Monday 24/03/25

US-Ukraine talks resume in Saudi Arabia after Trump envoy praises Putin (Financial Times, Christopher Miller, Anastasia Stognei and James Politi) shows that American and Ukrainian negotiators came together again in Saudi Arabia yesterday for a second round of negotiations. Trump’s special envoy for Russia made pro-Putin noises and branded European postwar security efforts as “a posture and a pose”. It is difficult to ascertain whether remarks like this are just being made by the US side as part of some overarching negotiation tactic or whether they actually believe all this. It sounds like there was some progress although it doesn’t seem like Putin is giving any ground.

Over in Europe, How Spain’s economy became the envy of Europe (The Times, Edith Fishta) is an interesting article on Spain and its quiet success, which is evident in how the country’s GDP grow by 3.2% last year versus Germany’s 0.2% contraction and France’s more sedate growth of 1.1%. Spain’s economy minister Carlos Cuerpo made the observation that “Despite making up just 10 per cent of the Euro area, Spain drove 50 per cent of [Europe’s] total growth”. He put the growth down to a strong labour market, decent exports and foreign investment. Tourism was also very strong and contributed 12% of GDP but the contribution of non-tourism services also continues to rise. Labour minister Yolanda Diaz Pérez believes that this strength is partly down to immigration. Labour reforms and new laws that prioritise training for migrants have led to immigrants filling 70% of new jobs in the space of two years! * SO WHAT? * What would Trump make of this?? Spain’s labour market is stable and even though there has been a major uptick in immigration, the economy is generating enough jobs to absorb them. OK, so the unemployment rate is still high by European standards (it now stands at 10.6% while youth unemployment is at 24%) but for Spain, the situation is actually very good. It’s quite nice to hear a European success story for a change isn’t it?!

Meanwhile, Turkey formally arrests Erdoğan rival in escalation of political crackdown (Financial Times, Ayla Jean Yackley) shows that president Erdoğan has taken things up a notch as a Turkish court formally arrested opposition leader and Istambul mayor Ekrem İmamoğlu on allegations of corruption. * SO WHAT?? * This is the first time under Erdoğan that someone so

high up in the Republican People’s party (CHP) has been detained. İmamoğlu called the court’s decision as a “black stain on democracy” and his arrest has prompted the biggest protests in over a decade in the country. Investors have been selling out of Turkish assets as doubts creep in over the government’s commitment to a recovery programme for its economy. İmamoğlu has accused Erdoğan of “weaponising the judiciary” to cling on to power. Does this situation remind you of what’s happening in a bigger country somewhere else in the world??

Back in the UK, Trump tariffs hang over Reeves’ plan to repair UK public finances (Financial Times, George Parker and Sam Fleming) shows that the chancellor is gearing up to arrest the slide in the UK’s finances by cutting welfare payouts, overseas aid and civil service jobs in Whitehall. It sounds like there’s also the possibility that we will ditch the digital services tax, which was supposed to raise £800m this year, to appease Trump. Thousands of Britons to have welfare income cut by more than 60% (Financial Times, Anna Gross, Delphine Strauss and Amy Borrett) highlights the hefty impact that’s about to hit benefits claimants that will be made in this week’s Spring Statement while ‘Let her raise taxes, then sack her’: why Reeves’s number may be up (Daily Telegraph, Szu Ping Chan and Samuel Montgomery) reflects the anger felt by those on the left of her party who are now promising the “mother of all rebellions” for abandoning the party’s values. It’s not going to be an easy week for her!

In commodities news, Orange juice prices plummet from record highs as demand sours (Financial Times, Susannah Savage) shows that orange juice futures prices have halved since the start of the year as consumers have ditched the expensive, and now bitter, drink. * SO WHAT? * This is a huge move given that OJ futures hit record highs in 2024 thanks to severe drought and crop disease hit Brazil, the world’s biggest producer. Fun fact: frozen orange juice can keep for two years and it’s possible to blend the newer crop with the older crop to improve quality, but there have been three consecutive years of falling supply so stocks are now running low. Diseased trees are yielding more bitter fruit and manufacturers can’t be as picky now with quality.

The world continues to reel in the face of the president’s actions and Donald Trump’s policies shatter Wall Street’s ‘US exceptionalism’ trade (Financial Times, Harriet Clarfelt) shows that the sell-off of the dollar and US equities has continued thanks to Trump’s tariffs and the uncertain economic outlook he’s been busy creating. Paul Weiss chair says Trump executive order could have destroyed law firm (Financial Times, Amelia Pollard) highlights a shocking action that the major US law firm has had to take after it became subject to an executive order that the chairman said “could easily have destroyed our firm”. Other law firms Perkins Coie and Covington & Burling have also been subject to the Trump treatment as he dished out revenge on companies that he perceives as enemies. At least another dozen are thought to be in line for the same treatment. Chairman Brad Karp, who was a high profile supporter of Kamala Harris, said that fighting the executive order in court would have killed the firm by scaring off existing clients and new ones alike. Paul Weiss has now made a deal with Trump to providing $10m worth of legal services pro bono on an annual basis for the next four years. Trump’s assault on the rule of law: ‘the speed and intent is remarkable’ (Financial Times, Edward Luce) kicks off with a very ominous quote from Trump (who himself was quoting Napoleon) – “He who saves his country does not violate any law” – and details Trump’s unprecedented attack on the judiciary. Most recently the assault intensified when a judge pushed for the blocking of a deportation of over 200 alleged Venezuelan gangsters was branded by the president as a “radical left lunatic” who he then called to be impeached. That was followed by the US Supreme Court Justice indirectly criticising the president’s actions, his revocation of security clearances for top politicians, and vindictive punishments on law firms. This all comes in addition to his war on universities, the installation of Trump-ites at the top of the FBI and Pentagon and then, of course, the installation of BFF Elon Musk at DOGE. Trump is ignoring mounting court restraining orders and has said that he wants to punish the “scum” who investigated him – oh yes, and then there was the pardoning of those who took part in the Capitol Hill riots. Trump also got a recent boost from the Supreme Court which granted him immunity from criminal prosecution. * SO WHAT? * For now, both Trump and Musk can pretty much do what they want. With four years of this in prospect I doubt that any firms are going to stand in his way and if he fills all the top positions in his executive with loyalists no-one’s really going to be able to fight back. If he strips the Fed of its independence, he can control the financial markets narrative as well. As for Paul Weiss, I suspect that the firm is going to lose clients even WITH this agreement in place and I would have thought that their lawyers will be queuing up to leave as other firms pick off their clients. I think other firms that are targeted like this will also see an exodus for the same reasons. There will be rich pickings for headhunters…

In terms of other repercussions for Trump actions, Malaysia to crack down on Nvidia chip flows under US pressure (Financial Times, Owen Walker and Alec Russell) shows that the country is going to tighten regulations on semiconductors to choke the flow of advanced chips to China. Washington suspects that such chips have been passing through Malaysia to get to China, which violates US export rules. It is demanding that Malaysia do something about it.

Nearer home, Turbulent markets could derail Ebury’s £2bn London listing (The Times, Ben Martin) shows that increasing market volatility caused by Trump’s actions could potentially delay an expected London listing of the cross-border payments company, something that is sorely needed for the London Stock Exchange given the lack of IPOs! The company says that it’ll make a definitive answer in the next four to five weeks about whether the flotation will go ahead this summer. * SO WHAT? * I would not be surprised to see other companies delaying flotation plans. Maybe this gives private equity firms another bite at the cherry as they could step in with funding – as they have been doing for some time now. Perhaps market volatility will give such private equity firms a bit more pricing power as they know that firms may be wary of floating on volatile markets – but will still need money.

In terms of Musk-related reactions, Utah’s Republican voters fume over Doge cuts (Financial Times, Joe Miller) takes a look at the real effect on the ground of DOGE’s scything of public entities. Even in a county where the Republican vote was 20% ahead of the Democrats, the cuts to local IRS offices have been devastating. Feelings have been running so high that Republican leadership has advised members to hold virtual town hall meetings instead of in-person ones. Then in Starlink’s rapid global rollout complicated by Elon Musk’s ties to Donald Trump (Financial Times, Rafe Uddin and Stephen Morris) we see further confirmation that Starlink is hitting resistance to its global roll-out of satellite services. * SO WHAT? * Interestingly, about 50% of Musk’s $314bn net worth is now tied to SpaceX, owner of Starlink, while his 20% stake in Tesla is now worth “just” $100bn. Starlink and SpaceX are expected to do well this year through satellite launches and communications deals with various countries however, countries are getting increasingly uncomfortable about their respective exposure to it. There is a definite need to support alternatives like Eutelsat in order to provide a more reliable alternative. As for those suffering from DOGE’s antics in the public sector, it seems to me that no-one’s going to stick their head above the parapet for this at the moment because Trump appears to be in maximum threat mode and, like I said before, he’s still got quite a few years of office left with a new cabinet in place, eager to please. However, if it continues, things could get very nasty…

In a quick scoot around some of today’s other interesting stories, Carmakers rush to ship vehicles to US ahead of new round of April tariffs (Financial Times, Harry Dempsey, Oliver Telling, Kana Inagaki and Song Jung-a) shows that, unsurprisingly, international carmakers are scrambling to beat Trump’s tariff deadline while Singapore’s luxury car sales plummet after money-laundering scandal (Financial Times, Owen Walker and Kana Inagaki) shows that luxury car sales in the island city-state have dropped by up to 75% over last year thanks to a government crackdown on money laundering and a hike in taxes. Wealthy customers (who were mainly Chinese) are now avoiding brands such as Bentley, Ferrari and Rolls-Royce in order to keep a lower profile. EV sales, on the other hand, have boomed! BYD became Singapore’s second-best selling car brand last year despite only having a presence there since 2020. I have mentioned this before a while back, but it’s very expensive to own a car in Singapore! First of all, you have to get a certificate of entitlement in order to get a car. Certificates for the most powerful cars currently cost just under S$117,000. Then for cars priced above $80,000, you have to pay an additional 320% tax!

In other news, DNA-Testing Company 23andMe Files for Bankruptcy, Announces CEO Resignation (Wall Street Journal, Kimberley Kao) shows that the personal genomics company has filed for Chapter 11 bankruptcy in the US and announced the resignation of its CEO and co-founder. The company just couldn’t settle on a profitable business model and this latest development follows on from last November’s 40% headcount reduction.

Then in Ocado waters down ethnic minority targets as bosses go cold on DEI (Daily Telegraph, Hannah Boland) we see that the online retail/tech company has become the latest company to ditch DEI commitments although the company said it remained committed to the cause. Trump’s very public scepticism of DEI has emboldened companies around the world to ditch their commitments. No doubt this will continue…

This video of some incredible Dutch candy-makers is mesmerising 👀! Their skills are incredible 😱😱😱!