One Week, Three Prices
On 17 September the US State Department notified Congress of a $24.3 billion sale of 48 F-35s to Saudi Arabia. It did so despite a Defense Intelligence Agency warning that Saudi use of Huawei and ZTE equipment could expose the jet’s secrets to China. The next day Donald Trump signed the Russia and Iran Sanctions Act, which lets him impose tariffs of up to 100% on countries that buy Russian oil. India is the obvious target: Russia was its largest crude supplier in September, at 1.74 million barrels a day. A week later Lula da Silva, whose country had been hit with a 25% US tariff in July, told the UN General Assembly that “Brazil does not fit in anyone’s backyard”. All three countries were playing the same game of courting both camps. In the same week, each was handed a very different bill.
Why the Room Opened
Three pressures have widened middle powers’ room for manoeuvre at once. The US-China trade war has made both capitals hungry for suppliers, markets and partners outside the other’s orbit. This year’s Iran war has made the Gulf’s oil, airspace and ports indispensable to Washington. The scramble for ports, minerals and data centres has given anyone with coastline, ore or sovereign capital something to sell. And Washington itself has turned transactional, trading tariff rates, chips and jets case by case instead of offering a single alliance package. Publics are on board. In a Körber Foundation survey released this year, 64% of Indian, 62% of Brazilian and 72% of South African respondents favoured non-alignment.
Stay ahead of the geopolitical week.
MD Briefing delivers expert analysis across five global fronts — the Indo-Pacific, energy, geoeconomics, European security, and the Middle East — every Monday morning. Free.
The result looks like a buyer’s market for India, Saudi Arabia, the UAE, Türkiye, Egypt, Indonesia, Brazil and much of Africa. Each can buy American jets and Chinese drones, join BRICS and court Washington. The question is who is actually profiting from that freedom.
Leverage Is Lent, Not Owned
The standard view, set out in Stewart Patrick’s “middle power moment” thesis at Carnegie, is that a looser order empowers middle powers as a class. The record of 2026 shows something narrower. Leverage goes not to middle powers in general but to those holding something a great power needs during its current crisis, and only for as long as that crisis lasts.
The Gulf shows the mechanism most clearly. Saudi Arabia signed a mutual defence pact with Pakistan in 2025, buys Chinese technology and sells oil to everyone, and it has still been offered F-35s over American intelligence objections. In July Washington lifted licence requirements on advanced AI chips for the UAE, moving it out of the tier it shared with China and Yemen. The Commerce Department cited the Emirates’ support for “Operation Epic Fury”, the US campaign against Iran. The prize was paid for wartime usefulness, not loyalty.
Türkiye has made the same trade. It still operates the Russian S-400 air-defence system that got it expelled from the F-35 programme in 2019. Yet at July’s NATO summit in Ankara, Trump said “we’re going to be taking the sanctions off” and promised to “consider” selling it the jet again. Ankara’s leverage is its position between Russia, the Middle East and Europe, and Washington needs that position more than it needs Türkiye’s compliance. Egypt, one of the largest recipients of US military aid, held its second set of air-combat drills with China in August, and nothing was taken away.
India shows how far this can stretch, and where it stops. In February New Delhi won a cut in US tariffs to 18% in return for buying American energy and ending Russian oil purchases. Seven months later Russian barrels still top its import list, because the Iran war has squeezed Gulf supply. India took the tariff cut and kept the oil. The new sanctions law is Washington’s way of sending the invoice.
Now look at the states without an urgent card to play. Brazil holds minerals and farmland that both superpowers want, but nothing Washington needs this month. Its reward for hedging was a 25% tariff, and its October election has become a referendum on soybean diplomacy and whose rare-earth supply chain to join. South Africa, the most committed non-aligner of all, has been barred from the US-hosted G20 in Miami in December. Qatar, the UAE, Vietnam and Kazakhstan are invited as guests. Indonesia joined BRICS and then paid for American goodwill by removing tariffs on 99% of US goods in exchange for a 19% rate.
The strongest objection is that this is a Trump effect rather than a structural one: a transactional president rewards deal-makers, and his successor may not. That is partly true. But the posture is durable, because publics in India, Brazil and South Africa want it, and Beijing prices hedging in the same way, through rare-earth export controls rather than tariffs. The deeper problem is collective action. As Patrick concedes, middle powers’ interests diverge too much for them to bargain as a bloc. BRICS has never negotiated a single concession from Washington or Beijing on its members’ behalf. Middle powers profit one at a time or not at all.
Three Ways the Market Clears
Base case: priced multi-alignment (about 55%). Bilateral deal-making continues. The Gulf states, Türkiye and India keep extracting concessions in exchange for wartime usefulness, while Brazil, South Africa and smaller African states keep paying tariffs or losing invitations for the same hedging. The key assumption is that the Iran war and pressure on Hormuz keep the Gulf central to US strategy into 2027. For investors, the lesson is to price political risk by a country’s current usefulness to Washington or Beijing, not by its stated alignment.
Downside: forced choice (about 25%). Washington uses the new sanctions law and imposes heavy tariffs on India over Russian oil, while Beijing tightens rare-earth exports to states that sign US mineral deals. The trigger would be the first tariff under the act against a major buyer. The space for hedging shrinks fast, and middle powers face the either-or choice they have spent a decade avoiding. India is the test case: too big to be bullied quietly, too dependent on Russian barrels to comply quickly.
Upside: middle powers trade around the superpowers (about 20%). Faced with tariffs from both sides, middle powers accelerate trade, payments and investment deals among themselves and with the EU, Japan and the UK. That would reduce the share of their economies exposed to Washington’s or Beijing’s pricing power. It is the only scenario in which leverage stops being lent and starts being owned, and it is slow work, measured in trade agreements, not summit communiqués.
Watch Who Sits at Doral
Great-power rivalry has opened real room for middle powers, but not for them as a class. The space belongs to whichever great power is buying, and the price is set by what that power needs this year. The Gulf, Türkiye and, for now, India are being paid. Brazil, South Africa and Indonesia are paying. Multi-alignment works as a pricing strategy, provided you hold something the buyer cannot do without.
The thing to watch is the G20 summit at Trump National Doral on 14–15 December, a meeting MD has already described as a bilateral bazaar with extra chairs. Watch whether Modi attends, whether Brazil or Indonesia protest South Africa’s exclusion, and which Gulf states are given the most time with Trump. The seating plan will show who has leverage more clearly than any declaration. In a world where every middle power hedges, the ones that matter are the ones each great power cannot afford to lose this year.
