Economy

Saudi Arabia's new economy
bin Salman rethinks – scales down giant project

It doesn't seem like there will be a habitable giant mirror in the desert, after all. After delays and budget problems, Saudi Crown Prince Mohammed bin Salman has reviewed the Neom project and decided to drastically lower the level of ambition. This is reported by the Financial Times.

Neom consists of several large construction projects. The most notable is the plan to build a futuristic city inside an oblong building intended to stretch 170 kilometers, from the Red Sea over the mountains and into the desert. Architects are currently reportedly working on the new design.

- It will be a completely different concept, says a source.

Another project is the ski resort Trojena. It is also being scaled down.

According to the FT, Neom will have a more industrial focus and may involve building data centers.

The future of free trade
Sources: India sharply cuts car tariffs on the EU

India plans to cut import duties on a limited number of EU cars with import prices over 15,000 euros to 40 percent from up to 110, sources told Reuters. This is seen as part of a free trade agreement that India and the EU are expected to present on Tuesday.

– The tariffs could eventually be reduced to 10 percent, the sources say.

The proposal applies to around 200,000 petrol and diesel cars per year, while electric cars are exempt for five years. The winners could be VW, Renault, Mercedes-Benz and BMW. 

The development of AI
Expert: AI billions put tech giants to the test

The tech giants' large AI investments raise new questions ahead of the reporting season. Despite the fact that companies such as Nvidia, Amazon, Meta, Apple, Alphabet and Microsoft have so far beaten expectations, uncertainty is increasing about the profitability of the extensive investments in data centers. According to forecasts, investments of a total of $540 billion are planned this year.

– Now we want to see that the investments pay off and that we achieve profitability in AI services, says Danske Bank's senior strategist Maria Landeborn to TT.

The risks include rapid technological development that can lead to write-downs and increased mutual dependence through cross-investments. If growth slows down while investments continue, new concerns may arise in the tech sector.

The tariff crisis: the future of the EU
Editor: "The EU should bring more pragmatism into the system"

Increased trade policy tensions have made economic dependence a growing risk for open economies, writes Frida Wallnor in an editorial in Dagens Industri. She highlights Canada as a good example: a country that is actively seeking new agreements and partnerships to reduce its dependence on the US.

“The EU would need to introduce more pragmatism into the system, more ‘good enough’ thinking, in order to get more done,” she writes, arguing that the Union should act more like Canada by expanding its trade relations more quickly and reducing dependence on individual markets.

In Göteborgs-Posten, Adam Cwejman writes that international rules and cooperation have never been independent systems, but have been shaped by the balance of power between states. According to him, access to economic resources and markets has determined which countries have been able to set the terms in the global trading system. Therefore, he argues, the West and Europe need political leaders who understand that order and rules do not arise by themselves.

“In Carney, there is a future leader for a West-centric and Europe-close power bloc,” Cwejman writes in an editorial.

Greenland crisis  Voices about the threat
Wallenberg: More coordination increases EU independence

Europe needs to cooperate more to reduce its economic dependence on the US, said Jacob Wallenberg, chairman of the Confederation of Swedish Enterprise, in an interview with SVT during the World Economic Forum in Davos.

– The 'silver lining' of everything we are going through now with the US is that there is greater awareness of and around these issues both in the political world and in the business world.

EU leaders such as Ursula von der Leyen and Emmanuel Macron have also raised the need for strengthened European coordination. 

The customs crisis  Canada-US relations
Bessent: "We cannot let Canada become a gateway"

The US is threatening Canada with 100 percent punitive tariffs if the country goes through with its trade agreement with China. According to Finance Minister Scott Bessent, the aim is to avoid Canada becoming a port of entry for goods from China.

“We have a very integrated market with Canada,” he said in an interview with ABC on Sunday, adding:

“Goods can cross the border up to six times during the manufacturing process. And we can’t let Canada become a gateway for cheap Chinese goods into the American market.”