Factoring in the Corn Belt’s operational window likely would have pushed Operation ‘Epic Fury’ past the spring planting season. By triggering a supply shock in the Gulf and a maritime blockade at Hormuz, Washington has blindsided the U.S. agricultural sector at its most sensitive period, seemingly underestimating the domestic trade-offs of the intervention.

While the United States is not systemically dependent on the Middle East for its total fertilizer supply, it remains vulnerable in several critical segments. According to the American Farm Bureau Federation (AFBF), Saudi Arabia alone accounted for 39% of U.S. phosphate imports in 2024, while Qatar and Saudi Arabia combined for 16% of urea imports. The administration is now actively seeking alternative suppliers, as domestic production capacity cannot pivot fast enough to offset this supply shock.

The global fertilizer market is highly integrated and structurally sensitive to supply disruptions. Characterized by limited strategic reserves, the sector operates on a just-in-time basis due to high storage costs, stringent safety regulations, and the hygroscopic nature of the products. “Supply disruptions in one part of the world can ripple across the trade routes and affect availability and price in other regions. While the United States is both a fertilizer producer and importer, those same global supply dynamics play a role in determining input costs for American farmers,” explains the Fertilizer Institute.

The price surge has been as sudden as the supply shock, with increases ranging from 20% to 35% across all major nutrient categories. “Spot urea prices in the US Gulf have risen USD 132.50/short ton since the conflict began, their largest two-week increase since September 2022,” notes Rabobank. This spike comes at a time when input costs were already eroding farm margins.

Nitrogen Volatility Drives Acreage Reallocation

As of March 13, 75% of U.S. farmers had yet to secure their fertilizer needs for the spring season, according to US Secretary of Agriculture Brooke Rollins. To mitigate these costs, farmers are considering a significant acreage shift. Analysts suggest that 1 to 1.5 million acres could swing from corn to soybeans this spring. By pivoting away from corn, farmers hope to slash their nitrogen bills - inflated by natural gas prices and logistical bottlenecks - in favor of a crop with intrinsic nitrogen-fixing capabilities.

The Realpolitik of Phosphate

Securing phosphate supplies has become a top strategic priority. In 2025, many farmers had already deferred purchases due to high costs. “Imports fell by 25% year over year following the imposition of IEEPA tariffs,” says the National Corn Association, warning that further disruptions could “further inflame a tight supply/high price situation in the United States.“

Following the 2021 imposition of countervailing duties (CVD) on Moroccan and Russian phosphate fertilizers, Saudi Arabia emerged as the primary U.S. supplier. With China expected to extend its export freeze beyond August 2026, the Fertilizer Institute identifies Russia and Morocco as the only viable substitutes for Saudi volumes.

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However, their ability to bridge the gap is far from guaranteed. “Russia is contending with domestic export limits and recent Ukrainian attacks on production plants, with industry sources reporting that companies are focused on meeting domestic demand,“ reports the CSIS (Center for Strategic and International Studies).

Morocco, the world’s leading phosphate producer, faces its own operational constraint: a 48% dependency on Gulf sulfur imports. Sulfur is the critical feedstock required for the acidulation of phosphate rock, effectively serving as the structural bottleneck for the entire industry. While Global Sovereign Advisory (GSA) noted on March 15 that “the country is said to have built up sufficient sulphur stocks to avoid being immediately affected by the crisis in the Gulf,” the long-term outlook remains precarious.

Furthermore, a reopening of the Strait of Hormuz appears unlikely in the short term. “The Pentagon confirmed this week that military options for escorting oil tankers through the strait have not been formally tasked, while the specifics of the DFC’s reinsurance mechanism are so far insufficient for shipping companies to offset the risk of traveling through the strait,” the CSIS explains.

Food Security Overrides Diplomacy: The Return of Sanctioned Origins

Food security is forcing Washington to engage with previously shunned suppliers. A coalition of agricultural groups has officially lobbied for the removal of duties on Moroccan and Russian fertilizers and the authorization of Venezuelan imports.

Their pleas have been heard. On March 13, the U.S. Treasury announced a partial easing of sanctions on Venezuelan fertilizers. Argus Media reported in December that the Department of Commerce would conduct a sunset review of Moroccan and Russian counterduties in March, potentially providing a window for administrative relief.

Finally, on March 19, Special Envoy John Coale announced in Minsk the total lifting of sanctions on Belarusian potash exports, which had been in place since the invasion of Ukraine.

The Trump administration understands that fertilizer inflation is a “slow-release poison.” Higher input costs first appear in planting shifts, then in yields and production costs, before eventually translating into grocery store inflation six to twelve months later. Ahead of the midterms, this lagged supply-side shock risks compromising the ‘affordability’ narrative at the core of the Republican agenda, transforming agricultural volatility into a political liability.

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It may appear to be an innocuous technicality at first glance. However, a close study of the Treasury’s quarterly reports on U.S. voting policy within the International Monetary Fund (IMF) is telling: since February 2025 and the inauguration of Donald Trump, the United States has consistently abstained or voted against most programs involving financing eligible for the Resilience and Sustainability Trust (RST) - the instrument designed to extend the IMF’s mandate toward long-term structural risks.

While this strategy has no immediate effect on final approvals - a qualified majority is the required threshold in this context - it serves as a persistent signal to the Board. Vote after vote, it underscores the U.S. determination to pivot the IMF’s strategy back toward what it deems its “original mandate.”

A Consistent Political Line

The tone was set on Inauguration Day. Executive Order 14169, titled “Reevaluating and Realigning United States Foreign Aid,” signed on January 20, 2025, mandated the Treasury Secretary to conduct a comprehensive review of U.S. commitments within International Financial Institutions (IFIs).

While the decree did not explicitly name the IMF or the World Bank, it served as a prelude to the hardline stances that defined 2025. “Now I know “sustainability” is a popular term around here. But I’m not talking about climate change or carbon footprints. I’m talking about economic and financial sustainability—the kind of sustainability that raises standards of living and keeps markets afloat. International financial institutions must be singularly focused on upholding this kind of sustainability if they are to succeed in their missions,” declared Scott Bessent before the Institute of International Finance (IIF) on April 23, 2025. He further argued that the IMF devotes “disproportionate time and resources to work on climate change, gender, and social issues.”

The Treasury Secretary reiterated these grievances the following day at the IMF-World Bank Spring Meetings, accusing the Fund of losing sight of the “core macroeconomic issues it was created to address.”

Washington views the IMF as a key pillar of American influence. Consequently, the current dynamic is one of redefinition rather than retreat. Lacking a broad consensus, the Trump administration is attempting to reshape the Fund’s perimeter through aggressive lobbying and strategic obstruction.

A Broken Pledge

Launched in April 2022, the RST aims to transform the IMF’s role by addressing long-term macroeconomic risks. Its primary function is to provide long-term financing (maturities up to 20 years, compared to the 3 to 5 years for traditional IMF instruments) to help low- and middle-income nations build resilience against climate change and future pandemics.

The RST is funded by the “recycling” of surplus Special Drawing Rights (SDRs) from the $650 billion general allocation of August 2021. The capitalization target, set at SDR 33 billion, has been met. Thanks to contributions from China, the EU, and Japan, the fund held approximately SDR 32 to 35 billion by early 2026.

“We expect the IMF to strengthen its surveillance activities and to do so with objectivity and evenhandedness. This work should be focused on macroeconomic and financial stability, rather than other areas beyond the IMF’s expertise like climate and gender.” Scott Bessent, October 2025.

However, the United States has never fulfilled its commitment to transfer SDR 15 billion, as Congress consistently refused to authorize the operation. In May 2025, the U.S. Treasury officially has removed this chapter from the budget request, finalizing the pivot. Unlike the previous year’s report, the document makes no mention of climate or the RST.

The Republican majority in Congress fully supports this “de-greening” strategy. “Under the Biden Administration, the IMF’s management tried to turn the Fund into a ‘World Bank Lite,’ launching initiatives on climate change and social policy. If the Trump Administration wants to pull back on the IMF’s mission creep, it can start by scrapping the Resilience and Sustainability Facility and focusing on the Poverty Reduction and Growth Trust,” stated House Financial Services Committee Chairman French Hill in his opening remarks during the hearing of Scott Bessent on May 7, 2025.

An Uncertain Future

The Center for Global Development (CGD) has noted a “loss of momentum“ in the RST’s operations. “Despite a few large programs in 2025 that absorbed significant financing, it is unlikely that all remaining RSF resources will be utilized by 2026 without adjustments to the facility’s design features,” concluded a report published in October 2025.

While the very existence of the RST is now publicly challenged by the U.S., its governance is being questioned by others. China and the G24 nations have contested the conditionality attached to these loans. To access the facility, countries must typically have a concurrent IMF-supported program with at least 18 months remaining—a requirement seen by some as overly restrictive.

However, a formal overhaul remains unlikely. Any major structural reform requires an 85% supermajority of the total voting power. With a nearly 16.5% share, the United States holds a de facto veto—a privilege it has no intention of relinquishing.

The debate is set to intensify in 2026. The IMF is scheduled to publish a comprehensive review of the facility, while the Independent Evaluation Office (IEO) will release its own report examining the relevance of integrating climate risks into the Fund’s core mandate.

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In 2025, the Indian economy faced a dual-front squeeze as it grappled with shifting regulatory barriers in the EU and aggressive tariff hikes in the United States..

On the American front, the hike in customs duties - reaching up to 50% in August 2025 - severely hampered key export-oriented segments of the Indian economy. The textile sector, which maintains a 29% revenue exposure to the U.S. and remains the country’s second-largest employer (accounting for 45 million direct and 60 million indirect jobs), saw export volumes plummet by 25%.

Simultaneously, Indian steel exports to the EU dropped from $7.4 billion to $5.5 billion between 2023 and 2025 - a 25% contraction. This downturn is largely attributed to industrial players pre-emptively adjusting to the Carbon Border Adjustment Mechanism (CBAM): a framework projected to erode corporate margins by 15% to 22% upon full implementation.

To secure its market access, New Delhi has finalized two major trade agreements in record time.

Washington: The Diplomacy of Constraint

The deal with the United States came at a high price, requiring significant concessions. The most geopolitically and economically charged of these is the cessation of Russian oil imports. While New Delhi has not officially confirmed this commitment, the pivot is already reflected in the data: imports of U.S. crude surged by over 70% between September and November 2025 (source: BNP Paribas Research).

Prime Minister Narendra Modi aims to absorb the premium—estimated at $10–$12 per barrel at current spot prices—through a rebound in exports facilitated by the trade deal. He argues the agreement provides a critical regional competitive advantage, bringing India’s average effective tariff rate down from 35.1% to 15.6%, compared to 19% for Vietnam and 16.2% for Thailand, while Chinese imports remain disadvantaged by a 34% duty.

However, domestic opposition has labeled the move a “capitulation,” accusing the Prime Minister of sacrificing strategic autonomy under pressure from the White House. The agricultural sector, which contributes over 16% to GDP and employs 45% of the workforce, fears an influx of cheap American agricultural commodities. The Samyukt Kisan Morcha (SKM) union has called for a day of protest on February 12, 2026. ​​As of today, the national strike is causing significant logistical bottlenecks across Northern India, as protesters demand binding guarantees that the U.S. trade pact will not undermine domestic Minimum Support Price (MSP) mechanisms.

Defending the pact, Commerce and Industry Minister Piyush Goyal emphasized that the dairy sector remains 100% excluded, maintaining a “red line“ for New Delhi. He argued this interim pact opens a $30 trillion market to Indian exporters, with strategic sectors like basmati rice, tea, and spices gaining zero or highly preferential access. The final framework of the treaty is expected by mid-March 2026.

The EU-India Pact: A Blueprint for Structural Synergy

In contrast, the relationship with Brussels is framed as a long-term strategic alignment. Following two decades of negotiations and a decisive acceleration in mid-2025, the agreement signed on January 27, 2026, formalizes a structural complementarity.

“India exports labour-intensive, downstream and processing-based goods, while the European Union supplies capital goods, advanced technology and industrial inputs,“ summarizes the Indian think tank Global Trade Research Initiative (GTRI).

This synergy aims to lower production costs without undermining the domestic industrial base. India plans to phase out or reduce tariffs on 96.6% of EU exports, while the EU will do the same for 99.5% of Indian products. The European Commission anticipates annual tariff savings of $4.7 billion, with exports projected to double by 2032. According to Allianz Research, France and Germany stand as the primary beneficiaries.

Furthermore, India’s increased involvement in Horizon Europe, announced February 6, signals that the partnership has evolved beyond mere trade into the co-development of “frontier” technologies like green hydrogen and AI, alongside regulatory convergence with the 22 associated nations (see below).

While the EU agreement has not been immune to opposition criticism, it is built on a logic of complementarity that experts at the GTRI describe as “economically rational.” According to the Kiel Institute, the treaty is set to boost the GDP of both blocs by 0.12% to 0.13% by 2030. Conversely, IRIS (The French Institute for International and Strategic Affairs) takes a more critical stance, highlighting the deal’s numerous “grey areas”.

The Carbon Tax: Transforming a Diplomatic Hurdle into Leverage?

In this ‘next-generation’ agreement, as characterized by a Member of the European Parliament, key red lines remained intact. For the EU, waiving the Carbon Border Adjustment Mechanism (CBAM)—which transitioned to its definitive payment phase on January 1, 2026—was non-negotiable. The levy has been a source of persistent diplomatic strain since 2021, as evidenced by India’s 29 official protests before the WTO (World Trade Organization).

However, the final negotiations established a phased rollout. Nearly half of Indian steel exports will retain customs duty exemptions while beginning their incremental alignment with the CBAM framework. Furthermore, the EU will invest €500 million in 2026–2027 to support the decarbonization of the Indian steel industry, facilitating the transition from coal to low-carbon technologies.

Crucially, New Delhi secured the activation of Article 9 of the EU regulation. By recognizing the equivalence between India’s Carbon Credit Trading Scheme (CCTS) and the EU’s Emissions Trading System (ETS), India will retain carbon tax revenues domestically to finance its energy transition.

US-India: A Regime of Reversible Favors

Economic research institutes broadly agree: the Washington-New Delhi pact follows a logic of short-termism. Designed primarily to reduce the U.S. trade deficit, the deal focuses on immediate market openings and serves largely as “damage control” following the 2025 tariff wars.

India has pledged to double its imports of American goods over five years—from $43 billion to $100 billion—a target many analysts regard as overly ambitious. This outlook is further clouded by a reversibility clause, which maintains a climate of chronic uncertainty for Indian firms.

“The U.S.-India agreement, at least at this point, contains some elastic words that will allow India to do less than Trump says it promised, although that will prompt more threats and bullying,” anticipates the CSIS (Center for Strategic & International Studies).

“The Greenland episode offers a clear lesson to India: trade deals with the U.S. are not a shield against coercion. Tariffs and sanctions can be reimposed regardless of agreements.” GTRI, January 2026.

The vulnerability of this bilateral relationship was highlighted on February 9, when the Indian textile industry discovered a preferential advantage granted to Bangladesh. “Bangladeshi garment exporters using US cotton can ship qualifying products to the US at zero tariff, while the broader tariff on Bangladeshi exports stands at 19 per cent. India has secured no such carve-out,” as highlighted by the Indian daily BusinessLine.

This setback underscores the inherent fragility of a relationship where Washington dispenses favors on an ad hoc basis to serve its own interests, all while strictly enforcing ‘Buy American’ mandates. As of 2026, the liberalization of the Indian market is well underway, but preserving economic sovereignty remains a high-stakes balancing act.

In the United States, the withdrawal from the Paris Agreement—formalized on January 20, 2025, and effective as of January 27, 2026—was merely the opening act of a systematic dismantling of federal and local climate frameworks.

Our previous edition of Transitions explored federal energy policy and its potential failure to keep pace with surging electricity demand. Washington is also targeting local carbon markets.

The tone was set by the Presidential Executive Order of April 8, 2025 (“Protecting American Energy From State Overreach”). The text explicitly denounces California’s “radical requirements” and directs the Attorney General to identify all local policies imposing “carbon penalties or taxes.” Under the leadership of the Department of Justice (DoJ), a “flood the zone” approach is underway to paralyze state-level climate initiatives.

Emission Data: A Strategy of Blindness

A major turning point occurred on September 12, 2025, when the Environmental Protection Agency (EPA) proposed terminating the Greenhouse Gas Reporting Program (GHGRP). This program, which centralizes and standardizes emission data from over 8,000 industrial facilities, serves as the indispensable data backbone for carbon market operations.

Faced with the risk of technical collapse—legal proceedings are currently under review—contingency plans are being deployed. The State of New York responded as early as December 1, 2025, by establishing its own reporting system. Both Washington State and New York are currently developing digital infrastructures to replace the EPA’s tools.

RGGI Buffeted by Local Political Volatility

Carbon markets are increasingly caught in the political crossfire. In Pennsylvania, Democratic Governor Josh Shapiro was forced to resolve his state’s exit from the Regional Greenhouse Gas Initiative (RGGI) in November 2025 to unblock the 2025-2026 budget, following 135 days of Republican obstruction. “It’s time to look forward – and I’m going to be aggressive about pushing for policies that create more jobs in the energy sector, bring more clean energy onto the grid, and reduce the cost of energy for Pennsylvanians,” he stated.

Conversely, in Virginia, newly inaugurated Governor Abigail Spanbergermade rejoining RGGI her first official act upon taking office. “RGGI generated hundreds of millions of dollars for Virginia — dollars that went directly to flood mitigation, energy efficiency programs, and lowering bills for families who need help most. Withdrawing from RGGI did not lower energy costs. In fact, the opposite happened — it just took money out of Virginia’s pocket. It is time to fix that mistake,” she declared on January 19, 2026. The state had previously withdrawn from the market at the end of 2023.

Toward a “Made in GOP” Carbon Tax?

The current administration’s policy is not without its contradictions. On one hand, the Department of the Interior (DoI) is multiplying hurdles for wind projects invoking wildlife conservation concerns to impede progress.

On the other, a faction of Senate Republicans is not ruling out crossing the carbon tax Rubicon—for protectionist reasons. Two bills—the bipartisan Foreign Pollution Fee Act (FPFA) and the Democratic-led Clean Competition Act (CCA), first introduced in 2023—could be placed on the legislative agenda if the Supreme Court limits presidential authority over discretionary tariffs.

“Despite purporting to address this problem, the Trump Administration’s illegal IEEPA tariffs have created economic chaos and worsened many of the underlying dynamics. Congress should set fairer, more predictable trade rules that support a race to the top for global decarbonization,” the CCA’s policy brief states.

Paradoxically, while the Trump administration’s rhetoric dismisses climate change as a “hoax”, it remains a strategic lever. The current dismantling of local carbon markets does not preclude an opportunistic federal pricing scheme, provided it serves to legitimize tariffs and anchor projected budget revenues.

While the slogan ‘Make Coal Great Again‘ defined Donald Trump’s first term, his second administration, though not abandoning coal, is pivoting toward gas and nuclear power at the expense of renewable energy, which it deems inefficient.

From Green to Great: The MAGA Policy Reset

From 2022 onward, the uncapped tax credits of the Inflation Reduction Act (IRA) catalyzed a surge in renewable energy development, sidelining fossil fuels.

The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, has largely dismantled this framework. While geothermal remains comparatively insulated, solar and wind face sharply constrained eligibility windows. Projects that fail to reach a material construction milestone by July 2026, or that are not operational by year-end 2027, are excluded from subsidy support — a material shock to late-stage development pipelines.

Beyond ideology, the Trump administration has justified this reversal on fiscal grounds. Initial CBO estimates put the ten-year cost of the IRA at USD 391 billion; revised projections now range from USD 800 billion (Brookings) to nearly USD 1 trillion by 2032 under the Penn Wharton Budget Model, raising concerns over long-term budgetary sustainability.

Capital markets reacted early. Even prior to the OBBBA’s enactment, wind and solar investment fell 18% year-on-year in the first half of 2025, to roughly USD 35 billion, according to a Deloitte report published in October 2025.

The Land-Use Lever: How Density Rules Block Green Energy

Fiscal tightening has been compounded by land-use constraints. Since August 1, 2025, the Department of the Interior has required renewable projects proposed on federal land or waters to demonstrate capacity density comparable to dispatchable assets such as gas or nuclear. Given their physical footprint, solar and wind are effectively disqualified — introducing a de facto siting barrier rather than an explicit ban.

The administration has also escalated its stance offshore. Five wind projects were cancelled in December 2025 on “national security” grounds, opening a new legal front. While recent court rulings — including January 2026 victories for Ørsted and Equinor — have favoured developers, White House spokeswoman Taylor Rogers affirmed that the administration will “keep fighting offshore wind projects” and looks “forward to ultimate victory on the issue.”

The SPEED Act, passed by the House in late 2025, further entrenches this asymmetry. Framed as a permitting reform — with average approval times exceeding 50 months, according to Lawrence Berkeley National Laboratory — a late amendment explicitly favours pipelines and small modular reactors (SMRs). Jason Grumet, CEO of the American Clean Power Association, has criticised the bill for violating the principle of technology neutrality and withdrawn industry support. Senate consideration is expected in Q1 2026.

Rising demand, constrained supply

This policy direction collides with a structural shift in demand. After nearly two decades of stagnation, U.S. electricity consumption began rising sharply in 2023. The acceleration is being driven by AI and data-intensive infrastructure: datacenters accounted for 4.4% of U.S. electricity demand in 2023 and could reach 12% by 2028, according to Berkeley Lab.

S&P Global estimates a generation capacity shortfall of approximately 15 GW by 2028. Near-term responses remain tactical rather than structural: delayed coal retirements, selective nuclear restarts, and incremental optimisation of existing assets.

Meanwhile, more than 2,600 GW of projects remain stuck in interconnection and permitting queues — 85% of which are solar, wind, and battery storage.

From a system-cost perspective, renewables retain a decisive advantage. Solar and storage can be deployed within 12 to 24 months, compared with 4 to 6 years for gas-fired plants and at least 8 to 12 years for next-generation nuclear, including SMRs.

In its January 13 outlook, the EIA projects that capacity growth through 2027 will be driven overwhelmingly by solar, wind, and batteries. Gas and nuclear capacity remain broadly flat, while coal continues its structural decline (see chart).

The Supply Shock: A Dogma Under Pressure

What is emerging is less a clean-energy retreat than a confrontation between ideology and system physics. As U.S. household electricity bills have risen markedly over the past two years, energy affordability is becoming a political constraint — particularly ahead of the midterms. In several states, voter backlash over energy costs may already be contributing to recent Republican setbacks at the local level.

The White House’s National Energy Dominance Council now seeks to compel PJM Interconnection — the grid operator for thirteen Eastern states — to establish dedicated power auctions, forcing Big Tech firms to contribute to the funding of new generation capacity. This initiative, announced on January 16, underscores the fundamental tension at the heart of U.S. strategy: while renewables are being politically sidelined, the administration implicitly acknowledges that the AI boom is creating a structural imbalance, the cost of which it refuses to pass on to voters.

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Inaction on climate change is a baffling enigma. We have understood the science for fifty years and felt its impact for at least ten. Having created the very problem that now endangers our survival as a species, we are left with a haunting question: why can we not find the will to act?

Yet, this mobilization was possible with the Covid-19 pandemic, or the ozone layer depletion. What makes this challenge different from the others?

The explanations are many, but I contend that we are locked into three societal “bubbles”—intellectual analogues to financial bubbles—where overconfidence in our models blinds us to reality.

To understand this, take the example of a rat in a maze with a piece of cheese. Initially, it wanders, exploring its surroundings. Then, it forges a specific route. Finally, it begins to follow that path mechanically, driven by the absolute confidence that it will find its food at the end. It becomes a prisoner of its own successful pattern.

We have navigated three “cheese moments”: the exploitation of natural resources through modern science; the neoliberal era’s global mobilization of human labor; and, finally, the rise of the modeling bubble. What began as a functional instrument for survival—modeling environments to better exploit them—has been elevated into a finality.

These systemic bubbles now create a profound impasse, stifling the moral urgency required to confront the climate emergency.

But didn’t the “neoliberal bubble” create the conditions for the economic and cultural rise of Europe?

This theme lies at the heart of my argument. In 17th and 18th-century Europe, thinkers—from Machiavelli and Spinoza to Adam Smith—sought new mechanisms to break the cycle of incessant warfare, all waged in the name of religion and morality. They launched a historical experiment unique in the world: the creation of instruments for human coordination that did not rely on moral or religious dictates. This birthed the modern state through the Treaty of Westphalia, alongside capitalism—both rooted in the then-emerging concept of self-interest.

The system has been an overwhelming success: life expectancy has surged, hundreds of millions have been lifted out of poverty, and billions have escaped illiteracy.

How does the same bubble explain today the methodological inability of the financial sector to address climate change, particularly in its investment decisions?

We engineered a system that is, by design, amoral. Yet the climate crisis resides within the domain of ethics and action; it is a matter of safeguarding both the vulnerable and future generations. The economic sphere has expanded so aggressively that it has effectively cannibalized the moral one, leading to a fundamental category error: the attempt to resolve an ethical breakdown through financial mechanisms never intended for such a task. Addressing this reality requires an entirely different set of instruments.

If we follow your reasoning, does modeling lead to a misleading representation of the world?

Modeling was originally conceived as a tool for survival—a practical means to secure the resources fundamental to life. Today, however, the model has become an end in itself. We must restore the tangible priority of resource access to the core of our decision-making.

How can we extract ourselves from this system of bubbles?

It is a daunting task. By definition, every bubble eventually bursts—and for the climate, that rupture translates into human catastrophe.

This is why I propose a “shock of representation” to catalyze a new value system, as human cooperation is fundamentally built upon the values we hold. Consider the perspective of astronauts viewing Earth from space; they all describe a radical shift in consciousness, a phenomenon driven by three key mechanisms.

First, they perceived the fragility of the Earth. When faced with the fragile, our intrinsic nature is to “take care”—a concept Levinas established as the very foundation of ethics. Next, they found the Earth beautiful, activating Kant’s notion of “disinterested beauty,” which detaches us from personal interest and “prepares us for morality.” Finally, this vantage point reminds us of the uniqueness of life within the void, echoing Spinoza’s insight that “we are nature.” Observing the Earth—beautiful, fragile, and alive amidst the frozen immensity of space—puts us back in our place: we are not above nature, but a part of it.

It is not a question of sending eight billion people into orbit, but of re-anchoring ourselves in the natural world. This could begin in schools, by teaching how certain plants emit gases to ward off predators or exploring the complex social and family codes of animals.

What solution do you foresee to create cooperation around the issue of climate?

The imperative now is to reconstruct a framework of common values. In the past, religions enabled large-scale cooperation, yet their competition prevented them from reaching a global consensus. Capitalism succeeded in going global, but it did so through an individualism that erodes our moral compass.

Today, the climate could become that universal value of responsibility. This is perhaps its most vital role: to reinvent our relationship with nature and, consequently, our bonds with each other. In a world drifting toward fragmentation, the climate is not just a colossal threat; it is a profound opportunity.

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Frédéric Samama is a global expert in sustainable finance. Holding a PhD in Economics and a degree in Philosophy, he also teaches at Sciences Po Paris. Co-author of Sovereign Wealth Funds and Long-Term Investing with Patrick Bolton and Nobel laureate Joseph Stiglitz, he recently released The Enigma of Climate Inaction (Routledge), the expanded English edition of Archéologie de l’inaction (Hermann, 2024).

By targeting U.S. soybeans, China initially accelerated a latent agricultural crisis, but the most severe damage has proven to be self-inflicted. Now that American households are feeling the effects of tariffs on their purchasing power and on vital goods like food products, the Trump administration is scrambling to dismantle the tariff arsenal it has built up since April.

While China has lately secured at least 10 additional cargoes in recent weeks, pushing soybeans seasonal purchases above 2 million metric tons, this modest reprieve does not compensate for past damages. Trade frictions and plummeting Chinese demand crippled U.S. farmers’ revenue, leading to a surge in defaults and bankruptcies. Consequently, the Trump administration made sectoral support its top priority.

Post-shutdown, the administration clearly established its fiscal priorities. The USDA (US Department of Agriculture) budget is ring-fenced for the entirety of fiscal year 2026 (through October 2026).

In the short term, farmers face acute liquidity constraints and cash flow risk until the promised federal support is actually disbursed. Secretary of Agriculture Brooke Rollins, speaking to Bloomberg News, confirmed a shift in circumstances since the initial discussions, indicating that the administration is now merely aiming to announce the aid package during the first week of December.

Limiting political damage

In the meantime, the White House is actively pursuing alternative measures to restore agricultural competitiveness in a sustained low-price environment. On November 14, the Administration published a list of over 200 tariff-exempt agricultural inputs, notably including specific categories of fertilizers. This policy reversal addresses a critical constraint: fertilizer costs for 2025 were projected to surge by +21%, according to the World Bank (October 29). By targeting input costs, the administration seeks to mitigate inflationary pressures embedded within the agricultural supply chain.

“Soybean producers are making difficult financial decisions as they plan for next year’s planting, following a challenging harvest season. The action taken today by President Trump will help reduce costs for a key component of soybean production,” stated Caleb Ragland, President of the ASA (American Soybean Association).

In a parallel diplomatic maneuver, the administration issued an Executive Order on November 20, excluding certain Brazilian agricultural imports - such as coffee - from the scope of the 40% ad valorem tariff put into place on July 30. This partial rollback is a diplomatic concession following “initial progress in negotiations” with President Lula da Silva, whose government was initially targeted over broader national security concerns.

Avoiding endogenous inflation

However, the political and fiscal support remains a secondary concern to the looming macro threat: the persistent, structural inflation that Washington’s own trade policies might have injected into the wider U.S. economy, a risk the Federal Reserve is now trying to assess.

The stark divergence within the Federal Reserve System underscores the profound uncertainty facing the U.S. economy. While the San Francisco Fed adopted a notably dovish stance, predicting that inflation—though tariff-linked—would naturally recede toward 2% next year, data from the Atlanta Fed offered a critical reality check. The Atlanta Fed’s surveys revealed that 40% of corporate cost increases are tariff-driven, and critically, that companies expect to raise prices through 2026 due to non-tariff-related internal pressures. This analysis confirms the endogenous inflation threat. Ultimately, the Federal Reserve Board’s final assessment reveals that participants expressed serious concern that the prolonged period of inflation above target risks an anchoring of longer-term expectations. The debate is inflammatory in the national political stage. “So far in 2025, the average family has paid more than $700 in higher costs,” estimates the Democrat minority of the Joint Economic Committee in a note.

The administration is navigating the unintended consequences of its trade policy, which might have triggered significant endogenous inflationary pressures that are currently eroding domestic purchasing power.

An Editorial Policy Reflecting Global Complexity

To be sincere, I have been writing this manifesto for many months, and it took the trial by fire of a first article before I could properly define and structure my thinking.

The consistency of Transitions lies in its unique subject: the study of incoming turmoils and their consequences. Far from offering disjointed content, a multiplicity of themes and disciplines will help to decrypt the world in its complexity, and clarify what it could be, through a prospective vision. The overall logic, which may not be visible in a single article, will be revealed over the course of the publications.

The Transitions editorial policy is based on a dual observation.

Regardless of official stance, nations are already being forced to adapt to environmental shocks. These are driven by the rising frequency of extreme weather events, pollution, and the loss of biodiversity.

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Donald Trump may claim to be a master of the deal, but Xi Jinping has proved just as skilled at getting under his skin. On October 29, just hours before the meeting between the two leaders, Beijing sent a small signal of appeasement, purchasing three cargo ships scheduled for delivery between December and January. This purely symbolic volume ended a six-month halt on American soybean imports.

Confirming Donald Trump’s statements after his meeting with Xi Jinping, Treasury Secretary Scott Bessent specified that China plans to buy 12 million metric tons of soybeans from the United States by January 2026, then 25 million metric tons per year. The final version of the agreement is expected to be signed in the coming days. “Our great soybean farmers, who the Chinese used as political pawns, that’s off the table, and they should prosper in the years to come,” Bessent said in an interview on Fox Business Network.

Chinese authorities have provided no details on the three-year agreement. Crucially, the issue of tariffs on U.S. imports was not addressed. The current tax level—a total of 34%—is critical, as it determines the competitiveness of U.S. soybeans against rivals whose tariffs entering the Chinese market are below 15%. “Before China applied its tariffs, the price difference between U.S. and Brazilian soybeans leaving their respective countries was negligible, with FOB (Free On Board, Ed. Note) prices standing at $407 vs. $405 per ton as of October 20. The loss of competitiveness does not stem from the market, but from the tariff barrier itself,“ stresses Gautier Le Molgat, France Director at Argus Media. This omission is not unprecedented. During the “Phase One” trade deal in 2020, retaliatory tariffs were never fully lifted, which left U.S. soybeans structurally disadvantaged. Without a complete tariff waiver, these new commitments could easily remain mere promises. This experience undoubtly explains the cautious reaction from the American Soybean Association (ASA).

Trade wars leave their mark

The preceding trade episode had lasting consequences. The Cato Institute estimates that U.S. exports were reduced by $27 billion, with soybeans accounting for 71% of that loss. “The combination of abundant production and slower-than-expected demand growth, even at historically low prices, is worrying. The risk of a reduction in planted acreage in 2026-2027, and thus a supply shock, is real because producers are currently disheartened by negative margins across many agricultural products this year,” explains Gautier Le Molgat.

“Soybeans have always held a strategic role. In the 1970s, during the Tokyo Round, the United States imposed an embargo to highlight Europe and Japan’s reliance on this protein source. Intensive livestock farming in Europe had been dependent on soybeans since the 1950s. By tripling its price, the embargo caused a lasting shock throughout the supply chains. It was also during this period that Europe encouraged Brazil to produce soybeans on a large scale.”

Philippe Chalmin, Professor Emeritus of Economic History at Paris-Dauphine University

As early as 2018, China accelerated its diversification strategy. Following Europe’s example in the 1970s, it shifted its focus to Brazil to secure its supply (see insert), while also supporting the development of Brazilian port and rail infrastructure. The U.S. share of Chinese imports has fallen below 25% in 2024, down from 50% in 2017, while Brazil and, to a lesser extent, Argentina, have seen their market share surge.

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Meanwhile, the United States has failed to find new export outlets; China absorbed more than half of U.S. soybean exports in 2024, a reality highlighted by the drop in Chinese imports in 2025.

“The Trump administration’s room for maneuver to find export markets is limited. Moreover, regardless of the outcome of negotiations with the United States, Chinese demand is likely to stagnate,“ confirms Simon Lacoume, Economist at Coface. Indeed, China faces demographic decline, having lost over 4 million inhabitants in the last three years. Furthermore, Beijing is pursuing a policy of optimizing animal feed, seeking to limit the protein content in soy meal. These two trends—one structural and the other strategic—place a durable ceiling on future demand.

The Crisis is Also Domestic

The prospects for the domestic market are no more promising. The agricultural sector is penalized on two fronts: while farmers await emergency bailouts in 2025-2026, similar to those of 2019-2020, they are suffering the consequences of the government shutdown, which freezes the potential disbursement of funds announced at the beginning of October. Concurrently, the design of aid mechanisms, though made more favorable by the One Big Beautiful Bill Act (OBBB), renders federal support for the soybean sector largely ineffective.

“Crush, Baby, Crush”

Faced with export market turbulence, the domestic biofuel sector could provide a sustainable alternative. The EPA (Environmental Protection Agency) published new proposals for the 2026-2027 Renewable Fuel Standard (RFS) program in June. The increase in mandatory targets is set to boost total biofuel demand by about 5 to 6%, meaning an additional 9 to 10 million tons of soybeans could be crushed by 2027.

Caught between high production costs, estimated at $12 to $13 per bushel, and market prices that struggle to exceed $10 per bushel, farmers have so far favored storage, betting on a future price rise or the arrival of a federal subsidy. “During the previous trade war with China, American farmers did not hesitate to aggressively stockpile their soybeans due to a lack of buyers. Stocks surged from 12 to over 25 million tons between 2018 and 2020 before falling back to around 15 million. As of September 30, 2025, they do not exceed 9 million, leaving some margin for holding onto the harvest today,” notes Gautier Le Molgat.

Default Filings on the Rise

Farm bankruptcies filed under Chapter 12 (Chapter 12 Bankruptcy), a procedure reserved for family farmers, are accelerating, increasing by nearly 96% nationally in the first quarter of 2025 (88 filings), compared to the same period in 2024 (45 filings).

This pressure is concentrated in the most fragile regions: Arkansas is one of the hardest-hit states, recording 15 filings in Q1 2025 alone, a number close to the state’s total for all of 2024.

This issue is highly sensitive on the national political stage ahead of the midterm elections. The political impact is exacerbated by a structural factor in Congress: the overrepresentation of rural America. As Philippe Chalmin highlights, the fact that every state has two senators, regardless of its population, grants agricultural states significant political leverage in budgetary and commercial negotiations. This institutional reality makes the Senate particularly sensitive to farm defaults, intensifying pressure on the White House to quickly release the promised aid and find new markets. While the unblocking of Chinese imports offers a breather to the Trump administration, it fails to solve the structural problems of an agricultural sector facing increasing competition in its export markets.

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