyptian authorities confirmed that the blaze was brought under control without any reported casualties, while no group had claimed responsibility for the attack at the time of writing.

A Broader Context That Cannot Be Ignored

The incident did not occur in a vacuum. It came only hours after the United States Central Command (CENTCOM) announced that it had conducted joint strikes with Saudi forces targeting armed factions in Iraq accused of launching drone attacks against Saudi oil facilities. Tehran responded by warning against a “miscalculation,” at a time when the Middle East is still grappling with the repercussions of an earlier round of escalation that erupted on 8 July, when U.S. forces carried out strikes inside Iranian territory following an attack on a commercial vessel in the Strait of Hormuz. Iran retaliated with attacks targeting U.S. military bases in Bahrain, Jordan, Qatar, Kuwait, the United Arab Emirates, and the Sultanate of Oman.

Against this tense backdrop, Damietta appears to represent yet another link in the chain of regional escalation—but an exceptional one. For decades, Egypt has sought to keep itself removed from direct military polarization in the region, unlike several Gulf states that have increasingly become arenas of open confrontation.

At the same time, this interpretation does not entirely rule out the possibility of an indirect Israeli role, driven by hostility toward Egypt’s growing diplomatic influence in the Palestinian and Gaza files. Cairo has remained committed to advancing the two-state solution and to implementing the second and third phases of the peace roadmap agreed upon following the Sharm El-Sheikh Peace Summit last October. The Israeli government, led by Benjamin Netanyahu, has sought to obstruct these efforts. Netanyahu, who is the subject of arrest warrants issued by the International Criminal Court, is widely accused of bearing responsibility for committing genocide that, according to Palestinian authorities, have resulted in the deaths of approximately 73,000 Palestinian civilians since 7 October 2023.

Why Egypt?

Over the past two years, Egypt has steadily strengthened its position as a regional hub for liquefying and re-exporting natural gas. This growing role has been supported by its two LNG plants at Idku and Damietta, in addition to a network of pipelines linking the country with Israel and Cyprus.

This infrastructure—unmatched elsewhere in the Eastern Mediterranean in terms of combined liquefaction capacity and direct access to European and global markets—has transformed Damietta and Idku into critical gateways for Eastern Mediterranean gas, including increasing volumes of Israeli/Stolen Palestinian natural gas liquefied and re-exported through Egyptian facilities.

According to local reports, the Energos Winter alone was supplying approximately 450 million cubic feet of gas per day to Egypt’s national grid and was preparing to receive four additional cargoes during August.

This expanding role gives any attack on Egypt’s gas infrastructure significance far beyond the immediate incident itself. It threatens not only Egypt’s domestic energy supplies but also a supply chain upon which Europe has increasingly relied as part of its strategy to diversify away from Russian natural gas.

Who Was Behind the Attack? Open Scenarios

At the time of writing, no organization had officially claimed responsibility, leaving several possible interpretations.

The first scenario cautions against prematurely attributing responsibility to Iran or its regional allies. It argues that the ambiguity surrounding the incident—and the absence of any claim of responsibility—may itself be deliberate, allowing whichever actor carried out the attack to undermine Egyptian stability without incurring immediate political costs.

This possibility includes actors competing over Eastern Mediterranean energy routes, as well as local or transnational groups pursuing agendas unrelated to the U.S.-Iran confrontation. Egyptian officials themselves have adopted a notably cautious approach. Egypt’s Minister of Information warned against “rushing to accuse any party,” while a former official suggested that “certain actors are seeking to drag Egypt into the conflict,” implying that the attack may have been designed precisely to draw Cairo into a confrontation it has consistently sought to avoid.

A second scenario, Israeli Involvement or the Involvement of Israel’s Allies

This, in itself, remains a serious hypothesis that is reportedly being discussed in undisclosed investigative circles. The prevailing analyses, supported by pro-Israeli and pro-American narratives, have largely centered on suspicions directed at Iran or Iran-aligned actors within the context of the ongoing conflict, rather than at Tel Aviv. This is partly because Israel maintains an energy partnership with Egypt, making any attack on an Egyptian export terminal potentially detrimental to its own natural gas interests.

Nevertheless, this hypothesis—like all others—must ultimately be assessed in light of the findings of the official investigations, which are still underway. It is worth recalling, however, that repeated warnings have been voiced regarding the visits of Israeli Prime Minister Benjamin Netanyahu to Washington, as such visits have often been followed by heightened regional instability, as was argued after developments last December. According to this line of analysis, Netanyahu seeks to prolong the conflict with Iran in order to strengthen his domestic political position, secure his continuation in office, and advance Israel’s long-term strategic objective of neutralizing Iran and carrying out “Greater Israel.”

Within this framework, some analysts argue that there are broader efforts to weaken both Egypt and Türkey. They cite remarks attributed to a former Mossad operative during appearances on Israeli television, alleging that such a strategy would also serve to divert international attention away from the Gaza file and the question of Palestinian statehood—an issue on which Egypt has intensified its diplomatic efforts in recent days. According to this interpretation, creating indirect pressure on Egypt—the region’s most stable and secure state—could be viewed as a means of drawing Cairo into a wider regional confrontation.

A third scenario links the incident directly to the broader U.S.-Iran escalation. According to the article, The New York Times, citing two Iranian sources, reported that the attack may have been intended as a signal that global shipping and energy supplies could face deeper disruptions should Tehran or its allies choose to escalate further. The sources, however, did not identify the perpetrators or specify the launch point of the drone.

The Messages Behind the Attack

Regardless of who carried out the operation, the choice of target sends several important signals. An attack on what the article describes as the first American-owned energy asset on Egyptian soil would convey a message to Washington that not only its military installations in the Gulf, but also its economic footprint across the region, has become increasingly vulnerable.

For Egypt, which has consistently pursued a policy of strategic restraint and regional neutrality, the incident serves as a reminder that its geographic position—adjacent to some of the world’s most important energy and maritime corridors—no longer guarantees insulation from the conflicts unfolding around it.

For global markets, the attack suggests that the geographic scope of potential disruption is expanding beyond the Strait of Hormuz and the Arabian Gulf into the Eastern Mediterranean, increasing insurance premiums for shipping and critical energy infrastructure in a region long regarded as comparatively secure.

Egypt’s Official Response

The Egyptian government handled the incident with considerable caution and procedural professionalism, treating it primarily as a crisis-management operation rather than a political event.

The Cabinet confirmed that the fire had been caused by a drone attack without attributing responsibility to any specific party, emphasizing that investigations were continuing “to take all necessary measures to safeguard Egypt’s interests and national security.”

Prime Minister Mostafa Madbouly described the response as a test of the state’s crisis-management capabilities, praising emergency teams for successfully moving the burning vessels away from the port, thereby preventing what could have become a far larger disaster.

President Abdel Fattah El-Sisi addressed the incident publicly for the first time during a telephone conversation with Spanish Prime Minister Pedro Sánchez. During the call, he confirmed that the competent authorities were conducting a comprehensive investigation, warned of the dangers posed by the escalating regional situation, and stressed the importance of cooperation between Egypt and the international community to contain the crisis while adhering to peaceful solutions.

This measured diplomatic approach—avoiding direct accusations while emphasizing de-escalation—reflects Cairo’s determination not to be drawn into a broader regional confrontation despite having come under direct attack on its own territory.

Several Gulf states also expressed their full solidarity with Egypt and voiced support for its efforts to safeguard its national security and sovereignty.

The Impact on Global Energy Markets

The Damietta incident occurred at a time when global energy markets were already under considerable strain. Brent crude had been hovering around US$90 per barrel following the escalation of 8 July, while the European Title Transfer Facility (TTF) benchmark for natural gas had climbed above US$700 per 1,000 cubic meters for the first time since March.

Any additional disruption affecting an Egyptian LNG export terminal risks reinforcing this upward trend. Europe has increasingly relied on Egyptian liquefied natural gas as part of its broader strategy to diversify supplies away from Russian pipeline gas. Consequently, even a temporary interruption to Egypt’s export infrastructure could heighten market concerns over supply security.

The incident also adds to the geopolitical risk premium already factored into insurance costs for vessels operating in the Eastern Mediterranean. Higher perceived risks could translate into increased shipping and insurance costs for LNG carriers throughout the region, even if subsequent investigations conclude that the attack was an isolated event unlikely to be repeated.

What Should Be Done to Prevent Similar Incidents?

First, Egypt should further strengthen its short-range air defense capabilities and counter-drone systems around strategic energy installations along its Mediterranean coastline. This includes deploying advanced early-warning radar networks and cost-effective interception systems capable of neutralizing small unmanned aerial vehicles before they reach critical infrastructure.

Second, broader regional intelligence-sharing mechanisms should be expanded among Egypt and neighboring states—including Cyprus, Greece, and Türkiye—in recognition of the increasingly interconnected nature of Eastern Mediterranean gas infrastructure and the shared strategic importance of safeguarding regional energy corridors.

Third, given that the targeted floating storage unit is owned by a U.S. company, Washington should contribute to financing and modernizing the protection of such critical infrastructure rather than limiting its response to statements indicating that it is merely “monitoring the situation,” as the article characterizes the U.S. reaction.

Finally—and perhaps most importantly—reducing the broader cycle of regional escalation between Washington and Tehran remains the only sustainable guarantee against similar incidents in the future. Any purely technical or localized security measures can mitigate immediate risks but cannot eliminate them so long as the underlying geopolitical drivers of confrontation remain unresolved.

Conclusion

The Damietta incident serves as a stark reminder that geographic neutrality alone is no longer sufficient to shield a country that has become a pivotal node in the global energy network.

References:

1- https://www.bbc.com/news/articles/c39ez3klwmro

2- https://www.reuters.com/world/middle-east/egypt-confirms-drone-caused-fire-two-gas-vessels-damietta-2026-07-30/

3- https://www.reuters.com/world/middle-east/drone-hits-gas-storage-tanker-egypts-mediterranean-port-2026-07-29/

4- https://www.nytimes.com/2026/07/29/world/middleeast/ships-drone-strike-egypt.html

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Rising populist parties in Europe and liberalism

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Leon Trotsky, one of the foremost leaders of the October Revolution, defined fascism as the totalitarian organization of society by monopoly capital. Magnates of large-scale monopoly capital are acutely aware that their profits cannot be safeguarded in the absence of authoritarian political power. Thus, fascism finds its bedrock of support among capitalist forces, the grand bourgeoisie, monopoly capital circles, and major landowners. We are all too familiar with the calamities fascism wrought upon the world in the era preceding the Second World War.

The post–World War II era is often commemorated as the golden age of capitalism—a period characterized by robust growth rates and low unemployment. Real wages climbed, social rights expanded, demands for a welfare state remained vibrant, and the pursuit of a social state yielded tangible results. This era ultimately met its demise in the 1970s, undone by shifts in the regime of accumulation and structural economic crises.

Today, across Europe, political parties that could virtually be characterized as the direct successors to pre-WWII fascist movements are consolidating their electoral gains. Germany, France, and Italy serve as quintessential examples. These parties weaponize poverty, unemployment, and anti-foreigner, anti-immigrant, anti-Muslim, and anti-Middle Eastern sentiments, while capitalizing on the incompetence of traditional center-right and center-left parties and taking a deeply Eurosceptic, critical stance toward the European Union. They employ caustic rhetoric against the political elites who have dominated governance for decades. Receiving endorsement from both US President Trump and Russian leader Putin, they draw substantial support simultaneously from working-class constituencies—traditionally the bedrock of the left—and from grand capital circles. While monopoly capital quietly pats these populist movements on the back, it simultaneously winks at liberal-democratic and increasingly indistinguishable social-democratic parties that champion unbridled capitalism and aggressive liberalism. Beyond France and Germany, examples abound from Italy to the United Kingdom…

The interests of grand capital, which back populist regimes and advocate authoritarian governance, also champion localization. For the erosion of the national, the public, and the collective—alongside the attenuation of the central state and the elevation of the local—works decisively to the advantage of big capital.

Why?

Because of this:

Under liberalism, the state does not regulate the market; rather, the market regulates, directs, and subdues both the state and society. In a liberal order, the state is expected to act on behalf of capital and in favor of the market—intervening in politics, society, and the law, and enacting statutory frameworks strictly to this end. The state is tasked with engineering legal and institutional arrangements for the market’s account and benefit. Society is reduced to a market-society, wherein the citizen is reimagined as a consumer, a client, and an entrepreneur. Since competition is elevated as the supreme imperative, citizens themselves must become entrepreneurial and competitive—a posture the state actively promotes and incentivizes.

According to liberals, the state bears no obligation to shield its citizens from the pitiless mechanics of the market or the ferocity of unchecked capitalism. On the contrary, the state demands and encourages that citizens establish themselves as entrepreneurial actors within the market arena. Consequently, the state aligns itself with capital, operating at its beck and call. Hence, liberalism harbors an innate preference for unorganized, non-unionized, cheap labor. Wages are suppressed; agricultural subsidies are gutted to a minimum; and strikes are banned on the flimsiest of pretexts.

Because liberalism insists that the state be sculpted, organized, and driven according to market demands—allowing the market to command and direct the state—the liberal vision of the nexus between politics and economics, as well as politics and law, is deeply fractured. In their worldview, law must operate exclusively to the advantage of capital, acting as the vigilant sentinel for the inviolability of property rights. It must dismantle every obstacle standing in the way of free trade, unbridled competition, and the free market, while swiftly and severely penalizing any force that dares to impede them. To conform to the expectations and demands of capital: this is the primary imperative required of the law.

In sum, through its championing of identity politics, its reduction of the citizen to a mere client, and its liquidation of the state’s social character in order to place public power at the disposal of capital, liberalism stands fundamentally opposed to the social, the public, and the national. This is a truth that must be firmly impressed upon left-liberals, nationalist-liberals, and conservative-liberals alike.

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