Israeli political analyst: 2025 was the year global balances shifted

The year 2025 was marked by major geopolitical and economic shocks worldwide, Israeli political analyst and Doctor of Political Science Yuri Bocharov told The Daily Baku.

According to him, 2025 will go down in history as a stage in which the global economy adapted to new realities.

Trade wars, sanctions, competition for markets, and changes in currency spheres of influence moved the world into a new phase. Some countries strengthened their positions thanks to raw materials and resources, while others suffered losses due to conflicts, inflation, and transportation crises. As a result, the world became a fragmented system, developing at uneven speeds.

According to 2024 data, the U.S. trade deficit with the European Union amounted to about 235 billion dollars, and its deficit in trade with China reached roughly 295 billion dollars. The European Union itself recorded a trade deficit with China of approximately 250 billion dollars.

Based on the results of the first 10 months of 2025, the U.S. trade deficit with China decreased to 268 billion dollars. However, the European Union, by ‘taking on’ part of Chinese imports, filled this gap, and as a result, the EU’s trade deficit with China rose to 210 billion dollars. Thus, although the tariffs introduced by the Trump administration had some localized effects, on a global scale they merely redirected trade flows. It is like rearranging the furniture in a room and calling it a renovation.

In other words, financial outflows from the U.S. first went to Europe and then to China. Against this background, the U.S. administration effectively declared a ‘war against everyone.’”

The Israeli analyst noted that since April 2025 the U.S. administration has introduced dozens of new import tariffs: 10 percent on most goods and 25–50 percent on specific categories. In May a 50-percent tariff on imports from the European Union was proposed. These steps further deepened the global trade war.

“As a result, inflation in the United States rose to 5.3 percent, and the prices of European-made cars increased by 18–22 percent. European wine and cheese producers lost 40 percent of the U.S. market, which was taken over by Argentinian and Australian products. Tesla, which depends on German components, was forced to cut production in Texas by 15 percent.

Counter-tariffs in the EU increased the price of the iPhone by 200 euros, while fuel rose by 0.15 euros per liter. Germany’s automotive industry lost orders worth 7 billion dollars, and the pharmaceutical sector faced a 12-percent increase in costs,” the analyst emphasized.

Bocharov added that Chinese manufacturers began relocating their factories to Mexico and Vietnam to circumvent tariffs. Japanese companies also shifted activity from the U.S. to Mexico. “Logistics costs increased by 30 percent, and shipments from Asia to Europe were delayed by 15–20 days. The main beneficiary of this process was Mexico: its exports to the U.S. grew by 35 percent.

At the same time, BRICS countries accelerated the development of their own financial mechanisms, while China doubled its share in the European market. As a result, the world effectively split into three major economic blocs.”

Addressing energy and commodity markets, the analyst said that OPEC+ raised oil prices above 80 dollars in the autumn of 2025 by reducing production: “This hit Asian and African countries particularly hard. Although tensions in the Middle East shook the oil market, some stability was restored by the end of the year. Inflation in developing countries remained in double digits, while Russia reduced inflation to single-digit levels through tight monetary policy. The U.S. and EU tightened sanctions against Russia, seriously affecting energy and technology supplies. China strengthened control over the export of high technologies and expanded the geography of its investments. The world gradually entered a phase of trade wars and economic bloc confrontation.”

He noted that conflicts in the Middle East triggered a logistics crisis, and security risks in the Red Sea increased transportation costs: “The Gulf states strengthened their economic positions thanks to high energy prices. Israel, despite military tensions, increased its exports in the fields of defense industry and technology. In Africa and Latin America, political instability affected commodity markets, creating additional risks in global supply chains. The year 2025 was also marked by the full integration of artificial intelligence into the economy. The technological race between the U.S. and China deepened, and in many sectors human labor began to be replaced by algorithms. Digital currencies became more widespread, and the global financial system fragmented into regional blocs.”

In Bocharov’s view, although global economic growth in 2025 amounted to about 3.1–3.2 percent, this figure does not fully reflect reality. For some countries the year was a period of recovery; for others it was a year of deep crisis. The global economy is no longer a single system but has become a multipolar structure where competing interests collide.

“Today the global economy is not just about numbers – it is the sum of political decisions, security strategies and people’s daily struggle for their livelihoods. The year 2025 clearly demonstrated this,” Israeli political analyst Yuri Bocharov stressed.