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Asian stocks mostly saw gains on Tuesday, bolstered by a strong rally in Chinese tech stocks following a meeting between Chinese President Xi Jinping and entrepreneurs, which is being interpreted as a show of support for the tech sector, reports AP. In Hong Kong, the Hang Seng climbed by 1.64% to 22,986.88, while the Shanghai Composite rose by 0.15% to 3,360.95. Japan’s Nikkei 225 increased by 0.39% to 39,296.11, following Japan’s economic growth surpassing forecasts for the fourth quarter. However, Australia’s S&P/ASX 200 dipped by 0.53% to 8,491.70, and South Korea’s Kospi gained 0.43% to 2,621.73. Fixing Germany's economy is a critical task for the country's next government Chinese tech stocks saw a significant boost on Tuesday. Alibaba, an e-commerce giant, and Xiaomi, a smartphone manufacturer, both saw their share prices increase by more than 4%. Similarly, Tencent, a video game company, and Meituan, an online services provider, also experienced gains. President Xi Jinping’s meeting with key entrepreneurs, including Alibaba’s Jack Ma, is viewed as a gesture of reassurance and stability following the previous crackdown on the technology sector in China. “The symbolism of Xi’s rare meeting with tech leaders is clear. This isn’t just another policy gathering; it’s a deliberate move reflecting Beijing’s growing concerns about economic momentum and its role in the global tech race,” said Stephen Innes, managing partner at SPI Asset Management. “For investors, the message is unmistakable: China’s leadership is once again backing the tech industry. Whether this leads to long-term policy changes or is simply a short-term confidence boost remains uncertain,” he added. All eyes are now on whether Chinese and Hong Kong stock markets will maintain their positive momentum, with Chinese stocks outperforming those of Japan, the U.S., and India this year. A report from BofA Securities highlighted key factors driving China’s stock market, including an unexpectedly improved U.S.-China relationship, with Trump imposing only a 10% tariff increase so far, and the rise of DeepSeek as a competitor to leading U.S. artificial intelligence models. Meanwhile, global markets are closely watching the potential impact of tariffs announced by Trump. However, analysts believe he may ultimately avoid triggering a global trade war. Trump’s most recent tariff measure will not take effect for several weeks, allowing time for negotiations with Washington. US plans to cut Iran’s oil exports by over 90% in renewed pressure campaign In energy trading, U.S. crude oil gained 54 cents to $71.25 a barrel, while Brent crude rose by two cents to $75.24 per barrel. In currency trading, the U.S. dollar strengthened against the Japanese yen, rising to 151.91 yen from 151.51 yen. The euro traded at $1.0465, down from $1.0484.

Germany needs a new business model. The old one, fueled by cheap natural gas from Russia and lucrative exports to China, is broken, leaving Europe's biggest economy mired in stagnation and angst about the future. Delivering that fresh growth strategy is going to be the biggest challenge for the government that takes office after a national election set for Feb. 23, seven months ahead of schedule. The nation that became known for the quality of its products has not seen real economic growth for five years. Multiple factors conspired to take Germany from industrial powerhouse to post-pandemic straggler: too much bureaucracy, a shortage of skilled workers, slow deployment of technology and a lack of clear direction from the outgoing coalition government are among them. Rising competition from China and high energy prices due to Russia's war in Ukraine were additional hits. “We really need a more company- and enterprise-friendly politics," said Klaus Geissdoerfer, CEO of industrial fan manufacturer EBM-Papst. “We have bright talent in Germany. We have good companies, but at the moment we don’t have the awareness on the political level.” Business criticism gets louder as election nears With 2.5 billion euros ($2.6 billion) in annual revenue and plants on three continents, EBM-Papst describes itself as the global leader in its field. The company reported last year that it was “suffering in Germany in particular” and experienced a 4.1% revenue decline in its home market. Geissdoerfer said EBM-Papst’s heating technology division lost 18.7% of its sales through a clumsily handled push to get property owners to replace gas furnaces with less polluting electric heat pumps. The requirements of the Building Energy Act put forward by Chancellor Olaf Scholz’ three-party coalition were so confusing, people put off the upgrades to their heating systems or rushed to buy new gas devices before the law took effect, he said. That sapped demand for the ultra-quiet heat pump fans EBM-Papst makes. Consumers wondered, “What is the right technology for my house?” Geissdoerfer said. “And so everybody said, 'If I don't have to, I better wait.'” Geissdoerfer made a complaint heard across industry: Germany's bureaucracy is excessive. A 2023 law that requires public and private entities to combat climate change by reducing their energy use means EBM-Papst must assign employees to detail what the company is doing to comply, he said. Germany extends border controls for six more months “So now, instead of implementing measures, they write and report,” the CEO said, adding that the documentation work is a poor use of time at a company whose core business is energy-saving equipment. “I really hope with the new government we can get this solved, because at the moment it’s too much.” EBM-Papst is moving in the direction where economists say Germany as a whole should put its industrial resources: into green and digital technology. The company, headquartered in Mulfingen, a town of 3,700 residents in rural southwest Germany, is equipping energy-hungry artificial intelligence data centers with efficient cooling systems for their servers. It also is working on incorporating AI features to help tech companies optimize their power use and to predict when equipment needs to be replaced. In the meantime, EBM-Papst is coping with Germany’s economic malaise by shifting its investment focus to Asia and the United States. The company now supplies U.S. customers, for instance, from plants in Farmington, Connecticut,and Telford, Tennessee. Its moves to localize production abroad predate the coronavirus pandemic but give EBM-Papst a shield against any new import taxes imposed by U.S. President Donald Trump. Ties to China and Russia put Germany in a bind On top of the homegrown issues, international relations have dealt another blow. Russia cut off most of the country's natural gas supplies over the German government's wartime support for Ukraine. Electricity prices, a key cost for industry, have risen to 2 1/2 times higher than in the U.S. and China. Metalworking firm Mecanindus-Vogelsang Group, which makes precision parts for automakers and other manufacturers, says it pays twice as much per kilowatt hour for the electricity its German plants use as it does for its U.S. sites in Mt. Sterling, Kentucky, and Lakewood, New Jersey. That's 100,000 euros in added costs and “a gigantic competitive disadvantage" CEO Ulrich Flatken said. “To avoid deindustrialization, which is already taking place, we urgently need internationally competitive energy prices,” Flatken said. Another shock came from China, which throughout the 2010s served as a lucrative market for German-made machinery and automobiles. Once Chinese companies started making those same products, backed by government subsidies, German exports suffered. Germany's economy shrinks again Germany's economy contracted in each of the last two years. By the end of 2024, it was only 0.3% bigger than it was in 2019, before the pandemic. The U.S. economy grew by 11.4% during over the same period, while China's expanded by 25.8%, according to Germany's Federal Statistical Office. Complacency and depression Marcel Fratzscher, president of the German Institute for Economic Research, thinks complacency set in during the boom years of exports to China. German companies weren’t quick enough to respond to technological trends, such as the move to electric cars, he said. “They enjoyed the success of the 2010s and they have been too slow in understanding that they need to change and adapt,” Fratzscher said. As the economic woes drag on, “mental depression” has set in, he said. “The pessimism is enormous among companies and citizens, and that’s an important explanation why companies are not investing.” Many business executives and economists argue that Germany's next government should work to loosen constitutional limits on debt so it can increase public spending on infrastructure and education. Fratzscher wonders if political leaders, like the economy, will falter in adopting new ways of doing things. “For the past 75 years, Germany has been built very much on consensus, stability oriented, lots of checks and balances in the political system, and that makes rapid change very difficult,” he said. “We need to change the mindset, to understand we need to be much faster on economic transformations.”

The United States has announced plans to slash Iran’s oil exports by more than 90 per cent as part of former President Donald Trump’s renewed “maximum pressure” campaign, Treasury Secretary Scott Bessent stated on Friday. Speaking to Fox Business, Bessent said, “We are committed to bringing the Iranians back to 100,000 barrels-a-day of oil exports,” referencing the level seen during Mr Trump’s first term in office. Currently, Iran is exporting between 1.5 million and 1.6 million barrels per day, according to Bessent. Last week, Mr Trump signed a memorandum directing the Treasury Department to impose “maximum economic pressure” on Tehran to prevent it from acquiring nuclear weapons. The order echoes the policy from his first administration, which saw Iran’s oil exports plummet from approximately three million barrels per day in 2017 to around 400,000 in 2019. During his initial term, Mr Trump withdrew from the 2015 Joint Comprehensive Plan of Action (JCPOA), arguing that the agreement failed to prevent Tehran from developing nuclear technology. Sanctions lifted under the deal were subsequently reimposed as part of Washington’s strategy to cripple Iran’s economy. Economic Pressure and Sanctions Bessent underscored the US’s capacity to enforce maximum economic pressure on Iran, suggesting that a return to “Trump 1.0 levels” of oil exports would lead to “severe economic distress” for the country. “Their economy is quite fragile right now,” he said, citing high inflation and a “gigantic” budget deficit. He further claimed that revenue from Iran’s oil exports was being used to fund “terrorist activity.” Modi says US and India target $500 billion bilateral trade by 2030 In line with Mr Trump’s directive, the Treasury Department has already imposed sanctions on three oil tankers, and Bessent signalled that further measures could be taken against Russian energy exports if instructed by the administration. The executive order also directed the State Department to “modify or rescind existing sanctions waivers” and coordinate with Treasury in implementing the maximum pressure policy. China and India in the Spotlight Experts warn that reducing Iran’s oil exports to near-zero levels would necessitate targeting intermediaries, as well as major buyers such as China and India. “The Chinese, perhaps Indians, are buying the sanctioned Iranian oil and that is unacceptable,” Bessent stated. While the US remains steadfast in its approach, Iranian Foreign Minister Abbas Araghchi dismissed the prospect of negotiations under such conditions. “Negotiation cannot be carried out from a weak stance, as it will no longer be considered negotiation but a kind of surrender. We never go to the negotiating table this way,” Iranian state media quoted him as saying this week. Opec’s Position Despite Washington’s aggressive stance, analysts suggest that the Organisation of the Petroleum Exporting Countries (Opec) is unlikely to alter its voluntary production cuts due to the US campaign. With Iran’s crude oil production recorded at 3.28 million barrels per day in January 2025, Opec is expected to have sufficient capacity to absorb any supply reductions resulting from the sanctions. China establishes over 30,000 smart factories As tensions escalate, the effectiveness of Mr Trump’s renewed maximum pressure strategy remains to be seen, particularly amid ongoing geopolitical shifts and Iran’s determined resistance to US-imposed economic constraints. Source: Agencies

New Delhi and Washington will work to more than double bilateral trade to $500 billion by 2030, Indian Prime Minister Narendra Modi said at a joint press conference with U.S. President Donald Trump on Thursday. Speaking at the conclusion of the two leaders’ meeting in Washington, Modi also said that “Our teams will work on concluding very soon, a mutually beneficial trade agreement.” Trump acknowledged India’s recent move to reduce tariffs on select imports and said he would begin talks on disparities on trade and hoped to reach an agreement. The remarks came hours after Trump signed a presidential memorandum outlining his plan to impose “reciprocal tariffs” on foreign nations, including India. The U.S. would simply charge the same tariff rates that India charges, Trump said, while the trade deficit with India could be addressed with the sale of oil and gas. India’s simple average tariff on countries with the most-favored-nation status stands at 17%, compared with the U.S. that levies 3.3%. The U.S. enjoys MFN status with most major economies. U.S. total goods trade with India is estimated at $129 billion in 2024, according to the Office of the U.S. Trade Representative. India’s surplus with the U.S., its second-largest trading partner, reached $45.7 billion last year. The U.S. will increase its military sales to India starting this year and ultimately provide F-35 fighter jets to the Asian ally, Trump said at the briefing, in an effort to confront what he called “the threat of radical Islamic terrorism.” India is the world’s biggest defense equipment importer. Honda, Nissan and Mitsubishi drop their talks on business integration Modi said India and the U.S. would also work together on developing artificial intelligence and semiconductors while focusing on establishing strong supply chains for strategic minerals. The lofty target of $500 billion in trade could be achievable, Raghuram Rajan, professor of finance at University of Chicago Booth School of Business and former Reserve Bank of India governor, told CNBC’s “Squawk Box Asia.” Besides shifting away from Russia — India’s key defense supplier — toward the U.S. for arms, India could also increase its purchases of liquified natural gas from American manufacturers, Rajan added. The Trump-Modi meeting had the threat of U.S. tariffs looming large. “We are, right now, a reciprocal nation... We’re going to have whatever India charges, we’re charging them. Whatever another country charges, we’re charging them. So it’s called reciprocal, which I think is a very fair way,” the U.S. president said at the press briefing. The president said that the reciprocal tariffs will not take effect immediately as his administration works on determining the appropriate tariff levels for each affected country. Trump has already slapped tariffs on China, Canada and Mexico as well as global tariffs on imports of steel and aluminum. Trump’s tariffs on Canada and Mexico are currently on pause after both countries pledged to crack down on illegal drug trafficking at their respective borders with the U.S. House Republicans unveil blueprint to extend $4.5 trillion in tax cuts and lift the debt ceiling Despite the encouraging tones from the meeting, signs of friction remain in the U.S.-India relation, said Daniel Balazs, a research fellow at the S. Rajaratnam School of International Studies, such as the illegal immigration issue and India’s close ties with Russia. “The latter, in particular, is unlikely to go away anytime soon and will probably remain a sore point between the two sides,” he said.

Japanese automakers Honda, Nissan and Mitsubishi said Thursday they are ending talks on business integration. Nissan Chief Executive Makoto Uchida said the talks had changed focus from setting up a joint holding company to making Nissan into a subsidiary of Honda. “The intent was to join forces to win in the global competition, but this was not going to realize Nissan's potential, so I could not accept it,” he told reporters. He said that Nissan was going to aim for a turnaround without Honda instead. Honda Chief Executive Toshihiro Mibe said in a separate news conference that Honda had suggested a stock swap to speed up decision-making. House Republicans unveil blueprint to extend $4.5 trillion in tax cuts and lift the debt ceiling “I am really disappointed,” Mibe told reporters. “I felt the potential was great, but I also knew actions that would bring pain were necessary to realize that." The automakers agreed to end their agreement regarding the consideration of the structure for a collaboration, a joint statement said. Honda Motor Co. and Nissan Motor Corp. announced in December that they were going to hold talks to set up a joint holding company. Mitsubishi Motors Corp. had said it was considering joining that group. From the start, the effort had analysts puzzled as to the advantages to any of the companies, as their model lineups and strengths overlap in an industry shaken by the arrival of powerful newcomers like Tesla and BYD, as well as the move to electrification. Honda and Nissan initially said they were trying to finalize an agreement by June and set up the holding company by August. The three automakers will continue to work together on electric vehicles and smart cars, such as autonomous driving, they said Thursday. China establishes over 30,000 smart factories In recent weeks, Japanese media had various reports about the talks breaking down, citing unidentified sources. Some said Nissan balked at becoming a minor player in the partnership with Honda. Mibe denied he knew or heard anything about the media speculation that Taiwan's Foxconn was considering taking a stake in Nissan. Honda is in far better financial shape and was to take the lead in the joint executive team. Honda reported Thursday that its April-December 2024 profits declined 7% to 805 billion yen ($5 billion). Nissan reported a loss for the July-September quarter as its vehicle sales sank, prompting it to slash 9,000 jobs. At that time, Uchida took a 50% pay cut to take responsibility for the results.

House Republicans released a budget plan Wednesday that sets the stage for advancing many of President Donald Trump's top domestic priorities, providing for up to $4.5 trillion in tax cuts and a $4 trillion increase in the debt limit so the U.S. can continue financing its bills. The budget plan also directs a variety of House committees to cut spending by at least $1.5 trillion while stating that the goal is to reduce spending by $2 trillion over 10 years. The blueprint represents a first step in a lengthy legislative process that would allow Republicans to pass some of their top priorities in a simple majority vote. The House Budget Committee is expected to hold votes on the plan on Thursday. House Speaker Mike Johnson predicted it would easily advance out of committee. “Then, we'll work with everybody over the week to make sure they are on board,” Johnson said. Johnson has set an ambitious schedule for moving the resolution and subsequent legislation, but tensions remain within the Republican conference about the scope of the proposed tax and spending cuts. Some want more in tax cuts than what is in the blueprint while others want steeper spending cuts. “There'll be a lot of negotiations back and forth," Johnson said. "There's a lot of moving parts to this, but our objective is to fulfill all the president's campaign promises and the full agenda, so we have time to do that." Budget resolutions are often considered statements of priorities. But the 45-page plan is more than just a policy blueprint as it provides specific directions to House committees to rearrange the federal money flow. GOP leaders are eyeing cuts to social services, and particularly Medicaid, as they seek massive savings. The Energy and Commerce Committee, which handles health care spending, is asked to cut $880 billion over the decade, while the Education and Workforce Committee is asked to reduce spending by $330 billion. The Agriculture Committee is asked to save $230 billion, while the Transportation and Infrastructure Committee is asked to find at least $10 billion in cuts through 2034. Even as some programs would be cut, money would be shifted to other Trump priorities, including a $100 billion boost in defense spending over the next decade through the Armed Services Committee and an additional $90 billion for the Homeland Security Department, which is carrying out Trump's massive immigration deportation. Dodgily obtained tax waivers for Shuchona Foundation scrapped House Democrats were harshly critical of the budget plan. Senate Democratic leader Chuck Schumer and House Democratic leader Hakeem Jeffries held a joint press conference and accused Republicans of not taking action to lower costs for everyday Americans since securing the White House and both chambers of Congress. “Why? Their primary objective is to enact massive tax cuts for their billionaire donors and wealthy corporations,” Jeffries said. “That's what the Republican budget is all about.” There is also concern from Democrats that the plan could lead to cuts in the safety net. Rep. Brendan Boyle, the top Democratic on the House Budget Committee, said the tax cuts won’t pay for themselves through increased economic growth so cuts to various government programs such as Medicaid will be sought. “Their plan blows up the deficit and sticks the middle class with the bill, whether through higher prices, deep cuts to essential programs, or both,” said the Philadelphia lawmaker. Republicans say they don’t want to take benefits away from those who rely on Medicaid, but they are considering requiring more able-bodied Americans to work as a condition of their participation. “If you add work requirements to Medicaid, it makes sense to people. It’s common sense,” Johnson said. “Little things like that make a big difference not only in the budgeting process but in the morale of the people. You know, work is good for you. You find dignity in work. And the people who are not doing that, we’re going to try to get their attention.” To offset some of the cost of extending the tax cuts Republicans passed in Trump's first term, they are also eying the possibility of ending some of the clean-energy tax credits that Democrats championed and passed under former President Joe Biden. As House Republicans press ahead, Senate Republicans are pursuing a narrower effort focused on boosting border security and defense spending. Republicans have been debating since last year whether to enact the bulk of Trump’s agenda in one or two pieces of legislation. The Senate is moving on a two-bill track, while the House is moving on a one-bill track. It’s unclear which side will win out in the end. The Senate Budget Committee advanced the narrower budget plan on Wednesday in a party-line vote. It would allow $175 billion to be spent on border security, $150 billion for defense and $20 billion for the Coast Guard. Their budget would not include an extension of tax cuts, leaving that to be dealt with in a second bill later this year. Japan says it has asked the US to exclude it from 25% steel and aluminum tariffs Sen. Lindsey Graham, the committee's chair, said in selling the blueprint that a majority of Americans support deporting immigrants who are in the U.S. illegally, but that Immigration and Customs Enforcement was running out of funding. He said more agents and detention space will be needed to allow for the deportation effort. “We don't have time to waste," said the South Carolina Republican. “Our country is very much at risk in multiple fashions abroad and at home.” Republicans defeated a spate of amendments from Democrats that included taking Medicaid and the nutrition assistance program known as SNAP off the table from cuts. Sen. Jeff Merkley, the top Democrat on the committee, said the amendments were focused on ensuring the process underway in Congress would not raise the cost of health care and other vital services for Americans. “Families of America, get worried,” he said as debate drew to a close.

China has built over 30,000 basic-level smart factories as part of a nationwide push to accelerate industrial digitalization and intelligent upgrading, according to the Ministry of Industry and Information Technology (MIIT). The initiative, under the smart factory gradient cultivation action, has also seen the creation of 1,200 advanced-level and 230 excellence-level smart factories. This achievement highlights the significant progress that has been made in reshaping the country's manufacturing landscape, according to the ministry. The 230 excellence-level factories, distributed across all 31 provincial regions in China and covering over 80 percent of manufacturing sectors, have carried out nearly 2,000 advanced scenarios, including smart warehousing, AI-powered quality inspections, and digital research and development, said MIIT. Japan says it has asked the US to exclude it from 25% steel and aluminum tariffs On average, these factories are 28.4 percent shorter in product development cycles, 22.3 percent higher in production efficiency, 50.2 percent lower in defect rates and 20.4 percent lower in carbon emissions, said the ministry. MIIT, alongside five other state agencies, jointly launched a smart factory gradient cultivation action last year and classified smart factories into four tiers based on technological maturity and integration depth, including the basic-level, the advanced-level, the excellence-level and the pioneer-level. For instance, basic-level smart factories are required to develop foundational capabilities in digitization and networking. This involves deploying the necessary smart manufacturing equipment, industrial software, and systems centered around typical scenarios of smart manufacturing. By doing so, they can achieve real-time data collection, automation of key production processes, enhance the informatization of production and operational management, and utilize intelligence exploration in certain aspects. Moving forward, MIIT will expand excellence-level smart factory promotion and prepare to launch pioneer-level cultivation, aiming to further promote the expansion, deeper integration, and elevated evolution of intelligent manufacturing, it said.

 Japan 's government said Wednesday it asked the U.S. to exclude it from 25% steel and aluminum tariffs, a change from duty-free quotas that Tokyo was given previously. Japan made the request through its embassy in Washington after U.S. President Donald Trump removed the exceptions and exemptions from his 2018 tariffs on steel imports to a minimum of 25%, while hiking aluminum tariffs to 25% from 10%. “Japan will firmly take necessary steps as we fully examine details of the new measures and their possible impact on the Japanese economy,” Chief Cabinet Secretary Yoshimasa Hayashi told reporters, suggesting that his country will lobby for an exemption in the coming weeks before the measures are due to take effect. The measures announced by Trump are part of his aggressive push to reset global trade in the belief that tax hikes on foreign-made products will strengthen domestic manufacturing. South Korea's top think tank lowers economic growth projection, citing Trump's tariffs Japan was given an annual duty-free quota of up to 1.25 million tons of steel under the former President Joe Biden ’s administration. Japan's exported 1.18 million tons of steel to the U.S. in 2024, according to the American Iron and Steel Institute. Japanese steel exports to the U.S. totaled 302.7 billion yen ($2 billion) in 2024, accounting for 1.4% of the total exports to America. Aluminum exports were much less, government data show.

South Korea’s top economic think tank slashed its growth forecast for the country’s economy for the second time in four months on Tuesday, expressing concern about the impact of U.S. President Donald Trump’s expanding tariffs. The Korea Development Institute now projects South Korea’s economy to grow by 1.6% in 2025, which is 0.4 percentage points lower than its previous estimate announced in November. Kim Jiyeon, a KDI economist, said the “deterioration of the trade environment” following Trump’s inauguration was a major factor. South Korea is also grappling with political instability caused by the impeachment and criminal indictment of President Yoon Suk Yeol after he briefly imposed martial law in December. Domestic demand remains weak due to slowing consumer spending and a declining job market, and the pace of exports is slowing with most key industries aside from semiconductors struggling to find momentum, said Jung Kyuchul, who heads KDI’s macroeconomic analysis department. KDI could be further lower its growth projections if Trump’s trade actions intensify or South Korea’s political turmoil drags on, Jung said. 25% steel, aluminum tariffs to be announced Monday: Trump “In November, we assumed that Trump’s steps to increase tariffs would proceed gradually over time and wouldn’t be carried out so quickly this year, but there have already been tariff increases targeting countries like China,” Jung said in a briefing. “We expected that uncertainties would be gradually resolved after the Trump administration took office, but we are now in a situation where uncertainties have actually grown.” Trump this week announced plans to impose 25% tariffs on all foreign steel and aluminum, following his decision last month to impose 10% duties on all Chinese imports, as he accelerates an aggressive push to reset global trade. Jung said Trump’s steel and aluminum tariffs won’t likely have a major impact on South Korea’s economy, as those products account for less than 1% of its exports to the United States. However, Trump says he is also contemplating tariffs on cars, semiconductors and pharmaceuticals. Global stocks fluctuate amid persistent concerns over Trump’s tariffs “Since our semiconductor exports are substantial, the economic impact would be considerable if that sector takes a hit,” Jung said.

All architecture student Amirhossein Azizi wanted for his 19th birthday was the latest iPhone — and for Iran's cash-strapped theocracy, it was just the gift they needed as well. Just buying a top-of-the-line iPhone 16 Pro Max in Iran's capital cost him on the day 1.6 billion rials ($1,880). An additional 450 million rials ($530) is required for import fees and registration on government-managed mobile phone networks. “I’m very happy to own one of the most expensive phones in the country," Azizi said. His father, Mohammad, laughed nearby and added: “Maybe if they had to earn the money themselves, they wouldn’t be so quick to spend it.” The purchase is only possible after Iran lifted import bans on expensive goods like foreign cars and new iPhones, yielding to public demand for the products while also trying to mask the dire straits of its economy. While being described as a way to boost Iran's much-vaunted “resistance economy," the decisions trapped Iranians into buying more affordable locally produced vehicles long derided as “death wagons” and boosted the prices of aging, second-hand iPhones. They also provide Iran with much-needed tax revenues as its government struggles under international sanctions over its nuclear program. Uncertainty over how U.S. President Donald Trump will deal with Iran also has put pressure on its rial currency, which sits at record lows against the dollar. Powerful forces within Iran long have been believed to be taking advantage of the sanctions, while those benefiting may just be among the country's most well-off citizens. "It’s more about perception than reality,” Iranian economist Saeed Leilaz said. ‘Resistance’ economics at play Iran's Supreme Leader Ayatollah Ali Khamenei, now 85, first proposed the idea nearly 15 years ago as Tehran faced its first round of intense sanctions over its nuclear program, which the West fears puts the Islamic Republic at the precipice of obtaining an atomic bomb. Iran maintains its program is peaceful — even as it enriches uranium closer than ever to weapons-grade levels. Iran launches its first drone-carrier warship “Sanctions are not new for us," Khamenei said in a 2010 speech. "All achievements have been made and all the great movements of the people of Iran have been launched while we were under sanctions.” In some ways, it's worked for Iran's ruling clerics since Trump unilaterally reimposed sanctions on Tehran after withdrawing America from the 2015 nuclear deal. Iran struck deals with China to continuing buying its crude oil, likely at a discount. Those in Iran's paramilitary Revolutionary Guard, which has grown into a major power center under Khamenei, handle the sales — both funding their operations against Israel during the Israel-Hamas war in the Gaza Strip and creating a new wealthy elite loyal to Khamenei. But for the average person, there's clearly a before and an after for the life under the nuclear deal, which saw Iran agree to drastically limit its enrichment and overall stockpile of uranium. At the time of the deal, the Iranian rial traded at 32,000 to $1. A decade later, $1 is worth 928,500 rials. The public's savings have evaporated, pushing average Iranians into holding onto gold, real estate and other tangible wealth. Others pursue cryptocurrencies or fall to get-rich schemes. Iran lifts car and iPhone import restrictions, seeking cash Iran banned the import of foreign cars in 2017, while not allowing iPhones newer than the 13 to be registered on the country’s mobile phone networks. The phone decision set off a scramble for older iPhones, boosting their price, while used car prices for foreign models remain high as well. In the last Persian year ending in March 2024, Iran imported $3.2 billion worth of mobile phones, customs data shows. The cut for high-end iPhones makes them a lucrative option to plug some of the gaping holes in Iran's government spending — though Iran's foreign currency reserves remain low due to sanctions. “Lifting restrictions on a few platforms or allowing iPhone imports are the kinds of steps the government can take quickly and with minimal cost to create a sense of progress,” said Leilaz, the economist. Such decisions also provide a quick win for Iran's reformist President Masoud Pezeshkian with Iran's elite — though it doesn't address any of the longer-term economic problems. Iran's foreign minister meets Taliban in first visit to Kabul in 8 years For cars, former President Hassan Rouhani banned imports of fully built foreign vehicles in 2018, after Trump unilaterally withdrew America from the nuclear deal. While in theory protecting Iranian foreign reserves, it also backed up local automobile manufacturers, whose products have long been criticized for not meeting international safety and quality standards — hence their “death wagon” monikers. Experts believe if Iran's government allowed more lower-priced, higher-quality imports, the country's automobile manufacturers would lose their edge. Restrictions still limit the number of foreign cars that can come into the country and tariffs that Pezeshkian wants lowered may have been again placed at 100%. “Since the number of newly imported cars is still limited, only a few people can afford them," said Saber, a car dealer in Tehran who spoke on condition only his first name be used to be able to discuss the issue frankly. "As a result, imported cars have skyrocketed in price on the open market.” What Trump does carries serious consequences for Iran As Iran's economy worsens, its theocracy worries conditions could again push the public back onto the streets in nationwide protests. That's why officials up to Khamenei have backed the idea of talking again to the West. While Trump has suggested he wants talks, he signed an executive order Feb. 4 calling for putting “Iran’s export of oil to zero,” including to China, which buys Tehran’s crude at a discount. It also seeks a “snapback” of United Nations sanctions on Iran over its nuclear program. If implemented, they could decimate Iran at a time where its people are looking for any sign of optimism. That includes a car show in Tehran in late January that featured foreign brands like Mazda, Nissan and Toyota, all sought after by Iranians. However, even with the change, Iran's economy still must exist in a world where the U.S. dollar reigns supreme and its rial continues to fall. “This biggest problem in this country is that everything depends on the dollar," said Saeed Maleki, standing among the vehicles at the show. "Today they tell you a car costs 3 billion rials. But after a week or a month will they still sell this for 3 billion? No! They will charge me with the new rates.”