The Economist - 1 March 2025

Год выпуска: March 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: 96

THE DON’S NEW WORLD ORDER

• A mafia-like struggle for global power has begun, with new rules that do not suit America: leader, page 9.
• The transactional world Donald Trump seeks: briefing, page 16.
• No, his Putin-wooing is not like Nixon going to China: The Telegram, page 52.

The new inheritocracy

• Unearned bequests are becoming nearly as important as working. That is dangerous for capitalism and society: leader, page 10.
• To get rich, forget about your career, page 61.

Can Europe defend itself?

• It will take years to build up an independent defence force, page 50.
• Does Britain's nuclear deterrent have a Trump-shaped problem? Page 47.
• Europe needs a single envoy for peace talks. Who? Charlemagne, page 46.

Nvidia and chip controls

• DeepSeek and Donald Trump pose a dual threat to America's chip-design champion, page 53.
• The American president still needs Taiwan, page 54.

Prabowo does a DOGE

• Indonesia's president takes a chainsaw to his country's budget—to fund boondoggles: leader, page 11.
• Prabowo Subianto's reckless cuts, page 29.

The world this week Politics

• The conservative Christian Democratic Union (CDU) and its sister party, the Christian Social Union in Bavaria, won Germany’s election with 29% of the vote. The hard-right Alternative for Germany (AfD) scored 21%, its best-ever result. The incumbent Social Democrats (SPD) took just 16% and the Greens 12%. Friedrich Merz, the probable next chancellor, has refused to work with the AfD so he will try to form a coalition with the SPD. After his victory Mr Merz said Europe could no longer rely on America for its defence and would have to take responsibility for its own security. He also ruled out a quick reform to Germany’s “debt brake”, which restricts government borrowing and spending, even on defence, saying that this required “a lot of difficult work”.
• Volodymyr Zelensky praised the “absolute heroism” of the Ukrainian people on the third anniversary of Russia’s invasion of Ukraine. Earlier, Mr Zelensky said he would be willing to step down as Ukraine’s president in exchange for NATO membership. On the eve of the anniversary Russia launched its biggest drone attack yet.
• At the United Nations, meanwhile, America shocked European allies by joining Russia in voting against a resolution at the General Assembly condemning Russia’s aggression in Ukraine. America then drafted a resolution at the Security Council calling for an end to the war, but containing no criticism of Russia. Its resolution passed, but Britain and France abstained.
• Underlining his emphasis on transactional diplomacy, Donald Tramp reached a deal with Ukraine to develop the country’s large deposits of critical minerals and invited Mr Zelensky to Washington for “a very big agreement”. Earlier, Vladimir Putin said he would allow “foreign partners” to develop Russia’s store of rare minerals. He also scotched Mr Trump’s optimism about reaching a peace deal, saying that Ukraine was only “touched on” in Russia’s negotiations with America. Ukraine was not on the agenda fora second round of talks in Turkey.

Europe on the back foot

• Emmanuel Macron visited Mr Trump at the White House. The French and American presidents discussed sending European peacekeepers to Ukraine as part of a peace deal. Mr Trump’s claim that Mr Putin would have “no problem” with the deployment was flatly contradicted by the Kremlin. Sir Keir Starmer, Britain’s prime minister, pledged to increase British defence spending from 2.3% to 2.5% of GDP ahead of his trip to Washington.
• Mr Trump sacked General Charles Brown as chairman of the Joint Chiefs of Staff with immediate effect, pulling Lieutenant-General Dan Caine out of retirement to replace him. General Caine has spent much of his military career in special operations.
• America’s House of Representatives passed a bill backed by Mr Trump that contains $4-5trn in tax cuts and $2trn in spending cuts. Most economists think that, if enacted, the bill will increase the deficit. The Senate now gets its say.
• The ceasefire in Gaza looked shaky. Israel released hundreds of Palestinian prisoners, but delayed the handoverbecause of Hamas’s ill treatment of hostages during release ceremonies. The militant group returned the remains of four more dead captives. Israel carried out DNA tests to check their identity; Hamas had earlier given the Israelis the body of a Palestinian woman instead of a hostage. It was the final exchange in the first phase of the ceasefire. Talks have not begun on the second stage. Meanwhile, Israel sent tanks into the West Bank for the first time in 20 years; around 40,000 Palestinians have fled their homes there in the past month.
• Sudan’s Rapid Support Forces announced the formation of a breakaway government in the areas under its control. The paramilitary group, which has been fighting the national army fortwo years and stands accused of genocide in Darfur, unveiled its “political charter” in Nairobi, the Kenyan capital. Sudan’s military government, led by Abdel Fattah al-Burhan, denounced Kenya for hosting the event, declaring it “tantamount to an act of hostility”.
• M23, a militia backed by Rwanda, continued its advance on Uvira, a city in eastern Democratic Republic of the Congo. Soldiers from Burundi, which is allied with DRC, manoeuvred to fend off M23, which has already captured the Lake Kivu region and its two main cities. Britain paused most bilateral aid to Rwanda, with which it has hitherto had good relations. It said aid flows would remain suspended until “significant progress” had been made to end the fighting.
• Taiwan’s coast guard claimed that it had caught a Chinese-owned ship cutting undersea cables and had detained the vessel. Taiwan has previously accused China of several such non-military “grey zone” actions against the island. China retorted that the episode was being “deliberately exaggerated” by Taiwan.
• In Pakistan at least ten militants were killed in an operation by the security forces near the border with Afghanistan. The region is used as a base by the Pakistani Taliban.
• South Korea’s fertility rate rose last year for the first time since 2015. But the average number of children per woman among all reproductive females is still just 0.75, according to official statistics. The country has already declared a “national demographic crisis”.
• Argentina’s president, Javier Milei, overrode opposition in the Senate to his two judicial nominations to the Supreme Court by appointing them temporarily by decree instead. Mr Milei says the constitution allows him to do this when Congress is in recess. Critics say he has weakened the court’s independence.
• The candidates running to replace Justin Trudeau as leader of Canada’s Liberal Party, and thus prime minister, held a debate. Relations with America took up a large part of the proceedings. Chrystia Freeland, who is running second in the polls behind Mark Carney, described Donald Trump as “the greatest threat to Canada since world war two”.

That’s not dandruff

• It emerged that a Colombian man was arrested for trying to smuggle cocaine under his toupee onto a flight bound for Amsterdam. The drugs were valued at $10,500. It is not the first time that drug-traffickers have used hair-raising schemes to smuggle their wares. In 2019 a man was caught at Barcelona’s airport with half a kilo of cocaine under his wig. False buttocks, breast implants, nuns’ habits and pineapples have all been used to traffick the drug.

The world this week Business

• BP’s chief executive, Murray Auchincloss, unveiled a new strategy that he said would “fundamentally reset” the company’s direction away from green energy and back towards oil and gas. Investments in renewables will be cut by 70%. Mr Auchincloss said that BP had underestimated the resilience of demand for fossil fuels and overestimated the speed of the green-energy transition. He had been under pressure to switch direction from investors unhappy with bp’s inert share price. Elliott Management, an activist fund manager, has taken a 5% stake. BP says it is still committed to its sustainability goals.
• Nvidia produced another solid set of quarterly earnings. Revenue rose by 78%, year on year, to $39bn, and quarterly net profit surged to $22bn. Demand for its latest-generation Blackwell chips is “amazing”, said Jensen Huang, Nvidia’s chief executive.
• A few weeks ago it was the hottest stock on Wall Street, but Palantir’s share price has fallen sharply of late, in part because of a new plan by Alex Karp, the boss of the software analytics company, that will allow him to sell 10m shares over six months. Market speculation that cuts to defence spending in America will affect Palantir’s bottom line also hurt the stock. The Pentagon is one of Palantir’s biggest customers.
• Apple announced that it would invest $500bn in America over the next four years, create 20,000 jobs and open a new factory in Houston making AI servers. The announcement seemed to be aimed at seeking favour with the Trump administration. Apple has made similar declarations before, including in 2021, when it committed to spend $430bn in America over five years. Meanwhile, Apple’s shareholders voted against a proposal from a conservative investor to abolish the company’s diversity, equity and inclusion programme.
• Upping the ante in competition between America and China, Alibaba made its own big declaration and said it would invest 380 billion yuan ($52bn) on Al and the cloud over three years, more than it has spent over the past decade.

iSpy

• In Britain Apple took the controversial decision to disable its Advanced Data Protection tool for iCloud services. ADP offers end-to-end encryption, which prevents anyone except the user, Apple included, from unscrambling the data. Britain’s government had demanded Apple weaken the system to allowit access. Apple refused, and has instead withdrawn ADP from the British market.
• In a surprise decision Unilever removed Hein Schumacher as chief executive after less than two years in the job, and replaced him with Fernando Fernandez, the chief financial officer. The consumer-goods conglomerate is underpressure from investors who want a faster pace of restructuring.
• Thames Water, a utility in Britain that is drowning in debt, reportedly asked KKR, a private-equity firm, and Castle Water, which provides water and sewage services to businesses and public bodies, to provide more details on their bids for the company. CK Infrastructure, which is based in Hong Kong, has offered to buy a majority stake in Thames Water, according to reports.
• Prosus, a global tech-investment company, boosted its food-delivery portfolio by agreeing to buy Just Eat Takeaway, which operates mostly in Europe, for €4.1bn ($4.3bn). Both companies have their headquarters in Amsterdam.
• American consumer confidence fell sharply in February, in part because of expectations that inflation will rise over the coming months and increasing-pessimism about the economy. The data suggest that Donald Trump’s trade war and his imposition of tariffs on even friendly trading partners is starting to worry consumers.
• Coinbase, a crypto exchange, said that the Securities and Exchange Commission had dropped its lawsuit against the firm for allegedly allowing trading in tokens that should have been classified as securities. The SEC also reportedly ended its investigation into the crypto business of Robinhood, a trading platform. The news comes amid a slump in crypto markets, despite Mr Trump’s crypto-friendliness.

A recipe for disaster

• Five years ago Elon Musk warned that Tesla’s stock could be “crushed like a souffle under a sledgehammer”. The carmaker’s share price has indeed tumbled this year, wiping out most of the gains it made after Donald Trump’s victory in November. Its long-awaited update this week of its autopilot software in China left investors unimpressed. And Europeans are turning away from its vehicles in droves. Tesla’s sales fell by half in Britain and the EU in January, year on year, according to the European Automobile Manufacturers’ Association.

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