Aurelia Butler

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SEOUL (Reuters) -South Korea’s acting president, Han Duck-soo, moved on Sunday to reassure the country’s allies and calm financial markets a day after President Yoon Suk Yeol was impeached and suspended from his duties over a martial law attempt.Han spoke with U.S. President Joe Biden by phone, the White House and Han’s office said.”South Korea will carry out its foreign and security policies without disruption and strive to ensure the South Korea-U.S. alliance is maintained and developed steadfastly,” Han said, according to a statement from his office.In a further attempt to stabilise the Asian nation’s leadership, the main opposition party announced it would not seek to impeach Han for his involvement in Yoon’s Dec. 3 martial law decision.”Given that the prime minister has already been confirmed as acting president and considering that excessive impeachments could lead to confusion in national governance, we have decided not to proceed with impeachment procedures,” Democratic Party leader Lee Jae-myung told reporters.Prosecutors said Yoon did not appear on Sunday morning in response to a summons for questioning in a criminal investigation into his martial law decision, and they promised to issue another order, Yonhap news agency reported.Yoon and a number of senior officials face potential charges of insurrection, abuse of authority and obstructing people from exercising their rights.The prosecutors’ office did not answer phone calls seeking comment.Han, a longtime technocrat picked by the conservative Yoon as prime minister, was elevated to acting president in accordance with the constitution while Yoon’s case moves to the Constitutional Court.Demonstrators seeking Yoon’s ouster braved the cold to throng the streets outside the National Assembly building where he was impeached. The crowd was about 200,000, according to police, Yonhap said.Since Han’s role is only acting president, “I hope he will exercise the minimum power to operate the country stably, rather than actively be involved in state affairs,” said Jo Sung-woo, a 39-year-old Seoul resident.About 8.5 km (five miles) away, a much smaller number of Yoon supporters demonstrated in the central Seoul area.”I really can’t stand to see these illegal lawmakers who were elected by fraudulent elections making evil laws and now this huge opposition party is running wild on their own,” said Yim Joung-sook, 55.NORTH KOREAN THREATYoon’s surprise martial law declaration and the ensuing political crisis spooked markets and South Korea’s diplomatic partners, worried over the country’s ability to deter nuclear-armed North Korea.Biden told Han the ironclad U.S.-South Korea alliance remained unchanged and Washington would work with Seoul to further develop and strengthen the alliance as well as trilateral cooperation including neighbour Japan, Han’s office said.The White House said in a statement that the U.S. president “expressed his appreciation for the resiliency of democracy and the rule of law in the ROK,” using the abbreviation for the country’s formal name, the Republic of Korea.Han convened his cabinet and National Security Council shortly after Saturday’s impeachment vote and vowed to maintain military readiness to prevent any breach of national security.He spoke by phone with the commander of U.S. Forces Korea, expressing concern about the possibility North Korea could attempt military provocations, such as launching ballistic missiles or cyber attacks, Yonhap said, citing Han’s office.South Korea’s partners wanted to see a credible and constitutional temporary leadership put in place as soon as possible, said Philip Turner, a former New Zealand ambassador to South Korea.”They will be pleased to see Prime Minister Han take over as acting president,” he said. “He is capable, experienced and well respected in foreign capitals.”But even with an acting president in place, international partners face months of uncertainty before a new president can be elected and a new government established, Turner added.The Constitutional Court has up to six months to decide whether to remove or reinstate Yoon. If he is removed or resigns, a new elections will be held within 60 days.ECONOMIC FALLOUTSouth Korean shares rose for a fourth straight session on Friday on hopes that the political uncertainty would ease after the impeachment vote in parliament, which followed a failed vote a week earlier.Democratic Party leader Lee said the most pressing issue is a slump in consumption caused by insufficient domestic demand and the government’s reduction of its fiscal role.He called for a National Stability Council for Governance comprising the government and parliament to discuss finance, economy and public livelihoods. “It is necessary to promptly discuss a supplementary budget,” Lee said, adding that such a measure could support for small businesses and investments related to artificial intelligence and infrastructure to try to head off energy shortages.Parliament, controlled by Lee’s party, passed a 673.3 trillion won ($470.6 billion) 2025 budget bill on Tuesday that cut the government’s 677.4 trillion won proposal, without reaching agreement with Yoon’s People Power Party and the government.By law parliament cannot increase government budgets, and at the time the Democratic Party said a supplementary budget could be needed to address spending for people’s livelihoods.The party said its cuts were mostly in reserve funds for the government, interest costs and funds allocated to the presidential office, prosecutors and auditors for classified operations. The government accused parliament of delaying projects for small businesses with the cuts.Deadlock over budget issues was one of the justifications Yoon cited for imposing martial law.South Korea’s financial authorities vowed on Sunday to act as needed to stabilise markets while the finance minister said he would announce an economic policy plan by year’s end. More

In a recent extensive report, TD Cowen analysts highlighted key themes heading into 2025, including the potential impact of AI on multiple levels.Among those is a significant boost to productivity, estimated at $2 trillion, which could emerge as AI reduces labor costs by more than 15%, “and potentially replacing up to 20% of worker tasks for 80% of the workforce in the U.S. alone,” according to the report.Investments in AI are accelerating, with TD Cowen projecting over $1 trillion in capital expenditures (capex) to fuel the next wave of advancements. The firm believes investors will be closely monitoring the evolution of tangible use cases, focused on commercialized products and supporting business models.The integration of AI into human activities is expected to unlock substantial productivity gains. A key focus lies in autonomous vehicle technologies.“The agentic AI innovation wave will extend to highly complex use cases that are directly integrated into daily human activities, such as in the emergence of autonomous vehicle capabilities delivered through a SaaS model,” the report states.Companies like Tesla (NASDAQ:TSLA) and Waymo are already spearheading these efforts. Waymo, for instance, has set a goal to become the “world’s most trusted driver” and has demonstrated a 73% reduction in injury-causing crashes compared to human drivers in similar conditions.Meanwhile, Tesla’s full self-driving (FSD) rollout in California and Texas is expected in 2025, and the electric vehicle (EV) giant has set a target for production of two million robocabs beginning in early 2026, aiming to exceed human driving capabilities in 2025.However, the impact of AI extends far beyond technology-focused industries, influencing virtually all sectors of the economy. In healthcare, for instance, AI is poised to revolutionize drug discovery and development. TD Cowen highlights its potential to cut research and development costs by as much as 70%.“We expect to see a continued high level of AI-enabled activity and investment in drug discovery, diagnostics, and related use cases across the healthcare industry.”Overall, the pace of AI adoption is accelerating faster than that of cloud technology, according to TD Cowen.“Advancements in generative AI appear to be moving on a logarithmic curve,” with generative AI increasingly driving its own evolution.This, the firm notes, differs from past computing cycles in which technology advanced on a more linear scale. More

These measures, often presented as a way to protect domestic industries, carry a complex set of implications that could ripple across markets and households.For consumers, one of the immediate concerns is inflation. Tariffs generally lead to higher costs for imported goods, which can result in increased prices on store shelves. This could squeeze purchasing power, particularly for lower- and middle-income households, which are more vulnerable to price hikes on essentials like food and everyday goods. Yardeni Research notes that while real wage growth has recently turned positive after years of stagnation, any policy-induced rise in consumer prices could erode these gains, dampening household confidence and spending.From a business perspective, tariffs can raise input costs, potentially squeezing profit margins. However, Yardeni Research suggests that companies might find some relief through other economic dynamics. For instance, a stronger U.S. dollar—often a byproduct of tariffs—can mitigate some of the price increases by making imports relatively cheaper in dollar terms. Moreover, the analysts highlight that productivity gains could continue to offset rising costs, keeping production expenses in check. During the first term of the Trump administration, a combination of deregulation and favorable trade deals helped sustain corporate profit margins, even amid similar tariff regimes.Nevertheless, the broader impact on global supply chains could pose risks. Tariffs disrupt established trade flows, forcing businesses to reevaluate sourcing and manufacturing strategies. For some firms, this could mean relocating production domestically, which might involve higher labor costs, or finding alternative suppliers, which could affect quality and consistency. Yardeni Research points out that sectors relying heavily on imported components, such as technology and automotive, could be hit particularly hard.Geopolitically, the imposition of tariffs often leads to retaliatory measures from trade partners. This tit-for-tat dynamic can escalate tensions, reduce global trade volumes, and impact emerging markets disproportionately. Countries like Mexico, which are tightly integrated into the U.S. supply chain, could face economic headwinds if tariffs disrupt cross-border commerce.The full scope of the tariffs’ impact will depend on how they are implemented and whether complementary policies, such as tax cuts or deregulation, are introduced to cushion the blow. Yardeni Research remains cautiously optimistic, suggesting that while tariffs are unlikely to trigger a major inflationary wave—thanks to factors like the strong dollar and productivity improvements—they could still alter consumer behavior and business strategies in ways that reverberate across the economy. More

The ministry said it will actively communicate with the parliament to keep the economy stable, adding that it plans to announce its biannual policy plan before the end of this year.The leader of the main opposition Democratic Party, Lee Jae-myung, called for a National Stability Council for Governance comprising the government and parliament to discuss finance, economy and public livelihoods.The Bank of Korea said in a statement that it would use all available policy instruments in conjunction with the government to respond to and avert any escalation of volatility in financial and foreign exchange markets.The bank said it is necessary to respond more actively to the economic impact than in past presidential impeachment periods due to heightened challenges in external conditions, such as increased uncertainty in the trading environment and intensified global competition in key industries.South Korea’s financial regulator said in a statement that financial markets are expected to stabilise as recent political events are considered temporary shocks, but it will expand market-stabilising funds if needed. More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

Nunes, a longtime Trump defender who led the U.S. House of Representatives Intelligence Committee during part of Trump’s first White House term, will remain Truth Social CEO while serving on the advisory panel, Trump said in a post on the platform. As committee chair, Nunes alleged that the FBI had conspired against Trump during its investigation of Russian interference in the 2016 presidential elections in which Trump defeated Democratic nominee Hillary Clinton. “Devin will draw on his experience as former Chairman of the House Intelligence Committee, and his key role in exposing the Russia, Russia, Russia Hoax, to provide me with independent assessments of the effectiveness and propriety of the U.S. Intelligence Community’s activities,” Trump wrote. The President’s Intelligence Advisory Board is a White House panel that offers the president independent assessments of intelligence agencies’ effectiveness and planning.Trump on Saturday also named IBM (NYSE:IBM) executive and former U.S. Department of Homeland Security official Troy Edgar to serve as the department’s deputy secretary, and businessman Bill White to serve as the U.S. ambassador to Belgium.(This story has been refiled to add the word ‘elect’ in paragraph 1) More