WORLD AND REGIONAL SITUATION IN THE FIRST 4 MONTHS OF 2025

1. World economy
          In the first 4 months of 2025, the world economy continued to recover slowly and unevenly. The Organization for Economic Cooperation and Development (OECD) forecasts global GDP growth in 2025 at 3.3%. The International Monetary Fund (IMF) forecasts 3.2%. The [1]United Nations forecasts growth at 2.8%, but believes that the world economy continues to face risks from trade tensions, geopolitical conflicts, rising public debt and demographic pressures. Inflation in many developed countries has cooled but remains high, forcing central banks to maintain cautious monetary policies; high interest rates and public debt risks put great pressure on emerging economies. Notably, since the end of January 2025, the United States has continuously announced measures to increase tariffs on a wide range of imports from many major partners (Canada, Mexico, China, etc.) [2], pushing the average effective tariff rate of the US to its highest level since the Great Depression; other major countries have also responded with corresponding tariff barriers. The escalating competition, trade protectionism and economic sanctions after the US election have caused global trade to decline. In addition, geopolitical conflicts (typically the Russia-Ukraine war and the Middle East crisis) continue to negatively impact energy prices, food and global supply chains. In this context, many countries have had to adjust their economic and financial policies, balancing between controlling inflation and supporting growth, while strengthening international cooperation to respond to common risks.
          2. Situation of major countries and relations between major countries
          In the United States , on January 20, 2025, Donald Trump was officially sworn in as the 47th President of the United States. In his inaugural speech, he declared the opening of a "golden era" for America and pledged to make the country "greater, stronger and more extraordinary than ever before". Immediately after taking office, the Trump administration carried out a sweeping reform of the administrative apparatus, notably appointing billionaire Elon Musk as head of the newly established Department of Government Efficiency. The US government also sharply cut federal spending, froze the budget of the United States Agency for International Development USAID and foreign aid programs, canceled many policies on climate change and electric vehicle subsidies, and removed barriers to the fossil fuel industry.
          Economically, on April 2, 2025, President Trump announced the “Liberation Day” tariff package, imposing 10% on all imports, with additional rates (10–50%) for many countries such as China, the EU, Canada, Mexico and Southeast Asian countries. On April 9, 2025, the US suspended tariffs for 90 days except for China (keeping them at 125%), returning to the basic rate of 10% for the remaining countries. This has created the strongest wave of trade protectionism in the US in a century. The chaos is not only about tariffs but also about legal instability, unpredictability and the erosion of trust in the US.
          In foreign affairs, the Trump administration has pursued a unilateral, hard-line, and anti-globalization policy. The US announced its withdrawal from a series of international organizations and agreements such as the Paris Agreement on climate change, the World Health Organization (WHO), the United Nations Human Rights Council, and especially imposed sanctions on the International Criminal Court (ICC) for “abuse of power” and “anti-Americanism”. According to the decree dated February 6, 2025, ICC officials and their families are banned from entering the country and their assets in the US are frozen [3]. On the bilateral front, President Trump announced the suspension of most foreign aid, put Cuba back on the list of state sponsors of terrorism, and used the “International Emergency Economic Powers Act” to impose heavy tariffs: 25% on goods from Mexico and Canada (of which energy from Canada is only subject to 10%), and 10% on Chinese goods, to deal with immigration issues and the fentanyl crisis. The move escalated trade tensions between the US and its neighbors, with Mexico quickly deploying a “Plan B” of tariffs and non-tariff measures, while Canadian Prime Minister Justin Trudeau announced retaliatory tariffs of 25% on US goods starting February 1, 2025.
          However, after reaching an initial agreement on border control and transnational crime, President Trump decided to postpone the imposition of 25% tariffs on Mexico and Canada for 30 days. On March 11, 2025, Mr. Trump also said that he was reconsidering the possibility of doubling Canadian steel and aluminum tariffs to 50%, but temporarily postponed the implementation after the province of Ontario suspended its 25% electricity surcharge with the US. These tense moves caused US financial markets to fluctuate: the S&P 500 index fell 0.45% and the Dow Jones fell 0.4% on the afternoon of March 11, 2025 in New York, reflecting investors' concerns about a new full-blown trade war [4].
          China continues to maintain political and social stability and promote institutional reform. On February 19, 2025, Beijing announced an action plan to promote foreign investment with 20 specific measures [5], aiming to encourage high-quality capital flows and facilitate mergers and acquisitions [6]. Foreign investment in China has shown signs of improvement. According to MOFCOM data, in January, China's actual utilization of foreign direct investment (FDI) reached 97.59 billion yuan (US$13.4 billion), down 13.4% year-on-year but up 27.5% from December 2024 [7]. In terms of artificial intelligence technology competition, China initiated a wave of AI model launches in 2025 with the emergence and outstanding success of DeepSeek - an AI model with performance on par with the world's leading Chatbots, but with much lower development costs. This has raised the issue of changing tactics in technology competition. On the trade front, China responded to the US and Canada's tax policies by imposing new tariffs on agricultural products imported from these two countries [8]. In terms of foreign affairs, the relationship between the US and China continues to maintain the trend of strategic competition and maintain high-level contacts and cooperation in a number of areas where both sides have common interests. In addition, China promotes relations with African countries when Foreign Minister Wang Yi visited a number of countries in this region; launched the Research Center for the Community of Common Destiny in Beijing (China) [9].
          Russia's domestic politics are stable with the approval rating for President Vladimir Putin and the government remaining high. Economically, in response to sanctions from the US and the West, Russian President Vladimir Putin has directed the adjustment of the economic growth structure, emphasizing the development of a supply-side economy to promote domestic production, expand employment opportunities and improve industrial capacity [10]. In foreign affairs, relations between Russia and the US and the West have not shown signs of easing. The US and the EU continue to impose additional sanctions on Russia. Meanwhile, Russia continues to maintain a tough stance on the Ukraine issue. Notably, Russia and Iran have signed a $4 billion agreement to develop seven major oil fields in Iran and discussed the construction of a regional gas distribution center [11]. These moves show that Russia is proactively expanding strategic relations to counter sanctions and siege from the West.
          EU countries continue to face many internal difficulties. Leading countries such as Germany and France have not found new growth drivers as industrial production declines and the risk of local recession increases. The EU is also trying to perfect its leadership apparatus for the new term (2024-2029) in the context of many disagreements between party groups on policy orientation within the European Parliament. The US government's re-application of protectionist measures and increased tariffs is causing concerns that it will negatively affect the EU's economic and trade prospects. In addition, Europe must address other challenges such as the migrant crisis, energy crisis and the prolonged war in Ukraine. Economically, the EU has built a "6-pillar" strategy to support the domestic manufacturing sector, including: Reducing energy prices, creating demand, promoting investment, ensuring access to important raw materials, developing global partnerships and retraining human resources. The aim of the plan is to “create stronger business incentives for European industry to invest in carbon neutral projects in heavy industry and clean technology”. It emphasises stimulus measures for environmentally friendly goods with “Made in Europe” origin, while reaffirming the target of producing 40% of important clean technology equipment in the region [12].
          In Asia , the political situation in South Korea continues to experience major fluctuations as President Yoon Suk Yeol was arrested by the Anti-Corruption Investigation Agency for High-Level Officials. Many high-level officials of this country also submitted their resignations [13]. In terms of the economy, President Donal Trump warned that he would impose higher tariffs on South Korea and may ask South Korea to pay more for US forces stationed in the country. During his first term, Mr. Trump asked South Korea to pay $5 billion for defense cost sharing, threatening to withdraw troops if this agreement was not reached. South Korea initially opposed this increase, but eventually agreed to pay $1 billion under the new agreement that will take effect from 2026. If this continues in President Donal Trump's second term, in the context of the current political crisis, South Korea will face more difficulties in the coming time [14].
3. Situation in Southeast Asia
          In 2025, the world economy in general and the Southeast Asian region in particular will continue its recovery cycle, but the progress is still slow. Many major economies such as the US, China, Germany and Japan are facing rising production costs and declining domestic demand, making growth prospects less optimistic. The Asian Development Bank (ADB) has lowered its growth forecast for developing economies in the Asia-Pacific region to 4.8% in 2025. In particular, the Southeast Asian region is forecast to grow at 4.5% [15]. The main reasons are weak consumer demand, stagnant investment and disruptions in the global supply chain.
          Politically, the region continues to see some instability in several countries, such as Myanmar and the Philippines , where internal problems and political conflicts continue to weigh on social stability and the investment climate. The political situation in Laos is largely stable, but the economy still faces many challenges. Inflation has declined year-on-year, thanks to stable agricultural supplies and an improved exchange rate. In Cambodia , the government of Prime Minister Hun Manet continues to maintain political stability, but has been criticized for its crackdown on dissent and restrictions on political freedoms.
          4. Conflicts and instability in some regions continue to develop in a complex manner, with deadlocks in negotiations and the risk of spreading, but there are also signs of detente.
          The military conflict between Israel and Hamas, Hezbollah and Houthi took a turning point when Israel and Hamas forces reached a ceasefire agreement on January 15, 2025. On February 9, 2025, the Israeli army completed its withdrawal from the Netzarim corridor. Under the initial 6-week ceasefire agreement, the two sides conducted several rounds of hostage exchanges, resumed humanitarian aid activities in Gaza and allowed evacuees to return to their homes in the North [16]. However, on March 18, 2025, Israel announced the resumption of the military campaign in Gaza, accusing Hamas of violating the agreement. The fighting then spread, making the situation in the area very complicated and potentially dangerous. On May 4, the Houthi group launched a ballistic missile at Israel's Ben Gurion airport, causing casualties and disrupting air traffic. Israel responded with a series of airstrikes on Houthi targets in Yemen, including Sanaa International Airport, completely destroying the facility. Meanwhile, Hezbollah has declared its support for Iran in the context of the conflict with Israel, although it has not taken direct military action. Iran, which backs these groups, has faced Israeli airstrikes on military facilities in Syria and Lebanon. The regional situation is further complicated by the fact that these armed groups, although declaring their support for Palestine, are cautious about directly participating in the conflict due to heavy losses and internal weakness. International diplomatic efforts are being deployed to reduce tensions and prevent the risk of war spreading in the region.
          About Russia-Ukraine conflict, the peace negotiations process still faces many difficulties due to differences in conditions between the two sides: Ukraine demands Russia to completely withdraw its troops, while Russia demands recognition of the sovereignty of the annexed regions and a commitment to neutrality. The US and its allies continue to support Ukraine and impose sanctions on Russia. President Trump actively promotes dialogue, notably the phone call with President Putin on February 12, 2025 and the Ukraine-US talks in Jeddah on March 11, 2025, where the two sides agreed to a 30-day ceasefire and start peace negotiations. The US pledged economic and military support for Ukraine. However, after the talks, Russia launched airstrikes in response to Ukraine's UAV attack, increasing tensions. Ukraine's use of ATACMS missiles to attack Russian territory and Russia's adjustment of its nuclear doctrine continue to push the risk of war escalation, making the prospect of peace negotiations even more deadlocked [17].
          Russia-Iran relations have been upgraded to a comprehensive strategic partnership, marking a new step forward in bilateral cooperation. The two countries agreed to strengthen comprehensive coordination in the fields of politics, economics, defense and security; pledged not to comply with third-party sanctions and resolve conflicts through diplomatic means. In recent years, Russia has supported Iran's entry into BRICS and the SCO, and cooperated in major projects such as the North-South international transport corridor, energy development, and defense. President Putin and Iranian President Pezeshkian both affirmed their determination to open a chapter of deep and sustainable cooperation. Experts say that this agreement could contribute to the formation of a close-knit Russia-Iran-China axis, with the possibility of expanding to North Korea in the future [18].
The Korean Peninsula is fraught with potential danger over North Korea’s missile tests. Meanwhile, South Korea and the United States continue large-scale joint military exercises to strengthen their defense capabilities and increase diplomatic pressure on Pyongyang. In addition, denuclearization negotiations have almost stalled due to deep differences between the parties. The domestic political situation in South Korea is also affected by disputes over foreign policy and national security amid rising tensions. Diplomatic efforts from major countries and international organizations continue to ease tensions and promote dialogue on the Korean Peninsula.