Recommended Weekend Reads
Latin America Can De-Risk Semiconductor Supply Chains, Why Russian-Indian Relations Have Remained Steady, and Why Tariffs Led to More Demand for Stablecoins Went Up and Less for the Dollar
August 29 - 31, 2025
Here are our recommended reads from reports and articles we read in the last week. We hope you find these useful and that you have a relaxing weekend. And let us know if you or someone you know wants to be added to our distribution list.
Americas
Latin America’s Role in De-Risking Semiconductor Supply Chains Center for Strategic & International Studies
While the semiconductor supply chain currently spans several continents, China has made efforts to develop a self-sufficient semiconductor manufacturing ecosystem through industrial policies such as “Made in China 2025,” which presents a direct strategic and economic challenge to the United States. De-risking the semiconductor supply chain, particularly that of “legacy chips,” is of paramount importance, particularly at a time in which the Trump administration considers imposing additional sectoral tariffs on semiconductors. Latin America sits at the juncture of possibility and opportunity at a critical time for the expansion of semiconductor manufacturing, providing some of the key elements and capabilities that allow for semiconductor assembly, testing, and packaging as well as final integration into electronics. For companies relying on semiconductor manufacturing, diversifying production sources is key to reducing the risks associated with supply chain disruptions and great power competition.
Latin America’s Opportunity in the AI Race Americas Quarterly
In recent weeks, two starkly different visions of the future of the digital world emerged from the globe’s AI superpowers. These competing philosophies have put Latin America in an uncomfortable position between them. The region now faces a digital dependency trap that could determine its technological fate for decades. Last month, the Trump administration released “Winning the Race: America’s AI Action Plan,” a comprehensive national AI strategy that frames artificial intelligence as a zero-sum competition where the U.S. must achieve “unquestioned and unchallenged global technological dominance. China then unveiled its “Action Plan on Global Governance of Artificial Intelligence.” For Latin American policymakers, these manifestos present what appears to be a binary choice. Choosing wrong could mean decades of technological dependency, limited sovereignty, and diminished prospects for indigenous innovation. The tension between the two paths, however, could offer the region an opportunity for growth.
On the Ground With a Top Mexican Cartel New York Times
For the last year, Paulina Villegas, an investigative journalist for The New York Times, had the daunting task of meeting repeatedly with members of the Sinaloa Cartel. The assignment had obvious risks: The Sinaloa Cartel is a U.S.-designated terrorist group. But the meetings, Ms. Villegas said, were vital to her quest to provide readers a clearer understanding of how powerful criminal groups operate, documenting the practices and root causes that both the Mexican and American governments are trying to address.
The Indo-Pacific
Why Russian-India Relations Have Been Steady in the Storm War on the Rocks
Russia has more friends than Western analysts like to admit, even three years into the Russo-Ukrainian War. While many have paid close attention to Russia’s beneficial partnership with Iran, the introduction of North Korea’s legions into the Ukrainian battlespace, or persistent materiel support from China, Russia’s other rising-power relationship is often underdiscussed — that of India. The Russian-Indian relationship is both of longer duration and deeper history than those Russia has with its other key partners. It is also sometimes ignored as it does not extend to shared adversarial relations with the greater West. This is a mistake, as India is one of Russia’s self-identified civilizational friends. Furthermore, despite various ups and downs, the partnership has proven quite resistant to third-party pressures, including recently from the anti-Russian Western coalition.
What’s New About Involution? Carnegie China
In recent months “neijuan” (内卷), or “involution,” has become one of the most important buzzwords in Chinese policymaking circles. It has come to describe a disruptive process of relentless competition and price cutting among Chinese businesses, and has been increasingly criticized by policymakers, from President Xi Jinping down, for leading to a zero-sum race to the bottom, marked by vicious price wars, large-scale losses, homogenous products, and improper business practices. An August 2 article in Caixin explains: China’s top economic planner vowed on Friday to intensify its crackdown on “involution,” pledging to curb disorderly corporate competition, rein in wasteful investment and standardize local governments’ business attraction practices to protect fair market order. The article is referring to the July 30 Politburo meeting that set out Beijing’s priorities for the second half of 2025. Of the three main priorities, two—the need to boost domestic consumption and the promise to support the real estate market—have been proposed regularly in the past three to four years. Much of the focus, however, was on the newest priority, which is to battle deflationary pressures by reducing “disorderly” price competition and overcapacity in manufacturing—measures, in other words, aimed at reining in involution.
Xi Unleashes China’s Biggest Purge of Military Leaders Since Mao Bloomberg
China’s leader has ousted almost a fifth of the generals whom he personally appointed while running the country, something his predecessors never did, according to a Bloomberg News analysis of TV footage, parliamentary gazettes, and other public records. Moreover, Xi’s purge has left the CMC with only four total members, down from seven when his third term started. That’s the fewest in the post-Mao era, the Bloomberg analysis shows. As more and more of China’s top military leaders fall, it leaves those trying to understand the nation grappling with a near-impossible question, given the opaque nature of the Communist Party: Is this all a sign of Xi’s political strength, or of his weakness? The implications reach around the world and across the global economy.
Geoeconomics
Tariffs, Stablecoins, and the Demand for Dollars Federal Reserve Bank of Cleveland
Several studies have shown that aggregate demand for US dollars fell following the announcement of tariffs by the US government on April 2, 2025. Using data on stablecoins as a proxy for dollar trading, we find that the decline in dollar demand is smaller for investors in countries that saw larger increases in tariffs. Our interpretation is that, as foreign investors anticipate that tariffs will make it more expensive to acquire US dollars in the future, they buy dollars today. This channel is stronger for more liquid stablecoins and for countries with tighter capital controls, consistent with the idea that, when actual dollars are hard to acquire, stablecoins may be regarded as a substitute. Our findings cast light on the effects of the tariffs on global foreign exchange markets, as well as on the degree to which stablecoins are considered a close substitute for dollars.
America’s Coming Crash: Will Washington’s Debt Addiction Spark the Next Global Crisis? Kenneth Rogoff/Foreign Affairs
For much of the past quarter-century, the rest of the world has looked in wonder at the United States’ ability to borrow its way out of trouble. Again and again, under both Democratic and Republican administrations, the government has used debt more vigorously than almost any other country to fight wars, global recessions, pandemics, and financial crises. Even as U.S. public debt rapidly climbed from one plateau to the next—net debt is now nearing 100 percent of national income—creditors at home and abroad showed no signs of debt fatigue. For years after the 2008–9 global financial crisis, interest rates on Treasury debt were ultralow, and a great many economists came to believe that they would remain so into the distant future. Thus, running government deficits—fresh borrowing—seemed a veritable free lunch. Given the dollar’s reputation as the world’s premier safe and liquid asset, global bond market investors would always be happy to digest another huge pile of dollar debt, especially in a crisis situation in which uncertainty was high and safe assets were in short supply. The past few years have cast serious doubt on those assumptions.
How Chips Factor Into a De Facto US Sovereign Wealth Fund OMFIF
In July 2025, former Intel Chief Executive Officer Pat Gelsinger called for a US sovereign wealth fund to ‘keep America’s technological edge’. Just a month in, a US SWF has materialized under Donald Trump’s administration – owning 10% of Intel Corporation, the only American company manufacturing advanced chips on US soil. Traditionally, sovereign wealth funds are state-owned investment funds that manage national surpluses. Norges Bank Investment Management, for example, manages Norway’s export surplus derived from its natural resources. However, the US SWF is from a trade deficit country. It is not one single fund authorised by the legislature. Instead, it’s a strategy driven by executive power. Unlike a conventional SWF, the US SWF has no formal, top-down asset allocation plan. That’s why in the months following Trump’s executive order for establishing the fund, the US SWF appeared first as an ad hoc collection of US stakes in business sectors, ranging from attempted control over TikTok to a golden share in the proposed Nippon Steel-US Steel merger, to equities in bitcoins formerly collected from various criminal and civil actions of the US government.