Trump’s Gaza plan triggers global uproar

Good morning. We start with the fallout from Donald Trump’s shock proposal for the US to “take over” Gaza. Also in today’s newsletter:

• Honda and Nissan’s merger nears collapse

• Modi’s party seeks Delhi election victory

• Wall Street quizzes US companies over tariff risks

The White House has sought to assuage fears of a protracted US military intervention in Gaza, insisting Donald Trump’s plan for Washington to assume control of the enclave did not necessarily mean putting “boots on the ground”.

Press secretary Karoline Leavitt said that while the president had made a “historic proposal for the United States to take over Gaza”, he had “not committed” to sending in US troops “just yet”.

Leavitt’s comments come a day after Trump caused uproar in the US and around the world with a proposal that the US should “take control” of the Palestinian enclave and that its entire population of 2.2mn should be resettled.

Saudi Arabia, a key US ally in the Middle East, said its support for an independent Palestinian state was “firm and unwavering” and a condition for re-establishing diplomatic relations with Israel — an agreement that Trump was widely expected to pursue.

The US president’s plan also provoked a hostile reaction from many in his own party, with some Republicans saying it strayed from his “America First” agenda.

• Trump’s grandiose Middle East playbook: A clear pattern has emerged in the history of the US president’s interventions in the Arab-Israeli conflict.

• Opinion: The pressure will be on the Saudis and their Arab partners to convince Trump of the calamity his scheme risks unleashing, writes Andrew England.

Here’s what else we’re keeping tabs on today:

• Economic data: Vietnam and Thailand report January CPI inflation figures.

• Results: Nippon Steel, Nikon, Amazon, Itochu, Suzuki Motor, AstraZeneca and Eli Lilly report earnings.

Five more top stories

1. The $58bn merger between Honda and Nissan is on the verge of collapse as a majority of Nissan board members agreed to reject the deal after an attempt by Honda to turn its rival into a fully owned subsidiary. Nissan executives were taken aback by the new proposal, which was delivered as a “take it or leave it” offer.

2. Prime Minister Narendra Modi’s overtures to India’s beleaguered middle class were put to the test yesterday as voters in Delhi went to the polls. The state legislature election took place after Modi’s government last week announced tax breaks for middle-income earners amid a broader economic slowdown. Read more about the vote.

3. The US Postal Service said it would resume accepting packages from China just a day after announcing a suspension of the service. The state-backed postal operator has struggled to respond to Trump’s decision to put tariffs on lower-priced goods, including parcels from large Chinese ecommerce groups including Temu and Shein.

• EU probes Shein: Brussels has launched an investigation into the China-founded ecommerce platform amid concerns that the company is violating European consumer protection rules by selling illegal products.

4. UnitedHealth Group has raised concerns with the top US securities regulator over a social media post by activist investor Bill Ackman, who claimed that the healthcare group could be inflating its profits. Ackman has a long history of using social media to make provocative and often market-moving statements.

5. Jeff Bezos’s $10bn philanthropic fund has stopped backing the Science Based Targets initiative, the leading voluntary climate standard setter that affects how companies including Apple and H&M can achieve a credible “net zero” label. The move is seen as the billionaire’s latest effort to curry favour with Trump.

News in-depth

Wall Street analysts are bombarding US companies with questions over how they will cope with Donald Trump’s trade wars, in an early sign of how the president’s policies are rippling through corporate America.

We’re also reading . . . 

• South-east Asia’s opportunity: Investment is pouring into the region, writes Chris Miller, but extracting value is proving harder than expected.

• Mumbai potholes: An attempt to monsoon-proof the city’s roads has left the streets in a state of disarray, writes Chris Kay.

• Netflix: The streaming group is betting on live events and an old-school addition to its line-up — the chat show — to boost its nascent ads business.

Chart of the day

China has kept the renminbi’s exchange rate with the dollar steady in its first official currency fix since Trump hit the country with tariffs. Traders had expected Beijing to weaken its currency in response to US levies and a stronger dollar. Here’s how analysts interpreted yesterday’s fix.

Take a break from the news . . . 

Against the backdrop of wildfire devastation in Los Angeles, Emily Cronin explores a lesser-discussed aspect of recovery so many people have been left to reckon with: rebuilding a wardrobe that may have taken years to amass.