Framing The World, CXXXXVI Edition

Framing The World, CXXXXVI Edition

In Framing's first issue of the year, we cover the news that open 2025, from the entry of Bulgaria and Romania into the Schengen area to the stop of Russian gas transit through Ukrainian pipelines to the EU and the reopening of the Indian embassy in North Korea to the withdrawal of French troops from the Ivory Coast. Still, we follow developments in the Russian-Ukrainian conflict, the South Korean institutional crisis, and the arrest in Iran of Italian journalist Cecilia Sala.

ECONOMICS AND INTERNATIONAL FINANCE

SUB-SAHARAN AFRICA

NORTH AMERICA

LATIN AMERICA AND THE CARIBBEAN

ASIA AND THE FAR EAST

WESTERN EUROPE AND EUROPEAN UNION

CENTRAL AND EASTERN EUROPE AND RUSSIA

MIDDLE EAST AND NORTH AFRICA (MENA)

TERRORISM AND INTERNATIONAL SECURITY

ECONOMICS AND INTERNATIONAL FINANCE

Stellantis, a record low. In 2024, Stellantis production in Italy fell 40%, hitting the lowest since the 1950s, with only 475,090 vehicles produced compared to 750,000 in 2023, according to FIM-CISL union data. Weak demand, Chinese competition and uncertainty over regulations for electric vehicles have hit the group's earnings, which issued a profit warning in the fall. The sudden exit of CEO Carlos Tavares prompted Chairman John Elkann to seek a new leader to address production problems in Europe and review strategies in the United States. Production at the Mirafiori plant in Turin has dropped 70%, and the union has announced protests against an EU ban on combustion engines by 2035. However, Stellantis confirmed its goal of 1 million vehicles produced in Italy by 2030 and a €2 billion investment plan for 2025. Meanwhile, new U.S. government rules have excluded Stellantis (and Volkswagen) from some tax credits for plug-in hybrid vehicles.

China, disappointing data again. China's manufacturing sector slowed again in December, fueling investor concerns. The Caixin index unexpectedly fell to 50.5 from 51.5 in November, against a forecast of 51.7. The drop reflects the impact of global trade uncertainties and risks of new tariffs on exports. To stimulate sales, manufacturers have cut prices, exacerbating pressures on an economy that is in the strongest deflationary phase in 25 years. The labor market is also suffering, with employment falling for the fourth consecutive month. Although the indicator remains above the critical threshold of 50, this is not enough to dispel investor skepticism: in fact, the CSI 300 index fell 2.9%, marking the worst start to the year since 2016, while 10-year government bond yields fell to a record low of 1.6%, indicating expectations of persistent deflation.

Rivian, shares soar. Rivian Automotive's shares jumped 23% Friday after the company exceeded annual production estimates (previously revised downward) and said it had fixed a problem that had slowed output. Rivian produced 49,476 vehicles in 2024, surpassing--though slightly--the revised forecast of 47,000-49,000 made in October, when it reduced its initial target of 57,000 due to a shortage of shared components for three of its models. In the fourth quarter, 12,727 vehicles were built and 14,183 delivered, bringing the annual delivery total to 51,579, above the lower end of the 50,500-52,000 estimate. Despite the rally, shares remain down 20% year-on-year.

Leonardo Aldeghi

SUB-SAHARAN AFRICA

Kenya, dozens of protesters have been arrested during nationwide clashes between police and demonstrators, according to rights groups, as anger swells over a wave of alleged abductions of government critics. Over the weekend, Kenyan President William Ruto promised to put an end to the abductions – an apparent climbdown from the leader who initially called the disappearances “fake news.” Anti-abduction protests continued on Monday, with police firing tear gas to disperse crowds in the capital, Nairobi. At least 53 unarmed protesters were arrested across the country throughout the day, according to the state-funded Kenya National Commission on Human Rights (KNCHR).

Ivory Coast has announced that French troops will leave the country this month after a decades-long military presence, becoming the latest African nation to downscale military ties with its former coloniser. In an end-of-year address to the nation on Tuesday, President Alassane Ouattara said the 43rd BIMA marine infantry battalion at Port-Bouet in Abidjan – where French troops were stationed – “will be handed over” to Ivory Coast’s armed forces as of January 2025. “We can be proud of our army, whose modernisation is now effective. It is in this context that we have decided on the concerted and organised withdrawal of French forces” from Ivory Coast, Ouattara said. France, whose colonial rule in West Africa ended in the 1960s, has nearly 1,000 soldiers in Ivory Coast, according to reports.

Aurelia Puliafito

NORTH AMERICA

U.S., the deal is halted. U.S. Steel shares plummeted Friday after President Joe Biden blocked the $14.1 billion sale of the iconic U.S. company to Japan's Nippon Steel, citing national security risks. According to Biden, the acquisition would have put a major steel producer under foreign control, compromising critical supply chains. U.S. Steel and Nippon Steel have announced legal action against the decision. The move could damage U.S.-Japan relations, with the latter having already pledged $2.7 billion in investments to soften the spirits of U.S. politicians and increase the deal's chances of approval. U.S. Steel CEO David Burritt had previously warned of possible plant closures and headquarters relocation from Pittsburgh if the Japanese offer is rejected.

Leonardo Aldeghi

LATIN AMERICA AND THE CARIBBEAN

Panama, President José Raúl Mulino Responds to Trump's Threats Over the Panama Canal. Following recent statements by the U.S. President-elect Donald Trump, who harshly criticized the tariffs imposed on American ships, calling them "excessive" and "unfair," and threatening to retake control of the Panama Canal, Panamanian President José Raúl Mulino stated that Panama's sovereignty is not negotiable under any circumstances. Trump's accusations stem from growing concerns over trade agreements between Panama and the People's Republic of China, whose influence over the Canal is increasing day by day. Nevertheless, the Panamanian president has repeatedly assured the complete neutrality of the Canal.

Alessia Boni

ASIA AND THE FAR EAST

China’s economy to grow by 5% in 2025, says Xi Jinping. Chinese President Xi Jinping has announced that the country’s economy will achieve a 5% growth rate in 2025, despite global uncertainties and tensions with the United States. In a speech published by the Xinhua news agency, he also emphasized that the Chinese economy is “overall stable and progressing.” President Xi highlighted how China’s current economic operation is facing challenges stemming from external uncertainties and the transformation of growth drivers, but he reassured that these challenges “can be overcome through hard work.” A new economic challenge for China will be the inauguration of newly elected US President Donald Trump on January 20, who has stated that he is already preparing new high tariffs to penalize Chinese subsidies on industrial products which, according to Trump, represent “unfair competition.”

No one can stop China’s reunification with Taiwan. “We Chinese on both sides of the Taiwan Strait belong to one and the same family. No one can ever sever the bond of kinship between us.” With these words, Chinese President Xi Jinping, during his 2025 New Year message published by the Xinhua news agency, reaffirmed his commitment to the reunification with Taiwan, which is still considered a “separatist province” rather than an independent state. He also added that “no one can block the historical momentum of the reunification of the motherland.” The speech marks yet another step in the escalating tensions between China and Taiwan. Since the Taiwanese President took office in May last year, China has conducted three major military exercises around the island, while Taiwan has held “tabletop exercises” to enhance its readiness in case of conflict.

(Leonardo Di Girolamo)

South Korea, Yoon rejects arrest warrant. On 3 January, South Korean police attempted to reach Yoon's residence, but were blocked by a wall of soldiers protecting the compound. After clashes between police and security agents, the authorities had to abandon the mission. The situation is unprecedented in South Korea as it is the first time a sitting president has been arrested. Accused three weeks ago and formally deprived of power, Yoon nevertheless blocked an arrest warrant thanks to the control exercised over his security apparatus. He is being investigated for incitement to insurrection, a crime that carries severe penalties, including life imprisonment or the death penalty. Yoon has ignored requests for interrogation and incited his supporters, who gather outside his residence every day, many camping out at night to obstruct the police.

North Korea, Indian Embassy reopens. According to media reports, India has decided to resume regular operations at its embassy in Pyongyang, three and a half years after it was closed due to the pandemic. Diplomatic relations between India and North Korea date back to 1973, when Delhi established diplomatic relations with both Pyongyang and Seoul, adopting a balanced approach between the two sides. However, following the international sanctions imposed in 2017 over North Korean nuclear programmes, India stopped economic exchanges with Pyongyang, while maintaining an open channel of communication. The reopening of the embassy coincides with Donald Trump's return to the White House. During his previous term, in fact, Trump had sought to improve relations with North Korean leader Kim Jong-un, initiating an unprecedented dialogue between the two countries.

(Francesco Oppia)

India protests China over new counties in Ladakh and a mega dam on the Brahmaputra. India has formally protested against China over the creation of two new counties, He'an and Hekang, in Hotan prefecture, which include territories in Ladakh, a region that New Delhi considers illegally occupied by Beijing. The Indian Ministry of External Affairs reiterated that the formation of the new counties will not alter Indian sovereignty over Ladakh and will not give legitimacy to the Chinese occupation. This protest follows a long territorial conflict between the two countries, fuelled by recent clashes along the border line. Furthermore, India has expressed concerns about another Chinese project that threatens to further exacerbate tensions: the construction of the world's largest dam on the Brahmaputra River, known as the Yarlung Tsangpo in Tibet. With an estimated cost of $137 billion, the mega project aims to produce 300 billion kWh of electricity annually, exceeding the capacity of the Three Gorges Dam in China by more than three times. New Delhi fears that the dam could have serious impacts on the flow of the river, which runs through the Indian states of Arunachal Pradesh and Assam, causing droughts and floods. The Indian Ministry of External Affairs emphasised that as India is a lower riparian state with established rights over the use of the Brahmaputra waters, Beijing has a duty to ensure that its activities do not harm the interests of downstream regions. Spokesman Randhir Jaiswal insisted on the need for more transparency and consultation between the two countries on a project of this magnitude.

(Ratì Mugnaini Provvedi)

Ratì Mugnaini Provvedi, Francesco Oppia and Leonardo Di Girolamo

WESTERN EUROPE AND THE EUROPEAN UNION

EU, Russian gas supplies stop. As of 1 January, Russian gas no longer flows through Ukrainian pipelines to the EU, marking the end of a contract with Gazprom that had been in place since 2019. The decision was celebrated by Zelensky as a defeat for Moscow, but raised criticism from countries which are still dependent on that route. There are in fact different impacts on EU countries. Austria and Hungary were among the most dependent on Russian gas: Austria, with contracts guaranteeing up to 98% supply, terminated its agreement with Gazprom in November 2023; Hungary continues to receive gas via TurkStream, maintaining favourable relations with Russia. Slovakia, on the other hand, can no longer physically access Russian gas and faces higher costs for alternative supplies from Germany. In the meantime, the EU has reduced its dependence on Russian gas from 40% to 8%, relying on suppliers such as Norway and the United States.

Romania and Bulgaria in the Schengen area. After more than 13 years of waiting, Romania and Bulgaria became full members of the Schengen area, which now has 29 countries and allows more than 400 million people to travel without border controls. The two countries had been partially included in the free movement zone in March 2024, when border controls at airports and ports were lifted. Bulgaria and Romania have been part of the European Union since 2007 and the requirements for joining the Schengen area had been formally achieved in 2011. However, the process to become part of the free movement zone was complicated: what unblocked the situation was the withdrawal of Austria's historic veto, which feared migration flows along the Balkan route. The Schengen enlargement comes in a delicate context, with eight countries temporarily re-establishing internal controls for reasons of terrorism and irregular immigration.

EU, new rules for gender balance in Boards of Directors. At the end of 2024, new rules to improve gender balance on company boards came into force in the EU. The directive sets a target of 40% representation of the under-represented gender among non-executive directors and 33% among all directors for large listed companies. Member states had to transpose the directive by 28 December 2024, while companies have to meet the targets by 30 June 2026. The rules include transparent and gender-neutral selection criteria and binding measures to ensure equal opportunities. EU Equality Commissioner Hadja Lahbib called the directive a decisive step towards breaking the "glass ceiling" and harnessing women's potential to drive innovation and growth. Proposed in 2012, the directive took 10 years of negotiations before it was approved in 2022.

Bianca Franzini

CENTRAL-EASTERN EUROPE AND RUSSIA

Azerbaijan: New evidence of an external attack on the plane that crashed near Aktau, Kazakhstan, on December 25, killing 38 people. It now seems clear that the plane went down due to external artillery fire. The aircraft was traveling from the Azerbaijani capital, Baku, to Grozny, Russia, and was therefore in Russian airspace when it was allegedly hit. Azerbaijan’s President Aliyev immediately accused Russia, claiming that the plane was shot down by Russian air defense systems. President Putin officially apologized to Aliyev but did not admit Moscow's responsibility, explaining that at the time, Russian cities where the plane could have landed were under attack by Ukrainian drones, which had triggered Russia's defense systems.

Silvia Pasetto

MIDDLE-EAST AND NORTH AFRICA (MENA)

Iran, Italian journalist arrested. Cecilia Sala, a Foglio journalist, was arrested without valid justification and is being held in harsh conditions in Evin prison, famous for being the prison of many dissidents of the Tehran regime. The Iranian regime attempts to instrumentalise and use the journalist's detention as a bargaining chip for Mohammed Abedini Najafabadi, who was arrested in mid-December at Malpensa airport. The Swiss-Iranian is accused by Washington of trafficking in military material, in particular some systems for the use of drones. The Italian government is working to obtain the journalist's release and the family has asked for a press silence to facilitate the diplomatic work of the institutions.

(Michele Magistretti)

Syria: French and German Foreign Ministers visit Damascus. Annalena Baerbock and Jean-Noel Barrot were received in Damascus during an official visit to the new Syrian government. The German Foreign Minister stressed the importance of fostering inclusion and protecting ethnic and religious minorities within Syria’s institutional framework, describing it as a key condition for lifting sanctions. She also highlighted the need to ensure that any European funds are safeguarded from falling into the hands of “Islamist structures.” The French Foreign Minister expressed France’s hope for a peaceful future in Syria, free from chemical weapons and “hostile foreign interference.” Both ministers emphasized the urgency of a political solution that incorporates Kurdish representatives into institutional processes and called for a lasting ceasefire. As part of their visit, they also toured the notorious Sednaya prison, a stark reminder of the country’s turbulent history.

(Matteo Francescucci)

Matteo Francescucci and Michele Magistretti

TERRORISM AND INTERNATIONAL SECURITY

Ukraine, new prisoner exchange between Moscow and Kyiv. On December 31, a major new prisoner exchange between the two warring countries was announced: 150 Russian soldiers were exchanged for 189 Ukrainian soldiers, according to President Zelensky. Meanwhile, a ban on the transit of Russian gas destined for Europe through Ukrainian territory has come into effect, driving gas prices back to October 2023 levels, exacerbated by the current cold temperatures. So far, the most severe impact has been felt in the separatist Moldovan region of Transnistria, where, as of Wednesday morning, heating and hot water have been cut off.

Silvia Pasetto

Framing The World is a project conceived and created by the collaboration between members of the team of Mondo Internazionale associates.

Alessia Boni: Latin America

Aurelia Puliafito: Sub-Saharan Africa

Bianca Franzini: Western Europe and the European Union

Caterina De Rosa: North America

Davide Shahhosseini: Terrorism and International Security

Federico Cortese: Central and Eastern Europe and Russia

Francesco Oppia: Asia and Far East

Giulio Ciofini: Sub-Saharan Africa

Gonzalo Pereyra: Terrorism and International Security

Leonardo Aldeghi: Economics and International Finance

Leonardo Di Girolamo: Asia and Far East

Lisa Pasolini: Latin America

Lorenzo Graziani: North America

Matteo Francescucci: Middle-East and North Africa

Michele Magistretti: Middle-East and North Africa

Ratì Mugnaini Provvedi: Asia and Far East

Silvia Pasetto: Central and Eastern Europe and Russia