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United States President Donald Trump has announced the launch of a strategic minerals stockpile.

The stockpile, called Project Vault, was announced on Monday. It will combine $2bn of private capital with a $10bn loan from the US Export-Import Bank.

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It is the latest move by the White House to invest in rare-earth minerals needed in the production of key goods, including semiconductor chips, smartphones and electric car batteries.

The aim is to “ensure that American businesses and workers are never harmed by any shortage”, Trump said at the White House.

The move to develop a strategic stockpile is the latest in a slew of efforts by the Trump administration to take control of the means of production for critical rare-earth materials to limit reliance on other countries, particularly China, which has held up its exports to gain leverage in negotiations with Trump.

Here’s a look at some of the investments the US government has made in this space.

What are the investments?

In 2025, the Trump administration acquired equity stakes in seven companies by converting federal grants into ownership positions. Among the investments is a 10 percent stake in USA Rare Earth, which plans to build rare-earth element and magnet production facilities in the US.

The project is supported by $1.6bn in funding allocated under the CHIPS Act, legislation passed during the administration of former Democratic President Joe Biden, aimed at reducing dependence on China for semiconductor manufacturing.

USA Rare Earth announced the investment last week and expects commercial production to begin in 2028.

The US government also acquired a roughly 10 percent stake, valued at about $1.9bn, in Korea Zinc to help fund a $7.4bn smelter in Tennessee through a joint venture controlled by the US government and unnamed US-based strategic investors, who would then control about 10 percent of the South Korean firm.

The venture will operate a mining complex anchored by two mines and the only operational zinc smelter in the US. Construction is set to begin this year, with commercial operations expected to start in 2029.

In October, the government announced a $35.6m investment to acquire a 10 percent stake in Canadian-based Trilogy Metals to support the Upper Kobuk Mineral Projects (UKMP) in Alaska. The investment backs the development of critical minerals, including copper, zinc, gold, and silver, in Alaska’s mineral-rich northwest Ambler mining district.

Also in October, the US announced a 5 percent stake in Lithium Americas as part of a joint venture with General Motors (GM) to fund operations at the Thacker Pass lithium mine in Nevada. The project will supply lithium for electric vehicles and has attracted significant interest from the Detroit-based automaker.

In August, the White House acquired an almost 10 percent stake in Intel. The government’s investment in the semiconductor chip giant was an effort to help fund the construction and expansion of the company’s domestic manufacturing capabilities.

In July, the White House announced a 15 percent investment in MP Materials, which operates the only currently active rare-earth mine in the US, located in California. The largest federal stakeholder in the investment is the Department of War, then called the Department of Defense, which committed $400m.

The US is also reportedly exploring an 8 percent share in Critical Minerals for a stake in the Tranbreez rare-earths deposit in Greenland, underscoring Trump’s unsolicited attempts to acquire the Danish self-governed territory, the Reuters news agency reported.

Amid news of Trump’s stockpile plan, sector stocks are mixed. MP Materials and Intel are up 0.6 percent and 5 percent, respectively. Others finished out the day trending downwards. Lithium Americas is down 2.2 percent. Trilogy metals is down almost 2 percent, USA Rare Earth is down by 1.3 percent, and Korean Zinc finished down 12.6 percent.

Is this unusual?

The government buying equity stakes in large companies is unusual in US history, but not unprecedented.

During the 2008 financial crisis, the US government temporarily acquired equity stakes in several major companies through the Troubled Asset Relief Programme (TARP). In 2009, TARP provided federal assistance to General Motors, ultimately leaving the government with a more than 60 percent ownership share. This intervention began in the final months of the administration of former President George W Bush. The government fully sold its stake in GM in 2013.

Through TARP, the government also acquired a 9.9 percent stake in Chrysler, which it exited in 2011.

The programme extended beyond car makers to the financial sector. The US government took a more than 73 percent stake in GMAC (General Motors Acceptance Corporation, now Ally Financial), exiting its ownership in 2014. It also acquired nearly 74 percent of the financial services insurance giant AIG, selling its remaining stake in 2012, and took a 34 percent stake in Citigroup, which it fully exited by 2010.

“This isn’t like 2008, when there was an urgent need to shore up critical companies. There’s a much more measured approach here. They [the US government] want these investments to generate returns, and they need to be seen as good investments in order to attract other forms of capital,” Nick Giles, senior equity research analyst at B Riley Securities, an investment banking and capital markets firm, told Al Jazeera.

During the Great Depression, the government bought stakes in several large banks. Before that, at the turn of the 20th century, it bought an equity stake in the Panama Railroad Company, which was responsible for building the railway that would be used during the construction of the Panama Canal. That equity stake was attached to a specific project rather than a more open-ended challenge, such as foreign dependence on critical minerals.

“There may not be a defined end date, but they’re clearly looking to make a return, and it sends an important signal that more is coming. I don’t think they [the government] are going to let this fail,” Giles added.

Political divide on the approach

Interest in providing funds to critical mineral projects was shared by Trump’s predecessor, Biden, who brought in the CHIPS Act for that purpose. Biden was focused on providing grants for projects rather than buying equity stakes.

Trump’s approach to buy stakes is actually more aligned with progressive Democrats than with members of his own party. Vermont Senator Bernie Sanders has long been a proponent of the US government buying equity stakes in companies.

In August, after the White House bought an equity stake in Intel, Sanders applauded the move.

“Taxpayers should not be providing billions of dollars in corporate welfare to large, profitable corporations like Intel without getting anything in return,” Sanders said at the time.

Kentucky Senator Rand Paul, a Republican known for his libertarian stances, called ownership a “terrible idea” and referred to it as a “step towards socialism” on CNBC. North Carolina’s Thom Tillis likened the Intel investment to something that countries like China or Russia would do.

For Babak Hafezi, professor of international business at the American University, the investments are a step to remove any reliance on China.

“Without domestic control and resiliency in both extraction and production, we are dependent on China, which extracts nearly 60 percent of global rare-earth minerals and produces 90 percent of it. This creates a major global chokepoint, and China can use this chokepoint as a means to dictate American Foreign policy via supply chain limitations,” he said.

“Thus, establishing free and open markets for US consumption is critical to remove any dependency.”

Feb. 2 (UPI) — President Donald Trump plans to launch a $12 billion stockpile of rare earth minerals to curb U.S. dependence on China.

The project is called Project Vault and it will be funded by a $10 billion loan from the U.S. Export-Import Bank and about $1.67 billion in private capital.

Trump’s plan seeks to procure and store rare-earth minerals that are critical to the automotive, defense, and tech industries. Minerals would be stored for use by U.S. manufacturers.

Some critical minerals that are of interest to tech companies and electric vehicle manufacturers include cobalt, lithium, titanium, silicon, nickel and graphite.

Rare earth minerals have been a focus of Trump’s during his second term. The White House said the United States was reliant on imports of minerals in 2024. Trump has since used mineral acquisition as a key point of international negotiations.

The president has also eyed Greenland for its mineral deposits. He recently alluded to invading Greenland and raising tariffs but walked back that rhetoric at the World Economic Forum last month.

Some companies that are expected to be involved in the Project Vault stockpile include General Motors, Stellantis, Boeing and Google.

Tehran, Iran – Iran’s economic outlook appears increasingly grim more than three weeks after the start of what became one of the most comprehensive and prolonged state-imposed internet blackouts in history, impacting a population of more than 90 million people.

Iranian authorities abruptly cut off all communications across the country on the night of January 8, at the height of nationwide protests that the United Nations and international human rights organisations say were suppressed with the use of deadly force.

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Most of Iran’s internet bandwidth, local and international phone calls and SMS text messages have been restored over recent days. But most of the country is still unable to freely connect to the global internet amid heavy filtering by the state.

The increased bandwidth allows more people to circumvent state restrictions using a variety of proxies and virtual private networks (VPNs), but solutions are often costly and temporary.

Last week, Information and Communications Technology Minister Sattar Hashemi told reporters his ministry estimates that the Iranian economy suffered at least 50 trillion rials (about $33m at the current exchange rate) in damages on a daily basis during the blackout.

But the minister admitted that the true toll is likely much higher, and said that other ministers and economic officials have privately offered heftier estimates that he did not expand upon.

‘Can’t do anything without the internet’

The government of President Masoud Pezeshkian has said the decision to fully block connectivity was taken outside of its control by the Supreme National Security Council.

Pezeshkian, who had made scaling back internet filtering a main campaign promise, has refrained from talking about Iran’s largest internet blackout to date, instead focusing on economic reforms and cash subsidies.

The administration has promised to offer online businesses financial support, but the losses have already been sudden, acute, and too heavy to bear for many.

Simin Siami, a travel agent working in Tehran, told Al Jazeera that her company lost most of its income and had to lay off a number of employees.

“Most international flights were cancelled, and there was no way to purchase tickets or compare existing flights,” she said, adding that her company was also unable to book hotels for customers, who were initially even unable to renew their passports.

“Unfortunately, that limited our services to selling tickets for local flights and booking local hotels, and cancelled all our previous international tickets and bookings.”

Saeed Mirzaei, who works at an immigration agency in the capital, said 46 employees at his company had to go on mandatory leave for weeks amid the shutdown.

He told Al Jazeera that they suddenly lost all contact with foreign counterparts, were unable to get updated information from embassies, and missed deadlines to apply for universities on behalf of their customers wishing to leave a heavily sanctioned Iran for better opportunities.

“We can’t do anything without the internet because our work deals directly with it,” Mirzaei said.

National internet a ‘bitter joke’

During the blackout, Iran’s theocratic establishment even struggled to sustain basic services using the so-called National Information Network, a limited nationalised intranet.

The connection to the intranet was slow and patchy, many companies remained disconnected from it, and those that were allowed to connect retained only a fraction of their customer base amid general economic stagnation across the country.

Hashemi, the communications minister, said a demand by hardliners within the establishment to move away from using the international web in favour of a domestic connection was a “bitter joke” that is not feasible to enforce.

He said his ministry estimates that the country’s online businesses could survive under a blackout for roughly 20 days, signalling that the state had no choice this week but to gradually restore internet bandwidth.

Figures for economic damages incurred by the blackout published by officials reflect only the visible costs and do not account for hidden losses, according to Abazar Barari, a member of Iran’s Chamber of Commerce.

“In the import and export sector, processes are heavily dependent on the internet from the very initial stages – such as price negotiations, issuance of pro forma and other invoices – to coordination with transportation companies and the verification of documents. As a result, the internet shutdown effectively disrupted foreign trade,” he told Al Jazeera.

“During this period, customer attrition also occurred, with the damage being particularly severe in certain food commodities, as many countries are unwilling to tie their food security to unstable supply conditions.”

‘They have no right to do this’

In a tumultuous country with one of the highest inflation rates in the world, numerous Iranians who tried to make money online to stay afloat are now deeply anxious as well.

From owners of small online businesses to teachers, chefs, crypto traders, gamers and streamers, people are taking to social media to ask others for extra support after the gradual reconnect this week.

Mehrnaz, a young video editor in Tehran, said she only went back to work this week after her company put her on forced leave without pay from the start of the protests in the city’s business district in late December.

“I was on the verge of having to move back to my parents’ house in another city. I’m only 25, and I hit near-zero for the second time this year. There might not be another time,” she said, pointing out that the first time was during the 12-day war with Israel and the United States in June.

Iran’s National Post Company announced on Sunday that postal deliveries experienced a 60-percent fall at the height of the blackout, mainly damaging small and home-based businesses that depended on mailing their products.

But beyond livelihoods, many in Iran are also angered by the fact that the state can cut off communications on command, violating the people’s right to benefit from the internet.

“They had the nerve to create a tiered internet and decide which type of use is ‘essential’,” said a woman who asked not to be identified for safety reasons.

“My child wants to search about his favourite animation movies, my mom wants to read news on Telegram, and my dad wants to download books. I want to go online and write that they have no right to do this.”

South Korean stocks nosedived by more than 5 percent Monday, due largely to a risk-averse sentiment following the nomination of the new Federal Reserve chair, and a sharp decline in silver and gold prices. The Korean won plunged against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) tumbled 274.69 points, or 5.26 percent, to close at 4,949.67, snapping a four-session winning streak.

The country’s main bourse operator, the Korea Exchange (KRX), issued a sell-side circuit breaker for 5 minutes around noon.

Trade volume was heavy at 568.8 million shares worth 32 trillion won (US$21.9 billion). Losers outnumbered winners 795 to 116.

Foreign and institutional investors offloaded a net 2.5 trillion won and 2.2 trillion won, respectively. Retail investors, on the other hand, went bargain hunting and snapped up a net 4.6 trillion won.

Local stocks came under selling pressure following the nomination of Kevin Warsh, seen widely as a hawkish figure, as Fed chair, and sharp declines in silver and gold prices, according to Lee Kyoung-min, an analyst from Daishin Securities.

“A sharp drop in precious metals triggered the liquidation and margin call of derivatives holding them. This in turn led to the forced liquidation of other assets, as investors went to preserve margins, further amplifying the stock market’s decline,” Lee said.

International gold prices have experienced a sharp decline of over 10 percent in the past few days, while sliver prices plunged over 30 percent.

The local gold market was affected, too, with gold traded on the KRX falling to its lowest permissible limit of 10 percent Monday. It marked the first time KRX gold prices fell to the floor since the market opened in March 2014, according to the bourse operator.

“There is a possibility the benchmark KOSPI could take a breather, considering its sharp gains recently, but a daily decline of 4 to 5 percent seems excessive,” Han Ji-young, a researcher at Kiwoom Securities, said.

Shares closed lower across the board.

Market top-cap Samsung Electronics declined 6.29 percent to 150,400 won, while its chipmaking rival SK hynix tumbled 8.69 percent to 830,000 won.

Top car marker Hyundai Motor retreated 4.4 percent to 478,000 won, bio firm Celltrion lost 3.33 percent to 203,000 won, and defense giant Hanwha Aerospace closed down 4.69 percent to 1,239,000 won.

Financial shares were among the few winners.

Hana Financial Group added 3.2 percent to 103,300 won, and Meritz Financial Group inched up 0.69 percent to 117,400 won.

The Korean won was quoted at 1,464.3 won against the U.S. dollar at 3:30 p.m., down 24.8 won from the previous session.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 1.4 basis points to 3.152 percent, and the return on the benchmark five-year government bonds rose 1.2 basis points to 3.448 percent.

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Modi’s government presents annual budget, focusing on sustaining growth despite volatile financial markets and trade uncertainty.

Indian Prime Minister Narendra Modi’s government has unveiled its annual budget, aiming for steady growth in an uncertain global economy rocked by recent tariff wars.

Finance Minister Nirmala Sitharaman presented the budget for the 2026-2027 financial year in Parliament on Sunday, prioritising infrastructure and domestic manufacturing, with a total expenditure estimated at $583bn.

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India’s economy has so far weathered punitive tariffs of 50 percent imposed by United States President Donald Trump over New Delhi’s imports of Russian oil. The government has sought to offset the impact of those duties by striking deals, such as its trade agreement with the European Union.

Despite the past year’s challenges, the Indian economy has remained one of the world’s fastest growing.

The budget for the new financial year, which starts on April 1, projects gross domestic product (GDP) growth in the range of 6.8 to 7.2 percent, according to the government’s annual Economic Survey presented in Parliament. It is a shade softer than this year’s projected 7.4 percent but still outpaces estimates by global institutions such as the World Bank.

To keep growth strong, the government said it will spend 12.2 trillion rupees ($133bn) on infrastructure in the new fiscal year, compared with 11.2 trillion rupees ($122bn) last year. It will also aim to boost manufacturing in seven strategic sectors, including pharmaceuticals, semiconductors, rare-earth magnets, chemicals, capital goods, textiles and sports goods while stepping up investments in niche industries like artificial intelligence.

Despite plans to prop up growth with state spending, the government is aiming to bring down the federal government debt-to-GDP ratio from 56.1 percent to 55.6 percent in the next financial year and the fiscal deficit from its current projected level of 4.4 percent of GDP to 4.3 percent.

Sitharaman offered no populist giveaways, saying New Delhi would focus on building resilience at home while strengthening its position in global supply chains, marking a departure from last year’s budget, which wooed the salaried middle class with steep tax cuts.

Before the budget presentation, Modi on Thursday said the nation was “moving away from long-term problems to tread the path of long-term solutions”.

“Long term solutions provide predictability that fosters trust in the world,” he said.

Modi’s government has struggled to raise manufacturing from its current level of contributing under 20 percent of India’s GDP to 25 percent to generate jobs for the millions of people entering the nation’s workforce each year.

It has also seen a sharp decline in the value of the rupee, which has recently weakened to all-time lows after foreign investors sold a record amount of Indian equities. Those sales have added up to $22bn since January last year.

“Overall, this is a budget without fireworks – not a big positive, not a big negative,” Aishvarya Dadheech, founder and chief investment officer at Mumbai-based Fident Asset Management, told the Reuters news agency.

Josef Centeno, who once dominated the corner of 4th and Main streets in downtown L.A. with his “Centenoplex” of restaurants, all centered around cozy Bäco Mercat, closed his Tex-Mex-ish restaurant Bar Amá in December to open Le Dräq, which brings the most popular dishes from the two restaurants onto one menu, including cheesy bäco bread, a mushroom coca made with vegan dough and green chicken enchiladas. Expect the menu to rotate often but to consistently feature eight dishes from Bäco Mercat, eight from Bar Amá and eight from Takoria, a new market-driven concept. The house burger is a standout, with pillowy milk bread from Centeno’s Orsa & Winston restaurant next door, a thick beef patty, Havarti cheese, and iceberg lettuce and raw red onion for crunch.

BUENO AIRES, Jan. 30 (UPI) — The Argentine government authorized private companies to import and sell liquefied natural gas — a move that removes the state from those operations and accelerates the privatization of Enarsa, the country’s public energy company.

The decision was formalized through a decree signed by President Javier Milei and published in the Official Gazette this week. The decree also extends through December 2027 a state of emergency in natural gas transportation and distribution, underscoring continued strain on the system.

Enarsa has historically handled production, transportation and marketing of oil, natural gas and electricity in Argentina. With the new policy, the government begins dismantling that role and shifting functions long overseen by the state to the private sector.

The decision addresses a long-standing structural problem. According to the Secretariat of Energy, Argentina lacks sufficient pipeline capacity to move all gas from producing areas to major urban centers.

That limitation becomes acute in winter. As heating demand rises, domestic supply falls short and the country must import liquefied natural gas by ship.

Until now, the state managed that process. Enarsa bought LNG on the international market at high prices and sold it domestically at well below cost, with the gap covered by taxpayer-funded subsidies.

“This change is part of the decision to move forward with privatizing Enarsa’s assets and activities and to remove the state from its role as an entrepreneur and intermediary in the energy market,” the Energy Secretariat said.

Officials said the state should focus on regulating the market, ensuring clear rules, promoting competition and guaranteeing supply rather than directly buying and selling gas.

Under the new framework, Enarsa will stop importing and marketing LNG, and private operators will take over under a competitive scheme.

The system eliminates the implicit subsidy that existed until now and transfers the entire operation to the private sector, subject to competition rules and state oversight.

To implement the plan, the government will sell access to the Escobar terminal on the outskirts of Buenos Aires. It is the country’s only operational facility where imported LNG is regasified for distribution.

The Secretariat of Energy will set the tender conditions. If no bids are received or the process fails, Enarsa may intervene temporarily to avoid supply disruptions.

Because only one terminal is operating, the government also said it will set a maximum gas price for the upcoming winter to prevent abuse of a dominant position.

Juan José Carbajales, a former undersecretary of hydrocarbons, told UPI that privatization basically means giving a private company the job of buying LNG shipments and then selling that gas inside Argentina.

He said the operation is purely commercial and does not include physical management of the Escobar terminal.

“The scheme will be based on requests the awardee receives from power generators and gas distributors, and sales will be capped by a maximum price set by the Energy Secretariat at least for the next two periods,” Carbajales said.

He said the decision reflects the government’s view that the function failed under state management — a stance rooted in broader distrust of public-sector economic activity, in this case Enarsa.

He said the position is ideological and supported by the so-called Bases Law, which prioritizes private initiative in the economy.

The former official added that large budget allocations to Enarsa did not prove a system failure, but rather a political decision by successive administrations to channel residential gas subsidies by buying fuel at international prices and selling it domestically at far lower levels.

He said the measure also aligns with reforms in the electricity market aimed at gradually returning to a system of free contracting between supply and demand.

Carbajales warned gas prices in Argentina could rise if international conditions push LNG costs higher.

“Although the government will cap that value for two years, uncertainty will remain about what happens once the ceiling is lifted,” he said.

The authorization for private companies to import natural gas is part of a broader privatization agenda promoted by Milei. Since taking office in December 2023, his administration has moved to sell or prepare for sale several state-owned companies.

Jan. 30 (UPI) — The Bureau of Labor Statistics on Friday said the Producer Price Index rose by a half percent in December, which raises concern that inflation could rise as a result.

The index measures the cost businesses pay for wholesale goods and is among the factors that potentially affect inflation and unemployment rates.

The nation’s inflation rate currently is 2.7%, while unemployment was 4.4% in December.

“On an over-year-ago basis, core final demand PPI goods rose 3.7%, which points to ongoing pipeline pressures for consumer inflation that appears to be bolstered in part by tariffs,” JPMorgan analysts said in a statement.

National Economic Council Director Kevin Hassett told CNBC that the higher Producer Price Index is not matched by the Consumer Price Index, which decreased in December.

“The CPI over the last three months, the annual rate, was lower than 2,” Hassett said.

“I think that right now we’re seeing materials prices like gold and so on are up quite a bit, in part because of all the investment that’s happening for artificial intelligence and data centers and so on,” he added.

December’s half-percent rise in the Producer Price Index was more than double its 0.2% rise in November and 0.1% increase in October, the BLS said.

For the year, wholesale prices, not including foods, energy and trade services, rose by 3.5%, which is slightly less than the 3.6% increase in 2024.

“Over 40 percent of the December increase in prices for final demand services can be traced to a 4.5-percent rise in margins for machinery and equipment wholesaling,” the BLS reported.

The cost of nonferrous metals also rose by 4.5% in December.

Also posting cost increases were the “indexes for guestroom rental; food and alcohol retailing; health, beauty and optical goods retailing; portfolio management; and airline passenger services also advanced,” the bureau said.

“Prices for residential natural gas, motor vehicles, soft drinks and aircraft and aircraft equipment also increased.”

While such costs rose, others declined by significant margins, including the cost for bundled wired telecommunications access services, which declined by 4.4%.

South Korean stocks closed a tad higher Friday to extend their winning streak to a fourth session to a new record high as investors scooped of artificial intelligence (AI) shares despite concerns over a bubble. The local currency fell against the greenback.

The benchmark Korea Composite Stock Price Index (KOSPI) inched up 3.11 points, or 0.06 percent, to close at 5,224.3, after rising as high as to 5,321.68.

Trade volume was heavy at 852 million shares worth 34.7 trillion won (US$24.1 billion). Losers outnumbered winners 602 to 278.

Individuals bought a net 2.2 trillion won, while foreigners sold a net 1.9 trillion won. Institutions sold a net 425 billion won.

Investors continued to purchase tech shares despite concerns over a bubble, as their performance has already been proven for robust earnings amid the AI cycle.

“For the time being, AI hardware and software companies need to overcome concerns over their profitability,” Han Ji-young, a researcher at Kiwoom Securities, said.

“During the period, the market’s preference for chipmakers that sell memory products to such companies will remain strong,” Han added.

The market advance was limited after U.S. President Donald Trump vowed to raise “reciprocal” tariffs and auto duties on South Korea back to 25 percent this week.

Top-cap Samsung Electronics edged down 0.12 percent to 160,500 won, while SK hynix set a fresh high at 909,000 won, up 5.57 percent.

Brokerage houses closed bullish amid the market rally, with Mirae Asset Securities rising 4.65 percent to 42,750 won and Kiwoom Securities increasing 4.11 percent to 443,500 won.

Top mobile carrier SK Telecom rose 4.32 percent to 72,500 won on the back of improved business outlook, and its rival KT added 1.43 percent to 56,900 won.

Samsung SDI rose 0.52 percent as the company said it has won a battery supply contract without disclosing details, with the deal widely believed to be related to Tesla Inc.’s energy storage system business.

The Korean won was quoted at 1,439.5 won against the U.S. dollar at 3:30 p.m., down 13.2 won from the previous session’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 3.2 basis points to 3.138 percent, and the return on the benchmark five-year government bonds added 4.1 basis points to 3.436 percent.

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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.

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“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.

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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.

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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%.