The Economist - 5 July 2025

Год выпуска: July 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

BIG, BEAUTIFUL ...BONKERS

• Trumponomics 2.0 is chipping away at the foundations of America’s prosperity: leader, page 7.
• Our analysis of a wildly profligate but oddly insubstantial law: briefing, page 14.
• Big, beautiful budgets are not just an American problem, page 58.

China’s surveillance state

• A technologist’s dream and a dissident’s nightmare: leader, page 9.
• China’s giant new gamble with digital IDs, page 30.

The tragedy of Keir Starmer

• He is rapidly losing his authority and his hope of achieving much in office: leader, page 8.
• By its own yardstick Britain’s government has squandered its first year, page 43.
• Explore our Starmer tracker, which monitors government performance, page 45.
• Labour is bungling its growth “mission”, page 44.

Jefferson rolls in his grave

• How the University of Virginia became a target, page 21.

Celebrity entrepreneurs

• From Kim Kardashian to Ryan Reynolds, A-listers are now a surprising source of commercial innovation: leader, page 10, and analysis, page 50.

The world this week Politics

• The American Senate passed Donald Trump’s “big, beautiful bill”, a colossal piece of legislation containing trillions of dollars in tax reductions, billions in spending on border security and swingeing cuts to welfare programmes and clean-energy projects. The bill passed by 51-50 votes, with J.D. Vance, the vice-president, casting the tie-breaking vote. Mr Trump then set about cajoling a few wavering Republicans in the House of Representatives who were opposed to the bill because it adds $3.4trn to budget deficits over the next ten years.

There may be trouble ahead

• Elon Musk, the Republicans’ biggest donor, who fell out with Mr Trump over the deficitbusting bill, called for the creation of a new political party to challenge both main parties, and suggested he would fund challengers at primary elections to Republicans who voted for the legislation. “What’s the point of a debt ceiling if we keep raising it?” he asked.
• The Trump administration piled the pressure on Harvard by informing the university that it had broken civil-rights law by failing to protect Jewish students from a campaign of harassment. Meanwhile, the president of the University of Virginia resigned, after the Justice Department demanded that he step down as part of a settlement over the college’s diversity policies.
• Mr Trump claimed that Israel had agreed to the “necessary conditions” for a 60-day ceasefire in Gaza. He did not specify what those conditions were but warned Hamas that if it did not agree to the deal, things would “only get worse”. Neither Israel nor Hamas said whether they had agreed to the plan. The civilian death toll continued to climb relentlessly.
• America is ending sanctions on Syria that were imposed during the rule of Bashar al-Assad. As Mr Trump signed the executive order, the White House said it would monitor Syria’s progress on normalising relations with Israel and dealing with terrorist groups.
• Iran arrested and executed people suspected of spying for Israel. Iranian officials think that the Iranian security services have been extensively infiltrated by Israeli agents.
• France transferred another military base used by its army to Senegal, following a similar handover in March. The change in command is part of a broader withdrawal of French troops from the west African country, which announced last year that France would have to close all its military bases there by the end of 2025.
• Narendra Modi, India’s prime minister, visited Ghana for talks with John Mahama, the president. The first visit to the west African country by an Indian leader in 30 years comes as India vies with Russia and China for influence in Africa. India is one of Ghana’s main trading partners and is one of the main recipients of its gold exports.
• Thailand’s Constitutional Court suspended Paetongtarn Shinawatra as prime minister while it considers arguments to remove her permanently. A group of 36 senators had petitioned the court, arguing she was not fit for office following the leak of a phone conversation she held with Hun Sen, Cambodia’s still influential former prime minister, during a border dispute. In the call Ms Paetongtarn seemed to criticise the Thai army.
• The Dalai Lama announced that his Gaden Phodrang Trust will have the sole authority to select his successor. The announcement by the spiritual leader of Tibetan Buddhism was closely watched by China, which insists that only it has the right to name a successor.
• Hugo Carvajal, a former chief of military intelligence in Venezuela, pleaded guilty to being part of a gang that trafficked cocaine to the United States. Mr Carvajal entered his plea days before he was due to stand trial in New York.
• Reports suggest he has done a deal with the American authorities in exchange for information on Nicolas Maduro, Venezuela’s president.
• In Chile Jeannette Jara won a national primary to be the left’s presidential candidate at an election in November. Ms Jara, a communist, will be backed by the incumbent government currently led by Gabriel Boric, who is not allowed to stand again. Conservative parties did not hold a primary, meaning they won’t put forward a single candidate. Each will slog it out with Ms Jara on election day.
• The British government was left reeling after it had to perform a u-turn over welfare reforms. The bill passed a crucial stage in Parliament, but only after the main provisions were gutted to quell a backbench rebellion from Labour MPs, leaving the government with a fiscal hole that it will probably have to fill with tax rises. Bond markets wobbled when Rachel Reeves’s future as chancellor of the exchequer was thrown into doubt. The day after the vote Ms Reeves cried in Parliament; the prime minister, Sir Keir Starmer, belatedly confirmed his support for her.
• Four journalists at LeMan, a satirical magazine, were arrested in Turkey for allegedly publishing a caricature of Muhammad the Prophet. The publication of the image infuriated Muslim hardliners; hundreds clashed with riot police in Istanbul. The journalists insist that the image does not refer to Muhammad.
• The Pentagon suspended certain shipments of missiles and ammunition to Ukraine, after a review determined that America’s stocks of the weapons were too low. The shipments were promised during the Biden administration. It is another blow for Ukraine. Russia has intensified its bombardment of the country in recent weeks.
• In Hungary up to 200,000 people marched in Budapest’s Pride event in defiance to the right-wing government of Viktor Orban, which has banned Pride marches throughout the country. The liberal mayor of Budapest skirted the ban by categorising it as a municipal event.
• The centrist government in France survived another vote of no-confidence in parliament. The right-wing National Rally (RN) withheld its support for the measure, though it may vote to bring the government down later this year if budget negotiations don’t go well.

A lot of hot air?

• Meanwhile, the French government gave an icy reception to a proposal by Marine Le Pen, the RN’s leader, to boost the use of air conditioning. France, like many other European countries, swelters in the summer, but, like other European countries, most houses do not have air con. The ecology minister dismissed the idea, linking air con to global warming.

The world this week Business

• Paramount Global reached a settlement with Donald Trump in his lawsuit against CBS News, which it owns. The president had claimed that CBS’s “6o Minutes” programme had selectively edited an interview with Kamala Harris in a way that amounted to “substantial news distortion” in the run-up to last year’s election. Many legal observers think the case would not have stood up in court, but Paramount has settled for $i6m, to be paid to Mr Trump’s future presidential library. It also relieves the pressure on the media giant’s proposed merger with Skydance Media, which is being scrutinised by the Federal Communications Commission.
• The S&P 500 broke a new record, almost five months after reaching its previous peak before it slumped in April amid Donald Trump’s trade wars. The index has risen by 25% from that trough. It is being boosted again by tech companies. Nvidia is closing in on a $4trn market value and Oracle’s share price jumped to a new high after it announced a cloud-computing contract (said to be with OpenAl) worth $3obn a year, one of the biggest data-centre deals to date. But even Nike’s stock has surged, by 15% in a day, amid signs that its turnaround plan is working.
• The threat of further tariffs is a big factor that could derail markets. The American government is piling the pressure on countries, including India and Japan, that are hoping to reach a deal on trade and avoid a new round of duties that come into effect on July 9th. Canada dumped its digital-services tax that targeted big, mainly American, tech companies, after Mr Trump threatened to end negotiations with that country. Vietnam did reach a trade deal, but “reciprocal” tariffs of 20% will still be slapped on its goods.
• The dollar edged up against other major currencies, after falling to three-year lows as investors assessed the fiscal impact of Mr Trump’s taxcutting jamboree in his “big, beautiful bill”. The dollar has had its worst first-half of a year since 1973, falling by 11% against a basket of currencies.

The battle of the leggings

• Lululemon launched a lawsuit against Costco for allegedly selling dupes of its yoga and leisure gear. The suit claims that Costco has unlawfully traded on Lululemon’s goodwill, reputation and “sweat” by selling knock-off versions of its patented designs, which include the Define jacket (as worn by Kate Middleton) and ABC pants (Barack Obama). Costco didn’t comment.
• Continuing its drive to reduce the layers of management across the company, Microsoft announced another 9,000 job cuts, or about 4% of its employees, which are in addition to the 6,000 it made public in May (those cuts were mostly in engineering and products). Microsoft says it is streamlining its workforce, but the job losses are also a signal to markets that it is trying to rein in costs as its spending on artificial intelligence balloons.
• Tesla reported another drop in sales. It delivered 384,122 vehicles in the second quarter, down by 13.5% from the same three months last year. That follows a 13% decline in deliveries in the previous quarter. Tesla’s sales have fallen sharply in Europe, and it faces cutthroat competition in China. Jim Farley, the boss of Ford, said this week that the growth of the electric-vehicle industry in China is “the most humbling thing I’ve ever seen”.
• Renault announced that its stake in Nissan will now “be treated as a financial asset measured at fair value through equity”, and that the accounting change means it will book a €9.5bn ($11.2bn) loss on the stake in its earnings for the first half. The news comes as the French and Japanese carmakers continue to restructure their alliance, through which Renault will eventually reduce its holding in Nissan to 10%, from 36% today.
• Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley and other American banks said they would raise their quarterly dividends to shareholders— Goldman by 33%—after passing the Federal Reserve’s latest stress tests. All 22 banks that were assessed by the Fed to see how they would fare in a severely adverse economic scenario passed the evaluation.

The great Greggs invasion

• The share price of Greggs dropped as fast as sinking dough, after the British purveyor of baked delicacies and sandwiches issued a profit warning. It blamed hot weather for reducing customer footfall in its shops. Despite introducing cooler goodies, such as iced caramelised biscuit lattes, Greggs is best known for its warmer treats, such as sausage rolls and steak bakes. Some analysts wonder if Greggs should still be rolling out quite as many new stores if sales are slowing. It has opened nearly 1,000 in a decade, taking its total to 2,600 across Britain.

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