Trumps deportations

When Donald Trump takes office on January 20th, deportations will be a priority. he president-elect has promised the biggest removals in American history, with workplace raids and the revocation of parole programmes. Stephen Miller, his deputy chief of staff, and Tom Homan, his border tsar, want to use the armed forces to get the job done. Mr Trump has cited “Operation Wetback”, a controversial campaign in the 1950s under President Dwight Eisenhower, which threw out around 1.1m people, as an inspiration. Experts estimate there may be 10m unauthorised workers in America, representing 6pc of the labour force. Migrants boost labour supply and economic output, lifting taxable income and business profits. Deportations are often discussed as a boon for American workers but it could in fact lead to production slowdowns, more imports and pricier housing.

(Adapted from “Can America’s Economy Cope With Mass Deportations?” by The Economist, published on January 6, 2025)

TikTok battle

The Supreme Court on Friday voiced skepticism of TikTok’s challenge to a federal law requiring the China-based social-media app to shut down or find new owners by Jan 19. The court heard oral arguments on the constitutionality of the bipartisan bill President Biden signed last April that classifies the app, which serves up short videos to some 170 million American users each month, as the tool of a foreign adversary that poses a grave threat to national security.

In early questioning from the court, most justices voiced doubts about TikTok’s arguments, viewing the law not as a restriction on free speech but instead as targeting the platform’s ownership by Beijing-based ByteDance. The Supreme Court agreed to hear TikTok’s appeal on an expedited schedule, meaning the justices could rule in time to spare the app — or seal its doom — before the Jan 19 deadline.

(Adapted from “TikTok Ban At The Supreme Court: Here’s What To Know,” by Jacob Gershman and Sarah E. Needleman, published on January 10, 2025, by the Wall Street Journal)

Indonesia’s nickels domination

In 2014, Indonesia moved to ban exports of unprocessed ores. It has the world’s largest reserves of nickel, a crucial ingredient in certain electric-vehicle batteries. The idea was to force companies that crave its abundant minerals to refine them inside the country, capturing valuable investment and creating jobs. Multilateral institutions were sceptical. Falling ore-export earnings could widen the current-account deficit and weigh on the shaky currency, the rupiah. Since 2020, when an export ban came into full force, the country has come to dominate the nickel market. Its share of the world’s refined-nickel production has doubled, to nearly half the total. But its new president, Prabowo Subianto, wants to go even further. His government may soon curtail supplies, to prop up prices. Those around Mr Prabowo dream of building a top-to-bottom electric-car supply chain but economic nationalists may be making a reckless bet.

(Adapted from “Just Because Indonesia Has Nickel Doesn’t Mean It Should Make EVs,” by The Economist, published on January 9, 2025)

China’s retail investors

As Chinese markets came crashing down at the start of 2025, a joke circulated among investors: “What is the most valuable asset in the market?” The answer, they replied with a chuckle, was “retail investors”. China’s stock markets are dominated by amateur investors. They buy high and sell low, helping the professionals eke out a living. They also seem to be in endless supply, no matter how much money is lost. But as the markets came crashing down at the start of 2025, it was not only retail investors who suffered. Many others were hit by the sell-off, too. The worst first day of trading since 2016 was followed by further drops for the CSI 300, a benchmark index. Yields on long-dated Chinese government bonds cratered, and the yuan fell. There is no shortage of explanations for the gloom, but the authorities have responded by bossing around investors.

(Adapted from “China’s Markets Take A Fresh Beating,” by The Economist, published on January 7, 2025)

Published in Dawn, The Business and Finance Weekly, January 13th, 2025