The Economist - 26 April 2025

Год выпуска: April 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: 80

ONLY 1,361 DAYS TO GO

• MAGA’s second term is a revolutionary project. Will it succeed? Leader, page 9.
• A special section on Donald Trump’s first 100 days in office, from page 19.

Xi’s latest purge

• As he grapples with Donald Trump, China’s president has plenty of other problems, page 33.
• China faces a sharp drop in foreign demand. Will its consumers step up? Page 62.

Don’t mess with the Fed

• Jerome Powell wins a reprieve. But expect more showdowns: leader, page 11.
• Market turbulence leaves American tech stocks looking vulnerable, page 60.

Africa’s unstoppable diaspora

• Emigration from Africa will change the world: Briefing, page 16.
• It will transcend today’s populist surge: leader, page 11.

When Ais break the rules

• They can learn to hide information from their users, page 68.
• What to do about it: leader, page 13.

The world this week Politics

• The body of Pope Francis lay in state in St Peter’s in Rome ahead of his funeral on April 26th. The 88-year-old pontiff died from a stroke following a recent bout of pneumonia. He made his last public appearance on Easter Sunday, the day before his death. Born Jorge Mario Bergoglio in Buenos Aires, he became pope in 2013 after Benedict XVI decided to retire. Francis was the first man from the southern hemisphere to head the Catholic church. Many world leaders are expected to attend his funeral including Donald Trump, Volodymyr Zelensky, Ukraine’s president, and Javier Milei, the president of Argentina.
• America increased the pressure on Ukraine to agree to a peace deal with Russia. J.D. Vance, the vice-president, outlined a proposal that would broadly let Russia occupy the territory it has captured and stop Ukraine from joining NATO, though did not cap the strength of Ukraine’s forces. Before Mr Vance’s statement Mr Zelensky again ruled out accepting Russia’s claim to Crimea. Mr Trump said that would only prolong the “killing field”. America is threatening to end its negotiations if both sides don’t agree to a deal. Meanwhile, nine people were killed in Russian strikes on Kyiv.
• Under pressure from America and European allies, the Spanish government laid out plans to raise defence spending by the end of the year. Spain’s current defence outlays of 1.28% of GDP are the lowest on that basis in NATO. But they will rise to just 2% of GDP, below the 3% that is expected to become the new NATO target. Pedro Sanchez, the Socialist prime minister, maintains that Spain is “pacifist”.

Dysfunctional government

• Mr Trump removed Gary Shapley as acting commissioner of America’s Internal Revenue Service just days after promoting him. Scott Bessent, the treasury secretary, was unhappy with the appointment of Mr Shapley, who was favoured by Elon Musk. The new acting commissioner is Michael Faulkender, Mr Bessent’s preferred choice. The IRS has had three leaders within the space of a week.
• It emerged that Pete Hegseth, America’s defence secretary, divulged more sensitive details on Signal about America’s strikes on Houthi rebels in Yemen, this time to his family and his lawyer. Separately, the Pentagon’s senior spokesman, John Ullyot, resigned and wrote a press column describing the “disarray” of Mr Hegseth’s leadership. “It’s been a month of total chaos,” he said.
• America’s Supreme Court issued a temporary halt to the deportation of a group of Venezuelans that the Trump administration claims are gang members. In an emergency case brought by lawyers for the Venezuelans the court told the government “not to remove any member of the putative class of detainees from the United States” until it had time to consider the matter.
• Alleged Venezuelan gang members have been deported from America to a prison in El Salvador under an agreement between the countries. Nayib Bukele, El Salvador’s president, has offered to exchange the 252 Venezuelans incarcerated in the prison for political prisoners in Venezuela. Venezuela accused El Salvador of detaining its citizens unlawfully.
• Meanwhile, the Supreme Court said it would hear arguments on May 15th regarding Mr Trump’s order to end birthright citizenship for children born in America to illegalimmigrant parents.
• Abbas Araghchi, Iran’s foreign minister, and Steve Witkoff, America’s Middle East envoy, met in Rome for a second round of nuclear talks. Both sides said the discussions went well and the two men agreed to meet again on April 26th. “Technical talks” are meant to begin on the same day.
• In an affidavit to Israel’s Supreme Court, Ronen Bar, the head of the Shin Bet, the domestic security agency, accused Binyamin Netanyahu, the prime minister, of trying to fire him for refusing to commit illegal acts. These include tracking people who protest against the government.
• America carried out an air strike on a Yemeni oil terminal controlled by the Houthis, a rebel group backed by Iran. The Houthi-run health ministry said the strike killed 74 people and injured 171 others. America said its purpose was to eliminate a source of fuel and revenue for the Houthis.
• A court in Ivory Coast ruled that Tidjane Thiam, the leader of the opposition Democratic party, must be removed from the electoral roll, which would stop him from running in October’s presidential election. Mr Thiam, a former CEO of Credit Suisse, is widely considered to be the most serious challenger to the ruling party of President Alassane Ouattara, who is currently defying a constitutional two-term limit by serving a third term.
• Congo banned the party of Joseph Kabila, a former president, and ordered the seizure of his property following reports that he had returned to the country after two years in South Africa. The government claims that Mr Kabila, who was said to have returned to Goma in the rebel-held east of the country, has links with M23, the Rwandan-backed rebel group that controls the city. Speculation about his return poses a challenge to the government of Felix Tshisekedi, Congo’s president, whose authority has been shaken by M23’s campaign.
• At least 26 people were killed when gunmen opened fire on tourists at a beauty spot in the Indian state of Jammu & Kashmir. It was the worst attack on tourists in Indian-controlled Kashmir since separatists started their insurgency in the region 36 years ago. A fairly unknown group calling itself the Resistance Front claimed responsibility on social media for the assault. India says the group is a proxy for Lashkar-e-Taiba, a Pakistan-based Islamist group which perpetrated the Mumbai attacks in 2008. In response India closed the only border crossing between the two countries.

Best buddies

• Before the attack J.D. Vance visited India for talks with Narendra Modi, the prime minister, over a trade deal. Mr Vance said good progress had been made. He also heaped praise on Mr Modi and spoke warmly of India’s relationship with America. India needs an agreement to fend off the threat of tariffs from America, its biggest trading partner.
• Pakistan deported 100,000 illegal migrants from Afghanistan back across the border this month ahead of an April 30th deadline for them to leave. In 2023 Pakistan launched a campaign to expel the estimated 1.7m Afghans living in the country without papers.

The world this week Business

• The IMF significantly revised down its forecasts of global growth, mostly because the “swift escalation of trade tensions and extremely high levels of policy uncertainty” are expected to impact economic activity. The fund now expects the world economy to expand by 2.8% this year, down from its previous projection of 3.3%. Prospects for almost all the major economies were downgraded. America’s GDP is now forecast to rise by 1.8% this year and output in the euro area is expected to increase by 0.8%, with Germany not growing at all. The IMF admitted that, given the fluid policy situation, its estimates could change.

The chaotic world of Trump

• Stockmarkets had another rollercoaster week. Investors took fright when Donald Trump made several comments deriding Jerome Powell for not cutting interest rates at a faster pace. Rumours swirled that the president was studying ways to fire the Federal Reserve’s chairman. But after markets swooned at the idea of the White House interfering with the central bank, Mr Trump toned down the rhetoric and said he had “no intention” of sacking Mr Powell.
• The dollar dropped to a three-year low against a basket of currencies amid Mr Trump’s tirade. The price of gold, a haven for investors in times of stress, rose above $3,500 a troy ounce for the first time.
• Mr Trump soothed markets further by saying he plans to be “very nice” to China in trade talks, suggesting that he could substantially reduce tariffs of 145% he has imposed on most Chinese goods. Scott Bessent, Mr Trump’s treasury secretary, has said the trade stand-off with China is unsustainable, but also that tariff reductions would not be unilateral.
• Meanwhile, America imposed duties of up to 3,521% on imports of solar panels from Cambodia and lower levies on those from Malaysia, Thailand and Vietnam. The tariffs come after an investigation, which started during the Biden administration, concluded that solar manufacturers in those countries are benefiting from state subsidies.
• In one telling indication of how Mr Trump’s policies have upended established trade, DHL, a global logistics company, suspended business-to-consumer shipments to the United States worth over $800. The company blamed more stringent customs checks in America. Business-to-business deliveries are not affected.
• Tesla reported a 9% drop in revenues and a 71% fall in net profit for the first quarter, year on year. Sales of Tesla’s electric cars, already under pressure from increased competition from China, have taken a hit from Elon Musk’s association with the Trump administration. Deliveries fell by 13% in the quarter, but by much more in Europe (though in Britain, Tesla’s biggest European market, sales were up by 3.5%). After the earnings report, Mr Musk promised to spend more time at Tesla and reduce his work for the government rooting out alleged inefficiencies.
• The race to develop faster charging times for electric-car batteries continued apace when CATL, based in China and the world’s biggest battery producer, announced that its atest product could charge a car in five minutes with a range of 520km (320 miles), BYD, Tesla’s biggest rival in China, recently said it could provide a range of 470km from a five-minute charge.
• The European Union fined Apple €500m ($570m) and Meta €200m in the first penalties to be imposed for stifling competition under the EU’s Digital Markets Act. Apple was fined for hindering communications between app developers and customers over pricing; Meta for telling users they must either allow their private data to be used for advertising or pay subscription fees. Both companies criticised the EU for levying the fines.
• Despite shutting down for a day in March because of a power outage, Heathrow airport reported a decent increase in revenue and profit for the first quarter.
• UnitedHealth Group’s share )rice failed to recover from the lammering it took after the company lowered its profit forecast. The health insurer blamed an unexpected rise in demand for medical services from older customers. Its stock slumped by 22% in a day. Brian Thompson, the CEO of United-Healthcare, was murdered in December in Manhattan.

Regulatory oversight

• The United Arab Emirates is set to take a gigantic leap of faith and use artificial intelligence to help write legislation, according to reports. The UAE has invested heavily in Al, with Abu Dhabi creating a state fund for the technology. Still, observers think allowing Al to take control of a country’s laws is a brave step, given its tendency to “hallucinate”, or make things up.

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