TheEconomist.2025.03.29

The Economist - "The World This Week" (March 27th, 2025)

This article summarizes the major global political and business events of the week, including Turkish political turmoil, international trade tensions led by Trump, and shifts in the Middle East and Asia. It highlights key economic indicators and significant cultural events.

Read on to discover:

• How global politics affect financial markets.
• How Trump's trade policies are reshaping international relations.
• What's driving major cultural shifts around the globe.

Core Content:

Politics:

1. Turkey:
   • Istanbul's mayor, a potential rival to Erdogan, was arrested on corruption charges, triggering protests and market instability.
   • The opposition claims the charges are politically motivated.
2. Russia and Ukraine:
   • Negotiations for a maritime truce in the Black Sea are underway, but Russia ties the deal to sanctions relief.
3. Europe:
   • Sweden is increasing defense spending to 3.5% of GDP, urging other NATO members to do the same.
   • The UK's University of Sussex was fined for failing to uphold freedom of speech.
4. Israel:
   • The government passed a budget with increased defense spending, despite opposition criticism over funding for religious projects.
   • Drone strikes in Lebanon followed rocket fire across the border.
   • Hamas claims 50,000 Palestinians have been killed in Gaza.
5. Other International News:
   • Fighting resumed in eastern Congo after a rebel group retracted a withdrawal promise.
   • The Unification Church was effectively banned in Japan following the assassination of Abe Shinzo.
   • America removed bounties on senior Taliban officials, signaling a thaw in relations.
6. United States:
   • The White House tried to downplay a security breach where details of a planned attack on Yemen were mistakenly shared.
   • Congressional authorization for PEPFAR, an AIDS relief program, expired, casting doubt on its future.
   • The Trump administration will revoke a program allowing temporary legal residency for migrants from several countries.
7. The Americas:
   • Brazil's Supreme Court decided that Bolsonaro should stand trial for his alleged coup plot.
   • Canada's new prime minister called a snap election amid rising support due to defiance of Trump's tariffs.

Business:

1. Britain:
   • The chancellor announced further cuts to incapacity benefits, increasing defense spending.
   • Annual inflation was forecast to rise to 3.2%.
2. Indonesia:
   • The central bank intervened to support the rupiah amid market concerns.
3. Heathrow Airport:
   • The airport shut down for 18 hours due to a fire at a substation, causing flight schedule chaos.
4. Boeing:
   • A trial date was set for Boeing on a criminal charge of misleading regulators about the 737 MAX's safety.
5. Defense Contracts:
   • Boeing was selected to build the American air force's Next Generation Air Dominance fighter jet.
6. Hyundai:
   • The company will invest $21 billion in America, including a steel plant in Louisiana.
7. Trade Wars:
   • Trump announced 25% tariffs on all vehicle and car part imports.
   • Copper prices rose amid speculation of punitive tariffs on imports of the metal.
8. Tech and Pharma:
   • SAP overtook Novo Nordisk to become Europe’s most valuable company, driven by AI hype.
   • Tesla's sales in Europe fell sharply, especially in Germany.
9. Retail:
   • Nike's stock dropped due to weak demand in China and geopolitical dynamics.

Leaders:

1. Israel's Expansionism:
   • Israel's military dominance risks overextension and strife.
   • The government is accused of cruel tactics and plans for ethnic cleansing.
2. Elon Musk's Efficiency Drive:
   • Musk's efforts to remake the government are causing animosity and legal breaches.
   • Actions appear designed to expand presidential power and root out "wrongthink."
3. Turkey's Democracy:
   • Erdogan is accused of throttling democracy with the arrest of Ekrem Imamoglu.
   • International reaction has been meek.
4. Trump's Tariffs:
   • Unpredictability of tariffs will increase economic pain.
   • Businesses struggle to adjust amid uncertainty.
5. Britain's Growth Prospects:
   • Labour can still rescue growth but must adopt radical reforms.
   • Voters oppose sensible reform, necessitating bold action.
6. Foreign Aid Priorities:
   • Donors should focus on public health and effective funding mechanisms.
   • Vaccination yields significant returns.

Q&A:

Q: What is the main concern regarding Israel's actions?

A: The main concern is that Israel's expansionist policies and cruel tactics may lead to overextension, bitter strife, and democratic backsliding.

Q: What is the critique of Elon Musk's role in the US government?

A: The critique centers on Musk's actions appearing to expand presidential power, root out "wrongthink," and create animosity and legal breaches, rather than improving efficiency.

Q: Why is Turkey's political situation concerning?

A: The arrest of Ekrem Imamoglu and the international community's mild response suggest Erdogan is prioritizing power over democratic values, risking an autocratic shift.

Q: What are the main economic consequences of Trump's tariff policies?

A: The main consequences are increased economic pain, uncertainty for businesses, and the potential for trade wars, which could undermine global economic stability.

Q: What is the recommended focus for foreign aid?

A: The recommendation is to prioritize public health, especially vaccinations, due to their high cost-effectiveness and potential to save lives.