Musk’s cuts, Trump’s trade squeeze, Powell and China space race
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Today, Trump orders plans for large-scale cuts to the federal workforce. Netanyahu threatens to end the Gaza ceasefire as a Saturday deadline looms. A new frontier in the space race opens up in Africa as China builds new alliances. And how countries are responding to Trump's economic threats.

It's Wednesday, February 12th. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes every weekday. I'm Jonah Green in New York. And I'm Carmel Crimmins in Dublin. Ryan Reynolds here for Mint Mobile. The message for everyone paying big wireless way too much. Please, for the love of everything good in this world, stop. With Mint, you can get premium wireless for just $15 a month. Of course, if you enjoy overpaying, no judgments, but that's weird.

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If a judge does block one of your policies, part of your agenda, will you abide by that ruling? Will you comply with that? Well, I always abide by the courts, and then I'll have to appeal it. The Oval Office on Tuesday, with President Donald Trump ordering U.S. agencies to step up efforts to shrink the federal workforce, despite legal challenges to the cuts.

Standing alongside him, with his four-year-old son, was Elon Musk, whose Department of Government Efficiency team has been tasked with overseeing the layoffs. I don't know of a case where an organization has been more transparent than the Doge organization. Musk also defended his role as an unelected official and called the federal bureaucracy an unconstitutional fourth branch of government.

Tuesday's executive order is the latest effort by Trump and Musk to shrink government departments and align with Trump's policy priorities. Thank you very much. We had a busy day today. The king just left. The king that Donald Trump is referring to is Jordan's King Abdullah, who he pressed to take in Palestinians under the president's controversial proposal for the Gaza Strip. Trump signaled he won't budge on his idea, which he's billed as a Riviera of the Middle East.

But King Abdullah reiterated Jordan's steadfast position against the displacement of Palestinians. At the same time, Israeli Prime Minister Benjamin Netanyahu was sending a warning about the delicate state of the ceasefire in Gaza. In a TV address, Netanyahu said the military would resume fighting Hamas if the Palestinian militant group did not release hostages by midday Saturday.

It's unclear if he meant some or all of the remaining hostages. Following Netanyahu's address, Hamas issued a statement renewing its commitment to the ceasefire and accusing Israel of jeopardizing the truce. You know, I think the standard case for free trade and all that

Appearing before Congress, Federal Reserve Chair Jerome Powell vouched for the strength of the economy, though he deferred on questions about tariffs, Elon Musk's role in government, and other Trump-related issues. Reporter Howard Schneider covers the Fed.

Howard, so Powell was a bit tight-lipped about tariffs, but at what point might American consumers see an impact? Well, we don't know any of this yet, to be honest, because he hasn't done anything. Everything has been proposed and then delayed.

If you put a 25% tariff on Mexico, who pays that? Is it going to be the consumer all the way downstream? Is it going to be a grocer, a retailer, a wholesaler along the way? Is the grower back upstream going to take some hit to their margin? This is known as tariff incidence. It's really how the tax is distributed across all the different people that might pay it.

So this is the issue. As the Fed keeps saying, we need to know what's going to get taxed, at what rate, over what time. And it's only then can you start to sort of model out what the impact might be. Now, the question also is, obviously, everyone's response. If you get a tariff here and then another country responds, and then you respond and they respond, that starts to get inflationary. And countries are responding to Trump's economic threats. Mark John is our European economics editor.

Mark, we've heard a lot about Mexico and Canada's pledge to put more troops on the US border in exchange for deferred tariffs. What have other nations been doing to head off the risk of tariffs or even the threat of outright resource grabs? Okay, so there's been quite a few other countries doing this. Take, for example, Japan. So it's long had a big trade surplus with the United States that Trump doesn't like. And when

Prime Minister Shigeru Ishiba visited the White House last week. They talked about investments that Japan could make in America, in fact, raising the amount of Japanese investment to $1 trillion. And of course, Trump also announced what he called progress on Nippon Steel's blocked $14.9 billion attempt to take over U.S. Steel. So he said that any bid must take the form of investment rather than an outright purchase.

If we move on to India then, so India is previously labelled by Trump a very big abuser on trade. India has actually been long very keen to emphasise its readiness to open its economy. So we know, for example, that India is considering tariff cuts in at least a dozen sectors from electronics to medical and surgical equipment and chemicals and

We think that Modi may also propose increased U.S. energy and defense imports, which of course will go down probably very well in Washington. And then there's Trump's pressure on NATO members to contribute more. Of course, NATO Secretary General Mark Rutte said last week that there will be new military spending pledges to be decided this year that would be considerably higher than the existing 2% of GDP target. We do not know, however,

where this spending is coming at and how long it's going to take those European allies to get where Trump, at least, feels they need to be. And if you're interested in how Trump's threatened trade war is impacting what central banks are up to, both in the US and overseas, check out this week's episode of Reuters Econ World. It's out later today on the Reuters app or wherever you get your podcasts.

In other news: He's a very happy guy tonight. I feel like the luckiest man on earth right now. American schoolteacher Mark Fogel has been freed by Russia. He was picked up in Moscow by Middle East envoy Steve Witkoff and welcomed home at the White House by President Trump. Fogel was released three and a half years into a 14-year sentence for holding medically prescribed marijuana. Trump said another person would be released today, without identifying who.

The first senior official in Trump's administration heads to Ukraine this week, and it's Treasury Secretary Scott Besant. On the agenda: US access to Ukraine's rare earth minerals and energy assets. That's according to a source with knowledge of the matter. Both Trump and the Ukrainian president, Volodymyr Zelensky, have expressed interest in cutting a deal under which the US would receive rare earths from Ukraine in exchange for support to counter Russia.

And Sunday's Super Bowl TV audience turned out to be the largest ever for a single network telecast. That's according to the Nielsen Ratings Agency. Almost 128 million viewers tuned in for the NFL championship, broadcast by Fox. While the U.S. still has by far the biggest space program in the world, China is catching up.

And Reuters has learned that Beijing is building space alliances in Africa to enhance its global surveillance network and advance its bid to become the world's dominant space power.

Joe Brock is our global aerospace editor. So Joe, how does this partnership between China and Africa work exactly? On the space side, it's essentially an aid partnership. So China is offering financing, is offering technical knowledge, is offering equipment to African countries in order to help them with economic development, help them with the types of things like agriculture, fighting climate change.

That is ostensibly the public face of this partnership.

And the private side? So the space equipment that Beijing is placing in developing countries is, according to the Pentagon and former US intelligence officials that we spoke to, is helping China to create a global surveillance network. You know, they are democratizing space to enhance an authoritarian capabilities, is how one former spook told us. China's response to those accusations is to say that the US is in no position to defame China because

because of its own record of spying. The spokesperson for the Chinese embassy in Washington said the US is the world's largest surveillance state and they deny categorically that they use their partnerships in order to advance military interests. What is it they're sending over? It's a combination of equipment. There are satellites which China builds and launches for these countries. The countries then operate those satellites.

There are also satellite ground stations, which are essentially where they collect the data and the information from space. And there are telescopes, observatories, which are the eyes on the skies where you're looking up and looking at what is in space, including satellites, which may be yours or could be your enemies.

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Shop blinds.com right now and get up to 45% off select styles. Rules and restrictions may apply. And for today's recommended read, we take you inside the collapse of Nissan and Honda's $60 billion merger talks. The negotiations unraveled just a month in, with corporate pride and denial partly to blame. 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 favorite podcast player,

We'll be back tomorrow with our daily headline show.