Starbucks Korea, which operates the coffee-chain franchise in South Korea, said all its staff would receive training in historical awareness. The firm faces a backlash after a “Tank Day” marketing gimmick was seen to be making light of a pro-democracy protest in 1980, at which hundreds were killed. Lululemon also found itself mired in controversy for ignoring local sensitivities, after it held a promotional event on the Great Wall of China that featured a Japanese drum. Amid renewed tensions between China and Japan the yoga-gear-maker apologised, blaming “limitations in our professional knowledge”. This article was downloaded by zlibrary from https://www.economist.com//the-world-this-week/2026/06/18/business
June 18th 2026 Dig deeper: Donald Trump gambles that Iran wants money more than power Republicans are desperate to move on from the Iran war War has strengthened the Islamic Republic. Peace could split it Iran’s battered economy will take years to recover The editorial cartoon appears weekly in The Economist. You can see last week’s here. This article was downloaded by zlibrary from https://www.economist.com//the-world-this-week/2026/06/18/the-weekly-cartoon
AI has granted America vast new power Britain is not yet ready to rejoin the EU Donald Trump gambles that Iran wants money more than power Don’t restrict Chinese biotech India’s new economy still faces an old problem
AI has granted America vast new power Its government is now the gatekeeper to frontier models—and most compute June 18th 2026 THE NEWS is full of how an ignominious peace deal with Iran exemplifies a decline in American power. That conclusion could hardly be more wrong. On June 12th the Trump administration ordered Anthropic to block foreigners from Fable and Mythos, its latest and most capable frontier AI models. In an instant, everyone learned that the American government can decide who may use the world’s most important technology. You don’t get much more powerful than that. The administration was responding to a supposed jailbreak for Fable, meaning a prompt that circumvents defences against uses such as hacking computers or making bioweapons. The chances are that it wanted Anthropic to switch off the models for everyone, and that targeting foreigners was a
means to an end. Sure enough, that is what Anthropic did, while claiming that the concern about its model was overblown. The legal basis of the order remains unclear, and the ban seems unlikely to last. What matters, though, is the demonstration that global access to the best AI may come down to a decision in the Oval Office. The administration showed in March that it is prepared to trample on the frontier AI companies, when it designated Anthropic a “supply-chain risk”. Now it has shown that it is prepared to trample on users, too. America must decide how to wield this vast new power. The rest of the world must decide what to do about it. Even as it plans for an unreliable America in everything from defence to trade, it now has to cope with a new way of being captive to the world’s biggest economy. This is not the first time America has tried to restrict access to frontier technologies. After the second world war it stopped helping Britain’s nuclear-weapons programme. When modern cryptography emerged in the 1970s, it blocked exports, before accepting the trade-off between having secure allies and using secrets to boost its own offensive capabilities. Uncle Sam still refuses to share its best military equipment, even with close allies. America kept the F-22 fighter for itself; allies got the F-35. To control access to a technology, though, depends on its nature, and rivals’ ability to develop it independently. Nuclear co-operation with Britain resumed in the 1950s after it developed technology of its own; with other countries, America used the Nuclear Non-Proliferation Treaty of 1968. Cryptography methods could not be contained and eventually went public. Many countries are capable of cyber-attacks. Frontier AI has echoes of all these examples. If the very best models can disable crucial infrastructure or help users create pandemic-ready pathogens then, like nuclear weapons, they are too dangerous for public hands. But as with cryptography algorithms, it will be hard to be sure that advanced proprietary capabilities will never be copied. Open-weight models, which anyone can download, could advance and proliferate. In cyber-security a small imbalance can bring big advantages: if an attacker has version 5 while the defender is stuck with version 4, and the better model uncovers just one
more vulnerability, the weaker party will be compromised. As AI is embedded in military hardware, a similar logic may apply on the battlefield. Yet America has a huge economic interest in leading in AI and selling its tech to foreigners. Many Anthropic staff are not American and so were hit by the ban; to freeze AI research at America’s best lab would be self- defeating. The firm also says that 80% of its consumer use is overseas. As American technology has boomed over the past decade, Europe’s payments to America for intellectual-property products have risen fivefold. America should not want to give the rest of the world a reason to team up with China, the second-ranking AI power. This may lead to a hierarchy of access. The best capabilities will be closely guarded by America, to provide an edge in cyber-offence and military capability. The next-best alternatives may be available to allies—the equivalent of the F-35. And a sufficiently handicapped model may be sold to the world with the best safety precautions its makers can design. Such a future would be uncomfortable for America’s allies, which are nowhere close to rivalling the likes of Anthropic. They are already vulnerable to Mr Trump’s bargaining on trade, alliances, the dollar system and more. AI could become the most important lever of the lot. True, some of the dependence is two-way: America needs Dutch lithography machines and Taiwanese fabs. And foreigners could always shun Anthropic or OpenAI in favour of good-enough open-weight alternatives. Yet running models requires computing power, which America has perhaps 15 times more of than Europe, plus much more ongoing investment. If SpaceX, whose share price has surged after listing on June 12th, realises its vision of data centres in space, the gap is unlikely to close. “Europe 2031”, a gloomy essay about the future of AI, imagines vassal status for Europe as its cyber-security, defence and swathes of its economy come to depend on American models and compute . Many countries will conclude they need America more than ever. They can still strengthen their bargaining positions. Compute is so lacking that it makes sense to build data centres almost anywhere, yet countries show no sense of what is at stake. In the seven months to June 2025 demand for new
grid connections in Britain rose from 41GW to 125GW, more than twice peak power demand. OpenAI paused a data-centre project there in April, citing regulation and costly energy. Throughout Europe more energy, easier planning and looser rules for modelmakers would help. In East Asia Taiwan, Japan and South Korea must integrate rather than duplicate their efforts. All should avoid the false promise of government attempts at steering investment. The goal should not be protectionism but ensuring that America is not the only economy where the AI ecosystem can thrive. As in trade and defence, the way to cope with Uncle Sam’s transactional turn is not to whine about alliances but to build strength. ■ For subscribers only: to see how we design each week’s cover, sign up to our weekly Cover Story newsletter. This article was downloaded by zlibrary from https://www.economist.com//leaders/2026/06/18/ai-has-granted-america-vast-new-power
Britain is not yet ready to rejoin the EU After a lost decade, it is time to focus on the future June 18th 2026 TEN YEARS and six prime ministers after voting to quit the European Union, Britain has, to paraphrase Dean Acheson, lost a continent but not yet found a role. The referendum on June 23rd 2016, in which Britons voted for Brexit by 52% to 48%, has left them more divided, less influential and poorer than they would otherwise have been. The promise that Britain would “take back control” was a cruel joke. The country has been buffeted by global events. Brexiteers promised immigration would fall, but under Boris Johnson it soared. The next ten years should be brighter, but first Britons must accept the big lesson from Brexit: that trying to lay all their country’s woes on a single cause is magical thinking which only makes everything worse. They must
not be tempted to make the same mistake all over again by imagining that rejoining the European Union is the answer to all their problems. Instead, national renewal means grappling with the many reasons why Britain is failing to live up to its potential. Policymaking is adrift, the state is inefficient and the private sector is weighed down by taxes and regulation. The country has mustered the leadership for a fresh start before, in the post- 1945 invention of the welfare state and the reinvigoration under Margaret Thatcher. It must do so again. As this newspaper warned at the time of the referendum, Brexit was a terrible blunder. Britain failed to make anything of the flexibility that Brexit brought. Dreams of a free-market Singapore-on-Thames have evaporated. Instead of deregulating, the state has become more intrusive, more inclined to meddle and, partly as a result, broke. The hit to GDP has been at least 2.5% and probably much more. The distraction mattered, too. Officials and businesses have spent countless hours haranguing each other, first over how to “get Brexit done”—and then over how to mitigate the damage. On the world stage, Britain has been diminished. Worse, the doomed search for silver bullets continues. The populist right is still obsessed with immigration, the populist left with curbing the evils of capitalism. Now centrists are seizing on evidence of buyer’s remorse—57% of Britons see Brexit as a mistake; just 30% still think it was right—to argue that Britain should strive to rejoin the EU. That would be a recipe for another decade lost to rowing over Europe. Britain needs to focus on the future. The world looks very different from how it did a decade ago. Amid war and pestilence, geopolitics has come storming back. Artificial intelligence looks poised to upend pretty much everything, from work to warfare. Yet government policy is plagued by the ailments that have taken hold during Britain’s lost decade. Defence is a good example. NATO allies reckon Russia could attack as soon as 2030. Looking to Asia and resentful of Europe, America is increasingly semi-detached. Britain has the instincts and experience to take a leading role