Germany’s domestic intelligence agency formally classified the Alternative for Germany as a right-wing extremist movement, meaning authorities will have enhanced powers to monitor the party as a potential threat to democracy.

The AfD, which has been endorsed by Tesla Chief Executive Officer and Donald Trump adviser Elon Musk, is the strongest force in some opinion polls ahead of the conservative bloc led by incoming Chancellor Friedrich Merz, who’s due to take office next week. 

Populist political forces have gained traction as Germany’s export-oriented economy has stalled. Volkswagen’s namesake brand generated hardly any returns last quarter. Chemical giant BASF warned trade-war uncertainty means it can’t make reliable predictions for its business this year. --Jonathan Tirone

What You Need to Know Today

Euro-area inflation unexpectedly held steady and an underlying measure jumped in an awkward report for officials weighing how to respond to the economic hit from US tariffs. The numbers may dampen some of the optimism that European Central Bank  officials have lately displayed. President Christine Lagarde said last week that she and her colleagues are “nearing completion” in their task of bringing inflation back to 2%.

TikTok owner ByteDance was fined €530 million ($600 million) by the European Union for illegally sending user data to China, warning the firm it didn’t do enough to keep information out of reach from Chinese state services. TikTok has been in the cross hairs of regulator before. In September 2023, it was fined €345 million for alleged lapses in the way it cares for children’s personal data.

Israel struck a target near the presidential palace in the Syrian capital after the Druze community in both countries called for help following a series of violent clashes between the minority group and Syrian government forces. It was the second time this week Israel has conducted military action in and around Damascus, an extension of a wider offensive in Syria since President Ahmed Al-Sharaa overthrew long-time predecessor Bashar Al-Assad in December.

Buildings and traffic in the city center in Damascus, Syria Photographer: David Lombeida/Bloomberg

Stocks among battered European industrial sectors are being bought by a French fund manager who’s betting that investor concerns over US President Donald Trump’s trade tariffs are overdone. Ginjer Asset Management’s Leonard Cohen is hoping the contrarian bet repeats his successful 2019 call on banking stocks, a strategy that enabled his fund to outperform peers over the years since then.

US officials have prepared a set of options for President Donald Trump to increase economic pressure on Russia as President Vladimir Putin drags his feet over attempts to end the war in Ukraine. People familiar with the planning cautioned us that Trump has made no decision yet as diplomatic efforts are ongoing. Deliberations over next steps may be clouded by the abrupt sidelining of Trump’s national security advisor. 

London is closing the gap with New York for the title of world’s top financial center, according to the latest Global Financial Centres Index. Is it a signal that the the UK’s efforts to rejuvenate its banking and investment sectors post-Brexit are starting to pay off? Find out more by listening to this week’s In The City podcast with host David Merrit and Chris Hayward, policy chairman of the City of London. 

China has quietly started to exempt some US goods from tariffs that likely cover around $40 billion worth of imports, in what looks like an effort to soften the blow of the trade war on its own economy. A list of exempted US products covering 131 items like pharmaceuticals and industrial chemicals has been circulating among traders and businesses over the past week. Global food prices rose to a two-year high last month in a sign that tariff uncertainty is starting to put a squeeze on trade. 

What You’ll Need to Know Tomorrow

For Your Commute

The smell of ammonia seeps into Ann Cuthbert’s furniture, clings to her curtains and can even overwhelm the taste of her food. “It’s like chopping an onion,” the 67-year-old says. “Your eyes will stream, and it irritates the back of the throat.” Cuthbert blames a pig farm owned by the UK’s biggest pork producer, which has been expanding in the area where she lives in eastern England. She’s been complaining almost weekly to the environmental watchdog. The company, Cranswick, says the farm is a model facility that meets all regulations. The squabble in Norfolk, a farming county famous for its poultry, could be another not-in-my-backyard English clash between homeowners and a big corporation. But it’s emblematic of the tension across Europe, as big producers of meat pursue profit and efficiency in an era of trade disruption and concerns about food security.

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