The Economist - 9 August 2025

Год выпуска: August 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

WHY ISRAEL MUST HOLD ITSELF TO ACCOUNT

• Why Israel must hold itself to account and how it can be made to do so: leader, page 7.
• Israel's legal system claims to be fiercely independent. On the Gaza war it is largely silent: briefing, page 15.
• The consequences of hunger and destruction will linger for years to come, page 36.
• More and more Israelis are outraged by their government’s conduct, page 38.
• Global courts are failing dismally to cope with geopolitics, page 49.
• The post-1945 order is crumbling. History offers a glimpse of alternatives that might work: The Telegram, page 51.

How McKinsey lost its edge

• The world’s most illustrious consultancy is stumbling, page 54.
• McKinsey and its rivals need a strategic rethink: leader, page 9.
• Do consultants make good chief executives? Page 55.

Strongman stand-off: Trump v Modi

• A dispute over tariffs and oil escalates, page 31.
• India’s bet on Russian energy may be about to go very wrong. China could benefit, page 63.

Germans fall out of love with beer

• A nation loses its taste for its most heavenly tipple, page 44.

An economist’s guide to life

• How the dismal science helps with big decisions: Free exchange, page 66.

The world this week Politics

• America escalated its row with India over purchasing Russian oil, which Donald Trump says is “fuelling the war” in Ukraine. The president will impose an extra 25% tariff on Indian goods on August 27th as a punishment, taking the overall levy to 50% on certain Indian imports (he is also using the threat to press for a trade deal). The Indian government said it was being unfairly singled out, pointing to the EU’s still-substantial trade with Russia. The Kremlin said it was up to individual countries to choose their trading partners.
• A Swiss delegation flew to Washington for talks on reducing a 39% tariff on Swiss exports to America, but returned seemingly empty-handed. The levy has stunned Switzerland, which sells a lot of watches and chocolate in the United States.
• Mr Trump said he would soon hold meetings with Vladimir Putin and Volodymyr Zelensky, following a trip to Moscow by America’s special envoy, Steve Witkoff. Mr Trump has warned Russia that he will impose swingeing sanctions if it does not take a big step towards ending the war with Ukraine. A few days earlier Mr Trump ordered nuclear submarines to be positioned in “appropriate regions” in response to “foolish and inflammatory statements” made by Dmitry Medvedev, the deputy chairman of Russia’s Security Council.
• In Lithuania Gintautas Paluck-as resigned as prime minister amid a business scandal (he denies any wrongdoing). He had been in the job for only eight months. The new prime minister will probably be Inga Ruginiene, who says she is “guided by left-wing, social democrat values”. Earlier, Lithuania asked NATO for more air support, after two drones crossed the border from Belarus last month.
• Around 600 former Israeli security officials wrote a letter to Mr Trump urging him to press the Israeli government to end the war in Gaza. The signatories included former heads of the Mossad and Shin Bet intelligence agencies and former generals in the Israel Defence Forces. The letter said that Israel had accomplished its military goals against Hamas and that a deal to release the remaining hostages in Gaza could not take place while the conflict still raged.

He’s not listening

• The letter came as Binyamin Netanyahu, Israel’s prime minister, prepared to expand Israel’s offensive to the whole of Gaza, giving it entire control over the strip for the first time since it officially withdrew in 2005. Meanwhile, Hamas and Palestinian Islamic Jihad were widely condemned for releasing videos of emaciated hostages. Hamas denied it was starving its captives. Chaos continued to surround aid distribution in Gaza, resulting in the deaths of dozens of people, according to the Hamas-run authorities.
• Ghazi Hamad, a senior member of Hamas, said that the announcements by Britain, Canada and France that they would recognise a Palestinian state were one of “the fruits” of Hamas’s attack on Israel on October 7th 2023. A British government spokesman refused to confirm whether Britain’s recognition of Palestine would go ahead if Hamas remained in power.
• The UN warned that people face starvation in el-Fasher, the capital of Sudan’s Darfur region, a focal point in the country’s civil war. The rebel Rapid Support Forces surround the city and have blocked aid from reaching it.
• The Italian government reacted furiously to a ruling by the European Court of Justice that means it must rethink its policy of sending migrants to Albania for processing. The ECJ said that EU states could fast-track migrant returns to safe countries of origin, but that the definition of “safe” must be subject to judicial review, and all citizens of the country must be “safe”. The government said the ECJ had further reduced “the already limited scope” of EU countries’ autonomy.
• An agreement between Britain and France came into force formalising the return of illegal migrants crossing to Britain in small boats. Sir Keir Starmer, the prime minister, labelled the scheme as “one in, one out”, and said it would “send a clear message” to those arriving illegally. Some 25,000 smallboat migrants have arrived since January, by far the highest number ever by this time of the year. Small-boat migrants account for barely 5% of all immigration, but their presence has led to protests and violent clashes, often outside hotels that house them.
• More than 100 people were feared to have died in flash floods that swept through a village in the Indian state of Uttarakhand. Meanwhile, Hong Kong recorded the most daily rainfall for August since 1884. And new temperature records were set in Japan, where the thermometer topped 41.8°C (107.2°F) in the city of Isesaki, north-east of Tokyo.
• Japan won a $6-5bn contract to build navy frigates for Australia, its most important defence deal since ending a ban on exporting military equipment in 2014. The warships will be highly automated and able to operate with a crew of 90, half the number deployed on Australia’s current type of frigate.
• Jair Bolsonaro, Brazil’s president from 2019 to 2023, was placed under house arrest on the order of Alexandre de Moraes, a justice on the Supreme Court. Mr Moraes is overseeing Mr Bolsonaro’s trial for allegedly trying to overturn the result of the 2022 election. The arrest worsened Brazil’s relations with America; the State Department condemned Mr Moraes’s order.
• Meanwhile, tariffs of 50% came into force on many Brazilian exports to the United States. The effective rate is significantly lower thanks to exceptions for products like orange juice and aircraft. Most agricultural products, including coffee, have been hit with the full 50%. Mr Trump has linked the tariffs to what he calls a “witch hunt” against Mr Bolsonaro.
• More than 50 Democratic state legislators in Texas left the state in order to deny the Republicans a quorum for remapping federal congressional districts. With a wafer-thin majority in the House of Representatives, the Republicans think they can gain five seats in Texas by redrawing the districts’ boundaries.

He’ll be back?

• In response Gavin Newsom, the governor of California, proposed putting a plan to voters to redraw that state’s congressional boundaries so that Democrats could pick up at least another five seats. Arnold Schwarzenegger, who was governor in 2010 when the power to redistrict seats was given to a non-partisan agency, is ready to return to politics and campaign against the proposal, according to his spokesman.

The world this week Business

• Donald Trump fired Erika McEntarfer as head of the Bureau of Labour Statistics, alleging, without evidence, that her department was manipulating employment figures to make his administration look bad. The BLS’s monthly jobs survey is watched closely by investors. Its report for July recorded 73,000 new jobs in the month, but it also revised down the estimate for May and June by a whopping 258,000, making those months the lowest for job creation since the start of the pandemic in early 2020. Economists are still trying to work out why the revision was so large. They also worry that Ms McEntarfer’s sacking will undermine the credibility of future federal statistics.

We need to talk about Kevin

• Mr Trump suggested that he was considering either Kevin Hassett or Kevin Warsh to replace Jerome Powell as chairman of the Federal Reserve. Mr Hassett is the director of the National Economic Council and Mr Warsh sat on the Fed’s board from 2006 to 2011. Mr Powell’s term as chairman does not end until May next year, but a vacancy on the Fed’s board could offer the president a chance to name his successor.
• China’s exports increased by 7.2% in July, year on year, helped by a truce in America’s trade war with China. August 12th is the next deadline for a trade deal.
• BP announced an oil-and-gas discovery at the Bumerangue prospect in Brazilian waters. It is the company’s biggest find in 25 years, forming part of its strategy to refocus on fossil fuels and away from renewables. BP also updated investors on its cost-cutting programme and said it would review the sequence of investments in new projects in order to increase shareholder value. It is also cutting 6,200 office jobs. Elliott Management, an activist hedge fund, is pressing BP to do more to increase its stock price.
• BP’s headline profit in the second quarter fell by 14%, year on year, though it was far from being the only big oil company to have had a damp spring. Chevron and ExxonMobil reported their lowest second-quarter net profits in four years. Shell and Total Energies have also announced sharp drops in profit for the period.
• After contemplating a move of its primary share listing to New York, Glencore confirmed that it will keep the stock registered on the London Stock Exchange (Glencore also trades shares in Johannesburg). It is a boost for the British bourse, which has seen a number of companies defect elsewhere of late.
• Tesla awarded shares worth around $30bn to Elon Musk, raising his holding to 16%. Mr Musk has warned he may leave the company or be forced out, but in a securities filing Tesla said “We are confident that this award will incentivise Elon to remain.” Mr Musk has been battling a judge’s decision to strike down a previous pay package worth $56bn. He must retain a senior executive role for two years to qualify for the new pay out. Meanwhile, Tesla’s European car sales plummeted again in July, as those of BYD, a low-cost Chinese competitor, surged.
• Palantir reported quarterly sales of $ibn for the first time. The data-analytics company, best known for its work in the defence industry, said revenue from the American government had risen by 53%, year on year, amid the Trump administration’s roll-out of new spending on national security. Palan-tir’s share price has surged by 135% this year, outperforming the likes of Meta, Netflix, Nvidia and Oracle.
• OpenAI was reported to be considering a sale of stock by current and former staff that would give it a notional value of $500bn, a huge increase from the $300bn it was reckoned to be worth in its previous funding round.
• Berkshire Hathaway wrote down its investment in Kraft Heinz for the second time since buying a large stake in the consumer-goods company in 2015. The charge reduced its post-tax profit by $3.8bn. The write-down comes amid investors’ skittishness about the looming departure of Warren Buffett as chief executive. Berkshire’s share price is down by almost 15% since early May, when it was announced that he would step down.

No such thing as bad PR?

• Jaguar Land Rover is getting a new chief executive. P.B. Balaji, who is head of finance at Tata Motors, JLR’s parent company, will sit in the driving seat from November, an appointment that is seen as tightening Tata’s grip on its subsidiary as it pivots towards making only electric cars. The leadership change comes as JLR also grapples with a controversial rebranding; an ad last year featured brightly coloured futuristic fashion models, but no cars. Responding to JLR’s management change this week, Donald Trump took to social media to decry the rebranding as woke, and asked, “Who wants to buy a Jaguar after looking at that disgraceful ad?”

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