Tuesday 11/02/25

In Donald Trump warns ‘all’ Israeli hostages must be released by Saturday (Financial Times, James Shotter and Felicia Schwartz) we see that the president threatened Hamas with chaos if it doesn’t release all the Israeli hostages from Gaza by 12 o’clock on Saturday. This followed Hamas’s earlier announcement that it was delaying the release of hostages that were supposed to be released this Saturday “until further notice”. Trump said that he’d support a cancellation of the ceasefire if the hostages weren’t released. This represents a serious threat to the current deal, which came into force three weeks ago after 15 months of fighting. There have been accusations from both sides accusing the other of breaching terms of the ceasefire.

Then in Donald Trump to halt enforcement of law banning bribery of foreign officials (Financial Times, Steff Chavez and Stefania Palma) we see that the president has now ordered the Department of Justice to stop enforcing a US anti-corruption law, the 1977 Foreign Corrupt Practices Act (FCPA), which forbids Americans from giving government officials backhanders in order to get business. He concluded that “it’s going to mean a lot more business for America”. * SO WHAT? * Given you hear that a lot of business in certain parts of the world hinges on bribes to ease the process, you can see why Trump is doing this (he argues that everyone else is at it so why self-police??). I believe that this practice is particularly prevalent in oil and gas, but the reality is that some governments are corrupt and bribery is just seen as a cost of doing business in all sorts of areas. Apart from the obvious moral aspects to this, a major problem now is that everyone’s going to know that the Americans are officially back in the frame, so bribery prices are just going to go up! 

Donald Trump to hit US steel and aluminium imports with 25% tariffs (Financial Times, Aime Williams) moves on from what I said yesterday – adding that the taxes will be applied across the board with no exceptions and come into force on March 4th. Trump said “This is a big deal – making America rich again” but UK Steel warns that Trump tariffs would be ‘devastating blow’ (The Guardian, Julia Kollewe and Graeme Wearden) highlights panic over here as a top bod at the trade body UK Steel pointed out that the US is the UK’s second-biggest export market after the EU and that our problems could be compounded by other countries dumping steel on the UK market as they divert their own exports away from the US. * SO WHAT? * This latest move is designed to protect US steelmakers but the reality is that this will also raise costs for American manufacturers who import it. All previous deals struck by Biden with the EU, UK and Japan are now nullified. The protectionist agenda continues…

Meanwhile, Starmer’s data centre blitz raises water shortage fears (Daily Telegraph, Pui-Guan Man and Matthew Field) shows that Starmer’s plans to build a load of data centres across

the UK in “AI growth zones” have raised concerns about water supplies needed to cool them. London and the South East are thought to be particularly at risk and the government’s own Environment Agency reckons that England faces a shortfall of about 5bn litres of water per day by 2050. * SO WHAT? * A government spokesman said that the growth zones were designed to attract investment in energy and water infrastructure and that tech improvements to cooling systems meant that newer data centres were using less water than they had been doing. That being said, a report from The Social Market Foundation think tank showed that, at the moment, powering a 100MW data centre is four times more expensive here than it is in the US! The race is well and truly on for nuclear power and water supply!!!

Mergers of English councils could lead to tax rises due to high debt levels (The Guardian, Richard Partington) reminds us of the ongoing state of our councils and that people living near to bankrupt ones are likely to see their council tax bills rise thanks to Angela Rayner’s “devolution revolution”, where the government is merging small district and county councils. Some of the councils are arguing that their debts may never be paid off – and Woking recently asked for its debts to be cancelled. * SO WHAT? * Rayner said last week that she would take a “commonsense approach” to the reorganisation – but no-one knows what that really means! I suspect that everyone is just going to blame each other but the buck is going to have to stop somewhere. FWIW, I don’t think this is about which party has led each council into disaster, incompetent people can be members of any party after all 🤣!

BP break-up pressure builds as activist investor Elliott takes stake (Daily Telegraph, Louis Goss) is a story doing the rounds in all the papers this morning as it turns out that activist investor Elliott Investment Management has built up a stake in BP. It is thought that Elliott could press the oil major to sell off its renewable energy assets, put more money into its core oil and gas business and get a new chairman. Wells Fargo analysts think that it could go even further with a full break-up of the business. * SO WHAT? * BP is the UK’s fifth biggest publicly listed company and has about 16,000 British employees and a break-up would cause a right kerfuffle. I can definitely see the company ditching its renewables business though…

In gas news, Cold weather sends European gas prices to two-year high (The Times, Emma Powell) shows that European gas prices have hit a two-year high as a cold snap has led to more withdrawals from storage facilities which had already been running lower than normal. They’d been running low because of a combination of lower temperatures being hit earlier than normal and because of higher demand from Asia.

Taiwan and TSMC scramble to head off Donald Trump’s tariff threat (Financial Times, Kathrin Hille) is an interesting article which focuses on both Taiwan’s and TSMC’s efforts to minimise the impact of Trump’s tariffs, given how much they both have at stake. Trump remains intent on taxing imported chips and ripping up the incentive scheme put together by Biden that would have subsidised TSMC’s promised $65bn investment in US production capacity with grants worth $6.6bn. Trump has been saying that TSMC could face paying anything up to 100% tax for importing chips into the US. * SO WHAT? * Trump wants production in the US and has accused TSMC of “stealing” the business from the US. He’s also accused Taiwan of freeloading US military support. Interestingly, although 70% of TSMC’s revenues came from North America in 2024 this has mainly been via iPhones and servers. Most chips are sent to places like China and India and assembled there and because tariffs normally apply to finished products, TSMC chips intended for US customers have gone under the radar – but that won’t happen now that tariffs are set to be applied across the board! TSMC is in a tricky spot because it wants to satisfy the Americans but is also adamant that it wants to keep its R&D in Taiwan. We’ll just have to see how this pans out!

Chinese chip champion’s ‘snowballing’ growth threatens Korean dominance (Financial Times, Christian Davies, Song Jung-a and Zijing Wu) highlights the success of China’s leading maker of memory chips, CXMT, which is continuing to take global market share from the like of South Korea’s Samsung and SK Hynix as well as America’s Micron. It seems that CXMT and DeepSeek are spearheading Chinese efforts to cut dependence on foreign tech in AI. * SO WHAT? * Samsung, SK Hynix and Micron have pretty much had the market to themselves thus far but

CXMT is hoovering up market share at a rapid rate at the lower end. CXMT is now so dominant in this area that the Korean incumbents have been forced out. The Koreans did this to Japanese makers in the 80s and 90s, and now the Chinese are doing it to them. Is it only a matter of time before the Chinese eclipse the Koreans at the higher end as well??

In AI news, Elon Musk-led consortium offers $100bn to take control of OpenAI (Financial Times, George Hammond) shows that Musk and some rich chums have submitted a bid for the non-profit part of OpenAI that controls it as Musk continues to object to OpenAI morphing into a for-profit enterprise. * SO WHAT? * Clearly there are conflicts of interest here given that Musk owns xAI but insiders say this is just a Musk publicity stunt.

Meanwhile, Open AI’s Sam Altman: ‘We’re about to empower people more than ever before’ (The Times, Danny Fortson and Katie Prescott) focuses on OpenAI’s founder who reckons that his new AI agent, Deep Research, brings AI closer to Artificial General Intelligence (AGI). AGI is the type of intelligence that beats the best humans at all cognitive tasks and is something that Altman believes can be achieved by the end of Trump’s second term in office – and maybe even next year, given how quickly things advance in this field! * SO WHAT? * Even Altman is saying what a deep impact AI is going to have on employment and he believes that there should be a global body akin to the UN’s International Atomic Energy Agency (IAEA) which governs the rules on “the safe, secure and peaceful use of nuclear technologies”.

In a look at how UK consumers are spending their money these days, UK used electric vehicle sales hit record last year as prices fell (The Guardian, Julia Kollewe) cites the latest figures from the SMMT which shows that sales of used EVs last year hit record highs thanks to massive depreciation but Secondhand electric car sales ‘face drastic road tax hit’ (Daily Telegraph, Matt Oliver) reminds us of an important consideration – that April sees the introduction of higher rates of vehicle excise duty (VED) – aka road tax – where EV drivers will have to pay tax for the first time, depending on the age of the car concerned. Basically, the newer it is, the less tax you’ll pay but here will also be an additional “expensive car supplement” that will apply to cars worth over £40k. * SO WHAT? * A lot of new EVs are coming to market this year, so I suspect that customers who’ve been thinking about taking the plunge will be tempted by newer cars, thereby potentially limited price upside to the used car market. I would say that most consumers think that EVs are inevitable, so they will be more open to buying them particularly as there is going to be more choice!

There’s an interesting conundrum at work in UK shoppers inspired by health food trends on social media ‘lift retail sales’ (The Guardian, Phillip Inman) where the latest Barclays figures show that retail sales increased in January on both credit and debit cards thanks to popular wellness trends being pushed by influencers! Food supplements, vitamins and high-protein foods have been seeing stronger sales but then McDonald’s bounces back with rise in sales outside US (The Times, Jessica Newman) shows that international sales at McDonald’s have rebounded after two consecutive bad quarters while Why McDonald’s has missed out on the Trump bump (Financial Times, Lex) shows that dangers still exist for the restaurant chain in Europe and the Middle East where boycotts could easily return. Trump’s ongoing sabre-rattling may also affect consumers’ appetite for American things in general.

In a quick scoot around some of today’s other interesting stories, Fox in deal to buy podcast producer Red Seat (Financial Times, Anna Nicolaou) highlights Fox’s move to buy Red Seat Ventures, a right-wing podcast company, as Rupert Murdoch’s TV group continues its push into the podcasting sector. Red Seat offers production, distribution and marketing capabilities for creators and will be backed into Fox’s existing Tubi business. * SO WHAT? * Podcasting continues to be a hot area and has been credited with helping Trump win the election by tapping into a younger audience. Clearly, Fox wants more of the pie!

US firms buy up central London offices at ‘market bottom’ (The Times, Tom Howard) cites data from CoStar, the property analytics group, which shows that cash-rich Americans are now active buyers of office spaces after spending the last few years on the sidelines. The West End has proved to be a particularly fruitful hunting ground for them and it seems that East Asian investors have been big sellers. Blackstone, Realty Income, Oval Real Estate and Global Holdings have all bought swanky property in the capital recently. * SO WHAT? * West End property values have weakened significantly in the last few years (about 15% on average versus their peak in 2021) but I would imagine that a stronger dollar has also had a role to play in this shift.

I thought that this was quite an unusual way to promote the Paris AI Summit! The Macron deepfake videos were pretty amazing, I thought! I think they were more convincing than this one with Donny T and Joe Biden but not quite as good as this one with Tom Cruise and Paris Hilton getting ready for a night out 😜