Reuters World News - Rubio and Russia's Ukraine talks, Argentina's cuts and low-cost loophole challenge

Episode Date: February 17, 2025

U.S. Secretary of State Marco Rubio has arrived in Saudi Arabia ahead of expected talks with Russian officials aimed at ending Moscow's nearly three-year war in Ukraine. At the same time, Europe��s leaders are holding an emergency meeting to discuss the developments. The U.S. has looked to Argentina over President Javier Milei’s cuts to federal government. And how Donald Trump's executive order taking aim at a little-known trade rule called "de minimis" caused chaos at New York’s JFK airport. Find our recommended read on how a failing economy is driving German voters to call for change here. And ahead of Germany's election this weekend, listen to our weekend episode here on how the far-right is shaping the vote. Listen to the Reuters Econ World podcast here and sign up for the Reuters Econ World newsletter here. Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, Marco Rubio's Middle East trip is underway, where he expects talks with Russian officials on the war in Ukraine. How Argentina took a chain saw to its government a year before Elon Musk's doge. And the headache of closing a loophole for low-cost imports. It's Monday, February 17th. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes every weekday. I'm Tara Oaks in Liverpool. U.S. Secretary of State, Marco Rubio, has arrived in Saudi Arabia for talks with Russian officials, aimed at ending Moscow's nearly three-year war in Ukraine.

The talks come after President Donald Trump spoke to Russian President Vladimir Putin by phone. European leaders are anxious that Trump and Putin will do a Ukraine peace deal that undermines Kiev and broader European security. Rachel Armstrong is our Europe editor. Donald Trump and Vladimir Putin have both said that they want to meet each other in person. So these talks will likely be aimed at laying the ground for where and when. Today will be the first opportunity for Russia to have an in-person meeting at a high level with the US to set out their terms for any kind of ceasefire. What we don't know is whether the US will then use that as an opportunity to start getching out.

a broader deal or whether they will solely be in listening mode and will be going away to talk with their Ukrainian and European counterparts afterwards. Yeah, Rubio said yesterday that Ukraine and Europe would be part of any real negotiations to end the war. But Europe have been caught on the hop a bit by Trump's recent Ukraine moves, right? I think many European governments are feeling very confused right now. Keith Kellogg, who has the title of the Ukraine envoy in the US administration, said that Europeans would not be involved in the discussions. That sent many of them reeling. Rubio tried to walk some of that back afterwards and said that there would be a role for Europe. However, the issues that Europeans have to deal with are not ones that will be surprising to the governments.

They know that there is an expectation that Europe will provide some kind of security guarantees in Ukraine. They know there is an expectation that European governments will have to spend a lot more money on defence for Ukraine because the US is no longer dealing with that. Up until now, though, those questions have been so difficult politically and financially for European governments that they haven't come up with a solution. Is this meeting in Paris today with a select group of European leaders? Britain has come out and said they will be willing to send peacekeeping troops into Ukraine. It would be very interesting to hear what the Germans, less than a week away from their election, say on something like that, which would likely be pretty unpopular domestically

to do that. President Donald Trump's administration has asked the U.S. Supreme Court to intervene in its bid to fire the head of an independent U.S. agency that protects government whistleblowers. The case has not yet been docketed by the court. Chinese President Xi Jinping has held a rare meeting with business leaders. Alibabao co-founder, Jack Ma, was one of the attendees. The symposium comes as Beijing grapples with the slowing economy and growing U.S. tensions. South Korea's Data Protection Authority says new downloads of a Chinese AI app, Deepseek, have been suspended in the country.

That's after Deepseek acknowledged failing to take into account some of the agency's rules on protecting personal data. Israel has received a shipment. of heavy MK84 bombs from the United States. Trump says he's lifted a Biden-era block on the export, despite a ceasefire agreement, because he believes in peace through strength. Argentina's president, Javier Milley, could face an impeachment trial in Congress after touting a cryptocurrency which crashed soon after.

Millet, late on Friday, posted on X recommending the little-known crypto coin Libra, which soon after shot up to nearly $5. apiece. Just hours later, the cryptocurrency plummeted to under one dollar. Argentina's fintech chamber acknowledged that the case could potentially be a rug pull. That's when developers of a crypto token draw legitimate investments, pumping up the value, only to later dump their stake. Millay himself deleted the post on X and said he had no relation to the cryptocurrency. Millie's crypto misstep comes after Elon Musk has praised his cutbacks for helping Argentina overturn a deep fiscal deficit after years of overspending

while bringing down triple-digit inflation. A reporter Lucinda Elliott recently traveled to Buenos Aires to sit down with Musk's equivalent in Argentina, a man named Federico Sturzegger. I went along to his ministry of deregulation and transformation of the state in downtown Buenos Aires. a biography of Elon Musk and this mini figurine of the Argentine President, Javier Milley, wielding a chainsaw. It's a symbol that he's adopted as part of his government's cost-cutting drive. So Sturznegre has been taking an axe to the government there in Buenos Aires for a little over a year now.

Or what's been the result? So spending cuts last year reached close to 5% of Argentina's GDP, as the government tried to get the country's finances back in order. Actually, workers on the state payroll fell by around 10% last year. That's nearly 40,000 jobs. And obviously, to get there, Malay has really taken aim at red tape that's just wrapped around umpteen areas from things like rent controls and generic medicine to farm export taxes and the charges for your electric vehicle. He's downgraded many ministries, including the Ministry of Education, of Labor, social development to reduce spending. But he has increased direct. payouts to the poorest, which for now has helped to temper protests and wider public anger.

Argentina has returned to a fiscal surplus. Inflation really has called. Poverty, however, has really risen. It reached nearly 53% in the first half of 2024, but that's now starting to come down. So what's next for Millet and Stetsenegger and Argentina's economy as a whole? So the government has authority to continue cutting in the way that it has until about June. That will mark a year of emergency measures that was granted by Congress to push deregulation by decree. And then the government has midterm elections later this year. And that's really where Malay is hoping to build on his very small minority in Congress and in the Senate so that he has backing from a broader group to push through this reform agenda.

Days after President Trump ended duty-free entry for cheap Chinese goods, more than a million packages were piled up at New York's JFK airport. The administration quickly put the order on hold to figure out a way to implement the policy change without crippling America's import system. The number of shipments entering the US through this tax-free channel, called de minimis, has exploded in recent years, reaching nearly 1.4 billion packages last year.

Stephen Eisenham has been looking at the story for us. So I think the main thing that the White House is trying to achieve here is stop the flow of chemicals that are used to make fentanyl, otherwise known as precursors, coming into the US. Because basically as these packages come in without the need to pay taxes to pay duty, they basically kind of fly through customs much faster than other goods. And as a result, it's easier to smuggle goods in. One other thing the White House is trying to do here is also,

So make sure that the tariffs on China apply to all goods, right? So during Trump's first term, when you put these tariffs on China, what happened was a massive increase in goods coming in via de minimis that previously wouldn't have come in through that channel because it meant avoiding these tariffs. So what are the challenges of making a system like this work? We talked to a lot of experts to understand really what went wrong. And effectively what people said to us is that you just can't do this overnight.

You've got 4 million packages arriving a day through de minimis. You're talking about just a vast quantity of stuff. And you can't just turn that off. Trump gave three days for this to be implemented. What happens now? The White House did say to us that this is going to be re-implemented soon. But they need to figure out how they can work at how can they effectively charge tariffs on all of these goods that are coming in.

And one of the big challenges for this is the U.S. Postal Service. The experts that we talked to said that that's kind of the Achilles heel of this attempt to close de minimis for China. The Postal Service was built up as a history of receiving letters right from abroad. So it's not really designed or built to charge tariffs in the same way as, say, FedEx or DHS or UPS, that have kind of in-house brokerage systems. For today's recommended read, we visit Germany and, in particular, its former industrial heartland. To look at the national debate raging about how. to revive Germany's economic fortunes ahead of Sunday's election.

There's a link in the pod description, where you can also find a link to our weekend episode also on Germany and the influence Defar Right has in the weekend vote. For more on any of the stories from today, check out Reuters.com or the Reuters app. Don't forget to follow us on your favourite podcast player, and we'll be back tomorrow with our daily headline show.