Stories to watch in 2025
The calendar has turned to 2025, so it’s natural to think about the twelve months ahead of us. There are lots and lots of stories that will unfold over the next twelve months, but I picked out three stories that I’ll be following this year.
Number one, What will the return of Donald Trump mean to the world’s biggest economy? And what will it mean to America’s trading partners? Number two, After almost three years of grinding war, what’s in store for Ukraine and Russia? And number three, investors are plowing money into AI data centers. What will AI look like a year from now?
Trump’s return
Let’s start with the return of Donald Trump. During his campaign, and then after the election, Trump promised to raise tariffs. A tariff is a tax on an import. So any country that produces parts or finished goods destined for the American market would have to pay the tax as the goods enter the country.
If a consumer buys a t-shirt from China, the seller would have to pay a tax when the t-shirt crosses the border and enters the United States. If a carmaker imports a component from Mexico, the supplier would have to pay that tax before that part makes it to the assembly line. There is some debate about “who pays” the tariff, but it’s generally accepted that this raises prices and reduces the overall benefit of trade.
Trump has promised to raise tariffs on all imports, but to specifically raise them on imports from China, Mexico, and Canada. If this happens, it will seriously disrupt the trading relationships between the U.S. and other countries. And other countries have said that if the U.S. raises tariffs, they—the other countries—will do the same, so that American-made goods destined for other markets will also pay a price.
If the U.S. and its trading partners all raise taxes on each other, consumers around the world will pay in the form of higher prices. But Trump has often threatened high tariffs, only to back off later in negotiations.
So the story to follow is this: will Trump follow through on his threats to raise tariffs? And if so, how will the world respond?
Ukraine endgame
It has been almost three years since Russia’s invasion of Ukraine in February 2022. The war has left hundreds of thousands of people dead and wounded. It has torched cities, upended lives, and decimated the economies of both countries.
In the war’s stunning first few months, Russia took control of some Ukrainian territory. But most of the war has been a grinding fight over limited territory, with each side suffering devastating casualties and not making much tangible progress.
Ukraine’s stated goal is to recoup all the territory it has lost, and recapture territory Russia took in 2014. They have a strong moral and legal case for this, but a very harsh reality is that Russia does not recognize Ukraine’s rights here and Russia is not giving up.
Ukraine and Russia can ill afford another year of fighting to a stalemate. Donald Trump has said he wants to negotiate an end to the fighting. Even the Ukrainian president has said he imagines the war will end sooner now that Trump is in office. This year, Russia and Ukraine might negotiate an end to the fighting.
Ukrainians have fought bravely to defend their capital and preserve their culture, country, territory, and independence. To cede territory to Russia would be a painful, painful pill to swallow. Even so, Ukraine may decide that a negotiated peace is the best way forward this year.
If that happens, then a lot will be riding on the terms of the deal. To accept any loss of territory, Ukraine would push hard for security guarantees from Europe and the U.S., and a path to membership in NATO or the E.U. Russia would push for a weaker Ukraine that it can continue to influence and intimidate in the future.
How this gets resolved will matter. far beyond the front lines of today’s war.
Where is AI going?
The third story I’ll be watching this year is the development of artificial intelligence. Here’s how I would summarize the last two years. ChatGPT came out in late 2022, and in 2023 the world was playing around with large language models and imagining what might be possible.
In 2024, companies and individuals started trying out ways to incorporate AI in their lives and business processes—some with greater success than others. Large company bosses say they are interested in using AI, but many haven’t implemented it yet on a large scale. They’re afraid of things like data privacy, mistakes, and the cost of training employees to use it. And while they’re impressed with AI in general, many company bosses aren’t yet convinced they can reliably use it in their own businesses.
Small and medium-sized companies have been quicker to adapt. Many companies now use AI behind the scenes. Others have added AI tools into their products. But it’s still early days. Some industries have benefitted more than others.
What will 2025 bring? I’ll be watching to see how businesses use AI to make their products better, make their people happier, and improve productivity. I might say the same thing next January, though. A recent survey of company bosses showed that fewer than 10 percent of large businesses plan to invest seriously in AI in 2025.
Jeff’s take
I use a lot of software that has AI built right into the product—and most of them are useless. Some of them are just embarrassingly bad, like a company decided, “Okay, we’re building AI into our tool” and didn’t even care about whether it helped the customer or not. But some companies have really gotten it right, and I’m really impressed with how they’ve built AI into their products. Like most new tools, the secret is not in simply having the tool, but in finding ways to use it effectively. And sometimes that means knowing when not to use it.
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