Washington and Beijing have sketched a “substantial proposal” in Kuala Lumpur, pausing 100 % U.S. tariffs and delaying China’s rare-earth export curbs for a year. Brent crude jumped 0.7 % on the news, and soybean futures rallied 3 %, proof that even a framework—not a treaty—can reprice global risk. (reuters.com)

Yet the real signal lies deeper: both powers are quietly conceding that weaponised interdependence cuts both ways. In 2019 the Trump-Xi “Phase One” truce collapsed within months when enforcement proved toothless; today’s draft skirts structural issues (state subsidies, data governance), suggesting another short half-life. Investors cheering the bounce should recall that world merchandise trade already shrank to 25 % of global GDP in 2024 from 30 % in 2008—an era of fragmentation, not integration.

Still, the détente exposes Western supply-chain vulnerabilities as sharply as OPEC’s 1973 embargo once did. If rare-earths are the new oil, simply “buying time” is not a strategy. As economist Dani Rodrik warns, “Stability bought with concessions can entrench, rather than resolve, systemic imbalances.”

— The Gist AI Editor

US Debt Warning

The International Monetary Fund (IMF) projects US government debt is set to exceed that of Italy, a nation long associated with fragile public finances (FT). The forecast indicates the US debt-to-GDP ratio, a key measure of a country’s ability to repay its debts, will climb to 146.8% by 2030. This trajectory places American public debt on a less sustainable path than any other major advanced economy, signaling significant fiscal challenges ahead that could impact global market stability and borrowing costs. Our perspective: such figures underscore the urgent need for fiscal restraint, a core tenet of limited government, to avert a long-term sovereign debt crisis.

Germany’s Geopolitical Pivot

Germany is embarking on a massive military expansion with a newly detailed €377 billion procurement plan, aiming to establish the Bundeswehr as “the strongest conventional army in Europe” (Politico.Eu). The blueprint includes approximately 320 new weapons and equipment projects, a significant strategic shift for a nation historically defined by post-war military caution. This rearmament reflects a fundamental change in European security dynamics, with Berlin stepping up to become the central pillar of the continent’s defense in response to renewed geopolitical threats. The move signals a major realignment of power and responsibility within NATO.

China’s Solar Sector Rebounds

China’s major polysilicon producers, essential for manufacturing solar panels, are signaling a significant market recovery after a prolonged downturn (Bloomberg). This turnaround, attributed to coordinated production cuts or “self-discipline,” is reshaping the global solar supply chain. While potentially stabilizing prices for solar components, it also reinforces China’s dominant position in the renewable energy sector. From a free-market standpoint, this coordinated action warrants scrutiny as it could stifle competition and concentrate market power, affecting the price and accessibility of solar technology worldwide.

Stay tuned for the next Gist—your edge in a shifting world.

US government debt burden on track to overtake Italy’s, IMF figures show
— Financial Times

UK rail spending benefits economy more than regulator’s models show, RMT says
— Financial Times

Novartis to buy Avidity Biosciences for $12bn
— Financial Times

Build, baby, build! Britain’s new housing chief channels Trump — and riles up Labour MPs
— Politico.Eu

‘Yellowstone’ Creator Taylor Sheridan to Leave Paramount for NBCUniversal
— Wall Street Journal

China’s Solar Self-Discipline Spurs Turnaround at Silicon Makers
— Bloomberg

Pharma’s Innovation Bet

Swiss giant Novartis is acquiring Avidity Biosciences, a US-based firm specializing in rare muscle disease therapies, in a $12 billion deal. This move isn’t just corporate consolidation; it’s the market’s high-speed mechanism for scaling vital innovation. Novartis is paying a 46% premium on Avidity’s closing share price, signaling the immense value placed on its novel RNA-targeting technology. As blockbuster drug patents expire, such acquisitions are a critical, capital-efficient strategy for large pharmaceutical companies to replenish their pipelines, effectively funding the next wave of biotech breakthroughs. (Ansa)

London’s Steel Realpolitik

The UK is pushing for a Western steel alliance with the EU and potentially the US, a pivot from pure free-trade doctrine to pragmatic commercial diplomacy. This initiative aims to align tariff policies to counter state-subsidized Chinese steel dumping, which distorts the global market. The move acknowledges that competing with non-market economies requires a coordinated defensive front rather than unilateral openness. It represents a strategic recalculation in London, balancing libertarian ideals with the geopolitical reality of ensuring a level competitive field for critical industries. (Politico)

Argentina’s Libertarian Mandate

Argentina’s midterm legislative elections delivered a powerful endorsement for President Javier Milei’s radical economic reforms. His La Libertad Avanza party secured a surprisingly strong ~41% of the national vote, providing a crucial political tailwind for his agenda of deep spending cuts and deregulation. For European policymakers and investors, this is a live stress test of “shock therapy” economics. The result demonstrates that a platform of aggressive fiscal austerity can, at least for now, command significant popular support, a development anti-statist movements on the continent will watch keenly. (ZDF, El Pais)

Catch the next Gist for the continent’s moving pieces.

Sweden’s still ahead in the preparedness game — and now it means business
— Politico Europe

Milei pone a prueba en las urnas su modelo de recortes para Argentina
— El Pais

Novartis compra Avidity Biosciences per 12 miliardi di dollari
— Ansa

Aktuelles zum Krieg in der Ukraine
— ZDF

Kongresswahlen in Argentinien: Mileis Partei liegt vorne
— ZDF

Ukraine war briefing: Russia claims test of nuclear-powered missile condemned as ‘flying Chornobyl’
— The Guardian