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Leaders | MAGAlomania
Donald Trump’s economic delusions are already hurting America
The president and reality are drifting apart
Mar 6th 2025
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Editor’s note (March 6th): Since this article was published, Donald Trump announced that tariffs on Mexican and Canadian goods covered by the North American trade agreement (roughly half their total exports to America, according to the White House) would be paused until April 2nd. Hefty tariff increases and significant uncertainty, therefore, still loom over the world economy—precisely what our leader discusses. Indeed, our cover illustration feels only more apposite.
In his speech to Congress on March 4th President Donald Trump painted a fantastical picture. The American Dream, he declared, was surging bigger and better than ever before. His tariffs would preserve jobs, make America richer still, and protect its very soul. Unfortunately, in the real world things look different. Investors, consumers and companies show the first signs of souring on the Trumpian vision. With his aggressive and erratic protectionism, Mr Trump is playing with fire.
By imposing 25% tariffs on goods from Canada and Mexico, also on March 4th, Mr Trump is setting light to one of the world’s most integrated supply chains. Although he belatedly delayed duties on cars by one month, plenty of other industries will suffer. He has also raised tariffs on China and has threatened the European Union, Japan and South Korea. Some of these duties may also be deferred; others may never materialise. Yet in economics as in foreign relations, it is becoming clear that policy is being set on the president’s whim. That will cause lasting damage at home and abroad.
When Mr Trump won the election in November, investors and bosses cheered him on. The S&P 500 rose by nearly 4% in the week after the vote in anticipation of the new president lighting a bonfire of red tape and bringing about generous tax cuts. His protectionist and anti-immigration rhetoric, investors hoped, would come to nothing. A stockmarket correction or a return of inflation would surely curb his worst instincts.
Alas, those hopes are going up in smoke. Elon Musk’s doge is causing chaos and grabbing headlines, but with little sign yet of a deregulatory bonanza. (Mr Trump’s order banning the federal purchase of paper straws will do little for America Inc’s bottom line.) The budget blueprint passed in Congress in February keeps the tax cuts from 2017, in Mr Trump’s first term, but does not expand them—though it does add trillions to the national debt. In the meantime, Mr Trump’s tariff promises would return the average effective duty to levels not seen since the 1940s, when trade volumes were much smaller.
No wonder that, despite Mr Trump’s talk of a roaring comeback, the markets are flashing red. The S&P 500 has given up nearly all its gains since the election. Although economic growth remains fair, in recent weeks the yield on ten-year Treasuries has fallen, measures of consumer sentiment have plunged and small businesses’ confidence has slipped, hinting at a slowdown to come. Meanwhile, inflation expectations are rising, perhaps because Mr Trump is talking about all those wonderful new tariffs.
Underlying the alarm is a dawning realisation that Mr Trump is less bound by constraints than investors had expected. Although price rises blew up Kamala Harris’s presidential campaign, the prospect of inflation is not deterring Mr Trump, who argues that the economic harm from tariffs is worth it. During his first term he gloried in the long stockmarket boom; this time markets have not featured among his many social-media posts. His postponement of the car tariffs is too short-lived for the industry to adapt. Mr Trump is sticking to his belief that tariffs are good for the economy.
Just as important, the people around the president also appear to lack influence. Scott Bessent, the treasury secretary, and Howard Lutnick, the commerce secretary, are both financiers, but if they are trying to rein in Mr Trump, they are not doing very well. Instead of being wise counsellors, they come across as stooges, explaining why tariffs are essential and Wall Street doesn’t matter. Few businesspeople want to speak truth to power for fear of drawing Mr Trump’s ire. And so the president and reality seem to be drifting ever further apart.
That threatens America’s trading partners. For some reason, Mr Trump reserves special hostility for Canada and the EU. Because his approach lacks any coherent logic, there is no knowing how to avert his threats. Worse is to come if he carries through his promise to Congress to impose reciprocal tariffs, which match the duties that American exports face abroad. That would create 2.3m individual levies, requiring constant adjustment and negotiation, a bureaucratic nightmare that America unilaterally abandoned in the 1920s. Reciprocal tariffs would strike a fatal blow to the global trading system, under which every country has a universal rate for every good that is not within a free-trade agreement.
As if that were not bad enough, tariffs will harm America’s economy, too. The president says he wants to show farmers that he loves them. But protecting America’s 1.9m farms from competition will inflate the grocery bills of its nearly 300m consumers; and compensating them for retaliatory tariffs will add to the deficit. Whatever Mr Trump believes, economic growth will suffer because tariffs will increase input costs. If businesses cannot pass them on to consumers, their margins will wither; if they can, households will experience what amounts to a tax rise.
Mr Trump’s policies set up an almighty clash with the Federal Reserve, which will be torn between keeping rates high to curb inflation and cutting them to boost growth. One of America’s most important remaining independent institutions, the Fed would have to face down an angry president used to getting his way. When the administration staged a power grab over the Fed’s regulatory responsibilities it carefully set monetary policy apart. How long would that distinction last?
MAGAlomania
The world economy is at a dangerous moment. Having defied reality (and the constitution) after he lost the election in 2020, only to be triumphantly re-elected in 2024, Mr Trump has no patience for being told that he is wrong. The fact that his belief in protectionism is fundamentally flawed may not sink in for some time, if it ever does. As the message that Mr Trump is harming the economy grows louder, he could lash out at the messengers, including his advisers, the Fed or the media. The president is likely to inhabit his protectionist fantasy for some time. The real world will pay the price. ■
Leaders | America and Ukraine
The lesson from Trump’s Ukrainian weapons freeze
And the grim choice facing Volodymyr Zelensky
Photograph: US Air Force
Mar 4th 2025
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IN AMERICA FOREIGN policy works on a simple formula: with Donald Trump in the White House, dependence leads to maltreatment. That is the lesson the world should take from a devastating week, which culminated in an announcement on March 3rd that America is pausing all military aid to Ukraine until it accepts Mr Trump’s terms for peace with Russia. It is as if Ukraine were in an abusive relationship.
Bitter as it must have been, Volodymyr Zelensky, Ukraine’s president, was right to respond by promising to do what he must to salvage as much American help as he can. Do not imagine that the outcome will be good for Ukraine, Europe or even America. It will just be less awful than what would follow from Mr Zelensky’s continued defiance of a president who so fundamentally miscalculates his own country’s interests.
Mr Trump argues that his tactics are justified because he is working for peace. He shares the Biden administration’s fears that a proxy conflict with nuclear-armed Russia could end up dragging America into “world war three”. He says he is providing security guarantees in the form of mining investments, because Russia would not dare invade Ukraine if that meant seizing American assets or killing American mine-workers.
Mr Trump has described his own plan as “genius”. In fact, it is incoherent. The last nationwide minerals survey of Ukraine was back in the 1960s: nobody knows how much mining would take place or how soon. Even if American citizens were present, they would not offer Ukraine much extra security. Russia could simply bypass the mines, while guaranteeing their ownership and the safety of their personnel. If Western security fails in Ukraine, then Russia will be emboldened to threaten and harm other countries, including the Baltic states. World war three would be closer, not further away.
Mr Trump argues that Vladimir Putin, Russia’s president, would never cross him. But why not? Mr Trump has just demonstrated that he does not think Ukraine is worth fighting for—and underlined this by mauling Mr Zelensky in the Oval Office. Even if Mr Putin holds back out of respect for Mr Trump, he may not feel bound to keep the peace after 2029.
For all these reasons Mr Zelensky is justified in asking for American security guarantees. But he is unlikely to get them. Neither may Britain and France, which have pleaded for American backup for any troops they put into Ukraine to safeguard a ceasefire. The choice for Mr Zelensky is therefore a bad minerals deal without security guarantees, but with the possibility of at least some American support and with a European military presence; or no deal and no American support.
The time was when America’s allies could count on it to stand by them in a crisis, despite differences over policy. These days, by contrast, America’s allies have to prepare for the worst. Mr Trump says he is merely “pausing” the supply of weapons, but Ukraine’s allies have to behave as if the freeze is permanent. On March 5th, after the original weapons freeze, America also stopped sharing intelligence. That will make it harder for Ukraine to identify Russian targets.
Europeans should back Mr Zelensky and champion Ukrainians’ right to self-determination, even if that irks Mr Trump. They should also seize Russian state assets in Europe and use them to pay for Ukraine’s defence. They need to finance Ukraine’s own arms producers. They need to increase Europe’s own production of weapons and buy American arms for Ukraine, supposing Mr Trump will agree to it.
NATO has been the most successful military alliance in history. But as Mr Trump continues to see his allies’ dependence as a vulnerability to exploit, so Europe must prepare for abandonment or extortion, even if that risks accelerating the very collapse of NATO that Europe most wants to avoid. That is the tragedy of Mr Trump’s strong-arming of America’s friends. ■
United States | The headless opposition
Democrats are struggling to respond to Trump
First, the party must work out what it stands for
Photograph: Getty Images
Mar 6th 2025|WASHINGTON, DC
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EVERY DAY, President Donald Trump gives fresh reasons for Democrats to rue their election loss in 2024. The failures of Joe Biden and Kamala Harris mean that everything they professed to care about—the transatlantic alliance, the state’s capacity to improve society, the rule of law—is being unwound. Democrats spent years declaiming that a second Trump presidency would be catastrophic, an existential threat to American democracy. And yet more Americans preferred him to the alternative the Democratic Party set before them.
Understanding how it all went so wrong would seem to be a priority.
You would think. But watching the succession proceedings at the Democratic National Committee a few weeks ago did not inspire much confidence. In his farewell address, Jaime Harrison, the outgoing chairman, proudly recounted a story about an encounter with donors who had expressed doubts about Ms Harris. “In all due respect, you are not worthy to even tie her shoes,” he told them. He continued fawning: “We should be thanking her every single day for all the hard work and effort she put in to fight for our democracy.” The next day, his successor, Ken Martin, took the reins of the party apparatus by demonstrating similar incapacity for introspection. “Anyone saying we need to start over with a new message is wrong,” Mr Martin had told the Democratic mandarins who elected him. “We got the right message.”
Others think that the party’s problems run deeper. “Anyone who just says, ‘The message is fine, we just didn’t get it out there,’ is very naïve about the problem,” says Seth Moulton, a Democratic congressman from Massachusetts. “It’s just an excuse for doing nothing and maintaining the status quo. Good luck with that. We’ll keep losing.” Increasing educational polarisation has realigned American politics—and not in the Democrats’ favour. While Ms Harris improved her margins among white, college-educated voters, she lost ground among almost every other important group: women (slipping five percentage points compared with 2020), those without college degrees (-8 points), Hispanics (-15 points), African-Americans (-16 points), the young (-20 points). Democrats once dreamed that demographic change would guarantee political dominance; instead it could be a nightmare.
After any major loss, political parties often go through a warring-factions period. After Mr Trump’s first victory, a massive resistance movement benefited the party’s progressives. They achieved their apotheosis in 2020, when presidential hopefuls tripped over themselves to propose new trillion-dollar spending packages, while ideas about systemic racism and white privilege became voguish. This time round, though, the moderates are ascendant, arguing that the party veered too far left and turned off the non-white and working-class voters that were the party’s traditional power base. “We’ve turned into what I call the ‘shame on you’ party: You can’t drive that car, you can’t eat that food, you can’t use that word, you can’t work in that industry,” says Adam Frisch of Welcome PAC, a group that aims to elect moderate Democrats in difficult districts.
There are subtle signs that the balance is shifting. Based on their lack of protest, elected Democrats seem to have tacitly accepted that they lost the culture wars over immigration policy, over trans issues and over diversity, equity and inclusion (DEI). But there is general unwillingness to repudiate these prior stances. “We’re afraid of difficult conversations, and we’re afraid to go against the extremist positions of many of the interest groups,” says Mr Moulton, who provoked a protest rally in his home district for breaking with his party and arguing that trans girls should not compete in girls’ sports. Some progressives also worry that identity politics went too far. Faiz Shakir, the presidential campaign manager for Bernie Sanders in 2020, says the party has successfully presented itself as “multiethnic…but not working class: a party that’s much more concerned about diversity and equity inclusion efforts” than economic justice. Interest groups advancing abortion rights, anti-racism, environmentalism and immigrant rights have been quieter in the face of such criticism, but they still retain considerable influence over Democratic politicians and, perhaps even more importantly, their staffs.
Chart: The Economist
In American politics, spells in the wilderness run at least two years—until the midterm elections. When a party’s representatives are in the minority it is difficult for them to demonstrate resistance without emphasising impotence. James Carville, a provocative Democratic strategist, has counselled the party to “play dead” and let the chaotic experience of Trump-led governance play out for itself. Some would say that Mr Carville’s advice is already being heeded. Hakeem Jeffries, the Democratic minority leader in the House, has said “We’re not going to swing at every pitch.” In fact, Mr Jeffries has spent some of his time on a book tour promoting his illustrated book for children, “The ABCs of Democracy”, and hosting a roundtable of social-justice groups in defence of DEI.
In defence of Mr Jeffries (and his Senate counterpart Chuck Schumer), the job of congressional leadership is to whip caucuses, fundraise and recruit promising candidates—it is not to set the intellectual direction for the party or even to excel at media appearances. There is some wisdom to Mr Carville’s advice on imitating possums. Political scientists describe public opinion as thermostatic—going cold when politicians go hot (and vice versa, ad infinitum). That suggests that, unless the party completely implodes, they will have a strong showing in the midterm elections in 2026. But until a presidential candidate is chosen for the next election, what the party stands for will remain contested.
Outside of the ancien régime, there are already efforts to generate fresh ideas. “We have to go on offense by contrasting the chaos and corruption of this administration with cost of living for Americans, which is going to go up under his tenure,” says Jake Auchincloss, another Democratic congressman from Massachusetts. He argues that rather than offering voters light populism on cultural issues—“Diet Coke” when the richer version is already at hand—“our economic telos as a party should be treating cost disease, particularly in housing and health care”.
Groupsthink
And if anything, resistance is livelier outside Washington. State attorneys-general in Democratic states were better prepared for Mr Trump’s return to power and have nimbly reacted to even his more unpredictable actions, such as letting Elon Musk rampage through the federal bureaucracy. The American Civil Liberties Union (aclu) has worked with blue cities and states to set up “firewalls for freedom” that hinder the federal government’s efforts to restrict abortion or enact deportations. The resistance “doesn’t look the same as last time” because there are fewer rallies but “in fact, it’s actually more strategic and more impactful,” says Deirdre Schifeling of the aclu which has sued the administration 14 times already.
Progressives are also slowly reckoning with the refutation of their theory that identity politics and expansive state spending would galvanise America’s proletariat. In fact, the dispossessed were repelled. Sorting out how to get them back is the essential task of the party. It will have a few years to ponder how to do it. ■
United States | Right click
The women vying to make conservatism fashionable online
Intellectual dominance is not enough for the MAGA movement. Aesthetic dominance must follow
Photograph: raqisright/theconservateur/shelbyjeppsen
Mar 6th 2025|NEW YORK
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ANYTHING CAN look good with the right lighting. An influencer touches up her makeup while decrying the “radicalism of the left”. In an Instagram video viewed 27m times a young woman shows off her “outfit of the day”: a get-up for church, fashioned to conceal a gun. A 20-something poses in sunglasses with her coffee: iced vanilla latte with raw milk.
While these posts are coloured by Republican sensibilities, at first scroll they resemble something any regular influencer might upload. Beauty, fashion and lifestyle content keep social media algorithms ticking. It is both fun to watch and can be lucrative for the small share of influencers who attract most of the marketing spend. Many such creators shy away from politics. If anything, it is often those on the right who allege they have been shunned by their peers, passed over for brand deals or had their content suppressed after revealing whom they voted for. Newly empowered by Donald Trump, Republican influencers are wielding style and substance to set the record straight.
“The conservative movement never had correct presentation,” says Isabelle Redfield, who co-founded “The Conservateur”, an online magazine that angles itself as an alternative to Vogue. “They were always marketing to men.” Their Instagram posts include glossy guides on “How to Dress Like an It-Girl This Winter” and calls to “Thank a DOGE boy today!”. Many of their over 100,000 followers do not follow other political accounts, claims Caroline Downey, its editor. “But there’s something about us that is appealing at an instinctual level, and they enjoy honestly, our glamorisation of a lifestyle that we think is objectively good, true and beautiful.”
Since Robert F. Kennedy junior’s campaign to “Make America Healthy Again” made it to the cabinet, unpasteurised milk—once the prerogative of Californian hippies—has become trendy among conservatives. “Nobody batted an eyelash when, you know, the Gwyneth Paltrows of the world were talking about raw milk,” says Alex Clark, a wellness podcaster who promotes the stuff to over 400,000 Instagram followers, of the ensuing outrage.
Fashioning unreconstructed conservative ideas into something aesthetically appealing online has sometimes veered on caricature. In recent years “trad wives”—typically rural and religious stay-at-home mothers who film themselves cooking, cleaning and, on occasion, procuring their own raw milk from cows—have soared in popularity. But that is not the full picture.
Raquel Debono, an influencer based in New York, says she did not fit into such “categories”. She began posting on social media to show that “you could be like a normal girl in New York City who would be a normal influencer in every other sense”. In between uploading TikToks about it being “a good day to be MAGA”, Ms Debono, who is Canadian and said she could not vote in the election, chronicles everything from her outfits to her dating life. She hosts parties encouraging other young Republicans in the city to “Make America Hot Again”.
At one such event in Manhattan (dress code: “like you’re meeting your future husband or wife—because you might be”), Zoe, an attendee, says she lost friends after voting for Mr Trump but gained new ones here. She lists several influencers and podcasters she follows that “let women like us know that it’s OK to be conservative and to cling on to our values”. Mainstream media is something “we’re all learning is not trustworthy”, says Meredith, another guest. Social media, by contrast, offers access to independent creators with “hot takes or, like, nuanced stories”.
She is not alone. Nearly four in ten American adults under 30 get their news from news influencers, according to the Pew Research Centre. The White House welcomes podcasters and influencers to the briefing room. The president’s own 17-year-old grand-daughter, Kai Trump, has racked up millions of followers making vlogs about playing golf, drinking Starbucks and shopping for a homecoming dress. Her most popular uploads offer access to outdo the most well-sourced correspondent: “Watching a Rocket Launch at SpaceX with Elon Musk!” “My grandpa became the President again.”■
United States | Lexington
Donald Trump’s Washington reaches a new partisan peak
His address to Congress showed that Republicans will follow their leader anywhere, and that Democrats don’t have one
Illustration: David Simonds
Mar 5th 2025
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“The next president of the United States will only be the president of a party,” Thomas Jefferson predicted as George Washington, with his singular stature, ceded the office. In the modern era, that cramped vision of the presidency has never been more starkly on display than it was on March 4th, when Donald Trump addressed a joint session of Congress for the first time in his second term. At least within the chamber that evening, he was the president of worshipful Republicans, and the scowling, leaderless Democrats seemed relevant only as his foil, or chew toy.
Mr Trump’s own vision for America under him was as grandiose and imperious as ever. “We are going to forge the freest, most advanced, most dynamic and most dominant civilisation ever to exist on the face of this earth,” he pledged in closing, having earned at least one superlative by delivering the longest presidential speech to Congress, at about 100 minutes, in recorded history. Yet as he extolled his imposition of tariffs on allies and adversaries alike, declared victory over “wokeness” and “unelected bureaucrats” and renewed pledges to obtain Greenland and the Panama Canal, he held out little hope that political unity would blossom within his civilisation. For their part, Democrats showed no interest in it. They stayed seated or stood with backs turned as Mr Trump made his way into the chamber, shaking Republican hands and air-kissing Republican cheeks.
Anticipating this stony reception, Mr Trump came prepared to beat Democrats over the head with their own silence. “Once again, I look at the Democrats in front of me, and I realise there is absolutely nothing I can say to make them happy or to make them stand or smile or applaud,” he said. As Republicans leapt to their feet to clap or chant “USA” and “Trump”, Democrats presented themselves less as a coherent opposition than a confused, petulantly partisan one. Some waved little signs saying “False” or “Save Medicaid”. Some walked out, wearing shirts that read “Resist” on the back because they just couldn’t, unfortunately. One was ejected for trying to shout the president down. Few clapped, and then wanly, even when Mr Trump announced that Pakistan had turned over the terrorist behind an attack that killed 13 American soldiers during the withdrawal from Afghanistan in 2021.
In fairness to Democrats, Mr Trump was baiting them into partisan displays by extravagantly bragging about his election and his achievements already back on the job. He said “it has been stated by many” that his first month in office was the most successful in American history. “You know who number two is?” he asked. “George Washington.” He called his Democratic predecessor, Joe Biden, “the worst president in American history”. He asserted that Elon Musk and his Department of Government Efficiency had found “hundreds of billions of dollars of fraud”, an amount in excess even of Mr Musk’s own poorly substantiated claims.
Intensifying Republican support by goading Democrats is a familiar tactic for Mr Trump, and it remains a risky one. Despite his assertions to the contrary, his approval rating is only slightly higher than that of the most unpopular president early in his term since 1953—the 45th one, Donald Trump. Republican leaders have taken to urging their lawmakers to skip town halls, saying the worried constituents who keep turning up are paid activists.
Mr Trump’s many boasts during his speech about executive orders backlit his dearth so far of legislative achievements. As during the campaign, Mr Trump repeatedly warned of threats posed by people he said entered America illegally under Mr Biden. While Democrats had said they needed new legislation to secure the border, Mr Trump said, “it turned out that all we really needed was a new president”. It was one of his best lines, but later he acknowledged he needed such legislation himself, calling on Congress to supply money for border security. “Americans expect Congress to send me this funding without delay,” he said. Democrats in the chamber had not forgotten he ordered Republicans to block such help when Mr Biden wanted it.
It’s the economy, as usual
When spending on pandemic relief is excluded, Mr Trump still added more to the national debt in his first term than Mr Biden did. But he told Congress he would balance the budget while delivering “tax cuts for everybody”, raising expectations Republicans would struggle to meet even with more than a paper-thin House majority and without a united opposition. Polling suggests most Americans are already anxious about his economic stewardship. Having promised as a candidate to lower inflation on his first day in office, he has talked less about high prices lately. Before Congress, he complained he had inherited “an inflation nightmare”, but he cannot hope to avoid responsibility for long, particularly if his gamble on tariffs does not, as he promised, succeed in “protecting the soul” of America and making it “rich again”. Despite the display of Republican unity, some party leaders are antsy about tariffs’ consequences for prices. “There’ll be a little disturbance,” Mr Trump acknowledged, a rare admission tariffs could have any downside. “But we’re OK with that. It won’t be much.”
Delivering the Democratic response, Elissa Slotkin, a new senator from Michigan and former CIA officer, executed a thankless task effectively, particularly given the Democrats’ muddle. She spoke of proudly serving Democratic and Republican presidents and of bipartisan American support for a healthy middle class and strong national security. While Mr Trump was cutting programmes to finance “an unprecedented giveaway to his billionaire friends”, she said, “grocery and home prices are going up, not down, and he hasn’t laid out a credible plan to deal with either of those.” It’s a message that might work if prices stay high, and if Democrats ever come up with a credible plan themselves. ■
The Americas | Funky Brazil
A new kind of Brazilian music is poised for a global boom
Bossa nova and samba are out. Funk is in
Play that funk music, AnittaPhotograph: Getty Images
Mar 6th 2025|São Paulo
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The world is watching Brazil after the country won its first Oscar for “I’m Still Here”, a film set in Rio de Janeiro during the dictatorship in the 1970s. The film’s smooth soundtrack feeds into foreigners’ imagination of Brazil as a country where samba and bossa nova bands croon jazzy songs on sandy boardwalks. But this image is out of date. Modern Brazilians prefer sertanejo, a bouncing country genre, and funk, a style that emerged from Rio’s favelas. Funk in particular could go global, and change Brazil’s brand in the process.
Sertanejo has been the most listened-to genre on Brazilian radio and streaming platforms for a decade. Its ascent reflects changes in Brazil’s economy, which used to be based on manufacturing but is now driven by agriculture. “Most music producers in Brazil used to be based in Rio,” says Leo Morel of Midia Research, a market-research firm. But as agriculture became more important, “rural states started winning a voice”. Sertanejo singers’ themes are cattle, beer and American pickup trucks. In 2003 the genre accounted for 15 of the 100 most-played songs on Brazilian radio; in 2022 that figure was 76.
But despite this dominance, sertanejo has little export potential. Few artists care about going global, says Mr Morel. That leaves funk (which Brazilians pronounce as “funky”) as the genre that could alter Brazil’s reputation. “We make music to be heard by as many people as possible,” says Kevin o Chris, a funk singer.
Brazilian funk emerged in the late 1980s, inspired by Miami bass and electro-funk, two sub-genres of American hip-hop that incorporate electronic drums. Brazilians made funk their own by speeding up the underlying rhythms. Where hip-hop or reggaeton, the genre popularised in Puerto Rico, run at around 90 beats per minute, funk races along at 130 or more. Brazilians have developed a sub-culture around the genre, including weekly baile funk (dance parties) in favelas, with moves like the acrobatic passinho for men, which involves elaborate footwork, and the rebolada for women, a paced variant of twerking.
Brazilian funk’s themes and lyrics can often be violent. At a recent baile funk in a favela in the Rio neighbourhood of Glória, teenagers walked around with rifles slung over their shoulders and cartridge belts around their waists. A man in his 20s waved a gold-encrusted semi-automatic rifle. Behind the stage, armed men guarded a table stacked with pouches of cocaine for sale.
Despite this hardcore vibe, funk’s catchy tunes are helping it go mainstream. Taísa Machado, a dance teacher and curator of an exhibition on funk in Rio, says that her students used to be regulars at bailes funk. Now they are dentists and therapists who live in rich neighbourhoods. Most are white. This normalisation has incensed conservative lawmakers. In January a São Paulo councilwoman introduced a bill banning local government from hiring artists who promote crime to perform at public events. The national Congress is now discussing the bill. It is seen as explicitly targeting funk.
If Brazil’s musical ambassadors used to be the likes of Gilberto Gil, today the preferred mascot is Anitta, a genre-crossing artist from a poor suburb of Rio known for her prodigious hip-thrusting abilities and “innumerable” plastic surgeries (she has referred to herself as “Frankenstein”). She has worked for years to break into the international market, teaching herself Spanish and English, buying a house in Miami and singing her way onto the books of Republic Records, a prestigious record label owned by Universal Music Group, a Dutch-American giant. In 2022 she was the first Brazilian to top Spotify’s global charts with her song “Envolver”, a reggaeton tune sung in Spanish. Her latest album is trilingual and returns to her origins in funk.
Não falo português
The fact that Anitta has had to learn two new languages and mix genres in order to go global shows up the difficulty Brazilian artists have in reaching international audiences. “It is easier to export Brazilian footballers than musicians and culture,” says Michele Miranda, a music journalist. Spanish-speaking Latin American immigrants in the United States have helped popularise genres such as reggaeton. Brazil’s diaspora is smaller and more insular.
But funk producers think their genre will boom before long. Last year Beyoncé and Kanye West, two American superstars, sampled funk on their new albums. Papatinho, a Brazilian producer who often travels to the United States, says musicians there had no idea what funk was, until recently. Then last year he received phone calls from Timbaland and Snoop Dogg, as well as Mr West, all famous American musicians, asking him to send samples. “I used to add funk in small quantities, like a spice, but now people want the whole sauce,” he says.
The likes of Mr West and Beyoncé may be responding to business incentives as well as looking for good beats. Latin America and sub-Saharan Africa are the fastest-growing music markets in the world. Though Latin America contains only 8% of the world’s population, it accounts for almost a quarter of Spotify’s monthly active-user base, according to Roberta Pate of Spotify Brazil. She notes that a key ingredient in the success of other international genres, like reggaeton, was “consistency in how artists dedicate their resources to conquering global audiences”. If Anitta is anything to go by, then funk’s global crescendo may not be far off. ■
China | The National People’s Congress
China’s leaders reveal their plan to cope with 2025
Beating trade wars and deflation and boosting science are priorities
Photograph: Getty Images
Mar 5th 2025|HONG KONG
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It is not often that the world’s two superpowers hold state-of-the-nation addresses back-to-back. But thanks to a quirk of scheduling and the magic of time zones, it happened this week. Li Qiang, China’s prime minister, gave his annual report to the country’s rubber-stamp parliament, the National People’s Congress, in Beijing on March 5th. A few minutes later, President Donald Trump began a fiery speech to a joint session of Congress in Washington. The contrast was instructive.
Mr Trump’s speech, bombastic and bilious, was heckled by a congressman who had to be removed from the chamber for “disruption of proper decorum”. The president’s words were punctuated by chants of “usa, usa, usa!” and “Fight, fight, fight!” and “Na na na na, hey hey, goodbye!”
Mr Li’s speech had none of that. His audience—3,000 delegates assembled in the Great Hall of the People overlooking Tiananmen Square (pictured)—tried to look attentive. Tea was sipped, proper decorum preserved. Much of what Mr Li said was formulaic and predictable. As always, he heaped dutiful praise on his boss, Xi Jinping. But amid the platitudes and boilerplate, the fiscal numbers he provided were revealing about his government’s mindset at a difficult time. China’s economy faces a lingering property slump, chronic deflation and an intensifying trade war. The government’s response has too much of what Mr Trump sorely lacks: caution.
Photograph: Reuters
In his report, China’s prime minister announced the same official economic growth target as last year: about 5%. He also provided a catalogue of ten “major tasks” for the year ahead that echoed the list in 2024. Industrial modernisation, technological self-reliance and expanding domestic demand all featured prominently. But stimulating domestic spending was elevated from the third priority last year to the top task for 2025. Indeed, Mr Li mentioned consumption 32 times, a record. The previous peak (adjusted for the length of the speech) was 26 times in 2009, as China tried to revive spending in the aftermath of the global financial crisis.
Now, as then, the government is keen to restore consumer confidence, which has never recovered from the covid lockdowns. It also wants to steady the property market, which is struggling to find a bottom. Homeowners are no longer sure that their flats will hold their value. And homebuyers who have paid in advance are no longer confident their property will be built. These fears have contributed to a lack of demand and months of declining prices.
Photograph: Getty Images
America’s trade war will not help. Mr Trump hit China with a fresh 10% tariff on the day before Mr Li’s speech, following a similar duty a month earlier. Combined with older levies, they mean Chinese goods now face an average American tariff of about 34%, reckons Larry Hu of Macquarie, an Australian bank. China’s government swiftly retaliated by imposing tariffs on a narrower range of American goods, from chicken to soyabeans. It also added more American firms to a blacklist that could curb their dealings with Chinese firms. “If war is what the us wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” said the Ministry of Foreign Affairs.
To offset tariffs and deflation, China’s economy needs a more forceful stimulus. “It is better to act early than late,” as Mr Li put it. Most economists have been expecting an extra fiscal push this year of about 2% of gdp or more. That would be enough to stop deflation worsening, though probably not much more.
The fiscal package Mr Li actually announced had several parts. The target for this year’s headline budget deficit will rise from 3% of gdp last year to 4% this year. The headline figure covers only a fraction of China’s sprawling public finances, leaving out government-managed funds and financing vehicles sponsored by local governments, among other things.
Photograph: Reuters
But the headline number sends an important signal. By tradition, China has tried to keep the official deficit at 3% of gdp or below, in keeping with old-fashioned international norms. A 4% deficit shows that it is willing to abandon fiscal piety for the sake of rescuing the economy. That was a good first step.
As well as a bigger headline deficit, the central government will also loosen the financial reins on local governments. It will increase the quota of “special bonds” they can sell from 3.9trn yuan ($540bn) last year to 4.4trn this year. These securities were once reserved for infrastructure projects that can earn some revenue. But local governments can now use the money to buy unsold flats and idle land from property developers. The larger quota was close to expectations: a satisfactory second step.
But on the third step, the speech fell somewhat short. The central government will itself sell another batch of “special” bonds worth 1.8trn yuan, including 500bn yuan to help recapitalise China’s banks. That is more than it sold last year. But the figure is about 700bn yuan below expectations. All told, economists expect China’s broad fiscal deficit to increase by a little less than 2% of gdp (see chart 1).
Chart: The Economist
The style of China’s stimulus was also mildly disappointing. In the past the government has lavished money on bridges to nowhere and other white elephants. Whereas America fights downturns by printing money, China pours concrete. In his speech Mr Li promised to give greater priority to “improving the people’s well-being” and “boosting consumption”. The central government will, for example, devote 300bn yuan to its “trade-in” scheme which encourages households to replace old appliances and cars with newer ones.
China has also given civil servants a pay rise. And it will up medical-insurance subsidies for rural folk and city dwellers who are not covered by work-based schemes. Annual subsidies would rise to 700 yuan per person, an increase of 4.5%, according to the budget. The same groups will receive an increase in their basic pensions of 20 yuan a month, similar to last year. That is a large rise in percentage terms (almost 40% over two years) but tiny in absolute amounts. Nonetheless, of the extra fiscal stimulus provided this year, only about a quarter is related to consumption, calculates Robin Xing of Morgan Stanley.
Boosting consumption is not the only priority. A new “guidance fund” will also mobilise 1trn yuan in venture capital for new technologies. The budget for national defence will rise by 7.2%, before adjusting for inflation. In the past, China’s economy has kept pace with increased military spending, through a mix of real growth and inflation (see chart 2). As a result, the official military budget has remained fairly steady as a percentage of gdp, fluctuating around 1.3%. But now that China has slower growth and deflation, the equation has changed. Last year, for example, gdp grew by only 4.2% in nominal terms, before adjusting for changing prices.
Chart: The Economist
Will the same thing happen this year? The government does not give a growth forecast for nominal gdp. But the fiscal arithmetic in Mr Li’s speech implies he expects it to grow by about 4.9%. Since that is slower than the target for real, inflation-adjusted growth, the government must believe that economy-wide prices could fall again this year. Not even the government, then, expects their stimulus efforts to succeed in decisively defeating deflation.
In his very different speech in Washington, America’s president said he was looking forward to relentless success. “Our country is on the verge of a comeback the likes of which the world has never witnessed,” he said. More prudent leaders like to underpromise in the hope of overdelivering. But in the fight against deflation, that may be the wrong approach. Gloom can be self-fulfilling. In trying to restore confidence and revive animal spirits, then, a dash of bravado probably helps. The back-to-back speeches offered a stark contrast. Both would have been better if each had more closely resembled the other. ■
Middle East & Africa | Fragile ceasefires in the Middle East
Israel’s army adopts a high-stakes new strategy: more terrain
It remains present inside Syria, Lebanon, Gaza and the West Bank
Seizing the moment and the landPhotograph: AFP
Mar 3rd 2025|JERUSALEM
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THE SECOND stage of the ceasefire in Gaza, whereby Israel and Hamas were to officially end the war there, was supposed to start on March 2nd. But Israel has declined to begin the talks to which it committed in a deal in January. It is demanding an extension to the first stage of the truce, during which it wants Hamas to release more of the 59 hostages whom the militants still hold. To put pressure on Hamas to agree to the modified agreement, Israel has once again cut off supplies of aid to the war-ravaged strip.
The stalling of the ceasefire is part of a wider strategic shift, as Israel’s army seeks to maintain a larger geographical presence, including in territory that is not Israeli. It has begun to create what it intends to be indefinite “buffer zones” on four fronts: in Gaza, on the borders with Lebanon and Syria, and in the West Bank (see map).
Map: The Economist
The move is driven by chaos in these places, the lingering trauma of Hamas’s attack in October 2023 and by pressure from right-wing parties in the governing coalition of Binyamin Netanyahu, the prime minister. It is underpinned by Mr Netanyahu’s apparent confidence that he has the backing of Donald Trump’s administration, which has shown little sign of trying to rein in Israel’s army or its government.
The Gaza truce is not the only ceasefire agreement to which Israel is not adhering. Under the terms of an American-brokered agreement with Hizbullah, the Shia movement that controlled chunks of Lebanon until its war with Israel last year, the Israel Defence Forces (IDF) was supposed to leave Lebanese territory by late January. Israel demanded an extension until the Lebanese army had completed its takeover of the area. But even after that deadline passed on February 18th, Israeli soldiers remained in five fortified positions in southern Lebanon.
Read all our coverage of the war in the Middle East
Israel justifies the delay by claiming a need to protect Israeli communities near the border. A return of Hizbullah forces to the south could put them at risk again. The government says the IDF will vacate the posts once it is confident the Lebanese army can secure the border and keep Hizbullah out (it is not clear yet if it is up to the job). Israel has neither set a date nor defined the conditions for confidence.
Farther to the east, on the Golan Heights, Israel is deviating from its ceasefire with Syria. A deal was struck with the regime of Hafez al-Assad in 1974. But when Syrian opposition forces overthrew his son, Bashar, in December, Israeli forces crossed the border on the Golan and occupied Syrian territory. Israel’s original justification was the lack of a recognised force to protect the border. Since then, the Hayat Tahrir al-Sham (HTS) movement has established a government in Damascus, but it does not have firm control of the country; rival armed groups are active.
Partly as a result, the IDF has begun to build permanent positions in Syria. On February 23rd Mr Netanyahu said that Israel “will not allow HTS forces or the new Syrian army to enter the area south of Damascus”. He demanded a “complete demilitarisation of southern Syria in the provinces of Quneitra, Daraa and Suwayda from the forces of the new regime”.
Last, Israeli troops have ignored past agreements in the Palestinian cities of Jenin and Tulkarm in the West Bank, where an estimated 40,000 civilians have been forced to leave their homes because of continuing Israeli operations against armed groups there. The cities are part of “Area a”, control of which was allotted to the Palestinian Authority under the second Oslo agreement, signed in 1995. On January 29th Israel Katz, the Israeli defence minister, said that “after the completion of the operation, IDF forces will remain in the camp to ensure that terror does not return”.
Israeli security officials say that the events of the past 17 months have meant the country has to adopt what one calls “a different strategy of risk management”. This means Israel will act based not on what its intelligence services assess its enemies are planning in the short term, but on their potential capabilities. For now, the expanded IDF footprint may be sustainable and avoid a serious backlash. Hizbullah and Hamas are at a low ebb following Israel’s devastating campaigns in Gaza and Lebanon. The government in Damascus has other priorities as it tries to avoid a meltdown of its economy and the country descending into anarchy or civil war.
The most immediate concern is Gaza. Hamas may have little interest in resuming the war while it regains civilian control of the coastal strip and rebuilds its battered fighting force. But if the group continues to refuse to change the terms of the agreement, Israel is preparing a massive new offensive. Israeli officers say that could pave the way for the plan, first announced by Mr Trump, to remove Gaza’s population and build the “riviera” of the Middle East. On March 5th America confirmed that it had been talking directly to Hamas. Mr Trump said there would be “hell to pay” unless the group released the hostages. The risk of the war reigniting looks real.
There are longer-term costs, too. In southern Lebanon, Israel’s continued presence gives Hizbullah an excuse to keep its military strength despite pressure from the new Lebanese government and the public to disarm. For Israel, the burden of maintaining its more expansive presence will be high, both in financial terms and in keeping up mobilisation levels among reservists, many of whom are already into their fourth months-long stint of duty since the war in Gaza began. It also depends on continued support from the notoriously fickle Trump administration.
The IDF’s larger footprint could also endanger a unique set of opportunities for Israel. Since signing its first treaty with an Arab country, Egypt, in 1978, Israel has balanced military deterrence with diplomacy. That treaty, and another with Jordan, have survived events in the region. The new governments in Syria and Lebanon are anxious to engage with the West and to prove that they are no longer havens for pro-Iranian proxies. The continued—or expanded—occupation of their territory may not be the best start to improving relations. ■
Europe | Coping with the switch-off
Donald Trump’s chokehold on Ukraine
Where an American American cut-off of military aid will hurt most
Photograph: Getty Images
Mar 3rd 2025|KYIV
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Editor’s note (March 4th 2025): This story has been updated.
In a sleek business tower in Kyiv, a group of engineers huddle over a new, carbon-black drone called Batyar, “the Rogue”. It looks much like the Iranian-Russian Shahed drones that have been terrorising Ukrainian cities for the past few months. With a range of up to 1,500km at a cost of just $25,000 apiece, its optical terrain-recognition system lets it evade most electronic jamming, so it should more than match its Russian rival. It is the result of many joint collaborations by Ukrainian and American firms. What happens when such co-operation ends?
Thanks to the war, Ukraine is now a world leader in the technology of drones, which are more potent than many weapons provided by the West. Yet overall Ukraine has relied heavily on Western and American military support. Mr Trump’s threat to withhold it had already circulated before his fateful meeting with Volodymyr Zelensky in the Oval Office on February 28th. And on March 3rd Mr Trump ordered an immediate pause; two days later intelligence-sharing was cut off too. “No one wants to believe in the worst-case scenario,” said a military source before the American president’s latest declaration. “But there is worry that some items will be simply impossible to replace.”
The key elements of America’s support are not just the actual weapons but also the ability to maintain and repair them; the air-defence missiles that keep cities functioning; the Starlink system that is the backbone of military communications; but the sharing of intelligence may turn out to be the most critical of all.
Ukrainian soldiers know what happens when the flow of American weapons dries up. In late 2023 Mr Trump ordered Republicans in Congress to withhold approval of the next package of military aid. As a result, Ukraine was short of shells for six months. Nazary Kishak, a Ukrainian officer, says he witnessed the result of the hold-up during Russia’s siege of the Ukrainian city of Bakhmut: a ten-to-one advantage in the supply of artillery shells enabled Russia to destroy the city completely amid a needless loss of life.
To some extent Ukraine’s home-made drones can make up for a loss of artillery firepower. But this requires money: the local defence industry is running below full capacity. Drones have been effective and relatively cheap, but artillery is still needed and shells are too few. The loss of American Bradley fighting vehicles will be damaging, too. The end of American GPS-guided rockets would give Russia freedom of manoeuvre behind the front lines. Lieutenant Kishak says a stop order on such weapons will lead to “more Bakhmuts”.
Only America can produce high-end weapons like the Patriot missiles that have intercepted the Russian hypersonic and ballistic missiles raining down on Ukraine’s cities. On paper the French-Italian SAMP/T system could replace them if it were produced at scale. But it would not knock out Russia’s fastest missiles (though a more advanced version is expected next year). Without the Patriots, more of Ukraine will face the battering of cities near the front, such as Kharkiv. America has been working with Japan to co-produce Patriots, but probably in modest numbers. And Mr Trump would have to approve a transfer, which he might refuse.
The Starlink satellite network, paid for by Poland but controlled by America, is irreplaceable too. The Ukrainians have produced workarounds, for instance during their incursion into Russia’s Kursk region, where most Starlink systems have been disabled. A Ukrainian official says a backup using similar technology is in the works: “We have one to roll out in days; a more extensive solution in three months.” But the switch will be tricky and will remove a key battlefield advantage. Alternatives are inferior in vital respects and vulnerable to Russian electronic warfare.
Most vital of all has been American intelligence, also suspended on March 5th. It has warned Ukrainians when Russian planes are set to strike; forewarned them of new incursions; tracked the flow of Russian, Iranian and North Korean weapons; and enabled them to hit stores, logistics and operational hubs. It has also guided Ukraine’s rockets and drones to targets deep inside Russia. Ukrainian drones can see for a short distance behind the front lines, but American eyes have let them peer much deeper. A Western military official says Europeans might provide some alternatives—Britain, for example, routinely flies surveillance aircraft over the Black Sea—but not as fast. “With this kind of warfare, it’s all about timing. Without US intelligence, Ukraine will struggle with dynamic targeting” to hit new targets as soon as they pop up.
Despite these omens, Ukraine’s top brass have not given way to despair. For one thing, they tell themselves, Mr Trump’s decision could be reversed or watered down. And there is a quiet confidence that the eastern front is fairly stable. “There will be a slow decline, and perhaps the front line may recede somewhat,” says a senior Ukrainian officer. “But there will be no tragedy.” So he hopes. ■
Britain | Bagehot
How Mumsnet changed Britain
The parenting website turns 25 this month
Illustration: Nate Kitch
Mar 6th 2025
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Twenty-five years ago this month, a new website appeared. The dotcom boom was at its height, and the internet was hot and modern. This forum was less so. “From breast to bottle”, ran one, less than whizzy, early headline. “How did you manage it?” Another section tempted readers with advice on such thrills as “socket covers, sterilised lunch boxes and stairgates”. Racier questions were posted: “Sex after Kids”, asked one. “Can it be even better than before?” Albeit not answers: the general feeling of the website on the matter was: “No”.
Mumsnet might not have been thrilling. Its success, however, was remarkable. Today, it is the most popular parenting website in Britain and one with an outsize influence. It retains its oddness. Its very name sounds like an oxymoron—mothers feel domestic, not digital—and its character is little less contrary. Its focus is often on the trivial: users discuss weaning and baby bottom butter—but its reach is colossal. It has around 10m monthly users, and those users trust it. When Mumsnetters recommended Waitrose’s Baby Bottom Butter as a fine moisturiser (for mother’s cheeks, not baby’s) it promptly sold out.
It is serious enough to attract prime ministers to its webchats—David Cameron, Gordon Brown and Boris Johnson all went on—then asks them: “What biscuit do you like?” (oatcakes, chocolate, and chocolate digestive, respectively). It is rarely taken too seriously; there is an account on X (formerly Twitter) called “Mumsnet Madness”. But it is serious enough to have helped change British laws and attitudes on topics from miscarriage to choking to trans. It is certainly serious enough to be insulted. Its users have been called “Guardian-reading, laptop-wielding harpies”. And it began, as so much of mothering does, with vomit.
In 1999 Justine Roberts, its CEO, was on a flight with her tiny twins. She had recently left her job in the City and was interested in founding an internet startup, though wasn’t sure on what. That holiday was her “light-bulb moment”, chiefly because it was so dark. The twins vomited; the hotel disappointed; Ms Roberts berated herself—then founded a website to “capture the wisdom of people who’ve been there and done that”. Mumsnet had begun.
Evidently other mothers were in need of such a site. A new mother, almost overnight, finds herself bereft of her job, her colleagues, her social life, her sleep and even her name: in hospital people simply call her “Mum”. It is a sudden and startling stripping of self. “Each suburban wife”, as the feminist writer Betty Friedan put it, “struggled…alone.” Mothers were, at that time, alone not merely socially but intellectually: so little literature touched on motherhood. Why? asked the writer Anne Enright. “Can mothers not hold a pen?”
Then came Mumsnet. Mothers might still not have held pens, but if their baby was awake at 2am they could, and now did, type into a laptop. Posts started to proliferate; their tone somewhere between a parenting magazine (“How good is your double buggy?”) and a parish one (“Thanks to Gilly for her recipe for Cartwheel Sandwiches”), with a dash of bracing biology thrown in. “Where”, asked a plaintive later post, “has my perineum gone?”
Its character developed too. The proliferation of acronyms—“DH” (dear husband), “DD” (dear daughter); “MIL“ (mother-in-law)—implied this was a cosy club. The tone of the posts suggested that it was quite a middle-class one. “Which chocolates”, asked one user, do “you view as typically middle class?” Many others merely lurk: Mumsnet offers unbeatable online eavesdropping. A post about a husband’s bedside beaker (for post-sex cleanup) is justly infamous. By 2019, 43.5m words were being posted a month. Mothers had a chat room of their own.
Most of those words are good-natured. Ms Roberts employs moderators but uses them sparingly: like a “pub landlord” they don’t eavesdrop on every conversation but “If someone gets nasty, we will chuck them out.” They rarely need to. Unlike other forms of social media, forums tend to be just that: sociable. When users congregate around a shared interest (babies, beakers) rather than for “self-promotion” it can, says Jaron Lanier, a computer scientist, foster a “more intelligent and civil environment”.
It is also partly because Mumsnet is so female: at least 95% of users are women. They want validation, not domination. Ms Roberts introduced the acronym “AIBU“—“Am I being unreasonable?” (and its corollary, “YANBU”—“You are not being…”) because “so many conversations were beginning with [that] phrase”.
AIBU on trans?
Mumsnetters have, however, been willing to be called unreasonable. In 2016 the trans lobby was in the ascendant. Slogans such as “trans women are women” were gaining ground; sites like Facebook and Twitter had suspended the accounts of some sceptics. Mumsnet did not suspend them, which caused it to lose advertising and attract insults. One article accused it of being “a toxic hotbed of transphobia”. Ms Roberts didn’t give in.
This was “hugely important”, says Hadley Freeman, a journalist. Some women used “the toxic hotbed” to organise “Man Friday” events at which they self-identified as men, wore fake beards and crashed male-only venues. Others used it to ask whether “AIBU to think” that the trans stuff was going “too far”. One reason they resisted, says Janice Turner, a Times journalist who covered it, is that so many were mums. And nothing “brings home the fact biological sex is real more than giving birth”.
The trans debate is now ebbing. Mumsnetters are back to posting about the issues that really matter. AIBU, asked a recent post, “to despise the word ‘comfy’?” Not much, then, has changed in the 25 years since Mumsnet began. And yet a lot has. YANBU if you think that Mumsnet made some of that change happen. ■
International | The Telegram
America First is a contagious condition
Donald Trump’s resentful, show-me-the-money approach to statecraft is catching on
Illustration: Ellie Foreman-Peck
Mar 6th 2025
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HIGH-MINDED Americans fear that President Donald Trump will make a pariah of their country. Ask foreign governments about Trumpian statecraft and they offer an opposite concern. When other countries ponder the basic elements of an America First foreign policy—indifference to liberal values, scorn for global rules and norms, and a cold-eyed focus on the national interest—a surprising number of them worry: this is going to catch on.
The Telegram has just spent a week in Washington and New York. He found veteran envoys reeling after America voted with Russia against its European allies on a UN resolution about Ukraine. An Asian diplomat says that the international order faces “a moment of extreme danger”.
In her Senate confirmation hearing, Mr Trump’s nominee for UN ambassador, Elise Stefanik, signalled America’s desire to narrow that world body’s work back down to its “founding mission of international peace and security”. The same diplomats worry that an America First approach is contagious. European countries that once took a lead in funding peacekeeping missions and humanitarian programmes are telling partners that, with Mr Trump pulling support from Ukraine, and with their own voters turning against overseas aid, the priority is projects that advance their national interests. Britain has just diverted much of its aid budget to defence spending. The Netherlands government announced that: “From now on, Dutch interests will take precedence in our country’s development policy.” Trade, security and migration were cited as core Dutch concerns.
Envoys describe middle powers—countries like Brazil, Malaysia or South Africa—becoming much more active in proposing solutions to conflicts or global crises. Often, their approach eschews the moral certainties of old-school Western interventionism, preferring consensus-building and compromise. Some “muscular” new arrivals on the global centre-stage are ready to throw their weight around and advance a transactional, ultra-realist approach with no patience for liberal values. Turkey and Gulf Arab states such as the United Arab Emirates are cited as examples.
Within America, principled critics of Mr Trump’s diplomacy point to his administration’s chaotic cuts to overseas aid programmes and predict that lives will be lost, shredding American soft power built up over decades as the world’s largest humanitarian donor. To opponents, Mr Trump’s pitiless approach to peacemaking in Ukraine undermines America’s credibility as Europe’s security guarantor. Most simply, Mr Trump’s contempt for global agreements and multilateral bodies creates gaps that rivals can fill. When his government repudiates climate-change agreements, questions arms-control treaties or threatens to quit or defund various UN bodies, all eyes turn to China, the autocratic giant that believes its destiny is to lead a multipolar world order.
Mr Trump’s worldview has few defenders in the embassies and foreign missions of Washington and New York. A diplomat from a close ally calls his foreign-policy instincts “reptilian”. For all that, a striking number of governments share much of Mr Trump’s bleak analysis about the ways of the world. Some admit that America has earned surprisingly little soft power by donating tens of billions of dollars to such programmes as PEPFAR, a scheme to treat and prevent HIV, notably in Africa. An African diplomat concedes that, in his continent, it is common for politicians to accuse Western donors of delivering finger-wagging lectures, while China is praised for offering loans to build roads. “Africans by and large do not consider aid to be a benign instrument. They consider that it sets up a power dynamic between giver and recipient.” Part of the explanation, says the diplomat, lies in self-interested behaviour by local elites. At election times, “politicians say: vote for me because this road was built. More than: vote for me because I worked with PEPFAR.”
Europe is stunned by Mr Trump’s bullying of Ukraine. Many middle powers see reality crushing the “pipe-dream” of continued Ukrainian defiance of Russia, its nuclear-armed neighbour. “As countries without the clout to wage wars, we know that these conflicts always end around a negotiating table,” says a diplomat from the global south. “The Ukrainians were playing with American chips and now the Americans have taken the chips off the table.”
Going back to a transactional, unstable world
Optimists talk of a multipolar world order that respects each country’s own values, in a welcome break from decades of Western meddling and bossiness. They describe groups of countries tackling climate change and other challenges, in coalitions of the willing and regional groups. Pessimists worry about a looming clash between rich and poor countries. There is much talk of giving developing countries a larger say in global institutions. But if poorer countries expect this to lead to huge transfers from the rich world, as reparations for colonialism or climate change, they are about to be disappointed. “If the debate centres on ‘show me the money’, we are setting ourselves up for failure,” worries the Asian diplomat. As Western donors walk away, they may not be replaced. An emissary from an emerging power recently asked a Chinese counterpart whether China would step up if America stops funding the UN. “Absolutely not,” came the reply.
In ten years the UN could be reduced to a skeleton, suggests Richard Gowan of the International Crisis Group, a Brussels-based conflict-prevention NGO. Technical agencies that oversee international standards or intellectual property may survive, as might stripped-down humanitarian agencies to help the neediest. The UN General Assembly could become an anti-Western talking-shop. “The old architecture is crumbling,” reckons a high-ranking diplomat. Mr Trump’s wrecking ball is speeding the collapse. ■
Business | Hunger games
Catering to protein-rich diets is a tasty business
“High protein” is the new “low calorie”
Photograph: Alamy
Mar 6th 2025|PARIS-SACLAY
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Alongside the crisps in the snack aisle, supermarkets are now stacking shelves with roasted chickpeas, cheese bites and beef jerky. An array of high-protein alternatives is appearing alongside low-fat and low-sugar foods. Dairy sections are packed with hard-to-pronounce fare such as skyr and kefir. High-protein diets have become mainstream. On social media, food and fitness influencers recommend protein. Celebrities have made it trendy to look strong, rather than skinny. A trend is verging on an obsession.
Google searches for “high-protein diet” reached their highest point ever in January. Some 64% of Americans want to increase the amount of protein they eat, according to the Hartman Group, a research firm, leaving old favourites like fibre and whole grains trailing (see chart). In Britain Ocado, an online supermarket, reckons over 40% of consumers have increased their protein intake over the past year. So what explains the insatiable appetite?
Chart: The Economist
Gym bunnies have been wolfing down protein for decades. More recently the less buff have also realised that protein can help them build muscle while feeling fuller for longer. Kantar, a market-research firm, estimates that spending in British supermarkets on protein-packed sports nutrition products, like bars and powder, reached £143m ($182m) in the 12 months to February, almost twice as much as in the same period three years before.
Juergen Esser at Danone, a French dairy giant, says hunger for protein first took off among youngsters who want to look muscular. It soon spread to older people eager to stay strong and healthy. The pandemic got people worrying about their health and spurred demand. Now food firms are anticipating a rush of interest from users of glp-1 drugs, such as Ozempic, which suppress appetite.
The popularity of weight-loss drugs is growing fast. Over 8% of Americans were on glp-1s by the middle of last year, according to Numerator, a data firm. The share is rising in other rich countries. As users seem to lose muscle as well as fat, many are turning to protein to tone up. A study from Cornell University finds that a switch away from processed foods means that household spending on groceries drops by 5.5% on average when at least one person begins using glp-1 drugs.
The range of high-protein snacks on offer in supermarkets has expanded from shakes aimed at gym-dwellers, with hyper-masculine black packaging and brand names like Barebells and Grenade. Food businesses have launched an array of new products. Nestlé, a Swiss firm, sells protein-loaded frozen pizza and pastas. Conagra Brands, an American company, recently launched a range of ready meals labelled “glp-1 friendly”. Even Mars is flogging high-protein versions of its chocolate bars.
High-protein products are also helping firms bulk up. Revenues at Danone increased by 4.3% in 2024, driven by high-protein yoghurts and drinks. Sales by the firm’s high-protein unit have jumped to €1bn ($1.1bn) from around €400m in 2021, far outpacing growth in the wider business. The question is whether the trend has gone too far. Everyone needs protein to maintain muscle, control blood sugar and much else besides. But the science around how much is uncertain. The World Health Organisation recommends 0.83 grams a day per kilogram of body weight. By that measure, the average American or Briton consumes too much.
For food firms already struggling to tick several boxes it is yet another challenge. Consumers do not only want more protein and less ultra-processing, but also more plant-based food and anything good for the gut. Danone is working on “hybrid” dairy products that combine regular milk protein with the plant-based sort, which can be easier to digest and better for the planet. Biotiful Gut Health, a producer of kefir, is focused on high-protein products with natural ingredients. The Curators, a British snackmaker, has another balancing act to perform. When the firm began making soya and lentil chips, it settled on ten grams of protein per bag. Recipes with more were not as tasty. And as food fads come and go, a decent flavour may be the most enduring requirement of all.■
Business | Schumpeter
The world’s trustbusters hint that they want more deals
Do they really?
Illustration: Brett Ryder
Mar 6th 2025
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AT THE START of the year dealmakers around the globe were sharpening their pencils. Donald Trump’s incoming administration was promising to slash corporate taxes and tear up red tape in the world’s mightiest economy. Political leaders in other large markets at last appeared to grasp that in order to keep up with America, they had better put innovation and economic growth ahead of caution (in risk-averse Europe) or common prosperity (in Xi Jinping’s China).
Top trustbusters, including freshly appointed ones in America, Britain and the European Union, heard the message loud and clear. Big, they signalled, would no longer necessarily be seen as bad. Suspicion and zealous enforcement were out. Predictability and permissiveness were in. Animal spirits among empire-building bosses were up, together with the share prices of firms that advise them on mergers and acquisitions (M&A).
Two months into 2025 hopes of a deals bonanza—and the advisers’ rich market values, which have slid by around a fifth from their peaks—feel like a distant memory. Mr Trump’s $4trn tax cut may be at risk from a few Republican fiscal hawks in Congress who want more of it offset with unpopular reductions in federal spending. His tariff threats turned out to be no bluff: just ask Canada, Mexico and China, which on March 4th got slapped with swingeing new levies. And boardrooms must contend with what broader Trumpian dismantling of the rules-based international order means for their businesses. Thank goodness the new antitrust cops are no longer adding to the uncertainty. Right?
Wrong. Lina Khan and Margrethe Vestager, who in the past few years personified activist trustbusting in America and the EU, respectively, may be gone. But their successors, and those successors’ political taskmasters, look no less eager to use competition law as a Swiss-army knife: an all-purpose tool for achieving policy goals beyond ensuring that consumers don’t get a raw deal. That, at least, is what Schumpeter concluded after a day of rubbing shoulders with competition regulators, executives, lawyers and other M&A types. They gathered in London on February 27th for the inaugural Antitrust Summit hosted by Economist Impact, a commercial division of The Economist’s parent company.
On the surface, antitrust czars do seem deal-friendlier. In January Britain’s Labour government sacked the chairman of the Competition and Markets Authority (CMA), Marcus Bokkerink, apparently for not being growth-minded enough. Sarah Cardell, the CMA’s chief executive, now says that where her agency has discretion “You will see action to promote growth.” Teresa Ribera, the EU’s top competition regulator, has been tasked with revising the bloc’s merger guidelines to be “more supportive of companies scaling up in global markets”. Across the Atlantic, Andrew Ferguson, whom Mr Trump picked to head the Federal Trade Commission (FTC), has pooh-poohed Ms Khan’s “war on mergers”.
It isn’t just talk. In December Ms Ribera’s agency blessed the $16.5bn takeover by the parent company of Novo Nordisk, the Danish maker of Ozempic, a celebrated weight-loss drug, of Catalent, an American contract drug manufacturer. It also approved the $700m purchase of Run:ai, which manages artificial-intelligence workloads, by Nvidia, a $2.8trn AI-chip behemoth. The same month Britain’s CMA waved through Vodafone’s $19bn merger with Three to create the country’s biggest mobile-telecoms operator. On March 5th the CMA concluded that the partnership between Microsoft and OpenAI, the world’s biggest software firm and hottest AI-model creator, does not qualify for investigation under British competition law.
Yet acquisitive CEOs mustn’t mistake any of this for a return to the days when trustbusters cared mostly about whether a merger would raise prices for consumers. Ms Ribera is likely to be accommodating of deals that create European champions, but no less wary of “killer acquisitions” in which dominant firms snap up baby challengers before they mature into fully grown rivals. Some European politicians would like her to use competition rules to keep inflation in check, echoing requests made to Ms Khan.
Mr Ferguson has made it clear that “the FTC feels workers’ pain” and is concerned about the fate of small businesses, which sounds an awful lot like his leftie predecessor. He is additionally troubled by firms abusing their market power in areas that anger Mr Trump’s MAGA base, such as online censorship, diversity, equity and inclusion initiatives, or efforts to combat climate change.
Then there is geopolitics. Christine Wilson, a former FTC commissioner now at Freshfields, a law firm, foresees the blending of antitrust and trade policies as more countries turn protectionist. In such a world, fixing a deal’s regulatory problem in China can create a political problem in the West, or vice versa. John Davies of Brunswick, a firm of corporate advisers, calls this “the waterbed effect”. “You have time to work out the regulatory stuff. The political stuff can go wrong on the first day,” cautions Sir Simon Robey, co-founder of Robey Warshaw, another advisory firm.
Blades of glory
Antitrust is not, in other words, going back to being a scalpel in the service of economic efficiency. The Swiss-army knife is here to stay, with different governments switching blades in and out in line with their political goals. Right now these objectives may be conducive to a bit more dealmaking. In the long run, though, antitrust that is more political will also be more fickle. As Sir John Vickers of Oxford University, who used to run Britain’s Office of Fair Trading, observes, “If you want to promote investment in the economy, then tipping a bucket of political risk is not a wise thing to do.” Wise words. ■
Business | No longer narrowing
The pay gap between men and women won’t go away
Our glass-ceiling index makes gloomy reading
Photograph: Getty Images
Mar 6th 2025
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That women earn less than men in rich countries is so well-known it is often met with a shrug. The gender wage gap is one of ten indicators in our annual “glass-ceiling index”, ranking how women fare in the workplace. On most measures, including representation on boards and in parliaments, countries improve each year. But across the oecd, a club of mostly rich countries, the median gap is stuck at 11.4%, up from a low of 11.1% in 2020 (see chart) despite policies designed to narrow it.
Anti-discrimination and equal-pay laws have been on most countries’ books for decades. In 2017 Britain started forcing big companies to publish wage-gap data; the eu and Japan have followed. Ten American states have laws requiring employers to disclose pay in job advertisements. Yet the gap remains, and in some countries, such as Australia and Japan, is growing.
Chart: The Economist
One reason is that the pandemic disproportionately affected women, who were likelier to be laid off or to quit to look after their children. This tallies with the still sizeable “motherhood penalty” hurting the careers of women who start families. It is particularly true in countries with costly childcare such as Britain and America. Other research looks at the gender differences in careers, children or not.
A recent book argues that women continue to be muscled out of the highest-paid sectors such as banking and tech. In “Fair Shake”, Naomi Cahn, June Carbone and Nancy Levit, three American law professors, say that a “winner takes all” model of competition and excessive working hours discourages women from entering certain fields and holds down those who do. At many firms, a “tournament-like” culture where workers battle for bonuses favours men, who tend to form alliances and may behave badly to get ahead.
In a striking example, the proportion of women with computer-science degrees peaked in 1986; women are now twice as likely to leave the tech industry as men. The maleness of Silicon Valley was by no means inevitable. Studies have also found that even when women enter male-dominated fields, wages tend to fall, suggesting that their labour is systematically undervalued. Sexual harassment is also still rife in these fields, with women who report it likelier to switch to lower-paying jobs.
Care work, norms and work culture help to explain why corporate career pipelines seem so selectively leaky. Women hold 43% of managerial jobs at big American companies, but their share of chief executives’ suites has only just passed 10%. That’s hard to shrug off.■
Business | Bartleby
The behaviour that annoys colleagues more than any other
And the reasons to try to remain calm
Illustration: Paul Blow
Mar 6th 2025
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Surveys of office behaviour are not scientific. In a global poll conducted last year by Kickresume, a firm that helps create cvs, 85% of people said they had experienced an annoying co-worker. That means the remaining 15% are either sole traders or liars. But surveys can still reveal truths about what gets people riled up. The Kickresume survey put credit-stealing top of the list of irritating colleague behaviour, as did a survey of British workers in 2022 by Perspectus Global, a research firm. Another recent poll, this time of American workers and conducted by BambooHR, crowned taking credit for employees’ ideas as the worst managerial trait of all.
You get the picture. Grabbing kudos for someone else’s idea makes lots of people angry. In fact, it is seen as unacceptable from a very early age: research has shown that children as young as five disapprove of plagiarism. Done intentionally and repeatedly, credit-grabbing is not just annoying but bad for the organisation: ideas are hoarded, trust erodes and motivation suffers. A recent paper by Siyuan Chen of Beijing Jiaotong University and his co-authors found that credit-claiming by executives at a large Chinese manufacturing firm was associated with worse job performance by employees.
When something happens a lot and is extremely irritating, a coping mechanism is needed. So the next time you hear your brilliant idea coming out of the mouth of a colleague, breathe deeply and remember three things.
First, credit-stealing may be less malevolent than imagined. Psychologists have long documented a phenomenon called “cryptomnesia” in which people inadvertently plagiarise the ideas of others. Experiments into cryptomnesia vary but the basic set-up is for participants in a group to be asked to generate ideas to solve a particular problem. They are then told to recall only their own ideas, and to come up with new ideas that do not replicate ones that have already been raised. Despite these instructions, people tend to claim a decent chunk of old ideas as their own, and to copy previous suggestions when raising ostensibly new ideas. People may steal credit without even realising it.
Second, innovation very rarely takes the form of an entirely new idea; instead, it recombines existing ones. And people often reach the same conclusions independently. That is the message of “Like”, an entertaining new book by Martin Reeves and Bob Goodman on the origins of the “like” button. The thumbs-up icon was made ubiquitous when Facebook adopted it in 2009, but well before then firms like Vimeo, Yelp, Digg.com and FriendFeed had been experimenting with ways for users to register an emotional reaction to content. So even if you think of an idea as your own stroke of genius, the reality is likely to be messier.
Third, credit-stealing can backfire. Decent bosses know that success stems from teams of people, not individuals (bad bosses will just appropriate the idea as their own anyway). Work by Eric VanEpps of Vanderbilt University and his co-authors has found that the best way to project both competence and warmth is to mix a bit of bragging and a bit of praise for others. And though expressing pride in achievements, even if they are not your own, can be a good way to communicate an aura of success, it pays not to be too specific.
A paper by Rebecca Schaumberg of the Wharton School of the University of Pennsylvania looks at what happens when people show pride in a performance whose details are known to others. Imagine, for example, two programmers who post identical high scores in a programming competition; one goes on a frenzy of fist-pumping and the other says she is not that proud of how she did. Observers reckon that the buoyant programmer is at the ceiling of her potential, and judge the downbeat one to be more skilled. Overt credit-stealers may appear less, not more, competent.
Ideally, you would not need to reconcile yourself to a bit of credit-stealing. Recognition would simply be doled out accurately. But even when credit has been allocated appropriately, there is another problem. Work by Heather Sarsons of the University of British Columbia and others has shown that male academic economists get tenure regardless of whether they solo-author or co-author papers; women are less likely to get tenure the more they co-author. That suggests biases can still end up distorting recognition when it is not possible to know who contributed most on a team. That really is infuriating. ■
Finance & economics | Buttonwood
Why silver is the new gold
Safe-haven demand and solar panels have sent its price soaring
Illustration: Satoshi Kambayashi
Mar 5th 2025
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It is a fabulous time to be a gold bug. Not long ago, outing yourself as one was a good way of getting people to back away from you at an investment conference. The popular image was of someone in possession of their own electricity generator, stacks of water-purification tablets and several years’ supply of tinned food. Now it just features a shrewd investor. Since the start of 2023 the shiniest asset’s price has soared by nearly 60% in dollars. That is more than any of the world’s leading share indices—including, after a turbulent couple of weeks, America’s S&P 500.
Yet the sweetest vindication goes to fans of another precious metal. Even gold enthusiasts tend to view an ardent interest in silver as somewhat eccentric. To traders it is the “poor man’s gold” or “the devil’s metal”. For years those nicknames were justified by silver’s lacklustre returns and the wild ride its price took along the way. The devil’s metal is still not for the faint-hearted. But it has almost kept pace with gold over the past year and has outperformed it over the past five. With investment flows now following returns, a once-niche asset is inching towards the mainstream.
Logic suggests that silver’s price should move similarly to gold’s. It, too, is rare, pretty and inert, and so has been used to forge jewellery and coins for millennia. This long-established role as a store of value lends it “safe-haven” appeal when investors are nervous. As with gold, the fixed amount of silver in the Earth’s crust ought also to make it a good hedge against inflation. Sure enough, both metals’ recent rallies came as investors fretted over geopolitical chaos and persistently rising prices. In doing so they overcame another common tendency, for their prices to fall when real interest rates rise and vice versa, since they generate no income.
So much for theory. In practice, different levels of mining supply and industrial demand ensure that the silver-to-gold price ratio is changing all the time. Over the long term, that has led to decades of disappointment for silverites. For most of the 1970s you would have needed to sell 30 to 40 ounces of silver to buy one of gold. Today it would be more like 90.
Speculators have been burned by the devil’s metal, too. After the global financial crisis of 2007-09, faltering industrial demand and a spotlight on haven assets meant silver’s price depended more than ever on traders’ whims. As a result, the silver-to-gold price ratio spent years moving in line with the gold price. A bet on silver became an amplified bet on gold—a relationship cherished by hedge funds, which would usually have had to pay for a margin loan to obtain such leverage. The relationship then fell apart towards the end of the 2010s, causing traders relying on it to lose their shirts, as silver abruptly fell out of fashion with investors.
Now it is back in vogue. Central banks have spent years building up their gold reserves. In September Interfax, a Russian news agency, reported that its government would soon start buying silver, too. Last year was the first since 2021 that silver exchange-traded funds, which individuals use to buy commodities, saw net inflows. This year traders in New York have been draining London’s vaults of gold, amid fears that such imports may face tariffs in the future. They have been snapping up silver even faster—so much so, in fact, that the transatlantic price gap justifies loading bars of it onto commercial flights.
What is more, a widening gulf between supply and demand looks likely to keep the frenzy going. The annual supply of silver, driven by mining production and recycling, has contracted slightly over the past decade, according to the Silver Institute, a research outfit. Over the same period, industrial demand has surged by more than 50%, owing largely to silver’s use in solar panels. Imports into China, which manufactures large quantities of these, have shot up. Since mining capacity cannot be expanded quickly, the imbalance should continue to boost silver’s price for some time.
As the world becomes a more fractious place, it is hard to imagine investors’ demand for haven assets falling soon. Meanwhile, the incentives for governments to store value in places beyond the reach of Uncle Sam are growing. That is a big reason why central bankers have been buying so much gold of late. Some may be tempted, along with Donald Trump, to include cryptocurrencies in their reserves. But there is another precious metal that could do the job, too. It is time for silverites to come in from the cold.■
Finance & economics | Free exchange
It is not the economic impact of tariffs that is most worrying
What are the lessons of the 1930s?
Illustration: Álvaro Bernis
Mar 6th 2025
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Editor’s note (March 6th): Since this article was published, Donald Trump announced that tariffs on Mexican and Canadian goods covered by the North American trade agreement (roughly half their total exports to America, according to the White House) would be paused until April 2nd.
Canada’s business press remained sanguine. Belligerent statements by the American president, one Toronto-based newspaper wrote, were mere campaign rhetoric; he would ultimately decide against tariffs that might “arouse resentment in Canada”. Such confidence turned out to be gravely misplaced. In 1930 Herbert Hoover signed into law the infamous Smoot-Hawley tariffs, named after their congressional sponsors. The average levy on American imports increased from 40% in 1929 to 60% by 1932, and the global trade system unravelled.
Now the world may be in for a repeat. The Smoot-Hawley tariffs were meant to protect farmers, but grew owing to congressional “logrolling”, as representatives sought advantages for their local industries. At the time, few thought the whole package was wise. This newspaper responded to the bill’s passage by calling it “tragic-comic”. Much the same could be said of today’s tariffs. At a minute past midnight on March 4th, Donald Trump imposed 25% levies on Canadian and Mexican imports (later offering carmakers a reprieve), as well as an extra 10% on Chinese imports, despite the fact there is little appetite among Americans for a trade war with the country’s allies, let alone any economic rationale.
What can be learned from the earlier episode? America’s Smoot-Hawley tariffs have been blamed for the Depression, but this is inaccurate. Economic historians instead finger unintended monetary tightening as the downturn’s cause. The Federal Reserve failed to react to bank collapses, leading money supply to contract. This exacerbated the impact of protectionism: deflation lifted effective tariff rates, which were often levied as cents on the weight of imports, rather than as a percentage of value.
If the direct economic impact of the tariffs has been overstated, their overall impact has not. The worst damage came from the division of democracies into rival trade blocs. During the 1920s the League of Nations, a precursor to the United Nations, managed to negotiate a “tariff truce”. The Smoot-Hawley tariffs incensed America’s allies, who were infuriated by their economic punishment, but even more so by a sense of betrayal that it had been inflicted by an ally. In 1931 Neville Chamberlain, the British chancellor, set out to institute “imperial preferences”, creating a tariff wall around the British Empire. This was brought into reality by the Ottawa Agreements in 1932, signed by Britain, Australia, Canada, India, New Zealand and South Africa. Similar policies in the Dutch and French empires also caused damage. For instance, Japanese exports were shut out of both India and Indonesia, then a Dutch colony, undermining liberals in Tokyo.
This time round, the democracies of the world will hold together: they are exploring how to deepen trade relations. Yet the danger of division is not history’s only warning. The Smoot-Hawley tariffs undoubtedly helped one export: anti-Americanism. Cuba, which depended on sugar exports to America, fell into a recession. Its economic collapse led to an anti-American revolution in 1933 and a short-lived government that was overthrown by an American-backed coup. Relations between the two countries have been frosty ever since. Canada’s Liberal Party called a snap election after retaliating against America by raising duties on commodities such as eggs and wheat. The even more anti-American and pro-tariff Conservative Party proceeded to win it. Today the Liberals, now seen as more anti-Trump than the Conservatives, are the beneficiaries. They have shot up in the polls ahead of an election that could take place in a matter of weeks.
During the 1930s many countries had treaties with America that prevented them from retaliating with tariffs. Instead, they employed more subtle techniques such as import quotas for cars, then the cutting edge of American manufacturing, as well as bottom-up boycotts. The Italian Royal Automobile Club called for consumers to avoid American cars, saying that it was unpatriotic to be seen driving one. Consider it an interwar equivalent of today’s boycotts of Tesla, an electric-car company run by Elon Musk, who is a close ally of Mr Trump. Kris Mitchener of the Leavey School of Business, Kevin O’Rourke of Sciences Po and Kirsten Wandschneider of the University of Vienna find that, even in countries which did not formally retaliate, imports from America dropped by 15-20% more than economic conditions implied.
Second time also as farce
Tariffs also interacted explosively with monetary policy. The gold standard, an exchange system in which currencies were pegged to the price of gold, was the culprit (as it was for the Fed’s mistakes in responding to bank failures). Britain left the gold standard in 1931. Weaker sterling made its exports, and those of its colonies that also used the pound, more competitive, finding extra buyers in foreign markets. This led others to impose higher tariffs on British goods or bring in exchange controls to prevent the outflow of gold from their own treasuries. An inability to secure the currency needed to buy imports did more to stop international trade than tariffs did. At first, America and France defected from the exchange-rate system, hoarding gold, before quitting altogether.
Students of financial crises should worry. Nowadays the dollar, as the global reserve currency, plays a role akin to that of gold in the interwar period. Around half of global trade is invoiced in the currency. Its role is buttressed by America’s military might. Indeed, Barry Eichengreen of the University of California, Berkeley, and his colleagues find that countries with American military alliances are more likely to hold dollar reserves, and the Fed is consequently more willing to act as a lender of last resort for the global economy. In 2008 and 2020 swap lines between America and its allies helped prevent a repeat of the Depression. In this new, more transactional world, will such a backstop still be available? ■
Finance & economics | Bukele buckles
El Salvador’s wild crypto experiment ends in failure
Its curtailment is the price of an IMF bail-out. And one worth paying
Relic of another agePhotograph: Getty Images
Mar 2nd 2025
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For much of the time since Nayib Bukele became president in 2019, El Salvador has teetered on the brink of default. The warning signs were familiar: high debt and interest payments, exacerbated by a wide fiscal deficit; low dollar reserves; anaemic investment and GDP growth. Negotiations with the IMF over a bail-out were deadlocked. Mr Bukele’s relentless attacks on the judiciary, his opponents and the media did not inspire confidence.
Then there was his crypto fixation. In 2021 El Salvador became the first country to make bitcoin legal tender, alongside the dollar. The president vowed to shun conventional capital markets, and raise billions via tokenised blockchain bonds. He would buy $500m-worth of bitcoin, build a “bitcoin city” in the jungle and develop geothermal energy to power bitcoin miners. The conventional markets shunned him. Several Salvadoran bonds traded below 30 cents on the dollar in the summer of 2022. When the government started deferring public-sector salaries to preserve cash, investors prepared for the worst.
Yet El Salvador has defied expectations—and on February 26th the IMF’s board approved a $1.4bn loan to be disbursed over 40 months. In order to obtain the money, El Salvador has made the usual promises on fiscal discipline. It is also scaling back its crypto project. After a change to the law in January, taxes are no longer payable in bitcoin, and its acceptance in the private sector is voluntary.
On its way to the IMF deal, El Salvador showed remarkable commitment to paying its debts; Mr Bukele was in part motivated by a desire to show up his Wall Street doubters. The country’s bond prices have climbed all the way back to par. Officials used scarce dollars to buy back bonds at a discount, saving a good share of future payments of principal. The fiscal deficit, which hit 10% of GDP in 2020, has returned to pre-pandemic levels of 2-3%. A crackdown on tax evasion, strong inflows of remittances and an economic uptick have boosted government revenue; the phasing-out of energy subsidies and pandemic-era programmes have slowed spending.
The fund’s loan lowers the risk of a debt crisis, especially if it unlocks a further $2.1bn from other multilateral lenders as is hoped. Despite the deficit-cutting, the country might not have managed much longer. When debt is high and growth low, raising money at 12%, as El Salvador did in early 2024, is unsustainable. Sovereign default is all the more costly in a dollarised economy such as El Salvador’s, with no lender of last resort to avert a bank run or financial contagion. Local bank deposits are partly backed by government debt, so default might snowball into a banking crisis and even de-dollarisation.
Pumped, now dumped
As for bitcoin, its demotion may be more of a blessing than a concession. Mr Bukele promoted the cryptocurrency as a way to provide financial services to the two-thirds of adults without a bank account and to lower the cost of remittances, which come to almost a quarter of GDP. But the main barriers to financial inclusion are the size of the formal economy and low digital literacy. Remittances are expensive because Salvadorans like to send and receive banknotes, a pricey business made pricier by crime. The government also rushed the roll-out of Chivo, a digital wallet. Bugs and identity theft, to snaffle the $30-worth of bitcoin for signing up, were rife.
The IMF was wary of lending to El Salvador while bitcoin was legal tender. Its volatile price posed a risk to financial and fiscal stability. The fund also pointed to bitcoin’s potential use in crime. El Salvador, according to the IMF, will limit “transactions in and purchases of” the currency. The country has in fact kept buying up to 1.6 bitcoin a day since the deal, according to blockchain data. It may yet have to reduce or reverse purchases to comply with the agreement. El Salvador owns 6,102 bitcoin, valued at around $550m, including unrealised gains of $250m or so, about which the president boasts regularly.
Despite these profits, crypto has brought El Salvador more costs than benefits. The free publicity has been welcome, yet crypto-investment and crypto-tourism have been small beer. Gains in financial inclusion and from more efficient payments are meagre at best: the currency never really caught on. In 2022, when the hype was at its peak, a survey by CID-Gallup found that only a fifth of firms accepted bitcoin and just 5% of tax payments were in crypto. Recent numbers are likely to be even lower, as Salvadorans have retained their strong preference for cash and payment cards.
Moreover, the policy cost $375m in all—from the Chivo rollout, subsidised transaction fees, bitcoin ATMs and more—according to Moody’s, a rating agency. That far exceeds the profits on bitcoin holdings, which could still evaporate. By delaying an IMF deal, the crypto experiment kept El Salvador’s risk premium high.
Mr Bukele enjoys stratospheric approval ratings, often above 90%. It was not crypto that made him “the world’s most popular dictator”, as he calls himself, but his draconian crackdown on crime, in which due process and the rights of presumed criminals have been forgotten. His obsession with cryptocurrency has done little to ease El Salvador’s economic woes. Although bitcoin may remain a reserve asset on the national balance-sheet, its days as legal tender are over. Mr Bukele is just the latest crypto-utopian to see his wild ideas dissolve on contact with reality. ■
Science & technology | Well informed
Is posh moisturiser worth the money?
Don’t break the bank
Illustration: Cristina Spanò
Mar 1st 2025
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There is a tendency to trivialise the skin, says Peter Elias, a dermatologist at the University of California, San Francisco. And yet this largest organ of the body is vital to health, keeping moisture in and germs out. Many things can interfere with these functions. Dry weather draws moisture from the skin. Bathing or showering too often—more than once per day—or using harsh cleansers that strip away naturally occurring oils, can also cause problems. When the skin becomes too dry, it can become itchy and inflamed. Dryness can also cause cracks in the skin which can lead to infections.
Some people are more prone to skin dryness than others. According to the American Academy of Dermatology, olive-skinned people are less likely to have dry skin than people with black, brown or fair skin. Men also have thicker, oilier skin, so they are less likely to experience dryness. Genetic ailments, such as ichthyosis, can cause dry and scaly skin, and so can diabetes or kidney disease.
Age is also a factor. The skin naturally produces an oil called sebum that coats, protects and moisturises the skin. Oil production tends to peak during puberty—the reason for those pesky pimples—and then slowly decreases over time.
The three types of moisturiser can help. Humectants, such as hyaluronic acid and glycerin, pull moisture from inside the body onto the surface of the skin. Occlusives, such as petroleum jelly and shea butter, block water from evaporating from the skin. Emollients, such as ceramide, smooth the skin by filling in gaps between skin cells. A review published in January in Experimental Dermatology found that ceramide made skin look and feel smoother and also reduced inflammation of the skin.
If the goal is soft, well-hydrated skin, experts say that cheaper products work just as well as the boutique options. “You don’t need to break the bank,” says Nour Kibbi, a clinical associate professor of dermatology at Stanford University. Where splurging may pay off, says Abigail Waldman, a dermatologist at Brigham and Women’s Hospital in Massachusetts, is on products that reduce the signs of ageing. As people age, skin-cell production slows and the skin thins. Older people also produce less collagen, which keeps the skin plump. This combination leads to wrinkles.
Retinol and other retinoids, a class of products chemically derived from vitamin A, reduce the appearance of wrinkles by increasing cell and collagen production. A study published in JAMA Dermatology in 2007 tested the effectiveness of retinol by comparing the arms of 36 elderly people who, three times a week, had had lotion with retinol put on one arm and lotion without retinol on the other. After six months, the researchers found that the arms with retinol had fewer fine wrinkles. Nearly 20 years later, experts still recommend retinol as a way to reduce the signs of ageing.
TikTok influencers are keen to sell these so-called “anti-ageing” products to their Gen Z customers to delay or prevent ageing. But there is no benefit to prophylactic use, says Dr Waldman. “The only product on the market that is truly anti-ageing is sunscreen,” says Zoe Draelos, a dermatologist at Duke University. Sunscreen can prevent damage from ultraviolet light that can cause sunspots and wrinkles. For all their benefits, however, ingredients such as retinol and glycolic acid can also cause redness, irritation, dryness, and cracks in the skin. Which might mean another trip to the shops for even more moisturisers.■
Culture | A (bit)coin toss
Why the art market is growing more friendly to crypto
Everyone wins: buyers avoid taxes, and auction houses make money
Photograph: Getty Images
Mar 6th 2025|NEW YORK
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Andy Warhol captured the art market’s commercialism with his colourful silk-screen dollar signs. “Good business is the best art,” he quipped. Were he alive today, bitcoin symbols might be filling his works instead, as a sign of the times. The auction market has recently been embracing crypto with gusto in a bid to bring in younger, more tech-savvy clients.
In an auction of AI-generated art ending on March 5th, Christie’s, the world’s second-largest auction house, will accept crypto on most lots. Sotheby’s, the largest, accepted crypto on all lots for the first time in February during an auction in Saudi Arabia. Crypto-holders are “adding up to a more significant share of the population than four years ago, when it was niche and poorly understood by the mainstream”, says Marcus Fox of Christie’s.
The logic for accepting crypto is simple: auction houses sell art for money, and crypto is money. Buying art at auction can be intimidating for first-time buyers; if paying with crypto helps them feel comfortable, that increases the odds that they will submit a bid and even buy again. As David Galperin, Sotheby’s head of contemporary art, explains, “One of our primary objectives is cultivating new collector bases and bringing new people into the Sotheby’s universe.”
Buyers’ motivation for using crypto to pay may extend beyond ease. In most jurisdictions, when people sell their crypto, they are supposed to pay capital-gains tax on the sale. But if instead of cashing out, they use crypto to buy art, they can try to avoid taxation while diversifying their portfolio (though they risk stiff consequences if caught).
Some may also want to turn dirty crypto into clean assets. Crypto proponents will point out, correctly, that traditional currency can also be laundered. Crypto is supposed to be more traceable because its history is recorded on publicly available blockchains. But services such as crypto mixers, which mingle customers’ crypto together and allow owners to withdraw deposits with obscured sources, exist to evade the blockchain’s supposed transparency. Both Sotheby’s and Christie’s say their compliance checks and due diligence are rigorous for crypto, and neither accepts payments that come from mixers. But one prominent crypto critic notes that blockchain traceability can be altered “in ways that are very challenging to trace”.
The Trump administration’s crypto bullishness means that buying art with crypto will only grow more common. Compliance departments will be busy; auction houses will be richer; and crypto bros will have some lovely new decor.■
Obituary | Knit one, purl one
Stitch by stitch, Rose Girone kept her family going
The oldest known Holocaust survivor died on February 24th, aged 113
Photograph: Reha Bennicasa via Selfhelp Community Services
Mar 6th 2025
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Knitting divides opinion. On one side are those for whom it is traumatic. First, the very look of a knitting pattern, in which a suave and fancy-sweatered man introduces two pages of impenetrable mathematical code; the fiddliness of casting on; the reluctance of the needles to co-operate; the panic of a dropped stitch, the aborted rescue, the unravelling; and then the indescribable sadness of the finished object, whatever it was meant to be, tight, shapeless and useless.
For others, though, it is a delightful symbol of slow living, best practised in a Scandinavian hut glowing with hygge, with thick needles and thicker yarn, to make designs as intricate as snowflakes. It can also be fished from a bag whenever calmness is called for, in queues or at airports, or when frustrated. With a piece of knitting on the go, there is no dead or unprofitable time. Every moment can be devoted to progress and satisfaction.
Rose Girone was definitely in the latter camp. She loved knitting from childhood, when an aunt in Hamburg first put the needles in her hands, to when, at 110, she was given nice new needles and a ball of red wool for her birthday. By then it was tricky for her to do the slip-knot for casting on, but she managed a few stitches all the same. Until she was 105 she had been teaching at the Knitting Place in Port Washington, New York; until she was 102 she had kept briskly clicking away; and in her 90s she had thought nothing of crawling on the floor to pin out still-damp knitted pieces into the shape of a jumper or a dress. When people brought her pictures from Vogue and wanted the same, she might stay up all night with her measure and graph paper, doing the maths. Quite simply, she could not imagine a life without knitting.
Yet plenty had occurred in hers to disrupt a knitter’s calm. In 1938 she endured Kristallnacht in Breslau, when everything Jewish in the city was smashed or set on fire. Soon afterwards, the Nazis arrested her husband Julius and sent him to Buchenwald; she was spared because she was hugely pregnant with her first and only child. With luck and ingenuity, her relations obtained Chinese exit visas that allowed her, her baby Reha and even Julius to escape to Shanghai, one of the few open ports that still accepted Jews. By 1941, though, the Japanese took over Shanghai and set up a mile-square ghetto for the city’s 20,000 Jewish refugees. She and her family saw out the war there, before seeking refuge in America in 1947. There, her life had to start again from scratch.
She did not forget her knitting, though. No other career had appealed to her anyway, and after marrying Julius (an arranged marriage, but he was plump and prosperous, in the shipping business) she was happy to be a Hausfrau. Soon enough there was little Reha to knit for, chunky little items that could wrap her from the breeze on the deck of a ship. Reha was not the name Rose had wanted; it was the one she disliked least on Hitler’s list of permissible names for Jewish babies. But she did not believe in fretting over foolishness, or small things. She did not complain about the money and jewellery they had been made to leave behind, nor about their place in the Japanese ghetto, in a tiny room that had once been a bathroom under a staircase in a block of flats. True, there was only a single bed for the three of them, ticklish with cockroaches and bed-bugs, where rats ran over them as they slept. But, as she kept reminding the family, weren’t they lucky? They were together, and out of Europe.
She had also, luckily, found work. A man she met persuaded her to show her knitwear to an elegant boutique in Shanghai, which took her on. So many orders came in that she recruited Chinese women to a workshop to help her, acting out any parts of the patterns they did not understand. Julius meanwhile traded the few things they had brought with them, trinkets and linens, and went hunting, bringing back pheasant and quail full of buckshot. He could not make much money, though, and she could. She was soon providing knits for the most fashionable folk in Shanghai, all while living under the stairs. When they finally left, and could take only $10 with them, she folded eight $10 bills very, very small and stitched them over with yarn, to make buttons on one of her sweaters. That way, they took $80 out.
Her time in America showed similar ingenuity. After two weeks she applied for a job, even though she hardly spoke English (let alone knitting English, with its swatches and blockings and bloomings), and got it. After she divorced Julius for not pulling his weight, and she and Reha were scrimping in furnished rooms, by sheer luck she met a man who owned a resort in the Adirondacks, where the rich of the north-east went on holiday. He set her up with a stall in the hotel lobby, and soon she was opening her own business in Queens. It expanded to Rose’s Knitting Studio in Forest Hills, which ran for years before, in 1980, she sold it. By then she had long met and married Jack Girone, her perfect partner.
She did not stop teaching knitting, though, and her classes were among the most sought-after in New York. As a teacher she was kind, telling novices to have a coffee in Dunkin’ Donuts rather than watch as she ripped their efforts undone. After all, she had known her own disasters, including a batch of white sweaters in Shanghai which she tried to dry too fast, and singed in the oven.
Her instructions for life remained the same. Anything you could fix with money was not a problem. Nothing was so very bad that something good couldn’t come of it. Don’t sweat the small stuff. Her recipe for longevity was good children (you had to be lucky with that. She had the best child in the world), and lots of dark chocolate. Most important, though, was always to have a plan. Don’t wake up and say, “What am I going to do today?”
She definitely had a plan. Sometimes as she snoozed in very old age her daughter would hear her muttering in German, eins, zwei, drei, vier. She was counting stitches again. ■
