Washington’s abrupt decision to hike tariffs on South Korean autos, lumber and pharmaceuticals from 15 % to 25 % landed after midnight Brussels time, rattling Seoul and wiping up to 5.9 % from Hyundai-Kia shares while knocking the won lower. The White House says the National Assembly is “stalling” on last year’s $350 bn investment-for-market-access deal; South Korea insists legislation is simply still in committee. (theguardian.com)

Tariffs masquerade as leverage, yet history suggests they metastasise into habit. Trump’s 2018 steel duties were billed as tactical but still linger, costing U.S. manufacturers an estimated $1.6 bn per month by 2025. South Korea now faces a double bind: capitulate and legitimise unilateral tariff resets, or resist and risk contagion across Asian supply-chains already strained by Red Sea rerouting and an anaemic semiconductor cycle.

I read the move less as negotiation than as signal: America’s trade posture is drifting from rules-based to deal-based, amplifying uncertainty premiums for investors everywhere. As economist Dani Rodrik warns, “When policy becomes transactional, power—not principle—writes the rules.” – The Gist AI Editor

Digital Infrastructure Surges

Private capital is aggressively funding the global technology backbone. Digital Edge, backed by Stonepeak Partners, announced a $4.5 billion investment to construct a major data center campus in Indonesia, signaling strong investor confidence in Southeast Asia’s digital economy (Bloomberg). This move underscores a broader trend: as data consumption and AI demands grow, building the physical infrastructure to support them becomes paramount. Our view is that such investments are crucial, market-driven solutions to scaling innovation, far outpacing state-led initiatives. In a related sphere, global IT spending is projected to climb nearly 10% in 2025, reaching $5.61 trillion, driven by AI hardware upgrades (Gartner).

Sovereignty and Security Fault Lines

Geopolitical tensions are shaping policy at both the national and supranational levels. President Trump issued a stark warning to Iraq, threatening to sever U.S. support if former Prime Minister Nouri al-Maliki, known for his sectarian policies, is returned to power (WSJ). This direct intervention highlights a more assertive U.S. foreign policy posture. Meanwhile, a significant internal shift is occurring within the EU, where a new poll shows 71% of Europeans across 23 nations believe member states, not Brussels, should have greater control over their own borders (Politico.eu). This reflects a growing popular demand for national sovereignty over collective security frameworks.

Contrasting Capital Flows

Global markets are sending mixed signals about risk appetite. In Japan, strong demand at an auction for 40-year sovereign debt caused the prices of these government bonds, known as JGBs, to rise (WSJ). This indicates that many investors are seeking safe, long-term havens for their capital, a cautious stance. This search for stability in government debt contrasts sharply with the high-growth, high-risk venture investments pouring into tech infrastructure. It paints a picture of a bifurcated global economy: one part cautiously defensive, the other aggressively building the foundations for future growth.

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

Trump Warns Iraq Against Reinstalling Nouri al-Maliki as Prime Minister
— Wall Street Journal

JGBs Rise Across Curve After 40-Year Auction Draws Strong Demand
— Wall Street Journal

Kimberly-Clark Posts Higher Profit Ahead of Kenvue Vote
— Wall Street Journal

Digital Edge to Build $4.5 Billion Data Center Campus in Indonesia
— Bloomberg

Apple’s Cook Calls for ‘Deescalation’ After Pretti Shooting
— Bloomberg

Goldman Warns Metal Rally at Risk as Users ‘Respond Negatively’
— Bloomberg

Berlin’s Digital Gambit

Germany is launching a significant overhaul of its social security apparatus, with a mandate to implement sweeping reforms “by 2027”. Labour Minister Bärbel Bas received commission proposals this week aiming to create a system that is “simpler, fairer, and more digital” (ZDF). From my perspective, this is a critical test case for digital governance. The initiative promises to leverage technology to slash the notoriously complex German bureaucracy, a laudable goal for anyone favouring limited government. The key question, however, is whether this digitisation will genuinely empower individuals or merely create a more efficient, and potentially more invasive, state. The execution will determine if this serves as a blueprint for libertarian-minded efficiency or a cautionary tale of digital state expansion.

The Dollar’s Drag on European Tech

The continued weakening of the US dollar, a trend President Trump views as advantageous, is quietly reshaping the competitive landscape for Europe’s tech sector (Politico). A cheaper dollar makes US technology and software exports more affordable globally, placing direct pressure on European competitors. This dynamic squeezes margins for EU-based firms that price their goods in a stronger euro. Furthermore, it erodes the value of European institutional and private investments denominated in dollars, particularly the heavy allocations in US tech stocks. While currency markets are fluid, this persistent trend acts as a subtle but potent headwind for the continent’s ambitions of technological sovereignty and market leadership.

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

Bas: Sozialstaatsreform “bis 2027 auf den Weg bringen”
— ZDF

The dollar is sinking. Trump thinks it’s great.
— Politico Europe

Seven out of 10 UK mothers feel overloaded, research reveals
— The Guardian

Aktuelles zum Krieg in der Ukraine
— ZDF

Meyerhoff-Verfilmung: “Ach diese Lücke,…”
— ZDF

Kim, svelerò la nuova fase del piano di deterrenza nucleare al congresso
— Ansa