The Economy, Electric Vehicles, & Eliminating Delivery Drones

March 4, 2025

Hello, readers – happy Tuesday! Today, we’ll be talking about the U.S. economy, the ceasefire (such as it is), tariffs, EVs, the FBI, money laundering, and drones.

Here’s some good news: Thanks to Labour’s workers’ rights reforms, parents in Britain will be granted a right to bereavement leave after suffering a miscarriage. Also, acres of native trees will be planted as part of a project to help re-establish an area of Dartmoor’s ancient woodland and reduce the risk of flooding around the River Erme.

“You can observe a lot by just watching.” – Yogi Berra

A Red Wave Hits The Economy

(Federal Reserve by Alex Wong via Getty Images)

The first quarter of 2025 isn’t over yet, but the economic alarm bells are already ringing. Over the weekend, the GDPNow model (an economic forecasting algorithm run by the Federal Reserve’s Atlanta branch) projected a rollercoaster-style dip for the U.S.’s GDP this quarter, with the economy expected to contract by a gut-wrenching 2.8% as of yesterday – Q4 2024 saw the U.S. economy expand by 2.3%.

Recessions are normally associated with prolonged periods of economic shrinkage of 2% or more. Does that mean we should start being worried about the R-word? Possibly, but not quite yet. We still have four weeks to go until the end of Q1 2025, and there’s lots of economic data that the GDPNow model is still missing. However, the fact that the model’s predictions got worse after receiving more data – it forecast a 1.5% shrinkage just last Friday – doesn’t make us optimistic.

Commerce Secretary Howard Lutnick has proposed leaving government spending out of GDP, claiming that the White House has used its spending to make the economy appear more healthy in the past. Critics claim he’s calling for the shift to obscure the impact of Elon Musk’s cost-cutting efforts. Over the weekend, Trump also announced his own paradigm-shifting plan to “move forward” to establish a “US Crypto Reserve.” Other than naming a few coins that might be involved in the reserve (causing their values to skyrocket), the president has been very hush-hush on details.

What’s In A Name?

Over the weekend, Israel cut off Gaza from all humanitarian aid as the region awaits a second phase in the Israel-Hamas ceasefire. Israel’s government (with the silent backing of the Western world’s ruling class) is likely looking to leverage its blockade of Gaza to force Hamas into accepting new ceasefire terms.

Advertising its new ceasefire proposal as a U.S. plan it’s calling the “Witkoff proposal,” Israel is now demanding that Hamas give up half of its 59 remaining hostages in exchange for an extension to the current ceasefire and a promise of a lasting peace sometime in the future. The proposal will not see Israel release any of the over 10,000 Palestinians it’s holding in prisons.

That deal will sit on the negotiation table – though no negotiations are currently taking place – as Israel prepares to enact a “hell plan” to put pressure on the people of Gaza. No, we’re not editorializing – Netanyahu’s government has described its blockade plans using those exact words. In addition to keeping humanitarian aid out of Gaza, the “hell plan” will cut off the enclave from electricity and water supplies, force residents in the north back into Gaza’s southern reaches, and might even see IDF troops re-enter the area in a lightning offensive.

Trump Tariffs Take Hold

The Trump tariffs are set to take effect today, as the White House has not come to an agreement with either Canada or Mexico to stave off a neighborly trade battle. “No room left for Mexico or for Canada,” Trump said yesterday. “The tariffs, you know, they’re all set. They go into effect tomorrow.” The stock market immediately dropped on that news, with the S&P 500 dipping by 1.76% by market close.
The tariffs will impose 25% fees on goods imported from Mexico and Canada and 10% duties on imports from China. Both of the U.S.’s neighbors appear ready to impose their own tariffs on U.S. goods if the tariffs do go through (they’re still praying that they won’t), and China is also poised to respond. According to China’s state-backed Global Times, Beijing is looking at imposing tariffs on U.S. agricultural imports. That policy will likely sting for American farmers, as China is the world’s largest agricultural importer and the top destination for American agriculture products.

Brussels Backs Down

The E.U. is easing up its environmental regulations on automakers as the continent’s electric vehicle sales continue to sink. Yesterday, European Commission president Ursula von der Leyen announced that E.U. carmakers will have two additional years to make their 2025 fleets compliant with E.U. climate targets, which dictate how many gas-powered vehicles automakers should sell each year. This means that companies can count EV sales from 2026 and 2027 towards their 2025 climate targets.
Von der Leyen hopes that easing up on climate goals will give carmakers more “breathing space” as European EV sales struggle through a rough period. Environmentalists, however, argue that the new policy “rewards laggards and does little for Europe’s car industry – except to leave it further behind China on electric vehicles.”

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You Have The Right To Retire Silently

The head of the FBI’s New York Field Office, James Dennehy, was forced out of the bureau yesterday after being offered the choice to resign or be fired – he was eligible to retire and took that route. Last month, Dennehy told staff to “dig in” after the Trump administration removed senior FBI leaders and requested the names of all agents who worked on January 6 cases.
The news comes amid other major shifts at the FBI. Kash Patel and Dan Bongino, two conservative media figures, will now head the bureau, and Trump has called agents who worked on the January 6 cases “corrupt.” Also, on Friday, Interim U.S. Attorney for the District of Columbia Ed Martin demoted several top officials in the office.

Folding To The Money Launderers

Late Sunday night, the Treasury Department announced that it will no longer enforce a law that is intended to make it harder to launder money or form shell corporations using a database that contains personal information on the owners of U.S. businesses. There will no longer be penalties if companies fail to register for the database, which was created during the Biden administration.
“This Biden rule has been an absolute disaster for Small Businesses Nationwide,” President Trump said of the news. “The economic menace of BOI reporting will soon be no more.” Small businesses faced the brunt of the burden because shell companies often have fewer employees.

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All Quiet In The Southwestern Skies

After months of enduring an ambient overhead buzz, things are finally quieting down for the residents of one Texas town. Since early last year, Amazon has been operating test flights for its Amazon Prime Air delivery drones over College Station, Texas. The drones are supposed to make consumers’ lives easier by delivering small items like batteries or toothpaste in under an hour, but residents say that the constant noise from the drones has disrupted their daily lives for over a year.
College Station residents have raised a ruckus over their town’s drone delivery program. Some are worried that the drones might be spying on their children while they swim, others say the constant buzz disrupts their peace, and others say the flying robots are scaring their dogs and local wildlife. Now, the company is packing up its bags (and boxes) in the area, though it will continue testing drone delivery programs elsewhere in the U.S.
“I don’t think anybody expected the noise to be as invasive as it has been,” said one local, who’s glad that the testing is over. “I don’t think we should ban this,” said another resident. “If there’s a place for it, and the market needs it, then fine, but it shouldn’t mess up the peace in the neighborhood.” For now, Amazon is still looking to set up more drone delivery locations, and might even open up a new location near College Station – hopefully in a quieter neighborhood.

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