FT : SoftBank’s Masayoshi Son floats idea of US-Japan sovereign wealth fund

SoftBank’s Masayoshi Son floats idea of US-Japan sovereign wealth fund
Washington and Tokyo discuss possibility of fund that would make large-scale US tech and infrastructure investments

SoftBank founder Masayoshi Son has floated the idea of creating a joint US-Japan sovereign wealth fund to make large-scale investments in tech and infrastructure across the US.

The idea has been raised at the highest political levels in Washington and Tokyo, according to three people close to the situation, and could become a template for other governments to forge closer investment ties with the US.

The plan, which has been discussed directly between Son and US Treasury Secretary Scott Bessent and outlined to other top government figures in both countries, has not yet crystallised into a formal proposal, according to three people close to the situation. 

The joint fund idea has been raised several times in recent weeks, however, as Japanese negotiators and the Trump administration edge towards a trade deal. Japan has dug into a position where it will push for zero tariffs, while the US side has made it clear that it will go no lower than its “baseline” tariff of 10 per cent.

But following a call between Donald Trump and Japanese Prime Minister Shigeru Ishiba on Friday, the latter told domestic media he now expected that a planned meeting between the two on the sidelines of the G7 meeting in Canada in mid-June would be a “milestone” in negotiations.

Under the suggested wealth fund structure, the US Treasury and the Japanese ministry of finance would be joint owners and operators of the fund, each with a significant stake. They would then open the vehicle to other limited partner investors, and could potentially offer ordinary Americans and Japanese the chance to own a slice.

One person familiar with the discussions said that to be effective in its investment ambitions the fund would have to be “enormous” — with potentially $300bn in initial capital and then heavily leveraged.

The appeal of the joint fund would stem from its capacity to deliver a revenue stream to both governments, according to people briefed on its details.

“The theory is that Bessent is looking for revenue streams for the Treasury that do not involve raising taxes, and however far out this joint fund may sound, it would in theory provide that,” said one person briefed on the situation who added that the idea had been pitched as marking a clear break with previous strategies.

The person added that they believed Bessent “wants something that can become the blueprint for a new sovereign-to-sovereign financial architecture, while Japan wants a properly governed covenant that protects Japan from the ad hoc decisions of Oval Office politics.”

In the past, the person added, the US government, or individual state, would offer tax incentives for big direct investors to build factories or infrastructure projects. The expectation behind that strategy was that government would indirectly receive tax at some point. But investment made by the envisaged joint fund would directly deliver profits in proportion to the original investment.

Son is close to Trump and was a prominent visitor to the incoming president’s Mar-a-Lago home in December. He has been central to the joint fund proposal, said the two people close to the situation, potentially hoping that he would ultimately play a role in directing the fund’s investment decisions. 

The SoftBank boss is used to making high-stakes bets and stood beside Trump in January to unveil his $500bn Stargate plan to build US data centres and artificial intelligence infrastructure with OpenAI and Oracle. It is the kind of project that could attract investment from the proposed wealth fund, said one of the people familiar with Son’s thinking.

A spokesperson for the Treasury declined to comment. SoftBank declined to comment.

FT : DR Congo eyes US minerals deal tied to peace in rebel-hit east by end of Ju

DR Congo eyes US minerals deal tied to peace in rebel-hit east by end of June
Another round of negotiations in Washington expected next week

Officials from the Democratic Republic of Congo are optimistic they can reach a deal with Washington next month to secure US investment in critical minerals alongside support to end a Rwandan-backed rebellion in the country’s east. 

The scope of Kinshasa’s negotiations with Washington is hugely ambitious, and combines giving US companies access to lithium, cobalt and coltan deposits in return for investment in infrastructure and mines, with efforts to draw a line under 30 years of conflict in regions bordering Rwanda.

Two people close to the negotiations said an investment deal with the US and separate peace deal with Rwanda were possible “by the end of June”. But potential stumbling blocks remain substantial.  

The US hopes to regain a foothold in a mining sector that has been dominated by China since Beijing reached its own multibillion dollar mines-for-infrastructure deal with Kinshasa in 2008.

The DR Congo’s mining minister Kizito Pakabomba told the Financial Times that an agreement with the US would help “diversify our partnerships”, reducing the country’s dependence on China for the exploitation of its vast mineral riches.

A deal could also lay the foundations for co-operation between the DR Congo and its neighbours including Rwanda, in the export and processing of metals.

But in a sign of tensions underlying the talks, DR Congo officials said there could be no question of sanctioning of Rwandan involvement in Congo’s minerals trade until M23 rebels retreated from a swath of territory they have occupied since January, and the Rwandan troops allegedly supporting them withdraw across the border.

Rwanda has long been accused of using security concerns across its border as a smokescreen for the plunder of Congolese resources including coltan used in mobile phones, and gold. Rwandan president Paul Kagame’s government denies supporting the M23 rebels, while claiming that his army is defending itself against hostile forces.

People close to the talks said that Kigali saw the negotiations as an opportunity to legitimise access to Congolese resources and attract US investment to expand its own existing metals processing. But before considering any such prospect, Kinshasa wants first to regain control of territory, including the cities of Goma and Bukavu, that it has lost.

“It would be very difficult for us to accept that particularly because there are still Rwandan troops in the [DR Congo] and there are still M23 troops committing abuses,” said a senior Congolese official who asked not to be named.

Yolande Makolo, Kagame’s spokesperson, said “Rwanda’s defensive measures along” the border, “are necessary as long as threats and the cause of insecurity in the DRC persists”. More important than the date of any peace agreement, she said, was for it to “deal with the root causes and be long-lasting”.

But Makolo added that Rwanda was “optimistic” about the approach the administration of US President Donald Trump was taking.

“Economic collaboration between the countries of the region that leverages our respective strengths, and benefits all our people is what we ourselves have always envisioned for this part of the continent. This is why we are committed to this process,” she said.  

A person close to the talks said Massad Boulos, Trump’s Africa envoy and father-in-law to his daughter Tiffany, had called for another round of negotiations in Washington next week to iron out some of the differences.

Boulos, who met Congolese President Félix Tshisekedi in Kinshasa and Kagame in Kigali in April, said last week he had provided both parties with the first draft of a peace agreement.

A spokesperson for the US State Department said: “Both participants have committed to work to find peaceful resolutions to the issues driving the conflict in eastern DRC, and to introduce greater transparency to natural resource supply chains. Respect for each country’s territorial integrity is at the centre of the process.”

FT : Canadian pension giant to invest more than £8bn in UK

Canadian pension giant to invest more than £8bn in UK
Government plans for infrastructure are ‘huge opportunity’, says CDPQ chief

Canada’s second-largest pension fund plans to invest more than £8bn in the UK over the next five years, in a boost to chancellor Rachel Reeves as she seeks external investment to fund big infrastructure projects.

Caisse de dépôt et placement du Québec, which manages C$473bn (£254bn) on behalf of 6mn pension savers, planned to increase its allocation to UK assets by 50 per cent over the next five years, the fund’s chief executive Charles Emond told the Financial Times in an interview. 

“We’d like to be a partner of trust and choice in the UK,” said Emond, adding that the government’s plans to increase infrastructure spending were “a huge opportunity and we’d like to be there in the early stages to see if we can do something”. 

He added that the UK would be “top of the list” compared with many other countries in terms of “willingness, clarity, transparency, deal mode and execution, seriousness and welcoming us . . . from that perspective they stood out and I think real stuff will come out of it”.  

CDPQ — one of the world’s largest infrastructure investors — currently invests C$32bn (£17bn) in the UK, with assets including stakes in Wales-based electricity generator First Hydro Company and London Array Offshore Wind Farm, located in the Thames Estuary.  

The fund sold its stake in Heathrow airport late last year after owning it for more than 16 years. 

Emond, who took the reins at CDPQ in 2020, a year after joining from Scotiabank, said he expected the fund’s allocation to Europe more broadly to grow from its current level of 15 per cent of the portfolio to as much as 17 per cent, with new investment focused on assets linked to the energy transition.   

“In Europe, energy security matters a lot . . . governments have financial constraints . . . that’s where private capital like us can come in,” said Emond. 

The Montreal-based fund’s plan to increase investment in the UK, as well as in France and Germany, comes as it is preparing to rebalance assets away from the US, which currently make up around 40 per cent of its portfolio. 

The 52-year-old chief executive said the fund’s US exposure would probably be “trimmed a little bit” as it was “at a peak after a decade of outperformance”. But he added it remained the “deepest, biggest, closest market to us and we will continue to deploy money there”. 

CDPQ’s plan to invest more in Britain comes as 17 of the UK’s largest defined contribution pension providers have pledged to invest at least 5 per cent of assets in their default funds in British private markets by the end of the decade, a move the government hopes will drive £25bn of investment into the UK.

Emond said this commitment from UK pension funds could create a “positive synergy” and help attract more overseas investment into the UK. He said CDPQ was keen to invest alongside British retirement funds as “like-minded partners” with local knowledge. 

The fund currently has C$25bn in France — its second-largest market in Europe — which Emond also expects to increase by 50 per cent by the end of the decade.

He added he was investing “time and effort” in exploring opportunities in Germany, with the country’s energy needs and loosened fiscal rules ushering in “a new beginning there with plenty of opportunities”.

FT : Defence spending is up — but on all the wrong things

Defence spending is up — but on all the wrong things
The changing nature of military operations will affect both markets and politics

Defence is the new tech when it comes to hot sectors. Or is it the other way round? That’s a question worth asking as defence stocks have rallied in recent weeks on everything from news of Donald Trump’s “Golden Dome” missile defence shield, to the new UK-EU security pact that would give UK defence companies access to Europe’s €150bn defence fund, to the broad understanding that US-China strategic competition is here to stay and Europe will be spending more on its own defence.

The issue is whether all this new spending will pay off, or whether technology disruption is changing not only the nature of war but the business of defence itself.

Military budgets in the US have long been huge (defence is the single largest item in the federal budget) and are getting even bigger under Trump. The president has requested a record $1tn for defence in the “big beautiful” budget bill, which just passed the House by one vote and will now go to the Senate.

Chinese military spending is also on the rise: the country is the second-largest spender after the US and has the world’s largest navy. Europe’s defence investment is set to increase sharply too, as it reprioritises its own security in the wake of Russia’s war in Ukraine and as the sense grows that the US has become an unreliable ally.

But much of this new investment is going to legacy items, such as F-35 fighter jets, ships and submarines. Trump’s missile defence plans are straight out of the Reagan-era Star Wars playbook. Some analysts have begun asking whether — even considering increased global conflict — this is money well spent at a time when technology is shifting the nature of war.

Cheap drones and missiles can, after all, now take out lines of Russian tanks moving into Ukraine. They have also been used by Houthi rebels in the Red Sea to destroy multiple ships and force the US into spending almost a billion dollars on military operations.

In some ways, Ukraine has been a testing ground for this shift in warfare. As Erik Prince, founder of the private military company Blackwater who now heads private equity firm Frontier Resource Group, noted in a February speech on the future of war, the Russia-Ukraine conflict has “massively accelerated warfare” in a way that we haven’t seen “since Genghis Khan put stirrups on horses”.

Today, innovations such as 3D-printed canister explosives on drones guided by software can take out Russian tanks for a few thousand dollars, while hackers figured out how to jam the navigation systems of American-made $150,000 javelin missiles within weeks. Add the growing power of artificial intelligence and you have, says Prince, who is a former Navy Seal, a situation in which the next big military innovations probably won’t come from the Pentagon, or even the defence research and development agency Darpa, but from “smart people” in “their garages”. As he put it, “trillions of dollars of installed capacity” is becoming obsolete.

This “tech-driven deflation and decentralisation have come in a major way to warfare for the first time”, according to market analyst Luke Gromen, who has also covered the topic recently. He likens the defence industry’s problem to an “incumbent’s curse” similar to Netflix’s decimation of Blockbuster Video, in which old-line defence firms will be outpaced by ground-up innovation. Louis Gave of Gavekal Research has called it “the Microsoft-ification of warfare”, a trend that could “undermine the comparative advantage of the world’s military superpowers”.

Just as companies such as IBM and Microsoft democratised PC ownership (you used to have to work for a large company to get access to mainframes), so ground-up innovation is shifting the nature of warfare today. This has potentially profound implications for incumbent defence contractors from Raytheon to BAE Systems to GE Aerospace and others who have seen their share prices rise in the recent market rallies. Their products could end up being the military equivalent of a mainframe computer compared with the laptops increasingly used on the battlefield.

Of course, these companies have their own innovation efforts under way. There are also many cutting-edge start-ups from Silicon Valley to Israel that aim to capitalise on high-tech, decentralised warfare. But the changing nature of war is not just a market question — it has macroeconomic and geopolitical implications as well. As Gromen puts it: “Western investors are operating based on a first principle of US military dominance as an infallible fallback support for US foreign policy, economic policy, and the USD system itself.” What if that assumption is incorrect?

For starters, you would be likely to see decreased reliance on the US manufacturers — something that is already happening, as evidenced by Europe’s rearmament plans, which rely on EU firms. It also begs the question of whether the US can afford to boost military spending at a time when debt and deficit levels are raising alarms. Finally, the democratisation of warfare gives both individuals and individual nations more defence autonomy. Success in this new world may be measured less on budget size and more on tech savvy.

FT : How Heineken tapped into China’s beer market

How Heineken tapped into China’s beer market
The country’s biggest brewer is using its Dutch partner to reach more of the growing premium segment

Western consumer brands in China have long been coming to terms with the prospect of lower growth in the world’s second-largest economy. But demand for Heineken’s beers tells a different story.

In 2023, sales volumes for the Dutch lager maker’s various brands, including Amstel, rose more than 50 per cent. Last year, as the overall mainland China beer market shrank, its volumes increased nearly 20 per cent to just under 700mn litres — almost enough to serve a pint to everyone in the country.

Heineken’s growth comes after a deal agreed in 2018 with China Resources Beer, China’s biggest brewer, which gave the state-owned group rights to the brand on the mainland while Heineken took a stake in China Resources Beer and gets royalties from the deal.

The approach points to pockets of opportunity for well-known foreign names in China’s fast-evolving consumer sector, even if the wider markets in which they operate are saturated.

“This is a very healthy transactional relationship,” said Tristan van Strien, global investor relations director at Heineken of the relationship with China Resources Beer. “They need us and we need them.”


Heineken’s growth rates “have undoubtedly outperformed”, said Euan McLeish, an analyst at Bernstein. “None of the other premium brands have been talking about double digits.” 

China’s overall beer market is in decline. Sales fell an estimated 4 to 5 per cent last year amid concerns over consumer confidence.

But for China Resources Beer, whose sales dropped 2.5 per cent in 2024, Heineken is a pick-me-up.

Its deal with Heineken gave it rights to the Dutch beer in China for an initial 20 years, in exchange for a stake in one of its holding companies that gives Heineken an effective interest of about 21 per cent in China Resources Beer.

The lager, previously mainly sold in two southern provinces, was rolled out across the country. Growth has been rapid, helped by sponsorship of events such as the Shanghai Formula 1 grand prix in March, where 500ml servings were on sale for Rmb40 ($5.5).

A 500ml serving of Heineken in China costs an average of Rmb12-15 ($1.67-2.08), according to Morningstar, though prices vary significantly across regions and from bars to shops.

Heineken has grown by “leveraging the distribution network of China Resources Beer”, said Jacky Tsang, an analyst at Morningstar. 


China Resources Beer, whose local Snow beer is the country’s best-seller, is using Heineken to push into China’s premium market — often defined as beers that cost at least 20 per cent more than the average.

“The overall beer volume in China is on a gradual decline trend,” said Tsang, meaning China Resources had “to go after price growth to drive profit growth”.

Heineken’s growth, from a low base, contrasts with other western brands, which have also generally positioned themselves as premium options in China.

Danish brewer Carlsberg, which has about 10 per cent of China’s beer market, reported that sales edged 1 per cent lower last year. Jacob Aarup-Andersen, chief executive, said last month the market had been “structurally declining” for 15 years, but there were still “ample growth opportunities”.

Anheuser-Busch-owned Budweiser, which, unlike Heineken, has built a significant distribution network in China, has also reported declining sales.

Competition between the two “is viewed as a winner-takes-all celebrity death match in the mind of many investors”, said McLeish, in reference to the still-developing premium market.

It now takes just 37 minutes of work for the average Chinese to afford 500ml of premium beer, Bernstein estimated, compared with well over an hour a decade ago — close to a global definition of affordability.

“We think in 20-year cycles, and this is the premium development cycle that’s happening in China,” said van Strien, who added that “premium beer tends to do really well” in downturns.

“You’re not talking about a huge capital outlay for someone to have a nice sociable evening.”

For McLeish, China Resource’s strategy poses a risk to “brand positioning” if the rapid expansion has an adverse impact on price and its premium status.

China Resources Beer “does not really have experience building premium brands” but “if they had taken their time . . . the growth rates would never have been nearly as fast”, he said.

Kevin Leung, investor relations director at China Resources Beer, said there were some promotions but no “significant price drop on any Heineken product”.

There are other risks. Heineken’s exposure to China Resources Beer’s falling share price led it to take a €874mn impairment charge last year, even as its own volumes sharply increased.

The Dutch company does not disclose its dividends and royalty income from the deal, but said its share of income from China Resources Beer and its royalties from China equate to about 6 to 7 per cent of net income globally.

Van Strien said volumes grew faster than 20 per cent in the first quarter of this year, and that in the same period, volumes of its Amstel brand doubled.

The deal with China Resources had “no planned endpoint”, said van Strien. “The reality is, having a local ownership is often a good thing for us,” he said.

>>> Weekend Papers Summary

FINANCIAL TIMES
-President Donald Trump has significantly reduced the White House National Security Council by firing several officials, placing others on administrative leave, and ordering many secondees to return to their home agencies. The NSC, temporarily run by secretary of state Marco Rubio, retained some staff, mostly senior directors, while eliminating dozens of positions in the office. The move, described as a "liquidation," comes three weeks after the president fired Mike Waltz as his first national security adviser. The officials who lost their positions were notified on Friday afternoon. It was unclear if Alex Wong, the deputy national security adviser, had been dismissed. Laura Loomer, a right-wing activist who helped persuade Trump to fire Waltz, has also been gunning for Wong, who is well-regarded with hawkish views on China. Ivan Kanapathy, senior director for Asia, remained but his entire team, including his China staff, had been let go.
-In an editorial, former Israeli Prime Minister Ehud Barak Israel warns that Israel must decide to either end the war by bringing all hostages home, or launch a full-scale assault on Gaza for a "total victory" over Hamas. The government also has to decide whether to align with far-right ministers like Itamar Ben-Gvir and Bezalel Smotrich, who advocate for Gaza's reoccupation and resettlement, or turn towards the international community, US President Donald Trump's vision of regional peace and international law. Trump has warned Israeli Prime Minister Benjamin Netanyahu that he will be abandoned if the war continues. France, Britain, and Canada have demanded Israel renew humanitarian aid, and the UK has suspended talks on a bilateral trade deal. A deal would benefit Israel by bringing back remaining hostages, ending the fighting, and allowing Israel to integrate into a new regional architecture.
-Donald Trump has announced plans to impose a 50% tariff on imports from the European Union (EU) starting on June 1, 2025. The US president accused the EU of unfair trade practices and said negotiations over a new deal were failing. The EU responded by stating it would defend its interests and was committed to securing a deal that works for both parties. Trump's comments escalated the stand-off with the EU, just two weeks after the US agreed with China to slash tariffs in a pact that comforted global investors. Trump said he had set the deal at 50% and did not know if the EU could avoid the new levy, although he would consider a delay if European companies committed to moving manufacturing to the US.
- Donald Trump has endorsed Nippon Steel's $15bn deal to buy US Steel, a move that reversal of his opposition to a cross-border transaction blocked by Joe Biden on national security grounds. The partnership will create at least 70,000 jobs and add $14 billion to the US economy, with the bulk of the additional investment expected to be made within the next 14 months. Trump's post was considered "tacit approval" by the administration for the $15B takeover they agreed at the end of 2023. The US company will remain headquartered in Pittsburgh, Pennsylvania, where it has been based for over a century. Trump opposed Nippon Steel's planned takeover of US Steel in last year's presidential election campaign, stating it would be a "horrible thing" if sold to a foreign entity. More meetings are needed to formalize the president's approval.
- British security officials are investigating whether Russia may be involved in three arson attacks on properties connected to Prime Minister Sir Keir Starmer. The attacks occurred earlier this month at Starmer's family home in Kentish Town, north London, along with a car and a previously owned residential property. Two Ukrainian men and a Romanian national have been charged with conspiracy to commit arson with intent to endanger life. UK officials are investigating whether actors in Russia may have recruited the trio accused of starting the fires. Prosecutor Sarah Przybylska has said the alleged conspiracy is currently "unexplained", while counterterrorism police are keeping an open mind about motive.
- The EU is content with the economic status quo established by Boris Johnson's Trade and Cooperation Agreement of December 2020, and has viewed the default option as perfectly acceptable. This has allowed EU negotiators to hold London hostage over its desire for a deal on agriculture, insisting on a 12-year extension to current fishing quotas in return. Neither of the UK's key "asks" - access to the EU's defense procurement schemes or a deal on agricultural trade - were formally signed off. Brexit has not made Britain more prosperous, but both sides were wary of the optics of failing to agree anything. Geopolitics was a major issue in the bilateral talks, and failing to agree a security deal due to a row over fishing would not have been a good look. The UK government's pragmatism came as a shock after years of posturing and ridiculous claims that "no deal is better than a bad deal." Although acutely conscious of the political incentives to set clear limits to its ambitions, it was also aware of the need to reduce trade frictions and secure a tighter security partnership.
- South Africa has proposed legislation to meet Elon Musk's conditions for offering his Starlink satellite internet service in his birth country, following Musk's refusal to comply with Black empowerment laws he called "openly racist". Following a meeting between President Cyril Ramaphosa and US President Donald Trump, Pretoria loosened affirmative action laws requiring foreign telecom investors to sell 30% of equity in their local entity to historically disadvantaged groups. Communications minister Solly Malatsi proposed companies invest in "equity equivalence programs" such as signing up local suppliers, creating jobs, or financing small businesses. The proposal will be open to public comment for 30 days.
-Spain is the last major holdout on a NATO plan to announce that the entire alliance will spend 5% of GDP on defense by 2032, a target demanded by US President Donald Trump. Madrid is under pressure to commit to the target and enable NATO to announce that all its members will meet the pledge at a meeting of its defense ministers in Brussels on June 5. Diplomats are straining to secure unanimous NATO backing ahead of the alliance's leaders' summit in The Hague on June 24, where many hope Trump will accept the promises of increased spending and reaffirm US security guarantees to Europe. Spain has yet to confirm its support for the 5% pledge, potentially blocking a unanimous statement and undermining alliance unity.
NEW YORK TIMES
-Harvard University has been embroiled in a confrontation with the Trump administration, following a demand for data on international students. The Department of Homeland Security's secretary, Kristin Noem, sent a letter to Harvard requesting coursework and information on student visa holders involved in misconduct or illegal activity. Harvard rebuffed some of the request, and the Trump administration retaliated by stating that Harvard could no longer enroll any international students, who make up about one-fourth of its total enrollment. The government also expanded its request for records to include videos of international students involved in protests or illegal activities.
-The Trump administration has threatened to block Harvard from enrolling international students, potentially removing over a quarter of the university's student body and potentially impacting tuition revenue. The move, which was frozen within 24 hours by a federal judge, highlights the risk other universities face from an administration that has shown deep hostility towards higher education. N.Y.U., Johns Hopkins, Columbia, and Carnegie Mellon have even larger international student shares than Harvard. The share of international students studying at these colleges and across the United States has been growing for the past two decades due to rising incomes in countries like China and India.
-A federal judge has ordered the Trump administration to return a Guatemalan man, O.C.G., who was deported to Mexico despite fearing persecution. O.C.G., a gay man, is currently living in hiding in Guatemala, claiming he cannot be gay there. Judge Brian E. Murphy criticized the government for initially claiming O.C.G. was not afraid of being sent to Mexico, where he claimed he was raped and held captive. He also found that O.C.G. was likely to prove that his removal lacked due process. The ruling criticized the government's initial claim of O.C.G.'s fear of persecution.
-A federal judge has stopped the Trump administration's attempts to block international students from attending Harvard University, the nation's oldest and prestigious institution. Harvard sued the administration less than 24 hours after the Department of Homeland Security moved to bar international students. The Boston judge, Allison D. Burroughs, issued a temporary restraining order against the federal edict, agreeing that Harvard had shown that its implementation would cause immediate and irreparable injury. Harvard's response signified a dramatic escalation of the battle between the administration and Harvard, as it feared destabilizing the school.
-A bipartisan group of senators arrived in Ottawa to stabilize the US-Canada relationship, aiming to mend a once-tight alliance that President Trump has tested with tariffs and tough talk. The group, consisting of four Democrats and a lone Republican, met with Prime Minister Mark Carney and senior Canadian officials to defuse tension that has built up in recent months. Senator Jeanne Shaheen of New Hampshire, the top Democrat on the Foreign Relations Committee, emphasized the importance of Canada to both states and the US and Canadian relationship to both countries. The delegation included fellow Democrats Tim Kaine, Amy Klobuchar, Peter Welch, and Kevin Cramer, the sole Republican.
-President Trump has threatened to impose a 50% tariff on all goods coming into the United States from the European Union starting next weekend, the latest zig in a series of trade policy blunders that have been confusing financial markets, businesses, and political leaders worldwide. The economic fallout on the American, European, and global economies will be severe if Trump follows through. Carsten Brzeski, chief Eurozone economist at ING, warned that such tariff levels could lead to higher inflation and slower growth in the United States, pushing Europe into a recession, and global growth falling. Julian Hinz, a trade researcher at the Kiel Institute for the World Economy, calculated that U.S. economic growth would drop 1.5%.
-Marco Rubio, the secretary of state and national security adviser, has announced a significant restructuring of the National Security Council, reducing its staff size by at least half. The downsizing is due to President Trump's preference for a style of foreign policy debate, where advisers follow the president's desired outcomes and comply with them. The council, a coordinating body across departments, guides the president and his top aides on key policy decisions. Some National Security Council officials from other agencies are returning to their original offices, while others are placed on administrative leave. Some teams will be gutted, while others will be collapsed and folded into others. Some teams will cease to exist. The downsizing is expected to help Trump conduct foreign policy debates in his preferred style.
-China's logistics machine in Ho Chi Minh City, Vietnam, has been a significant source of employment for workers packing cosmetics, clothes, and shoes for Shein, a Chinese fast-fashion retailer. Recruiters are also interviewing candidates outside the industrial park owned by Alibaba's supply chain arm. This activity, powered by Chinese money, has made Vietnam a thriving destination for companies seeking alternatives to China's factories. However, as President Trump's trade war disrupts supply chains, China's role is becoming a significant obstacle for Vietnam in avoiding a 46% tariff.
-Two commercial flights were diverted from Ronald Reagan National Airport on May 1 due to a communications glitch between an Army Black Hawk helicopter and Pentagon air traffic controllers. The helicopter attempted to land on the helipad near the Pentagon but was asked to fly around and land a short while later. The request came from air traffic controllers at the Pentagon, who lost audio and visual contact with the helicopter just moments before it was set to land. The Federal Aviation Administration and the National Transportation Safety Board are also investigating the incident. The Army and the Associated Press reported details of the Army review.
-Iran and the US made some progress during talks in Rome over the future of Iran's nuclear program, according to an intermediary. The talks, which took place for less than three hours, had "some but not conclusive progress," according to Oman's foreign minister, Badr al-Busaidi. The main issue at stake was Washington's demand that Iran halt all nuclear enrichment and dismantle all of its centrifuges. Iran has insisted that it will not give up the right to nuclear enrichment at lower levels as guaranteed by the Nuclear Nonproliferation Treaty. President Trump's Middle East envoy, Steve Witkoff, is trying to find a formula that works, and the fact that the talks did not break up in acrimony was viewed as positive. Iran's foreign minister, Abbas Araghchi, will need to consult with Iran's leadership, including Supreme Leader Ali Khamenei, over how to proceed. Araghchi said that the negotiations were one of the most professional stages he has experienced so far, and that there is now a clearer understanding of the American side's positions.
-A knife attack at Hamburg's central train station injured 17 people, with four in critical condition. The police believe a 39-year-old woman acted alone in the attack, but the investigation is ongoing. The motive is still being investigated, but the police believe the woman might have been in a state of mental distress. Hamburg's mayor, Peter Tschentscher, confirmed that the perpetrator is in custody. The attack occurred at the station, and all victims have been hospitalized. The police are still investigating a possible motive, but the woman surrendered without resistance upon arrival.

NEW YORK POST
-Cryptocurrency investor John Woeltz, a Kentucky-based cryptocurrency investor, is suspected of torturing an Italian tourist with a chainsaw in a weeks-long extortion attempt to gain the password for his accounts at a Manhattan apartment. The 28-year-old man broke out of the SoHo house of horrors and ran to a police officer, who said he had been held prisoner for more than two weeks. Cops discovered multiple Polaroid photos showing the tourist being tied up with electrical wire and tortured, including one of him bound to a chair with a gun pointed at his head. Woeltz was taken into custody and charged with two counts of second-degree assault, first-degree kidnapping, first-degree, first-degree unlawful imprisonment, and criminal possession of a weapon. The nightmare erupted from a dispute over cryptocurrency, in which the suspect allegedly tried to extort millions of dollars from the man by unleashing a litany of horrific tortures.
-Boeing has agreed to pay over $1B but avoided prosecution over two 737MAX plane crashes that killed 346 people. The non-prosecution agreement allows the aerospace giant to avoid being branded a convicted felon and was criticized by many families who lost relatives in the crashes and had pressed prosecutors to take Boeing to trial. The Justice Department expects to file the written agreement with Boeing by the end of next week, and Boeing will no longer face oversight by an independent monitor under the agreement.

>>> Barron’s Weekend Summary

Cover:
-Kentucky's legal sports betting trend has been a significant one, with the state spending $2.4B on sports in the 12 months following Democratic Gov. Andy Beshear's first legal sports bet. The trend has continued across the US, where Americans now spend around $150B a year on sports. 48% of American men under 50 have an account on digital sportsbooks at sites like DraftKings, FanDuel, ESPNBet, and BetMGM. This has generated new interest in professional sports leagues, with state coffers filled with new tax receipts and struggling media companies filling commercial breaks with ads for betting apps. However, addiction experts warn that gambling on smartphone apps carries higher addiction risks than traditional wagers. Internet search queries related to gambling addiction have consistently increased since 2021. It takes around seven years for someone with a gambling problem to first present for treatment, meaning a wave of problem gamblers have yet to identify themselves. Kentucky has five counselors certified to treat an estimated 60,000 problem gamblers, but there is no accurate count of gambling counselors nationwide.

Interview:
-IonQ, a company aiming to become the industry leader in quantum computing, is aiming to follow in the footsteps of major semiconductor companies like Nvidia and Broadcom. CEO Niccolo de Masi told Barron’s believes IonQ will be the Nvidia player, with other companies following suit. The company aims to build the world's best quantum computers to solve complex problems. It offers a full stack of software, hardware, and applications, including quantum-computing power accessible over the cloud. IonQ is the largest publicly traded quantum-computing company by market capitalization, at around $8.75B. Its next-largest peer, D-Wave Quantum, has a market cap of $4.84B. Shares of IonQ surged 29% to $43.36 on Thursday, while the benchmark S&P 500 was up 0.1%. IonQ was one of the first quantum pure plays to go public, founded by Duke professors Christopher Monroe and Jungsang Kim. The company began trading on the New York Stock Exchange in September 2021, with De Masi heading the special purpose acquisition company that took IonQ public. Since its inception, IonQ has worked to build a presence outside the U.S. by snapping up start-ups and private companies around the globe. De Masi points to IonQ's acquisition of a controlling stake in ID Quantique, a Swiss quantum-cryptography company, among other deals.

Tech Trader:
-The rapid advancements in artificial intelligence have led to a significant challenge for large technology companies, with Google being the most prominent. The debate on Wall Street is whether Alphabet's Google search is being disrupted by AI-driven chatbots, and whether the company is capable of reversing this. Google has introduced a major change to its search engine, but the technology is not enough to overcome the "innovator's dilemma" of moving quickly to the next paradigm. Last year, Alphabet generated $100B in net profit, with the majority coming from its search engine. However, as information-related searches increasingly rely on AI apps, Alphabet investors have been cautious, with the company's stock down 10% this year. Google's I/O developers conference recently featured a new AI video-generation model called Veo 3, which impressed experts with features such as data visualization, better personalization, and AI agent capabilities that can book restaurants or sporting events for users.

The Trader:
-Despite the Trump administration's threats of more tariffs on the European Union and Apple, long-term bond yields rose, pressuring stocks. The Dow Jones Industrial Average was on track to fall 2.6% this week, while the Nasdaq Composite and S&P 500 index were sliding 2.7% and 2.9%, respectively. Despite this, stocks are still trading higher than before the president's flurry of tariff announcements on April 2. The speed of the bounce has been alarmed by strategists, who note that when the CBOE Volatility Index (VIX) closes above 50, the S&P 500 tends to have a median gain above 20% over the next 12 months. The market also looks vulnerable to more macro shocks, including deficit concerns after the House of Representatives passed Trump's "big, beautiful bill" and tariffs. The stock market could be stuck in place until these worries dissipate enough to get investors buying again. Anthony Saglimbene, chief market strategist at Ameriprise, says that positive trade developments are needed to get to new all-time highs in the near term. A prolonged period of trading sideways could take some of the froth out of the market.
-IBM stock has seen a nearly 20% increase in 2025, making it the best performer in the Dow Jones Industrial Average. The company is now recognized as an emerging leader in cloud computing and artificial intelligence technology, thanks to products and services like Granite and Watsonx. This has fueled growth in its software and consulting services businesses, and excitement for the stock. However, investors may have unreasonable expectations, as IBM is no longer being valued like a slow-growth old tech stock that often relied heavily on stock buybacks to boost earnings per share. Analysts are forecasting annual earnings-per-share increases of about 6% for this year and 2026, and about 7% for the next few years after that. This means that IBM is trading at 3.5 times its projected long-term growth rate, a richer price-to-earnings-growth ratio than Nvidia and Alphabet, and even slightly higher than Amazon.com.

Features:
-The House of Representatives' tax and spending bill, passed by President Donald Trump, is expected to negatively impact clean energy projects, such as solar and wind farms. However, the bill's impact is worse than expected, as it repeals tax credits that have been in place for decades and were expanded by the Inflation Reduction Act. This would result in a significant loss of incentives for projects, potentially jeopardizing over $500B of clean energy manufacturing projects. Heather Cooper, a lawyer at McDermott Will & Emery, warns that the bill would be devastating to the industry, as it would repeal the Inflation Reduction Act. Some clean energy industries, such as rooftop solar and electric vehicles, would be hit harder, while others, such as biofuels, nuclear energy, and carbon capture, have survived with less damage.
-Heart attacks and strokes remain the world's biggest killers, 40 years after the first statin drug started lowering cholesterol levels. This year, test results on new cardiovascular drugs are expected to show their effectiveness in reducing blood levels of "bad" cholesterol, LDL, which gunks up arteries over time. A pack of new cardiovascular drugs are being tried as pills, biweekly or semiannual shots, and even once-for-a-lifetime infusions. Successful trial results in the next few years could save thousands of lives and generate billions in new annual revenue for drugmakers. Companies working on these drugs range from pharmaceutical companies like Eli Lilly, Merck, AstraZeneca, biotechs like Amgen and Regeneron Pharmaceuticals, to gene-editing specialists like Crispr Therapeutics and Verve Therapeutics. Regeneron and Sanofi took the first big step beyond statins in 2015 with Praluent, a biweekly injection of antibodies that sop up the enzyme called PCSK9, which strongly effects blood levels of LDL. Amgen followed with the PCSK9 antibody Repatha, and Novartis launched Leqvio.

Europe:
-President Donald Trump has announced plans to impose a 50% tariff on the European Union starting June 1 and threatened 25% tariffs on Apple iPhones if they weren't made in the US. The move comes as the trade war continues on multiple fronts, with analysts worried that Trump could use the EU as an example to pressure other priority countries to commit to a framework agreement faster. The EU is particularly problematic for the Trump administration because they are not caving to pressure, and the two sides aren't closer to a resolution on longstanding issues, such as standards for agriculture and commodity purchases and a digital services tax. Trump's announcement on Truth Social cited the EU's "powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies." The duties won't apply to any products manufactured in the US. The latest threats come as trade talks have dragged out on multiple fronts.

Emerging Markets:
-No update

Commodities:
-Platinum prices are starting to rise, and the rally could have legs. Platinum supply runs about seven million ounces annually from mining and recycling, compared with more than 100M ounces of gold. The World Platinum Investment Council estimates that the deficit will continue in 2025. More than half of mined platinum comes from South Africa, where mines are often old, deep, and expensive to operate. The WPIC sees mined supply falling 6% this year to 5.4M ounces. Unlike gold, platinum lacks central bank demand. Some 40% of demand comes from car catalytic converters, threatened by electric vehicles, which lack converters. However, EV sales have stalled, and popular hybrids use converters. Chinese buyers priced out of gold are turning to platinum. The largest platinum exchange-traded fund, Abrdn Physical Platinum Shares, hit a 52-week high this past week and is up 18% in 2025.

Streetwise:
-Big banks are mulling a joint stablecoin to increase adoption of crypto, according to The Wall Street Journal. This could justify higher Bitcoin prices due to finite supply, with 21 million Bitcoins being infinitely divisible and pegged to nothing. President Donald Trump attended a gala for big buyers of his memecoin, which has crypto bulls excited. Moody's US downgrade aligns with earlier moves from Standard & Poor's and Fitch, but it's more about repayment ability than repayment ability itself. A large deficit in the US implies greater bond supply and possibly inflation as the debt is monetized to avoid default. Bond investors have been balking in Japan, the United Kingdom, and Germany. To provide safety, investors should consider bonds, as they are supposed to provide a buffer. Russ Brownback, global head of macro positioning for fixed income at BlackRock, co-manages the $41B BlackRock Strategic Income Opportunities fund, which has made 2.5% year to date and ranks in the top quarter of nontraditional bond funds.

9to5 : Xiaomi overtakes Apple as the world’s top wearable vendor

Xiaomi overtakes Apple as the world’s top wearable vendor

Xiaomi has retaken the digital crown in the global wearable band market, surpassing Apple to become the top vendor in Q1 2025, according to new data from Canalys.

The research firm says Xiaomi pulled it with a more mature ecosystem strategy than the one it had back in mid-2021 (the last time it led the pack), while Apple’s wearable strategy has grown stale.

According to the Q1 2025 report, the wearable band market showed signs of strong recovery. Shipments rose 13% year-over-year to 46.6 million units, driven largely by demand for basic wearables, which are more appealing to emerging markets. And that’s where Xiaomi really pulled ahead.

As Canalys analyst Jack Leathem said:
Xiaomi has upgraded its Mi Band and Redmi Watch series with refreshed designs and advanced data capabilities, bringing comprehensive features down the price segments, boosting its value proposition. Its growth has also been supported by effective multi-category coordination and competitive pricing, particularly in emerging economies. (…) Samsung has also increased its focus on its basic bands to grow its presence in emerging economies.

Xiaomi shipped 8.7 million units this past quarter, up 44% from a year ago. The Redmi Band 5 played a key role, but Canalys says Xiaomi’s broader momentum comes from its HyperOS push, connecting phones, wearables, and home gear.

The Apple Watch, meanwhile, had a relatively quiet quarter. Shipments rose 5% to 7.6 million units, inching to 16% total unit share against Xiaomi’s 19%. These numbers echo a recent Counterpoint report, which highlighted the Apple Watch’s ongoing two-year global decline in 2024.

The report reads:
With 2025 marking the Apple Watch’s tenth anniversary, Apple is expected to regain momentum in the second half of the year with a big portfolio update, leaning on its mature and tightly integrated health-focused ecosystem.

As for the rest of the market, Huawei held onto third place with 7.1 million units, thanks to strong performance from its GT and Fit lines and the growing global footprint of the Huawei Health app.

Samsung, in fourth, saw the biggest jump among the top vendors, a whopping 74%, to 4.9 million units. The Korean company split its focus between basic bands for emerging markets, and higher-end smartwatches elsewhere. Garmin rounded out the top five with 1.8 million units and a 10% year-over-year increase.

9to5 : iPad Air vs reMarkable Paper Pro: Which tablet is best for note taking?

iPad Air vs reMarkable Paper Pro: Which tablet is best for note taking?

Over the past few months, I’ve had the pleasure of testing out the reMarkable Paper Pro. You can read my full review here, but in short, it gets everything right about the note taking experience.

Despite being an e-ink tablet, it does get quite pricey. However, there are certainly some fantastic parts of the experience that make it worth comparing to an iPad Air, depending on what you’re looking for in a note taking device for school, work, or whatever else.

Overview
Since the reMarkable Paper Pro comes in at $629 with the reMarkable Marker Plus included, it likely makes most sense to compare this against Apple’s iPad Air 11-inch. That comes in at $599 without an Apple Pencil, and adding in the Apple Pencil Pro will run you an additional $129. Granted, the equivalent iPad setup will run you $100 more than the reMarkable Paper Pro.

Given the fact that iPad Air‘s regularly go on sale, and that reMarkable Paper Pro will be receiving an unspecified price hike on May 28th, it’d be fair to say they’re roughly on the same playing field.

So, $629 for a reMarkable Paper Pro setup, versus $728 for a comparable iPad Air setup. Which is better for you?
iPad Air advantages

Obviously, the iPad Air has one key advantage: It runs iOS, has millions of apps available, can browse the web, play games, stream TV shows/movies, and much more. To some, that might end the comparison and make the iPad a clear winner, but I disagree.

Yes, if you want your tablet to do all of those things for you, the iPad Air is a no brainer. At the end of the day, the iPad Air is a general purpose tablet that’ll do a lot more for you.

However, if you also have a laptop to accompany your tablet, I’d argue that the iPad Air may fall into a category of slight redundance. Most things you’d want to do on the iPad can be done on a laptop, excluding any sort of touchscreen/stylus reliant features.
iPads are great, and if you want that – you should pick that. However, I have an alternative argument to offer…

reMarkable Paper Pro advantages
The reMarkable Paper Pro does one thing really well: note taking. At first thought, you might think: why would I pay so much for a device that only does one thing?

Well, that’s because it does that one thing really well. There’s also a second side to this argument: focus.

It’s much easier to focus on what you’re doing when the device isn’t capable of anything else. If you’re taking notes while studying, you could easily see a notification or have the temptation to check notification center. Or, if you’re reading an e-book, you could easily choose to swipe up and get into another app.

The best thing about the reMarkable Paper Pro is that you can’t easily get lost in the world of modern technology, while still having important technological features like cloud backup of your notes. Plus, you don’t have to worry about carrying around physical paper.

One last thing – the reMarkable Paper Pro also has rubber feet on the back, so if you place it down flat on a table caseless, you don’t have to worry about scratching it up.

Spec comparison
Here’s a quick rundown of all of the key specs between the two devices. reMarkable Paper Pro‘s strengths definitely lie in battery, form factor, and stylus. iPad has some rather neat features with the Apple Pencil Pro, and also clears in the display category. Both devices also offer keyboards for typed notes, though only the iPad offers a trackpad.


Wrap up
All in all, I’m not going to try to convince anyone that wanted to buy an iPad that they should buy a reMarkable Paper Pro. You can’t beat the fact that the iPad Air will do a lot more, for roughly the same cost.

But, if you’re not buying this to be a primary computing device, I’d argue that the reMarkable Paper Pro is a worthy alternative, especially if you really just want something you can zone in on. The reMarkable Paper Pro feels a lot nicer to write on, has substantially longer battery life, and really masters a minimalist form of digital note taking.