President Donald Trump’s affinity for grand economic agreements is well-documented, rivaled perhaps only by his preference for low gasoline prices for American consumers.

His current diplomatic tour of the Gulf states, however, appears to be steering these two objectives onto a collision course, particularly concerning a much-vaunted investment pledge from Saudi Arabia.

The Trump administration has enthusiastically promoted a Saudi investment initiative, with figures cited ranging from a substantial $600 billion to an eye-watering $1 trillion.

To put such numbers in perspective, a $1 trillion commitment would equate to the entirety of Saudi Arabia’s sovereign wealth fund or its annual Gross Domestic Product.

For the Kingdom to sustain such an ambitious level of long-term investment in the United States, economists suggest it would almost certainly necessitate a significant increase in currently subdued oil prices—a development highly likely to draw President Trump’s ire.

Fueling ambition: the oil price imperative for Saudi pledges

The feasibility of these colossal figures is intrinsically linked to the price of crude.

“The number is impressive, but its significance will ultimately depend on the depth, timeline, and the price of oil,” John Sfakianakis, chief economist and head of research at the Gulf Research Center in Riyadh, told Fortune.

Unless oil revenues rise, financing such commitments will strain public finances unless managed prudently.

Currently, oil constitutes approximately 60% of Saudi Arabia’s revenue, according to Gulf News.

This heavy reliance underscores the challenge.

“These pledges will of course have to face up to reality as indeed they are large,” Maya Senussi, lead economist at Oxford Economics, explained to Fortune in an email.

In our view, the headwinds to public finances from lower energy prices and focus on domestic Vision 2030 priorities mean the announced pledges will likely only partly materialise within the four-year timeframe.

The Kingdom’s ambitious Vision 2030 program, aimed at diversifying its economy through massive public-works projects, carries its own hefty price tag, estimated as high as $1.5 trillion.

To merely break even on its spending, Saudi Arabia requires an oil price of at least $96 a barrel, as estimated by Bloomberg, with other analyses placing the figure even north of $100.

This starkly contrasts with the current trading price of Brent crude, the international benchmark, which hovers around $65 a barrel.

The presidential push for pump relief: a brewing conflict?

That $65 figure is significantly lower than the $79 per barrel seen in January when President Trump assumed office—a price he openly deemed too high.

“I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil,” he declared at the World Economic Forum on January 23.

“You got to bring it down, which, frankly, I’m surprised they didn’t do before the election,” Trump added.

That didn’t show a lot of love.

It appears that “love,” or at least a strategic alignment, eventually materialized. OPEC recently announced production increases for May and June, a move that subsequently pushed oil prices lower.

Reuters columnist Ron Bousso characterized the Saudis’ action as an “unspoken gift to Trump.”

Indeed, Clayton Seigle, a senior fellow at the Center for Strategic and International Studies, wrote on Wednesday that lower gasoline prices mean “Trump has already scored his big Saudi win”.

The longevity of these lower prices, however, remains an open question.

Beyond the billions: economists question scale of Saudi commitment

The headline figure of $600 billion, let alone $1 trillion, has been met with considerable skepticism from many economic observers, who find the scale unusually large.

A fact sheet distributed by the White House detailed investments totaling a more modest $282 billion, which includes $142 billion in promised US arms sales.

Paul Donovan, chief economist of UBS Global Wealth Management, commented this week that the $600 billion plan possesses “a fanfare of spin, which does not necessarily change anything in reality.

The announcement does not require economic forecasts to change.”

Regarding the $1 trillion spending figure reportedly sought by Trump, Ziad Daoud, Bloomberg’s chief emerging markets economist, described it to The New York Times as “far-fetched.”

Even the $600 billion figure represents roughly 60% of Saudi Arabia’s GDP and about 40% of its current foreign assets, according to Tim Callen, a visiting fellow at the Arab Gulf States Institute and a former IMF official.

Callen wrote earlier this year that meeting such a target would necessitate the Kingdom quintupling the portion of foreign imports it sources from the US over the next four years.

While “it seems likely that Saudi investments in the United States will grow,” he conceded, “the scale of the commitment looks too large.”

Vision 2030: balancing domestic dreams with foreign Deals

Further complicating these substantial commitments is the aforementioned Vision 2030.

The immense domestic spending required by this program, estimated at $1.3 trillion, has already pushed the Kingdom into deficit spending.

Compounded by falling oil prices, Saudi Arabia’s deficit could potentially double by the end of this year to $70 billion, Farouk Soussa of Goldman Sachs told CNBC.

While Saudi Arabia can absorb some short-term deficit spending, Soussa noted, it will likely seek to close this gap through measures such as project cutbacks, asset sales, or tax increases.

The politics of pledges

President Trump has previously claimed Saudi Arabia purchased $450 billion of US exports during his first term.

However, Callen, from the Arab Gulf States Institute, asserts this figure was not “anywhere near” reality.

The practice of announcing grandiose public projects that later fall short of expectations is not unique.

Politicians often leverage such declarations to showcase their business-friendly credentials, leading to a veritable cottage industry dedicated to debunking these claims.

“Let’s be honest, announcements are always at the high end. I don’t think the actual effect is as big as the headline. But the sign is positive,” Simon Johnson, a Nobel prize-winning MIT economist, told Fortune.

Johnson had previously suggested that CEOs might announce development deals in swing states to curry favor with Trump, even if those promises ultimately proved to be “vaporware.”

During Trump’s first term, Johnson observed, “there were a lot of promises that didn’t come to fruition.”

He added, “But that is kind of the nature of the business: If you’re making big investments, they don’t happen overnight.”

The true scope and impact of Saudi Arabia’s current pledges will, therefore, likely unfold over a considerable period, contingent on numerous economic and geopolitical factors, chief among them the volatile price of oil.

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Japan witnessed record foreign inflows into its equities and long-term bonds in April, as global investors reacted to US President Donald Trump’s aggressive tariff announcements by reallocating capital away from American assets.

Data from Japan’s finance ministry showed net inflows of 8.21 trillion yen ($56.6 billion), the highest for any month since the government began tracking the data in 1996, according to Morningstar.

The surge in foreign interest was driven by heightened concerns over US policy stability and asset performance, pushing institutional investors to diversify their holdings.

“Trump tariff shocks likely changed global investors’ outlook on the US economy and asset performance, which likely led to diversification away from the US to other major markets including Japan,” said Yujiro Goto, Nomura’s head of FX strategy in Japan in a report by CNBC.

US tariffs triggered dramatic asset reallocation

Much of the inflows occurred in the immediate aftermath of Trump’s announcement of “reciprocal” tariffs in early April.

The US 10-year Treasury yield jumped 30 basis points from April 3 to 9, while Japan’s 10-year yield dropped 21 basis points during roughly the same period, reflecting a flight to safety.

While global equities initially slumped, Japan’s Nikkei 225 managed to end the month over 1% higher.

In contrast, the S&P 500 slipped nearly 1%. Analysts attributed this divergence to Japan’s haven status and institutional buying.

Pension funds, reserve managers, life insurers, and other asset managers were key drivers of the inflows, rather than retail investors, according to Nomura.

“It was quite an exceptional month, when you consider everything that has happened in the global macro economic environment,” said Kei Okamura, Neuberger Berman’s SVP and Japanese equities portfolio manager. 

“That obviously had an impact in the way global investors were thinking about the asset allocation towards the U.S … they needed to diversify,” he told CNBC in a phone call.

Analysts say demand for Japanese assets to remain strong despite US’ trade deals

The recent shift in the US administration’s trade posture — including a breakthrough in negotiations with China and bilateral agreements with allies such as the UK — may slow the pace of flows into Japan.

But many analysts still expect strong demand for Japanese assets to persist.

Vasu Menon, managing director of the investment strategy team at OCBC, said that Trump’s unpredictable policy moves and frequent reversals have eroded global confidence in US assets.

“Given such a backdrop, demand for Japanese assets may remain healthy even if it is not as a strong as the April level,” he said.

Japan’s ongoing talks with the US with regards to tariffs have also raised some optimism over cutting the 24% “reciprocal” tariffs on Japan, Menon said.

Reforms at Tokyo Stock Exchange, currency outlook support flows

Beyond geopolitics, structural factors are also making Japanese assets more attractive.

Reforms at the Tokyo Stock Exchange, launched in March 2023, have focused on improving corporate governance.

Companies trading below a price-to-book ratio of one must now either comply with reforms or explain why they are not doing so.

This push has spurred a wave of share buybacks, boosting earnings per share and supporting valuations.

Asset Management One International said the initiative had enhanced the appeal of Japanese equities for both domestic and foreign investors.

Moreover, with the Japanese economy showing signs of recovery and the yen potentially set to strengthen if the dollar weakens again, many asset managers see further room for inflows.

“So this trend has legs,” said Okamura. “Japan will likely continue to see good flows.”

Limited upside seen in short-term bonds

While long-term bonds and equities drew significant foreign interest, short-term Japanese Treasury bills are unlikely to attract similar inflows.

The arbitrage opportunities that existed when the Bank of Japan maintained negative interest rates have largely disappeared, said Morningstar’s Michael Makdad.

Still, Japanese equities in particular are benefiting from a confluence of favourable conditions — trade diversification, domestic reforms, and relative economic stability — making the country a compelling choice for global capital.

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European equity markets, initially poised for a subdued start on Friday, found upward momentum as the trading session commenced, buoyed by a rally in healthcare shares and renewed optimism surrounding US-China trade relations.

Investors, however, remained watchful, balancing the positive sentiment with ongoing global trade tensions and awaiting key regional economic data.

In premarket indications, Euro Stoxx 50 and Stoxx 600 futures had hinted at a flat to slightly positive open. Yet, as trading got underway, European shares extended their gains.

The pan-European STOXX 600 index advanced 0.4% by 0710 GMT, positioning itself for a fifth consecutive weekly rise.

This positive trajectory was mirrored across other local bourses, with Germany’s DAX notably trading near record high levels.

The heavyweight healthcare sub-index was a significant driver, climbing 1.4%, propelled by strong performances from pharmaceutical giants Novo Nordisk and Novartis.

The improved risk appetite was largely attributed to benign headlines suggesting a temporary truce in US-China trade disputes.

EU’s confident stance and key economic releases

The intricate dance of international trade remains a central theme for market participants.

European Union officials reiterated on Thursday that the bloc is actively pursuing a more comprehensive tariff reduction agreement with the United States, one that goes beyond the scope of current negotiations with the UK and China.

EU negotiators have expressed confidence in the bloc’s economic leverage, signaling a firm stance against being pressured into unfavorable terms.

On the economic data front, investor attention is keenly focused on the upcoming release of the Eurozone trade balance figures for March.

Additionally, Italy’s latest inflation rate and France’s unemployment data are anticipated, which could provide further insights into the region’s economic health.

With a light schedule for major corporate earnings, these macroeconomic developments and evolving trade narratives are expected to be primary drivers of market sentiment.

ECB navigates inflation

Adding another layer to the market calculus, commentary from European Central Bank officials suggests a potential nearing of the peak in its interest rate cycle.

Governing Council member Martins Kazaks told CNBC that the ECB’s interest rates are “relatively close to the terminal rate” if inflation continues to track within the central bank’s expectations.

“Currently, if one takes a look at the dynamics of inflation, we are by and large within the baseline scenario and if the baseline scenario holds, then I think we are relatively close to the terminal rate already,” stated Kazaks, who also serves as the Latvian central bank governor, speaking to CNBC’s Silvia Amaro on ‘Europe Early Edition’.

The terminal rate signifies the point at which interest rates neither hinder nor overly stimulate economic growth, allowing the central bank to achieve its inflation target.

The ECB’s key deposit facility rate currently stands at 2.25%, following a unanimous decision by the governing council to implement a 25 basis point reduction in April.

Kazaks also indicated that market expectations for a further 25 basis point cut at the ECB’s next policy meeting on June 5 are “relatively appropriate, in my view..

This view aligns with remarks made by fellow ECB board member Isabel Schnabel last week, who said: “The appropriate course of action is to keep rates close to where they are today – that is, firmly in neutral territory.”

While investment banks offer slightly varied outlooks, with Goldman Sachs anticipating two rate cuts this year and JPMorgan forecasting one, the overarching sentiment from within the ECB points towards a cautious approach as it navigates the path towards its inflation goals.

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In an era where the “grindset” ethos—marked by punishingly early wake-ups, ice baths, and unwavering adherence to corporate norms—has become a widely accepted blueprint for success, Airbnb CEO Brian Chesky is charting a distinctly different course.

He’s not just tweaking the playbook; he’s rewriting significant portions of it, advocating for a leadership style that prioritizes personal well-being alongside corporate achievement.

“Don’t apologize for how you want to run your company,” Chesky recently advised in an interview with the Wall Street Journal.

For the head of the $84.8 billion short-term rental giant, this philosophy translates into embracing late-night productivity and decisively cutting down on traditionally accepted, yet often tedious, executive duties.

The email exile and the end of early starts

One of the most significant departures from the corporate script for Chesky has been his relationship with email.

“Emailing was the thing about my job that I hated the most before the pandemic,” he confessed.

While much of the business world has seen a resurgence of pre-2019 office life—complete with five-day workweeks, team-building events, and casual office chatter—email has not made a similar comeback in Chesky’s routine.

He now rarely touches them, deeming them a significant annoyance.

Instead, the Airbnb chief prefers more direct and immediate forms of communication while on the clock, favoring calls and texts, as reported by the WSJ.

This isn’t the only entrenched office tradition Chesky has jettisoned. The dreaded 9 a.m. meeting is also a relic of the past for him.

As a self-professed night owl who finds his peak productivity in the later hours, Chesky has instituted a 10 a.m. start time for meetings, and not a minute sooner.

“When you’re CEO,” Chesky quipped, “you can decide when the first meeting of the day is.”

Night owl productivity: Chesky’s ‘5-to-9 after his 9-to-5’

The 43-year-old co-founder of Airbnb doesn’t subscribe to the “early bird gets the worm” adage.

His energy surges in the evening, particularly after his workout routine, which typically concludes around 9:30 p.m.

From 10 p.m. onwards, he hits his stride, often working until he falls asleep around 2:30 a.m.

In picture: Airbnb CEO Brian Chesky (Source: LinkedIn)

“If I had a girlfriend, that would probably change,” Chesky candidly remarked. “But I don’t, so I’ll enjoy this.”

This late-to-bed, late-to-rise schedule naturally dictates a later start to his formal workday.

Chesky is not alone in this preference; a growing cohort of high-achieving leaders are rejecting the 5 a.m. club and tailoring their sleep patterns to complement their demanding careers.

Musician and entrepreneur Will.i.am, for instance, manages his tech venture during standard business hours but then re-engages with his creative pursuits, working until 9 p.m.

“Work-life balance is not for the architects that are pulling visions into reality,” Will.i.am told Fortune.

Those words don’t compute to the mindset of the materializers.

Chesky’s unconventional approach, while potentially surprising to some in the tech world, is inspiring others.

Whitney Wolfe Herd, founder and former CEO of Bumble, shared with the Wall Street Journal, “Chesky always said to me that being a public-company CEO doesn’t have to be miserable, and I thought he was crazy.”

However, Chesky’s philosophy resonated, and upon her return to Bumble this year, Wolfe Herd felt better equipped for the role.

“He really taught me how to be a CEO again,” she stated.

This movement towards personalized leadership styles is gaining traction. Nvidia CEO Jensen Huang, who helms a $2.8 trillion chip company, eschews traditional corporate hierarchy.

He has famously eliminated one-on-one meetings, opting instead for larger group discussions with his leadership team to foster open collaboration and rapid information flow.

“In that way, our company was designed for agility. For information to flow as quickly as possible. For people to be empowered by what they are able to do, not what they know,” Huang explained last year.

Similarly, Whole Foods CEO Jason Buechel actively counters the always-on executive culture by fully utilizing his paid time off.

He champions the importance of rest and relaxation, asserting that neglecting earned vacation can be detrimental to mental health.

“I highly prioritize PTO,” Buechel recently told Fortune. “So I do use all of my allocation each year.”

These examples underscore a growing trend among top executives: a conscious effort to redefine success, not by a rigid set of rules, but by what genuinely works for them and their organizations.

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Amid US President Donald Trump’s criticism of Apple’s reported decision to shift a substantial portion of its iPhone production for the American market from China to India rather than the United States, experts have cautioned that relocating production to the US would be economically unfeasible—ultimately leaving the company worse off, even though India would lose out on jobs.

Speaking at an event in Qatar on Thursday, Trump revealed he had confronted Apple CEO Tim Cook, calling the decision a disappointment given Apple’s recent commitment to invest $500 billion in the United States.

“I had a little problem with Tim Cook yesterday,” Trump said. “I told him: ‘Tim, you’re my friend. You’re coming here with 500 billion but now you’re building all over India. I don’t want you building in India.’”

Trump said that Apple had long enjoyed favourable treatment in the US despite its substantial manufacturing base in China and added that the time had come for the company to build in the US.

“I said to Tim … we’ve treated you really good, we’ve put up with all the plants that you’ve built in China for years, now you got to build [for] us,” Trump said.

“We’re not interested in you building in India, India can take care of themselves … we want you to build here.”

Trump also said Apple was “going to be upping their production in the United States”, although he did not provide further details to back up the claim.

US assembly would result in a 13-fold increase in labour costs

While Trump’s remarks have underscored a push to onshore more manufacturing, experts have highlighted the economic impracticality of such a move.

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), said Apple stands to lose significantly more than India if it shifts assembly to the US due to steep increases in labour and operational costs.

Relocating assembly to the US would result in a 13-fold increase in labour costs—from $290 per month per worker in India to around $2,900 under US minimum wage norms.

This alone would raise the per-unit assembly cost from $30 to $390, slashing Apple’s profit per device from $450 to just $60, unless prices are raised.

Industry estimates suggest that building iPhones in the US could push their retail price to nearly $3,000, a far cry from the current $1,000 price tag.

“A lot better thought would prevail both in the Apple company and the US administration. They would realise the following facts. First, if they decide to manufacture in the USA as compared to China, India, or Vietnam, a USD 1,000 iPhone would cost USD 3,000,” Prashant Girbane, Director General of the Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA), said

Are American consumers willing to pay $3,000 for that iPhone?

India earns less than 3% of the total value but will lose out on jobs

The gains India makes from assembling iPhones are limited in terms of value addition.

While each iPhone made and exported from India brings in approximately $30, much of it is offset through subsidies under India’s Production Linked Incentive (PLI) scheme, and tariff reductions on key smartphone components—often done at Apple’s behest.

“For every iPhone sold at $1,000 in the US, India’s share is less than $30. Yet, in trade data, the full $7 billion export value adds to the US trade deficit,” Srivastava noted.

$30 is less than 3% of the total value, despite being key locations for final assembly.

Still, the final assembly work done in India creates much-needed jobs, with around 60,000 workers currently employed in Apple’s local supply chain.

In China, about 300,000 workers are involved in similar operations. India’s role, while low in value capture, is significant for employment and skills development.

If Apple does shift assembly away from India, Srivastava believes it could serve as a wake-up call for the country to move beyond “shallow assembly lines” and invest in higher-value areas such as semiconductors, batteries, and display technologies.

“The exit could push India to stop depending on final assembly and start building its own upstream ecosystem,” he said.

What to make of Trump’s comments?

Apple’s global supply chain remains heavily China-dependent.

Currently, about 85% of iPhones are made in China, with India accounting for roughly 15%.

Analysts believe Trump’s comments may be aimed at exerting pressure on India in ongoing trade negotiations. Some experts also said Apple is unlikely to scale back its India plans.

NK Goyal, Chairman of the Telecom Equipment Manufacturers Association (TEMA), dismissed Trump’s comments as premature and noted that Apple had exported over $22 billion worth of iPhones from India in the last year.

“Apple already has three factories in India and is planning two more. If it moves out of India, it will suffer losses due to shifting global tariffs and supply chain uncertainties,” Goyal said.

He believes Apple will continue using India as a key manufacturing base.

Supporting this, Jaideep Ghosh, former partner at KPMG, said that iPhones worth Rs 1.75 lakh crore were made in India in FY 2025, up from Rs 1.2 lakh crore the previous year.

“The Apple ecosystem is becoming more important for India,” he said.

Shifting not from the US, but from China

Industry experts also clarified that the manufacturing shift is not from the US to India, but from China to India—a move aligned with the broader geopolitical goal of diversifying supply chains away from Chinese dependence.

Girbane added, “The jobs and manufacturing are not moving away from the US to India; they are moving from China to India. That helps American companies and consumers by protecting them from dependence on a single nation.”

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