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Wars in Ukraine and Iran, and rising doubts about the reliability of the U.S., are making countries around the world wonder if having their own nukes is the key to survival.

Key Points

When it came to nuclear weapons, the U.S. had two top priorities in the 1990s. One was to ensure that newly independent Ukraine handed over its vast arsenal to Russia. The other was to prevent North Korea from obtaining its own nukes.

The first effort was a success, but today, many regard Ukraine’s disarmament as a strategic blunder, leaving it vulnerable to a Russian invasion that has triggered the bloodiest European war in generations. The second attempt was a failure: Pyongyang deftly exploited American reluctance to use military force and became a nuclear-armed state that can challenge global security.

Now, as Israel unleashes its military seeking to prevent what it says could be a similar nuclear breakthrough by Iran, these examples are being carefully studied around the world. Is the lesson that countries facing existential threats need nuclear weapons to survive? Or that pursuing those weapons is too dangerous, encouraging enemies to strike while they still can?

In the past, it was mostly rogue states like Libya, Syria and Iraq that tried to obtain nukes. Today the option is being seriously contemplated by American allies such as South Korea, Japan, Poland, Germany and Turkey, who worry that they can no longer rely on Washington’s protection. President Trump has fueled this existential dread by questioning the value of NATO, cutting off military aid to Ukraine and considering a pullback of American forces from South Korea.

Meanwhile, North Korea emerged from isolation to join a formal military alliance with Russia, sending troops to fight on European soil and testing its ballistic missiles on Ukrainian cities. It could do so with impunity because, unlike Tehran’s theocracy, Pyongyang’s totalitarian regime has a growing arsenal of nuclear weapons and doesn’t fear being challenged with military force.

“A lot of countries will now be thinking that nuclear weapons are the ticket to sovereignty,” said Kurt Volker, a former U.S. ambassador to NATO who served as special envoy for Ukraine in the first Trump administration. “If we don’t change our behavior—and I don’t expect we will—the world we’re going to live in 20 years from now will be a world with lots of nuclear-weapons states.”

A Ruthless New World

Nuclear-weapons technology is some 80 years old, and it’s within reach of any determined industrialized nation. Yet the nuclear club has remained small. The five nuclear powers recognized by the 1968 Nuclear Non-Proliferation Treaty (NPT)—the U.S., Russia, China, France and the U.K.—are all permanent members of the United Nations Security Council. The other four nuclear powers don’t belong to the NPT. India and Pakistan tested nuclear weapons in 1998; North Korea tested its first bomb in 2006. Israel, whose program drew on French assistance in the 1960s, is believed to have at least 90 warheads, but maintains a formal policy of ambiguity about its nuclear status.

The U.S. has long encouraged allied nations to rely on the American nuclear umbrella for protection rather than building their own arsenals. Despite all the fears sparked by the Trump administration, American officials insist that security commitments to allies remain ironclad. “We’re not going anywhere,” said Matthew Whitaker, the U.S. ambassador to NATO, at a conference in Brussels this month. “The United States cannot go alone into this very dangerous world, and so we need our allies. But we need allies that are capable, that are strong as well, and that can join the fight if a fight breaks out.”

Yet those promises sound less convincing in a ruthless global environment where interlocking conflicts continue to expand. “The international order, which we knew for 80 years after World War II, has fallen apart. That international order created a certain predictable environment, including nonproliferation treaties on so many types of weapons,” said Czech Foreign Minister Jan Lipavský. “Clearly, we now see a discussion on nuclear weapons—and Vladimir Putin is to blame for that because he opened this Pandora’s box. He’s challenging borders and so, logically, others are asking: how can we now protect our own borders?”

To France, the decision by President Charles de Gaulle to develop a fully independent nuclear capability in the 1960s, instead of relying on American promises, looks like a stroke of historic genius today. That decision went against American wishes at the time, noted French Defense Minister Sébastien Lecornu. “We have always believed that we cannot delegate our security to others,” he said.

Yet Lecornu noted that Russia’s invasion of Ukraine has also shown that nuclear weapons are no substitute for conventional military strength. “Nuclear deterrence doesn’t solve all your problems. Even though it is a nuclear power, Russia hasn’t been able to succeed in its conventional military operations in Ukraine where, three years later, the once great Russian army is stalled and has yet to conquer four oblasts,” or regions, he said. “This must be food for thought for our South Korean and Japanese friends when it comes to North Korea.”

Ukraine’s Choice

The contrast between Ukraine’s vulnerability and North Korea’s immunity looms large in the deliberations of governments worldwide. When Ukraine became independent in 1991, following the collapse of the Soviet Union, Russia swiftly removed tactical nuclear weapons from Ukrainian soil. But Kyiv retained sole physical custody over some 1,800 strategic warheads, the world’s third largest nuclear arsenal, as well as a fleet of strategic bombers and intercontinental missiles. Ukraine did not have the ability to launch these weapons independently, but officials familiar with the program say the country, where a large part of the Soviet Union’s military industries were located, had enough technical expertise to rewire the warheads and gain full control if it wanted.

“It shouldn’t surprise anybody that the United States wanted to eliminate those weapons, because they were designed, built and deployed to incinerate American cities,” said Steven Pifer, a former U.S. ambassador to Kyiv. Faced with economic collapse and fierce American pressure, Ukraine agreed to transfer its nuclear arsenal to Russia in accordance with the 1994 Budapest Memorandum. In exchange, the U.S., Russia and the U.K. gave “security assurances” to respect Ukraine’s independence and existing borders, commitments that ultimately turned out to be worthless.

A refusal would have put Ukraine on a very different geopolitical trajectory, Pifer noted: “If Ukraine had tried to keep nuclear weapons, it would not have been as ostracized as North Korea. But Ukraine would have had no relationship with NATO and the European Union, and Ukraine might have found out that if did get to a crisis point with Russia, it was having no support from the West.”

Former President Clinton, in an Irish TV interview in 2023, said he felt “terrible” about having forced Kyiv to give up nukes, suggesting Russia wouldn’t have invaded otherwise.

Lithuania’s Defense Minister Dovilė Šakalienė agreed, saying the West’s reluctance to help Ukraine after the Russian annexation of Crimea in 2014, which violated the Budapest Memorandum, shows that Kyiv should not have given up its arsenal.

“The message that this sends to other countries is: if you have weapons, don’t abandon them, if you have the ability to produce weapons, produce them. Weapons of all kinds,” she said. “As you see, countries that do have a nuclear weapon, somehow they do not get attacked fiercely…Saying let’s disarm, let’s be peaceful pigeons—that’s suicidal. Now we understand.”

Now that Ukraine has lost a fifth of its territory to Russia, and faces Putin’s demands to essentially relinquish sovereignty over the rest, many Ukrainians agree that the country made a mistake in the 1990s. They point out that, after initially imposing sanctions, the U.S. eventually acquiesced to India and Pakistan going nuclear. Ukraine might have followed the same path if it had insisted on keeping its nukes.

Some Ukrainian officials have even hinted that the door to pursuing nuclear weapons could be reopened. Retired Gen. Valeriy Zaluzhniy, Ukraine’s former military chief and current ambassador to London, raised eyebrows in March by saying that Ukraine has become the bulwark of European security even though “for now, it doesn’t possess its own nuclear weapons.” The Ukrainian government says it’s committed to the NPT.

While North Korea pursued a secret nuclear-weapons program primarily based on producing plutonium, Iran—which is a member of the NPT—developed an ostensibly civilian nuclear-energy program based on enriching uranium. Israel and the U.S. say that was a cover for its nuclear-weapons ambitions, and the program has cost Iran an estimated $1 trillion, between direct spending and the impact of sanctions. Yet it has turned out to be worse than useless in preventing the current Israeli onslaught.

“Instead of being a strategic asset, the nuclear program has proven a huge strategic liability for the regime,” said Karim Sadjadpour, a senior fellow at the Carnegie Endowment. “But when the dust of this war settles, there is a danger that the takeaway of Iran’s next leadership will be not that the mistake was to pursue nuclear weapons—they may think that the mistake was not to pursue nuclear weapons more rapidly.”

Iran’s neighbors are watching, too. In Turkey, TV commentators and some nationalist politicians have already called for developing nuclear weapons to deter Israel. “The future of the Middle East will be the rivalry between Israel and Turkey, given the weakening of Iran,” said Gérard Araud, a former French ambassador to the U.S. and the UN. “And in a region with a nuclear-armed power that uses military force to the extent that it does, if I were a Turkish strategist, I would consider the hypothesis of going nuclear to face an aggressive Israel.”

The End of Nonproliferation?

For Turkey and other potential nuclear states, any attempt to acquire nukes would incur considerable political and economic costs. Most existing nuclear powers oppose any erosion of their edge, and the five permanent members of the U.N. Security Council have historically used sanctions to punish violations of the NPT. But that international consensus is dwindling. Russia’s commitment to nonproliferation is particularly in doubt given its close ties to North Korea and Iran, including the transfer of technologies that could have nuclear applications.

“NPT is not dead, but it is now in a crisis mode,” said Ukraine’s former foreign minister Pavlo Klimkin, who was involved in nuclear disarmament talks in the 1990s as a young diplomat. “The NPT is not sustainable when a lot of countries feel that they are not secure delivering on NPT. And if they feel that they are not secure, they will think of something else.”

Nuclear experts say that it could take between two and five years for an industrial nation to gain nuclear capability—if it isn’t stopped by an attack, the way Israel ended Syria’s nuclear program in 2007 and Iraq’s in 1981. North Korea may have similar intentions when it comes to its southern neighbor. “What is happening in Iran is making South Koreans think twice about going nuclear. North Korea would have a strong incentive to prevent that, especially because South Korea has a conventional superiority,” said Lami Kim, a professor at the Daniel K. Inouye Asia-Pacific Center for Security Studies, a Honolulu-based think-tank affiliated with the Pentagon.

Nuclear capability doesn’t come cheap. Obtaining weapons and the means to deliver them, such as missiles, would cost at least several billion dollars, and potentially much more if international sanctions are imposed.

“Everyone wants to be able to fight outside their weight class, which is what being a nuclear power allows,” said Rep. Brian Mast, a Florida Republican who is chairman of the House Foreign Affairs Committee. Yet many countries that considered going nuclear in the past “stepped back and said, we just simply can’t afford to do that because we would have to put all those other things aside, despite our desire.”

The U.S. and other existing nuclear powers long argued against proliferation on the grounds that a planet with dozens of nuclear-armed states would be inherently much more unstable, even threatening the survival of humanity as a whole. When India and Pakistan clashed in May following a terrorist attack in Indian-controlled Kashmir, “You had a world on edge in a way that would not have otherwise been because they were two nuclear powers that were in direct conflict directly next to one another,” noted Mast.

Yet some argue that the clash ended quickly, and didn’t turn into a full-scale war, precisely because both sides could exercise nuclear deterrence. That’s a lesson for South Korea, which sees its strategic position increasingly endangered by the growth of North Korean military strength.

The expanding range of North Korea’s missiles and the potency of its nuclear arsenal mean that it now has the ability to threaten the U.S. mainland, which could deter future U.S. military action to protect South Korea. That leaves South Korea facing the same dilemma that prompted France to go nuclear, after de Gaulle asked President John F. Kennedy whether the U.S. would risk having New York City destroyed to protect Paris—and failed to obtain a clear-cut answer.

Opinion polls now show that a majority of South Koreans view American promises of security as insufficient, and some three-quarters want the country to acquire its own nuclear weapons. Support for nukes now “is in the middle of the mainstream,” said Eric Ballbach, an expert on Korea at the German Institute for International and Security Affairs in Berlin, noting that backing for a nuclear option has expanded beyond its traditional conservative base to parts of the center-left led by newly elected President Lee Jae-myung.

“Trump is certainly not going to take nuclear risks for allies, that’s just painfully obvious,” said Robert E. Kelly, a professor at Pusan National University in South Korea. He has authored several papers arguing that Seoul should develop an independent nuclear deterrent.

“Nobody believes that South Korea is going to launch a nuclear weapon out of the blue, nobody thinks that if Poland builds a nuclear weapon, they’re going to drop it on Moscow,” Kelly said. “These are democracies, and if they build a nuclear weapon, that’s OK. It’s only the American hubris that convinces us that we are the only ones responsible enough to manage these weapons.”

You love them, you want them, you can’t live without them…and they’re costing you a fortune in repairs, insurance and shockingly expensive replacement parts. Dan Neil on why our national obsession with the automobile has turned dangerously codependent.

I think of myself not so much as a car reviewer as an intimacy coordinator. Four out of five American households depend on an automobile to get to work, to get the kids to school, to go wherever. The typical driver spends about an hour a day in the car, says the AAA—more face time than many of us spend with our families. A good relationship starts with a good match.

Lately, though, Americans have been losing that car-loving feeling. Actually, they’re at the dish-throwing stage. Light-vehicle sales have fallen by about 1.7 million a year since 2016, reflecting the number of younger consumers declining the pleasures of ownership. Millions more remained trapped in toxic relationships with abusive elders. The average age of passenger cars on the road is currently 14.5 years, according to S&P Global’s data.

Most of the yelling is about money. According to U.S. Bureau of Labor Statistics, the total cost to own and operate an automobile averaged a frightening $12,296 in 2024, roughly 30% higher than a decade ago. Driving the numbers are new-vehicle prices, now averaging $48,883, according to Cox Automotive’s latest data. With middle-income buyers priced out of new cars, demand for used cars has strengthened, now averaging around $25,500.

Go ahead, throw a dish. It’ll make you feel better.

Among the major stressors: car insurance. Lexis-Nexis Risk Solutions’ annual report found average insurance costs rose 10% in 2024, after soaring 15% in 2023. Full-coverage policies now average $2,680 annually, up 12% from June 2024, says Bankrate.

And whatever you do, don’t mention depreciation. In 2024, the AAA calculated the average new vehicle loses an eye-watering $4,680 in value every year, over the first five years. Edmunds reported that in the last quarter 2024, one in four consumers were underwater on a car loan—meaning that they owed more than the vehicle’s market value.

The spike in personal transportation is a budget buster. Many thousands of families face being forced out of their cars and into what is effectively a second-class citizenship. What are we supposed to tell a generational workforce that is going broke just getting to work? Take one of America’s fine new trains?

It’s not just about money, honey. It’s about trust. Doubts start with the mounting complexity of new cars: turbocharged hybrid and plug-in hybrid powertrains; screen-based displays and controls; and advanced safety systems. Anyone who has ever owned a laptop has reason to question the shelf-life of the technology.

“How long will manufacturers offer replacement modules and software for older cars?” wonders Tom Wilkinson, a former GM employee living in Michigan. In the future, cars might come with a fixed lifespan, perhaps “10 years or 150,000 miles,” Wilkinson said. “After that, the [automaker] would brick them, if for no other reason than to avoid the decades-long liability….”

The acres of plastic under the hoods of new cars isn’t very reassuring. In the early 2000s, automakers stepped up the use of injection molded thermoplastic components, which have the advantage of being lighter, more recyclable and cheaper than metal.

In the past two decades automakers have filled their engine bays with plasticized water pumps, oil filter housings, radiators and hoses. Between 2012 to 2021, the average amount of plastic in automobiles increased by 16%, to 411 pounds, according to the American Chemistry Council.

Unfortunately, even the strongest plastics degrade in the daily extremes of heat cycling under the hood. It is only a matter of who pays. In 2021 BMW settled a class-action suit over engine failures related to so-called plastic embrittlement of timing chain components. In 2022 Volkswagen Group settled a similar suit involving the use of plastic water pumps.

Among the more widely loathed current practices is the use of wet timing belts. These toothed, reinforced-rubber belts synchronize an engine’s cam timing with the crankshaft. Commonly, the belt winds around the crank sprocket, partially submerged in hot engine oil.

A wet belt’s typical lifespan is roughly equivalent to a chain belt’s, but before wet belts break, they erode, spreading a rubbery contamination into the oiling system. If this gunk blocks the oil pickup, it can kill an engine.

Making matters worse—as in more expensive—is the practice of burying such term-limited components deep in the machinery, which often add hours of labor to the bill. In the terse wisdom of the garage: Engineers hate mechanics.

The “gizmo that failed in my Ford Escape that pivots to direct either hot or cold air in the HVAC is plastic,” said David Francis Kiley, a producer and publisher in Michigan. “The cost to replace it was over 2,000 bucks because the geniuses at Ford buried it with no access unless the whole dash was pulled out.”

Delivering value to customers, said Ford spokesperson Mike Levine, “requires a balance in engineering and manufacturing processes. We optimize between efficient assembly—which directly influences the customer’s initial purchase price—and repairability, to minimize a customer’s total cost of ownership over time.”

With garage repair costs up over 43% in six years, according to the U.S. Bureau of Labor Statistics, the not-worth-fixing threshold is shockingly easy to reach. The average single repair across all types of vehicles was $838 in 2024, according to Cox Automotive.

“Cars have become disposable because automakers want them to be,” said Eric Evarts, a high-school English teacher from Danbury, Conn. Evarts noted automakers’ ongoing fight against right-to-repair legislation. Among other things, right-to-repair would oblige automakers to make the necessary tools, codes and parts available to owners and independent garages.

It’s surprising how many of the current discontents are the consequences of good intentions. Take, for example, collision repair.

The cost of fixing damaged cars has skyrocketed 28% since 2021, according to data from the U.S. Bureau of Labor Statistics. The collision-repair industry blames the rising cost of replacement parts; a shortage of trained technicians; and the increasing complexity of new cars, with special scorn directed at Advanced Driver-Assist Systems, or ADAS.

Designed to reduce accidents and improve safety, ADAS technology—including functions such as automatic lane-keeping, dynamic cruise control and emergency braking—relies on cameras, sensors and transceivers integrated into the bumper trim, grille or windshield. Ultrasonic parking sensors are especially vulnerable.

In the era of ADAS, there is no such thing as a minor fender bender.

“My 2013 BMW X5 rear ended a small car and the damage to my car looked minor,” said Tom Walken, a psychologist in Raleigh, N.C. “But the electronics in the front bumper area pushed the repair cost to more than 75% of the car’s value so North Carolina law required that it be totaled.” (When contacted, BMW had no comment).

Millions of mindful consumers paid premium prices to drive electric cars. And they are still paying. Insurance companies are wary of covering collision repairs that involve battery packs or related systems. The diecast aluminum structural elements that undergird Teslas—“gigacastings”—are lightweight, compact and robust. But when damaged they often can’t be repaired, only replaced, and with great difficulty.

Last year Edmunds had a spot of trouble with the Tesla Cybertruck in its one-year test fleet. While parked on a street in West Hollywood, the huge, steel-paneled truck was struck in the left rear by a small sedan. The Tesla was totaled. The estimate for repairs— including $4,280 for a new rear casting and $16,584 for labor—came to $57,879.89. Edmunds sold its Cybertruck to a salvage company for $8,000. (When contacted, Tesla did not reply.)

The cost of making modern cars whole again, combined with steep depreciation, sends thousands of lightly damaged, otherwise functional cars and trucks to salvage yards every month. In 2018, adjusters totaled 19% of all vehicles they inspected, one of every five claims (LexisNexis Risk Solutions). By 2023, the ratio had jumped to one of four claims (27%).

No wonder people are having abandonment issues.

My take: If automobility is to remain a defining feature in American society, something has to give. And that’s gasoline. The mounting costs of the automobile enumerated are all associated with a greater disruption: vehicle electrification.

Despite Tesla’s best efforts, EV sales rose globally again in 2024. The global industry has reached the place where it is now nominally cheaper to build an EV than an equivalent ICE vehicle. As the cost of energy storage (batteries) continues to fall, EV’s advantages will accelerate. There is no rollback of rule or regulation that will allow ICE vehicles to again be cost-competitive.

EV technology is not perfect, not yet. But ICE technology is as good as it’s ever going to get.

So I say lean in and move on, America. Let go of the past. You have nothing to lose but your timing chains.

A draft agreement on reciprocal trade touches a litany of economic disputes between the economies—but not tariffs

Key Points

The U.S. and European Union appear to be nearing a deal on multiple non-tariff trade issues from deforestation rules to the treatment of U.S. tech companies in Europe—but the fate of looming tariffs set to be imposed by each trading partner remains unclear.

A draft “agreement on reciprocal trade” circulated by the U.S. Trade Representative’s office lays out tentative deals on a litany of specific trade issues, including the EU’s Digital Markets Act, its carbon-based border tariffs, shipbuilding and more, according to people with knowledge of the text, who said the agreement appeared to be close to final but emphasized it could change in the coming days and weeks.

But the text, the people said, doesn’t specifically address any of the tariffs that President Trump has threatened or imposed on the EU—from the 20% reciprocal tariff that Trump paused in April to higher duties on specific industries like automobiles and steel, the people said. It also doesn’t detail the EU’s proposed retaliatory tariffs, set to kick in on July 14 if no deal can be struck.

It remains unclear if tariff issues will be addressed in a separate deal, if those talks are at an impasse, or if the sides will decide to extend those negotiations beyond Trump’s July 9 tariff deadline. And it is also uncertain if the EU is on board with all of the provisions of the draft deal. The U.S. government and representatives for the EU’s executive body declined to comment on the details of the proposed agreement, but an EU spokesperson said the sides are “fully and deeply engaged in negotiations,” and that “a negotiated, mutually beneficial solution remains our preferred outcome.”

While it doesn’t address tariffs, the draft agreement covers a number of longstanding economic pain points for U.S. firms. It would see the U.S. and EU enter a dialogue on how to implement Europe’s Digital Markets Act—a tech-competition law that has drawn complaints from large American firms—and exempt U.S. companies from enforcement during those talks.

The bloc has already fined two American companies under the law: Apple and Meta Platforms. Exempting U.S. companies, which are responsible for most of the platforms regulated by the DMA, would largely defang one of the bloc’s signature digital laws.

The draft text also says the EU will delay implementation of its deforestation regulation for a year. That change in timing doesn’t appear to be new: The EU decided late last year to delay the deforestation rules after companies inside Europe and in other regions said they needed more time to comply.

The draft agreement would also see the U.S. and EU coordinate on Europe’s design and implementation of a carbon border adjustment mechanism—a tariff that would reflect the carbon-intensity of imports—and U.S. products would be exempted for a year after the policy is put in place. U.S. energy exports to Europe would also be exempt from EU methane rules.

Additionally, the EU will consider measures to encourage shipbuilding and shipping from market economies, similar to the penalties and fees for Chinese cargo ships that the U.S. government proposed earlier this year, according to the draft text. The U.S. and EU would also coordinate on defense procurement and critical minerals, among other provisions.

The draft text comes after weeks of U.S. and EU officials trading documents and holding talks in hopes of reaching an agreement ahead of the July 9 tariff deadline.

After the EU shared a proposal laying out what it was willing to negotiate in trade talks, U.S. Trade Representative Jamieson Greer said in early June that the bloc had provided “a credible starting point” for discussions, which he said were advancing quickly.

The EU’s proposal covered tariffs, non-tariff barriers and ways for the EU to purchase more U.S. goods, including liquefied natural gas, people familiar with the matter said.

The draft agreement circulated by the USTR’s office on Friday appears to address only a set of non-tariff barriers that it suggests the EU could lower.

It is unclear what, if anything, the U.S. might be willing to offer the EU in return. European officials have said they wouldn’t sign up to a deal that offers unilateral concessions, in part because they believe European voters would reject it.

Some European officials have also said that they would be unwilling to accept a trade deal with the U.S. that keeps Trump’s 10% baseline tariff in place. But with Trump touting that tariffs are generating revenue, many are accepting that they won’t be able to negotiate away the baseline tariff, according to people familiar with EU thinking.

Inheritance tax referendum spooks Swiss super-rich

Bankers and lawyers warn of exodus ahead of public vote on 50 per cent rate for the very wealthy

Lawyers and bankers in Switzerland are warning of a UK-style exodus of the wealthy ahead of a referendum on a 50 per cent inheritance tax for the super-rich.

The Alpine nation is due to hold a popular vote in November on the introduction of a federal tax on inheritances and gifts worth more than Sfr50mn ($61mn). Unlike existing cantonal duties that would still apply, the proposal does not include an exemption for spouses or direct descendants.

The looming vote comes after the UK sparked a rush for the exit among wealthy foreigners by making the global assets of non-domiciled residents liable to inheritance tax — a move it is now considering reversing. Meanwhile, jurisdictions such as Dubai and Italy have stepped up efforts to lure the rich.

“In terms of the chance for Switzerland to attract people leaving the UK, the damage has been done. The timing was terrible,” said Georgia Fotiou, a lawyer advising private clients at Staiger Law. “It hasn’t stopped everyone from coming but more have chosen Italy, Greece, the United Arab Emirates and elsewhere instead.”

The new tax was proposed by the far-left Young Socialists party in 2022 as a way of raising money to tackle the climate crisis. Under Swiss law, such proposals go to a public vote if they are backed by 100,000 signatures.

“The whole country has to vote on the proposal just as a sheer consequence of the proposal being made, which creates unnecessary uncertainty,” said Frédéric Rochat, managing partner of Geneva-based Lombard Odier. “The simple fact it exists is unhelpful.”

Peter Spuhler, owner of rolling stock giant Stadler Rail and one of Switzerland’s richest people, has publicly slammed the proposal as “a disaster for Switzerland”, saying his heirs could have to hand over as much as SFr2bn.

The prospect of the new tax risks further denting Switzerland’s reputation for stability, which has taken several hits in recent years including through the demise of Credit Suisse and the introduction of new financial regulations.

“Switzerland was always the country with an excellent environment when it comes to gift and inheritance tax. We have some bigger family companies we consult and they would have a big issue” if the proposal passes, said Stefan Piller, head of tax and legal for BDO in Zurich.

The new levy would place Switzerland above other jurisdictions such as Italy where inheritance taxes range between 4 per cent and 8 per cent, or Dubai and Hong Kong which have no inheritance or gift tax.

Business lobby group Economiesuisse said this week that the initiative “endangers Switzerland’s position as a reliable and stable business location internationally.”

As the vote approaches, some people are already departing, while others are deciding against relocating to the country.

Rochat said Lombard Odier had “seen Swiss-based families that have decided not to take any risk and to relocate ahead of the vote taking place”, while overseas clients had decided not to move to the country because the “extremely damaging” proposal had created uncertainty ahead of the vote.

Another Zurich-based private banker said a top client had relocated to Liechtenstein ahead of the vote because, even if the proposal does not pass, “the uncertainty around whether there will be another one in a few years made them want to move”.

However, other banks said plenty of wealthy people were still shifting money to Switzerland, long a haven in uncertain periods.

“We are seeing pretty big inflows from everywhere at the moment given global volatility,” said a third executive at a private bank, adding that Americans in particular had stepped up efforts to move money to the country under the Trump administration.

Christian Kälin, chair of Henley & Partners, a London-based consultancy that specialises in citizenship and residency through investment, said he did not “share the view that this has damaged Switzerland’s appeal”.

“We have seen some people waiting to see about the possible introduction, yes,” he said. “But frankly the people we deal with are intelligent and understand Switzerland will not introduce this easily.”

The federal council, the country’s executive branch, has rejected the initiative, as have the upper and lower houses of parliament, and experts have given the tax low chances of success in the November 30 referendum given Swiss citizens’ historic aversion to wealth taxes. To be passed, it requires majorities of both a majority of the population and a majority of the country’s 26 cantons.

However, Rochat said that if the proposal won or lost by a small margin the issue would probably be revisited in a few years, which would hurt Switzerland’s predictability. “It needs to be voted down with such an overwhelming majority [that this possibility can] be put to bed for 20 years.”

New Novo Nordisk drug could beat market leaders for weight loss, early results show

Participants in trial of amycretin injectable obesity drug lost an average of 24% of their body weight on highest dose

Novo Nordisk’s new injectable obesity drug has the potential to deliver higher weight loss than both of the current market blockbusters, an early stage trial has found.

In newly-published data, participants in the trial of injectable amycretin lost an average of 24.3 per cent of their body weight on the highest dose, compared with 1.1 per cent for those on a placebo.

The results come as the Danish pharma group races rival Eli Lilly to secure the best successor to the current best sellers — Lilly’s Zepbound and Novo’s Wegovy, which respectively cause average weight loss of 22.5 and 15 per cent.

According to another early-stage trial also published in medical journal The Lancet on Saturday, a tablet version of amycretin caused average weight loss of 13.1 per cent on the highest dose, compared with 1.2 per cent for the placebo.

Amycretin combines semaglutide, the active ingredient in Novo’s Wegovy and Ozempic, with amylin, a hormone that promotes a feeling of fullness. Novo said it would pursue further trials of both the oral and the injectable version of the drug. 

In the first-phase trial of the amycretin pill, participants’ weight loss did not plateau by the end of the 12 weeks, so in a longer trial or real life setting, they could lose more. 

Martin Lange, Novo Nordisk executive vice-president of development, said he believes the oral version of the drug may deliver similar weight loss to the injectable version, if patients take it for longer. 

He added that amycretin seems to have “substantial weight loss potential”, bolstering Novo’s portfolio of anti-obesity drugs. Evan Seigerman, an analyst at BMO Capital Markets, said amycretin looks “promising”.

Novo is trying to convince investors that its pipeline can compete with Lilly’s, after a disappointing result in trials of its new CagriSema obesity medication sent its shares tumbling late last year. More extensive data on CagriSema will be presented on Sunday at the American Diabetes Association conference. 

Shares in Novo have fallen more than 50 per cent in the past year, as investors worried it was losing its lead to Lilly’s Zepbound and Mounjaro, and questioned if its pipeline was as good as its rival’s. Last month, the company announced it would search for a replacement for its chief executive Lars Fruergaard Jørgensen.

Analysts are optimistic about Lilly’s orforglipron, another anti-obesity pill, which caused average weight loss of 14.7 per cent at the highest dose over 36 weeks, according to a phase 2 study published in 2023. The results of a more recent phase 3 trial in diabetic patients pushed Lilly’s shares up more than 15 per cent. 

Novo Nordisk has already submitted an application for the approval of an oral version of Wegovy to the US drug regulator. That was based on trial data that showed patients taking the pill achieved an average of 16.6 per cent weight loss over 64 weeks. 

Garmin has spent two decades in the middle of a disruptive storm. The company’s pioneering satellite navigation devices were undone by mobile phones. Then its consumer fitness devices were matched by smartwatches.

While other companies have folded under less pressure, Olathe, Kan.–based Garmin has thrived. For the past 12 years, it has been led by CEO Clifton Pemble, who joined Garmin in 1989 as a software engineer.

Pemble, 59, has turned Garmin into the rare electronics powerhouse not named Apple. While the iPhone and Apple Watch attract a broad audience, Garmin has embraced niche segments with devoted customers. Its devices—with navigation still at their core—dominate boating, aviation, fitness, cycling, and other outdoor recreation.

Garmin sales grew 20% last year to $6.3 billion. The company’s latest device is a smartwatch with a 2-inch display and eight days of battery life, besting Apple Watch’s battery by days.

Pemble doesn’t get the attention of Apple boss Tim Cook, but perhaps he should. Over the past three years, Garmin stock is up 112%, for a total annualized return of 31%, outpacing the market and Apple’s own 15% yearly gain.

German Chancellor Friedrich Merz aced his live White House face-off with President Donald Trump on June 5, keeping cool when the U.S. president implicitly linked him to Nazi predecessors. (D-Day “was not a pleasant day for you,” Trump asserted.)

He’s doing pretty well back home, too, 45 days or so after formally taking power. “Merz and the government have laid the groundwork for the economy to turn around,” says Sebastian Dullien, research director at the Dusseldorf-based Macroeconomic Policy Institute. He and other forecasters predict 1.5% gross-domestic-product growth for Germany next year after three years of stagnation.

A grumpy German public seems to agree, relatively. Merz’s approval rating jumped to 36% from 23% in a recent survey by pollster INSA.

Merz has stoked great expectations since his election victory in February. His amendment of Germany’s constitutional “debt brake” and pledge to spend “whatever it takes” on the military largely drove a nearly 20% year-to-date rally in the iShares Europe exchange-traded fund, while the S&P 500 index inched up 2%.

In office, he has reverted somewhat to incrementalist German type. A promised 500 billion euros ($576 billion) burst in infrastructure spending will be doled out over 12 years. An announced €46 billion corporate tax cut won’t actually reduce interest rates until 2028. “That’s too little, very late,” grumbles Carsten Brzeski, global head of macro at ING Research.

Recent history has set a low bar economically and politically, though. German industrial production has slumped 6% since Russia invaded Ukraine in February 2022, according to the U.S. Federal Reserve, as a cutoff of cheap Russian natural gas dovetailed with weakening Chinese demand. Former Chancellor Olaf Scholz’s three-party coalition seemed largely paralyzed by internal squabbles.

“We’re at the end of a very negative cycle,” Brzeski comments. “Merz didn’t need a lot to turn sentiment and bring back some growth.”

The current coalition between Merz’s Christian Democratic Union and Scholz’s Social Democrats (now minus Scholz) looks more cohesive, if only for fear of the hard right Alternative for Germany opposition. “They all know that if they mess up, the AfD will win the next elections,” Dullien says, using the party’s German acronym.

Merz’s sang-froid in Washington didn’t rid Europe of the threat of punishing new U.S. import tariffs. But investors, looking at the TACO (Trump always chickens out) trend in other trade talks, are expecting mitigation. “We have been positive from the get-go,” says Davide Oneglia, director of European and global macro at TS Lombard. “The European Union is putting something meaningful on the table, based on energy and defense purchases.”

Against that backdrop, he sees “absolutely more upside for European and German stocks over a six- to 12-month horizon.”

Oneglia remains bullish on European military stocks despite a roaring rally already this year. “There’s so much money chasing so little manufacturing capacity that it still has a long way to go,” he says.

Analysts from UBS concur, flagging French weapons makers Thales and Dassault Aviation as top European picks.

Merz’s fiscal revolution in Germany will inevitably decelerate into painstaking economic evolution. Heavy industry will struggle to recover from the Russian energy shock and leapfrogging Chinese competitors. The entrepreneurialism and research infrastructure for tomorrow’s industries will seep in slowly. “It isn’t in the German culture to go for abrupt change,” Dullien says.

But the right direction is better than dithering, and 1.5% growth is a lot better than nothing.