Insight: What is happening in Europe and Asia in August 2025?

The month of August has seen continued positive developments reflecting the current global affairs in Asia and Europe, marked by escalating diplomatic maneuvers, climate-related disasters, evolving economic strategies, and increasingly volatile regional conflicts. Across Asia, India has sought to derisk its trade relations with the US following Trump’s tariffs and has resumed talks with China. In Central Asia, Kazakhstan and Kyrgyzstan have bolstered bilateral ties. Meanwhile, severe flash floods have devastated parts of South Asia, underlining the accelerating toll of climate change. In global conflict, we are witnessing developments such as Hamas tentatively accepting a ceasefire deal while Cambodia and Thailand renew border dialogues.

In Europe, Trump’s attempts to brand himself as “peace dealer’’ are present in how he brokered the Ukraine peace talks and Armenia-Azerbaijan trade corridor agreement. Meanwhile, Germany has grown to be a vocal critic of China in the South China Sea and the Taiwan Strait. Lastly, Domestic unrest in Serbia and escalating wildfires in the Iberian Peninsula round out a month of significant political and environmental strain.

Asia

India-China talks to resume bilateral talks amidst Trump tariffs

TM - India and China agreed on August 19 to resume direct flights and increase trade and investment flows as they rebuild ties after the 2020 border clash between Chinese and Indian troops near Galwan Valley, Ladakh. This diplomatic chapter is following Chinese Foreign Minister Wang Yi's first visit to New Delhi in August 18-19 in three years, setting the stage for Narendra Modi and Xi Jinping’s meeting on the sidelines of the Shanghai Cooperation Organization (SCO) leaders' summit on August 31-September 1. 

Besides trade and investment, political issues such as India’s position on Taiwan are emphasised while New Delhi and Beijing agree on three new border mechanisms, especially the Sino-Indian border clash in Eastern Ladakh.

The two Asian giants' rapprochement is suspected to be built against the backdrop of U.S. President Donald Trump's policy. Beijing has also been reported to be clearing rare earth exports to China, a strategic move amidst China's trade war with the United States. Tariff pressure from Washington is an important factor in Beijing-New Delhi ties as India faced an additional 25 per cent tariff on its good (taking the total to 50 per cent from August 27) due to India's continued imports of Russian oil, while the US also stepped up cooperation with Pakistan in security and counterterrorism. [Reuters, South China Morning Post, The Diplomat]

Flash floods in Pakistan, India, and Nepal kill more than 400 people

TM - Flash floods caused by heavy rains have killed more than 300 people across parts of Pakistan, India-administered Kashmir, and Nepal. The region remains one of the most vulnerable due to climate change and extreme weather. The climate crisis has exacerbated not only the frequency but also the intensity of seasonal floods in the Himalayas recently.

In Northwestern Pakistan, at least 31 people were killed within 48 hours, especially in the Buner region of the Khyber Pakhtunkhwa province. Landslides and broken roads have prevented emergency workers from helping the communities in Buner, where people are feared to be buried under rubble. Meanwhile, in India-administered Kashmir, at least 60 people died and more than 200 are missing in the town of Chashoti, a popular pilgrimage site for Hindus. Meanwhile, in Nepal, at least 41 people died, with another 121 left injured. [CNN]

Kazakhstan - Kyrgyzstan strategic cooperation in trade and regional integration

TM - President of Kazakhstan, Kassym-Jomart Tokayev, and President of Kyrgyzstan, Sadyr Japarov, concluded a series of significant agreements during high-level talks on August 22 in Bishkek, Kyrgyzstan. This signals a new phase in bilateral cooperation, particularly to enhance trade and economic cooperation. Kazakhstan is one of Kyrgyzstan's key partners with bilateral trade amounting to 1.7 billion U.S. Dollar. 

Besides trade, logistical, agribusiness, regional integration, and water and energy cooperation were also discussed. According to Tokayev, the effective use of transboundary water resources is an important element for the stability and sustainable development of the region. Both sides have agreed to hold the next meeting of the Interregional Forum, which lays the ground for bilateral cooperation between Kyrgyzstan and Kazakhstan, in the near future. Recently, Trump has signaled a new wave of sanctions against Russia and its trading partners. [Astana Times, The Times of Central Asia]

India focuses on local currency trade, not de-dedollarisation in BRICS

TM - Spokesperson from the Ministry of External Affairs of India, Randhir Jaidwal, dismissed claims that India is pursuing de-dollarisation in BRICS by saying that it is "not part of India's financial agenda.'' This statement came following the Brazilian President, Luiz Inacio Lula da Silva's suggestion that BRICS could explore a trade currency amidst Trump's tariffs. 

Criticising the trial of former Brazilian President Jair Bolsonaro, Trump imposed a 50 per cent tariff on imports from Brazil, while India got an additional 25 per cent tariff, making it 50 per cent over its continued purchase of Russian crude oil.

India's External Affairs Minister, S. Jaishankar, clarified that India has not actively moved to reduce its reliance on the U.S. dollar, but instead is derisking trade by exploring alternative payment systems and reducing dependence on a single currency. The country has signed agreements with Russia, the UAE, and the Maldives to settle trades in local currencies. The country, however, still opposes a common BRICS currency with China. [Times of India]

Hamas claims that it accepts a proposal for a ceasefire and the release of hostages

TM - Hamas officials have said that they have accepted a proposal for a ceasefire in Gaza, which includes the release of half of the approximately 20 remaining Israeli hostages as part of a phased resolution to the war. The deal was following the negotiations between Hamas and Egyptian and Qatari officials, which have been taking place in Cairo recently. The two mediators have taken a central role in the talks amidst threats by Israel to launch a large new military offensive, aiming to take control of Gaza and potentially displacing up to 1 million Palestinians.

Previously, Israeli Prime Minister, Benjamin Netanyahu faced Israel's biggest protests of the war, which called for a deal to release the hostages securely and was criticised against his handling of the war in Gaza. In the 22 months of war, 62,000 had been killed by the Israeli troops in what some have dubbed 'a genocide. Recently, the Israeli government's plan to control Gaza has sparked protests over growing starvation in Gaza. The latest ceasefire proposal includes a suspension of military operations for 60 days during which the "Palestinian prisoners" would be exchanged  in return for half of the "Israeli hostages." 

The proposal is expected to be presented on August 25, although Netanyahu said that Israel is no longer interested in part deals. Netanyahu has only agreed to end the war if Hamas releases all of the hostages at once, disarms, and allows for the "demilitarisation of Gaza." [The Guardian]

Cambodia and Thailand's dialogue to strengthen the ceasefire implementation

TM - The Ministry of National Defense of Cambodia reaffirmed its commitment to advancing peace and stability in the Cambodia-Thailand border. Speaking on August 25, Lieutenant General Maly Socheata highlighted positive development and continuous discussions between the Cambodia-Thailand General Border Committee (GBC) and the Regional Border Committee (RBC).

The ongoing bilateral dialogue has been happening since the “immediate and unconditional’’ ceasefire agreement on July 28, brokered by ASEAN's chair, Malaysia, and came after Trump threatened the two countries not to make a trade deal with them.  The ceasefire followed weeks of heightened tension and skirmishes in the Cambodian-Thai border, which have happened sporadically in the past. Previously, the Thai-Cambodia Regional Border Committee (RBC) concluded the meeting with a consensus on existing ceasefire agreements agreed from the previous General Border Committee (GBC) meeting. The two sides continue to engage each other after the ceasefire. [Khmer Times, Pattaya Mail]

Europe

Germany criticizes China for ‘increasingly aggressive’ rhetoric 

BD - German Foreign Minister Johann Wadephul called out China for “unilaterally changing the status quo” and “shifting borders in its favour” during a meeting with his Japanese counterpart, Takeshi Iwaya, in Tokyo on 18 August, highlighting the country’s hardening rhetoric towards the Asian country. Wadephul and Iwaya underlined their countries’ adherence to the rule of law and international agreements, pointing towards cooperation on the wars in Ukraine, Gaza, and Iran amid what is seen by many as a breakdown of the prior international order.

In this context, the German Foreign Minister focused on China’s “increasingly aggressive” behaviour in the South China Sea and the Taiwan Strait, warning that “any escalation in this sensitive hub of international trade would have serious consequences for global security and the world economy."  He also criticized Chinese weapon deliveries and logistical support to Russia, which is currently in the third year of its aggressive war in Ukraine.

The minister’s statements come at a time where the German government seeks to take on a bolder stance regarding China’s regional ambitions and the two countries’ close trade relationship, which has come under fire in the past few years for making Germany too dependent on exports to China. [Deutsche Welle]

Trump, Zelenskyy, and EU leaders meet in Washington for Ukraine peace talks

BD - US President Donald Trump announced that he will aim to set up direct peace talks between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy on 18 August, while European leaders continued to push for US security guarantees. The meeting in the White House took place just three days after Trump’s long-awaited summit with Putin in Alaska. While the summit failed to produce a breakthrough in peace talks, Trump reiterated that he is keen on reuniting Putin and Zelenskyy for a face-to-face meeting this year.

“At the conclusion of the meetings, I called President Putin, and began the arrangements for a meeting, at a location to be determined, between President Putin and President Zelenskyy,” Trump posted on Truth Social, with the meeting supposed to take place within two weeks.

A delegation of EU leaders, consisting of German Chancellor Friedrich Merz, French President Emmanuel Macron, British Prime Minister Keir Starmer, Italian President Giorgia Meloni, Finnish President Alexander Stubbs and EU Commission President Ursula Von der Leyen,as well as NATO secretary general Mark Rutte, accompanied Zelenskyy to Washington, where they called on the US to grant security guarantees to Ukraine in case a peace agreement is reached. While Trump has promised to help Europe in defending Ukraine, he has so far fallen short of revealing what this help would look like. While Putin initially said to be “open” to direct talks with Zelenskyy, Russia’s foreign minister Sergey Lavrov rowed back just a few days later, stating no meeting is planned between the two presidents. [The Guardian]

Spain and Portugal ravaged by wildfires

BD - Large numbers of firefighters have been deployed to battle raging wildfires in Portugal and Spain, leading to several casualties. 27,000 Spanish citizens in the northwest and west of the country have been evacuated, with the northwestern Castile and Léon region being most affected. Fires in the Cáceres region and Galicia region are reported to have burned nearly 30,000 acres of forest, which has led to a total of 343,000 burned acres this year - almost double the amount of last year, according to the European Forest Fire Information System (EFFIS).

With a dry and humid climate, both countries have been confronted with increasing wildfires in the past few years, with climate change being one of the major contributing factors. Despite sanctions and hefty fines for perpetrators, the two Iberian countries so far have not been able to prevent the situation from spiralling. [BBC]

Police accused of violence as Serbian protests continue

BD - Protestors in Serbia have accused local police of abusing detained individuals on 19 August, as protests against the country’s government go into their 10th month. According to the protestors, pro-government loyalists pushed back violently following the destruction of President Aleksandar Vucic’s Serbian Progressive Party (SNS) offices, with riot police chiming in on the violence. More than 100 protesters were arrested, some of whom were allegedly beaten and threatened with rape, one protester told AFP.

The protests started in November last year, when the roof of a railway station in the country’s second biggest city, Novi Sad, collapsed and killed 16 people. The incident, seen as a result of the festering corruption in Serbia, has led to widespread protests mainly by students, calling for reforms and President Aleksandar Vucic to step down. [France 24]

Armenia and Azerbaijan sign a peace deal, establishing a trade corridor under US auspices

BD - The leaders of long-time foes Armenia and Azerbaijan signed a peace deal in Washington D.C. on 9 August, marking a big step towards resolving the longstanding feud surrounding the disputed Nagorno-Karabakh region. Azerbaijani president Ilham Aliyev and Armenian prime minister Nikol Pashinyan signed the pact following mediation by US president Donald Trump. The deal’s main tenet, the establishment of a trade corridor connecting Azerbaijan with its western exclave Nakhchivan, via Armenian territory, is regarded by many as a major boost to the region’s trade potential. 

The corridor, called Trump Route for International Peace and Prosperity (TRIPP), is set to facilitate trade along the so-called Middle Corridor, a land route connecting China with Europe while bypassing Russia and Iran. Armenia agreed to grant American companies the development rights to the corridor, over which the US will have a 99-year lease. 

The agreement is a symbol of Russia’s waning influence in the region, as the Kremlin had previously acted as the main mediator in regional conflicts and sent peacekeeping contingents. Russia’s ties with both countries have come under strain in recent years due to its unwillingness to support Armenia in its war against Azerbaijan, as well as its downing of an Azerbaijani plane and crackdown on the Azerbaijani diaspora in Russia.

Iran is also seen as one of the deal’s main losers, as a US presence will be established directly at its doorstep. Iranian president Masoud Pezeshkian vowed to block the project due to Iranian security concerns, without, however, providing any details on how he seeks to do so. 

Despite the deal being a big step towards achieving peace in the South Caucasus, a final peace deal is still contingent on an amendment of Armenia’s constitution, which would relinquish any territorial claims to the Nagorno-Karabakh region. While Pashinyan has promised to push for a ⅔ majority in order to implement the constitutional changes, he faces ample opposition within Armenia, where many see the agreement as surrendering. [The Guardian]

Contributors:

TM: Muhammad Anugrah Utama (Tama)

BD: Benedikt Stöckl