Balance of Power
World isolates Israel over Gaza aid withdrawal 
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An international consensus is emerging that Israel’s war against Hamas — its assaults on Gaza and withholding of aid — must stop.

Joint condemnations by allies, including the UK, France and Canada, and more threatening ones from countries like Spain speaking for the European Union, aim to force Prime Minister Benjamin Netanyahu to negotiate an end to combat and relief for the enclave’s 2 million inhabitants amid UN reports of impending starvation.

A new Israeli military operation, as announced by Netanyahu, “makes no sense except to turn Gaza into a graveyard,” said Spanish Foreign Minister José Manuel Albares. “And that’s something the international community cannot allow.”

CNN reported US officials had new intelligence suggesting Israel is making preparations for a potential strike on Iran’s nuclear facilities. This comes in the middle of nuclear negotiations between the Trump administration and Tehran.

There’s little reason to believe an attack is imminent — and some reason to suspect it’s a US leak to pressure Iran as its leadership starts to publicly cast doubt on the talks being successful. But the growing fear that Netanyahu could opt for military action nudged up oil prices.

Protesters calling for the boycott of Israeli-affiliate products and corporations in Jakarta, Indonesia.  Photographer: Agoes Rudianto/Getty Images

Disillusionment with Netanyahu is also growing within Israel. Left-leaning politicians accuse their government and army of war crimes. A majority wants hostage return to take precedence over war.

Netanyahu and his ministers say they’re unmoved and will pursue their goals: disarming Hamas, exiling its leaders, returning hostages and a future in which Gaza poses no threat.

They call this an existential battle to persuade neighbors that no compromise is possible with those, like Hamas, who seek Israel’s destruction. They’ve resumed limited humanitarian aid — though nowhere near enough, according to international observers.

Talks to return the remaining hostages have stalled but Israel says military pressure will lead to a deal or the defeat of Hamas.

The US wants the war over but hasn’t publicly told Israel to stop. For now, there’s no reason to believe that Israel will. Ethan Bronner

French President Emmanuel Macron and Benjamin Netanyahu in Jerusalem in October 2023. Photographer: Christophe Ena/AFP/Getty Images

Global Must Reads

Finance ministers at a Group of Seven meeting in Canada this week face a difficult task — trying to find common ground on trade issues while avoiding public conflict with US Treasury Secretary Scott Bessent. The White House has targeted G-7 allies as part of its tariff agenda, the biggest revamp of American postwar trade policy, and the worsening global economic outlook as a result will hang over the meeting.

China’s fiscal stimulus pushed its four-month budget deficit to a record high, as the government ramped up support for the economy during an escalation in its trade conflict with the US. The shortfall swelled by more than 50% compared with a year earlier, the clearest evidence yet that Beijing shifted into a higher gear in deploying this year’s planned fiscal stimulus to help the economy weather external shocks.

Nvidia chief Jensen Huang blasted the “failure” of US restrictions intended to help contain China’s technological ascent, calling on the White House to lower barriers to AI chip sales before American firms cede that market to up-and-coming rivals such as Huawei. China meanwhile said it could take legal action against anyone enforcing US restrictions on using Huawei’s AI chips.

An Nvidia quad-core processor on display during the Computex conference in Taipei, Taiwan, yesterday. Photographer: Annabelle Chih/Bloomberg

Elon Musk is committed to still be leading Tesla five years from now and expects to pare back his political spending, assuaging some investors’ concerns about the future of his most valuable company. The billionaire offered new details about his plans in a wide-ranging interview that also touched on his compensation and a possible spinoff of SpaceX’s Starlink satellite business, and criticism of Bill Gates.

EV battery giant CATL placed a $2 billion bet on the future of global trade over two years ago with its decision to build its first factory outside China in central Germany. Read how the plant is a flagship example of Beijing’s strategy of investing abroad to keep Chinese goods flowing into key markets, and a litmus test of how protectionist tariffs might impact global supply chains.

Not long ago, Brazil’s finance chief was a rising star in the government of President Luiz Inácio Lula da Silva. Now, factors beyond Fernando Haddad’s control have put his political ambitions on hold as Lula has made it clear he will bid for an unprecedented fourth term.

Trump is growing frustrated with demands to significantly boost the cap on the state and local tax deduction, according to a senior administration official, signaling a deadlock as Republicans aim to quickly pass a giant tax-cut bill.

Japanese Agriculture Minister Taku Eto quit today after saying he’s never needed to buy rice, a comment that fueled criticism of Prime Minister Shigeru Ishiba’s minority government and its handling of rising food prices ahead of an election.

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Tune in to our live coverage of the second day of the Qatar Economic Forum. 

Trumps attempts to shake up global trade caused widespread upheaval in markets and a decoupling from the US dollar, leaving investors hunting for alternatives. Which emerging markets stand to gain from the new order? Join us for a Live Q&A today at 10 a.m. ET.

Chart of the Day

Figures due tomorrow are likely to show Keir Starmer presiding over the biggest drop yet in net migration to the UK. For the prime minister, however, the hard part will be getting any credit from voters. Net migration soared after the pandemic, reaching a record 906,000 in the year to June 2023. The influx then slowed to a still-exceptional 728,000 last summer, shortly before Starmer’s Labour Party returned to power with a landslide victory over the Conservatives.

And Finally

At one of the biggest agricultural shows in the southern hemisphere last week, about 100 private planes and more than a dozen helicopters landed daily and million-dollar tractors were for sale. It’s a key date for South Africa’s commercial farmers, and most of them are White Afrikaners, the minority that Trump has offered refugee status because he says they’re victims of genocide and are having their land seized.

Michelle Engelbrecht serves a customer from her home northwest of Johannesburg.  Photographer: Leon Sadiki/Bloomberg

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