Recap | 18 August 2025
- Edward von der Schmidt
- 2 days ago
- 4 min read
Trump-Zelenskyy White House summit with European leaders exceeds expectations notwithstanding lack of details as officials eye land swaps and security guarantees with future talks proposed.
S&P upholds US long-term debt ratings on account of tariff revenues.
Markets calm prevails ahead of Fed communications with equity indices near records.
UK drops demand for Apple backdoor.
Facts in print. Thoughts in italics.
EDWARD VON DER SCHMIDT
Headlines
Trump, Zelenskyy & Co.:
An assembly of Western leaders at the White House struck a remarkably distinct chord from a contentious February meeting between President Trump and Ukrainian President Zelenskyy. Rancor gave way to Monday's flattery as both men were joined by the leaders of the EU, NATO, Germany, France, UK, Italy, and Finland. Although few concrete details were offered, the US voiced support for future security cooperation as well as Ukraine's prerogative to negotiate territorial concessions directly with Russia.
The US appeared to back off of Article 5-like security guarantees in favor of "coordination" with Europe. Earlier, Russia's Foreign Ministry had rebuffed the notion of stationing troops from NATO member countries in Ukraine - the idea behind the UK's proposed post-war "reassurance force". Trump also pushed back on France and Germany's calls to renew pressure for a near-term ceasefire in order to negotiate in earnest, which Russia has rejected.
Nevertheless, signs of diplomatic stirring were evident. The gathering brought a Ukrainian proposal for US arms purchases and shared drone production. President Zelenskyy suggested a 7-10 day window to finalize security guarantees, which President Trump said would be determined by a task force helmed by Secretary of State Rubio. German Chancellor Merz flagged a potential a Putin-Zelenskyy meeting in the next two weeks as leaders discussed a trilateral or even quadrilateral meeting to follow.
Separately, Russia agreed to send higher-level delegations for direct talks. Zelenskyy also floated the possibility of "proportional swaps" of territory, which he qualified by the constitutional hurdles to effecting them. When pressed, Trump would not rule out the involvement of US troops, but he stated that Europe would be the "first line of defense". (AP, Reuters, Bloomberg, WSJ, FT)
Absent controversy, the discussions amounted to a diplomatic coup for Ukraine and its European allies, who redirected the war's narrative even as the US downplayed expectations for a near-term ceasefire and NATO-like security guarantees. Regardless of his motivations and as unconventional as his approach may be, President Trump has prompted discussions that were nonexistent only months ago and without completely kowtowing to Russia or undermining Ukraine and European allies. Of course, the devil will be in the details.
Around the World
Gaza:
Hamas agreed to a 60-day ceasefire proposal moderated by Egypt and Qatar that resembles a US proposal from May. Israel has received the proposal but has not yet responded as the IDF directs its attention toward Gaza City. (Reuters)
India-China:
Indian Prime Minister Narendra Modi will meet with Chinese Foreign Minister Wang Yi on Tuesday after the latter met with his Indian counterpart on Monday. Discussions have concerned their disputed border, trade, and other bilateral issues. India's National Security Adviser referenced an "upward trend" in ties with China. Modi will attend the Shanghai Cooperation Organisation (SCO) summit in Tianjin on August 31 where he will meet with Chinese President Xi as the countries' diplomatic relations slowly normalize. (AP, Reuters)
Tariff policies and overtures to Pakistan have strained the relationship with a key US security ally in the Indo-Pacific and pushed them toward a strategic competitor.
Brazil-US:
Brazil formally responded to a US trade investigation under Section 301 of the Trade Act of 1974, which provides the basis for tariffs and other penalties to address "unreasonable or discriminatory" measures that "burden or restrict" US trade, allegations that Brazil denies. (Reuters)
US-South Korea:
The US and South Korea began their annual joint military exercises. The 11-day Ulchi Freedom Shield drills drew a rebuke from North Korean leader Kim Jong Un, who characterized the operation as a provocation. (Reuters)
Bolivia:
Over the weekend, a centrist candidate pulled off a surprising upset to lead the first round of presidential voting that triggered a run-off in Bolivia, a serious setback for the leftist ruling party (Movement for Socialism); right wing candidates underperformed. (AP, Reuters)
In an increasingly polarized world, the public's embrace of the center is a rarity. Time will tell whether Bolivia is a bellwether.
Macro
US Debt Ratings:
S&P Global maintained its AA+ long-term rating on US debt, citing "meaningful tariff revenue" and its potential to offset the deficit impact of recently passed fiscal legislation. (Reuters, Bloomberg)
Cyber
No Apple UK Backdoor:
US Director of National Intelligence Gabbard disclosed that the UK's Investigatory Powers Tribunal (IPT) dropped its order from January that Apple provide a backdoor to bypass its Advanced Data Protection service. (Reuters, Bloomberg)
Encryption (think scrambling) is designed to be computationally demanding and therefore time-intensive to crack, which is why state and private actors would prefer to quickly bypass it instead. Unfortunately, technical "backdoors" that allow law enforcement entities to bypass security mitigations are also available to those without authorization to use them. Capabilities do not discriminate.
It's important to note that data may be encrypted in transit, but when it is decrypted with an on-device key, anyone with sufficient operating system access can view the data - just like you do when you read your own messages.
Headlines like these distract from just how easy it is for professionals and amateurs alike to take over your phone, computer, or network without involving you in any way and gain access to your private information.