Flagship

Trade uncertainty slows investments

Uncertainty driven by US trade policy is paralyzing investors and executives, several prominent business leaders said. Without knowing US President Donald Trump’s tariff endgame, “how do you make decisions?” the CEO of investment giant Carlyle Group said at Semafor’s World Economy Summit Thursday. The uncertainty is functioning as a kind of tax on action for companies globally, Boston Consulting Group’s Rich Lesser added: “It’s not just a US CEO thing.” That anxiety was reflected in the US Federal Reserve’s Beige Book summarizing economic conditions based on interviews with businesses. The word “uncertainty” appeared 80 times, more than quadruple the number from the early days of the pandemic.

US-China ties ‘not fixable’

A return to the pre-trade war status quo between the US and China is “inconceivable” under President Donald Trump, a top geopolitical analyst said. Washington’s efforts to make trade deals with other countries and isolate China have rankled Beijing and made the relationship “not fixable,” Eurasia Group’s Ian Bremmer told Semafor’s World Economy Summit. His comments came as the US and China sent contradictory signals over the status of trade talks — Beijing said negotiations weren’t happening, after Trump said the countries were “actively” talking. The White House has softened its stance on Beijing in recent days, strengthening Chinese leaders’ belief that Trump will eventually back down, The Wall Street Journal reported.

Consumer spending still strong, CEOs say

US consumers have proven relatively resilient in the face of global trade disruptions, the heads of several financial firms said. The CEO of PayPal said at Semafor’s World Economy Summit that spending has been “healthy,” Mastercard’s boss said consumers are “empowered” and “still want to make that trip,” while Bank of America’s head told investors last week that consumers “are still solidly in the game.” But some credit card companies are nevertheless preparing for an economic downturn as analysts warn that Americans are making “big ticket” purchases early, to get ahead of possible tariff impacts: United Airlines’ CEO said bookings for big summer vacations remain strong, though “leisure bookings for the next two weeks” are weaker.

Germany cuts GDP forecast to 0%

Germany no longer expects its economy to grow this year as US President Donald Trump’s tariffs bite. Berlin had previously expected a mere 0.3% GDP growth in 2025, but new forecasts project three straight years without growth. The scaleback marks a swift reversal in spirits for Berlin, which just weeks ago unlocked hundreds of billions of euros for defense and infrastructure investments, sparking hopes for an economic rebound. But Germany’s export-oriented economy leaves it vulnerable to major trade disruptions. The bleak outlook comes as the European Union prepares for trade talks with the White House: Germany’s finance minister said at Semafor’s World Economy Summit that the weak economic data only ups the urgency for a deal.

Trump renews Harvard attacks

The leader of Harvard University’s top governing board dismissed the idea that US President Donald Trump’s demands of the school would help fight antisemitism. Harvard has sued the Trump administration over its threats to cut the university’s funding: The president has repeatedly criticized the nation’s oldest and wealthiest university — on Thursday once again calling it “Anti-Semitic” — which experts say is part of a wider effort to assert greater control over US higher education. But Penny Pritzker, the former US Commerce secretary, said at Semafor’s World Economy Summit that while some changes were needed at Harvard, “attacking research, attacking who you’re going to hire on campus, attacking lifesaving medical therapies — I don’t see how that’s related to fighting antisemitism.”

Trump calls for Russia to ‘STOP!’

US President Donald Trump insisted he was pressuring Russia to agree to a ceasefire in Ukraine after Moscow killed at least a dozen people in an aerial attack on Kyiv. The strikes drew international condemnation and came amid reports Washington was pressing Ukraine to agree to a deal in which it would give up its claim to Crimea, annexed by Russia. “We’re putting a lot of pressure on Russia,” Trump told reporters, after posting on Truth Social: “Vladimir, STOP!” Still, analysts said the US has made greater demands of Ukraine: “The peace plan … is one-sided,” Sky News’ international affairs editor wrote, “and to Ukraine and its European partners, it is a surrender plan.”

India-Pakistan ties plummet

India-Pakistan tensions ratcheted up following a brutal attack on tourists in Kashmir, with each side imposing tough restrictions on the other. New Delhi blames Islamabad for the attack, but Pakistan says it was not responsible: The country’s biggest English-language newspaper urged its neighbor to “look inwards and review its brutal rule” in the disputed territory. Islamabad closed its airspace to Indian flights, cancelled visas to Indian nationals, and expelled some diplomats after New Delhi imposed similar measures, even suspending a six-decade-old water-sharing agreement. “Action there will be, even if there is no ‘solution,’” a prominent Indian columnist wrote. “The perpetrators of Pahalgam will be brought to justice. But a sense of foreboding … will remain.”

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UK eyes solar geoengineering

British scientists will soon get a green light to begin research into solar geoengineering, dimming the sun to slow global warming. The UK government’s Advanced Research and Invention Agency, tasked with exploring unusual, “edge of the possible” ideas, has set aside £50 million ($66 million) for the work, which will explore techniques such as spraying tiny particles into the atmosphere or whitening clouds so they reflect more sunlight. The proposals are controversial, The Times of London noted: Critics say they risk unintended consequences, such as disrupting weather patterns, and are a distraction from reducing emissions. But climate models suggest keeping warming below 1.5°C — the target of the Paris Agreement — is unlikely through emissions reduction alone.

Google’s AI believes made-up proverbs

Google’s artificial intelligence-powered summaries hallucinate meanings for made-up sayings. Flagship asked it for the meaning of “proverbs” such as “three fish are worse than a golden horse,” which it promptly said was taken from Shakespeare’s Henry IV, Part 1; others have tried “You can’t lick a badger twice” and “a loose dog won’t surf,” for which it generated confident but entirely made-up meanings. Generative AI fundamentally works by predicting likely next words, and can be led astray by false premises: WIRED called it a “fundamental flaw.” Other models do not have the same bug, though, and Google will likely fix this foible within days. As has been the case with AI, it will only get more powerful from here.