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Economy
Hard Numbers: Croatia’s populist prez, Sweden sails forth, Mayotte hunkers down again, Hindus commence world’s largest religious ceremony
Re-elected Croatian President Zoran Milanovic with wife Sanja Music Milanovic celebrate after winning Croatia's presidential election ON January 12, 2025 in Zagreb, Croatia.
74: Populist Croatian President Zoran Milanovic won an impressive landslide reelection on Sunday, taking 74% of the vote. His office is largely ceremonial, but the overwhelming margin of victory should send a message to Prime Minister Andrej Plenkovic – in power since 2016 – about the changing mood of the country.
3: Sweden, NATO’s newest member state, announced its Navy would contribute up to three warships to the alliance’s efforts to secure the Baltic Sea from Russia. The Swedish coast guard will also contribute a further four ships, with seven on standby. With increased resources, NATO aims to prevent possible provocations like severing undersea communication cables, 10 of which have been damaged since 2023.
1: Nearly one month to the day since the French Indian Ocean territory of Mayotte was devastated by Cyclone Chido, Tropical Storm Dikeledi brought more inundating rains and strong winds to the island. Over 200 people were still missing from the first storm, which killed at least 39 and injured over 5,000 while destroying entire neighborhoods, and the French government has deployed over 4,000 emergency personnel and security forces to the island.
400 million: At least 400 million pilgrims are expected to kick off the Maha Kumbh Mela festival on Monday in the Indian city of Prayagraj, where pilgrims will immerse themselves at the confluence of the Ganga and Yamuna Rivers over six weeks. Hindus believe the mystical Saraswati River will intermingle in the mundane waters and cleanse worshippers’ souls — but the government faces a big logistical challenge: This will be the world’s largest-ever religious gathering, and officials have assembled 150,000 tents, 3,000 kitchens, 145,000 lavatories, all served by 450,000 new electric connections, protected by 40,000 policemen, and transported by 98 special trains making over 3,300 trips.FILE PHOTO: Children eat bread on a street near a flag adopted by the new Syrian rulers, after the ousting of Syria's Bashar al-Assad, in Damascus, Syria, December 24, 2024.
Diplomats and foreign ministers from17 Arab and EU states convened in Riyadh, Saudi Arabia, on Sunday to discuss the lifting of economic sanctions on Syria, originally imposed during the rule of ousted president Bashar al-Assad. Removing the sanctionsis key to reconstruction efforts for Damascus but will hinge on the new government’s ability to guarantee human rights in the country.
After the meeting, German Foreign Minister Annalena Baerbockadvocated maintaining sanctions against Assad’s allies but alleviating restrictions that affect the general population. Baerbock alsopledged an additional $51.2 million in aid for essential services. EU foreign policy chief Kaja Kallas also announceda meeting of foreign ministers in Brussels on Jan. 27 to discuss further relief measures.
As for the US, while it has not lifted sanctions, last week it issueda six-month exemption for certain transactions with Syrian governing institutions to expedite humanitarian assistance.
We’re watching whether those measures will be extended under the new administration of US President-elect Donald Trump, who in December said that Syria’s change of regime is “not our fight.” Trump also remarked that“Turkey is going to hold the key to Syria” – something thatSaudi Arabia may take issue with as it positions itself as a key regional player in Syria’s rebuilding.
LOS ANGELES, CA - JANUARY 07: A wind-driven fire burns on January 7, 2025 in Los Angeles, California. Santa Ana wind is fueling wildfires in Los Angeles that have destroyed homes and forced the evacuation of thousands of people.
As California’s most destructive wildfires continue to blaze across Los Angeles County, having killed 16 and displaced more than 166,000 residents, emergency response effortshave become politicized, both at home and abroad.
Actor James Woods, Tesla CEO Elon Musk, and right-wing political commentators have accused Los Angeles Fire Department Chief Kristin Crowley of prioritizing diversity, equity, and inclusion initiatives over firefighting essentials. In response, Crowley citeda $17.4 million budget reduction to the LAFD in 2025, affecting overtime staffing and essential programs. Los Angeles Fire Commission President Genethia Hudley-Hayes defended Crowley, arguing that the scale of the fires, high winds, and an empty reservoir that was under repair would have overwhelmed even a fully funded department. Meanwhile, California Gov. Gavin Newsom has called for an independent investigation into water supply failures.
While domestic politics is bitterly divided, on the international front the story is one of unity. Mexico and Canadahave sent firefighting equipment, including water bombers and personnel, despite President-elect Donald Trump’s promises of punitive tariffs against both countries.
Will the goodwill effort change hearts and minds in the Trump administration? Alberta Premier Danielle Smithposted to X that “Good neighbours are always there for each other in times of need, and we will assist our American friends in any way they need during this crisis.” She laterposted photos of herself meeting with Trump at Mar-A-Lago at the weekend, along with Canadian businessman Kevin O’Leary.
A person holds a placard on the day justices hear oral arguments in a bid by TikTok and its China-based parent company, ByteDance, to block a law intended to force the sale of the short-video app by Jan. 19 or face a ban on national security grounds, outside the U.S. Supreme Court, in Washington, U.S., January 10, 2025.
On Friday, the Supreme Court appeared poised to uphold the TikTok ban, largely dismissing the app’s argument that it should be able to exist in the US under the First Amendment’s free speech protections and favoring the government's concerns that it poses a national security threat.
Put simply, they see it as an issue of national security, not free speech.
“Congress doesn’t care about what’s on TikTok. They don’t care about the expression,” claimed Chief Justice John Roberts during questioning, clarifying “That’s shown by the remedy. They’re not saying TikTok has to stop. They’re saying the Chinese have to stop controlling TikTok.”
What’s the threat? US lawmakers are concerned about the Chinese government having access to enormous amounts of Americans’ data – and fear the app could be used to spread Beijing’s agenda. Facebook and other American social media platforms are notably banned in China – with Beijing taking a similar view to that of the US government. The justices seemed worried that TikTok could be used for espionage or even blackmail.
What does upholding the ban mean for the app? If the court rules against the app, it would mean that Bytedance, Tiktok’s parent company, must divest from the company before Jan. 19 or face a national ban on national security grounds. The app would no longer be available on the Google or Apple app stores.
But it won’t disappear from your phone if you already have it downloaded. The ban would only affect future downloads. Without the ability to update the app, however, it will likely degrade, and TikTok may block US users before that happens to avoid further legal issues. Incoming President Donald Trump has pledged to save the app, but there is no clear legal method to do so.
The decision could be an early reflection of one of this year’s Top Risks 2025 from our parent company, Eurasia Group: the breakdown of the US-China relationship. The world’s biggest superpowers increasingly distrust one another, and Trump’s return to office is likely to exacerbate the decoupling — increasing the risk of instability and crisis.
The US government currently raises about $5 trillion a year in revenue. That plus another $2 trillion in debt are what make up the nearly $7 trillion that Uncle Sam spends annually.
But where does that revenue actually come from? Here’s a look at the breakdown.
Bear in mind, as you look at this, that incoming US president Donald Trump has suggested he wants to replace the income tax with his new tariffs. Would that be possible?
It’s true that until the income tax was implemented in the early 20th century, tariffs provided the lion’s share of US government revenue. But that was a time before social security, medicare, or a modern military when the government spent barely $500,000 a year.
With Trump’s tariffs expected to raise, at best, about $300 billion per year, using them to replace income taxes would entail an unfathomably radical shrinking of the US federal government.
Hard Numbers: Deadly Tibet earthquake, Laken Riley bill passed, Another BRICS in the wall, Remembering Charlie Hebdo massacre
Rescue teams work amid rubble in the aftermath of an earthquake in a location given as Shigatse City, Tibet Autonomous Region, China, January 7, 2025, in this screengrab obtained from a handout video.
126: At least 126 people have died following a major 7.1-magnitude earthquake that struck Tibet and parts of Nepal on Tuesday. The exact death toll is still unknown as the rough terrain in the world’s highest mountains makes it difficult to access affected communities. Dozens more people are believed to be trapped in rubble, and China’s government has deployed over 3,000 rescue workers to save as many as possible.
264-159: The US House of Representatives on Tuesday passed the so-called Laken Riley Act mandating the detention of undocumented immigrants accused of certain minor crimes by a margin of 264-159. It had bipartisan support, with 48 Democrats voting for the bill, as the party faces pressure to toughen up on immigration.
10: Indonesia became the 10th member of the BRICS multilateral organization on Tuesday, as new President Prabowo Subianto attempts to position his country as one of the leading emerging economies. He’ll need to watch his step, however, as incoming US President Donald Trump has threatened 100% tariffs on countries that attempt to displace the US dollar, which BRICS has long set as one of its aims.
10: France marked the 10-year anniversary of the brutal terrorist massacre of the staff of Charlie Hebdo magazine by two al-Qaida-linked gunmen on Tuesday. The terrorists killed 12 people in retaliation for the magazine publishing cartoons depicting the Islamic prophet Mohammed, prompting a massive outpouring of support for the slain staff, whom many French and European voters see as having died in the name of freedom of speech and thought.Hard Numbers: Exaggerated claims, Cash grab, Microsoft’s building plans, Chip stocks soar
In this photo illustration, the US Federal Trade Comission logo is displayed on a smartphone with stock market percentages in the background.
1 million: Software company accessiBe has been charged $1 million by the Federal Trade Commission to settle charges that it lied about its AI tool being able to make websites accessible for people with disabilities. “Overstating a product’s AI or other capabilities without adequate evidence is deceptive,” said FTC consumer protection chief Samuel Levine.
56 billion: Generative AI companies raised $56 billion across 885 separate deals in 2024, according to new data from the financial website PitchBook. That’s up nearly 200% from 2023’s $29.1 billion total. Only $6.2 billion went to non-US firms, which means Silicon Valley is still king in the world of AI.
80 billion: To support its AI ambitions, Microsoft plans to spend $80 billion to construct data center infrastructure in 2025. In a blog post published on Friday, the company specified that more than half of that will go toward facilities in the US, “reflecting our commitment to this country and our confidence in the American economy.”
4: Microsoft’s announcement sent chip stocks flying Monday, with the Philadelphia Semiconductor Index rising 4% on the news. The biggest gainers included computer memory company Micron and equipment manufacturer Applied Materials. Contract chipmaker Foxconn also posted positive earnings to start the week, boosting high-profile customer Nvidia 5% in the process.