Economy

United States President Donald Trump has withdrawn his $10bn lawsuit against the Internal Revenue Service (IRS) stemming from a leak of his tax returns and said his administration will create a $1.77bn anti-weaponisation fund that would compensate some of Trump’s political allies.

The court filing, released on Monday in Florida, did not disclose the terms of the deal, including whether either party settled.

However, the Department of Justice (DOJ) on Monday announced the establishment of a $1.77bn fund called the Anti-Weaponisation Fund that would “provide a systematic process to hear and redress claims of others who suffered weaponisation and lawfare”.

The DOJ said in its press release that it was part of the settlement agreement.

ABC News first reported last week that the president was prepared to drop the lawsuit as part of a deal that would create the fund to pay Trump allies who were perceived as wrongly investigated and prosecuted.

Trump, his adult sons Donald Trump Jr and Eric Trump, and the Trump Organization sued the IRS in January, arguing the agency should have done more to prevent a former contractor from disclosing their tax returns to media outlets during the president’s first term.

The case arose from former IRS contractor Charles Littlejohn’s leak of Trump’s tax returns to media outlets, including the New York Times and ProPublica, in 2019 and 2020.

Those returns showed that Trump paid little or no income taxes in many years, the Times reported in 2020.

Prosecutors charged Littlejohn in 2023 with leaking tax records of Trump and thousands of other wealthy Americans to the media, saying he was motivated by a political agenda. Littlejohn later pleaded guilty to improper disclosures, and a judge sentenced him to five years in prison.

Trump filed the lawsuit personally, not in his official capacity as president.

Political pushback

While the court filing did not mention the terms of any potential deal, news that the president would create a fund to protect his political allies sparked backlash.

Representative Jamie Raskin, a Democrat from Maryland, called the idea “unconstitutional”.

“This, of course, is a political grievance fund that Donald Trump can use to pay off his friends,” Raskin, the top Democrat on the House Judiciary Committee, said in an interview on Sunday with the ABC News programme This Week.

“If these people have a valid cause of action, they should bring it to the court like every other American does, and use the system of due process, and prove things by clear and convincing evidence, or a preponderance of evidence. Go and prove it. But the idea that Donald Trump can just pass it out like a pardon is absurd,” he said.

California Governor Gavin Newsom also criticised the president amid reports of the deal.

“Donald Trump wants to settle his joke lawsuit against his own IRS department to hand out $1.7 BILLION of OUR TAX DOLLARS to Jan. 6th insurrectionists and his cronies,” Newsom said in a post on X.

“It is an outrage that the American taxpayers are having to pay for this and that we have a president who is exercising such open corruption in front of everyone and expecting us to go along with it,” Representative Pramila Jayapal, a Democrat from Washington state, told the progressive MeidasTouch network.

Despite the criticisms, it is not clear who would specifically benefit from the funds.

Trump has long claimed that the DOJ under his predecessor, President Joe Biden, a Democrat, was weaponised against him, pointing to the criminal charges where he faced allegations that he conspired to overturn the results of the 2020 presidential election, which Trump lost by more than seven million votes, and that he retained classified documents at his Mar-a-Lago estate.

Merrick Garland, the attorney general during the Biden administration, denied allegations of politicisation. The Justice Department also investigated prominent Democrats, including Biden’s son Hunter Biden and former US Senator Bob Menendez, a Democrat from New Jersey.

“The machinery of government should never be weaponised against any American, and it is this Department’s intention to make right the wrongs that were previously done while ensuring this never happens again,” said Acting Attorney General Todd Blanche said in a release.

However, the Trump administration has actively pursued cases against perceived political enemies, including former FBI director James Comey and former Federal Reserve Chairman Jerome Powell, Fed Governor Lisa Cook, New York Attorney General Letitia James, Arizona Senator Mark Kelly, and California Senator Adam Schiff. 

The DOJ said that there is legal precedent for the fund, pointing to a programme called “Keepseagle” under the administration of former US President Barack Obama, a Democrat. That created a fund to address allegations of racism against the federal government.

The White House referred Al Jazeera to the DOJ for a request for comment. The DOJ did not respond.

The government watchdog group Citizens for Responsibility and Ethics (CREW) announced on X that it would be investigating how the funds would be used.

“While Americans are struggling with an affordability crisis, President Trump plans to use nearly $1.8bn in taxpayer money to pay off his friends and allies—including potentially the violent insurrectionists who attacked the Capitol on January 6th,” CREW’s president, Donald K Sherman, said in a statement provided to Al Jazeera.

“By settling his absurd $10bn lawsuit against his own administration, Trump and the Justice Department just engaged in the most brazen act of self-dealing in the history of the presidency, and did so quickly in order to avoid the scrutiny of the judicial process, while quite likely violating the Constitution’s Domestic Emoluments Clause in the process. This is one of the single most corrupt acts in American history.”

A long time coming

Lawyers for the president asked a federal judge in April to pause the case for 90 days while the two sides worked to reach a settlement or resolution.

“This limited pause will neither prejudice the parties nor delay ultimate resolution,” the filing in April said. “Rather, the extension will promote judicial economy and allow the Parties to explore avenues that could narrow or resolve the issues efficiently.”

When asked in February how he would handle any potential damages from the case, Trump said, “I think what we’ll do is do something for charity.”

“We could make it a substantial amount,” he said at the time. “Nobody would care because it’s going to go to numerous very good charities.”

The litigation against the IRS raised novel legal questions, including conflicts of interest, about whether a president can sue his own government. It is not clear if the judge will accept Trump’s withdrawal of the case.

Under the US Constitution, federal courts may only hear genuine disputes between litigants with opposing stakes in the outcome.

US District Court Judge Kathleen Williams in Miami, who oversees Trump’s lawsuit, wrote last month that it was unclear whether the parties to the lawsuit were “truly antagonistic to each other”.

Williams had set a court hearing for May 27 to hear arguments on whether she should dismiss the case on those grounds.

WHEN it comes to flying to the States, a major airline has unveiled a huge new revamp of their planes – and it’s making it much comfier to fly long-haul.

Having flown to and from America several times over the past five years to visit family, I quickly found a love for United Airlines‘.

Follow The Sun’s award-winning travel team on Instagram and Tiktok for top holiday tips and inspiration @thesuntravel.

The airline recently announced they were launching a brand new ‘Elevated’ cabin on their 787-9 Dreamliner between San Francisco and London Heathrow, upgrading every single class from economy to business.

This includes the rollout of the first ever new business class United Polaris Studio suites, which have more spacious seats, larger screens and Bluetooth connectivity.

I, however, was trying out United’s new Premium Plus Economy seat which they say has “elements normally reserved for business class customers” – a welcome sight when leaving gloomy London.

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There’s a total of 35 United Premium Plus seats arranged in a 2-3-2 configuration in the new cabin design, each with privacy dividers and a built-in reading light – both firsts for United Premium Plus seats.

And in all honesty, the seats felt closer to business class than economy and even better than some business class seats I’ve experienced on other airlines.

I opted for the very first row with enough room that when stretching out my legs straight, they still didn’t hit the wall in front of me.

Plonking myself down in my aisle seat – which actually felt more like an armchair – I was immediately impressed by how comfortable it was.

And then when it came to checking out the generous 40.6cm 4K OLED screen, I was excited to snuggle down and watch one of the latest film releases.

Pressing play on Wuthering Heights, I connected my Airpods to the Bluetooth to listen in to the film and placed my phone on the quartzite cocktail table between my seat and the next seat to connect it to the wireless charging.

As for the amenities, a small ‘United 100’ pouch to celebrate the airline’s centenary was on my seat featuring branded socks, an eye mask and some Vitamin C Perricone MD products.

Also on my seat was a Saks Fifth Avenue pillow and blanket, which added to my cinema experience when Wuthering Heights started to play.

When it comes to space, passengers get 96.5cm pitch and 50.8cm width, and then 15cm of recline – which while not much felt spacious enough and with the new privacy screen acting as a good headrest, I was more than comfortable.

Power outlets and bottle holders are located between the seats for added convenience too.

Located on one armrest is also a remote for the TV and a small cubbyhole where you’ll find your overhead earphones.

Of course, you can now also get Starlink Wi-Fi on United flights – even if it is just for messaging – which I have to admit was super speedy.

Another thing I love about United is that you are always fed well,

My first meal consisted of an artichoke salad and bread for starter, with roast chicken for my main and chocolate truffles for dessert.

Mid-flight, I then enjoyed a chicken burrito and before landing, tucked into another salad and a paneer curry.

In between these courses, the cabin crew were great at always ensuring I had enough water or a drink of my choosing – whether that be alcoholic or non-alcoholic.

United aims to have at least 30 planes with the new Elevated interior flying by the end of 2027.

So if you’re trying to decide which airline to go with on your next trip to the US? I’d recommend United – if you want a business class experience on a premium economy budget.

China will buy ‘at least’ $17bn worth of US agricultural goods annually, the White House says.

China will buy “at least” $17bn worth of agricultural goods from the United States annually following US President Donald Trump and Chinese leader Xi Jinping’s summit in Beijing, the White House has said.

China will make the purchases through 2028, with the 2026 target applying to the remainder of the year on a proportionate basis, according to a fact sheet released on Sunday.

The White House said the deal is in addition to China’s commitment to buy at least 87 million metric tonnes of US soya beans, which was made at Trump and Xi’s summit in South Korea in October.

China will also restore market access for US beef by renewing the expired listings of more than 400 production facilities, and resume imports of poultry from states determined by the US Department of Agriculture to be free of avian influenza, according to the fact sheet.

Trump and Xi also agreed to establish two new bodies – the US-China Board of Trade and the US-China Board of Investment – to manage trade and investment between the sides, the White House said.

China has yet to confirm or comment on the White House’s announcement.

The Chinese Embassy in Washington, DC, did not immediately respond to a request for comment.

The White House’s update provides further clarity on the outcome of Trump and Xi’s two-day summit, which was heavy on pageantry and camaraderie but light on concrete agreements.

During their two days of talks in Beijing, Trump and Xi sought greater alignment on economic issues and trade, while largely skirting the sensitive issues of Taiwan and the US-Israel war on Iran.

In a readout after the summit wrapped up on Friday, the White House said the two sides had discussed ways to “enhance economic cooperation”, and that they agreed on the need to keep the Strait of Hormuz open and that Iran “can never have a nuclear weapon.”

Beijing did not explicitly state that Iran should not have nuclear weapons, but stressed the importance of reaching “a settlement on the Iranian nuclear issue and other issues that accommodates the concerns of all parties”.

Neither White House statement contained any mention of Taiwan, the self-governing island that Beijing views as an integral part of its territory.

The omission of any reference to the island – the defence of which Washington is committed to supporting under the 1979 Taiwan Relations Act – came after Xi warned of “clashes and even conflicts” between the superpowers if the issue is not “handled properly”.

After nearly a decade of tit-for-tat economic salvoes between Washington and Beijing, US-Chinese trade is down sharply from its peak.

Their bilateral trade in goods last year came to some $415bn, down from more than $690bn in 2022.

Prime Minister Narendra Modi says his talks with the Dutch PM also focused on expanding cooperation in defence and security.

India’s Tata Electronics has signed a deal with Dutch technology giant ASML to build a major semiconductor plant in western India, as Prime Minister Narendra Modi visited the Netherlands during his European tour.

The agreement, announced on Saturday, will support the development of Tata’s semiconductor facility in Dholera, Gujarat – Modi’s home state.

ASML, Europe’s largest technology company by market value, manufactures advanced lithography machines used to produce high-end microchips found in products ranging from mobile phones to cars.

The Dutch company said it would help “establish and ramp up” production at the plant by supplying its cutting-edge chipmaking tools.

Tata Electronics plans to invest $11bn in the facility, which is expected to manufacture chips for artificial intelligence, the automotive industry and other sectors.

ASML chief executive Christophe Fouquet said the company saw “many compelling opportunities” in India’s growing semiconductor industry.

“We are committed to establishing long-term partnerships in the region,” Fouquet said in a statement.

The deal comes as India and the Netherlands move to deepen economic ties, with New Delhi seeking foreign technology and investment to boost manufacturing and create jobs.

The European Union has increasingly viewed India – the world’s most populous country and one of its fastest-growing economies – as a key future market.

During his visit, Modi held talks with Dutch Prime Minister Rob Jetten and met King Willem-Alexander.

“My conversations with Prime Minister Rob Jetten were extensive and covered a wide range of topics,” Modi wrote on X.

“One of them was defense and security. I spoke about the possibility of drawing up an action plan for the defense industry as quickly as possible. We can also collaborate in sectors such as space travel, maritime systems, and maritime security.”

Modi also addressed members of the Indian diaspora and is expected to inspect centuries-old Chola copper plates being returned to India by Leiden University.

Indian and Dutch officials are also discussing a more flexible visa arrangement for Indian students and workers in the Netherlands.

Modi will next travel to Sweden for talks with Prime Minister Ulf Kristersson focused on trade, innovation and green technology cooperation. The visit marks his second trip to the country since attending the first India-Nordic summit in 2018.

Military and law enforcement clashed with demonstrators outside La Paz, Bolivia, in an attempt to clear roadways that had been blocked as part of nationwide antigovernment protests.

As many as 3,500 soldiers and police were deployed as part of the operation that began in the early hours of Saturday. Around 57 people were arrested, according to the citizens’ rights ombudsman’s office.

Miners, schoolteachers, Indigenous groups and unions have helped to organise the protests, which aimed to convey outrage against the government of centre-right President Rodrigo Paz.

Bolivia is in the grips of an historic economic crisis, considered the worst the country has seen in decades.

The government’s foreign currency reserves have cratered, as exports from Bolivia have slowed down.

Key among those was natural gas. Vast reserves of the fuel were discovered in the late 20th century, and for nearly three decades, those natural gas deposits powered Bolivia’s economy, transforming the South American country into a major energy exporter.

But in 2022, the dynamic switched, amid mismanagement and dwindling supplies. Since then, Bolivia has had to import fuel from abroad, exacerbating its economic crisis.

Currently, many parts of the country have experienced long lines for fuel and shortages of basic supplies like food.

Paz, who was elected in October, had campaigned on alleviating the economic stress. But since taking office, he has spurred outrage by ending a two-decade-old fuel subsidy and pushing to privatise state-owned companies.

Earlier this month, the protests forced the repeal of a land reform measure, Law 1720, that critics claimed could be used to dispossess small, rural landowners, in favour of bigger holdings.

The Bolivian government has estimated that 22 roadblocks have been erected across the country in recent weeks.

Some of the protesters have demanded Paz’s resignation: His election in October marked the end of nearly two decades of rule by the Movement for Socialism (MAS).

But Paz’s office has blamed the demonstrations for cutting off key supplies to cities like La Paz, which holds the seat of government.

Food prices have increased since the blockades began, and the government claims three people have died after being unable to reach hospitals.

According to presidential spokesperson Jose Luis Galvez, Saturday’s crackdown on the protesters was designed to create a “humanitarian corridor” to ensure the free flow of supplies to hospitals in La Paz.

Earlier this week, Paz also thanked his Argentinian counterpart, Javier Milei, for delivering humanitarian assistance to Bolivia.

“This gesture of solidarity not only strengthens the historic bonds of brotherhood between our nations, but also represents vital relief for our communities in times of great need,” Paz wrote on social media on Friday.

Milei responded by denouncing the protesters as anti-democratic.

“Argentina stands with the Bolivian people and supports their democratically elected authorities against those who seek to destabilise the country and obstruct the path toward freedom and progress,” the Argentinian president said.

CHICAGO — President-elect Bill Clinton used a community college in Chicago Monday to try out an updated economic message that Americans will be hearing frequently from him in the weeks to come: We’re not out of the woods yet.

“When you read that things are getting better with the unemployment rate, inflation rate, housing starts, things of that kind, that’s a good thing,” Clinton told an audience of some 150 students at Wilbur Wright Community College on this city’s northwest side. But, he warned, those improvements are merely part of the short-term business cycle.

“Underneath that,” he said, are “20 years of problems.”

“We may or may not be coming out of the recession,” Clinton said. “There are some good indicators that we are, but the long-term problems are there and that is what I have to address.”

Clinton’s statements reflect a basic dilemma that he faces: He relied on a bad economy to help him get elected. And while he would like to see improvements, he must rely on continued worries about the economy to get his programs enacted over what is certain to be fierce opposition from vested interests in Washington. In addition, of course, having defeated President Bush on the issue of the economy, Clinton would like to be able to say that economic improvements occurred on his watch, not on that of his predecessor.

With the economy showing steady signs of improvement, those factors have impelled Clinton and his aides to try with increasing diligence to focus public attention on the long-term trends of economic stagnation–and his long-term agenda to change them–rather than on talk of a short-term stimulus to help an economy that may well be moving out of recession on its own.

The emphasis on the long-term agenda will be central to the economic conference that Clinton plans to convene in Little Rock next week. Aides envision the conclave in large part as a tutorial to explain to Americans why the country needs Clinton’s agenda of raising taxes, revamping the health care system, and increasing spending on education, training and new technologies to reduce the deficit.

In answering questions from the students, Clinton provided the most detailed view since the election of how he intends to form a coherent agenda out of the many promises he made in the campaign.

Repeatedly he referred to two key proposals: His plan for a national service trust fund to let Americans finance their educations by borrowing money and paying part of it back through public-service work, and his plans to reform the nation’s health care system.

Changing the health care system is the one thing that he would do “if I could wave a magic wand,” Clinton said, reminding the students of the effect that rising health care costs have had on the ability of American companies to compete.

At the same time, the session with the students showcased a shift in Clinton’s rhetoric from the language of the campaign to the sterner realities of governing. During the campaign, Clinton struggled against his natural tendency to give four-part answers to all questions. Now he appears to have given up that fight.

And repeatedly, as the students asked Clinton for more federal money for program after program, the President-elect, mindful of the massive deficit he soon will inherit, responded with a polite version of “no.”

One woman asked if he would provide special incentives for minority students to attend college. No, Clinton said, the goal should be to make loans and scholarship funds broadly available and then recruit in minority communities. A nursing student asked about special incentives to encourage people to pursue nursing careers. No, Clinton replied, noting that nursing salaries have gone up because of shortages.

Still another noted that some of the classes he wanted to take have been canceled due to a lack of funds. Could the federal government help? he asked. “The federal government, with the huge deficits we are now facing, does not have the capacity to take over substantial funding of the community college system,” Clinton replied.

Despite that, Clinton seemed to win the student’s enthusiasm simply by having shown up.

“He could have just gone to Princeton or Yale and spoken in their auditorium. Instead he came here,” said Erika Marie Dimitrijevic, a 35-year-old mother who attends an ultrasound training program at the school. “I think he wants to get closer to the people.”

Dimitrijevic is in many ways representative of the school, whose average student is a 31-year-old woman. Roughly 50% of the 14,000 Wright students are white, while 20% are black and 30% are Latino. About 15% are women who head households.

The President-elect also used the occasion to score some points with the area’s political leaders, who were crucial in his battles to win his party’s nomination and to defeat President Bush. They will be equally important to whatever success he manages in the next four years. Clinton took time to meet with Chicago Mayor Richard M. Daley, along with Daley’s brother William, who has been touted in Chicago as a potential secretary of transportation in the Clinton Administration.

And in speaking to the students, Clinton made a point of praising their local congressman, Rep. Dan Rostenkowski, chairman of the House Ways and Means Committee, whose panel will have jurisdiction over much of Clinton’s economic and health care proposals and whose help Clinton has courted assiduously in recent weeks.

If he succeeds in changing the nation’s health care system, “it will be in no small measure because of Danny Rostenkowski’s leadership,” he said.

Later in the day, Clinton arrived in Washington and courted members of Congress by attending a reception for newly elected freshmen.

He will spend most of today on Capitol Hill, meeting with freshmen congressmen again as well as with congressional committee chairmen.

Clinton’s attempts to woo members of Congress, both the powerful and the new, are in sharp–and deliberate–contrast to the approach of Jimmy Carter, the last Democratic President, whose relations with Capitol Hill were tense and troubled. Clinton and his aides, by contrast, have taken every possible opportunity to try to bring members of Congress onto his team, an effort which is likely to include appointing several to his Cabinet.

The first of those expected Cabinet appointments are expected later this week.

As Clinton left the White House guest quarters at Blair House Monday night, en route to a party at the home of Washington Post Co. Chairwoman Katharine Graham, he was accompanied by several members of his transition team and Lawrence Summers, a World Bank economist, who is considered a possible choice for economic security adviser.

After a scheduled return to Little Rock tonight, Clinton likely will resign from the post of governor Wednesday, closing a 12-year chapter of his life. He is also expected to release new ethics guidelines for his Administration.

Researcher Tracy Shryer in Chicago contributed to this story.

Before arriving for his high-stakes summit with Chinese leader Xi Jinping, United States President Donald Trump aimed to set expectations high.

He said he would urge Xi to “open up” China’s economy and announced a delegation of top business executives, including Tesla’s Elon Musk, Apple’s Tim Cook and Nvidia’s Jensen Huang, to accompany him.

As Trump and Xi prepare to wrap up two days of meetings on Friday, the expectations for their summit’s outcome among observers generally are modest at best.

While Trump and Xi are anticipated to extend the one-year pause in their trade war agreed to in South Korea in October, the expectations are for a stabilisation – not revitalisation – in ties between the world’s two largest economies, which are locked in a rivalry that spans everything from trade and artificial intelligence to the status of Taiwan.

“It is important to be clear-eyed about the state of relations here,” Claire E Reade, a senior counsel at Arnold & Porter who previously worked on China at the Office of the US Trade Representative (USTR), told Al Jazeera.

“China does not trust the US, and China wants to beat the US in what it sees as long-term global competition,” Reade said.

“This limits what can be agreed.”

While Trump and Xi have yet to announce the final contours of any trade agreement, the US side has flagged various business deals in the pipeline.

In a pre-recorded interview with Fox News that aired on Thursday, Trump said that China would invest “hundreds of billions of dollars” in companies run by the CEOs in his delegation, without providing further details.

Trump also said that Beijing had agreed to purchase US oil and 200 Boeing aircraft.

Trump administration officials have said that the sides are also discussing the establishment of a “Board of Investment” to manage investments between the countries.

“A realistic ‘opening up’ of the Chinese market would likely focus first on sectors where the economic complementarity is most obvious,” Taiyi Sun, an associate professor of political science at Christopher Newport University in Newport News, Virginia, told Al Jazeera.

“Agricultural goods such as soybeans and beef, as well as high-value-added manufacturing products like Boeing aircraft, are natural areas for expansion because they match existing Chinese demand with American export strengths.”

Sun said a “gradual” opening for US firms in sectors such as financial services could also be possible.

“But those areas are politically and institutionally more sensitive inside China, so progress would likely be incremental rather than immediate,” he said.

Gabriel Wildau, a senior vice president at global business advisory firm Teneo, said both sides will be seeking to address supply-chain vulnerabilities exposed by their trade war.

“The Iran war has likely increased the US’s vulnerability to export controls on rare earths, given the need to rebuild the munition stocks depleted in that war,” Wildau told Al Jazeera.

“Washington will therefore be willing to offer tariff relief – or at least assurances not to impose new tariffs – in exchange for Beijing’s commitment to keep rare earth exports flowing.”

While Trump and Xi agreed to roll back some trade barriers at their summit in South Korea, US-Chinese business and trade remain severely constrained after a decade of tit-for-tat economic salvoes between the sides.

The average US tariff on Chinese goods stood at 47.5 percent after the South Korea summit, up from 3.1 percent before Trump’s first term, according to the Peterson Institute for International Economics.

China’s average tariff on US goods stood at 31.9 percent, up from 8.4 percent in 2018, according to the think tank.

Two-way goods trade amounted to about $415bn in 2025, down sharply from its 2022 peak of $690bn.

Carsten Holz, an expert on the Chinese economy at the Hong Kong University of Science and Technology, said China has less incentive to make concessions to the US than before, amid the rise of its domestic industries.

“Across many industrial sectors, PRC [People’s Republic of China] firms hold leading or controlling positions,” Holz told Al Jazeera.

“As a result, the PRC economy has little to gain from opening further to the US and is likely to only offer largely symbolic gestures.”

Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore, voiced similar sentiments about the limits of US leverage.

“Basically, Trump expects China to buy more stuff from America and let US companies operate more freely in China,” Elms told Al Jazeera.

“What is he offering?” Elms said. “Very little, largely because Trump sees the bilateral relationship as one where the US has been fair and China has not.”

Reade, the former USTR official, said Xi would not agree to any measures that “harm Chinese interests in any way.”

“Instead, China will potentially give the US no-cost ‘gifts,’” Reade said, suggesting such measures could include the removal of trade barriers it placed on US beef.

“It may buy US goods it needs,” Reade said.

“If it allows purchases of US tech products, it will only be because it needs them right now,” she added, “But this does not interfere with China’s strategic plans to eliminate dependence on US technology over the longer term.”

Protesters have demanded the resignation of President Rodrigo Paz, who was elected on a platform of economic reform.

Demonstrators, led by mining groups and rural unions, have clashed with law enforcement in Bolivia as tensions simmer over the country’s economic crisis, the worst in decades.

On Thursday, small explosions were heard in the midst of the protest in La Paz, credited to miners setting off small sticks of dynamite. Some protesters were reported as attempting to breach the presidential palace.

The unrest follows weeks of road blockades, as miners, farmers, teachers and rural workers express frustration over the country’s ongoing economic turmoil.

Bolivia used to be a major exporter of natural gas, but in recent years, its reserves began to shrivel, and its production has plummeted. Now, rather than being a fuel exporter, it has become a net importer, reliant on oil and natural gas from abroad.

The collapse of the natural gas industry has been coupled with dwindling supplies of foreign currency in the country. The result has been soaring inflation, supply shortages and higher prices.

Bolivians have experienced long lines for fuel, and hospitals have reported a lack of basic supplies like oxygen and medication.

Centre-right leader Rodrigo Paz was elected in October last year in part on a promise to address the economic tailspin.

His victory marked a political sea change in Bolivia. For much of the past two decades, except for a brief period in 2019, the country has been governed by the Movement Towards Socialism (MAS).

The decline of MAS has been credited, in part, to the uproar over the economy.

But on Thursday, Paz likewise faced calls from protesters for his resignation, just as his MAS predecessor, Luis Arce, had.

Earlier in the day, a group of 20 miners were invited to the presidential palace to meet with Paz and discuss their demands, according to the Reuters news agency.

Ahead of the meeting, Economy Minister Jose Gabriel Espinoza said his government was “open to dialogue”.

Among the issues reportedly discussed were fuel subsidies, welfare benefits and changes to an agrarian reform measure, Law 1720, that was repealed on Wednesday after outcry.

Still, officials have refused demands that Paz step down. “The president is not going to resign,” Mauricio Zamora, the minister of public works, services and housing, said earlier this month.

Some of Paz’s allies have blamed the unrest on former President Evo Morales, a former trade union leader who continues to draw popular support in Bolivia’s rural areas.

Morales, who led Bolivia from 2006 to 2019, previously supported protests against Paz’s predecessor Arce, after splitting from MAS.

He is also the subject of an arrest warrant: Morales has been accused of statutory rape and was held in contempt of court for failing to show up to a hearing last week.

A prolific social media user, Morales posted multiple times on Thursday about the protests, accusing the government of using him as a scapegoat. He also echoed calls for officials to address the shortages of food, fuel and other basic supplies.

“They believe that the thousands of Bolivians currently protesting — in the streets and on the roads — are merely obeying a single individual,” Morales wrote in one post.

“The outraged are driven by their social conscience and their fury against a government that, from day one, betrayed its constituents and the nation.”

Amid an oil blockade against the island, the US blames Cuba’s communist leadership for ‘standing in the way’ of aid.

The United States has offered $100m in humanitarian assistance to Cuba on the condition that the island’s communist government agrees to “meaningful reforms”.

The sum was made public in a statement from the US State Department on Wednesday, though the administration of President Donald Trump underscored it had made the offer privately in the past.

But the $100m comes with strings: namely, that Cuba’s government commits to Trump-approved changes.

“Today, the Department of State is publicly restating the United States’ generous offer to provide an additional $100 million in direct humanitarian assistance to the Cuban people,” the statement said.

“The decision rests with the Cuban regime to accept our offer of assistance or deny critical living-saving aid and ultimately be accountable to the Cuban people for standing in the way of critical assistance.”

The statement marks the latest chapter in an ongoing pressure campaign designed to destabilise Cuba’s communist leadership.

Since Cold War tensions in the 1960s, the US has placed a comprehensive trade embargo on the Caribbean island, in part as a reaction to the Cuban Revolution.

It has become the longest-running trade embargo in modern history, and the US has justified its continuation by pointing to systematic repression under Cuba’s communist government.

But critics have denounced the trade embargo as worsening humanitarian conditions on the island.

The crisis reached a tipping point in January, after Trump abducted Venezuelan President Nicolas Maduro, a close ally of Cuba.

In the following weeks, Trump cut off Venezuelan funds and oil supplies to Cuba. He then threatened economic penalties against any country that supplied Cuba with fuel, implementing a de facto oil blockade on the island.

Since then, only one Russian oil tanker has reached Cuba in late March. That month alone, the island suffered two island-wide blackouts.

Cuba relies heavily on foreign imports of oil to power its ageing energy grid. Only 40 percent of its oil supply is produced domestically, according to the International Energy Agency.

The United Nations warned earlier this year that Cuba faces the possibility of humanitarian “collapse”, with public transportation grinding to a halt, food prices soaring and public services like hospitals struggling to keep the lights on.

Trump, meanwhile, has repeatedly threatened to shift his focus to Cuba after the US-Israeli war on Iran ends, saying the island is “next” on his list of countries where he would like to see regime change.

“As we achieve a historic transformation in Venezuela, we’re also looking forward to the great change that will soon be coming to Cuba,” Trump told Latin American leaders at a summit in March.

“Cuba’s in its last moments of life as it was. It’ll have a great new life, but it’s in its last moments of life the way it is.”

Earlier this month, the US president issued a fresh wave of sanctions against the Cuban government, accusing the island of posing “an unusual and extraordinary threat to US national security and foreign policy”.

Media reports have also indicated that the Trump administration has stepped up its surveillance flights around Cuba, possibly in preparation for a surge of military assets to the Caribbean.

In Wednesday’s statement, the State Department blamed the communist system for having “only served to enrich the elites and condemn the Cuban people to poverty”.

It did not mention the US role in the humanitarian crisis on the island but instead described Cuba’s government as a hurdle to delivering much-needed aid.

“The regime refuses to allow the United States to provide this assistance to the Cuban people, who are in desperate need of assistance due to the failures of Cuba’s corrupt regime,” the State Department wrote.

It added that, should Cuba accept its terms, the $100m would be distributed through the Catholic Church and “other reliable independent humanitarian organizations”, rather than through the island’s government.

Taipei, Taiwan – Chinese President Xi Jinping is expected to seek concessions on Taiwan and US tariffs when he meets United States President Donald Trump for a high-stakes summit taking place in the shadow of the war on Iran.

Trump will arrive in China on Wednesday evening for a three-day visit that will mark the first trip by a US leader to the country since 2017, when Trump visited in the early days of his first term.

Unlike Trump, who is renowned for his mercurial policymaking, Xi is widely seen as predictable in his goals for the summit, particularly as they concern Beijing’s longstanding “core interests” related to national security and territorial integrity.

At the top of that list is Taiwan.

While Taiwan’s government considers itself the head of a de facto sovereign state, Beijing views the island as an inalienable part of its territory.

The US formally cut ties with Taiwan – also known as the Republic of China – decades ago, but is committed to aiding the self-governing democracy’s defence under the 1979 Taiwan Relations Act.

Under the law, Washington has provided Taiwan with billions of dollars in arms and pursued cooperation in areas such as military training and intelligence sharing, which Beijing considers interference in its internal affairs.

The US government officially acknowledges that China views Taiwan as part of its territory, but does not express a stance on whether it agrees.

Washington is also intentionally vague about whether it would intervene to defend Taiwan if China sought to annex it by force.

In a call with US Secretary of State Marco Rubio last month, Chinese Foreign Minister Wang Yi made clear that Taiwan would be raised at the summit, describing the issue as “the biggest risk in the China-US relationship”, according to a Chinese readout of the call.

China’s embassy in Washington, DC, reiterated that message after Trump’s departure for the summit on Tuesday, naming Taiwan as the first of “four red lines” that “must not be challenged”.

While analysts say it is unlikely that the US will change its position on Taiwan due to Chinese pressure, Trump said this week that the summit’s agenda would include US arms sales to the island, raising questions about the future of a stalled multibillion-dollar arms deal.

The US Congress approved the arms package reportedly worth $14bn earlier this year, but the sale still requires Trump’s final approval.

Xi will use his meetings with Trump to “influence and potentially convince Trump to agree to scale back, if not completely suspend, sales to Taiwan,” William Yang, a Taipei-based analyst at the Crisis Group, told Al Jazeera.

If Trump were to make concessions on weapons sales to Taiwan, he would be breaking with a longstanding policy against consulting with Beijing that dates back to former US President Ronald Reagan.

Cancelling or watering down the deal would be a serious blow to Taiwanese President William Lai Ching-te, who is locked in an intense fight with the opposition over defence spending, Yang said.

“They are hoping to first influence Trump’s decision around this issue and potentially create a situation where it will be much harder for [Lai’s] government to request more special defensive spending in the future,” Yang said.

Restoring the US-China framework

Xi is also eager to smooth over US-China relations after a tumultuous 18 months that saw Trump launch a second trade war with the world’s second-largest economy, according to analysts.

The standoff saw each side roll out escalating tit-for-tat tariffs – briefly sending duties well above 100 percent – and other punitive measures, such as export controls, before Washington and Beijing hit pause in May.

During their last meeting in South Korea in October, Xi and Trump agreed to a one-year reprieve in their trade war, while keeping some trade measures in place, including certain tariffs and export controls.

Over the past month, the US has rolled out several rounds of new sanctions targeting Chinese firms, including refiners accused of buying Iranian oil and companies accused of helping Tehran obtain materials to build drones and missiles.

Earlier this month, Beijing issued a “prohibition order” directing firms to disregard the US sanctions on its oil refineries.

“Beijing wants predictability and certainty for the remainder of Trump’s term through January 2029, because Beijing needs to be able to plan its own economic policies,” Feng Chucheng, a founding partner of Beijing-based Hutong Research advisory, told Al Jazeera.

These policy considerations include understanding tariff levels the US will apply to China and its trade partners, Feng said.

Wang Wen, dean of the school for global leadership at Renmin University in Beijing, said China wishes to return to a relationship based on “peaceful coexistence, mutual respect, and win-win cooperation”.

“We hope that this meeting will bring the US policy towards China back to these three principles,” Wang told Al Jazeera.

The stakes are high for Beijing, where the view of Trump has shifted from a “predictable transactional counterpart” to a “more action-oriented and harder-to-restrain opponent,” Hung Pu-Chao, deputy executive director of the Center for Mainland China and Regional Development Research at Taiwan’s Tunghai University, told Al Jazeera.

Restoring the US-China relationship to a stable footing is one way to mitigate these risks, Hung said.

Rather than secure concessions, Hung said, China’s priority is “trying to adjust the current strategic position and negotiating pace that are unfavourable to it, and bring US-China interactions back into a framework that it can better control”.

At the summit, Xi is likely to agree to increase purchases of US agricultural exports and Boeing planes, Feng said, and could also back Trump’s plan to create a “Board of Trade” and a “Board of Investment” to oversee US-China economic ties.

But China is unlikely to make compromises on rare earths – a sector it dominates – unless the US makes major political concessions, Feng said.

Calling for dialogue on the war on Iran

The US-Israel war on Iran will loom large over the summit.

Although not a main player in the conflict, China has been hit by the economic fallout of the war and the shutdown of the Strait of Hormuz, through which one-fifth of global oil and natural gas supplies usually pass.

Beijing has called for negotiations and a comprehensive ceasefire since the start of the conflict, a message Xi is likely to reiterate in his talks with Trump, according to Jodie Wen, a postdoctoral fellow at the Center for International Security and Strategy at Tsinghua University in Beijing.

“Xi will talk about this issue with Donald Trump and say that we all know that the war has a huge impact on the world, on Asian countries and the US, so we must have dialogue,” Wen told Al Jazeera.

Trump said on Tuesday that he does not need China’s “help” resolving the war, though the White House has pressured Beijing to lean on Iran to reopen the strait.

Xi and his top diplomat, Wang, have met more than a dozen global leaders and high-level officials since the start of the war, playing a behind-the-scenes mediating role.

China has had a “comprehensive strategic partnership” with Iran since 2016, and buys more than 80 percent of its oil.

Wen, the postdoctoral fellow at Tsinghua University, said Xi is unlikely to agree to any involvement except as a mediator, which she described as consistent with China’s longstanding approach to global affairs.

“China’s foreign policy principle is non-intervention,” she said. “This is our principle.”

United States President Donald Trump has departed for Beijing ahead of a high-stakes summit with Chinese President Xi Jinping, after weeks of unsuccessful US efforts to persuade China to help bring Iran back to negotiations and ease tensions around the Strait of Hormuz.

The leaders of the world’s two largest economies are due to meet on Thursday and Friday during Trump’s first visit to China since 2017, with talks expected to focus on trade, Taiwan, artificial intelligence and the war involving Iran.

Here is what we know about the upcoming summit and the key issues expected to dominate the agenda.

Why does the Trump-Xi summit matter?

The Trump-Xi summit is a high-level meeting between Trump and Xi Jinping taking place in Beijing as the world’s two largest economies face growing tensions over trade, technology, Taiwan and the Iran war.

The summit is particularly significant because Trump will be the first US leader to visit China in nearly a decade, while the talks also come at a time of heightened geopolitical and economic uncertainty. Originally expected earlier this year, the meeting was delayed by the war on Iran.

Before departing for Beijing, Trump said he and Xi would have a “long talk” about Iran, although he stressed that trade would remain the central focus of the visit.

“Trade remains politically powerful, especially for Trump, because it gives rivalry a language that voters can easily understand,” said Salvador Santino Regilme, associate professor and programme chair of international relations at Leiden University. “Yet the deeper conflict concerns hierarchy, legitimacy and the future architecture of global order.”

Regilme added that both countries remain locked in a relationship shaped by strategic rivalry and deep economic dependence.

“The United States still relies heavily on China’s manufacturing capacity and low-cost production, while China depends on access to US consumers, technology, capital markets and the wider stability of the dollar-centred global economy.”

“This is the paradox of US-China rivalry: each side wants greater autonomy, yet both remain tied to a structure of mutual dependence that neither can easily dismantle without hurting itself,” Regilme added.

What are the biggest issues at the Trump-Xi summit?

Analysts say the US and China are entering the summit with different priorities.

Trump is expected to focus heavily on trade with the aim of securing what he can present as economic wins ahead of November’s midterm elections. Washington has pushed for China to increase purchases of American goods, including Boeing aircraft, beef and soya beans, while also seeking closer investment and trade cooperation.

Beijing, meanwhile, is expected to press the US to ease restrictions on advanced semiconductor exports and roll back measures limiting China’s access to critical chip-making technology. Taiwan is also likely to remain one of the most sensitive and contested issues in the summit.

Trump has also said he plans to raise the case of Jimmy Lai, the jailed Hong Kong media tycoon and pro-democracy figure sentenced earlier this year under Beijing’s national security law.

Beyond bilateral disputes, the two leaders are also expected to discuss the war on Iran, tensions around the Strait of Hormuz and the growing risks linked to artificial intelligence.

The biggest flashpoints include:

Tech vs rare earths

Technology and supply chains are expected to be among the key issues at the summit, as Washington and Beijing remain locked in a widening battle over semiconductors and critical minerals.

The US has tightened restrictions on advanced chips and chip-making equipment going to China, saying the measures are needed to slow Beijing’s military and AI development.

China, meanwhile, controls roughly 90 percent of global rare earth refining, materials essential for semiconductors, electric vehicles, military equipment and electronics, and has responded with tighter export controls on several critical minerals.

Beijing is expected to push for fewer US technology restrictions, while Washington wants China to resume shipments of rare earths and critical minerals after export controls disrupted parts of the American automotive and aerospace sectors.

 Iran war and the Strait of Hormuz

The Iran war is expected to be one of the most closely watched issues at the summit.

Analysts expect Washington to press Beijing to use its influence over Tehran, particularly because China remains the largest buyer of Iranian oil — by far — purchasing more than 80 percent of Iran’s shipped crude exports. US officials have also urged China to support efforts to reopen and secure the Strait of Hormuz, a vital route for global energy supplies.

The conflict has also increased pressure on China’s economy and energy security. About half of China’s crude oil imports come from the Middle East, while disruptions in the Gulf have left commercial shipping vulnerable to attacks and delays.

“I have no doubt that Trump is going to at least try to enlist Xi Jinping to assert some pressure for the Iranians to come back to the table and agree to a settlement,” said Dan Grazier, a senior fellow and director of the National Security Reform programme at the Stimson Center.

Experts say Iran may be one of the few areas where US and Chinese interests overlap, as both countries benefit from stable energy flows through the Gulf.

“Both sides would like to see the strait opened,” said Gregory Poling, director and senior fellow at the Center for Strategic and International Studies (CSIS), but he noted Beijing is unlikely to align itself too closely with Washington’s approach towards Tehran.

While China wants shipping through the Strait of Hormuz restored, Poling argued the diplomatic and strategic pressure created by the disruption is falling far more heavily on Washington.

“It is not China being humiliated in the strait … It’s the US.”

Taiwan: An existential problem

Taiwan is expected to be one of the most sensitive issues, with Beijing repeatedly warning that it remains the biggest source of tension in US-China relations.

China claims the self-ruled island as part of its territory and has increased military pressure on Taiwan in recent years through regular air and naval operations around the island.

Tensions have risen further under Taiwanese President William Lai Ching-te, whom Beijing has sharply criticised because his party views Taiwan as already sovereign.

The US officially recognises the communist mainland as China but is legally committed under the Taiwan Relations Act to support Taiwan’s self-defence, a policy that has long angered China. Washington has approved tens of billions of dollars in military sales to Taiwan over the years, including an $11bn package announced last year, and Trump recently said he discussed the issue with Xi ahead of the summit.

Analysts say Taiwan will be paying close attention to what Trump and Xi say publicly after the summit, especially on defence and arms sales.

“What matters is the precise wording,” Regilme said. “Whether Trump reaffirms support for Taiwan’s defence, whether he sounds ambiguous on arms sales, and whether he gives Xi any rhetorical opening to claim that Washington is restraining Taipei.”

Regilme said Beijing is likely to push for limits on US arms sales and stronger political restrictions on Taiwan, while also discouraging any movement towards formal independence. At the same time, Taipei fears it could become part of a broader geopolitical bargain between Washington and Beijing.

“In great-power politics, small words often carry large consequences, especially for those whose survival depends on the credibility of others,” Regilme added.

Tariffs

Trade is also expected to be a sticking point after years of friction between the US and China over tariffs and economic competition.

The latest trade dispute intensified last year when Trump imposed new tariffs on Chinese goods. China responded with its own tariffs.

At the height of the dispute, tariffs on some goods climbed above 100 percent, prompting concerns about the impact on global trade and supply chains.

The two countries later agreed to temporarily lower tensions through a trade truce reached during talks in South Korea. As part of the deal, China agreed to buy more US agricultural products, including soya beans, while Washington rolled back some tariffs.

What would count as a successful outcome for Trump and Xi?

Analysts say a successful outcome for Trump would likely need to be visible and easy to sell politically at home. That could include Chinese purchases of US goods, movement on tariffs, cooperation on Iran, or progress on rare earth exports.

“Trump’s foreign policy style places enormous value on the public performance of dealmaking, so the optics of success may matter almost as much as the substance,” Regilme said.

For Xi, success would mean preserving stability without appearing to bow to Washington, while securing greater economic predictability and recognition of China as a global power.

“A comprehensive trade deal seems unlikely because the structural sources of rivalry remain unresolved,” Regilme added.

Instead, he said a limited agreement is more likely, potentially involving tariff pauses, purchase commitments, rare earth arrangements or a framework for future negotiations.

“Such an agreement would manage the rivalry temporarily, while leaving untouched the deeper problem: the two economies remain mutually dependent, but their governments increasingly treat that dependency as a strategic danger.”

In a United States court, OpenAI chief executive Sam Altman has rejected claims from fellow tech mogul Elon Musk that he betrayed the artificial intelligence company’s original vision.

Tuesday marked the start of Altman’s testimony in a contentious trial unfolding in Oakland, California, between some of tech’s richest and most powerful titans.

Musk, the wealthiest man in the world, has sued Altman and OpenAI president Greg Brockman on the basis that they “stole a charity” by shifting its purpose.

He alleged that OpenAI’s leader persuaded him to invest $38bn, based on a goal of improving humanity, only to see the company pivot to a for-profit venture in 2019.

On the witness stand on Tuesday, Altman instead framed Musk as a competitor obsessed with exercising control over OpenAI.

“It does not fit with my conception of the words ‘stealing a charity’ to look at what has actually happened here,” Altman told the court.

The two men have long had an acrimonious relationship, driven in part by differing views about artificial intelligence.

Musk — a self-described free speech “absolutist” — currently runs his own AI chatbot, Grok, which has been accused of perpetuating right-wing conspiracy theories and offensive materials.

He is seeking $150bn in damages from OpenAI and Microsoft, one of its principal investors.

Altman’s testimony comes more than two weeks into the trial, which has seen him and Musk square off against each other.

In his testimony, Altman argued that Musk knew of the plans to develop OpenAI into a for-profit enterprise when he invested, and he asserted that Musk even petitioned to have a majority stake in the company.

“An early number that Mr Musk threw out was that he should have 90 percent of the equity to start,” Altman told the jury. “It then softened, but it always was a majority.”

The outcome of the trial could determine the future of OpenAI, its leadership, and products like ChatGPT. As part of his lawsuit, Musk is pushing for the removal of Altman and Brockman.

The trial comes as OpenAI prepares for a potential initial public offering that could see it valued at $1 trillion, a historically large sum.

During earlier testimony, Musk portrayed Altman as a liar who could not be trusted with the development of the technology.

“If you have someone who is not trustworthy in charge of AI, I think that’s a very big danger for the whole world,” Musk said.

Musk’s lawyer, Steven Molo, also sought to undermine Altman’s reliability during questioning on Tuesday.

“Have you misled people when you do business?” Molo asked Altman.

“I do not think so,” Altman replied.

Altman, meanwhile, sought to cast doubt on Musk’s leadership; Musk ultimately left OpenAI’s board in 2018 to pursue his own AI development.

“I don’t think Mr Musk understood how to run a good research lab,” Altman said. “He had demotivated some of our most key researchers.”

The US public, for its part, has been largely unconvinced by high-minded rhetoric about the transformative potential of AI.

A March 2026 poll by the Pew Research Center suggested that a majority of respondents in the US believe AI will worsen, rather than improve, the ability to think creatively, form meaningful relationships, make difficult decisions, and solve problems.

Just 10 percent of respondents said they were more excited than concerned about the increased use of AI in daily life.

But the industry has been quick to translate its substantial economic power into political influence as lawmakers consider how best to regulate the technology.

The use of AI has emerged as an election-season issue as the US midterms approach in November, and the administration of President Donald Trump has proposed a “national policy framework” for the technology to avoid a patchwork of state regulations.

The AI industry has become a driver of eye-watering investment in recent years, with the United Nations estimating that the global market could be worth $4.8 trillion by 2033.

After successfully launching Nigeria’s only operational oil refinery in 2024, billionaire businessman Aliko Dangote has set his sights on East Africa as the next location for another mega refinery project, according to recent reports.

It comes as African countries are actively seeking ways to make energy more secure, following huge global disruptions amid the US and Israel’s war on Iran and Tehran’s subsequent closure of the Strait of Hormuz, through which about 20 percent of the world’s oil and natural gas is shipped.

Dangote, Africa’s richest man, appeared to be one of the winners from this fallout when his newly operational refinery, located in Nigeria’s commercial Lagos State, began selling large volumes of crude oil across the continent as the war on Iran escalated in March and global oil prices soared.

At present, West, South and East Africa rely primarily on importing refined petroleum products from the Middle East, meaning they are highly vulnerable to disruptions there.

Neighbours of Nigeria – Cameroon, Togo, Ghana and even Tanzania, further to the east – are among the countries that have turned to Nigeria as supplies from the Middle East dry up.

By the end of March, the refinery, which has the capacity to produce 650,000 barrels per day (bpd), reported it was also receiving orders from beyond the continent, especially for severely scarce jet fuel as hundreds of flights were cancelled across regions.

Supply from Dangote’s refinery has cushioned the impact of the war in terms of fuel supply for Nigeria and neighbouring countries, analysts say.

Nigeria is Africa’s largest oil producer, and the $19bn project in Lagos is currently the world’s largest single-train refinery, meaning it employs a single processing line rather than multiple units. But it hit full production capacity in February 2026, the same month the war with Iran started.

Nigeria has no functional state-owned refinery, so Dangote’s refinery is now positioning the country to be a net exporter of jet fuel and diesel.

Here’s why more refining capacity in Africa matters for the continent:

What is Dangote’s plan for an East Africa refinery?

In April, Kenya’s President William Ruto announced that East African countries were in talks to build a joint oil refinery at Tanzania’s Tanga port, which would have a similar capacity to Dangote’s Lagos operation.

“We do not want to be held hostage any more by the Strait of Hormuz,” Ruto said at a Nairobi business event in April, which Dangote was present at.

“We do not want to be held hostage by wars that are started by other people. We have our resources here, and we are saying we are going to use our African resources to industrialise our region.”

In an interview with the Financial Times on Sunday, however, Dangote said he would prefer to build the new operation in Kenya rather than Tanzania.

“I’m leaning more towards Mombasa because Mombasa has a much larger, deeper port,” the billionaire told the UK newspaper.

“Kenyans consume more. It’s a bigger economy,” he said, adding that “the ball is in the hands of President Ruto … Whatever President Ruto says is what I’ll do.”

He has projected construction costs of between $15bn and $17bn.

But venturing into East Africa, which has a very different commercial landscape from West Africa, could prove a challenge, analyst Dumebi Oluwole of Lagos-based intelligence firm Stears told Al Jazeera.

“Dangote has proven it [his operation] can build at scale,” she said. “The East African test will be whether it can also navigate the political and logistical landscape of a fragmented, multi-country market.”

Why aren’t African countries already producing more oil?

Despite having sizeable crude reserves, African countries only refine about 44 percent of the total oil consumed themselves, with imports making up the rest, according to a 2022 African Union report.

The top producers of refined oil are Algeria, Egypt and South Africa. There are about 21 refineries in North Africa.

Southern Africa has another seven, while West Africa has 14. However, most refineries in the two regions are either not operating or are producing below the capacity they are equipped to.

East Africa’s only existing refinery is in Mombasa, but it stopped operating in 2013 due to a combination of slow government policies and exiting investors, who deemed it commercially unviable as a result.

There is currently no refining capacity at all in East Africa, despite the region having about 4.7 billion barrels of crude reserves, according to the African Union, mainly in Uganda, South Sudan, Kenya and the Democratic Republic of the Congo.

Kenya imported 40 million barrels of petroleum in 2025. It regularly buys oil from the UAE, Saudi Arabia, India and Oman, all of which have been hampered by Iran’s closure of the Strait of Hormuz.

Nigeria itself is Africa’s biggest net crude producer with a 1.5 million to 1.6 million bpd capacity. The country has not refined meaningfully since 2019.

What difference will local refineries make for African countries?

Exporting most of its crude to then import refined products is expensive and puts Africa on the back foot, analyst Oluwole said.

More oil refined on the continent would mean lower petrol pump prices, lower transport costs, and more energy available for people and businesses, in theory. It would also mean greater access to by-products like fertilisers for farmers, for example, or petrochemicals for manufacturers.

“Dangote has demonstrated that a viable, scalable, intra-African energy supply option is possible – that proof of concept matters enormously,” said Oluwole.

“It reflects a growing continental conviction that Africa can provide for itself, and that this is no longer wishful thinking,” she added.

In Nigeria’s case, Dangote’s refinery is yet to ease pressures, though. Local airlines, for example, have complained about having to pay high prices for jet fuel even with improved local supplies. Analysts say that could be because Nigeria’s government removed fuel subsidies in 2023. Bureaucracy within the state oil company also forced Dangote’s refinery to import crude.

Still, the refinery is contributing to “a more transparent and competitive market”, Oluwole said, adding that results should eventually show.

Other countries are stepping up. Last week, Angola’s $470m Cabinda refinery began supplying domestic as well as foreign markets. The project is owned primarily by the United Kingdom’s Gemcorp Capital and has a capacity of 30,000bpd, with plans to double by the end of 2026.

Dangote’s planned refinery in Kenya, if completed, could also help to reduce East Africa’s reliance on the Middle East.

A separate, government-funded refinery project in Uganda’s Hoima region is also in the works. Authorities expect the project to be able to refine 60,000bpd when it starts operations in 2029. It will be fed by the joint Uganda-Tanzania East African Crude Oil Pipeline (EACOP), an ongoing project which will transport crude from Uganda’s Lake Albert to Tanzania’s Tanga Port.

Uganda also plans to produce diesel, jet fuel, kerosene and Liquefied Petroleum Gas (LPG).

With big plans in place, Oluwole says it’s now left to African governments to create enabling business environments for the private sector.

“Dangote has opened the door,” she said. “The question now is whether African institutions and governments will walk through it.”

Fake online advertisements and social media groups are luring people in Jordan with promises of “quick profits” from cheap gold with sellers disappearing once funds have been transferred or customers defrauded with counterfeit and substandard metals, Jordanians tell Al Jazeera.

Mohammed Nassar said he was quoted a price for gold lower than local market rates due to an “online store” claiming it was exempt from manufacturing fees, government licensing costs or shop rents.

The Jordanian shopper transferred the money to secure what he thought was a bargain before the website disappeared and Nassar realised he had become the victim of a scam.

In another case, a young woman named Tala Al-Habashneh told Al Jazeera that she bought gold through a social media platform after agreeing with the seller and transferring the promised amount.

On closer examination of the product, she found that her gold was counterfeit, mixed with other metals and lacking any official stamps or invoices to prove its origin or carat.

Tala immediately filed a complaint with the Cybercrime Directorate of Jordan’s Public Security Directorate. The case is pending.

Government monitoring

Wafaa Al-Momani, assistant director general for Regulatory Affairs and director of the Jewelry Directorate at the Jordan Standards and Metrology Organisation (JSMO), told Al Jazeera that the institution is the only entity in the kingdom responsible for monitoring precious metal jewellery – such as gold, silver and platinum – and overseeing jewellery trading.

All imported jewellery is examined and stamped by the JSMO before being released onto the market, she said, while local workshops are also required to submit jewellery for inspection and verification before it can be sold.

Al-Momani said her organisation has received some complaints about companies, websites and social media groups engaged in fraud by “promoting the buying and selling of gold, especially broken gold [used or damaged], through unlicensed individuals”.

The JSMO is monitoring sellers engaged in fraud in coordination with security authorities to prevent jewellery from being sold outside licensed shops.

Al-Momani said the JSMO is tightening oversight of gold shops and sellers in the kingdom and said any store found selling unstamped jewellery or violating legal standards will face legal penalties but also warned Jordanians that buying gold through unofficial channels “does not guarantee that the jewellery conforms to legal standards or carats”.

Adornment and treasure

Rabhi Allan, the head of the Jordanian Association of Jewelry and Goldsmiths, explained that gold remains a traditional means of saving and investment for Jordanians as well as an accessory, quoting the popular saying: “Gold is an adornment and a treasure.”

However, he described the sale of gold through social media as “alien to Jordanian society” and stressed that transactions of this “cash commodity” should only take place via official shops with invoices clearly stating the weight, carat and labour costs of the product.

He said the association had filed complaints with the Cybercrime Directorate against unlicensed and anonymous sites, noting that these pages “appear and disappear without warning”, a situation that leaves victims without the ability to secure their consumer rights.

The association has documented numerous complaints and court cases resulting from gold sales conducted through social media platforms that often use edited or fabricated images and fake offers to attract buyers.

Others offer gold at prices significantly below market value to lure buyers, but the product sold is often counterfeit, nonexistent or contains far less of the precious metal than advertised.

He urged citizens to buy gold only via licensed and accredited shops that display official prices and issue proper invoices to protect buyers’ rights.

While questions have been raised about whether some gold sales conducted through social media could be linked to illegal activities, Allan said the cases monitored so far appear to be “individual incidents that do not amount to money laundering”.

Security warning

The Cybercrime Unit of the Public Security Directorate also warned citizens against buying gold through social media advertisements and confirmed that the body has received multiple complaints of fraud linked to the trade.

Colonel Amer Al-Sartawi, Public Security Directorate spokesperson, told Al Jazeera that the grievances ranged from cases where money was wired to fraudsters who subsequently disappeared without delivering the promised gold to incidents in which buyers received counterfeit pieces made from other less valuable metals, such as copper or iron.

Al-Sartawi urged citizens not to deal with such pages and to buy gold exclusively from licensed and accredited shops.

US Department of Energy moves to transfer 53.3 million barrels amid rising oil prices.

The United States has announced its latest release of emergency oil stockpiles in coordination with the International Energy Agency (IEA).

The US Department of Energy said on Monday that it had begun transferring 53.3 million barrels from the strategic petroleum reserve after awarding contracts to nine companies under its emergency exchange programme.

Trafigura Trading LLC, a Texas-based commodities trading company, was granted the biggest haul of nearly 13 million barrels, with Marathon Petroleum Corporation and ExxonMobil set to receive 12.4 million barrels and 11.4 million barrels, respectively.

Macquarie Commodities Trading US, Atlantic Trading & Marketing, BP Products North America, Energy Transfer Crude Marketing, Mercuria Energy America and Phillips 66 will receive between 1.05 million and 6.55 million barrels each, according to the Energy Department.

Under the department’s exchange scheme, participating firms are required to replenish the stockpile with new barrels at a later date.

“These actions continue to move oil swiftly into the market, address near-term supply needs, and ensure that the Strategic Petroleum Reserve remains strong through the return of premium barrels,” Kyle Haustveit, the head of the department’s Hydrocarbons and Geothermal Energy Office, said in a statement.

The transfer comes after US President Donald Trump’s administration agreed in March to release 172 million barrels of crude as part of the IEA’s coordination of the largest unloading of global stockpiles in history.

Oil prices have surged since the US and Israel launched their war on Iran in late February, with Tehran’s retaliatory blockade of the Strait of Hormuz paralysing one of the world’s most important trade routes.

Maritime traffic in the strait has ground to a halt amid Iranian threats against commercial shipping, disrupting about one-fifth of the global oil trade.

Oil prices continued to edge higher on Monday after Trump dismissed Iran’s latest peace proposal and warned that the ceasefire between the sides was “on life support”, dampening hopes for a quick resolution to the conflict.

Facing growing public discontent over rising fuel prices, Trump on Monday also pledged to waive the 18.4 cents-per-gallon federal tax on petrol, though taxation is the purview of the US Congress.

Futures for Brent crude, the international benchmark, were up about 1 percent in Asia on Tuesday morning, topping $105 a barrel.

Ex-mayor of wealthy Los Angeles suburb promoted pro-China propaganda at behest of Chinese officials, prosecutors say.

The former mayor of a wealthy suburb in the United States city of Los Angeles has admitted to acting as an illegal agent of China, according to authorities.

Eileen Wang, the former mayor of Arcadia, agreed to plead guilty to one count of acting as an illegal agent of a foreign government from late 2020 until 2022, the US Department of Justice said on Monday.

Wang admitted that she did not notify the US government that she was acting on behalf of China while promoting pro-Beijing propaganda, the Justice Department said.

Wang, 58, operated a website, called the US News Center, that published content supportive of the People’s Republic of China (PRC) while purporting to provide news for Chinese Americans, the department said.

Wang ran the site with Yaoning Sun, a Californian man who was sentenced to four years in prison after pleading guilty to acting as an illegal agent of a foreign government in October 2025, according to US prosecutors.

Wang’s activities included republishing a “PRC official-written essay” that denied allegations that the Chinese government was committing genocide against ethnic-minority Uighurs in its far-western region of Xinjiang, according to prosecutors.

Wang resigned as mayor on Monday, according to a statement published on the City of Arcadia’s website.

She faces a maximum penalty of 10 years in prison.

Her lawyers, Brian A Sun and Jason Liang, said Wang wished to apologise for “mistakes she has made in her personal life”.

“It is important to note, however, that the conduct underlying the information and the agreement with the government relates solely to Ms. Wang’s personal life – i.e., a media platform that she once operated with someone whom she believed to be her fiancé – and not to her conduct as an elected public official,” Sun and Liang said in a statement.

“Her love and devotion for the Arcadia community have not changed and did not waver,” they added.

“She asks for the community’s understanding and continued support.”

US Assistant Attorney General for National Security John A Eisenberg issued a statement expressing deep concern over Wang’s activities.

“Individuals elected to public office in the United States should act only for the people of the United States that they represent,” he said.

“It is deeply concerning that someone who previously received and executed directives from PRC government officials is now in a position of public trust at all, but particularly so because that relationship with that foreign government had never been disclosed.”

China’s embassy in Washington, DC, did not immediately respond to a request for comment.

Wang’s prosecution comes as US President Donald Trump and Chinese President Xi Jinping are set to meet in Beijing on Wednesday for a summit expected to focus on the US-Israel war on Iran, trade, and the status of Taiwan, among other issues.

The summit comes after the two leaders agreed to a yearlong pause in their trade war during a meeting in South Korea last October.

Senator Hawley plans legislative action supporting President Trump’s bid to waive the petrol tax amid rising consumer costs.

United States President Donald Trump said he will cut the 18-cent federal tax on petrol to offset surging prices that have continued to soar after his comments that the US ceasefire with Iran is on “life support”.

On Monday, Trump said he would suspend the petrol tax, but did not specify an end date.

“Yup, we’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in,” Trump told CBS News.

Trump later told reporters that he would waive the tax, which generates $2.5bn in funds used for US roadway infrastructure, “till it’s appropriate”.

The US administration hinted at the idea on Sunday, when US Energy Secretary Chris Wright told the NBC News programme Meet the Press that the White House was considering suspending the tax.

While the Republican president claimed he would waive the tax, that is not within the White House’s authority. Suspending a federal tax requires an act of the US Congress.

However, key Trump ally Senator Josh Hawley, a Republican from Missouri, said on the social media platform X that he would introduce legislation on Monday to do that.

In March, Senator Mark Kelly, a Democrat from Arizona, proposed suspending the tax until October.

“I anticipate it would pass, but there could be a procedural delay. It also suggests that President Trump doesn’t see a quick end to the reduced volumes and is trying to cushion the American consumer,” Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, told Al Jazeera.

“The impact could be greater in states that have also reduced their own petrol taxes and could reinforce differentiation between petrol prices by region.”

US states also tax petrol, with Indiana, Kentucky and Georgia moving to make cuts to give consumers some relief at the pump.

Petrol prices have continued to climb since the initial strikes of the US-Israel war on Iran on February 28. The average price for a gallon (3.78 litres) of regular petrol is $4.52, according to the American Automobile Association, which tracks daily petrol prices, compared with $2.98 when the strikes first began.

However, news of the stumbling ceasefire has sent oil prices surging. Brent crude futures were up $3.17, or 3.13 percent, at $104.46 a barrel, while US West Texas Intermediate crude was at $98.32 a barrel, up $2.90, or 3.04 percent. Brent reached a session high of $105.99 and WTI hit a peak of $100.37.

On Wall Street, stocks for oil and gas giants are trending upward. Shell was up 1.6 percent in midday trading, Exxon rose 3.1 percent, BP gained 2 percent, and Chevron climbed 1.7 percent.

Airline bailout?

Trump was also asked by CBS on Monday whether a bailout was planned for the airline industry, which has taken a hit since the war on Iran began.

The president told the outlet that a bailout had not “really been presented” and that “the airlines are doing not badly”.

However, earlier this month, budget carrier Spirit Airlines ceased operations after 34 years. Court documents said the airline shut down because of “recent geopolitical events resulting in a massive and sustained increase in fuel prices”.

That comes as other major US carriers raise prices. In April, United Airlines said it would raise fares by 20 percent amid a surge in jet fuel costs.

Tehran, Iran – Skyrocketing inflation is jeopardising food security among households in conflict-hit Iran, new figures show, as diplomatic efforts to end the war launched by the United States and Israel intensify.

“The people must realistically understand the conditions and restrictions of the country,” President Masoud Pezeshkian told a group of officials who gathered on Sunday to discuss rebuilding structures damaged or destroyed in US and Israeli attacks.

“It is natural that there are difficulties and problems in this path, but through people’s cooperation and reliance on national cohesion, problems can be solved,” he was quoted as saying by state media.

Pezeshkian’s comments came a day after the Statistical Center of Iran (SCI) said Farvardin, the first month of the Persian calendar year that ended on April 20, had an inflation rate of 73.5 percent compared to the same month of the previous year. The SCI also noted that inflation was five percent higher in Farvardin compared to the previous month.

The Central Bank of Iran, which reports figures based on a different method and with different data sets, reported a slightly lower inflation rate of 67 percent for Farvardin compared to a year earlier, and a seven percent monthly increase.

Although not matched, both figures indicate a considerably accelerating pace for general inflation, which has been among the highest in the world over recent years, and is continuously making Iranians poorer.

A Tehran resident told Al Jazeera she could no longer afford some of the items she could just last month.

“And it’s not just me – I think most people in society right now can’t afford many of the things they want,” she said.

Figures from the institutions also showed that food inflation is much higher than headline inflation, meaning that people are increasingly forced to pay an expanding share of their shrinking salaries on basic items.

The SCI reported a staggering 115 percent food inflation rate for the first month of the year, compared to the same period the year before, with several staple items more than tripling in price.

Solid vegetable oil had the highest increase at 375 percent, followed by liquid cooking oil at 308 percent; imported rice at 209 percent; Iranian rice at 173 percent; and chicken at 191 percent. The lowest price hikes were for butter, at 48 percent, followed by infant formula at 71 percent and pasta at 75 percent.

Majid, a young man who works at a liver kebab shop in the capital, said the eatery has increased prices three times in recent months.

“The price of liver has doubled. When we ask suppliers why, they either say there’s a shortage or that sheep are being exported. Honestly, there’s no real oversight,” he said.

The state-run Consumers and Producers Protection Organization said in a directive sent to 31 governors across Iran on Sunday that new price hikes for cooking oil are “illegal” and “must be returned to previous levels”, without saying how officials expected that to happen amid deteriorating economic conditions.

The country’s embattled currency, the rial, has also been registering new all-time lows over the past two weeks. On Sunday afternoon, it stood at about 1.77 million against the US dollar in Tehran’s open market after marginally recovering. The rate was about 830,000 per US dollar a year ago.

Subsidies and ‘enemy plots’

The response from the government has included offering subsidies and coupons, while trying to crack down on acts such as hoarding that are perceived to be contributing to price hikes.

But this has not been accompanied by a clear macroeconomic stabilisation package as the US presses on with a naval blockade of Iranian ports.

As Iranian media reported on Sunday that Tehran had sent an official response to the text for an agreement earlier proposed by the US through mediator Pakistan, Pezeshkian said, “If there is talk of negotiations, it does not mean surrender.”

The government hands out monthly cash subsidies and electronic vouchers to buy essential goods at select stores, which together amount to less than $10 each month per person. Authorities are considering raising the amount, but a hefty budget crunch has made that more difficult.

Pezeshkian and Central Bank chief Abdolnasser Hemmati have said they are aware of the price increases, but have blamed the war that began in late February while coordinating with the judiciary to act against price gauging and hoarding.

A number of lawmakers in Iran’s hardline-dominated parliament, as well as state television hosts and outlets linked to the Islamic Revolutionary Guard Corps (IRGC), have said the price surges are suspicious. They have described the runaway prices as being part of an “economic revenge” campaign by enemies who suffered failures in the military arena.

“I want the people of Iran not to be fooled by the enemy-made price hikes,” a guest on state television’s Ofogh network said on Saturday. “Great things have happened, and great things are ahead. The economic achievements of the war are unrivalled by any other period.”

But some of the economic pain continues to be inflicted as a direct result of a near-total internet shutdown now being imposed by Iranian authorities for a 72nd day.

Numerous officials in the government, internet infrastructure firms, telecommunication companies and other state-linked organisations have emphasised that they are against a tiered internet system that is now being implemented. But they have said they bear no responsibility, since the blackout, which is expected to remain in place until the war ends, is ordered by the Supreme National Security Council.

In the meantime, the combined impact of local mismanagement, Western sanctions, blockade, war and the internet shutdown is squeezing people and businesses hard.

“The startup ecosystem of the country is dead, we are searching for a tombstone for it,” the Guild Association of Internet-based Businesses said in a statement on Saturday.

San Francisco, United States – Greer Dove’s days are packed with studying business and finance, as well as doing administrative work at college, along with caring for her eight-year-old daughter with special needs. But once a week, Dove, a single mother, makes sure to drop in at the food bank in California’s Marin County to pick up vegetables, fruit and other food. Along with the federal government’s food benefits, they keep her housing running.

“We need this so we can keep functioning at a high level,” she says. “She loves fruit, so I make sure to get it,” she says of her daughter.

Dove, who is also looking for a full-time job, has worked in restaurants, event management, retail, television shows, office administration and payroll over the years. But she has been on the federal government’s Supplemental Nutritional Assistance Program (SNAP) for six years, and with the food bank, for more than three years. Before she got food benefits, Dove fed her daughter all she had and skipped meals or looked around for snacks in the offices she worked at to get her through the day.

United States President Donald Trump’s One Big Beautiful Bill Act (OBBBA), passed in June, cut SNAP benefits by more than $186bn over the next 10 years to make up for extending cuts to income tax. This could lead to more than 3 million people nationwide, and 665,000 recipients in California, losing such food benefits, according to estimates.

“This will bring a series of cuts that collectively present an existential threat to food benefits,” says Andrew Cheyne, managing director of government relations and public affairs at the County Welfare Directors Association of California.

California’s proposed billionaire tax, which seeks to impose a one-time 5 percent tax on the assets of the state’s more than 200 billionaires to make up for the funding gap created by the OBBBA, got more than 1.5 million signatures in April. It is likely to be on the ballot for the November midterm election.

While most of the nearly $100bn expected to be raised through the tax will go towards filling the gap in health insurance created by the OBBBA, 10 percent will be used to make up for the retrenchment in food benefits.

In California, where more than 5.3 million people, more than any other state, receive food benefits, the impacts of the cuts began to be felt in April when 72,000 immigrants started losing benefits. June onwards, nearly 600,000 recipients will be screened for work eligibility. Recipients, including those who are homeless, seniors, foster youth and veterans, will have to work, study or volunteer to receive food benefits. Failing the screening to meet work requirements for three months will lead to their food benefits being cut.

Brian Galle, professor of law at the University of California at Berkeley and one of the tax measure’s authors, says that in California, the state that introduced gig work, “jobs are increasingly precarious. You may find enough work or not. You may get tips or not. But nutrition needs are steady.”

Making impossible choices

On a recent Friday morning, new members lined up to enrol at a whitewashed, bunting-festooned La Ofrenda food bank in San Francisco’s Mission district. The food bank doles out fresh vegetables, fruit and bread that have been donated by large grocery stores once those products neared expiration date.

Gladys Lee had taken a 45-minute train ride after a friend told her about it. Lee worked at downtown San Francisco’s Hyatt hotel as a room cleaner for three decades until a back injury meant she could not push the heavy cleaning carts any more and had to leave. After seven years of struggling to find work, food was getting scarce, and Lee found her way to La Ofrenda. She packed what she could into a carton and held it in her arms for the train ride back.

Food benefit rolls have shrunk by more than 3.3 million nationally in the six months from July 2025, when the OBBBA was enacted, to January 2026.

In California, the rolls of Calfresh, as food benefits are known in the state, shrank by 288,000 or 6 percent from July 2025 to February 2026, according to analysis by the Center for Budget and Policy Priorities, a Washington, DC-based think tank. This reduction in rolls happened even before the OBBBA cuts began.

Brooke Rollins, the agriculture secretary, wrote in a recent essay that the shrinking of SNAP rolls reflected an ebullient economy and buoyant job growth.

“The drop in SNAP recipients affirms that many Americans are moving from welfare to work,” she wrote. “It is no secret that Trump’s massive tax cuts and deregulation efforts are unleashing robust, private sector-led economic growth, which are fueling trillions in investments, booming wage growth”.

But unemployment remained stable at about 4.4 percent since July 2025, according to the Bureau of Labor Statistics data, while SNAP rolls shrank.

“This last time we saw such a steep, quick decline, other than during natural disasters, is three decades ago when welfare reform was enacted,” says Dottie Rosenbaum, senior fellow and director of  Federal SNAP Policy at the Center for Budget and Policy Priorities.

Nationally, SNAP rolls shrank by 8 percent, while in California, they shrank by 5.5 percent, in part because the work eligibility requirements were delayed until June, while some other states have already implemented them.

At La Ofrenda, Roberto Alfaro, executive director of the nonprofit Homey, says he started the food bank when food costs went up during the pandemic. They have stayed high, he says. Now he sees people doing day jobs and night jobs and coming for food when they have paid rent.

“People are making impossible choices,” says Keely O’Brien, a policy advocate at the Western Center for Law and Poverty.

While California is the world’s fourth-largest economy, growth has come with a soaring cost-of-living crisis.

“With rising housing and utility costs, few households can dedicate that much of their income towards food,” O’Brien says.

The OBBA has also shifted the administrative cost of meeting work eligibility requirements to states, and beginning next year, part of the cost of SNAP will also fall on states.

“To make requirements more stringent, you are creating more government, more bureaucratic logjam,” says Jaren Sorkow, state director for the Children’s Defence Fund.

This has already led to a 51 percent drop in SNAP rolls in Arizona, which has begun implementing the OBBBA cuts, according to data by the Center for Budget and Policy Priorities.

Making something from nothing

Several measures to counter the $100bn gap in funding for health insurance and food benefits created by the OBBBA have been floated in California. The biggest of these is the one-time 5 percent tax on those with assets of more than a billion dollars. The tax will raise $100bn, its authors estimate.

As it seems set to be voted on in the November election, it faces mounting opposition from the state’s tech entrepreneurs who have funded measures to undercut the tax.

Tech entrepreneurs have called it an economic 9/11, saying taxing their assets, including shareholding in startups, will lead to a flight of capital and innovation from the state. Sergey Brin, a cofounder of Google Inc, now spends a week in Nevada and a week in his Bay Area offices and has spent more than $57m on opposing the billionaire tax. He has backed two measures that undercut the billion tax, which have also received 1.4 million and 1.5 million signatures and are also set to be on the ballot for the November election.

One of these measures prohibits future taxes on personal property, including financial assets, savings and retirement accounts, as well as intellectual property. The other would increase audits of taxpayer-funded programmes, and includes language that would essentially invalidate the billionaire tax.

In a recent statement to The New York Times, Brin said, “I fled socialism with my family in 1979 and know the devastating, oppressive society it created in the Soviet Union. I don’t want California to end up in the same place.”

The coalition of unions backing the billionaire tax is bracing for the fight ahead. “We expect to be outspent,” says Kris Cuaresma-Primm, director of partnerships for the coalition that is backing the billionaire tax. “We will keep communicating to people that there is a tidal wave of pain coming from the cuts, and we want to reclaim the losses from the OBBBA.”

Giulia Varaschin, senior tax policy adviser at the International Tax Observatory, who recently coauthored a study on wealth taxes, says there is little academic evidence that such taxes cause the wealthy to leave at a notable scale. “There is only a marginal flight with very little, if any, economic impact,” she says.

The study, coauthored with the economist Gabriel Zucman, who supports the California billionaire tax, did find that wealth taxes had not raised as much revenue as estimated in several European countries and became less popular as a result.

Varaschin says this was because these taxes were levied on a larger set of the wealthy, which included homeowners or small businesses, rather than the ultra-rich or billionaires. The taxpayers could hardly afford to pay it, and the government made exemptions instead. These taxes also did not touch assets, where much of the wealth of the ultra-rich lies, Varaschin says.

The California tax remedies this by taxing only billionaires and taxing assets, including shares in companies.

Daniel Shaviro, Wayne Perry professor of taxation at New York University, says, “Traditionally, these taxes can be hard to enforce because tax administration don’t want to go after these people.”

Even if it passes, “The governor could just say this is not a high priority for him and not enforce it,” Shaviro says, referring to Governor Gavin Newsom, who has opposed the tax.

But Primm says, “The governor is out of touch with Californians on this”.

Newsom is in the last year of his last term as governor. However, nearly all the candidates running for the June 2 primary for governor, except billionaire Tom Steyer, who is running as a progressive Democrat, also oppose this measure. While some have said this will lead to a flight of capital, others say the spending plan does not include expenses for education, which was not cut in the OBBBA.

Greer Dove, who gets food through Calfresh and the San Francisco Marin Food Bank for herself and her daughter, says the looming food benefit cuts are worrying. “The anxiety of it all is adding up. I could be next.”

Caught between rising inflation and slowing growth, the United States Federal Reserve, the European Central Bank and the Bank of England are keeping interest rates and borrowing costs steady.

That’s despite rising energy bills, fuel and food costs squeezing businesses and households worldwide.

The International Monetary Fund is warning of a global slowdown, and no one knows how long the energy shock set off by the US-Israel war on Iran will last.

The impact will be felt hardest in emerging markets and developing nations. Central banks face a tough choice: fight rising prices or support a weakening economy.

Brent crude rises amid clashes in critical waterway.

Oil prices have jumped after clashes between United States and Iran in the Strait of Hormuz pushed their tenuous ceasefire to the brink.

Futures for Brent crude rose as much as 7.5 percent during a volatile trading session on Thursday, before easing as Asia’s markets opened on Friday morning.

The international benchmark stood at $101.12 per barrel as of 03:00 GMT, down from the day’s high of $103.70.

The latest rise came after the US and Iran exchanged fire in the critical strait, a conduit for about one-fifth of global oil and natural gas supplies, despite the truce announced between the sides on April 7.

US Central Command (CENTCOM) said it launched strikes on Iran after three US Navy guided-missile destroyers came under attack from Iranian missiles, drones and small boats in the strait.

Iran’s Khatam al-Anbiya Central Headquarters earlier accused the US of violating the ceasefire by attacking an Iranian oil tanker and another vessel in the vicinity of the waterway.

The Iranian military headquarters also accused the US of targeting civilian areas, including Qeshm Island.

US President Donald Trump on Thursday appeared to downplay the clashes, saying the ceasefire remained in effect, while Iran’s state-run Press TV said the situation had gone “back to normal”.

Shipping in the strait has been at a near standstill since late February amid the threat of Iranian attacks on the massive oil tankers that usually transport much of the world’s energy supplies.

Brent prices are up about 40 percent compared with before the war amid an estimated shortfall in daily production of 14.5 million barrels.

Asian stock markets opened lower on Friday amid the heightened tensions, with Japan’s benchmark Nikkei 225, South Korea’s KOSPI and Hong Kong’s Hang Seng Index each falling more than 1 percent.

On Wall Street, the benchmark S&P 500 fell about 0.4 percent overnight after hitting an all-time high the previous day.

WASHINGTON — White House economists estimate that President Trump’s deals with pharmaceutical companies to drop some of their U.S. prescription drug prices to what they charge in other countries could save $529 billion over the next 10 years.

The analysis obtained by the Associated Press includes the first economy-wide projections behind a policy at the core of Trump’s pitch to voters going into November’s midterm elections for control of the House and Senate. Democratic lawmakers have been doubtful about the savings claimed by Trump and these new numbers are likely to trigger additional questions about the data.

Cost-of-living issues are at the forefront of voters’ concerns and higher energy prices tied to the Iran war have deepened the public’s anxiety. Trump has tried in part to address affordability concerns by focusing on his efforts to cut deals with companies so that the cost of prescription drugs in the U.S. would no longer be dramatically higher than in other affluent nations.

“Now you have the lowest drug prices anywhere in the world,” Trump said at a Friday rally before a crowd of seniors in Florida. “And that alone should win us the midterms.”

The analysis was done by administration officials for the White House Council of Economic Advisers. They also estimated that federal and state governments could save a combined $64.3 billion on Medicaid during the next decade because of what Trump calls his “most favored nation” policy on drug prices.

Few of the details of the deals struck by the Trump administration and 17 leading pharmaceutical companies have been made public, making it hard to independently verify the projected savings. The White House analysis sought to estimate the prospective savings as more medications come onto the market and fall under Trump’s framework — with one model in the report tallying the possible savings at $733 billion over a decade.

Trump and his Department of Health and Human Services have touted his drug-pricing deals as transformative and urged Congress to codify their principles into law. Democratic lawmakers have challenged the administration’s claims of savings. Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and 17 Senate Democrats in April proposed a measure requiring the administration to disclose the terms of the agreements signed by pharmaceutical companies.

“If these deals are so great, why is the Trump administration afraid of showing them to the public?” Wyden said when announcing the measure. Health Secretary Robert F. Kennedy Jr. said his team would share details that didn’t include proprietary information or trade secrets.

The White House said it has not shared the text of the agreements because they include highly sensitive data that could move financial markets.

The potential savings estimated by the Trump administration would be substantial as Americans spent $467 billion on prescription drugs in 2024, according to the most recent government data available. The analysis is premised on the idea that foreign countries would also pay more for their prescription drugs, which would diversify drugmakers’ sources of revenue and preserve their ability to innovate with new treatments.

Outside economists have caveated that any savings might not flow directly to patients, many of whom already pay discounted prices for their drugs through their insurance coverage.

The Congressional Budget Office in October 2024 estimated that a plan similar to what Trump ended up adopting could reduce prescription drug prices by more than 5%, though the decrease “would probably diminish over time as manufacturers adjusted to the new policy by altering prices or distribution of drugs in other countries.”

The scope of the savings claimed by the Trump administration are likely to intensify the scrutiny by Democrats, who counter that any price reductions would be offset by higher costs for prescription drugs not covered by the “most favored nation” framework. One of their main critiques is that pharmaceutical companies have increased their profit margins while working with the administration.

In April, staff working for Sen. Bernie Sanders, I-Vt., released an analysis that looked at 15 of the companies that have agreed to this drug-pricing plan and found that their combined profits jumped 66% over the past year to $177 billion. The report noted that the tax cuts Trump signed into law last year “exempted or delayed many of the most expensive drugs” from price negotiations with Medicare.

The Trump administration has countered that they consider Sanders’ critique to be flawed, saying that it’s based on the list prices for pharmaceutical drugs instead of the actual price that patients pay.

Boak writes for the Associated Press.