Eurozone Stagnated in Fourth Quarter, Contrasting With U.S. Growth |
U.S. and European authorities reported differing economic performance data yesterday: the U.S. grew at a 2.3 percent pace in the last quarter of 2024, while the Eurozone did not grow. The European Central Bank cut its main interest rate yesterday, with bank President Christine Lagarde citing economic “headwinds” and potential “greater friction in global trade.” European Union (EU) officials are bracing for potential trade confrontation with the Donald Trump administration after Trump last week said the bloc was going to be “in for tariffs”—though he did not immediately specify those plans.
Yesterday’s divergent data from the United States and Europe continues a broader trend of the United States emerging stronger from the COVID-19 downturn and subsequent strains—such as the economic shock of the war in Ukraine—than Europe. The U.S. Federal Reserve had its own interest rate announcement this week, and held rates steady. (Reuters, FT, Bloomberg, Politico, WSJ)
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“If European leaders find the political will to implement [recent] recommendations, the EU will be home to a single market that can punch at its true weight in the international arena; it will become stronger and more self-sufficient. Should Europeans fail to act in unison to realize this vision, they will lose jobs, investment, and innovation to the United States and China, at the cost of ever-lower standards of living,” CFR’s Matthias Matthijs and Carnegie Europe’s Erik Jones write for Foreign Affairs.
“The primary argument for the implementation of broad-based tariffs is that they will reverse the hollowing out of American manufacturing and reduce the trade deficit,” the American Enterprise Institute’s Phil Gramm and Harvard University's Larry Summers write in the Wall Street Journal. “Contrary to the repeated claim, there has been no hollowing out of American manufacturing. Industrial production in the U.S. is at an all-time high.”
CFR’s Sebastian Mallaby, Bridgewater Associates’ Karen Karniol-Tambour, the Peterson Institute for International Economics’ Adam Posen, and International Capital Strategies’ Douglas Rediker dove into the current global economic outlook at a meeting this week.
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Report: China Builds New Military Command Center in Beijing |
Satellite images and interviews with former and current U.S. officials suggest the western Beijing facility would be at least ten times the size of the Pentagon and would include underground bunkers, the Financial Times reported. The U.S. Director of National Intelligence did not comment, while the Chinese embassy in Washington said it was “not aware of the details” but China’s defense policy is “defensive in nature.” (FT)
CFR expert David Sacks details six big takeaways from U.S. reports on China’s military strength.
Japan: The country last October saw the largest year-on-year jump in foreign workers since records began in 2008. Japan has loosened permissions for foreign workers as part of efforts to address its aging population; the total workforce is now 3.4 percent international, government data shows. (Nikkei)
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India to Host DeepSeek Model on Local Servers |
The country will respond to data privacy “issues” related to Chinese artificial intelligence (AI) model DeepSeek by hosting and testing the model on local servers, India’s information technology minister said. India has banned China-linked apps like TikTok and WeChat citing national security concerns; Indian officials say they hope to drive development of the country’s own AI sector. Italy blocked the DeepSeek app outright, and countries such as France and South Korea said they would question the company about privacy measures. (TechCrunch, Indian Express, Reuters)
Yesterday, CFR hosted a discussion on “what could possibly go right” in AI’s future with expert Reid Hoffman.
Afghanistan: The women’s cricket team played a charity match in Australia yesterday, its first game in over three years after members fled the Taliban takeover. Most of the team are now refugees in Australia. (Al Jazeera)
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Middle East and North Africa |
U.S. Contractors to Staff Gaza Checkpoint During Truce |
A U.S. security firm is hiring almost one hundred U.S. special forces veterans to assist in vehicle inspection in Gaza during the ongoing cease-fire, a company spokesperson told Reuters. An unnamed Palestinian official close to the talks said that U.S. contractors would be deployed away from Gaza residents. After yesterday’s hostage and prisoner exchange was completed yesterday albeit a delay, the next stage of hostage releases is set for tomorrow. (Reuters, Times of Israel)
Syria: Former rebel leader Ahmad al-Sharaa pledged to pursue those who had “committed massacres and crimes“ and to hold a “national dialogue conference” in his first speech since being declared the country’s interim president yesterday. (BBC) |
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Uganda Confirms Ebola Death Two Years After Its Last Outbreak Ended |
A nurse has died of Ebola in Kampala, a health official said. Uganda’s most recent outbreak was declared finished in January 2023 after killing over fifty-five people. The World Health Organization said it would send over an initial $1 million to support Uganda’s response. (AP)
For Think Global Health, Mariëlle Bemelmans and Moses Mulumba advocate for vaccines for Africa by Africa.
Mozambique: EU election observers judged Mozambique’s October 2024 vote as “marked by anomalies and serious flaws” in a report. Post-election violence killed over three hundred people in the country. Mozambique’s Constitutional Council said the vote contained some irregularities but upheld the outcome, which extended the governing party’s rule. (Bloomberg)
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Norway’s Governing Coalition Breaks Down After Energy Policy Dispute |
A Euroskeptic party broke away from Norway’s governing coalition yesterday. It opposed steps to integrate with the EU energy market and adopt certain EU efficiency standards, saying consumers would face higher prices. Norway is not an EU member but adheres to some of its policies to gain access to the European Economic Area. The governing party is now expected to lead a minority government until already scheduled elections on September 8. (Euronews, FT)
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Rubio to Talk Canal, Immigration Concerns in Panama |
U.S. Secretary of State Marco Rubio said ahead of his trip to Panama tomorrow that Trump’s desire to retake control of the Panama canal is driven by national security concerns over Chinese influence. Panama’s President José Raúl Mulino said he will not negotiate on control of the canal. Rubio and Mulino are also due to discuss immigration. (AP, Reuters)
CFR’s Diana Roy explains who really controls the Panama Canal.
U.S./Brazil: Brazilian President Luiz Inácio Lula da Silva said there would be “reciprocity” if the United States put tariffs on Brazil but said he would prefer to “improve our relationship with the United States.” (AFP)
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Trump Reiterates Plans for Canada, Mexico Tariffs With Potential Oil Exception |
President Donald Trump yesterday said he would follow through on a proposal to apply tariffs on Canada and Mexico tomorrow. He also mentioned a potential exclusion for oil. In 2023, nearly 60 percent of U.S. crude oil imports came from Canada; together with Mexico the two countries supplied over 71 percent of US crude oil imports, according to the Congressional Research Service. Negotiators from both Canada and Mexico as well as some Trump advisors are working to try to prevent or limit the tariffs, the Wall Street Journal reported. (FT, CRS, WSJ)
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The 2025 Grammy Awards are set to highlight rising African musicians. But in the streaming age, questions remain about who profits from the rise of the continent’s artists on a global stage, New Lines Magazine reports. |
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