Volkswagen may pull its plans for a major Audi factory in the US, citing President Donald Trump’s automotive tariffs.
The car giant’s CEO told Handelsblatt that US levies cost VW $2.5 billion in the first nine months of 2025, and that reductions were necessary.
German investments in the US as a whole fell 45% year-on-year in 2025 as Trump’s duties took hold, Reuters reported, while German exports to the US also fell, although the dollar’s depreciation was likely a factor.
After Trump warned at the World Economic Forum last week of possible further duties on Europe, growing global uncertainty over the stability of trade relationships pushed gold above $5,000 per ounce for the first time.
More from Semafor Flagship
- Japan parts with Chinese pandas as tensions with Beijing grow
- London’s Heathrow airport relaxes rules over fluids
- Global credit ratings agency S&P boosts DRC outlook
- India, EU set to boost ties with raft of new deals
- Mexico considers halting Cuba oil exports amid US retaliation concerns
- Taiwan monitoring China after Beijing fires top general
Japan parts with Chinese pandas as tensions with Beijing grow
Japan’s only pandas will return to China tomorrow, with relations between Tokyo and Beijing frosty.
Crowds gathered at Tokyo’s Ueno Zoo for emotional goodbyes to Xiao Xiao and Lei Lei during their last public appearance Sunday; their departure leaves the country without pandas for the first time since 1972. Prime Minister Sanae Takaichi’s recent comments that Japan could support Taiwan if China attacked the island sparked tensions, and prospects of replacement pandas are uncertain.
Beijing has used loans of the bamboo-eating, sex-shy bears to gesture goodwill to other nations since World War II, and the growing hostility between the East Asian powers suggests that goodwill is in short supply.
London’s Heathrow airport relaxes rules over fluids
London Heathrow, the world’s sixth-busiest airport, will allow passengers to carry fluids in containers larger than 100 ml (3.4 fl oz).
The rules have been in place since 2006, following a foiled plot involving bombs disguised as soft drinks. Several other UK and international airports have done likewise, notably London Gatwick and Dubai International.
Airline security measures tend to ratchet up, so possible declines are noteworthy, though the end of what The Guardian called “the tyranny of tiny toiletries” is driven not by reduced concern but by the rollout of new scanning technologies which can reliably tell explosive liquids from harmless ones. US concern over air terrorism has declined since its post-9/11 peak, although UK citizens remain worried.
Global credit ratings agency S&P boosts DRC outlook
Global credit ratings agency S&P raised the Democratic Republic of Congo’s outlook to positive from stable, citing its fiscal performance and rising exports.
The revision represents a reprieve for the war-wracked nation, which has been the subject of renewed interest from Chinese and US mining firms seeking control of the country’s vast resources. The DRC holds some of the world’s biggest metal deposits, including of cobalt, a key component in the lithium-ion batteries that power EVs.
S&P’s decision comes shortly after the International Monetary Fund approved a new $440 million financing facility for the country, though IMF officials warned of commodity price fluctuations, as well as of the risk of a renewed conflict with Rwanda-backed rebels.
India, EU set to boost ties with raft of new deals
India looks set to sign deals strengthening relations with the EU, the latest indication of the rapid realignment of global ties in the year since US President Donald Trump took office.
Top EU officials will be the guests of honor at India’s Republic Day celebrations, and are expected to sign a trade agreement as well as a security and maritime pact.
Both Brussels and Delhi have faced Trump’s wrath over the past 12 months, and the deals, which were agreed unusually quickly, point to the priority they have placed on shifting away from a reliance on Washington.
“In an increasingly volatile world,” the European Commission chief told the Times of India, “this cooperation is not only valuable, it is vital.”
Mexico considers halting Cuba oil exports amid US retaliation concerns
Mexico is reportedly considering halting oil shipments to Cuba in a bid to avoid retaliation from Washington, which is looking to overthrow the regime in Havana.
Cuba had long relied on Venezuelan oil to run its economy, but crude shipments have plummeted since the US ouster of Nicolás Maduro and its blockade on oil tankers leaving Venezuela; Mexico is now the top oil exporter to Cuba.
Mexico is seeking to placate US President Donald Trump — who has repeatedly threatened steep tariffs as well as military strikes against cartels in the country — ahead of an upcoming review of a North American free trade agreement that is a lifeline for Mexico’s economy.
Taiwan monitoring China after Beijing fires top general
Taiwanese authorities said they were monitoring “abnormal” changes at the top of China’s military after the stunning dismissal of the country’s leading general.
Chinese leader Xi Jinping placed Zhang Youxia and another senior officer under investigation for corruption, an astonishing shakeup of military leadership: Zhang reportedly leaked nuclear secrets to the US.
Taipei said it was on alert because the threat from the mainland, which regards Taiwan as a renegade province, remained high. The move further consolidates power in Xi’s hands but raises “doubts about the country’s war readiness,” The Economist noted.
“The PLA is in a major crisis,” one expert warned, “with a level of leadership instability unseen since the heyday of the Cultural Revolution.”
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US President Donald Trump said the White House was “reviewing everything” after a second protester was killed by federal agents in Minneapolis, but blamed “Democrat ensued chaos” for the violence.
Alex Pretti was shot repeatedly on Saturday, apparently after having been disarmed. Federal officials defended officers’ actions but Trump refused to say whether the agents acted appropriately, The Wall Street Journal reported. He did, however, say immigration enforcement “at some point… will leave” the city.
The operation to deport illegal migrants has lasted almost two months and involves 3,000 agents, CBS reported. Hundreds of local businesses closed Friday and thousands of people protested the ongoing crackdown in the wake of the fatal shooting of another demonstrator this month.
Taiwan monitoring China after Beijing fires top general
Taiwanese authorities said they were monitoring “abnormal” changes at the top of China’s military after the stunning dismissal of the country’s leading general.
Chinese leader Xi Jinping placed Zhang Youxia and another senior officer under investigation for corruption, an astonishing shakeup of military leadership: Zhang reportedly leaked nuclear secrets to the US.
Taipei said it was on alert because the threat from the mainland, which regards Taiwan as a renegade province, remained high. The move further consolidates power in Xi’s hands but raises “doubts about the country’s war readiness,” The Economist noted.
“The PLA is in a major crisis,” one expert warned, “with a level of leadership instability unseen since the heyday of the Cultural Revolution.”
India, EU set to boost ties with raft of new deals
India looks set to sign deals strengthening relations with the EU, the latest indication of the rapid realignment of global ties in the year since US President Donald Trump took office.
Top EU officials will be the guests of honor at India’s Republic Day celebrations, and are expected to sign a trade agreement as well as a security and maritime pact.
Both Brussels and Delhi have faced Trump’s wrath over the past 12 months, and the deals, which were agreed unusually quickly, point to the priority they have placed on shifting away from a reliance on Washington.
“In an increasingly volatile world,” the European Commission chief told the Times of India, “this cooperation is not only valuable, it is vital.”
Mexico considers halting Cuba oil exports amid US retaliation concerns
Mexico is reportedly considering halting oil shipments to Cuba in a bid to avoid retaliation from Washington, which is looking to overthrow the regime in Havana.
Cuba had long relied on Venezuelan oil to run its economy, but crude shipments have plummeted since the US ouster of Nicolás Maduro and its blockade on oil tankers leaving Venezuela; Mexico is now the top oil exporter to Cuba.
Mexico is seeking to placate US President Donald Trump — who has repeatedly threatened steep tariffs as well as military strikes against cartels in the country — ahead of an upcoming review of a North American free trade agreement that is a lifeline for Mexico’s economy.
Japan parts with Chinese pandas as tensions with Beijing grow
Japan’s only pandas will return to China tomorrow, with relations between Tokyo and Beijing frosty.
Crowds gathered at Tokyo’s Ueno Zoo for emotional goodbyes to Xiao Xiao and Lei Lei during their last public appearance Sunday; their departure leaves the country without pandas for the first time since 1972. Prime Minister Sanae Takaichi’s recent comments that Japan could support Taiwan if China attacked the island sparked tensions, and prospects of replacement pandas are uncertain.
Beijing has used loans of the bamboo-eating, sex-shy bears to gesture goodwill to other nations since World War II, and the growing hostility between the East Asian powers suggests that goodwill is in short supply.
London’s Heathrow airport relaxes rules over fluids
London Heathrow, the world’s sixth-busiest airport, will allow passengers to carry fluids in containers larger than 100 ml (3.4 fl oz).
The rules have been in place since 2006, following a foiled plot involving bombs disguised as soft drinks. Several other UK and international airports have done likewise, notably London Gatwick and Dubai International.
Airline security measures tend to ratchet up, so possible declines are noteworthy, though the end of what The Guardian called “the tyranny of tiny toiletries” is driven not by reduced concern but by the rollout of new scanning technologies which can reliably tell explosive liquids from harmless ones. US concern over air terrorism has declined since its post-9/11 peak, although UK citizens remain worried.
Global credit ratings agency S&P boosts DRC outlook
Global credit ratings agency S&P raised the Democratic Republic of Congo’s outlook to positive from stable, citing its fiscal performance and rising exports.
The revision represents a reprieve for the war-wracked nation, which has been the subject of renewed interest from Chinese and US mining firms seeking control of the country’s vast resources. The DRC holds some of the world’s biggest metal deposits, including of cobalt, a key component in the lithium-ion batteries that power EVs.
S&P’s decision comes shortly after the International Monetary Fund approved a new $440 million financing facility for the country, though IMF officials warned of commodity price fluctuations, as well as of the risk of a renewed conflict with Rwanda-backed rebels.
Furor erupts after federal agents kill second person in Minnesota
Furor erupted across the US after immigration agents on Saturday shot and killed a second person in Minnesota, escalating tensions over the Trump administration’s deportation crackdown.
Video footage appeared to show authorities firing on the man, a 37-year-old ICU nurse and American citizen, at least 10 times after they removed a gun from his waistband, contradicting the White House’s account of the incident.
More than 60 CEOs called for “immediate de-escalation,” and Democrats could partially shut down the federal government this week by blocking homeland security funding.
For weeks, federal agents have been “visibly unprepared to handle the policing situations their presence created,” The New York Times wrote.
The latest shooting, according to The Minnesota Star Tribune, “upended any sense” that tensions would ease.
ICE shooting compounds political pressure facing Trump
Saturday’s killing of a Minneapolis protester by federal agents is set to compound the political pressure on US President Donald Trump at a time when his domestic and foreign agendas are facing sharper opposition, analysts said.
The shooting “is a crescendo rather than a singular event,” CNN wrote, and accompanies a broader “change in atmosphere,” The Washington Post wrote, as those in Trump’s crosshairs — from Washington to Brussels — take a firmer approach to his aggressive tactics.
“There is this new energy when our allies are rattling the saber back, and that is in turn emboldening folks at home,” a Republican strategist said.
The global press cast the shooting as a crisis for Trump and the country.
“American politics is likely to descend into chaos this year,” a Chinese state outlet wrote.
China’s top general is ousted as Xi ramps up crackdown
China’s top general was ousted after being accused of leaking nuclear secrets to the US, a stunning purge that raises questions about Beijing’s military readiness.
Zhang Youxia — who was second in military command only to Chinese leader Xi Jinping and considered one of his closest confidants — allegedly undermined Xi’s authority, official statements suggest, but The Wall Street Journal reported that he was also accused of providing data on China’s nuclear weapons to Washington.
Xi has overseen a corruption crackdown, cementing his grip on power, though Zhang’s ouster deals a blow to Beijing’s chain of command that could take years to rebuild, analysts said.
“The chances of an attack on Taiwan in the short term have been lowered,” a Taipei-based expert said.
New Pentagon plan deprioritizes China
A new US national security strategy deprioritized China as the military’s top threat, shifting focus to the homeland and Western Hemisphere.
The Pentagon plan calls for the abandonment of “grandiose strategies” and prioritizes diplomacy with Beijing in an effort to deter the superpower “through strength, not confrontation.”
It signals a longer-term goal of reducing Washington’s military role in Europe, East Asia, and the Middle East.
But even as the Pentagon strikes a more conciliatory tone toward Beijing, many in President Donald Trump’s inner circle view the “Donroe Doctrine” — Trump’s focus on the Western Hemisphere — as a show of might that weakens China’s geostrategic influence, Nikkei wrote.
US set to make its largest investment in rare earths
The US government is reportedly pursuing a $1.6 billion investment in an American rare earth company, its largest such foray into the sector, as Washington looks to build up its domestic mineral supply chain.
The planned 10% stake in USA Rare Earth, the Financial Times reported, marks the latest intervention by the Trump administration into private industries it deems central to national security: The government has stakes in at least six other minerals companies.
USA Rare Earth’s CEO told Semafor last year that she welcomed the administration’s involvement.
“We have a very fragile supply chain that relies on the whole country of China,” she said. “Our job now… is to take this off of the geopolitical leverage game board.”
Dangerous winter storm blasts US
A massive winter storm pounded much of the US with snow, ice, and dangerously cold temperatures.
Airlines canceled more than 17,000 flights on Sunday — a level last seen during the early days of the pandemic, according to an aviation analytics firm — while ice across the mid-Atlantic and South knocked out power for more than 1 million customers; outages could last for days in hard-hit areas like Nashville.
The storm shattered records and was unique in its spread, stretching from New Mexico to New England: Copenhagen, New York, saw a temperature reading of minus 49°F (minus 45°C).
“An Arctic siege has taken over our state,” the governor said.
Gas prices spike ahead of major US storm
US natural gas prices rose 75% in three days as the country braced for a huge Arctic storm.
Much of the East Coast and Midwest expect snow and sleet, with travel likely to be disrupted. Heavy snow and subzero temperatures in big cities will drive heating demand, and the cold will also hit Texas’ oil-and-gas fields, which could “wreak havoc on the power grid,” The Wall Street Journal reported.
Washington ordered grid operators to use backup electricity generation from alternative sources, such as data centers and factories — an unusual move, the WSJ noted, since they do not usually distribute energy to the grid, and it is unclear whether the plan could work at short notice.
Anthropic vows to protect humanity with AI ‘constitution’
Anthropic updated Claude’s “Constitution,” spelling out the chatbot’s “ethical character” and, crucially, requiring it not to “kill or disempower” humanity.
The Constitution is baked into Claude’s thinking; previous versions were softer guidelines, but as Claude becomes more powerful, its maker has added constraints on dangerous behavior.
Sci-fi fans might be reminded of Isaac Asimov’s Laws of Robotics, banning robots from harming humans, a near-impossible task with traditional programming because “harm” is ill-defined; natural-language AIs, though, can understand the instruction despite its fuzziness, making something like the Laws possible.
Of course, as in Asimov’s stories, there will still be tensions. Claude itself noted to Flagship that its instruction to be “honest” will sometimes conflict with its instruction to do no harm.
Venezuela’s interim president Rodríguez consolidates power
Venezuela’s interim President Delcy Rodríguez moved to strengthen her grip on power as she faces domestic and foreign threats.
She has shaken up the country’s military, long the basis of power for the ruling Socialist party, replacing at least half a dozen top officials.
Rodríguez has also responded to US pressure by fast-tracking a law to open the state-controlled oil sector to private and foreign investment. The move appears to have worked on at least one person: US President Donald Trump, who has pressed global oil companies to invest tens of billions of dollars in Venezuela in order to tap the nation’s huge crude reserves, said Rodríguez was showing “very strong leadership.”
Russia, Ukraine, US to meet for talks in Abu Dhabi
Russia, Ukraine, and the US will hold talks in Abu Dhabi today.
The meeting, which officials said would be the first trilateral talks since Moscow’s 2022 invasion, comes after a US envoy met Russian President Vladimir Putin in Moscow, and Washington and Kyiv agreed to postwar security guarantees. All sides will send senior negotiators, in what the BBC called “a measure of the seriousness of the talks,” but there are sticking points, notably the Kremlin’s demand that Ukraine give up 25% of the Donetsk region, still partly controlled by Kyiv.
The EU is also looking to the postwar period: The European Commission said a multi-billion-dollar plan to rebuild Ukraine and integrate it into the EU single market was “close to an agreement.”
Foreign investors seen as unlikely to flee US
Analysts and economists downplayed the possibility of foreign investors exiting US assets en masse, in large part because they have few other options.
A Danish pension fund and a major global bond investor said this month they were diversifying away from US bonds, spurring President Donald Trump to threaten “big retaliation” were Europeans — cumulatively the largest holders of US Treasurys — to dump them.
But if European nations did try, the sheer size of the American market means they would struggle to reallocate those resources elsewhere, a former Federal Reserve vice-chair noted on the Foreign Affairs podcast. And a fire sale could end up harming European investors even more than Washington itself, the Financial Times warned.
LatAm exports soar despite US tariffs
Latin American exports boomed last year despite US tariffs, with many nations increasing their reliance on China as their biggest goods market.
Since the start of his second term, US President Donald Trump has vowed to outmuscle China in the Western Hemisphere, part of his “Donroe Doctrine” of regional dominance. But Washington’s levies, paired with Beijing’s insatiable appetite for commodities such as metals, beef, and soy, have only strengthened Latin America’s ties with the Chinese economy while helping reduce its exposure to US policy changes.
The shift is reshaping geopolitics, Bloomberg reported: Trump’s moves have deepened China’s footprint, and even some of the White House’s closest regional allies recently boosted trade ties to Beijing.
China pursues new trade allies as US influence wanes
China scored big trade wins as the US pushed ahead with its protectionist moves.
Beijing reached agreements with the EU and Canada to allow more Chinese-made electric vehicles into both markets, while Britain’s prime minister will travel to China soon to revive business cooperation. Germany’s chancellor is also expected to visit next month.
US President Donald Trump’s speech at Davos this week reiterated he would keep tariffs in place, affirming Washington’s retreat from the helm of a free-trade liberal order, The New York Times argued: Beijing is keen to assume that mantle, and despite its repressive surveillance state and military expansionism, it is “at least rhetorically” invested in the rules-based, multilateral model that Trump has denounced.
Greenland threats, Trump’s Peace Board signal shift in world order
Speeches and shifts by Western leaders this week cemented a growing fracture in the transatlantic alliance.
NATO fended off a crisis over US President Donald Trump’s threats to annex Greenland, but several European leaders have raised questions over the details of a “framework” deal between Washington and NATO.
A top EU official, meanwhile, said bloc members had “serious doubts” about Trump’s Board of Peace — ostensibly meant to oversee a ceasefire in Gaza but which European leaders worry is aimed at challenging the UN; Washington withdrew Ottawa’s invite following a speech by Canada’s leader articulating a “rupture” in global politics. Germany’s chancellor echoed that sentiment, warning at Davos that the “old world order is unraveling at a breathtaking pace.”
European leaders contemplate future of US ties
Europe’s leaders huddled Thursday to recalibrate the future of their relationship with the US after a week of diplomatic tumult.
The emergency summit was convened before US President Donald Trump dropped his tariff threat against eight European countries over Greenland, but “the damage has been done” to the transatlantic relationship, Bloomberg’s Brussels bureau chief wrote.
Politico summed up the lasting feeling as “dread and skepticism,” despite Trump’s climbdown of his Greenland ambitions and reports that his deal with NATO would respect Denmark’s sovereignty.
Europe’s uncertain approach to Trump prompted a scathing rebuke from Ukrainian President Volodymyr Zelenskyy at Davos, who said Thursday that far from becoming a global power, “Europe looks lost.”
Poland begins largest overhaul of navy since Cold War
Poland began the largest overhaul of its navy since the Cold War to bolster defenses in the face of Russian expansionism and transatlantic tensions.
Warsaw is proportionally NATO’s biggest spender, with 4.7% of GDP going to defense, but its maritime forces have largely been neglected.
Moscow’s escalating hybrid warfare, however, has heightened security concerns in the Baltic Sea, and Europe is stepping up coordination and production: Warsaw will buy three new submarines from Sweden, and is expected to sign a defense agreement with the UK.
Europe lacks initiative, not ideas, when it comes to innovative defense coordination, the Stimson Center argued, perhaps because it fears that “bold action” could exacerbate US President Donald Trump’s hostility toward the continent.
Trump sues JPMorgan, Jamie Dimon over alleged ‘debanking’
US President Donald Trump on Thursday sued JPMorgan Chase and CEO Jamie Dimon, alleging they illegally “debanked” him.
The bank closed accounts for Trump and his businesses several weeks after the Jan. 6, 2021 Capitol riot; the president has zeroed in on JPMorgan in his effort to oppose what he and his allies see as a systemic effort among financial institutions to refuse services to conservatives.
The bank said it doesn’t close accounts for political reasons.
Dimon has recently been critical about some of Trump’s economic policies, including tariffs and his proposed credit card interest rate cap. Other Wall Street CEOs at Davos, Bloomberg noted, are taking a different approach to Trump: avoiding talking about him at all.
Trump administration lays out its ‘New Gaza’ vision
US officials on Thursday laid out an ambitious vision for a “New Gaza,” replete with skyscrapers and luxury homes.
The plan envisages $25 billion in investment to rebuild the devastated enclave within three years, Donald Trump’s son-in-law Jared Kushner told business leaders at Davos.
But the splashy reconstruction ideas “exist mostly on paper,” The New York Times wrote.
Israel and Hamas first need to advance a fragile US-brokered ceasefire: Central to that task is the demilitarization of Hamas, whose members have been promised amnesty for disarming.
Kushner said his “master plan” was aimed at “catastrophic success,” but Hamas hasn’t agreed to give up its weapons, and Trump’s Board of Peace to oversee Gaza’s reconstruction lacks Palestinian representation.
Chinese chipmakers go public as self-sufficiency push expands
Chinese AI chipmaker Moore Threads tripled its revenue in 2025, estimates show, as Beijing accelerates its push for technological self-sufficiency.
The company, which aims to rival Nvidia, is at the front of a stream of Chinese chip firms going public.
Tech giants Alibaba and Baidu plan to spin off their semiconductor units as independent listings in a bid to capitalize on enthusiasm for locally made processors.
That domestic push is central to the debate over Beijing’s move to restrict imports of powerful Nvidia H200 chips after Washington approved their sale.
China wants to reduce reliance on US tech, but Chinese companies are hungry for the superior Nvidia products, with some considering sourcing H200s from the black market.
Oscars look beyond Hollywood
International films were represented in all four Oscars acting categories for the first time, reflecting an Academy Awards that is increasingly looking beyond Hollywood.
Titles financed and produced outside the US, which predominantly featured non-English languages, were “not only present but dominant,” Deadline wrote: Swedish actor Stellan Skarsgård grabbed a Best Supporting Actor nomination for Norwegian film Sentimental Value, Wagner Moura became the first Brazilian Best Actor nominee, and KPop Demon Hunters — the animated juggernaut that was American-made but centered on Korean culture — scooped two nominations.
Thanks to streaming platforms, foreign-language content is now “mainstream viewing,” Monocle wrote, while institutions, not viewers, “continue to draw borders that the screen itself has already dissolved.”
Trump launches Gaza ‘Board of Peace’ at Davos
US President Donald Trump launched his Gaza “Board of Peace” before a crowd of fewer than 20 leaders, as European nations conspicuously kept their distance.
Trump claimed the board, initially created to mediate in Gaza, would work “alongside the UN,” addressing concerns it might bypass existing international bodies. Among the attendees were Argentine President Javier Milei and Hungary’s Viktor Orbán, one of two EU leaders to show up.
During the ceremony, Trump’s son-in-law Jared Kushner gave a PowerPoint presentation pitching Gaza’s redevelopment with coastal resorts and energy infrastructure, while Trump said that once the board was completely formed, “we can do pretty much whatever we want in conjunction with the UN.”
Trump touts ‘framework of a deal’ on Greenland
US President Donald Trump touted “the framework of a deal” over Greenland, but details remained scarce, leaving European leaders voicing relief but unsure of next steps.
Trump had previously threatened tariffs and potential military action; EU leaders are set to discuss the plan today. The agreement’s outlines remain unclear, but potentially involve rights to Greenland’s minerals and increased NATO presence.
Reaching a final deal will be “hard work,” one Atlantic Council analyst said, but Europe may have more leverage than widely assumed: While the continent needs US military might, the US needs European territory for its bases, World Politics Review noted.
China’s loans to Africa plummet as Beijing pivots to strategic investments
Chinese lending to Africa plummeted, new data showed, as Beijing shifted its focus to strategic investments on the continent.
Total lending in 2024 amounted to $2.1 billion, down by more than 90% from its 2016 peak, a Boston University report showed. The pivot partly reflects the poor performance of previous loans, after several African nations defaulted. In response, Beijing recalibrated its engagement with the continent, pursuing investments in strategic projects — notably in energy, mining, and transportation — amid an intensifying rivalry with Washington.
Chinese financing through the Belt and Road Initiative reached a record last year, with “Africa emerging as [a] key beneficiary,” Beijing mouthpiece China Daily reported.
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