The summit of its parts: Ukraine, Trump and Putin

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0:50The Economist

0:57Hello and welcome to The Intelligence from The Economist. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world.

1:12Nowhere on the planet was more associated with the car than Detroit was. Now that it's in a petrol-fueled past, what city will end up being the Detroit of electric vehicles? And more people than ever have allergies. Luckily, more treatments than ever exist for them. We look at how science is taming even the most dangerous cases.

1:50But first...

1:57Nearly 160 years ago, the Russian Tsar Alexander II sold Alaska to America for the bargain price of$7.2 million, around$170 million today. The money helped, but the deal was partly to undermine the British, who had designs on it. On Friday, history could repeat, or rhyme anyway. In Alaska, a Russian leader may again strike a bargain with America and squeeze Europeans aside. My instinct really tells me that we have a shot at it. Donald Trump says a peace deal for Ukraine is within reach. It's very complicated, but we're going to get some back. We're going to get some switched. There'll be some swapping of territories to the betterment of both.

2:44The details matter here, a lot, as does the question of who will be in the room. For a long time, Ukraine's peace talks have been two things at once. Practically dead, but at the same time never quite without a pulse. And in a way, they still are. Oliver Carroll is our Ukraine correspondent. Russia, the US and Ukraine, the three main negotiation parties, they're still quite far apart. But they do seem closer than they've ever been before. Getting to a deal will mean working through quite a bit of Trumpian chaos, controversy, and a lot of confusion. Well, we come to you to hack through the confusion.

3:31Let's get started on how we got here. Right, so let's start with the Friday deadline, which has just come and gone. You will remember this was an ultimatum to Vladimir Putin. end the war or face crippling sanctions. And there was a lot of tough rhetoric. In the end, it was a soft climb down. Putin didn't start fighting. He didn't get the sanctions. But instead, he got a nice, bright, shiny summit in Alaska. And Putin certainly hopes that will be without the involvement of Volodymyr Zelensky, though negotiations are ongoing on that. A key moment seems to have been this last-minute intervention of Trump's presidential envoy, Steve Witkoff.

4:10He travelled to Russia last week and seems to have put quite a few spanners in the works. Before he was there, I know there'd been quite a bit of progress in secret talks, the outlines of a deal. But those recent talks on Putin's counterproposal, which is the idea of a major land swap with Ukraine, essentially leaving heavily fortified lines in the Donbass to give Russia what it hasn't achieved in nearly four years of fighting. That's the key moment of controversy and something which obviously for Ukraine is a red line. So after that intervention, then what's on the table? What's the shape of the deal that's kind of being discussed now?

4:50Well, still as before, it seems to be a two-part process. First, a ceasefire. And I understand Putin offered a limited ceasefire in the sea and in the air, which Ukraine would broadly accept, though it would rather a land ceasefire as well. And then later the implementation of a broader peace proposal subject to presidential talks. Now, Ukraine wanted that to include Zelensky. It's a big question as to whether he will be included there. But after this sort of wick off to and fro, we've been brought to a more confused and to a more unacceptable for Ukraine picture. These landslops, particularly with Russia returning relatively smaller territories, perhaps Topalegian nuclear power station, but in return for Ukraine essentially upping sticks and leaving and surrendering broad sections of Donbass.

5:40I mean, there's lots of reporting out there that Witkoff himself didn't understand what exactly was being proposed by Russia. And it seems that finally Russia was essentially proposing to stop fighting at the current lines in other regions only in exchange for receiving more land in the Donbass, which obviously for Ukraine is unacceptable. This appearance of Witkoff, I mean, historically, he's not seen as the most competent of negotiators. His involvement in the pitch has traditionally been associated with more problems, especially for Ukraine. So as we come up on this summit, who are the players?

6:16Presumably Mr. Witkoff, among others. Right. In America especially, there's a lot of competition going on, but not just in America, but Ukraine too. It's important to note how much ego can drive these political processes. There seems to have been about three phases to the American approach. I mean, the first phase was when relations between Zelensky and Trump were terrible. And this was a point where Steve Wyckoff gained the ascendancy. Later, with the support of the Europeans, another special representative, Keith Kellogg, a retired general who knows some of the stakes in greater detail, he came to the fore and became more influential with Donald Trump.

6:54The latest stage appears to be in a mix of those two approaches. and the very last stage, Kellogg seems to have been cut out of the picture at the last minute. As far as I can see, the American position is not at all clear. A lot is still to play for. The EU is fighting back, trying to reassert their leverage. As I say, the positions are still quite far apart, but ultimately there is a sense that even in Ukraine, the hope isn't lost that those positions can be closed. But that means selling an eventual plan at home. What does that look like for both of them? Yeah, I mean, the question of what might happen if Zelensky has to sell a bad piece, I mean, it reminds me of basically what happened back in 2015.

7:36As part of the Minsk process, Ukraine was supposed to vote through a decentralization law, and Russia knew that would be very difficult. This is precisely why they put it in there, the idea of accepting essentially a cancerous part of Ukraine back into Ukraine and then being able to influence Ukraine from that part. So I was in parliament at the time, I remember, watching the events outside. There was a huge violent protest. They threw grenades at policemen. One of the policemen died. And so I think there is a danger that Putin has deliberately calibrated this counteroffer to basically seem reasonable.

8:12Landswalk makes sense. But in fact, this is something which would be very difficult for Ukrainian soldiers and Ukrainian people to accept. Not least it would require rewrites of the constitution. And certainly the frontline signs, I mean, they're ambiguous. Russia is still making progress, albeit at a huge bloody price. There is a question as to how long it can continue at that pace because recruitment of these soldiers for Russia, I mean, it's an incredibly dangerous job. It requires very high sign-on bonuses. And there is a question as to whether the Russian economy, given that it's going into recession, will be able to keep that up without a more general mobilization.

8:52And Putin has obviously so far resisted that. I mean, the worrying thing for Ukraine is that even in the original set of proposals before Witkoff got involved, there was no sense of a real solid security guarantee. The worry is that even if we come to a freezing of the conflict, Russia will use the time to regroup, to retrain its officer corps, and then attack again with much more force and try and get it right this time. So you hinted along the way there that Ukraine does maybe have some leverage in this and is going to be presented with what you say are absolute no-go, redline proposals. How do you think it's going to play what's about to happen in Alaska?

9:32Well, as with anything involving Donald Trump, it's really important not to anger him. Ego is a very important thing here and he's unpredictable. The danger is that at some point in the near future, Trump will decide this is a no-go for him and will lose patience. Europe might be thrown overboard. And regardless, all the options right now for Ukraine are going to be difficult. The point we've come to is that every continuation is low probability, but also highly damaging. The continuation of war is bad. You can argue for both sides, but at the same time, it's relatively worse for Ukraine, which every day, its statehood is weakening.

10:13You know, this is a war which has been going on for nearly four years. And for a lot of Ukrainians, it can't go on for much longer. Oliver, thanks very much for your time. It's a pleasure, Jason.

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12:13Perceptive merchants and inventive craftsmen. In the mid-20th century, Detroit was a center for the global car industry. These men pioneered the building of the automobile industry. At the end of the 20th century, that influence really began to wane. In Detroit, the idea of mass production was perfected.

12:40And now cities around the world are competing for a similar role. But this time they're producing electric vehicles as opposed to petrol-fueled cars. Don Wineland is The Economist's China Business and Finance Editor. So one of the cities that wants to become the new Detroit is Chongqing. I recently visited there. It's a very large city with a huge auto manufacturing industry. As it turns out, though, lots of cities in China want to take that role. Well, tell me more about that internal competition. What cities are fighting for that crown? So China's the world's biggest EV manufacturer. It's the biggest EV market.

13:28Over the past decade, the government has really pushed the production and the purchasing of electric vehicles. So, for example, in 2018, about 5 % of auto sales were electric vehicles. Now there are somewhere around 50%. There are 12 provinces or administrative regions that produced at least a million cars last year, and four of them managed to make over 2 million. And if you Google the Detroit of China, there's a lot of cities that are aspiring to become Detroit. So why though? Why so much internal competition for that Motown crown? Manufacturing matters a lot in China. So local government officials are really looking to grab onto this type of really large manufacturing business whenever they can.

14:19Just five years ago, the property industry was generating about 30 % of GDP in China. Five years later, it's producing somewhere between 20 % to 22%. Now, local officials are looking to replace this. and the central government has been promoting manufacturing as one of the key ways to boost your economy. Auto manufacturing happens to be the biggest chunk of manufacturing when it comes to single industries, but it only makes up about 5 % of GDP currently. So that means that if you want a chunk of China's auto manufacturing growth, you really got to fight for it. And we see cities doing that all the time.

15:04Over the past couple of years, local governments have backed new auto brands that have gone bust very quickly. It's not an easy game to be in right now, but it is a way to make sure your economy is growing quickly. So what are these provinces and regions doing to compete, each one trying to beat its neighbor at this game? So if you go back to the origins of China's auto industry, it was really all about state-owned companies. When you get to the 1980s, you have foreign auto manufacturers coming into China and setting up JVs, that is joint ventures, with the state-owned firms. And this turbocharges the auto industry.

15:44So even as recently as the 2000s, you really needed to have a state-owned firm and a foreign firm to really have any kind of auto industry within your region. Now that China leads the world in EV production, it has a lot of its own savvy private automakers that are making up most of the growth in the country. So you have BYD in Shenzhen. You have Xpeng in Guangzhou. These are both located in Guangdong province, and that's really helped turbocharge Guangdong's auto production. That province made about 5.7 million cars last year. On the other hand, Chongqing has a large state company. It has which is a private company that has recently started producing EVs with Huawei, which is the massive telecommunications equipment giant.

16:37And it also has a lot of JVs with foreign companies. So these areas really had a winning combination for EV production. And so from your perspective, looking at the sort of notional leaderboard here, who's ahead in the race to become the Detroit for today? Well, it's clear that Guangdong province is the biggest producer right now. But one of the things that really interests me about Chongqing is that it's been very, very adaptive to how this industry has been changing. So in 2016, Chongqing was already the world's biggest auto city. It was producing three million vehicles that year. But most of these cars were cheap petrol-fueled cars, and their sales were being boosted by a national sales tax cut for cars with small engines.

17:29In 2018, when these tax cuts ended, production fell very rapidly. But what we can see in Chongqing is a supply chain. It's been able to change very quickly to EVs and attract a lot of investments. So in 2017, Chong An, which is the local state-owned giant for auto production, invested about 100 billion yuan in its EV transition. In 2019, BYD, the world's largest EV maker, invested 10 billion yuan to build a very large battery production facility in Chongqing. So a lot of the supply chains in this city have adapted. So it sounds like in this race, you're kind of backing Chongqing. Is that fair to say?

18:15If I had to place a bet on it over the next 10 years, Chongqing has a good chance. There's another advantage that an inland city like Chongqing has compared to, say, Shanghai or Guangdong province. It's a lot cheaper in Chongqing. Housing prices are much lower. That means if you're trying to attract talent to come to your company from other places, people are more willing to move to Chongqing because it's cheaper. So it really could be a tight race between a few different inland cities where costs are low. You have Hafei on the one hand, which is this up-and-coming auto production and technology hub, and then you have Chongqing on the other hand.

18:57And Jason, I don't know if you've ever been to Chongqing, but it's one of my favorite cities in China, and I think a lot of people in China feel the same. It's a culture and nightlife city. Its architecture is world famous. It has all these amazing bridges that cross several different rivers. And of course, the food there is very famous too. When you're considering that bigger picture of what Detroit was, Chongqing definitely fits in better than a place like, say, Hafei. With apologies to our listeners in Hafei, thanks very much for your time, Don. Thanks a lot.

19:48There was a time that me being this close to this sound would have been impossible. As a kid, I had dozens and dozens of allergies, most of all to cats. Now I have this guy, Jerry, an extremely fetching tuxedo cat. He does pretty good business on Instagram. I got lucky. My allergies went away throughout my teens. For many, many others, they don't. But their luck is turning. Science is getting better and better at dealing with allergies, even for the most life-threatening ones. Allergies just seem to be on the rise. I mean, more people react to things like pollen, cats, dogs, and food. Emily Steinmark is a science correspondent for The Economist.

20:34In fact, in America, the share of children with food allergies has risen from around 3.4 % in 1997 to 5.8 % in 2021. So it definitely seems to be the case that the world is getting more allergic to itself. However, it's not all bad news. There are treatments allowing people to manage their allergies and they are becoming increasingly effective, accessible and safe. Okay, putting aside the question of the growth in cases of allergies, let's talk about the real basics. What even are allergies? What's going on? Basically, in the case of a person with an allergy, their immune system is confused, right?

21:13So usually an immune system is protecting you from things like bacteria and viruses and other bad stuff that can get into the body. And it does this through various immune cells and mechanisms. One of them is immune antibodies. And there is one that is on the lookout for parasites, specifically worms. and it's called IgE antibody. And this antibody, we don't really use that much anymore. But when it sees something, it thinks it's bad for you. It starts this whole reaction that releases histamine into the body. And if you have a worm or a parasite, it can be quite useful because it produces mucus.

21:53It helps you like cough it up and like get rid of this bad thing. But the problem is that in this day and age, IgE doesn't really have that much of a job anymore. and so it gets confused a lot of the time. So in people with allergies, it will see something that isn't actually dangerous, that is not a parasite or a worm, say a little bit of peanut or a floating bit of pollen and it will go into overdrive and cause these classic allergic symptoms such as wheezing and hives and in the worst case scenario, histamine can provoke a whole body reaction known as an anaphylactic shock which can end up blocking the airways and basically you can die.

22:32But you were suggesting the treatments are getting better. Yeah, absolutely. And the only way to really treat an allergy is immunotherapy. And they work by repeatedly exposing the body to a tiny bit of this allergen that sets you off and then gradually increasing that allergen. So for things like pollen, dust mites and cat dander, immunotherapy is really quite common now. And it comes in like shots of drops and tablets. And they're highly effective for most people. However, progress has been quite a lot slower for food allergies. And why is that? Well, I mean, they're just more dangerous. I mean, they carry a higher risk of anaphylaxis.

23:08And a lot of the people with allergies are children. And so if you're going to try and expose a child to something that could kill them, you want to go really slowly and be really careful. However, progress is being made. In 2020, America's Food and Drug Administration approved the first oral immunotherapy for children with peanut allergy. So that's super exciting. it just involves taking a powder that contains peanut protein with food and the idea is not necessarily that they can then go on to just like eat loads of peanut butter and jelly sandwiches all day every day but more that they wouldn't be as much of risk of anaphylaxis if they were accidentally exposed say at school or on a plane or something like that so it's not a complete cure but it's still a big improvement and gives them more peace of mind that their child is less at risk when they're out and about.

23:57So at the mention of the word cure, I wonder, looking at the slope of the curve as you see it, is there a future where basically peanut butter and jelly sandwiches and cats for all is even plausible? I think researchers are hoping that could be the case. There's a lot of work going on that are really trying to take immunotherapy to the next level. So companies developing therapies that are based on small fragments of these allergen proteins called peptides. There is emerging evidence to suggest that might be safer to expose people to than the full protein because they seem to be able to increase the tolerance to these allergens without setting off harmful immune reactions.

24:37There's also a monoclonal antibody, which is basically a protein that's made in the lab that works like an antibody in the body that can go in and block IgE, that parasite noticing antibody I spoke about before, from setting off its harmful immune reaction and so blocking the histamine. You do have to keep taking it. So the idea is perhaps you can combine it and give people this monoclonal antibody to kind of make sure people aren't getting harmful reactions and then giving them immunotherapy at the same time. So I think We're not looking at overcoming all allergies in the sort of near future, but I think from speaking to scientists in the field, they are optimistic that we can make really good progress towards either preventing allergies in the first place or treating them much more safely so that people can go for long periods of time without any symptoms at all.

25:33Emily, thanks very much for joining us. Thank you very much for having me.