Business

Jan. 30 (UPI) — President Donald Trump on Thursday night said he was decertifying all Canada-made aircraft and threatened a 50% tariff on all planes sold to the United States, further deepening the fissure in U.S.-Canada relations created under Trump’s second term in office.

Trump made the threat in a post on his Truth Social platform, stating the threat was in response to Canada’s alleged refusal to certify several Gulfstream jet series.

“We are hereby decertifying their Bombardier Global Expresses and all Aircraft made in Canada, until such time as Gulfstream, a Great American Company, is fully certified, as it should have been many years ago,” Trump said.

“Further, Canada is effectively prohibiting the sale of Gulfstream products in Canada through this very same certification process. If, for any reason, this situation is not immediately corrected, I am going to charge Canada a 50% Tariff on any and all Aircraft sold in the United States of America.”

By law, aircraft certification, which includes safety and airworthiness determinations, is governed by the Federal Aviation Administration, and it was not clear if the president has the power to decertify already approved aircraft by presidential action.

UPI contacted the FAA for clarification and was directed to speak with the White House, which has yet to respond to questions about decertification and its process.

Bombardier, the Montreal-based aerospace company, said it has “taken note” of Trump’s social media post and is in contact with the Canadian government.

“Our aircraft, facilities and technicians are fully certified to FAA standards and renowned around the world,” Bombardier said in a statement.

Bombardier said it employs more than 3,000 people across nine facilities in the United States and creates “thousands of jobs” there through its 2,800 suppliers. It said it is also “actively investing” in expanding its U.S. operations.

Relations between the United States and Canada have precipitously dropped since Trump returned to the White House in January 2025.

Trump’s threats to annex Canada, impose unilateral tariffs and take Greenland — territory of a NATO ally — by force if needed has prompted Ottawa to pivot toward Europe and Asia.

The announcement comes on the heels of reports stating that the Trump administration has been in talks with the Alberta Prosperity Project separatist organization.

According to The Financial Times, the first to report on the development Thursday, separatist leaders in the western Canadian province met with U.S. officials in Washington three times since spring.

The APP has said that its leadership has taken “several strategic trips” to Washington, D.C., to foster discussions on Alberta’s potential as an independent nation.

Jeffry Rath, a separatist supporter who participated in the talks, said U.S. officials are “very enthusiastic about Alberta becoming an independent country,” according to the APP.

The meetings were swiftly and widely condemned in Canada.

“I expect the U.S. administration to respect Canadian sovereignty,” Prime Minister Mark Carney of Canada told reporters on Thursday.

“I’m always clear in my conversations with President Trump to that effect, and then move on to what we can do together.”

Premier David Eby of British Columbia called the meetings “treasonous activity.”

“I’m not talking about debates that we have inside the country among Canadians, about how we order ourselves, our relationships between the federal government, the provinces, referenda that might be held. I’m talking about crossing the border, soliciting the assistance of a foreign government to break up this country,” Eby said during the same press conference.

“And I don’t think we should stand for it.”

Jan. 29 (UPI) — The National Highway Transportation and Safety Administration is investigating an incident in which an autonomous Waymo taxi struck and injured a child last week in Santa Monica, Calif.

The child was injured Friday after they ran into the street and was struck by an autonomous Waymo taxi about two blocks from an elementary school during its morning drop-off hours, the NHTSA’s Office of Defects said.

“The child ran across the street from behind a double-parked SUV towards the school and was struck by the Waymo AV,” NHTSA officials said in a document on the matter.

The child stood up after being struck and walked to the sidewalk as Waymo officials contacted local authorities to report the incident. The extent of the child’s injuries was not reported.

The autonomous vehicle remained in the spot where the incident occurred and stayed there until police cleared it to leave.

The agency said its Defects Investigation unit will determine if the driverless Waymo taxi “exercised appropriate caution given, among other things, its proximity to the elementary school during drop-off hours and the presence of young pedestrians and other potential vulnerable road users.”

Waymo officials said Wednesday they were committed to improving road safety for passengers and everyone who shares the road. Transparency regarding crashes and other incidents is a component of that commitment to safety, they said.

“Following the event, we voluntarily contacted the National Highway Traffic Safety Administration (NHTSA) that same day. NHTSA has indicated to us that they intend to open an investigation into this incident, and we will cooperate fully with them throughout the process.”

Waymo officials said the unidentified child “suddenly entered the roadway from behind a tall SUV, moving directly into our vehicle’s path.”.

“Our technology immediately detected the individual as soon as they began to emerge from behind the stopped vehicle,” Waymo officials said.

“The Waymo driver braked hard, reducing speed from approximately 17 mph to under 6 mph before contact was made.”

While the autonomous taxi struck the child, Waymo officials said a similar vehicle driven by a human likely would have struck the child at about 14 mph instead of less than 6 mph.

“This event demonstrates the critical value of our safety systems,” Waymo said. “We remain committed to improving road safety where we operate as we continue on our mission to be the world’s most trusted driver.”

Friday’s incident was the second for Waymo during the past week in California.

Another of its vehicles on Sunday struck several parked vehicles while traveling on a one-way street near Dodger Stadium in Los Angeles.

That vehicle was being operated in manual mode by a driver when the crash occurred, and no injuries were reported.

Tech firm Alphabet owns Waymo, as well as Google and other subsidiary companies.

Jan. 29 (UPI) — Chinese e-commerce platform Temu has taken its dispute with Mercado Libre to federal court after Argentina’s largest online marketplace accused it of unfair competition.

Mercado Libre filed a complaint in August 2025 with Argentina’s Secretariat of Industry and Commerce, alleging Temu violated Commercial Fairness Decree No. 274/2019, which governs truthful advertising and fair competition in the country.

After reviewing the filing, the National Directorate of Policies for the Development of the Domestic Market opened an investigation and ordered Temu to suspend digital advertising and promotions deemed misleading.

In response, Temu turned to federal court Wednesday to try to halt the administrative measure and maintain its operations in Argentina, Argentine daily La Nacion reported.

According to the complaint, the company founded by Argentine entrepreneur Marcos Galperin challenged Temu’s commercial strategy, which Mercado Libre said relies on extreme discounts and promotions that are not met under the conditions advertised, local outlet Ambito reported.

Among the main allegations are discounts ranging from 80% to 100% that apply only if users meet additional requirements, such as minimum purchase amounts, buying other products or completing purchases within the app.

Mercado Libre also accused Temu of what it described as “misleading gamification,” using games and interactive features that promise prizes or free products, but in practice impose increasingly complex and unclear conditions.

The dispute is now under the jurisdiction of the National Chamber of Appeals in Civil and Commercial Federal Matters, which must determine the next steps in the case, Infobae reported.

Temu rejected the allegations and said its business model is transparent and that prices, discounts and conditions are clearly disclosed to users, which the company contended rules out consumer deception.

Mercado Libre said the complaint is not related to Argentina’s opening of imports, a policy it supports. The company noted that it also offers imported goods through its international purchases category and competes in what it described as a dynamic and open market with both local and global players.

The legal battle unfolds amid rapid growth in cross-border e-commerce in Argentina. Data cited in the case show door-to-door purchases through platforms such as Temu and Shein posted increases close to 300% year over year, driven by low prices, direct shipping and intensive social media marketing.

The expansion of the Chinese platforms has revived debate over the regulatory framework for digital commerce and competition between domestic and foreign companies, Perfil reported.

Mercado Libre executives reiterated the need for rules that are “the same for everyone,” as the case becomes a key recent precedent on competition and advertising in Argentina’s e-commerce sector.

BUENOS AIRES, Jan. 29 (UPI) — Uruguay has raised warning signals in its economic policy after its currency appreciated the most in the world against the dollar this week — a situation the government views as a risk to export competitiveness and the pace of economic growth.

In recent days, the Uruguayan peso strengthened more than comparable currencies and moved to the top of global foreign exchange performance. As a result, the dollar fell 3.1% in the local market, a deeper decline than those recorded in Brazil, Chile or Colombia.

The scenario set off alarms within the economic team. To counter the dollar’s weakness, the Central Bank of Uruguay announced a cut to its benchmark interest rate to 6.5% to discourage financial capital inflows and ease pressure on the local currency.

Along the same lines, the Economy Ministry confirmed forward dollar purchases and coordination with state-owned companies to increase demand for the U.S. currency. Those steps are complemented by measures aimed at reducing domestic costs and supporting economic activity, investment and employment, as concerns begin to mount in the productive sector.

Uruguayan economist Luciano Magnífico, of the Catholic University of Uruguay, said the dollar’s behavior in the country cannot be analyzed in isolation.

“The evolution of the dollar in Uruguay has closely tracked what has happened internationally, and particularly its performance against other regional currencies,” he told UPI.

According to Magnífico, the recent weakness of the U.S. currency largely reflects external factors.

“This weakening was closely linked to economic policies promoted during the first year of the Trump administration, especially on trade. That generated significant volatility in financial variables, and Uruguay was not immune to that dynamic,” he said.

The problem, he said, is that Uruguay’s economy already was expensive in terms of the dollar before this episode.

“According to the main indicators, Uruguay had been carrying an overvaluation for years, and this new drop in the dollar further aggravated that situation,” he said.

That combination hits exporters hardest because they are paid in dollars while many of their costs are in pesos. “When the exchange rate falls, the margin between income and expenses shrinks,” the economist explained. In some cases, that gap can become critical for business continuity.

Gonzalo Oleggini, a Uruguayan foreign trade consultant, focused on companies’ day-to-day operations.

“In Uruguay, as in many countries, foreign trade is conducted in dollars. An exporting industry, such as glass manufacturing, collects in dollars, but pays most of its costs in pesos,” he told UPI.

That mismatch becomes more visible when the dollar loses value.

“A year ago, each dollar brought in 40 pesos. A few days ago, it was 36. That means that for the same sale, a company receives less money to cover virtually the same costs, or even higher ones, because there is inflation and wages are rising,” he said.

Oleggini stressed that the impact is greater in labor-intensive sectors.

“Wages and social contributions weigh heavily in the cost structure. Since Uruguay does not have a highly automated industry, the blow remains strong,” he said.

As a result, much of the productive sector is affected.

“The meatpacking industry, plastics, services, logistics, tourism. The country becomes more expensive in dollar terms, making it harder to sell goods and services abroad,” he said. “Ultimately, the entire export sector, both goods and services, is the most affected.”

The concern is also explained by the weight of foreign trade in the economy.

Uruguay generates about $75 billion a year in economic output, and close to $24 billion of that comes from foreign trade in goods and services.

“It is one of the central pillars of the country’s production,” the consultant said.

One of the sectors generating the strongest concern is agriculture.

“That the dollar keeps falling and has been clearly below 40 pesos for several days is quite frustrating for us,” Rafael Ferber, president of the Rural Association of Uruguay, told local newspaper El Observador.

“We feel that macroeconomic measures continue to be taken in the wrong direction,” he said.

Ferber warned that the combination of factors pushing the exchange rate lower has made the situation “absolutely critical” for producers and exporters.

“Uruguay is basically an exporting country, something that is often poorly measured. It exports close to 70% of what it produces. Therefore, it depends on foreign currency much more than other countries,” he said.

Carmen Porteiro, president of the Uruguayan Exporters Union, said recent government decisions are moving in the right direction, although she noted the sector has been warning since last year about the impact of peso appreciation on competitiveness.

That loss of margins, she said, translates into lower investment, workforce adjustments and, in extreme cases, business closures, with direct effects on employment and future growth.

Oleggini said it is difficult to act against a global trend.

“The ability of a small economy like Uruguay’s to influence this is very limited,” he said.

“You can try to move the exchange rate a few pesos, as happened when it fell from 40 to 36 and then rose to 38, but there are no real chances of a strong peso depreciation, which is what exporters are seeking,” he said.

“From the United States, there is a positive view of a weaker dollar as part of its economic strategy. That makes it very difficult to think of a reversal,” he added.

The main tool applied in Uruguay has been the interest rate cut.

“The idea is to reduce incentives to place money and push those pesos into the market, which could generate a slight depreciation of the exchange rate,” Oleggini said. “It is the strongest tool being used and the one that may have some effect, although always limited.”

The gap with exporters’ demands remains wide.

“Many talk about a dollar at 50 pesos, and today we are at 36 or 38. Even bringing it to 40 would already be a challenge,” he said. “Reaching that level in an economy like Uruguay’s, with a weak dollar globally, is today almost a utopia.”

SEOUL, Jan. 29 (UPI) — South Korea’s two semiconductor giants, Samsung Electronics and SK hynix, posted record performances last year, driven by the rising demand for memory chips amid the AI boom.

Samsung Electronics announced Thursday that its fourth-quarter operating profit more than doubled year-on-year to $14 billion on sales of $65.6 billion, up 23.8%. Both were all-time highs.

For the full year 2025, revenue rose 10.9% from a year earlier to $233.4 billion, while operating income climbed 33.2% to $30.5 billion.

The strong showing came a day after SK hynix released its strong earnings.

In the final quarter of 2025, SK hynix posted $23 billion in sales, up 66% from a year before, for an operating profit of $13.4 billion, a 137% surge.

For the full year, its turnover and operating income increased 47% and 101% to $68 billion and $33 billion, respectively.

The 2026 outlook for both companies remains bright amid continued expansion in the AI industry.

“Looking ahead to Q1 2026, the DS Division expects AI and server demand to continue increasing, leading to more opportunities for structural growth. In response, the division will continue to focus on profitability via a strong emphasis on high-performance products,” Samsung said in a statement.

“In 2026 as a whole, the DS Division aims to lead the AI era with product competitiveness amid a rapidly growing demand environment, particularly by expanding the sales of AI-related offerings in both DRAM and NAND,” it added.

Short for device solutions, Samsung’s DS Division deals with semiconductors and components. By contrast, its device experience part handles mobile phones, home appliances and network equipment.

“As the AI market shifts from training to inference while demand for distributed architectures expands, the role of memory will become increasingly critical,” SK hynix said in a statement.

“Accordingly, not only demand for high-performance memory such as HBM is expected to grow continuously, but also for overall memory products including server DRAM and NAND as well,” it said.

Semiconductor super-cycle and DRAM beggars

In line with the upbeat prospect, brokerage houses project that Samsung’s bottom line will near $90 billion this year, while that of SK hynix will surpass $70 billion.

SK Securities even forecasts that Samsung and SK hynix each will rack up more than $100 billion in profits this year.

Soaring semiconductor prices and outstanding earnings of chipmakers have fueled talk of a “semiconductor super-cycle.”

Business tracker TrendForce predicts that DRAM prices will rocket more than 55% in the first three months of 2026 compared to the previous quarter. Those of NAND flash are also expected to climb over 30% over the same period.

SK Securities analyst Han Dong-hee also said that supply shortages are spreading across all product segments, including advanced high-bandwidth memory, which is essential for AI applications, as well as commodity DRAM used in mobile devices or computers.

“For customers, the top priority has become securing stable volumes through long-term agreements, while suppliers are expected to pursue profit maximization and stable growth by optimizing the share of long-term contracts,” Han said in a report.

Sungkyunkwan University semiconductor professor Choi Byoung-deog said that there are “DRAM beggars,” or executives from major global tech companiesm who have been traveling to Korea to beg for chips from Samsung and SK hynix.

“The super-cycle in memory will eventually come to an end. As global tech giants keep pouring massive investments into AI, however, the current upcycle is likely to last two or three years,” Choi told UPI. “That’s why desperate buyers are flying to Korea to plead for memory chip supplies.”

Sungkyunkwan University semiconductor professor Han Tae-hee struck a more cautious tone, though.

“I also expect that the present super-cycle will continue through this summer. But beyond that, any unexpected events could take place to weigh on the semiconductor industry,” Han said in a phone interview.

“Six months ago, we could not predict today’s booming memory chip sales. Likewise, we cannot know for sure what will happen six months later.”

The share price of Samsung Electronics fell 1.05% on the Seoul bourse Thursday, while SK hynix rose 2.38%.

It was built on democracy, open markets and cooperation – with America at the helm.

But the rules-based global order created after World War II is now under strain. Conflicts are rising. International rules are being tested. Trade tensions are escalating. And alliances are shifting.

At the centre of it all is US President Donald Trump.

In just a few short weeks, he’s captured Venezuela’s president, vowed to take control of Greenland, and threatened to slap tariffs on those who oppose him.

Meanwhile, China is presenting itself as a stable partner.

Many warn that the global order is starting to break apart.

Jan. 28 (UPI) — Electric vehicle maker Tesla’s revenue and profits fell during the fourth quarter of 2025 despite record levels of production.

Tesla officials on Wednesday reported the Elon Musk-owned company’s adjusted income dropped by 16% during the final quarter of 2025, while net income fell 61% for the quarter and 46% for the entire year.

The quarterly and final revenue report for 2025 reflects Tesla’s largest year-to-year revenue drop as its quarterly global sales of electric vehicles declined despite an increased global demand for EVs.

Partly to blame is the end of a $7,500 federal tax credit for those who bought qualifying EVs, combined with opposition by those who opposed Musk leading the Department of Government Efficiency and his general support of the Trump administration earlier in 2025.

Tesla also is facing increased competition from other EV makers, including Chinese EV firm BYD.

Despite the decline in revenues, Tesla shares rose in value by about 3% during after-hours trading on Wednesday and peaked at $449.76 per share before declining to $437.02.

Tesla officials reported that it produced a quarterly record 434,358 EVs during the final three months of 2025 and delivered 418,227. It also produced a record 14.2 GWh of energy-storage products.

For the year, Tesla produced 1.66 million EVs, delivered 1.64 million and produced 46.7 GWh of energy-storage products.

The United States Federal Reserve is holding interest rates steady in its first rate decision of 2026.

Rates will remain at 3.5 to 3.75 percent, the Fed said on Wednesday, defying US President Donald Trump’s calls for more aggressive interest rate cuts.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated,” the central bank said in its release announcing the decision.

Wednesday’s decision was widely expected. CME FedWatch, a tool that tracks expectations for monetary policy, forecast a more than 97 percent chance that the central bank would hold rates steady.

The tracker also expects two rate cuts in 2026, with the highest probability for the first cut occurring in June at the earliest.

“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization,” the central bank said.

The decision comes amid signs of stabilisation in the US labour market. The US economy added 584,000 jobs in 2025, marking the lowest annual job growth since 2003. Payrolls rose by 64,000 jobs in October and 50,000 in December. While job growth remains weak, December’s figure represents a modest rebound from October, when the economy lost 105,000 jobs, according to the Bureau of Labor Statistics.

There are indications that the labour market may cool further in the months ahead. This week, both Amazon and UPS announced tens of thousands of job cuts, some of which were driven by a push towards increasing the use of artificial intelligence in the workplace.

Another threat to the US economy and the job market comes in the form of a looming government shutdown. That can happen as early as Saturday, and depending on its duration, it could slow spending as federal workers are temporarily left without paycheques.

Political tensions

The decision to hold interest rates steady comes despite Trump’s increased pressure on the central bank to cut rates. Fed Chairman Jerome Powell has long stressed the Federal Reserve’s independence, and Wednesday’s decision is the first since Powell’s rebuke of a criminal Department of Justice investigation into him. The central bank chair, whose term expires in May, called the inquiry a “pretext” to pressure him.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said in remarks in early January in response to a subpoena.

Last week, the Supreme Court heard arguments in a case examining whether Trump has the legal authority to remove Fed Governor Lisa Cook amid allegations of mortgage fraud.

Meanwhile, Fed Governor Stephan Miran’s term is set to expire this week. Trump picked Miran to temporarily fill the seat vacated by Adriana Kugler in August while seeking a more permanent replacement.

Miran was one of two central bank governors who voted to lower interest rates alongside Christopher Waller.

The developments come as Trump searches for a new Fed chair. He has explicitly called for further interest rate cuts and for a chairman who shares his views.

“Anybody that disagrees with me will never be the Fed Chairman!” Trump said in a post on Truth Social in December.

The political pressure has caught the attention of global central banks as well.

“The Federal Reserve is the biggest, most important central bank in the world, and we all need it to work well. A loss of independence of the Fed would affect us all,” Bank of Canada Governor Tiff Macklem said on Wednesday. Canada’s central bank held rates steady ahead of the US central bank’s decision.

Macklem was one of the central bank heads who earlier this month issued a joint statement backing Powell. Last September, Macklem said Trump’s attempts to pressure the Fed were starting to hit markets.

The Dow Jones Industrial Average is flat, as is the Nasdaq, and the S&P 500 is down 0.1 in midday trading.

Package-delivery giant targets savings of $3bn in 2026 amid push to slash deliveries for Amazon.

United Parcel Service, one of the world’s largest package-delivery companies, has announced plans to slash up to 30,000 jobs amid a push to cut costs and boost profits.

UPS, based in the US state of Georgia, will make the cuts as part of efforts to achieve savings of $3bn in 2026, UPS chief financial officer Brian ⁠Dykes said on an earnings call on Tuesday.

Dykes said the job cuts, part of plans to reduce UPS’s reliance on deliveries for its largest customer, Amazon, would be achieved through attrition and voluntary buyouts.

“We expect to offer a second voluntary separation programme for full-time drivers,” Dykes said.

UPS will also shut 24 buildings in the first half of the year and evaluate other buildings for closure in the second half, Dykes said.

He said the savings would be on top of $3.5bn in savings achieved in 2025 through cost-cutting measures, including the elimination of 26.9 million labour hours and the closure of 93 buildings.

Sean O’Brien, president of the Teamsters union, slammed the job cuts in a statement posted on social media.

“Corporate vultures giggled about giving their disrespectful driver buyout program another shot,” O’Brien said.

“Reminder: Teamsters overwhelmingly rejected UPS’s insulting payoff last year. We still know our worth. Drivers still endure violent winters and brutal heat to make UPS its billions. UPS must honor our contract and reward our members.”

UPS announced last year that it would reduce shipments for Amazon by half as part of plans to focus on a smaller volume of more lucrative deliveries.

The firm’s reported revenues of $24.5bn for the final three months of 2025, taking earnings for the year to $88.7bn, and projected revenues in 2026 are expected to hit $89.7bn.

UPS shares were largely unmoved on Tuesday, closing 0.22 percent higher.

Jan. 27 (UPI) — Meta, Snap, TikTok and YouTube will face accusers in a series of lawsuits alleging that they intentionally design their platforms to be addictive.

The trials begin in Los Angeles Superior Court Tuesday, filed by a group of parents, teens and school districts. Once teens are addicted to the platforms, plaintiffs allege, they suffer from depression, self-harm, eating disorders and more. There are about 1,600 plaintiffs involving 350 families and 250 school districts.

“The fact that a social media company is going to have to stand trial before a jury … is unprecedented,” Matthew Bergman, founder of the Social Media Victims Law Center and an attorney in the cases, said in a press conference.

The first case involves a 19-year-old identified as KGM and her mother, Karen Glenn. They are suing TikTok, Meta and YouTube because they say the companies created addictive features that damaged her mental health and led to self-harm and suicidal ideation. Snap was also a defendant in the case, but it settled the case last week.

Her case’s outcome could help determine the outcomes of more than 1,000 injury cases against the companies. The case is expected to last several weeks.

The thousands of cases against these tech giants have been lumped together in a judicial council coordination proceeding, which allows California cases to collaborate and streamline pre-trial hearings.

The plaintiffs want financial damages as well as injunctions that would force the companies to change the design of their platforms and create industry-wide safety standards.

Top company executives are expected to testify, including Meta founder Mark Zuckerberg, Snap CEO Evan Spiegel, Instagram’s Adam Mosseri and more. Experts in online harm are also expected to testify.

“For parents whose children have been exploited, groomed, or died because of big tech platforms, the next six weeks are the first step toward accountability after years of being ignored by these companies,” Sarah Gardner, CEO of the Heat Initiative, which advocates for child safety online, told CNN. “These are the tobacco trials of our generation, and for the first time, families across the country will hear directly from big tech CEOs about how they intentionally designed their products to addict our kids.”

KGM alleges in court documents that on Instagram she was bullied and sextorted, which is when someone threatens to share explicit images of the victim unless they send money or more photos.

For two weeks, KGM’s friends and family had to ask other Instagram users to report the people targeting her before Meta would do something about it, court documents said.

“Defendants’ knowing and deliberate product design, marketing, distribution, programming and operational decision and conduct caused serious emotional and mental harms to K.G.M. and her family,” the suit said. “Those harms include, but are not limited to, dangerous dependency on their products, anxiety, depression, self-harm, and body dysmorphia.”

Tech companies and their CEOs reject the allegation that social media harms teens’ mental health. They argue that it offers a connection with friends and entertainment. They also lean on Section 230, a federal law that protects them from liability over content posted by users.

Japanese Prime Minister Sanae Takaichi’s tax and spending pledges in advance of snap elections next month have sent jitters through global markets.

Japanese government bonds and the yen have been on a rollercoaster since Takaichi unveiled plans to pause the country’s consumption tax if her Liberal Democratic Party wins the February 8 vote.

The market turmoil reflects concerns about the long-term sustainability of Japan’s debt levels, which are the highest among advanced economies.

The volatility has extended beyond Japan, highlighting broader fiscal sustainability worries in an era in which the United States and other major economies are running huge deficits.

What has Takaichi promised on the economy?

Takaichi said last week that she would suspend the country’s 8 percent consumption tax on food and non-alcoholic beverages for two years if her government is returned to power, following her dissolution of the House of Representatives.

Based on Japanese government data, Takaichi’s plan would result in an estimated revenue shortfall of 5 trillion yen ($31.71bn) each year.

Takaichi, a proponent of predecessor Shinzo Abe’s agenda of high public spending and ultra-loose monetary policy, said the shortfall could be made up by reviewing existing expenditures and tax breaks, but did not provide specific details.

Takaichi’s tax pledge comes after her Cabinet in November approved Japan’s largest stimulus since the COVID-19 pandemic.

The package, worth 21.3 trillion yen ($137bn), included one-time cash handouts of 20,000 yen per child for families, subsidies for utility bills amounting to about 7,000 yen per household over a three-month period, and food coupons worth 3,000 yen per person.

Why have Takaichi’s pledges unnerved markets?

Japan’s long-term government bond yields soared following Takaichi’s announcement.

Yields on 40-year bonds rose above 4 percent on Tuesday, the highest on record, as investors exited from Japanese government debt en masse.

Bond markets, through which governments borrow money from investors in exchange for paying out a fixed rate of interest, are closely watched as a gauge of the health of countries’ balance sheets.

While typically offering lower returns than stocks, government bonds are seen as low-risk investments as they have the backing of the state, making them attractive to investors seeking safe places to park their money.

As confidence in a government’s ability to repay its debts declines, bond yields rise as investors seek higher interest payments for holding riskier debt.

“When Prime Minister Takaichi announced a planned reduction in consumption taxes, this made existing bond-holders of Japan’s debt uneasy, requiring a higher compensation for the risk they bear,” Anastassia Fedyk, an assistant professor of finance at the Haas School of Business of the University of California, Berkeley, told Al Jazeera.

“As a result, bond prices dropped and yields rose. And yes, this is a general pattern that applies to other countries, too, though Japan has an especially high level of debt, making its position more vulnerable.”

Japan’s debt-to-GDP ratio already exceeds 230 percent, following decades of deficit spending by governments aiming to reverse the country’s long-term economic stagnation.

The East Asian country’s debt burden stands far above that of peers such as the US, UK and France, whose debt-to-GDP ratios are about 125 percent, 115 percent and 101 percent, respectively.

At the same time, the Bank of Japan (BOJ) has been scaling back bond purchases as part of its move away from decades of ultra-low interest rates, limiting its options for interventions to bring yields down.

“Bond investors reacted because her headline package looks like large, near-term fiscal loosening at exactly the moment the BOJ is trying to normalise policy,” Sayuri Shirai, a professor of economics at Keio University in Tokyo, told Al Jazeera.

How does all this affect the rest of the world?

The sell-off in Japanese bonds reverberated through markets overseas, with yields on 30-year US Treasuries rising to their highest level since September.

As Japanese bond yields rise, local investors are able to earn higher interest payments at home.

That can incentivise investors to offload other bonds, such as US Treasuries.

As of November, Japanese investors held $1.2 trillion in US Treasuries, more than any other foreign group of buyers.

In an interview with Fox News last week, US Treasury Secretary Scott Bessent expressed concern about the impact of Japan’s bond market on US Treasury prices and said he anticipated that his Japanese counterparts would “begin saying the things that will calm the market down.”

Japan’s long-term bond yields fell on Monday amid the expectations that Japanese and US authorities would step in to prop up the yen.

On Friday, The New York Times and The Wall Street Journal reported that the Federal Reserve Bank of New York had inquired about the cost of exchanging the Japanese currency for US dollars.

“Japan matters globally through flows. If Japanese government bond yields rise, Japanese investors can earn more at home, potentially reducing demand for foreign bonds; that can nudge global yields and risk pricing,” Shirai said.

“This is why global-market pieces have framed Japan’s bond move as a wider rates story.”

Higher bond yields in Japan, the US and elsewhere raise the cost of borrowing and servicing the national debt.

In a worst-case scenario, a sharp escalation in interest rates can lead to a country defaulting on its debts.

Masahiko Loo, a fixed income strategist at State Street Investment Management in Tokyo, said that the reaction of international investors to Takaichi’s plans reflects growing sensitivity to fiscal credibility in highly indebted economies.

“Yes, Japan may be the spark, but the warning applies equally to the US and others with large structural deficits,” Loo told Al Jazeera.

Is Japan on the verge of a financial crisis?

Probably not.

While Japan is more indebted than its peers, its fiscal position is more sustainable than it might appear due to factors specific to the country – at least in the short to medium term – according to economists.

The vast majority of Japan’s debt is held by local institutions and denominated in yen, reducing the likelihood of a panic induced by foreign investors, while interest rates are far lower than in other economies.

“The debt situation is more manageable than a lot of people think,” Thomas Mathews, head of markets for Asia Pacific at Capital Economics, told Al Jazeera.

“Net debt-to-GDP is on a downward trajectory, and Japan’s budget deficit isn’t all that big by global standards.”

Loo of State Street Investment Management said that the turmoil surrounding Japan had more to do with a “communication gap around fiscal sustainability and policy coordination” than the country’s solvency.

“That said, markets are likely to continue testing the feasibility of the agenda, as even fiscally sanguine countries have, at times, been disciplined by market forces,” Loo said.

SEOUL, Jan. 27 (UPI) — South Korea’s Hyundai ADM Bio announced plans to launch global clinical trials of its new drug, Penetrium, for rheumatoid arthritis and prostate cancer during a symposium held in Seoul on Tuesday.

Citing promising preclinical results, the biopharmaceutical company said that it aims to begin the clinical tests in the near future.

“In the field of rheumatoid arthritis, we expect to enter clinical trials simultaneously in South Korea and the United States,” Hyundai ADM Bio CEO Cho Won-dong said. “For prostate cancer, we have already received approval from the Korean authorities.”

Dankook University professor Choy Jin-ho, who played a key role in the development of Penetrium, expressed hope that the new-concept drug could bring about a paradigm shift in the fight against multiple diseases, including other types of tumors in addition to prostate cancers.

“A significant portion of anticancer drug resistance is not caused by genetic mutations in cancer cells themselves, but rather by the formation of stroma around them during treatment, which acts like a fortress wall blocking drug penetration,” he said.

Choy said Penetrium was designed to target the “fortress wall,” or the supportive structure around cancer cells, so that drugs could be delivered more effectively.

The symposium brought together experts at home and abroad. Among them were Dr. John Isaacs, professor clinical rheumatology at Newcastle University in the United Kingdom, and Dr. Frederick Millard, a professor of medicine at UC San Diego Health.

Isaacs is one of the leading experts on rheumatoid arthritis, while Millard is known for his contributions to prostate cancer research.

Noting that conventional rheumatoid arthritis treatments often involved immune suppression and significant side effects, Isaacs praised Hyundai ADM Bio’s approach of controlling only the metabolism of pathological cells without suppressing the immune system.

Millard expressed optimism about the new strategy breaking down the protective barriers that shield cancerous cells, instead of targeting them for direct destruction.

The share price of Hyundai ADM Bio jumped 13.56% on the Seoul bourse on Wednesday. Its parent company, Hyundai Bioscience, surged by the daily limit of 30%.

SEOUL, Jan. 27 (UPI) — South Korea will dispatch a delegation of senior trade and industry officials to Washington after U.S. President Donald Trump announced a sharp increase in tariffs on Korean goods, the Ministry of Trade, Industry and Resources said Tuesday.

Trade Minister Yeo Han-koo and Industry Minister Kim Jung-kwan will travel to the United States to meet their counterparts for talks on the tariff hike, the ministry said in a press release.

The decision was made at an emergency interagency meeting chaired by presidential chief of staff for policy Kim Yong-beom, convened hours after Trump’s surprise announcement on social media.

Trump said he was raising his so-called “reciprocal” tariffs on South Korea from 15% to 25%, accusing Seoul’s National Assembly of failing to act quickly enough to implement a bilateral trade deal finalized late last year.

“South Korea’s Legislature is not living up to its Deal with the United States,” Trump wrote earlier Tuesday on his Truth Social platform.

He said the higher tariffs would apply to automobiles, lumber, pharmaceuticals and other goods covered by the agreement.

The legislation to implement the deal was submitted to the National Assembly by the ruling Democratic Party in November but has yet to be passed.

Kim, who is currently in Canada, will travel to Washington as soon as his schedule allows to meet with U.S. Commerce Secretary Howard Lutnick, according to the ministry. Yeo will depart from Seoul to hold talks with U.S. Trade Representative Jamieson Greer.

Trump and South Korean President Lee Jae Myung finalized trade negotiations on the sidelines of the Asia-Pacific Economic Cooperation forum in Gyeongju on Oct. 29.

The two sides released a fact sheet in November detailing the terms of the deal, under which Trump’s tariffs on South Korean goods, including automobiles, would be reduced from 25% to 15%.

In exchange for the lower tariffs, South Korea pledged to invest $350 billion in the United States, including $150 billion in the U.S. shipbuilding sector and $200 billion for strategic industries under a memorandum of understanding to be signed by the two governments.

The fact sheet also formalized Washington’s approval of Seoul’s long-sought plan to build nuclear-powered submarines, a capability South Korean officials have framed as part of broader industrial and security cooperation with the United States.

The tariff move comes amid a dispute involving a South Korean regulatory probe into Coupang, a U.S.-listed e-commerce company, following a large-scale data breach.

On Friday, South Korean Prime Minister Kim Min-seok said he addressed the matter directly in talks with U.S. Vice President JD Vance, stressing that American firms had not been unfairly targeted.

“I made it clear that there has been no discriminatory treatment against U.S. companies,” Kim told Korean correspondents in Washington, D.C.

Following Tuesday’s emergency meeting, South Korea’s presidential office said it would react “calmly” to the announced tariff increase.

“Since the tariff increase will only take effect after administrative procedures such as publication in the Federal Register, the Korean government plans to calmly respond while conveying its commitment to implementing the tariff agreement to the U.S. side,” presidential spokeswoman Kang Yu-jung said in a written briefing.

South Korean stocks initially fell on the tariff news, with the benchmark KOSPI dropping by 0.84% in the first 15 minutes of trading before reversing early losses to gain 2.73% and close at an all-time high of 5,084.85.

Jan. 26 (UPI) — Treasury Secretary Scott Bessent announced Monday that the department canceled all contracts with consulting firm Booz Allen Hamilton because of a data leak that included President Donald Trump‘s tax returns.

The department has 31 contracts with Booz Allen for a total of $4.8 million in annual spending and $21 million in total obligations, a press release said.

“President Trump has entrusted his cabinet to root out waste, fraud, and abuse, and canceling these contracts is an essential step to increasing Americans’ trust in government,” Bessent said in a statement.

Between 2018 and 2020, a Booz Allen employee, Charles Edward Littlejohn, “stole and leaked the confidential tax returns and return information of hundreds of thousands of taxpayers.”

The breach affected about 406,000 taxpayers, including Trump, Amazon founder Jeff Bezos and Tesla CEO Elon Musk.

“Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service,” Bessent said.

Littlejohn pleaded guilty in October 2023 to one charge of disclosure of tax return information and was sentenced to five years in prison. He admitted to leaking Trump’s tax information to The New York Times and leaking other tax information to ProPublica.

Booz Allen’s stock price dipped by 8% on the news, CNBC reported.

Jan. 26 (UPI) — Critical minerals startup USA Rare Earth announced Monday that the Department of Commerce will give the company a $1.3 billion loan and $277 million in federal funding.

USA Rare Earth will issue Commerce 16.1 million shares of common stock and 17.6 million in warrants. The federal government will have an 8% to 16% stake in the company, depending on whether it uses the warrants, a filing with the Securities and Exchange Commission said.

USA Rare Earth shares rose more than 20% Monday after the announcement, CNBC reported.

The injection of funds will help the company build a magnet manufacturing plant in Stillwater, Okla., and a mine at the Round Top mineral deposit in Sierra Blanca, Texas.

CEO Barbara Humpton said the government deal will turn USA Rare Earth into an industry leader.

“This is a watershed moment in our work to secure and grow a resilient and independent rare earth value chain based in this country,” CNBC reported that Humpton told analysts Monday.

“We have long said that meeting the urgent call to reassure the rare earth and critical minerals industry will require a multiplayer solution, and this establishes our company as one of the leaders,” she said.

Commerce will allocate the funding from 2026 through 2028 based on milestones in USA Rare Earth’s business plan, Chief Financial Officer Rob Steele told analysts.

The company needs about $4.1 billion for its plan, he said. It still needs to raise about $600 million more capital.

“We believe we can raise the remaining capital from attractive sources, and you should assume that’s equity capital but that can come from strategic investments as well as institutional investors,” Steele said.

China dominates the global supply chain of rare earth materials. During trade disputes with President Donald Trump, Beijing tried to cut off rare earth exports.

“USA Rare Earth’s heavy critical minerals project is essential to restoring U.S. critical mineral independence,” Commerce Secretary Howard Lutnick said in a statement. “This investment ensures our supply chains are resilient and no longer reliant on foreign nations.”

“The Department of Energy is ending America’s reliance on foreign nations for the critical materials essential to our economy and national security,” said U.S. Energy Secretary Chris Wright in a statement. “The DOE is partnering with USAR to rebuild the critical minerals supply chain. By expanding domestic mining, processing and manufacturing capabilities, we are creating good-paying American jobs and safeguarding our national security.”

“Accelerating the onshoring of rare earth minerals, metals, and magnets is paramount to national and economic security,” U.S. Investment Accelerator Executive Director Michael Grimes said in a statement. “With the Department of Commerce’s funding for USA Rare Earth’s vertically integrated mine-to-magnet operations, we will significantly increase the domestic supply of crucial components for semiconductors, defense and numerous other industries strategic to the United States.”

SEOUL, Jan. 26 (UPI) — South Korea’s cash-strapped discount chain Home Plus said Monday that it was waiting for an infusion of $210 million emergency operating funds from its stakeholders and state-run Korea Development Bank.

The retailer requested its shareholder, MBK Partners, creditor Meritz Financial Group, and KDB each to provide $70 million to help the company stay afloat while it searches for a new owner.

MBK Partners has pledged to offer its share of the funding, but Meritz and KDB have yet to disclose their positions, according to Home Plus.

Speaking at a National Assembly meeting last Wednesday, Home Plus CEO Joh Joo-yun said that the company is in a grave situation.

“Deliveries to Home Plus stores have plunged to about half their previous levels,” she said. “If emergency funding is not secured within January, we may be unable to pay employee wages or even settle payments for merchandise.”

Under such circumstances, Joh worried that it might be impossible to achieve a turnaround.

Meanwhile, the Seoul Central District Court earlier this month rejected prosecutors’ requests for arrest warrants for MBK Partners Chairman Michael Byungjoo Kim and other executives from the private equity fund and its portfolio company Home Plus.

Prosecutors sought to detain them in connection with asset-backed bonds issued by Home Plus in February, shortly before the firm filed for court receivership in early March.

They argued that such conduct may have exposed investors to potential losses, constituting fraud and violations of the relevant laws.

However, the court stressed the need to ensure that the suspects have sufficient opportunity to defend themselves without being held in custody.

In 2015, MBK took over Home Plus from Tesco in a deal valued at roughly $5 billion. In recent years, the retailer has faced mounting difficulties due to the fallout from the COVID-19 pandemic and intensifying competition from e-commerce rivals.

Against this backdrop, Home Plus has sought to find a new buyer, but such efforts have so far made little progress.