The Economist - 8 February 2025

Год выпуска: February 2025

Автор: The Economist Newspaper and The Economist Group

Жанр: Экономика/Политика

Издательство: «The Economist Newspaper Ltd»

Формат: PDF (журнал на английском языке)

Качество: OCR

Количество страниц: 76

Scam Inc

How the world’s most dangerous illegal industry really works

• Online scamming is a vast, sophisticated and fast-growing global enterprise. Nobody is safe: leader, page 9, and briefing, page 15.
• Cryptocurrencies are spawning a new generation of private eyes, page 65.

Elon Musk's wood-chipper

• He brings the Twitter playbook to government, page 18.
• Donald Trump's approach to retribution and reward is something new, and dangerous, for the presidency: Lexington, page 23.

Trump and tariff wars

• It is still frighteningly plausible that America’s president blows up global trade: leader, page 11.
• Mr Trump has returned with extra protectionist zeal and little to stop him, page 56.
• Mexico and Canada have avoided tariffs, for now, page 24.
• Can Europe stay the sole free-trader? Charlemagne, page 43.

Taking MAGA to Gaza

• America's scheme for the region contains shards of truth. And much to regret: leader, page 10, and analysis, page 34.
• An interview with Syria's president, Ahmed al-Sharaa, page 35.

The economics of fake diamonds

About to propose? You might want to avoid a diamond, whether natural or lab-grown: Free exchange, page 62.

The world this week Politics

• During a visit by Binyamin Netanyahu, Israel’s prime minister, to the White House Donald Trump suggested that the 2m Palestinians in Gaza should be “permanently” resettled in neighbouring countries and that there should be a full American takeover of the strip. Mr Trump said the enclave could be developed into the “riviera of the Middle East”. Egypt and Jordan retorted that they would not host displaced Palestinians. The UN warned deportations would be tantamount to ethnic cleansing and breach international law. Saudi Arabia rejected the suggestion and reaffirmed its support for a Palestinian state. Mr Netanyahu said the idea was “worth paying attention to”. Israel’s far-right welcomed the plan.
• Mr Trump issued an order reinstating his “maximum pressure” campaign on Iran by enforcing sanctions aiming to reduce its oil exports to zero.
• Ahmed al-Sharaa,the newly appointed interim president of Syria, laid out his vision for the country. In an interview with The Economist he outlined a timetable for taking Syria in “the direction of” democracy and promised presidential elections, but was non-committal on the question of Islamic law and women’s rights. He criticised America’s “illegal” military presence in Syria and welcomed talks with Russia about its military bases.
• In eastern Democratic Republic of Congo a “humanitarian” ceasefire declared by an alliance of rebel groups, including M23, which is backed by Rwanda, appeared to be breaking down. The capture of Goma, the largest city in eastern Congo, has marked an escalation in a conflict that spans decades. At least 900 people have been killed in recent fighting around the city, and possibly as many as 3,000. The rebels said they had no intention of attacking Bukavu, another city along the Rwandan border, and asked South Africa to withdraw its forces from Congo.
• The future of the US Agency for International Development looked to be in doubt after Donald Trump said it was run by “radical lunatics” and Elon Musk suggested he had the president’s support to shut it down as part of his crackdown on government waste. Marco Rubio, America’s secretary of state, was then appointed as USAID’s acting director. Its website was shut and staff were told to work from home.

There’s a new sheriff in town

• The president of Panama, Jose Raul Mulino, announced that he would not renew an investment agreement with China. This came after a visit to Panama by Mr Rubio, who warned its government to take immediate steps over what he said was China’s “influence and control” over the Panama Canal. Mr Trump repeated his threat to take command of the waterway, which would violate Panama’s sovereignty over it.
• Mr Rubio also visited El Salvador, where the president, Nayib Bukele, offered to “outsource” the country’s prisons to America. Mr Bukele suggested that Salvadorean gang members in the United States as well as American citizens convicted of crimes could be incarcerated in El Salvador’s penal system for a fee. His crackdown on gang-violence at home has led to a dramatic fall in murders.
• Mr Trump signed an executive order banning transgender women and girls from participating in women’s sports in colleges and schools. If educational institutions don’t comply they will lose federal funding. The order, which relies on existing equal opportunity laws, aims to “protect allfemale athletic opportunities and all-female locker rooms”.
• The lower house of Congress in the Philippines voted to impeach Sara Duterte as vice-president. Ms Duterte has been feuding with the president, Ferdinand “Bongbong” Marcos, ever since their election in 2022. She has been accused of misappropriating funds and last year raised the prospect of assassinating Mr Marcos. She denies any wrongdoing. The Senate will not hear her impeachment trial until June.
• Australia banned DeepSeek’s chatbot app and website from all government devices and computers over national security concerns, though the government insists the ban is not linked to DeepSeek’s Chinese origins. Taiwan has also prohibited the use of DeepSeek in government departments.
• A gunman shot dead 11 people at an educational facility in the Swedish town of Orebro, the worst mass shooting in Sweden’s history. The suspect then apparently shot himself. Police said there was no ideological motive for the attack.
• The French prime minister, Francois Bayrou, used a constitutional rule to push the government’s budget through parliament without a vote. Arguments over the budget led to the downfall of Mr Bayrou’s predecessor, Michel Barnier, in December. Mr Bayrou survived two votes of no confidence after the hard right and the Socialists withdrew their support for the motions.
• Bart De Wever, a Flemish nationalist, was sworn in as Belgium’s prime minister, leading a new coalition government headed, for the first time in the country ’s history, by a party from the hard right. Mr De Wever’s N-VA party took the most seats in an election last June. In a speech to parliament he said his government’s priorities would include a crackdown on migration and increasingdefence spending.
• Norway’s governing coalition collapsed in a row over implementing energy directives from the EU. The Labour Party is now governing- alone and has appointed Jens Stoltenberg, who was NATO’s secretary-general for a decade before stepping down last year, as finance minister. Ageneral election looms in September.
• Armen Sargsyan, the commander of a pro-Russian paramilitary group in eastern Ukraine, was killed by a bomb in Moscow. Russian media said it was an assassination. The SBU, Ukraine’s security service, had recently described how Mr Sargsyan enrolled convicts to fight against Ukraine. In December Ukraine admitted that it had killed General Igor Kirillov, head of Russia’s biological and chemical warfare division, with a bomb in Moscow.

Nul points

• In an unexpected turn to soft power, Vladimir Putin said a Russian alternative to this year’s Eurovision Song Contest would be held in Moscow.
• Russia was booted out of Eurovision when it invaded Ukraine. Mr Putin’s revival of the Intervision Song Contest will feature contestants from countries like Belarus, China and Cuba. Unlike the often extravagant gay-friendly performances at Eurovision, it will focus on sober, traditional family values. North Korea could even make an appearance.

The world this week Business

• Donald Trump announced and then postponed punitive tariffs of 25% on goods from Canada and Mexico. The American president is using the threat of tariffs to press both countries to stop the flow of migrants and fentanyl across the border. He granted a 30-day reprieve following urgent talks with Claudia Sheinbaum, Mexico’s president, and Justin Trudeau, Canada’s prime minister. Both leaders promised to boost their border security. Both had earlier vowed to retaliate with tariffs of their own on American products. The European Union said it would also retaliate after Mr Trump said he would “definitely” impose tariffs on EU imports over America’s trade deficit with the region. Global markets shuddered.

The phoney war

• Mr Trump did impose extra tariffs of 10% on Chinese imports. China responded with limited duties on a range of American goods, tighter export controls on critical minerals and an antitrust investigation into Google, which has little presence in China. Its muted response raised hopes that the two sides will negotiate.
• The tremors from the political earthquake in Washington spread to the Consumer Financial Protection Bureau, a watchdog that the Republicans have wanted to abolish ever since its creation after the global financial crisis of 2007-09. Donald Trump dismissed Rohit Chopra as head of the bureau and Scott Bessent, the treasury secretary, took over as acting director. Mr Bessent immediately put the CFPB’s investigations and proceedings on hold.
• The chief executive of Hewlett Packard Enterprise, Antonio Neri, said his company would fight the Justice Department’s attempt to block its $14bn acquisition of Juniper Networks. The department’s lawsuit claims the takeover would reduce competition in the market for networking equipment, but Mr Neri said its reasoning is flawed. The deal has already been approved in Britain and the EU.
• The share price of Palantir surged to a new high, after the data-analytics company produced a bumper set of earnings and described demand for its artificial-intelligence software as “untamed”. The company focuses primarily on the defence industry and has benefited from the election of Mr Trump. Alex Karp, the CEO, described the new government’s cost-cutting drive as a “revolution”, which would benefit Palantir because of its data-crunching expertise.
• By contrast, Alphabet’s stock sank after its quarterly earnings disappointed investors. Revenue from its cloud business grew by 30%, year on year, but this was less than the 35% in the previous quarter. Alphabet suggested it didn’t have the capacity to meet demand. It also anticipated investing $75bn on data centres this year, up from $53bn last year.

What market rout in AI?

• OpenAl and SoftBank announced a venture that will develop AI across the Japanese conglomerate’s subsidiaries. SoftBank is investing $3bn a year in the project, named Cristal Intelligence. Its aim is to create AI agents for “knowledge work” that will automate mundane tasks, such as generating financial reports and managing customer inquiries. It will also be marketed to other companies in Japan. Masayoshi Son, SoftBank’s boss, said he now believes that the ability of AI to match or surpass humans across a range of cognitive tasks will happen much sooner than he had predicted.
• The release of “Moana 2” and “Mufasa: The Lion King” helped Disney’s earnings come roaring back to life in the last three months of 2024. Operating income at the company’s entertainment division, which includes films, grew by 95% in the quarter, year on year. Revenue from streaming was up by 9%. “Inside Out 2”, “Deadpool & Wolverine” and “Moana 2” were the top three box-office hits worldwide in 2024.
• Quarterly revenue and profit at UBS came in above market expectations, which the Swiss bank said was a result of strong demand from institutional and private clients following the election of Mr Trump. It warned, however, that its plans for a $3bn share buy-back could be derailed by possible higher capital requirements in Switzerland.
• UPS announced that it was reducing the amount of shipments it handles from Amazon by 50% so that it can focus on more profitable business. The US Postal Service recently adjusted its fees, shaking up the economics of parcel deliveries. We are “taking control of our destiny”, said Carol Tome, the chief executive, before UPS’s share price sank by almost 15%.
• Spotify reported its first annual profit since launching in 2008. The music and podcast streaming platform now has 675m monthly active users.

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