The Economist - 3 May 2025

Год выпуска: May 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

THE TAIWAN TEST

It’s closer than you think

• An opportunity is opening for China to call America’s bluff: leader, page 9.
• Military exercises foreshadow a blockade of Taiwan, page 15.
• Can China sap a divided and isolated Taiwan of its will to resist? Page 17.
• Any Chinese curbs on Taiwan’s trade would carry big economic costs, page 18.
• China stands firm against the Trumpnado, page 57.

Inside the IRS mess

• Resignations and staff cuts portend the loss of billions in revenue, page 19.

Trump is right on deep-sea mining

• He is high-handed, but going after metals on the ocean floor makes sense: leader, page 12, and analysis, page 46.

Luxuries Europe cannot afford

• Five policies the EU can no longer indulge in: Charlemagne, page 42.

Bowel cancer and young people

• Rising rates of early-onset bowel cancer could be explained by childhood exposure to a common gut bacterium, page 64.

The world this week Politics

• Following the victory of his Liberal Party in Canada’s election, Mark Carney, the prime minister, claimed a fresh mandate to negotiate with America over trade and security and said he would do so on “our terms”. Mr Carney and Donald Trump have agreed to meet soon. The Liberals fell just short of a majority, but it was still a stunning turnaround for a party that was 20 percentage points behind in the polls three months ago. Pierre Poilievre, the leader of the opposition Conservative Party, who was on course to become prime minister before the Liberals’ revival, lost his seat.
• Two days before the election 11 people were killed when a man drove a car through crowds of people celebrating a Filipino festival in Vancouver. Police arrested the man, who has a long history of mental illness.
• Cuba re-arrested two leading dissidents, José Daniel Ferrer and Felix Navarro, just three months after releasing them from jail in a deal that was brokered by the Vatican and the Biden administration.
• America and Ukraine signed a long-awaited agreement that gives America access to Ukraine’s natural resources and critical minerals, easing a source of tension between the two countries. Details were sketchy, but the deal provides for a reconstruction fund for Ukraine. Scott Bessent, America’s treasury secretary, signed the document for America and was unusually supportive of Ukraine, saying that it would boost a “peace process centred on a free, sovereign and prosperous” nation. He also said that no state or person who financed or supplied “the Russian war machine” would be allowed to benefit.
• The Vatican announced that the conclave of cardinals to elect the next pope will start its deliberations on May 7th. Pope Francis’s funeral at St Peter’s Basilica was attended by more than 250,000 people, including scores of world leaders.
• Electricity was gradually restored to Spain and Portugal after a widespread blackout that affected both countries. Trains came to a halt, lifts got stuck and phones and computers went offline during the outage. The Spanish authorities ruled out a cyber-attack. Investigations into the cause of the blackout continue, but speculation has fallen on a possible lack of grid and storage capacity for renewable energy, which Spain increasingly relies on.
• At least 25 people were arrested across France in connection with a recent series of attacks on prisons, including the firing of an assault weapon at Toulon’s jail. The authorities say the trouble was caused by criminal gangs angered by a crackdown on drug-trafficking.

Passports are not for sale

• The European Court of Justice ruled that Malta would have to end its golden-passport scheme, which grants Maltese citizenship, and thus rights in the European Union, to people who invest or buy property in the country. The court found that this amounted “to rendering the acquisition of nationality a mere commercial transaction”. Other EU countries offer golden-visa programmes that grant residence permits to investors, but these too have raised legal concerns.
• The International Court of Justice began hearings on Israel’s legal obligations to allow humanitarian aid into Gaza. Israel stopped allowing aid to enter the strip on March 2nd. It claims this is to force Hamas to release the remaining hostages. The UN and aid agencies say food is running out, which Israel denies.
• Ronen Bar, the head of the Shin Bet, Israel’s domestic security agency, said he would stand down from the job on June 15th. Binyamin Netanyahu has been trying to sack Mr Bar, who is in charge of investigating corruption allegations against aides of the Israeli prime minister. Mr Bar has accused Mr Netanyahu of ordering the Shin Bet to spy on anti-government protesters.
• At least 70 people died in an explosion and fire at Bandar Abbas, Iran’s biggest port. The interior minister blamed “non-compliance with safety precautions and negligence”.
• The international Red Cross began escorting hundreds of unarmed Congolese soldiers and police from the UN base in Goma, the biggest city in eastern Congo, to Kinshasa, the country’s capital, which lies 1,600km (1,000 miles) to the west. Goma was captured by M23, a Rwandan-backed rebel group, in January. A South African-led peacekeeping force that had been fighting the rebels also began withdrawing from the region.
• Japan’s prime minister, Ishiba Shigeru, visited Vietnam (and the Philippines) where trade was top of the agenda. In Hanoi, Vietnam’s capital, the Vietnamese prime minister, Pham Minh Chinh, said both countries would “uphold the global order of free trade”. Many Japanese manufacturers assemble their products in Vietnam. Amid Donald Trump’s trade war, diplomatic efforts have gathered pace in the region to strengthen ties. Japan hosted a top-level meeting with China and South Korea in March and Xi Jinping, China’s leader, recently visited Vietnam.
• Tensions remained high between India and Pakistan following the massacre of 26 civilians in Indian-controlled Kashmir in a terrorist attack that India says had cross-border involvement from Pakistan. Pakistan braced itself for India to retaliate through a military strike. The Pakistani government was also preparing to take legal action against India for suspending a treaty that distributes water from the Indus river to Pakistan.
• Donald Trump signed more executive orders that crack down on illegal immigration, one of which directed the federal government to compile a list of “sanctuary cities”, or municipalities that enact policies to shield migrants from deportation. Meanwhile, the FBI arrested a judge in Wisconsin for allegedly trying to stop a man from being apprehended by immigration agents. The FBI claims the judge obstructed the arrest by allowing the man to escape by a side door. She will enter her plea to the allegation on May 15th.

Trump 2: Judgment Day

• Mr Trump marked the 100th day of his second term in office with a speech in Michigan. The president said he had sparked a “revolution of common sense” and that opinion polls recording his waning popularity were “fake”. Mr Trump’s flurry of more than 200 executive actions include orders on tariffs, migration and diversity programmes, as well as this week, requiring that lorry drivers can read and speak English. The S&P 500 lost 7% of its value during Mr Trump’s 100 days, the worst start to a presidency since Gerald Ford’s in 1974.

The world this week Business

• Donald Trump gave a little relief to a car industry left reeling by his tariffs on imports of vehicles and auto parts. The president signed one order giving carmakers a reprieve from import duties on aluminium and steel, so there is no “cumulative effect” in the tariffs they face, he said. A second order amends his 25% car tariff by allowing manufacturers who make vehicles in the United States with foreign parts to claim a rebate of 3.75% against the value of their sales, falling to 2.75% next year. Several carmakers, including General Motors and Stellantis, have pulled their profit guidance amid the uncertainty.

The Trump economy

• America’s economy shrank by 0.3% in the first quarter of the year at an annualised rate. The trade deficit swelled as companies rushed to build up inventories of foreign goods before tariffs came into effect. And government spending declined over the three months.
• Microsoft brought some welcome cheer to investors by reporting solid earnings for the first quarter. Revenues rose by 13%, year on year, to $70.1bn, and net profit increased by 18%, to $25.8bn. Revenues from its cloud-computing division were in line with expectations, putting to rest for now market concerns of slower growth in the business.
• Meta also published a set of bumper results for the quarter, with net profit up by 35%, to $i6.6bn. The company raised its estimate of how much it will spend on investing in data centres. Underlining Mark Zuckerberg’s wish to ensure Meta leads its rivals in artificial intelligence, the company unveiled a stand-alone app to rival ChatGPT.
• At Pirelli, an Italian maker of tyres, the board of directors voted to remove the status of Sinochem, a Chinese state-owned conglomerate, as its controlling shareholder. Sinochem is Pirelli’s biggest shareholder with a 37% stake, but two years ago the Italian government used legislation to limit Sinochem’s influence. Italy’s regulators gave Pirelli the option of changing its status. Pirelli’s tyre-sensor technology is what’s at stake. It fears being shut out of America because of its Chinese links.
• Airbus agreed to buy some factories from Spirit AeroSystems, which makes aircraft fuselage sections. The deal, which includes sites in North Carolina, France and Northern Ireland, secures a future for Spirit, an integral supplier to the aviation industry. The company used to belong to Boeing until it was sold off 20 years ago, but it struggled, despite adding Airbus as a customer. Boeing is buying back the rest of the business.
• Deliveroo, a British fooddelivery company that also operates in France, Italy and elsewhere, said it would probably recommend that shareholders accept a £2.7bn ($3.6bn) takeover offer from DoorDash, the largest fooddelivery platform in America, if the deal’s other details are acceptable. It is the latest instance of consolidation in the low-profit industry.

Investigating journalism

• A presenter on CBS’s “60 Minutes”, America’s premier current-affairs programme, told viewers that Paramount, CBS’s owner, was supervising its content and that the show’s top producer had resigned because he felt he had lost his independence. None of its stories has been pulled, but speculation has swirled that Paramount wants to ensure its merger with Skydance Media won’t be torpedoed by the Trump administration because of its networks’ political coverage. Meanwhile, Paramount was reportedly ready to settle a lawsuit brought by Mr Trump that accuses CBS News of underhandedly editing an interview with Kamala Harris, Mr Trump’s Democratic opponent last year.
• The recent turmoil that hit bond and currency markets proved to be a boon for Deutsche Bank, which reported its best quarterly pre-tax profit in 14 years. The German bank has now earned more in cumulative profits than it has lost over the past ten years; between 2015 and 2019 its losses were huge.
• The euro area’s GDP grew by 0.4% in the first quarter of 2025 compared with the last quarter of 2024, and by 1.2% year on year. German GDP expanded by 0.2%, quarter on quarter. The European Central Bank cut interest rates again recently, taking the rate on its deposit facility to 2.25%, amid concerns that a trade war would hurt the currency bloc’s economy.
• In a sign of the White House’s sensitivity to the public’s scepticism on tariffs, Mr Trump’s press secretary described Amazon’s reported plan to display the cost of import duties against products on its website as a “hostile and political” act. We have no such plans, Amazon hastily responded. Mr Trump called Jeff Bezos to smooth things over. He “solved the problem very quickly”, said the president. “He did the right thing. Good guy.”

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