The Economist - 29 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: 84

ELON MUSK S EFFICIENCY DRIVE

• Is Elon Musk remaking America’s government, or breaking it? Leader, page 9.
• The world’s richest man has unleashed his people on the state—but to what end? Page 21.
• His business empire is not the impregnable fortress it once was, page 59.
• Of Musk and Mars, page 72.

Erdogan hammers Turkey

• The country’s president is throttling its democracy: leader, page 11.
• Courage and tear gas in Turkey’s streets, page 47.

China’s stockmarket rally

• Can Wall Street learn to love China again? Buttonwood, page 70.

Netanyahu’s hubris

• Israel’s expansionism is a danger to others—and itself: leader, page 10.
• Unrestrained, the country is reshaping the Middle East: briefing, page 18.
• The Jewish diaspora, page 44.

Signals intelligence Trump style

• The cover-up is even worse than the group chat: Lexington, page 28.

The world this week Politics

• More than i,8oo protesters were detained in Turkey following the arrest of Ekrem Imamoglu, the mayor of Istanbul, on corruption charges. Mr Imamoglu is the main potential electoral threat to Recep Tayyip Erdogan, Turkey’s president; the opposition says the charges are politically motivated and bogus. Amid the turmoil Turkey’s stockmarket fell heavily and the lira slumped against the dollar. Both clawed back some losses after emergency interventions from the stockmarket regulator and the central bank.

Russia plays America

• American negotiators held separate talks with Russia and Ukraine to arrange a maritime truce in the Black Sea. Ukraine said it would accept the deal. Russia suggested it would do so only when sanctions were lifted on some Russian banks, which the EU may block. The White House called it a positive step, but the truce, which covers only a small part of a much wider conflict, remains hypothetical.
• Sweden’s centre-right government announced a rise in defence spending, from 2.4% to 3.5% of GDP. Ulf Kristersson, the prime minister, said all European countries in NATO, which Sweden joined last year, would have to take a “big step forward” in funding defence.
• America lowered the diplomatic heat with Denmark by altering the itinerary of a visit to Greenland by a US delegation. The Danish prime minister, Mette Frederiksen, had said the original plan, in which the delegation would attend a dog-sled race, was unacceptable, because it was part of America’s charm offensive to pry Greenland away from Denmark. The new itinerary involves America’s vice-president, J.D. Vance, visiting America’s space base at Pituffik.
• The Israeli government managed to get its budget through the Knesset, ensuring the survival of Binyamin Netanyahu’s ruling coalition. The bill had to pass by the end of March to avoid fresh elections. The budget includes a huge increase in defence spending. Mr Netanyahu’s opponents criticised funding for projects that placate the far-right parties in his coalition, such as religious seminaries. Earlier, the Supreme Court told the cabinet to suspend its sacking of Ronen Baras head of the Shin Bet, Israel’s domestic intelligence agency, until the court can hold a hearing.
• Israel carried out drone strikes in southern Lebanon, after several rockets were fired across the border. A ceasefire between Israel and Lebanon has largely held since November. Israel claimed it killed a senior Hizbullah commander in one of its drone strikes.
• Iranian-backed Houthi rebels in Yemen claimed responsibility for firing a missile at Ben Gurion airport near Tel Aviv and two other missiles at Israel. All were intercepted. Meanwhile, the Hamas-run health authority in Gaza claimed that 50,000 Palestinians have been killed in the war with Israel there. It did not provide a breakdown of civilian and combatant deaths.
• Fighting resumed in eastern Congo after M23, a rebel group supported by Rwanda, retracted a promise to withdraw from the strategically important town of Walikale. It had announced the withdrawal following the latest round of peace talks between Congo and Rwanda, brokered by Qatar.
• The Sudanese Armed Forces said they had recaptured the airport in Khartoum, Sudan’s capital, from the Rapid Support Forces, the army’s main adversary in the country’s civil war. The SAF had earlier retaken the presidential palace. Taking command of the airport brings the army one step closer towards regaining control of Khartoum, which it lost to the RSF after the war began in 2023.
• At least 27 people were killed by wildfires in South Korea, a country where forest infernos are a rarity. The fires, which officials think were started by people burning overgrown grass, were fuelled by a spell of dry weather and high winds.
• The Unification Church was in effect banned in Japan by a court. The church was founded in South Korea and is often referred to as a sect. The Japanese government had sought its dissolution following the assassination of Abe Shinzo, a former prime minister, in 2022. Abe’s assassin held a grudge against the church and an investigation revealed its links with politicians in the ruling Liberal Democratic Party.
• America removed bounties from the heads of three senior Taliban officials in Afghanistan. It follows a slight thaw in the icy relations between the two countries. A senior American diplomat visited Kabul recently for the first time since the Taliban regained power in 2021. The visit led to the release of an American held captive by the regime since 2022.

Sending the wrong Signal

• The White House tried to play down the worst security breach of Donald Trump’s presidency. Jeffrey Goldberg, the editor of the Atlantic, was added to a security chat group by mistake, and was sent details in advance of America’s plans to bomb Houthi rebels in Yemen. The chats on the Signal app also revealed J.D. Vance saying that he hates “bailing Europe out again”, and Pete Hegseth, the defence secretary, sharing his “loathing of European freeloading”. Mr Trump held no one to account for the breach.
• The Trump administration gave notice that it would soon revoke a programme that has given 530,000 migrants from Cuba, Haiti, Nicaragua and Venezuela a temporary legal right to live in the United States. It said they should leave or face deportation.
• Lawyers representing the Venezuelan government asked El Salvador’s Supreme Court to free some of the 238 Venezuelans who were deported from the United States to a prison in El Salvador under an agreement with the country. America says they are gang members; the lawyers disagree.
• Brazil’s Supreme Court decided that Jair Bolsonaro should stand trial for his alleged involvement in a plot to overthrow the government. Mr Bolsonaro lost his re-election bid for president in 2022. He is accused of devising a coup against the winner, Luiz Inacio Lula da Silva, and of trying to undermine the democratic system. Mr Bolsonaro says the charges are “baseless”.
• Canada’s new prime minister, Mark Carney, called a snap election for April 28th. Mr Carney’s Liberal Party has staged a remarkable comeback in the polls, as voters rally around their government in defiance of Mr Trump’s imposition of tariffs and his disparaging of Canada as America’s 51st state (he referred to Justin Trudeau, Mr Carney’s predecessor, as Governor Trudeau).

The world this week Business

• Rachel Reeves, Britain’s chancellor of the exchequer, laid out her Spring Statement, a sort of mini-budget. With official forecasters lowering the economy’s expected growth rate this year to i% and the government facing high borrowing costs, Ms Reeves announced further cuts to incapacity benefits and stricter eligibility requirements for disability allowance. This, she said, would allow her to keep within her fiscal rules. There were no tax rises, and defence spending was increased. Annual inflation was forecast to come in at 3.2% in 2025, up from a previous estimate of 2.6%.
• Indonesia’s central bank intervened to prop up the rupiah after it fell to levels last seen during the Asian financial crisis of 1998. The currency has been hit by market concerns about the government’s finances amid a big public-spending increase, and by the global uncertainty over trade.

Not ready for take-off

• London’s Heathrow airport went on a PR defensive after shutting down entirely for 18 hours when a fire at a local electricity substation knocked out its critical systems. The closure of the international hub led to chaos in flight schedules. Many airlines will want compensation. Questions were raised about why the airport relied on just one substation. Britain’s National Grid insisted that the network was capable of supplying it with power.
• A federal judge set June 23rd as the start of Boeing’s trial on a criminal charge of misleading regulators about the safety of its 737 max aircraft ahead of two fatal crashes in 2018 and 2019. Boeing pleaded guilty last July, but the families of the crash victims objected to the terms of the plea deal. The judge rejected the guilty plea in December, citing the use of diversity measures to select a monitor to oversee Boeing’s compliance with the deal, rather than choosing a monitor on merit. Boeing hopes to avoid the trial by resolving the matter with the Justice Department.
• There was some much-needed good news for Boeing when Donald Trump selected it to build the American airforce’s Next Generation Air Dominance fighter jet. Dubbed the F-47 (in part after Mr Trump’s term as America’s 47th president) the jet will replace Lockheed Martin’s F-22 Raptor.
• Hyundai, a South Korean conglomerate best known for producing cars, announced that it would invest $21bn in America, including a steel plant in Louisiana and various factories to supply it with parts and materials. Marking the announcement, Donald Trump claimed this was proof that his tariffs policy was working as intended. “Money is pouring in,” he said. Hyundai already has big established investments in America. By announcing its latest deal now it hopes to win carve-outs from Mr Trump’s trade levies.
• Mr Trump’s latest salvo in that trade war was to announce 25% tariffs on all imports of vehicles and car parts, to take effect soon. On April 2nd Mr Trump will also announce wide-ranging reciprocal tariffs on countries he thinks have an unfair trade advantage with America. He calls it “Liberation Day”.
• Copper prices shot up amid speculation that the Trump administration will soon impose punitive tariffs on imports of the metal, which has upended the market. Traders have been sending their purchases of copper, which is widely used in pipes, cables and electric cars, to American warehouses linked to COMEX, America’s main commodities-trading platform, to avoid the duties. Copper prices in New York are now much higher than on the London Metal Exchange.
• SAP overtook Novo Nordisk to become Europe’s most-valuable company by stockmarket capitalisation. Based in Germa ny, SAP, a provider of business software, has benefited from hype surrounding artificial intelligence. Novo Nordisk, by contrast, has seen its share price fall by half since June as the hype around its bestselling weight-loss drugs, Ozempic and Wegovy, recedes.

Schadenfreude

• Tesla’s sales in Europe fell sharply in February, down by 40% year on year, and by 76% in Germany, where Elon Musk has expressed support for the hard right. This was despite a 26% overall rise in sales of battery-electric vehicles, according to the European Automobile Manufacturers’ Association. The left, which once embraced Mr Musk for his green credentials, has turned against him. In America the FBI has created a task-force to tackle what it describes as acts of “domestic terrorism” against Tesla cars and facilities.
• Nike’s stock dropped to a five-year low, after it forecast another big decrease in revenue. The sportswear company listed a litany of challenges, from weak demand in China to tariffs and “geopolitical dynamics”. All a far cry from its mantra of “Just do it”.

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