Business

In what seems like the blink of an eye, China has gone from being up to five years behind the United States in top-tier artificial intelligence (AI) to lagging by just a few months. While US players, including Anthropic's Claude and OpenAI's ChatGPT, have spent hundreds of billions of dollars to push the frontier of AI, China has pursued a very different path. Faced with US curbs on high-end chips that help AI to do its most advanced thinking, Chinese tech firms have prioritized dozens of open-source AI models built on "good enough" technology. These platforms, including DeepSeek, Alibaba's Qwen and Xiaomi's MiMo, are now widely deployed across Chinese businesses, government services and consumer devices. Chinese AI models narrow gap with US leaders In the latest sign of the gap closi...

Why are oil prices rising again? Around two weeks after the resumption of US and Iranian attacks in the Gulf region, the price of Brent crude broke above $100 a barrel (€87.8) on July 24. This marked a nearly one-third increase from last month's low but is still below the $126 peak reached in April at the height of the conflict. The latest oil price surge was fueled by a major escalation in the Red Sea that could further set back efforts to export Gulf oil through alternative southern routes as the Strait of Hormuz remains effectively shut. The Iran-backed Houthi rebels based in Yemen entered the conflict on Wednesday (July 22), claiming responsibility for attacks on two Saudi oil tankers, and have threatened to further disrupt commercial traffic in the Red Sea. The Red Sea route had ...

The European Central Bank (ECB) said on Thursday it would hold its interest rates steady for the time being, but indicated it was closely monitoring the economic fallout of the Iran war.  The ECB had raised rates last month and hinted at more to come, but a string of relatively calm data in the weeks that followed made a follow-up step seem less urgent.  Still, Thursday's decision came as oil futures prices once again briefly topped $100 per barrel and as more intense exchanges of fire between the US and Iran have again become a daily occurrence. What did the ECB say about its rates decision?  The Frankfurt-based central bank for countries in the eurozone single currency area said that the outlook for energy prices was currently in line with projections from June, if well above the lev...

Which countries will face Trump's new tariffs? The Trump administration on Thursday announced new tariffs on 60 economies, including the European Union, citing their handling of imported goods made with forced labor. In a statement, the United States Trade Representative (USTR) said it had investigated major trading partners and found that they failed to impose and effectively enforce a prohibition on the importation of goods made through modern slavery. The tariffs cover more than 99% of US imports and replace a temporary 10% global tariff that was due to expire. A 10% tariff will apply to countries like Argentina, India, Pakistan and the UK that have adopted or committed to forced-labor import restrictions.   Trump hits Canada with 50% tariffs in major trade escalationTo view this v...

The youth job crisis that first became obvious in China points to major economic and social problems that governments and businesses need to address. Last year, unemployment, weak job prospects and a general lack of economic opportunities drove young people onto the streets in Kenya, Peru, Nepal, Indonesia and the Philippines. This year, concerns about youth unemployment have added fuel to protests in South Africa and Morocco. In India, they helped give rise to the Cockroach Janta Party, a movement that started as a satirical social media project but quickly gained national attention. China's youth unemployment problem Youth unemployment refers to the share of young people, typically aged 15 to 24, who are actively seeking work but cannot find it. The rate is usually higher than overal...

Oil and gas exports from the Gulf face renewed disruption as fighting between the US and Iran intensifies. For both countries control of the Strait of Hormuz is key. Over the past months, Iran has shown that it can control or at least disrupt the strait, says Guntram Wolff, a senior fellow at Bruegel, a think tank, and a professor of economics at the Free University in Brussels. "Several months of bombing campaigns have not undone Iran's ability to control the Strait of Hormuz," said Wolff, leaving the US with the challenge of trying to get the upper hand. This week, traffic in the strait has again nearly stopped as Iran attacked tankers and fired drones and missiles at military facilities in Bahrain, Kuwait and Jordan. The US launched more strikes on Iran and restarted a naval blockad...

In July, hundreds of firefighters are battling flames in Spain, Portugal and France. A map from NASA's Fire Information for Resource Management System (FIRMS) shows more wildfires: Red dots are scattered all over the world — essentially only the white areas of Greenland and Antarctica are excluded. Each of the dots marks a satellite-detected hotspot or active fire. NASA's Fire Information for Resource Management System shows red dots that indicate a satellite-detected hotspot or active fireImage: NASA FIRMS With heat waves and droughts, wildfires are occurring more frequently worldwide. They often starts quite unspectacularly — a discarded cigarette or a spark blown away from a campfire is enough to set dry leaves and small branches on fire. After that, quick action is important to ext...

Oil and gas exports from the Gulf face renewed disruption as fighting between the US and Iran intensifies. For both countries control of the Strait of Hormuz is key. Over the past months, Iran has shown that it can control or at least disrupt the strait, says Guntram Wolff, a senior fellow at Bruegel, a think tank, and a professor of economics at the Free University in Brussels. "Several months of bombing campaigns have not undone Iran's ability to control the Strait of Hormuz," said Wolff, leaving the US with the challenge of trying to get the upper hand. This week, traffic in the strait has again nearly stopped as Iran attacked tankers and fired drones and missiles at military facilities in Bahrain, Kuwait and Jordan. The US launched more strikes on Iran and restarted a naval blockad...

Since the pandemic, Indonesia has delivered steady annual growth of 5%. Then, Iran closed the Strait of Hormuz. As Southeast Asia's largest economy still heavily relies on imported fuel despite having its own oil reserves, the Indonesian government took an immediate hit. The cost of fuel subsidies, for which ministers had budgeted around $22 billion (€19.2 billion), rocketed. Reuters news agency reported in March that policymakers would need an extra $6 billion or more to keep prices stable. The national currency, the rupiah, plunged 8% to record lows near 18,000 to the dollar. The Jakarta stock market, which had been heading for a record above 9,000, fell by a third, becoming the worst-performing stock market this year. Foreign investors pulled billions out of Indonesian assets. The F...

The US Trade Representative's office (USTR) has said it will impose a 25% tariff on most imports from Brazil. The charges are set to come into effect in a week, on July 22.  The trade barriers are the first of their kind since the Supreme Court annulled the cornerstone of US President Donald Trump's prior sweeping tariff regime, famously announced on what Trump dubbed "Liberation Day" in 2025.  It also comes amid friction between the Trump administration and Brazil's President Luiz Inacio "Lula" da Silva, not least because of Trump's ties to Brazil's former right-wing populist president Jair Bolsonaro and his family. Brazil votes in general elections this October. What US measures are planned against Brazil?  Following an investigation, the USTR argued that Brazil's trade practices on ...