Economy

It was the second time in one day that the FTC pulled out of litigation begun during the Biden administration.

The Republican-controlled Federal Trade Commission is abandoning a Biden-era effort to block Microsoft’s purchase of Call of Duty video game maker Activision Blizzard.

In an order issued Thursday, the FTC said it had determined that “the public interest is best served by dismissing the administrative litigation in this case.”

It was the second time in one day that the FTC pulled out of litigation begun during the administration of former President Joe Biden, a Democrat. Earlier Thursday, the FTC said it was dismissing a lawsuit against PepsiCo that was filed by the Democratic-controlled FTC in January.

Microsoft announced a $69bn acquisition of Activision in January 2022. It was one of the most expensive tech acquisitions in history and was designed to boost sales of Microsoft’s Xbox gaming console, which has lagged in sales behind Sony’s PlayStation and Nintendo.

In December 2022, the FTC – then led by Democratic Chairwoman Lina Khan – sued to temporarily block the acquisition, saying it would let Microsoft suppress competitors who want access to Xbox and its subscription content.

In July 2023, the United States District Court in Northern California denied the FTC’s request to pause the acquisition, but the FTC appealed. Earlier this month, a federal appeals court also denied the FTC’s request.

In the meantime, Microsoft completed its purchase of Activision in October 2023 after it won approval from the United Kingdom’s competition watchdog, which had also considered blocking the merger.

Brad Smith, Microsoft’s vice chairman and president, said Thursday in a statement on X that the decision is a victory for video game players and for “common sense in Washington DC”.

“We are grateful to the FTC for today’s announcement,” Smith said.

Political actions

Khan stepped down from the FTC when President Donald Trump took office in January, and Trump fired Democratic Commissioners Rebecca Slaughter and Alvaro Bedoya in March. Bedoya and Slaughter have sued the Trump administration, saying their removal was illegal.

Right now, the FTC is made up of three Republican commissioners, and it’s unclear when the two Democrats on the commission will be replaced. A message seeking comment was left with the FTC.

In the PepsiCo case, FTC Chairman Andrew Ferguson said the Biden-era FTC rushed to authorise a case just three days before Trump’s inauguration. He said on Thursday that the case, which alleged that PepsiCo was violating the law by giving unfair price advantages to Walmart, was a “dubious political stunt”.

But the FTC hasn’t stood in the way of some Biden-era policies. Earlier this month, a rule the FTC announced in December requiring ticket sellers, hotels, vacation rental platforms and others to disclose their fees upfront went into effect.

US President Donald Trump has threatened a 50-percent tariff on all imports from the European Union and 25-percent on Apple products unless iPhones are made in the United States.

The president announced his intentions over social media on Friday.

“Our discussions with them are going nowhere!” Trump posted on Truth Social. “Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States.”

The Republican president’s proposal would see higher import taxes on goods from the EU, a longstanding US ally, than from China, a geopolitical rival that had its tariffs cut to 30 percent this month so Washington and Beijing could hold negotiations.

Trump has been upset by the lack of progress in trade talks with the EU, which has proposed mutually cutting tariffs to zero even as the president has publicly insisted on preserving a baseline 10-percent tax on most imports.

Trump aides have said the goal of his tariffs was to isolate China and strike new agreements with allies, but the president’s tariff threats undermine the logic of those claims. Not only could the EU face higher tariffs than China, but the bloc of member states might have been better off by establishing a broad front with China and other countries against Trump’s trade policy, said German economist Marcel Fratscher.

“The strategy of the EU Commission and Germany in the trade conflict with Trump is a total failure,” Fratscher, the head of the German Institute for Economic Research, said on X. “This was a failure you could see coming — Trump sees Europe’s wavering, hesitation and concessions as the weaknesses that they are.”

Apple’s ultimatum

Trump’s post had been preceded by a threat of import taxes against Apple for its plans to continue making its iPhone in Asia. Apple now joins Amazon, Walmart and other major US  companies in the White House’s crosshairs as they try to respond to the uncertainty and inflationary pressures unleashed by his tariffs.

“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote on Truth Social. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the US.”

The statement by Trump is critical in that he suggests the company itself would bear the price of tariffs, contradicting his earlier claims as he rolled out a series of aggressive tariffs over the past several months that foreign countries would shoulder the cost of the import taxes. In general, importers pay the tariffs and the costs are often passed along to consumers in the form of higher prices.

In response to Trump’s tariffs on China, Apple CEO Tim Cook said earlier this month that most iPhones sold in the US during the current fiscal quarter would come from India, with iPads and other devices being imported from Vietnam. After Trump rolled out tariffs in April, analysts estimated that the cost for a $1,200 iPhone, if made in America, could jump anywhere from $1,500 to $3,500.

“The pressure from Trump administration on Apple to build iPhone production in the US … would result in an iPhone price point that is a non-starter for Cupertino and translate into iPhone prices of ~$3,500 which is not realistic as this would take 5-10 years to shift production to the US. We believe the concept of Apple producing iPhones in the US is a fairy tale that is not feasible,” Wedbush Securities analyst Dan Ives said in a note.

Trump had previously created an exemption on electronics imported from China to help companies such as Apple, something he could now remove. He also threatened separate 25-percent import taxes on computer chips and could have the tariffs schedule rewritten in ways that could expose Apple products to the taxes.

Until recently, the US president repeatedly bragged about the $500bn that Apple in February pledged to invest domestically as part of its development of artificial intelligence technologies. But he publicly turned against the company last week while speaking in Qatar.

“I had a little problem with Tim Cook yesterday,” Trump told the audience. “I said to him, ‘My friend, I treated you very good. You’re coming here with $500bn, but now I hear you’re building all over India. I don’t want you building in India.’”

A global response

German Foreign Minister Johann Wadephul said the EU’s executive commission has his country’s full support in working to “preserve our access to the American market”.

“I think such tariffs help no one, but would just lead to economic development in both markets suffering,” Wadephul said in Berlin. “So we are still counting on negotiations, and support the European Commission in defending Europe and the European market while at the same time working on persuasion in America.”

Dutch Prime Minister Dick Schoof said he expected a calm and robust response from the EU to the announcement of possible new US trade tariffs.

In response to the news, Volvo Cars CEO Hakan Samuelsson said the tariffs would result in higher prices for consumers. In an interview with the Reuters news agency, he said the tariff would limit the ability of Volvo Cars to sell its Belgium-made EX30 electric vehicle in the US.

Investors are shaken on the move. As of 10:30am in New York (14:30 GMT), the Dow was down 0.6 percent, the tech-heavy Nasdaq was down 1 percent and the S&P 500 was down 0.8 percent. Apple is down 2.3 percent from the market close yesterday.

SAP, Europe’s most valuable company’s stock, is down 1.8 percent from yesterday’s close. Novo Nordisk, the Danish pharmaceutical giant and the maker of the blockbuster drug Ozempic, which is Europe’s second-highest valued company, has seen its stock down 1 percent on the news.

Shares in LVMH and Hermes, France’s largest listed companies by market capitalisation, fell by about 3 and 4 percent, respectively.

United States debt has long been considered the safest of all safe havens.
But, Washington has just lost its pristine reputation as a borrower.
Moody’s has downgraded the nation from its top-notch AAA rating, becoming the last of the big three agencies to do so.
The ratings agency has cited the United States’s growing debt – now at $36 trillion, almost 120 percent of gross domestic product – and rising debt service costs.
Against this backdrop, President Donald Trump is pushing what he calls the “one big, beautiful bill”.
Critics warn his tax cut package could add trillions more to the already ballooning deficit.

The group said it would call for analysis on international supply chain resilience.

Finance ministers and central bank governors from the Group of Seven (G7) democracies have pledged to address “excessive imbalances” in the global economy and said they could increase sanctions on Russia.

The G7 announced the plan on Thursday as the officials, who met in the Canadian Rocky Mountains, said there was a need for a common understanding of how “non-market policies and practices” undermine international economic security.

The document did not name China, but references by the United States and other G7 economies to non-market policies and practices often are targeted at China’s state subsidies and export-driven economic model.

The final communique called for an analysis of market concentration and international supply chain resilience.

“We agree on the importance of a level playing field and taking a broadly coordinated approach to address the harm caused by those who do not abide by the same rules and lack transparency,” it said.

Lowering Russian oil price cap

European Commission Executive Vice President Valdis Dombrovskis said the G7 ministers discussed proposals for further sanctions on Russia to try to end its war in Ukraine. They included lowering the G7-led $60-per-barrel price cap on Russian oil, given that Russian crude is now selling under that level, he said.

The G7 participants condemned what they called Russia’s “continued brutal war” against Ukraine and said that if efforts to achieve a ceasefire failed, they would explore all possible options, including “further ramping up sanctions”.

Russia’s sovereign assets in G7 jurisdictions would remain immobilised until Moscow ended the war and paid for the damage it has caused to Ukraine, the communique said. It did not mention a price cap.

Brent crude currently trades at around $64 per barrel.

A European official said the US is “not convinced” about lowering the Russian oil price cap.

Earlier this week, the US Treasury said Secretary Scott Bessent intended to press G7 allies to focus on rebalancing the global economy to protect workers and companies from China’s “unfair practices”.

The communique also recognised an increase in low-value international “de minimis” package shipments that can overwhelm customs and tax collection systems and be used for smuggling drugs and other illicit goods.

The duty-free de minimis exemption for packages valued below $800 has been exploited by Chinese e-commerce companies including Shein and Temu.

Economists echo Dimon’s concerns as US credit downgrade and tariff-driven uncertainty continue.

JPMorgan Chase CEO Jamie Dimon has warned that he can’t rule out the possibility that the United States will fall into what is called stagflation— an economic term that refers to a period when inflation and unemployment are high as economic growth is slow.

In an interview with Bloomberg Television on Thursday, Dimon said, “I don’t agree that we’re in a sweet spot” in response to a question about some US Federal Reserve officials saying that the US economy was in a sweet spot.

Dimon made his comments while at JPMorgan’s Global China Summit in Shanghai. His comments come against the backdrop of the US facing increasing geopolitical tensions, rising deficits and pressure on consumer prices from changing government policies on tariffs that have led retailers to announce a need to raise prices and left businesses in a wait-and-watch mode over all the economic uncertainties.

Economists like Stuart Mackintosh, executive director of the financial think tank Group of Thirty, echoed Dimon’s concerns to Al Jazeera.

“Stagflation is a real risk we cannot rule out. We’re in a circumstance where we have uncertainty on tariffs, uncertainty on many policies that increase the downward pressure on growth in America.”

Last week Moody’s Ratings downgraded the US economy’s credit rating. The firm lowered its gold-standard Aaa to an Aa1 credit rating for the US, citing its growing national debt.

Dimon’s Thursday comments were underscored by his remarks at the company’s investor day on Monday.

“Credit today is a bad risk,” Dimon said.

While at the summit, Dimon also offered comments on US President Donald Trump’s “big beautiful bill”, the tax and spending bill passed by the US House of Representatives that includes key parts of the Trump administration agenda including tax cuts, slashes to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), increased funding for immigration enforcement, and new taxes on colleges and universities.

“I think they should do the tax bill. I do think it’ll stabilise things a little bit, but it’ll probably add to the deficit,” Dimon said in a record first obtained by the Reuters news agency.

The nonpartisan Congressional Budget Office has said that the tax bill would add $3.8 trillion to the national debt.

‘Inflation going up’

In the Bloomberg interview, Dimon added that the US Federal Reserve is doing the right thing to wait and see before it decides on monetary policy. The central bank opted to hold rates steady at its last policy meeting, which was largely in line with economists’ expectations.

Policymakers weighed a stable labour market at the time, even as they acknowledged that could be short-lived.

“This is unsustainable. We might get into a much worse economic picture almost immediately,” Mackintosh said.

More information on the state of the US labour market is expected in the next couple of weeks as both the US Department of Labor and the payroll and human resources firm ADP are slated to release their monthly report on the rate of job growth.

Dimon has also long warned that inflation and stagflation will continue to increase.

“I think the chance of inflation going up and stagflation is a little bit higher than other people think,” he noted.

On Wall Street, JPMorgan Chase’s stock has trended up following Dimon’s remarks. As of noon in New York (16:00 GMT), it was 0.2 percent higher than yesterday’s market close after opening lower this morning.

The Republican-controlled US House of Representatives has passed the “Big, Beautiful Bill”, the sweeping tax and spending bill by a single vote.

The legislation, which would enact much of President Donald Trump’s policy agenda, passed early Thursday morning after an overnight session.

The bill, which is now headed to the Senate, will cut taxes, but also saddle the country with trillions of dollars more in debt.

The bill would fulfil many of Trump’s populist campaign pledges, delivering new tax breaks on tips and car loans and boosting spending on the military and border enforcement. It will add about $3.8 trillion to the federal government’s $36.2 trillion in debt over the next decade, according to the nonpartisan Congressional Budget Office.

“This is arguably the most significant piece of Legislation that will ever be signed in the History of our Country!” Trump wrote on social media.

The package passed in a 215-214 vote after a marathon push that kept lawmakers debating the bill through two successive nights.

All of the chamber’s Democrats and two Republicans voted against it, while a third Republican voted “present”, neither for nor against the bill. Another Republican missed the vote because he was asleep.

With a narrow 220-212 majority, House Speaker Mike Johnson could not afford to lose more than a handful of votes from his side, and he made several last-minute changes to satisfy various Republican factions.

“The House has passed generational, truly nation-shaping legislation,” Johnson said.

The bill is now headed to the Republican-controlled Senate, where it will likely be changed further during weeks of debate.

The 1,100-page bill would extend corporate and individual tax cuts passed in 2017 during Trump’s first term in office, cancel many green-energy incentives passed by Democratic former President Joe Biden and tighten eligibility for health and food programmes for the poor.

It also would fund Trump’s crackdown on immigration, adding tens of thousands of border guards and creating the capacity to deport up to one million people each year. Regulations on firearm silencers would be loosened.

The bill passed despite growing concerns about the US debt, which has reached 124 percent of gross domestic product (GDP), prompting a downgrade of the country’s top-notch credit rating by Moody’s last week. The US government has recorded budget deficits every year of this century, as Republican and Democratic administrations alike have failed to bring spending into alignment with revenue.

Interest payments accounted for one out of every eight dollars spent by the US government last year, more than the amount spent on the military, according to the CBO. That share is due to grow to one out of every six dollars over the next 10 years as an ageing population pushes up the government’s health and pension costs, even if Trump’s budget bill is not taken into account.

A mixed response

“We’re not rearranging deck chairs on the Titanic tonight. We’re putting coal in the boiler and setting a course for the iceberg,” said Representative Thomas Massie of Kentucky, one of the two Republicans to vote against the bill.

The growing debt has paradoxically given urgency for Republicans to pass the bill, as it would raise the federal government’s debt ceiling by $4 trillion. That would avert the prospect of a default, which officials have warned could otherwise come sometime in the middle of this year.

Republicans have also argued that failure to pass the bill would mean an effective tax hike for many Americans, as Trump’s 2017 tax cuts are due to expire at the end of the year.

Hardliners on the party’s right flank had pushed for deeper spending cuts to lessen the budget impact, but they met resistance from centrists who worried that would fall too heavily on the 71 million low-income Americans enrolled in the Medicaid health programme. Johnson made changes to address conservatives’ concerns, pulling forward new work requirements for Medicaid recipients to take effect at the end of 2026, two years earlier than before. That would kick several million people off the programme, according to the CBO. The bill also would penalise states that expand Medicaid in the future.

Johnson also expanded a deduction for state and local tax payments from $30,000 to $40,000, which was a priority for a handful of centrist Republicans who represent high-tax states like New York and California. Democrats blasted the bill as disproportionately benefitting the wealthy while cutting benefits for working Americans. The CBO found it would reduce income for the poorest 10 percent of US households and boost income for the top 10 percent.

“This bill is a scam, a tax scam designed to steal from you, the American people, and give to Trump’s millionaire and billionaire friends,” Democratic Representative Jim McGovern said.

Investors, unnerved by the fiscal position of the US and Trump’s erratic tariff moves, are increasingly selling the dollar and other US assets that make up the bedrock of the global financial system. The three major indices the Dow, Nasdaq and S&P 500 are trending upwards slightly after its worst day in a month following a bond market sell-off yesterday.

JPMorgan Chase Chief Executive Jamie Dimon gave a mixed response to the bill’s passage.

“I think they should do the tax bill. I do think it’ll stabilise things a little bit, but it’ll probably add to the deficit,” Dimon said at JPMorgan’s Global China Summit in Shanghai.

Target has slashed its annual forecasts amid a pullback in discretionary spending due to tariff-driven uncertainty and a backlash against shifts in its diversity, equity and inclusion (DEI) policy.

The United States big box retailer, which reported its first-quarter earnings on Wednesday, relies on China for 30 percent of its store label goods. While it is on track to reduce its dependency by another 5 percent by the end of the year, tariff-driven uncertainty has caused a slump.

In its forecast, the Minneapolis, Minnesota-based retailer expects a low single-digit decline in annual sales. Wall Street analysts expected a marginal increase of 0.27 percent in annual sales, according to the LSEG. Target previously forecasted net sales growth of about 1 percent.

This comes as Bank of America recently forecasted that consumers have eased up on spending as the most recent report from The Conference Board showed a slowdown in consumer confidence, which hit a 13-year low in April. The US economy also showed the first contraction in three years in the first quarter.

Target’s first-quarter comparable sales fell 3.8 percent compared with analysts’ estimates of a 1.08 percent decline. It expects annual adjusted earnings of $7 to $9 per share, compared with its prior forecast of $8.80 to $9.80. Analysts were expecting $8.40.

“Expectations were very low for Target’s first quarter. Even against that, Target’s results came in light,” Michael Baker, a DA Davidson analyst, told the news agency Reuters. Target’s stock has performed poorly, down nearly 28 percent this year, in contrast to Walmart’s 9 percent gain and Home Depot’s 2.3 percent decline.

Target’s stock is tumbling on the news of its disappointing earnings report. As of 11am in New York (15:00 GMT), it was down 2.91 percent from the market open although it is up more than 1 percent over the past five days.

DEI boycotts weigh on sales 

Target also said its first-quarter performance was impacted by changes made to its DEI policies in January.

Target ended many of its DEI policies, drawing condemnation as some of its critics noted that its commitment to inclusiveness had helped attract younger, more diverse consumers. The decision generated more attention as it coincided with US President Donald Trump’s executive order to eliminate DEI policies in federal agencies and schools.

The backlash led to economic boycotts, notably from Reverend Jamal-Harrison Bryant, a Georgia pastor who organised a 40-day “fast” of Target stores. He has since called for those efforts to continue in recognition of the fifth anniversary of George Floyd’s murder by police in Minneapolis, Target’s headquarters.

CEO Brian Cornell said the reversal of some DEI policies played a role in first-quarter performance but he couldn’t quantify the impact.

Worse than competitors 

“Target’s [results] do nothing to restore confidence in the company. On the contrary, they are emblematic of a business that has made too many mistakes and has lost its way on several fronts,” GlobalData Managing Director Neil Saunders told Reuters, pointing to issues including poor inventory management and a lack of exciting merchandise.

Target’s forecast contrasts with its bigger rival Walmart, which maintained its annual forecasts last week but said it would need to pass on higher prices due to tariffs. That has drawn the ire of Trump, who said Walmart should “eat the tariffs” on imported goods instead of passing on the costs.

Unlike Walmart, which generates the bulk of its revenues by selling groceries like bananas, milk, toilet paper and shampoo, a majority of what Target sells falls in the nonessential category – largely apparel, home furnishings and beauty products, which it sources from China.

TJX, the parent company of retailer TJ Maxx, also reported its earnings on Wednesday, and while tariffs loom, the company is set to maintain its forecasts. The Massachusetts-based big box retailer expects comparable sales to grow 2 percent to 3 percent during the current quarter.

Unlike Target and Walmart, TJ Maxx, relies on expansive sourcing from middlemen in the US, which limits the impact of any new tariffs on China.

Looming price hike 

On a media call, Target executives declined to provide details on potential price increases due to tariffs. Most tariff-related increases could be offset, they said, but acknowledged that raising prices could be a “last resort”.

Cornell said pricing decisions will largely depend on ongoing efforts to source more products from the US and reduce reliance on China.

“That is going to play a very important role,” he said.

Rick Gomez, the company’s chief commercial officer, said Target is working on negotiating with suppliers, expanding sourcing to other Asian countries beyond China, re-evaluating its product assortment, and adjusting the timing and quantity of orders.

“These efforts are expected to offset the vast majority of the incremental tariff exposure,” Gomez said.

In one case, a person suffered permanent brain damage because of a delayed transfer, The Guardian newspaper reported.

UnitedHealth has allegedly secretly paid nursing homes to reduce hospital transfers — the latest accusations in a series of woes facing the health insurance giant.

The alleged action, first reported by The Guardian newspaper on Wednesday, was part of a series of cost-cutting tactics that have saved the company millions, but at times, risked residents’ health, the publication showed, citing an investigation.

The story, which cites thousands of documents and firsthand accounts of more than 20 former employees of the healthcare company and nursing homes, says that the insurance giant sent its own medical teams to nursing homes to push the cost-cutting measures. As a result, patients who urgently needed medical care did not receive it, including one person who now lives with permanent brain damage after a delayed transfer.

The allegations add to the litany of negatives that have hurt UnitedHealth in the last several months, following a massive cyberattack at its Change Healthcare unit, reports of criminal and civil investigations into the company’s practices, including one for Medicare fraud and the abrupt departure of CEO Andrew Witty last week.

UnitedHealth said in response to the story, “The US Department of Justice investigated these allegations, interviewed witnesses, and obtained thousands of documents that demonstrated the significant factual inaccuracies in the allegations.”

The company also said that the DOJ “declined to pursue the matter”.

Wall Street responds 

Shares have stumbled all year, losing more than 39 percent compared with a 0.6 percent decrease for the Dow. As of noon ET (16:00 GMT), the stock is down more than 3.6 percent.

“The news is only seemingly getting worse for UnitedHealth,” said Sahak Manuelian, managing director, global equity trading at Wedbush Securities.

HSBC downgraded the stock to “reduce” from “hold,” and cut the price target to a street-low of $270.

The brokerage said higher medical costs, pressure on drug pricing and its pharmacy benefit management unit, OptumRx, and a potential Medicaid funding cut can upset the company’s recovery journey.

Disruption from the ‘highly sophisticated and targeted cyber attack’, first reported around Easter weekend, continues.

British retailer Marks & Spencer estimates that a cyberattack that stopped it from processing online orders and left store shelves empty will cost it about 300 million pounds ($403m).

The company said in a business update (PDF) on Wednesday that disruption from the “highly sophisticated and targeted cyber attack,” which was first reported around the Easter weekend, is expected to continue until July.

Online sales of food, home and beauty products have been “heavily impacted” because the company, popularly known as M&S, had to pause online shopping.

The attack on one of the biggest names on the United Kingdom high street forced M&S to resort to pen and paper to move billions of pounds of fresh food, drinks and clothing after it switched off its automated stock systems.

That led to bare food shelves and frustrated customers, denting profits.

A month on, M&S’s large online clothing service remains offline, and the attack has wiped more than a billion pounds off its stock market value.

Chairman Archie Norman said the timing of the attack was unfortunate as M&S, which has been implementing a comprehensive turnaround plan since 2022, had been starting to show its full potential.

“But in business life, just as you think you’re onto a good streak, events have a way of putting you on your backside,” he said.

M&S, which has 65,000 staff and 565 stores, said the hack would cost about 300 million pounds ($403m) in lost operating profit in its year to March 2026, although it hopes to halve that impact through insurance, cost control and other actions.

Chief executive Stuart Machin said the company is focused on recovery and restoring its systems and operations.

“This incident is a bump in the road, and we will come out of this in better shape,” Machin said. He did not provide any details on the attack or who might be behind it.

Earlier this month, the company said customer personal data, which could have included names, emails, addresses and dates of birth, was taken by hackers in the attack.

Two other British retailers, luxury London department store Harrods and supermarket chain Co-op, have also been targeted by cyberattacks at around the same time.

UK Prime Minister Keir Starmer has announced a “landmark deal” with the EU that lays the ground for closer collaboration with the bloc.

Nearly nine years after the United Kingdom voted to leave the European Union, the new agreement includes a new security and defence pact, fewer restrictions on British food exporters and visitors, and a controversial new fishing agreement.

Britain said the reset with its biggest trading partner would reduce red tape for agricultural producers, making food cheaper. The deal would also improve energy security and, by 2040, add nearly 9 billion pounds ($12.1bn) to the economy.

While Starmer sold the deal as a “win-win”, attacks immediately emerged from the opposition Conservative Party, which said the deal would make the UK a “rule-taker” from Brussels.

Nigel Farage, head of the hard-right, pro-Brexit Reform UK party, called the deal an “abject surrender”.

What are the terms of the deal?

As part of Monday’s defence-and-security agreement, the UK and the EU will work more closely on information sharing, maritime issues and cybersecurity.

Crucially for Britain, the bloc committed to exploring ways for the UK to access EU procurement defence funds.

British weapons manufacturers can now take part in a 150-billion-euro ($169bn) programme to rearm Europe – part of United States President Donald Trump’s push for Brussels to spend more on defence.

Meanwhile, both sides have agreed to work on a joint agrifood agreement to remove Brexit-era trade barriers like safety checks on animals, paperwork and bans on certain products.

In 2023, UK food and drink exports to the EU were worth 14 billion pounds ($18.7bn), accounting for 57 percent of all the sector’s overseas sales. Monday’s agreement should raise that.

In exchange, the UK will need to follow EU food standards – a system known as “dynamic alignment” – and accept the European Court of Justice’s oversight in this area.

There have been talks on linking up the UK and EU’s carbon markets (i.e., a tradable price on CO2 emission) and on a joint electricity market.

The deal also paves the way for the UK’s return to the Erasmus student exchange programme, as well as granting young people access to the EU through work and travel.

In a symbolic gesture to please tourists, Britons will be allowed to use border e-gates at most EU airports, reducing queues at passport controls.

Finally, the UK will grant EU fishers access to British waters for an additional 12 years, an eleventh-hour concession from the UK – three times longer than it had originally offered.

Does this amount to backtracking on Brexit?

Critics from the Conservative Party and Reform UK quickly denounced the deal as a betrayal of Brexit, arguing that the price of the trade agreement was excessive.

The fisheries deal drew fierce disapproval, with opposition politicians saying it meant handing over Britain’s fishing waters to European fishers for an extra decade.

Fishing is a key issue in the UK, despite making up just 0.04 percent of gross domestic product (GDP). And Starmer’s deal appears to have reignited tensions last seen during Brexit negotiations.

Offering “12 years access to British waters is three times longer than the govt wanted,” Conservative leader Kemi Badenoch wrote on X. “We’re becoming a rule-taker from Brussels once again.”

Reform’s leader, Farage, told Bloomberg that Starmer’s deal on fisheries “will be the end of the industry”. The Scottish Fishermen’s Federation called it a “horror show”.

Elsewhere, there were complaints about Britain having to submit itself to the jurisdiction of the European Court of Justice on agrifood policies.

For their part, the Conservatives vowed to reverse all these changes if they got back into power.

Still, Starmer stuck firmly to his election promise of not re-joining the European single market (in which goods and people can move freely) or the customs union (which eliminates tariffs on goods traded between EU countries).

What were the costs of Brexit?

According to the Office for Budget Responsibility (OBR), the Ministry of Finance’s independent forecaster, the UK’s decision to leave the EU will shrink trade flows by 15 percent.

The OBR also that calculated Brexit will lower GDP by 4 percent over the long term. That’s the equivalent of costing the economy 100 billion pounds ($134bn) per year.

For starters, Brexit involved erecting significant trade barriers with Europe. In 2024, UK goods exports to the EU were 18 percent below their 2019 level, in real terms.

The decision to leave the EU also triggered business uncertainty. Lacking clarity over the UK’s future economic relationship with the EU, business investment softened.

The National Institute of Economic and Social Research estimates that business investment was 13 percent lower in 2023 than under a remain scenario.

Brexiteers promised that leaving the EU would allow Westminster to sign global free trade agreements and break away from the EU’s demanding regulatory regime.

“The argument was that doing business at home and abroad would be simplified,” says Gaurav Ganguly, head of EMEA Economic Research at Moody’s Analytics.

“And while the UK has signed several trade deals since 2020, Brexit has not unleashed the potential that was talked about [by its advocates].”

In recent weeks, the UK has signed up to trade agreements with India and the US. But Britain’s average GDP growth was just 0.64 percent between 2020 and 2024.

Elsewhere, public support for Brexit has fallen since the 52-48 percent leave vote in the 2016 referendum.

Earlier this year, polling by YouGov found only 30 percent of Britons now think it was right for the UK to vote to leave the EU, versus 55 percent who say it was wrong.

Roughly 60 percent of people believe Brexit has gone badly, including one-third of leave voters. A majority also believe that leaving the EU has damaged Britain’s economy.

Are the economic benefits from the new agreement?

Ever since last year’s election, the Labour government has pledged to improve Britain’s anaemic levels of growth. It sees lower trade barriers with the EU as crucial to that goal.

Acknowledging the damage inflicted to Britain’s trade by Brexit, Starmer said the deal to remove restrictions on food would give 9 billion pounds ($12bn) boost to the UK economy by 2040.

In a government briefing, Downing Street said it would redress the 21 percent drop in exports and 7 percent drop in imports seen since Brexit.

That said, 9 billion pounds ($12bn) would amount to just 0.2 percent of the UK’s national output. As such, this week’s agreement deal has dismantled only a fraction of the trade barriers erected post-Brexit.

“Yesterday’s deal may lift growth,” Ganguly told Al Jazeera. “But the UK economy continues to struggle from structural weaknesses, including low productivity and limited fiscal space.”

The Centre for European Reform, a London-based think tank, recently calculated that the UK-EU reset would boost Britain’s GDP by between 0.3 percent and 0.7 percent.

Ganguly said he is “not inclined to change my forecast in the short term”, adding “In addition, it’s clear that yesterday’s agreements won’t completely reverse the economic hit from Brexit.”

The upshot is that Ganguly expects modest GDP growth of around 1-2 percent between now and the next election cycle, in 2029.

Washington, DC – United States President Donald Trump and Secretary of Defense Pete Hegseth have laid out their clearest plan yet for the “Golden Dome” missile defence programme, which would include putting weapons in space for the first time.

Speaking from the White House on Tuesday, Trump said he had “officially selected an architecture” for the system, designed to take down “hypersonic missiles, ballistic missiles and advanced cruise missiles”.

“I promised the American people that I would build a cutting-edge missile defence shield to protect our homeland from the threat of foreign missile attack,” Trump told reporters in the Oval Office.

The Golden Dome system, he added, would include “space-based sensors and interceptors”.

“ Once fully constructed, the Golden Dome will be capable of intercepting missiles even if they are launched from other sides of the world and even if they’re launched from space,” Trump continued. “We will have the best system ever built.”

The announcement comes just less than four months after Trump signed an executive order kicking off the programme’s development. General Michael Guetlein – who currently serves as the vice chief of space operations at Space Force, a branch of the US military – is slated to manage the programme.

Speaking at the event, Hegseth hailed the plan as a “game changer” and a “generational investment in security of America and Americans”.

The White House did not immediately release further details about the missile defence system, and the Pentagon is reportedly still working out its capabilities and requirements.

The Congressional Budget Office estimated earlier this month that the space-based components of the Golden Dome alone could cost as much as $542bn over the next 20 years.

It noted that a high number of sensors and interceptors would be needed for a space-based system to be effective, particularly as foreign militaries like North Korea’s grow more sophisticated.

But on Tuesday, Trump outlined a much lower price tag and timeline.

“It should be fully operational before the end of my term. So, we’ll have it done in about three years,” Trump said.

He estimated the total cost to add up to about $175bn, adding that he planned to use existing defence capabilities to build the system.

But the funding for the programme has so far not been secured. At Tuesday’s news conference, Trump confirmed that he was seeking $25bn for the system in a tax cut bill currently moving through Congress, although that sum could be cut amid ongoing negotiations.

There is likely to be some variation in the total cost of the project. The Associated Press news agency, for example, cited an unnamed government official as saying that Trump had been given three versions of the plan, described as “medium”, “high” and “extra high”.

Those tiers corresponded to how many satellites, sensors and interceptors would be put in space as part of the programme. The news agency reported that Trump chose the “high” version, which has an initial cost ranging between $30bn and $100bn.

Questions over viability

As he explained his plans for the Golden Dome on Tuesday, Trump cited several inspirations, including Israel’s “Iron Dome” missile defence system, which is funded in part by the US.

He also pointed to the work of a fellow Republican, the late President Ronald Reagan, who served in the White House during the Cold War in the 1980s.

As part of his Strategic Defense Initiative in 1983, Reagan had proposed a barrier to nuclear weapons that included space-based technology.

“ We will truly be completing the job that President Reagan started 40 years ago, forever ending the missile threat to the American homeland,” Trump said.

But questions have persisted over the viability of a space-based defence system, its price, and whether it could ignite a new arms race.

Democrats have also questioned the possible involvement of Elon Musk’s SpaceX, which is a frontrunner among the technology companies seeking to build key components of the system.

A group of 42 Democratic lawmakers have called for a probe into Musk’s role in the bidding process, pointing to his position as a special adviser to Trump and his substantial campaign donations to the president.

“If Mr. Musk were to exercise improper influence over the Golden Dome contract, it would be another example
of a disturbing pattern of Mr. Musk flouting conflict of interest rules,” the Democrats wrote in a letter, calling for the probe.

On Tuesday, Trump did not directly respond to a question about which companies would be involved in the Golden Dome. Instead, he highlighted that the system would boost industries in states like Alaska, Indiana, Florida and Georgia.

He added, “Canada has called us, and they want to be a part of it. So we’ll be talking to them.”

Elon Musk has claimed a turnaround in Tesla sales after a slump even as Starlink, the internet service provider that he owns, is growing.

Elon Musk has said he is committed to staying on as Tesla’s CEO for at least another five years, weeks after the electric vehicle maker’s chair dismissed reports that the board had approached executive search firms about finding his successor.

Having reasonable control of Tesla was the most important factor in staying on as head of the company, Musk said on Tuesday at an economic forum in Qatar.

“Yes, no doubt about that at all,” Musk said in response to a question on whether he planned to stick around as Tesla CEO.

Earlier this month, Tesla chair Robyn Denholm denied a Wall Street Journal report that said board members had reached out to several executive search firms to find a replacement for Musk.

Musk, who spoke by video at the event in Qatar, said that Tesla had already turned around sales and demand was strong in regions apart from Europe, where the company has faced protests over his political views.

Tesla sales have also slumped in the United States, where there was a nine percent drop in the first three months of 2025, according to the research firm Cox Automotive. That was largely driven by Musk’s political involvement, including leading the US Department of Government Efficiency, which made significant cuts across the federal workforce. As a result, protests ensued and boycotts of Musk-connected businesses unfolded.

Tesla reported a 13 percent drop in first-quarter deliveries. The Tesla chief has said there has been a turnaround.

“We’re now back over a trillion dollars in market cap, so clearly, the market is aware of the situation, so it’s already turned around,” Musk said.

Tesla currently has a market capitalization of $1.08 trillion.

Musk also referred to Chancellor Kathaleen St Jude McCormick, a Delaware judge who stopped a $56bn pay package for Musk, as an “activist who is cosplaying a judge in a Halloween costume”.

Yet he acknowledged his Tesla pay was a part of his consideration about staying with the carmaker, though he also wanted “sufficient voting control” so he “cannot be ousted by activist investors”.

“It’s not a money thing, it’s a reasonable control thing over the future of the company, especially if we’re building millions, potentially billions of humanoid robots,” he added.

This comes as the billionaire said he will spend “a lot less” in political contributions, after pumping $270m into Donald Trump’s successful 2024 US presidential bid.

“In terms of political spending, I’m going to do a lot less in the future,” Musk said, adding that he does not “currently see a reason” to do more.

As of 11am Eastern time (15:00 GMT) Tesla’s stock was up 1.13 percent higher than when the market opened. The stock is down 15 percent for the year.

Starlink grows

Musk also weighed in on the future of the internet service provider Starlink, which he operates. He said that the company might go public at some point in the future, but that there was no rush.

Starlink has expanded rapidly worldwide to operate in more than 70 countries, with a strong focus on further growth in emerging markets such as India.

South Africa’s government plans to offer a workaround of local Black ownership laws to allow Starlink to operate in the country, according to the news agency Bloomberg, which cited three people familiar with the discussions.

The offer would come at a “last-minute” meeting planned for Tuesday night between South African officials and Musk or his representatives, Bloomberg said. South Africa’s President Cyril Ramaphosa and a delegation of government officials arrived in Washington on Monday in a bid to reset strained ties with the US.

Public spending cuts across six African countries have resulted in the incomes of health and education workers falling by up to 50 percent in five years, leaving them struggling to make ends meet, according to international NGO ActionAid.

The Human Cost of Public Sector Cuts in Africa report published on Tuesday found that 97 percent of the healthcare workers it surveyed in Ethiopia, Ghana, Kenya, Liberia, Malawi and Nigeria could not cover their basic needs like food and rent with their wages.

The International Monetary Fund (IMF) is to blame for these countries’ failing public systems, the report said, as the agency advises governments to significantly cut public spending to pay back foreign debt. As the debt crisis rapidly worsens across the Global South, more than three-quarters of all low-income countries in the world are spending more on debt servicing than healthcare.

“The debt crisis and the IMF’s insistence on cuts to public services in favour of foreign debt repayments have severely hindered investments in healthcare and education across Africa. For example, in 2024, Nigeria allocated only 4% of its national revenue to health, while a staggering 20.1% went toward repaying foreign debt,” said ActionAid Nigeria’s Country Director Andrew Mamedu.

The report highlighted how insufficient budgets in the healthcare system had resulted in chronic shortages and a decline in the quality of service.

Women also appear to be disproportionally affected.

“In the past month, I have witnessed four women giving birth at home due to unaffordable hospital fees. The community is forced to seek vaccines and immunisation in private hospitals since they are not available in public hospitals. Our [local] health services are limited in terms of catering for pregnant and lactating women,” said a healthcare worker from Kenya, who  ActionAid identified only as Maria.

Medicines for malaria – which remains a leading cause of death across the African continent, especially in young children and pregnant women – are now 10 times more expensive at private facilities, the NGO said. Millions don’t have access to lifesaving healthcare due to long travel distances, rising fees and a medical workforce shortage.

“Malaria is an epidemic in our area [because medication is now beyond the reach of many]. Five years ago, we could buy [antimalarial medication] for 50 birrs ($0.4), but now it costs more than 500 birr ($4) in private health centres,” a community member from Muyakela Kebele in Ethiopia, identified only as Marym, told ActionAid.

‘Delivering quality education is nearly impossible’

The situation is equally dire in education, as budget cuts have led to failing public education systems crippled by rising costs, a shortage of learning materials and overcrowded classrooms.

Teachers report being overwhelmed by overcrowded classrooms, with some having to manage more than 200 students. In addition, about 87 percent of teachers said they lacked basic classroom materials, with 73 percent saying they paid for the materials themselves.

Meanwhile, teachers’ wages have been gradually falling, with 84 percent reporting a 10-15 percent drop in their income over the past five years.

“I often struggle to put enough food on the table,” said a teacher from Liberia, identified as Kasor.

Four of the six countries included in the report are spending less than the recommended one-fifth of their national budget on education, according to the UNESCO Institute for Statistics.

“I now believe teaching is the least valued profession. With over 200 students in my class and inadequate teaching and learning materials, delivering quality education is nearly impossible,” said a primary school teacher in Malawi’s Rumphi District, identified as Maluwa.

Action Aid said its report shows that the consequences of IMF-endorsed policies are far-reaching. Healthcare workers and educators are severely limited in the work they can do, which has direct consequences on the quality of services they can provide, it said.

“The debt crisis and drive for austerity is amplified for countries in the Global South and low-income countries, especially due to an unfair global economic system held in place by outdated institutions, such as the IMF,” said Roos Saalbrink, the global economic justice lead at ActionAid International. “This means the burden of debt falls on those most marginalised – once again. This must end.”

On Sunday, a key congressional committee in the United States approved President Donald Trump’s new tax cut bill, which could pass in the House of Representatives later this week.

The bill extends Trump’s 2017 tax cuts and may add up to $5 trillion to the national debt, deepening worries after a recent US credit ratings downgrade by Moody’s on Friday, which cited concerns about the nation’s growing $36 trillion debt.

The US has the highest amount of national debt in the world and is facing growing concerns about its long-term fiscal stability.

What is US debt?

Debt is simply the total amount of money the US government owes to its lenders, currently amounting to $36.2 trillion. This represents 122 percent of the country’s annual economic output or gross domestic product (GDP), and it is growing by about $1 trillion every three months.

The highest debt-to-GDP ratio was during the pandemic in 2020, when the ratio hit 133 percent. The US is among the top 10 countries in the world with the highest debt-to-GDP ratio.

What is the debt ceiling, and why does it keep increasing?

When the government spends more money than it collects, it creates a deficit.

To cover this deficit, the government borrows more money. To ensure that borrowing is subject to legislative approval, the US Congress sets a limit to how much the government can borrow to fund existing obligations like Social Security, healthcare and defence. This limit is known as the debt ceiling.

Once the ceiling is reached, the government cannot borrow more unless Congress raises or suspends the limit. Since 1960, Congress has raised, suspended or changed the terms of the debt ceiling 78 times, allowing the US to borrow more money.

The federal deficit under different presidents

The federal deficit is how much more money the government spends than it brings in during a single year. A federal surplus would mean the US is bringing in more money than it is spending.

The deficit grew sharply during Trump’s first term, especially in 2020 during the COVID-19 pandemic, when the government spent heavily while tax revenues dropped due to job losses. That year, the deficit reached nearly 15 percent of the entire economy (GDP).

Under former President Bill Clinton, there was a federal surplus – the result of favourable economic conditions such as the dot-com boom, as well as tax increases which raised more revenues.

What are Treasury bills, notes and bonds?

When the US wants to borrow money, it turns to the Treasury – the finance department of the federal government.

To borrow money, the Treasury sells various types of debt securities, such as Treasury bills, Treasury notes and Treasury bonds to investors.

These securities are essentially loans made by investors to the US government, with a promise to repay them with interest.

US Treasuries have long been considered a safe asset because the risk of the US failing to repay its investors has been very low.

Different debt securities mature over different times – this is when the debt is repaid to the investor.

• Treasury bills (T-bills) are short-term and mature within one year
• Treasury notes (T-notes) are medium-term and mature between 2 and 10 years
• Treasury bonds (T-bonds) are long-term and mature in 20 to 30 years.

Who holds US debt?

Three-quarters of the $36.2 trillion US debt, approximately $27.2 trillion, is held domestically, of which:

• $15.16 trillion (42 percent) is held by US private investors and entities, mostly in the form of savings bonds, mutual funds and pension funds.
• $7.36 trillion (20 percent) is held by intra-governmental US agencies and trusts.
• $4.63 trillion (13 percent) is held by the Federal Reserve.

Among individuals, Warren Buffett, through his company Berkshire Hathaway, is the single largest non-government holder of US Treasury bills, valued at $314bn.

Foreign investors hold the remaining quarter, valued at $9.05 trillion (25 percent).

Over the past 50 years, the share of US debt held by foreign entities has increased fivefold. In 1970, only 5 percent was owned by overseas investors; today, that figure has risen to 25 percent.

Which countries hold the most foreign debt?

Countries buy US debt because it offers a safe, stable investment for their foreign currency reserves, helps manage exchange rates and provides reliable interest income.

Foreign investors hold $9.05 trillion of debt, of which:

• Japan holds $1.13 trillion
• The United Kingdom holds $779.3bn, overtaking China in March as the second-largest non-US holder of treasuries
• China holds $765.4bn
• The Cayman Islands ($455.3bn) holds a large amount of US debt because it is a tax haven
• Canada ($426.2bn)

In response to Trump’s tariffs, both Japan and China have indicated they will use their substantial holdings of US treasuries as leverage in trade negotiations with the Trump administration.

Earlier this month, Japanese Finance Minister Katsunobu Kato said Japan’s massive holding of US treasuries could be a “card on the table” in trade negotiations.

Similarly, China has been gradually selling US treasuries for years. In February, China’s US treasury holdings dropped to their lowest level since 2009, reflecting efforts to diversify reserves and ongoing trade tensions.

What does high US debt mean for the average American?

If the US government is spending more on debt interest repayments, it can affect budgets and public spending as it becomes more costly for the government to sustain itself.

The government may raise taxes to generate more revenue to pay down its national debt, increasing costs for average people. Increasing debt could also lead to higher interest rates, making mortgages, car loans and credit card debt more expensive.

Sale of genetic testing company raises concerns about privacy of 23andMe’s 15 million customers.

Regeneron Pharmaceuticals has bought the genetic testing company 23andMe, a company once valued at $6bn, for $256m through a bankruptcy auction.

Regeneron said in a statement on Monday that it aims to bolster its capabilities in genomics-driven drug discovery by using customer DNA profiles, collected via its popular direct-to-consumer saliva testing kits.

It added it would prioritise the ethical use of customers’ DNA data.

However, the transaction has put the spotlight back on data privacy issues, especially in light of 23andMe’s recent challenges. Founded in 2006, 23andMe has collected the genetic information of roughly 15 million people.

The genomics firm, once a trailblazer in ancestry DNA testing, has faced dwindling demand for its core services and reputational damage from a 2023 data breach that exposed sensitive genetic and personal information of millions of users.

The hack and subsequent bankruptcy filing have drawn scrutiny from lawmakers who warned that millions of customers’ genetic data could be sold to unscrupulous buyers.

After the company’s bankruptcy filing in March, several congressional committees and federal agencies, including the Senate Health, Education, Labor and Pensions Committee and  the Federal Trade Commission, penned letters voicing concerns  that the company’s data could end up in the hands of malicious parties.

The Subcommittee on Oversight and Accountability in the House of Representatives launched an investigation into the matter.

Acknowledging the heightened scrutiny, Regeneron said it will uphold 23andMe’s existing privacy policies and comply with all applicable data protection laws.

The drugmaker also committed to working transparently with a court-appointed independent overseer who will assess the implications of the deal for consumer privacy and is expected to deliver a report to the court by June 10.

The court is scheduled to consider approval of the transaction on June 17.

Investments in genomics “make good strategic sense” for Regeneron but might take a decade or more to see a return, Bernstein analyst William Pickering told the news agency Reuters.

“Given Regeneron’s track record, we also believe 23andMe customers are in good hands from a privacy perspective,” Pickering added.

As part of the agreement, Regeneron will acquire all units of 23andMe except the company’s on-demand telehealth service Lemonaid Health, which is being shuttered.

After the transaction, expected to be completed in the third quarter, 23andMe will operate as a wholly owned unit of Regeneron.

Despite the news of the purchase, Regeneron’s stock was down 0.6 percent from the market open on Wall Street as of 12pm in New York (16:00 GMT) although it had gone up 2.86 percent over the previous five days.

Despite slowdown, data points to reliance of Chinese economy in the face of Donald Trump’s tariffs.

China’s industrial output and retail sales growth have slowed amid trade tensions with the United States.

Factory output grew 6.1 percent year-on-year in April, down from a 7.7 percent rise in March, data released by China’s National Bureau of Statistics showed on Monday.

While down compared with the previous month, the figure beat analysts’ expectations.

Analysts polled by the Reuters and Bloomberg news agencies had respectively forecast growth of 5.5 percent and 5.7 percent.

Retail sales grew 5.1 percent year-on-year, slower than the 5.9 percent growth recorded in March and below analysts’ forecasts.

Fixed-asset investment, which includes property and infrastructure investment, rose 4 percent.

Unemployment fell slightly, from 5.2 percent to 5.1 percent.

The latest data is likely to bolster hopes of China’s economy remaining resilient in the face of US President Donald Trump’s tariffs, after gross domestic product expanded a better-than-expected 5.4 percent in the January-March period.

The National Bureau of Statistics said the economy maintained “new and positive development momentum” due to Beijing’s economic policies, despite the “increasing impact of external shocks”.

“However, we should be aware that there are still many unstable and uncertain factors in external environment, and the foundation for sustained economic recovery needs to be further consolidated,” the statistics agency said in a statement.

The economic figures are the first to be released since Washington and Beijing last week agreed to dramatically reduce tariffs on each other’s goods for 90 days.

Under the deal reached in Geneva, the US lowered its tariff on Chinese goods from 145 percent to 30 percent, while China slashed its rate from 125 percent to 10 percent.

“The risk is that tariffs remain in place for a long time, and eventually, we see production offshored,” Lynn Song, chief economist for Greater China at ING, said in a note on Monday.

“But amid tariff unpredictability, not just for China but across the world, few companies will be rushing to commit resources to set up offshore manufacturing facilities. This could mean that a decent portion of China’s manufacturing and exports will be less impacted than originally feared.”

Nonpartisan analysts say bill would add $3-5tn to the nation’s $36.2tn debt over the next decade.

United States President Donald Trump’s sweeping tax-cut bill has won approval from a key congressional committee to advance towards possible passage in the House of Representatives later this week.

The rare Sunday night vote marks a big win for Trump and House Speaker Mike Johnson, after hardline Republican conservatives on Friday blocked the bill from clearing the House Budget Committee over a dispute involving spending cuts to the Medicaid healthcare programme for lower-income Americans and the repeal of green energy tax credits.

Four hardline members of the committee’s 21 Republicans allowed the legislation to advance by voting “present”. The bill passed in a 17-16 vote, with all Democrats voting against it.

The hardliners had spent much of the day in closed-door negotiations with House Republican leaders and White House officials.

Johnson met with Republican lawmakers shortly before the meeting, telling reporters that the changes agreed to were “just some minor modifications. Not a huge thing.”

Republican House Budget Chairman Jodey Arrington said he expects deliberations to continue on into the week, “right up until the time we put this big, beautiful bill before the House”.

Nonpartisan analysts say the bill, which would extend the 2017 tax cuts that were Trump’s signature first-term legislative win, would add $3 trillion to $5 trillion to the $36.2 trillion national debt over the next decade.

Credit ratings agency Moody’s cited the rising debt, which it said was on track to reach 134 percent of gross domestic product (GDP) by 2035, for its decision on Friday to downgrade the US’s credit rating.

US Treasury Secretary Scott Bessent said in an interview with CNN on Sunday that the bill would spur economic growth sufficient to offset any growth in the debt, adding that he did not put much credence in Moody’s downgrade.

Economic experts have warned that the downgrade – following previous downgrades by Fitch Ratings and S&P – is a clear sign that the US has too much debt and lawmakers need to either increase revenues or spend less.

Trump’s Republicans hold a 220-213 majority in the House, and are divided over how deeply to slash spending to offset the cost of the tax cuts.

Hardliners want cuts to Medicaid, which some Republican senators have pushed back against, saying it would hurt the very voters who elected Trump in November, and whose support they will need in 2026 when control of Congress is again up for grabs.

The bill’s cuts would kick 8.6 million people off Medicaid.

It also aims to eliminate taxes on tips and some overtime income – both Trump campaign promises – while boosting defence spending and providing more funds for Trump’s border crackdown.

Democratic US Senator Chris Murphy of Connecticut said the credit rating cut spelled trouble for Americans.

“That is a big deal. That means that we are likely headed for a recession,” Murphy told NBC’s Meet the Press.

“These guys are running the economy recklessly.”

On May 12, the United States and China announced that they are putting reciprocal tariffs on pause for 90 days. Some tariffs will be retained while trade negotiations continue, a joint statement said.

This is yet another reversal of the sweeping tariffs US President Donald Trump imposed in early April that destabilised the global economy and sent stock markets into freefall.

Although he claimed that his measures would make the US economy “boom”, it was clear from the start that they would not work. A trade war cannot improve the lot of American workers, nor bring back manufacturing into the country.

Now spooked by corporations slashing profit targets and reports of the US gross domestic product (GDP) shrinking, the Trump administration appears to be walking back on its strategy. But going back to economic liberalism under the guise of “stability” is not the right course of action.

The current global economic system, distorted by policies favouring the rich sustained over decades, has proven itself to be unsustainable. That is why we need a new world economic order that promotes inclusive and sustainable development across both the Global North and South and addresses global socioeconomic challenges.

The crisis of liberal globalisation

The troubles that economies around the world currently face are the result of policies the elites of the Global North imposed over the past 80 years.

In its original Keynesian vision, the economic order put forward by the Allied Powers after World War II aimed to combine trade, labour, and development best practices to foster inclusive growth. However, over the following few decades, corporate opposition in the US and Britain derailed this order, replacing it with a skewed system centred around the Global North’s chief economic instruments, the World Bank and the International Monetary Fund, both created in 1944.

In the 1970s, economic elites blamed rising inflation and stagnation not on temporary shocks like the oil crisis but on what they saw as excessive concessions to organised labour: government overspending, strong unions, and heavy regulation. Subsequently, they launched an institutional counter-revolution against the Keynesian model of power sharing and social compromise.

This counter-revolution took shape in the 1980s under US President Ronald Reagan and UK Prime Minister Margaret Thatcher, who aggressively pursued policies to restore corporate profitability. They slashed taxes on the wealthy, liberalised international capital flows that made it easier to relocate production to low-cost economies, deregulated the financial sector, weakened labour unions, and privatised public services. As a result, outsourcing of labour, tax evasion, real estate speculation, financialisation, and credit-fuelled bubbles became US corporations’ dominant ways of making profit.

In developing countries, the IMF, the World Bank and regional development banks pushed governments to cut public spending, privatise state-owned enterprises, remove trade barriers, and deregulate markets rapidly and with little regard for social consequences.

As a result, the 1980s and 90s became lost decades for many countries embracing globalisation through radical liberalisation. These policies triggered massive employment shocks, rising inequalities, skyrocketing debt and persistent financial turbulence from Mexico to Russia.

East Asian economies were the exceptions, as they learned to circumvent the straitjacket of liberal globalisation and joined the global economy on their own terms.

The biggest beneficiaries of this system were Western economic elites, as corporations profited from low-cost production abroad and domestic deregulation at home. The same cannot be said for Western workers, who faced stagnating real wages, eroded labour protections, and increasing economic insecurity under the pressure of competitiveness, relocation, and automation.

Illiberal economic policy is doomed to fail

For those of us who studied the post-war economic order, it was apparent that without correcting the pitfalls of liberal globalism, a nationalist, illiberal counter-revolution was coming. We saw its signs early on in Europe, where illiberal populists rose to prominence, gaining a foothold first in the periphery and then gradually scaling up to become Europe’s most disruptive force.

In the countries where they gained power, they pursued policies superficially resembling developmentalism. Yet, instead of achieving genuine structural transformation, they fostered oligarchies dominated by politically connected elites. Instead of development, they delivered rent-seeking and resource extraction without boosting productivity or innovation.

Trump’s economic policies follow a similar path of economic populism and nationalistic rhetoric. Just like illiberal economic policies failed in Europe, his tariffs were never going to magically reindustrialise the US or end working-class suffering.

If anything, tariffs – or now the threat of imposing them – will accelerate China’s competitive edge by pushing it to deepen domestic supply chains, foster regional cooperation, and reduce reliance on Western markets. In the US, the illiberal response will drag labour standards down, eroding real wages through inflation and propping up elites with artificial protections.

Furthermore, Trump has no real industrial policy, which renders his reactive trade measures completely ineffective. A genuine industrial policy would coordinate public investment, support targeted sectors, enforce labour standards, and channel technological change towards good jobs.

His predecessor, President Joe Biden, laid the foundations of such an industrial policy agenda in the Inflation Reduction and CHIPS acts. However, these programmes are now under attack from the Trump administration, and their remaining vestiges will not have a meaningful effect.

Without these pillars, workers are left exposed to economic shocks and excluded from the gains of growth, while the rhetoric of reindustrialisation becomes little more than a political performance.

The way forward

While Trump’s economic policies are unlikely to work, returning to economic liberalism will not resolve socioeconomic grievances either. Let us remember that past efforts to maintain this deeply flawed system at any cost backfired.

Following the 2008 global financial crisis, Western governments rescued big banks and allowed financial markets to return to business as usual. Meaningful reforms of the global economic architecture never materialised. Meanwhile, the living standards of working- and middle-class families from Germany to the US stagnated or declined as wages flatlined, housing prices soared, and economic insecurity deepened.

We cannot return to this dysfunction again. We need a new global economic order focused on multilateral governance, ecological sustainability, and human-centric development. Such progressive global multilateralism would mean governments coordinating not only on taxing multinational corporations and curbing tax havens but also on regulating capital flows, setting minimum labour and environmental standards, sharing green technologies, and jointly financing global public goods.

In this new economic order, the institutions of global economic governance would make space for developing and emerging countries to implement industrial policies and build stronger ties with public finance bodies to mobilise patient, sustainable capital. This cooperative approach would offer a practical alternative to liberal globalism by promoting accountable public investment and development-focused financial collaboration.

Parallel to the eco-social developmentalism in emerging economies, wealthy nations need to embrace a post-growth model gradually. This strategy prioritises wellbeing, ecological stability, and social equity over endless GDP expansion.

This means investing in care work, green infrastructure, and public services rather than chasing short-term profits or extractive growth. For mature economies, the goal should be shifting from growing more to distributing better and living within planetary limits. This would also allow more space for low- and middle-income countries to improve their living standards without overexploiting our limited shared natural resources.

With stronger cooperation between national and multilateral public finance institutions and better tools to tax and regulate corporations, governments could regain the capacity to create stable, well-paying jobs, strengthen organised labour, and tackle inequalities. This is the only way for American workers to regain the quality of life they aspire to.

Such progressive multilateralism would be a powerful long-term antidote against illiberal populism. Achieving this shift, however, requires building robust global and regional political coalitions to challenge entrenched corporate interests and counterbalance the existing liberal, capital-driven global framework.

The challenge is clear: not only to critique Trump’s destructive policies but to present a bold, coherent vision of industrial renewal, ecological sustainability, and global justice. The coming months will show whether anyone is prepared to lead that transformation.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

The proposed merger, which would create the largest cable provider in the US, could face antitrust hurdles.

Charter Communications has agreed to buy its rival Cox Communications for $21.9bn in a deal that would unite the two of the largest cable and broadband operators in the United States as they battle streaming giants and mobile carriers for customers.

The deal, announced on Friday, comes more than a decade after the companies reportedly abandoned an earlier merger attempt. Since then, pressure has intensified on cable companies, with wireless carriers attracting broadband customers with aggressive plans, while millions ditch traditional pay-TV for streaming.

The companies said they expect to realise $500m in cost savings within three years of the deal’s expected close in mid-2026.

Under the cash-and-stock deal, Charter will take on about $12.6bn of Cox’s net debt and other obligations, giving the transaction an enterprise value of $34.5bn.

Cox Enterprises, the family-owned parent of Cox Communications, will own about 23 percent of the merged entity, with its CEO Alex Taylor serving as chairman.

The combined firm will rebrand as Cox Communications within a year of the deal’s close, with Charter’s Spectrum being the consumer-facing brand. It will keep its headquarters in Stamford, Connecticut, while maintaining a big presence at Cox’s campus in Atlanta, Georgia.

The merger with Cox – one of the biggest deals globally this year – will aid Charter’s push to bundle broadband and mobile services, helping it fend off competition from carriers.

Analysts have said Charter’s strategy of combining internet, TV and mobile services into a single, customizable package has shown merit, but it needs scale as cable firms rely on leasing network access from major carriers to offer mobile plans.

“This combination will augment our ability to innovate and provide high-quality, competitively priced products,” said Charter CEO Chris Winfrey, who will head the combined company.

The Spectrum-owner has a market value of nearly $60bn.

On Wall Street, Charter’s stock rose on the news of the potential merger. As of 12:00pm ET (16:00 GMT) the stock is up 1.66 percent since the market opened.

Antitrust concerns 

The merger will be among the first major tests of M&A regulation under the administration of US President Donald Trump, as it would create the largest US cable TV and broadband provider with about 38 million subscribers, surpassing current market leader Comcast.

It will likely be reviewed by the US Department of Justice’s antitrust division. Assistant Attorney General Gail Slater, who leads the division, has made it clear she intends to focus on mergers that decrease competition in ways that harm consumers or workers.

EMarketer analyst Ross Benes said the merged entity would be the largest US pay-TV operator, but the “ISP (internet service provider) side of the business is more consequential” for consumers, potentially positioning it as a regional monopoly.

Winfrey echoed Trump’s “America First” employment priorities and said the deal would bring Cox’s customer service jobs back from overseas, but he did not specify how many. Charter’s customer service teams are already based entirely in the US.

“This is the first big corporate move (in the same sector) to happen under the new Trump administration so … will set the tone for other potential moves or not,” said PP Foresight analyst Paolo Pescatore.

Charter and Cox had also discussed a merger in 2013 before shelving the plan, according to media reports. But speculation had risen again in recent months after cable billionaire John Malone said in November Charter should be allowed to merge with rivals such as Cox, shortly after Charter agreed to buy his Liberty Broadband.

Liberty Broadband shareholders will receive direct interest in Charter under the terms of the deal with Cox.

United States House Republicans’ “big, beautiful bill”, a wide-ranging tax and spending legislation, is at a crucial moment.

The nearly 400-page legislation proposes sweeping changes which include extending the 2017 tax cuts, slashing taxes for businesses and individuals, and enacting deep cuts to social programmes like Medicaid and SNAP.

While Republicans tout the bill as a boon for economic growth and middle-class relief, nonpartisan analysts warn it could add trillions to the national debt and strip millions of Americans of medical and food assistance.

The bill will be voted on by the House Budget Committee today and, if passed, will be voted on the floor next week.

The most substantive part of the bill is an extension of the 2017 tax cuts. The tax bill would add at least an additional $2.5 trillion to the national deficit over the next 10 years and decrease federal tax revenue by roughly $4 trillion by 2034.

Passing the legislation will also raise the debt ceiling, which sets the amount of money the government can borrow to pay for existing expenditures, by $4 trillion, a sticking point for hardline Republicans who want deeper cuts.

Here are some of the key measures in the proposed bill in its current form.

Changes for households

The bill increases standard deductions for all Americans. Individual deductions will increase by $1,000, $1,500 for heads of households, and $2,000 for married couples.

The bill extends the child tax credit of $2,000, which would otherwise have ended with the expiration of the 2017 tax cuts at year’s end.

It bumps up the child tax credit by $500 per child for this tax year and runs through the end of 2028. It also includes a $1,000 savings account for children born between December 31, 2024 and January 1, 2029. The legislation would also allow families to annually contribute $5,000 tax-free.

There is a new tax deduction for Americans 65 and older. The new bill would give a $4,000 annual deduction starting this year for people making a gross income of $75,000 for a single person and $150,000 for a married couple. If passed, the rule would take effect for the current tax year and run until the end of 2028.

“It will just make tax paying more complicated and more uncertain when a lot of these things ultimately expire,” Adam Michel, director of tax policy studies at the right-leaning Cato Institute, told Al Jazeera.

Another provision in the bill modifies state and local tax (SALT) deductions. It allows filers to be able to write off some of what they paid in local and state taxes from their federal filings.

Under the 2017 tax act, that was capped at $10,000, but the new legislation would raise that to $30,000. Some Republicans, particularly those in states with higher taxes like New York and California, have been pushing to raise the cap or abolish it altogether. However, they have faced fiscal hawks and those who see the increases as relief for those already wealthy.

The bill includes an increased benefit for small businesses that allows them to deduct 23 percent of their qualified business income from their taxes, up from the current 20 percent.

There is also a call for no taxes on overtime pay for select individuals. It would not apply to people who are non-citizens, those who are considered “highly compensated employees,” and those who earn a tipped wage.

The bill, however, also eliminates taxes on tips, a critical campaign promise by both Donald Trump and his Democratic rival Kamala Harris. The bill would allow people who work in sectors like food service, as well as hair care, nail care, aesthetics, and body and spa treatments, to specifically deduct the amount of tipped income they receive.

At the federal level, employers will still not be required to pay tipped workers more than the subminimum wage of $2.13 hourly. The intention is that workers will be able to make up the difference in tipping the receipt from customers.

Cuts to the social safety net

The legislation calls to make $880bn in cuts to key government programmes with a focus mostly on Medicaid and food stamps.

The CBO found that more than 10 million people could lose Medicaid access and 7.6 million could lose access to health insurance completely by 2034 under the current plan.

Even far-right Republicans have called out the Medicaid cuts. In an op-ed in The New York Times this week, Republican Senator Josh Hawley of Missouri said the cuts are “morally wrong and politically suicidal”.

According to a new report from One Fair Wage shared with Al Jazeera, tipped workers could be hit especially hard, as 1.2 million restaurant and tipped workers could lose access to Medicaid.

“A no tax on tips proposal, which is like a minuscule percentage of their income and doesn’t affect two-thirds of tips workers because they don’t earn enough to pay federal income tax, is just nowhere near enough to compensate for the fact that we’re going to have millions of these workers lose the ability to take care of themselves, in some cases go into medical debt, in many cases just not take care of themselves,” Saru Jayaraman, president of One Fair Wage, an advocacy group for restaurant workers, told Al Jazeera.

The bill also introduces work requirements to receive benefits, saying that recipients must prove they work, volunteer or are enrolled in school for at least 80 hours each month.

At the same time, the bill also shortens the open enrolment period by a month for the Affordable Care Act (ACA), otherwise known as Obamacare. This means people who have employer-funded healthcare and lose their job might lose eligibility to buy a private plan on the healthcare exchange.

“It’s taking folks like 11 to 12 weeks to find a new job. The worse the labour market gets, that number will tick up. If you’re unemployed for three months, you get kicked off Medicaid,” Liz Pancotti, managing director of policy and advocacy at the Groundwork Collective, told Al Jazeera.

“Then, if you try to go buy a plan on the ACA marketplace, you are no longer eligible for subsidies … which I think is really cruel.”

Other major proposed cuts will hit programmes like Supplemental Nutrition Assistance Programme or SNAP, which helps 42 million low-income individuals afford groceries and comes at a time when food costs are still 2 percent higher than a year ago. The CBO found that 3 million people could lose SNAP access under the new plan.

The bill would also force states to take up more responsibility in funding the programmes. States would be required to cover 75 percent of the administrative costs, and all states would have to pay at least 5 percent of the benefits — 28 states would need to pay 25 percent.

“States are now going to be on the hook for billions of dollars in funding for these two vital programmes. They have a tough choice. One is, do they cut funding from others like K-12 education, roads, veteran services, etc, to cover this gap, or do they raise taxes so that they can raise more revenue to cover this gap,” Pancotti added.

Under the current law, the federal government is solely responsible for shouldering the cost of benefits. The proposed cuts would save $300bn for the federal government but hit state budgets hard.

Bill fuels Trump administration priorities

The bill would also cut the $7,500 tax credit for new electric vehicle purchases and $4,000 for a used EV, a move which could hurt several major US automakers that are already reeling from the administration’s tariffs on automobiles.

General Motors pumped billions into domestic EV production in the last year, which has included a $900m investment to retrofit an existing plant to build electric vehicles in Michigan and alongside Samsung, the carmaker invested $3.5bn in EV battery manufacturing in the US.

In February, Ford CEO Jim Farley said that revoking the EV tax credit could put factory jobs on the chopping block. The carmaker invested in three EV battery plants in Michigan, Kentucky and Tennessee. The federal government under the administration of former President Joe Biden paid out more than $2bn in EV tax credits in 2024.

The proposed legislation would also give the Trump administration authority to revoke the tax exempt status of nonprofit organisations that it deems as a “terrorist supporting organisation”. It would give the secretary of the treasury the ability to accuse any nonprofit of supporting “terrorism”, revoke their tax exempt status without allowing them due process to prove otherwise, which has raised serious concerns amongst critics.

“This measure’s real intent lurks behind its hyperbolic and unsubstantiated anti-terrorist rhetoric: It would allow the Treasury Department to explicitly target, harass and investigate thousands of U.S. organizations that make up civil society, including nonprofit newsrooms,” Jenna Ruddock, advocacy director of Free Press Action, said in a statement.

“The bill’s language lacks any meaningful safeguards against abuse. Instead it puts the burden of proof on organizations rather than on the government. It’s not hard to imagine how the Trump administration would use it to exact revenge on groups that have raised questions about or simply angered the president and other officials in his orbit.”

The bill would introduce new taxes on colleges, including a varying tax rate based on the size of a university’s endowment per student with the highest at 14 percent for universities with a per student endowment of more than $1.25m but less than $2m and 21 percent for those of $2m or more.

This comes amid the Trump administration’s increased tensions with higher education. In the last week, the Trump administration pulled $450m in grants to Harvard on top of the $2.2bn it pulled in April — a move which will hinder research into cancer and heart disease, among other areas. Harvard has an endowment of $53.2bn, making it one of the richest schools in the country.

The legislation would also increase funding for a border wall between the US and Mexico, which the administration has argued will help curb undocumented immigration. However, there is no evidence that such a wall has deterred border crossings.

A 2018 analysis from Stanford University found that a border wall would only curb migration by 0.6 percent, yet the bill would give more than $50bn to finish the border wall and maritime crossings. The bill would also provide $45bn for building and maintaining detention facilities and another $14bn for transport.