The Economist - 17 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: 80

Crypto meets the swamp

Why it won’t end well

• The crypto industry dreamed of being above politics. It has become synonymous with self-dealing: leader, page 7.
• Friendly regulators, lavish election spending and the Trump family’s investments have drawn the industry into politics: briefing, page 16.

Europe’s free-speech problem

• The continent that gave the world the Enlightenment has forgotten how to nurture free expression: leader, page 8.
• Britain’s muddled laws on online speech, page 48.
• Europe’s clumsy efforts to police wrongthink, page 43.

Syria after sanctions

• On a tour of the Gulf, Donald Trump resets his Middle East policy, page 38.
• Foreign-policy advances for Syria’s president are not yet helping solve his country’s worsening problems at home, page 40.

America’s red economy

• The world’s largest economy is becoming two—and the MAGA half is thriving, page 61.

The future of fighter planes

• They will be bigger, stealthier and fly much farther, page 68.

The world this week Politics

• Donald Trump received a warm welcome in Saudi Arabia, where he described the kingdom’s de facto leader, Muhammad bin Salman, as an “incredible man”. In a speech emphasising his break from American foreign-policy orthodoxy, Mr Trump said that the “gleaming marvels” of Riyadh and other cities in the Gulf region were not created by “nation-builders, neocons or liberal non-profits” but by Arab regimes that embraced their “national traditions” and heritage. He also pleased his hosts by announcing that America would lift sanctions on Syria. Mr Trump briefly met Ahmed al-Sharaa, Syria’s president, and urged him to reconcile with Israel. Qatar and the United Arab Emirates were also on Mr Trump’s itinerary.

The sky’s the limit

• Before the trip Qatar’s offer of giving Mr Trump a Boeing 747 to be refurbished as Air Force One, the presidential plane, raised eyebrows in America among maga conservatives as well as Democrats. Some Republicans have questioned America’s close relationship with the Gulf state because of its support for Hamas.
• As Mr Trump visited the Gulf states Israel intensified its bombardment of Gaza, killing 80 people, according to the Hamas-run authorities. The UN warned of an imminent risk of famine, saying around half a million face starvation. Israel, which has maintained a blockade on aid since March, denies there is a crisis and says it wants to work with private contractors to deliver supplies, so that Hamas can’t steal them.
• Hamas released an Israeli-American hostage after holding him for 19 months. Edan Alexander is thought to be the last living American to have been held by the militant group. Several Americans are among the more than 30 bodies of dead hostages that Hamas has not released.
• The junta in Mali dissolved all political parties, continuing a crackdown on the country’s remaining vestiges of democracy. The opposition has been galvanised by an attempt by General Assimi Goita, the “transitional” president, to stay in power until at least 2030.
• Around 100 people died in flooding in eastern Congo, according to regional officials. The floods affected an area near Lake Tanganyika that is still under the control of the government in Kinshasa and has not fallen to the Rwandan-backed M23 rebels.
• Colombia’s president, Gustavo Petro, announced that his country will join China’s Belt and Road Initiative, a vast network of development projects. The symbolic shift towards China by a traditional ally of the United States will irritate the Trump administration. Colombia was one of the last holdouts in Latin America and the Caribbean against joining the BRI. At a summit in Beijing Xi Jinping pledged to provide the region with fresh credit and investments.
• Luis Arce decided not to stand for re-election as Bolivia’s president this August. Mr Arce is pulling out in order not to split the left, which is divided in its support for him and for a faction loyal to Evo Morales, a former president who is embroiled in legal troubles. The constitutional court has also ruled that Mr Morales cannot stand for another term.
• After a few breaches at its start, a ceasefire held between India and Pakistan in their worst military conflict for 25 years, which was triggered by a terrorist attack in Indian-administered Kashmir. Donald Trump claimed credit for brokering the ceasefire, which annoyed India. It wants any talks to focus on Pakistan’s support for terrorist groups, rather than the future of Kashmir.
• A midterm election in the Philippines brought gains for politicians allied with Ferdinand Marcos junior, the president. But politicians aligned with Sara Duterte, the vice-president, also did well, complicating plans in Congress to try her on impeachment charges. The president and vice-president are elected separately, and the current administration has been riven by fighting between the Marcos and Duterte dynasties.
• In a ruling that could bring about more political transparency in the European Union, the EU’s General Court found that the European Commission should not have withheld text messages between Ursula von der Leyen, the commission’s president, and the chief executive of Pfizer, a drugs company, during the pandemic. Mrs von der Leyen was instrumental in striking a vaccine deal with Pfizer. The case was brought by the Netv York Times, which sued the commission after it refused to release the texts in 2022.
• The Kurdistan Workers’ Party (PKK), which is designated as a terrorist group in Turkey, officially decided to disband and end its militant push for a separate Kurdish state. Recep Tayyip Erdogan, Turkey’s president, welcomed the announcement and said the authorities would monitor the situation. The PKK wants to see how the Turkish government responds to its decision to disband before it hands over its weapons.
• Albania’s prime minister, Edi Rama, who heads the Socialist Party, won his fourth election in a row, gaining 52% of the vote in a low turnout against the right-wing Democratic Party led by a former prime minister and president, Sali Berisha, with 34%. Mr Rama, who took office in 2013, is bidding for Albania to join the eu by 2030. European leaders are gathering in Tirana, Albania’s capital, on May 16th for a summit of the European Political Community, which includes eu and non-EU countries such as Britain, Norway, Switzerland and Turkey.
• Britain’s prime minister, Sir Keir Starmer, proposed a tougher policy on legal immigration, arguing that the system seems “almost designed to permit abuse”. Changes to cut immigrant numbers include raising skill requirements for work, reducing the length of student work visas and extending settlement requirements from five to ten years. All immigrants, including spouses, will need to speak basic English. Sir Keir suggested that he was not responding to the recent success of the anti-immigration Reform UK in local elections.

Saints and Sinner

• Pope Leo XIV had a busy first week after his election by the conclave of cardinals in the Vatican. As well as being the first pontiff to hail from the United States he also holds Peruvian citizenship. Pope Leo paid a surprise visit to a shrine and wrote a letter to the American Jewish Committee pledging to strengthen the Catholic church’s “dialogue and cooperation with the Jewish people”. He also met the world’s number one tennis player, Jannik Sinner.

The world this week Business

• Following a round of talks in Geneva, America and China agreed to pull back from their trade war and slash tariffs, for 90 days at least. Donald Trump said some of the duties could be reimposed if no progress was made in further negotiations, but at probably a far lower rate than the 145% tariff America ended up levying on Chinese goods. Scott Bessent, the treasury secretary, said America would now aim for a strategic, and not a general, decoupling from Chinese trade. In another sign of a thaw in the trade war, China reportedly lifted its ban on Chinese airlines taking delivery of Boeing aircraft.
• Stockmarkets surged in response to the rapprochement on trade. The S&P 500 erased its losses for the year, though is still below its February peak. The NASDAQ Composite and Dow Jones Industrial Average weren’t far behind. The gains were led by chipmakers such as Nvidia and AMD, and Tesla, which saw its market capitalisation climb above $itrn again.
• Before the breakthrough in Geneva America struck a trade deal with Britain, the first in a line of countries that Mr Trump says are eager to come to reciprocal agreements. The deal, covering mostly cars and beef, was comparatively small potatoes in the wider trade war. The bulk of trade between the two countries is in services, which are not subject to tariffs.
• The American government’s receipts from customs duties hit a record $16.3bn in April, over double the $7.1bn that was collected in April 2024.
• Honda and Nissan both tore up their annual profit forecasts because of the hits they expect to take from tariffs. The Japanese carmakers have factories in America but also produce vehicles in Mexico to sell in the us. Nissan’s troubles pre-date the imposition of the levies. It is restructuring its business, and this week announced that it would cut 20,000 jobs, 15% of its global workforce, and close seven of its 17 plants.

The perils of predictions

• Foxconn lowered its outlook for the year, in part because of uncertainties in trade but also because of currency fluctuations. The contract manufacturer, best known for assembling the iPhone in China, is building a factory in Mexico to produce Nvidia’s GB200, which brings together several processing units in one superchip.
• Mr Trump’s trade duties have not caused America’s inflation rate to jump, so far at least. The latest figures showed annual inflation slowing to 2.3% in April from 2.4% in March. Month-on-month consumer prices rose by 0.2%. Economists think tariffs will eventually cause inflation to spike in the coming months.
• The pharmaceutical industry found itself caught in Mr Trump’s cross-hairs, when he signed an executive order that would force companies to lower the price of their drugs to align with those in other countries. The president is seeking price reductions of between 59% and 90%, and is threatening to take action if the industry doesn’t comply. But the order is fraught with difficulties, including the fact that generic drugs, which account for most American prescriptions, are far cheaper in America than in other rich countries.

Deep pockets of the state

• Mr Trump’s trip to the Middle East saw a raft of trade deals, including $142bn in defence equipment to Saudi Arabia that America described as the largest such pact in history. Qatar agreed to buy up to 210 Boeing aircraft. And the United Arab Emirates, already a global hub for artificial intelligence, hoped to strike deals to import advanced chips. Meanwhile, Saudi Arabia announced the creation of a new state-backed company to develop Al infrastructure and data centres. Humain will own Al assets as well as invest in them, with a focus on large language models based in Arabic. Nvidia and AMD will supply it with state-of-the art chips.
• As the Gulf states increase their public investments in AI, SoftBank, by contrast, denied reports that it is hesitating over its commitments to the technology because of market uncertainty. The Japanese tech conglomerate’s chief financial officer said it was “very much making progress” in choosing data centres for Stargate, America’s vast Al project, in which SoftBank is a major investor. SoftBank made its first annual profit in four years for the 12 months ending March, helped by the performance of its telecoms companies. Its Vision Fund 1, which houses investments in firms such as ByteDance, made a gain, but its Vision Fund 2, which invests in more recent startups, booked a loss.
• CATL, based in China and the world’s largest producer of batteries for electric vehicles, hopes to raise $4.6bn from its forthcoming secondary listing, which would make it the world’s biggest stock offering so far this year. The shares are due to start trading in Hong Kong on May 20th.

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