Reuters World News - Texas redistricting faceoff, Israel’s Gaza plans and Musk’s pay

Episode Date: August 6, 2025

Texas governor Greg Abbott orders the arrest of Democratic lawmakers who fled the state to block a Republican-led redistricting vote from going ahead. Israeli officials float the idea of expanding their military offensive in Gaza and annexing parts of the enclave. And Tesla grants Elon Musk a hefty pay deal worth $29 billion. Sign up for the Reuters Econ World newsletter here. Listen to the Reuters Econ World podcast here. Find the Recommended Read 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, the governor of Texas orders Democrats back to the state in a fight with national consequences. Israel weighs its options after indirect ceasefire talks collapse. Switzerland tries to land a trade deal under the weight of huge tariffs. And Tesla's board backs Elon Musk's next big bet to the tune of $29 billion. It's Tuesday, August 5th. This is Reuters World News.

You knew everything you need to know from the front lines and 10 minutes every single day. I'm Kim Vennel in Wanganui, New Zealand. Texas Governor Greg Abbott is ordering the arrest of Democratic lawmakers who fled the state. They left to stop a Republican-led redistricting vote from going ahead. It's not just Texas. It really is the United States of America because if they succeed in Texas, They will take this to other states. Speaking in Illinois, Democrat Al Green

says he and his colleagues will continue to fight. It's an unparalleled situation which could have huge implications for the whole country. Joey Axe is in Washington, D.C. Joey, are these lawmakers actually going to be arrested? This situation is unprecedented. We have seen Democrats flee the state in the past in an effort to deny quorum.

but we've never seen the governor suggest that he might use law enforcement to force them back to the Capitol. So a lot of this is kind of untested waters. One thing that I think I can say is as long as those Democratic lawmakers are outside the bounds of Texas itself, there isn't a whole lot that the governor can do. What's at stake here? What's at stake is potentially control of the entire U.S. House of Representatives, and with it, the future of Donald Trump's political agenda. When Republicans won the House last year, they did so by a margin of only three seats. The map that Republicans in Texas are trying to jam through is intended to flip five Democratic seats all on its own. There's every reason to think that the battle for the House will be

very closely contested again in the midterms next year, and every seat's going to count. The other likelihood is that there are other states that are going to follow Texas's lead. We've seen Republican leaders in places like Florida and Ohio, make it clear that they intend to redistrict in a way that's going to benefit their party. And we've also seen Democratic governors, like Gavin Newsom in California, J.B. Pritzker and Illinois signal that they're inclined to pass their own new maps to try to counter what Texas is doing. Israeli officials are floating the idea of doubling down in Gaza using even more force and annexing parts of the strip. It's one of the options on the table after indirect ceasefire talks with Hamas collapsed.

Prime Minister Benjamin Netanyahu will convene his security cabinet this week to decide. It's despite US Middle East envoy Steve Whitkoff saying he was working with the Israelis on a plan to end the war. Meanwhile, in Gaza, burial blankets are running out because of border restrictions and the sheer number of people dying every day. Israel killed some 40 Palestinians on Monday, at least some of whom were trying to get food, according to help authorities. The US-backed Gaza Humanitarian Foundation

says there were no incidents at or near their sites on Monday. Reuters was unable to verify where the incidents took place. Video obtained by Reuters from Saturday shows crowds of, of people, including children, being shot at as they try to get to an aid distribution point. The US could make some tourists and business visitors pay a bond of up to $15,000 to enter the country. It's an effort to crack down on visa overstayers and could be imposed on people who come from countries with high visa overstay rates or where vetting is deemed not good enough. U.S. consular officers will have discretion to decide who has to pay a bond.

The pilot program goes into effect in two weeks. Supporters of Brazilian former president Jaye Bolsonaro gather outside his house after a judge ordered his house arrest. Bolsonaro is accused of breaking restraining orders, allegedly trying to get President Trump to interfere in his case, which is currently before the court. The former president is charged with consulate, aspiring with allies to violently overturn his 2022 election loss.

The US president supports Bolsonaro and says the case is a witch hunt and has slapped Brazil with a 50% tariff starting Wednesday. Other countries which haven't yet struck a trade deal with the US are facing the fallout too. President Trump is again threatening to substantially raise tariffs on India because it buys Russian oil. A move New Delhi says is, unjustified. Over in Europe, Switzerland is trying to get rid of a whopping 39% tariff its goods face and says it's putting together an attractive offer for Washington.

John Revel is in Zurich. Switzerland is in a state of shock, to be honest. The country has no tariffs with anybody in the world on visible products. So there's a lot of kind of confusion and shock and a little bit of anger. Everyone's going like, why us? Why have we got such a big tariff when the EU got 15%. What can Switzerland offer to try and sway the US? Well, it's quite limited because Switzerland is only a small country of 9 million people. So we don't buy US products or the tariff on US products. It's not going to make much of a difference to the US. What the Swiss government has been doing is they've been emphasising how much Swiss companies invest in the US. I mean, I think Switzerland's the sixth biggest investor in the US.

There's a lot of big companies like Roche and Novartis from the drugs world. There's also Nestle from the food world. And they are investing a lot of money in factories and research in development facilities in the US. Basically, they've got to try and win American goodwill rather than threaten the US back. How are Swiss companies going to handle this? There's a lot of big brands you mentioned. Will they pass on costs to American consumers? It's a of a mixed bag really. Some of the companies will increase prices further if they can. So if it's like a particularly important machine tool or the particularly expensive and desired watches, they can increase their prices because for Patac Philippe's and Rolexes, there's a waiting list anyway. But the

cheaper Swiss watches, kind of like your Tisos or your Longines, which are cost to like 500 to 1,000, that's going to hurt. Nestle produces most of its food in the US for the US. Apart from Nespress which gets made in Switzerland. So, Nespresso could become more expensive. Traders are increasing bets. The Federal Reserve will cut rates, with the dollar remaining under pressure following Friday's US jobs report

showing cracks in the labour market. Investors are also assessing the broader impact of US tariffs unleashed last week. There's a lot of uncertainties in the market and traders are bracing for volatility. Key earnings are out later today, which could influence markets from big names including Walt Disney, Pfizer and Caterpillar. Sean Diddy Combs will remain in jail while he awaits sentencing in October.

Combs was found guilty on one charge of transportation to engage in prostitution, but not guilty on three more serious counts of sex trafficking and racketeering conspiracy. His lawyers had asked for his release on a $50 million bond. A judge declined, citing violence, co-eastern. version and subjugation in the case. Tesla has granted CEO Elon Musk's stock, which equates to a pay package worth about $29 billion. It's a message from Tesla's board backing Musk's next big bets. US Auto's editor Mike Collias is in Ann Arbor, Michigan.

Right now, I would say in Tesla's case, they're facing probably more challenges than any time that I can think of. EB sales in general are falling, at least in the U.S., Tesla's sales are falling. Its profitability has been pinched in the U.S., the federal rules are sort of moving against electric cars. And so a lot is riding now on his next big bet, which is robotaxies and standing up an autonomous ride hailing service. And that's a very far from a sure thing.

And so you have all of these challenges that are stacked up. And so I think the most interesting thing about this pay package is that it really signals that Tesla's board is still all in on Elon Musk and that any speculation that the board was ready to move on or was growing tired of all the controversy and, you know, Musk's forays into politics and picking fights with Trump. Like all that seems to be quelled by this deal. They think that he's the one best suited to lead them, you know, through these challenges. And for today's recommended read, the third country deportation arrangement between the US and Rwanda, in which up to 250 illegal immigrants will be sent to the Central African country. We'll put a link to that story in today's podcast description. For more on any of the stories from today, check out Reuters.com or the Reuters app.

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