The Economist - 31 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: 88

New, untested and dangerous

A special report on American finance

• American finance is exceptional. Under Donald Trump, it is also exceptionally dangerous: leader, page 7.
• Innovative financial giants have supplanted banks atop Wall Street. Thomas Bennett hails their dynamism, but warns against hubris, see our special report, after page 38.

Who is leading in Chinese Al?

• The battle to cash in heats up, page 31.

Why a cleaner India is a hotter India

• If its awful air pollution is ever solved, temperatures will rise: leader, page 10, and analysis, page 27.

Bukele: from cool to cruel

• First he busted gangs, now El Salvador’s president busts critics: leader, page 8.
• How Nayib Bukele is devolving from tech-savvy reformer to textbook autocrat: briefing, page 14.

MAGA v foreign students

• The Trump administration wants to remake American universities. Instead it is damaging them: leader, page 8.
• How it is driving talent away, page 19.
• New levies on foreigners in the tax bill, page 18.

The world this week Politics

• The Trump administration intensified its crackdown on foreign students coming to American universities, as the State Department instructed American embassies not to process new visa applications. The government intends to strengthen its vetting process. That includes trawling students’ social media for anything inflammatory, such as support for Hamas. Marco Rubio, the secretary of state, said the administration would also “aggressively” rescind the visas of Chinese students, who normally eschew campus activism and make up a quarter of international students.

The resistance

• The government escalated its fight with Harvard, telling federal departments to cancel contracts with the university worth around $ioom. Donald Trump has already decided to terminate $2.6bn in research grants and has suggested he will give the money to schools that teach a trade instead. Earlier, a federal judge put a temporary stop to the Department of Homeland Security’s attempt to bar Harvard from enrolling foreign students.
• Elon Musk decided to leave his job in the administration heading the Department of Government Efficiency. Mr Musk’s announcement came soon after he criticised Mr Trump’s One Big Beautiful Bill Act, which passed the House of Representatives with just a one-vote margin and is headed to the Senate. Mr Musk said he was “disappointed” by the sweeping tax-and-spending bill, because it would undermine his work. A White House official was quoted as saying that the process of “offboard-ing” Mr Musk had begun.
• Russia stepped up its bombardment of Ukraine, as Vladimir Putin seized the opportunity of America’s disengagement from peace talks. Mr Putin had gone “absolutely crazy”, said Mr Trump, also noting that “he’s sending rockets into cities and killing people, and I don’t like it at all.” However, the American president has not authorised any new weapons for Ukraine, and shipments may soon end.
• Meanwhile, Russia regained some of the territory in Sumy that Ukraine had forced it out of in 2022, near the start of the war. Assessing the latest intelligence, Volodymyr Zelensky said there was no indication that Russia was “seriously considering peace or diplomacy”. He also said that Russia had amassed 50,000 troops near Sumy to prepare for a major offensive.
• The National Assembly in France voted in favour of a bill to legalise assisted dying, which will allow anyone over 18 who is suffering a life-threatening or terminal illness to apply for the procedure. Mental suffering alone will not be counted as a qualifying condition. The legislation winds its way to the Senate. Supporters of assisted dying hope it will become law in 2027.
• Britain’s King Charles visited Canada, where he is also head of state, on a trip that was seen as providing moral support to Canadians amid Mr Trump’s trade war and musings about taking over the country. The king avoided any reference to Mr Trump or tariffs, but noted that “The true north is indeed strong and free.”
• The electoral authorities in Venezuela claimed the government had almost swept the board in regional and local elections. Filled with supporters of Nicolas Maduro’s autocratic regime, the electoral council provided no evidence for the victory. Observers said that a lack of voters at polling stations belied its statement that turnout was 43%. Only one state, Cojedes, now has a governor from the opposition.
• Mexico’s electoral body was reportedly investigating claims that political parties were trying to influence voters ahead of the country’s first-ever judicial elections on June 1st. All positions for magistrates, federal judges and Supreme Court justices are up for grabs, though the 5,000 or so candidates are not allowed to have any formal links with parties.
• An election in Suriname gave the opposition National Democratic Party 18 seats in the national assembly and the ruling Progressive Reform Party 17 seats. Smaller parties are being courted for their support to form a government. Like neighbouring Guyana, Suriname is on the cusp of an oil boom after the discovery of huge offshore reserves.
• Israel faced growing condemnation for its conduct in Gaza. Speaking about the war, Mr Trump said he would like “to stop that whole situation as quickly as possible”. Friedrich Merz, the chancellor of Germany and one of Israel’s staunchest supporters, said “the current level of attacks on Gaza can no longer be justified.” Meanwhile, it was confirmed that Muhammad Sinwar, one of the last senior commanders in Hamas, was killed in an Israeli strike in early May.
• Israel launched the American-backed Gaza Humanitarian Foundation, which is meant to distribute aid through private contractors via a number of hubs. It suspended the programme after crowds of Palestinians overran one site where food was to be handed out. Jake Wood, the head of the group, resigned, citing principles of “humanity, neutrality, impartiality and independence”.
• Amid the disorder a UN food warehouse was looted. Scores of people were injured as they scrambled for supplies.
• Israel hit back at Houthi rebels in Yemen, after the Iranian-backed group launched a missile and projectile at Israel, both of which were intercepted. Israel said it destroyed the last remaining aeroplane used by the Houthis at Yemen’s main airport.

There’s trouble afoot

• According to press reports Joseph Kabila has returned to the Democratic Republic of Congo, which he led as president from 2001 to 2019 before going into voluntary exile. He visited Goma in eastern Congo, which is held by M23 rebels backed by Rwanda. Mr Kabila has denied claims that he supports the insurgency.
• Just a week after announcing that they would split, Australia’s Liberal and National parties said they had resolved their policy differences and would reunite their conservative alliance in opposition to the Labor government.
• The Association of South-East Asian Nations (asean) and the Gulf Co-operation Council, which represents Saudi Arabia, the United Arab Emirates and other Persian Gulf countries (but not Iran), held a joint summit in Kuala Lumpur, Malaysia’s capital. The meeting was called to develop economic ties between the regions. Li Qiang, China’s prime minister, spoke in support of globalisation and urged the summit to commit to expanding free trade.

The world this week Business

• Donald Trump’s signature policy of arbitrarily imposing tariffs on countries was thrown into disarray when the federal US Court of International Trade decided that he did not have the power to issue the duties under the economic-emergency law that he has cited. Its ruling does not apply to tariffs imposed under different laws, such as on steel and cars. The White House criticised the court, saying “It is not for unelected judges to decide” how to respond to an emergency. It will appeal against the finding. Before the decision Mr Trump suspended a threat to impose 50% tariffs on the European Union and extended a deadline for a trade deal to July 9th.
• Nvidia reported another bumper set of quarterly earnings. The producer of high-end chips for artificial intelligence saw its revenue soar by 69%, year on year, to $44.ibn, and net profit jump by 26%, to $18.8bn. And that was despite booking a $4-5bn charge in relation to Mr Trump’s curbs on sales to China. Jensen Huang, Nvidia’s chief executive, reiterated his criticism of those restrictions, arguing that shielding Chinese firms from American competition “only strengthens them abroad”.
• Xiaomi reported first-quarter revenue of 111.3bn yuan ($153bn), up by 47% year on year. The Chinese smartphone giant has been building up its electric-car business: deliveries rose by 9% compared with the previous quarter. But the venture is not yet turning a profit. Xiaomi’s units that develop electric cars, artificial intelligence and other new technologies lost 500m yuan.
• BYD, China’s leading maker of electric cars, sold more fully electric vehicles in Europe than Tesla for the first time, according to JATO Dynamics, a market research firm. Registrations of BYD cars soared in the region by 169% in April, year on year, as consumers soured on Elon Musk’s Tesla. The European carmakers’ association noted a 26.4% increase in overall sales in the EU of pure-battery vehicles in the first four months of the year.

In the driving seat

• Stellantis, which counts Chrysler, Fiat and Peugeot among its brands, announced that Antonio Filosa would take over as chief executive, replacing Carlos Tavares, who resigned abruptly in December. Mr Filosa, an Italian, currently heads the carmaker’s North American division. He will have to steer Stellantis through uncertainty in the industry over tariffs. (The company’s biggest shareholder part-owns The Economist's parent firm.)
• Volvo announced 3,000 layoffs, affecting roughly 15% of its workforce, in an attempt to reduce costs. The carmaker said the job cuts would mostly affect office workers in Sweden, its home country. Volvo has promised to cut SKr18bn ($1.9bn) in costs after it announced a big drop in operating income in the first quarter.
• Nippon Steel’s bid to buy US Steel was back on again, after Donald Trump gave his support to the “planned partnership”. The president offered few details, saying only that America would retain control over us Steel. A senator from Pennsylvania, US Steel’s home state, said the government would retain veto power over key decisions at the company. Joe Biden blocked the takeover in the dying days of his presidency.
• Germany overtook Japan to become the world’s biggest holder of foreign assets, a position it last held in 1991. According to figures from Japan’s finance ministry, Japan’s net external assets rose to an all-time high of ¥533trn ($3.7trn). But Germany’s foreign assets rose faster, to ¥570trn. The trend was in part driven by the euro’s strength against Japan’s currency, which increased the value of many of Germany’s foreign assets in yen terms. China ranked third, with ¥516trn.
• Japan’s annual inflation rate held steady in April at 3.6%. But the core rate, which in Japan excludes food prices but includes energy, rose to 3.5%, the fastest pace since January 2023. Traders are now guessing whether the Bank of Japan will increase interest rates sooner rather than later.
• Salesforce agreed to buy Informatica for $8bn. Salesforce provides data-manage-ment software for businesses. Salesforce says the deal will strengthen its autonomous “Al agents”, which firms can deploy in areas such as customer service.

Burning out

• After successfully making its way to space, SpaceX’s Starship fell back to Earth. The uncrewed rocket broke up while re-entering the atmosphere over the Indian Ocean, after spinning out of control. It was Starship’s third test flight since it was upgraded with a new design. Elon Musk, SpaceX’s boss, spied a silver lining: “Lot of good data to review,” he posted on X.

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