Interview with Thomas Goldstein, Analyst

Risk Outlook: July 31, 2026

Jul 31, 2026

Welcome to the Stepwise Risk Outlook, which highlights and contextualizes over-the-horizon developments in key regions of the world and industries of the global market. Today’s featured interview is with Thomas Goldstein, Analyst.

Interview with Thomas Goldstein, Analyst

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Thomas Goldstein is an analyst with Steptoe’s Global Strategic Engagement Team with a focus on US foreign policy, European geopolitics, and the Western Balkans. Thomas provides forward-looking analysis on domestic and geopolitical developments for international clients, providing assessments and key takeaways to guide strategic decisions and stakeholder engagement plans. Thomas speaks and researches in German.

Thomas sat down with Ian Cameron, the team’s other lead Europe analyst, to discuss current developments in transatlantic relations.

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Global

The US releases $600 million in funding to the Vaccine Alliance (Gavi), restoring significant funding to the global public health organization. The US reached an agreement with Gavi leaders to transition away from mercury-containing vaccines (thimerosal preservatives) to safer vaccine formulations, end COVID-19 vaccines in routine immunization programs and adopt “cost-cutting” measures, including prohibiting US funding from being used in partner programs with the World Health Organization (WHO). The funding agreement releases Congressionally appropriated funds to Gavi for both FY25 and FY26. A key disagreement that blocked cooperation was a dispute over the safety of thimerosal. While international experts consider it safe, US Health Secretary Robert F. Kennedy Jr disagreed. The US no longer uses thimerosal preservatives in vaccines, but it is harder to replace in jurisdictions lacking ready access to refrigeration.

Gavi is a leading global immunization organization that vaccinates children in poor countries. Launched by the WHO, World Bank, UNICEF, and the Gates Foundation in 2000, Gavi has vaccinated more than 1.1 billion children across 78 low- and middle-income countries, saving an estimated 500,000 lives yearly. The US has been Gavi’s third-largest financial contributor in recent years, providing 13% of its funding since 2000. Gavi provides vaccines for 20 diseases, including measles, malaria and polio.

Under the Trump Administration, assistance to international public health programs has been dramatically restructured. In January 2026, the US withdrew from the WHO, ending decades-long membership and financial support. The administration abolished USAID, ending most aid programs, absorbing the residual operations into the State Department. The administration established a new framework for supporting public health through direct country-to-country agreements, giving the US more control over how US funds are dispersed. Dozens of bilateral MOUs totaling over $20 billion have been signed for the 2026–2030 funding period, with approved programs focusing on health security away from family planning, maternal health and children’s health.

Europe

A Russian cruise missile hit Polish territory early Thursday with no casualties. Poland scrambled jets to intercept the incoming Kh-101 missile, but it crashed in a rural area in Lublin province, near Ukraine’s border, causing a 10-meter-wide crater about two kilometers away from the nearest buildings. Polish Prime Minister Donald Tusk described the affair as a “very serious incident” but said that Poland was likely not the intended target. Ukrainian President Volodymyr Zelenskyy noted that the bombardment on Ukraine on Thursday morning killed at least eight people, including three children, and that a lack of air defenses contributed to the deadly attack.

Russia’s strategy remains imposing maximum pain, especially through a ballistic missile advantage. Homegrown Ukrainian air defenses have scaled counter-drone technology, such as through jamming or interceptor drones, but Ukraine still lacks the means to counter advanced ballistic and cruise missiles. The US agreed to allow the production of Patriot missile interceptors on Ukrainian territory during the early July NATO summit, but it could take months to begin production, and Ukrainian designs for a missile interceptor, like the Freyja, remain in development stages and have less sophisticated honing capabilities. The US is in short supply of its own Patriot missiles due to the Iran war, intensifying Ukrainian exposure to incoming missile threats. Nonetheless, the implication of Polish territory will strengthen Europe’s resolve to accelerate a solution.

Read More: Politico, AP, New York Times [paywall]

Middle East

President Trump announced that the Board of Peace had reached an agreement for the “complete disarmament of Hamas in Gaza.” The agreement has been confirmed by Hamas, but not addressed by Israel at the time of publication. If effective, the deal would constitute long-awaited progress on the stalled Gaza peace plan, which has struggled to progress past phase one (hostage exchanges) amid continued hostilities and disagreements over Hamas’ and Israel’s future role in the enclave.

The problem will be sequencing. President Trump’s announcement and Hamas’ acknowledgement called for Israel to fully withdraw following Hamas’ disarmament (at which point the yet-to-be-formed International Stabilization Force will work with a new Palestinian police force to secure Gaza). Hamas also called for Israel to end all hostilities. But securing Hamas’ full disarmament (a sea change for a group founded to undertake armed resistance, per their charter) without concrete proof that Israel will withdraw (which Israel will want to delay until Hamas is incapable of retaking Gaza) will be difficult.

The deal may not survive the current Israeli domestic political environment. Political fault lines are hardening as politicians enter the thick of campaigning season ahead of fall elections; Netanyahu is eager to prove his security credentials to far-right coalition members and voters who do not want to risk empowering Hamas, and his competitors equally want to project strength and avoid the appearance of conceding to Hamas.

Read More: BBC, AP, Wall Street Journal [paywall], New York Times [paywall]

Asia-Pacific

US-China relations are showing renewed signs of strain ahead of the September leaders’ summit, with Washington’s latest import restrictions and Beijing’s threat of retaliation underscoring the challenges of stabilizing bilateral ties. Shortly after the US unveiled restrictions on foreign-produced advanced robotic devices and connected power inverters—which disproportionately affect Chinese manufacturers given China’s dominance in both markets—the Ministry of Commerce criticized the measures as discriminatory and undermined “the stability of China-US” relations. MOFCOM warned Beijing would “resolutely” retaliate if Washington continued its unilateral actions.

The renewed pressures echo the tense environment that preceded last year’s Trump-Xi summit in Busan, signaling tensions could again accumulate in the weeks before the leaders meet. Ahead of the 2025 summit, Washington escalated tariffs and semiconductor controls, while Beijing responded with restrictions on rare earth elements and magnets. The two leaders subsequently agreed to pause and roll back several of the escalatory trade measures. But this time, tensions are also spilling into the strategic realm, with Trump questioning whether Xi will honor his commitment not to arm Iran. Trump on Wednesday said he would be “quite disappointed” if Xi broke a personal commitment not to arm Iran, following a Reuters report alleging China would supply Iran with 300-400 MANPADS, a claim Beijing has denied. The developments suggest both could enter September’s summit with tensions elevated across economic and strategic fronts, potentially complicating efforts to stabilize bilateral relations.

Read More: MOFCOM, New York Times [paywall], South China Morning Post [paywall], Center for Strategic and International Studies

Americas

Cuba has announced one of its most significant economic liberalization efforts in decades. Measures that took effect this week under Decree 160 removed 46 of the 125 restrictions on private enterprise and relaxed 35 more, allowing private businesses to import and sell products such as fuel, operate private pharmacies, and expand activities in some sectors that have traditionally been dominated by the state. The government is seeking to address a deepening humanitarian and economic crisis marked by chronic shortages of food, medicine, fuel, and electricity. The reforms also include greater flexibility for foreign investment in Cuba’s struggling energy sector, easier imports of electric vehicles, and the authorization of private elder-care facilities. Cuban officials say the changes are necessary to confront worsening shortages and stimulate economic activity, while President Miguel Díaz-Canel has stressed that the reforms do not signal a move away from socialism or the privatization of strategic sectors.

The policy shift comes as Cuba faces mounting pressure from a U.S. sanctions campaign and a severe oil shortage that has contributed to recurring blackouts. Lawmakers recently approved a wider package of 176 economic measures aimed at revitalizing key sectors including agriculture, tourism, and energy. Additional reforms will ease access to state-owned farmland, expand opportunities for private tourism operators, and create new avenues for foreign investment. Cuba is still subject to sweeping US sanctions, including secondary sanctions that create broad risks for foreign companies investing in Cuba. While the government portrays the measures as essential for economic recovery, they are not likely to significantly reshape the island’s tightly controlled economic model.

Read More: AP, Reuters [paywall], ABC

Africa

Disagreements persist between the Democratic Republic of the Congo (DRC) and Rwanda over implementation of the US-brokered peace agreement. A central point of contention is the total disarmament of the Democratic Forces for the Liberation of Rwanda (FDLR), a paramilitary group founded in part by ethnic Hutu fighters linked to the 1994 Rwandan genocide against the Tutsi minority. Rwanda perceives the FDLR as an existential threat and has long demanded that the DRC dismantle the group, which also has ties to certain Congolese military units. While Kinshasa has stated the FDLR has begun to disarm, Kigali remains skeptical, accusing the Congolese government of stalling peace negotiations and prolonging conflict.

The dispute underscores the principal obstacle to implementing the peace agreement and complicates US efforts to stabilize the eastern DRC. Failure to make verifiable progress on FDLR disarmament is likely to prolong insecurity and undermine confidence-building measures between Kinshasa and Kigali. Meanwhile, the Rwanda-backed M23 rebel movement continues to consolidate control over territory in eastern DRC and establish parallel administrative structures, further eroding the authority of the Congolese state. Continued instability threatens to delay implementation of the US-DRC Strategic Partnership, which seeks to expand US access to critical minerals in the DRC in exchange for enhanced security cooperation and assistance in ending the conflict with Rwanda.

Read More: Reuters [paywall], Stepwise Risk Outlook

Geoeconomics

Reporting identified India as a key facilitator of European-made security goods entering Russia, with a sharp uptick in sensitive or dual-use European goods exported to Russia following its invasion of Ukraine. German-origin goods accounted for the largest number of transactions. Alongside the transshipment of finished goods, the supply chain risks EU- and UK-origin components being assembled in India into finished products and then exported to Russia. The report also identified growing exports of sensitive US, Japanese, Canadian and Australian-origin goods from India to Russia.

India’s expanding trade ties and manufacturing ambitions could further complicate efforts to monitor Western-origin goods. The “Make in India” initiative is attracting foreign firms and integrating India into longer, less transparent supply chains, increasing the likelihood of India serving as an increasingly important conduit for Western tech reaching Russia and the importance of end-use monitoring. The India-UK trade deal, which entered into force on July 15, and the anticipated India-EU trade agreement could further deepen these links, reinforcing the need for stronger supply-chain oversight.

The EU’s recent action against Kyrgyzstan could offer a precedent for addressing similar circumvention risks involving India. The EU restricted specified sanctioned goods and technology from being exported to Kyrgyzstan under its “anti-circumvention” tool, which was used for the first time this April, to block its ability to re-export to Russia. However, imposing similar measures on India is likely to face much greater reluctance given its growing importance as a trading partner.

Read More: Politico, Kharon, Atlantic Council

Disruptive Technology

The EU opened tenders for seven AI gigafactories worth an investment of up to €30 billion. Of this pot of money, €10 billion will stem from the EU’s High Performance Computing Joint Undertaking program, and the bloc aims to crowd-in an additional €20 billion from private investors. The submission deadline for AI computing facility proposals is November 12, 2026, and the Commission will decide the winning bids by early 2027. The EU’s Commissioner for tech sovereignty, Henna Virkunnen, stated that there have been 76 expressions of interest in the gigafactories across 16 member states.

The EU’s AI factory plan could add 15% to the bloc’s total compute capability. With more compute, the EU hopes to support AI start-ups in developing frontier models within the bloc under the standards of its digital regulations, including data protections in the GDPR and the consumer protection rules through the Digital Services Act. Moreover, the extra compute could reduce the EU’s dependence on American hyperscalers, which control more than 70% of the European cloud market. However, the EU will depend on US-designed advanced semiconductors to power its gigafactories, so complete independence will not be feasible through the project.

Read More: Deutsche Welle, Politico, CNBC

Energy

The heat waves hitting Europe are having a real impact on energy security. Specifically. the changes in water level caused by the series of heat waves across Europe are starting to impair a number of different energy sources. Hungary and Romania have both begun cutting back generation at their nuclear power plants along the Danube River, and France’s fleet of nuclear plants has had to cut output because rivers aren’t providing the necessary water for cooling. In Serbia, the country’s largest hydropower plant likewise had to reduce output in late July. Falling water levels are also affecting transportation of energy. Rates for oil barges on the Rhine River in Germany are at near record levels due to a bottleneck caused by the low water level.

Climate change will have to inform how states think about their energy mix and how they design energy security policies. While geopolitical shocks have repeatedly roiled global energy markets in recent years and made countries prioritize energy security, the heat waves are demonstrating that renewables like nuclear and hydropower are also vulnerable to disruption. Moreover, supply bottlenecks can emerge even with otherwise resilient global energy supplies due to climate change’s impacts. The issues present with renewables, combined with the supply shocks from the Middle East and Russia, will potentially create momentum for redundancy in energy supplies that can handle simultaneous disruptions across different elements of energy infrastructure and supplies.

Read More: Reuters [paywall], Reuters, Argus Media, New York Times [paywall]

Transnational Crime and Corruption

French prosecutors requested the indictment of 23 individuals and corporate entities alleged to have laundered embezzled public funds from Gabon, the Republic of the Congo and Equatorial Guinea. The defendants included French bank BNP Paribas, family members of Gabon’s former president and the wife of the president of the Republic of the Congo. The charges follow nearly 12 years of investigations by French authorities and the seizure of 52 properties in France.

The charges stem from alleged corruption dating back to the 1990s. Omar Bongo, who ruled Gabon from 1967 to 2009, allegedly sent tens of millions of euros in embezzled funds to a Gabonese interior design company. This company then worked with BNP Paribas to acquire EUR 35 million in French real estate between 1996 and 2008. French courts previously charged BNP Paribas with corruption, laundering and misappropriation of public funds for its work with Gabonese political figures in May 2021.

Read More: France 24 (in French), Organized Crime and Corruption Reporting Project, Sherpa