What you need to know about Donald Trump’s Gaza plan

Published

2 months ago

February 5, 2025

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Donald Trump’s announcement that he wants to “develop” Gaza and turn it into the “Riviera of the Middle East” has been described as “absurd” and “entirely unrealistic”.

During a joint news conference with Israeli Prime Minister Benjamin Netanyahu late on Tuesday, Mr Trump proposed that the two million people living in Gaza could be moved to Jordan, Egypt – and beyond.

Gazans hit back at Trump’s plan; US latest

While it is not clear how Gaza will be rebuilt when the current conflict between Hamas and Israel ends – it is equally uncertain how the US would come to “own” Gaza, resettle its population, and redevelop the land.

What did Trump say about the Gaza Strip?

Mr Trump described Gaza as a “demolition site” where “virtually every building is down”.

Laying out his idea of what would happen beyond an Israel-Hamas ceasefire, he proposed: “The US will take over the Gaza Strip and we will do a job with it too.”

He said America would be “responsible for dismantling all of the dangerous unexploded bombs and other weapons on the site”, before it would “get rid of the destroyed buildings”, and “level it out”.

He envisioned an “economic development”, which he described as the “Riveria of the Middle East” – that would create thousands and thousands of jobs”.

“Everybody I’ve spoken to loves the idea of the United States owning that piece of land, developing and creating thousands of jobs,” he added.

The White House has described the plan as “out-of-the-box” and “visionary”.

What about the population?

Gaza’s two million people would not return to their territory under Mr Trump’s plans.

Instead, he suggested building “various domains” for them to “permanently… live out their lives in peace and harmony instead of having to go back and do it again”.

This could take the form of “numerous sites” or “one large site”, he added.

The only locations he mentioned by name were Jordan and Egypt, which he said, despite their leaders consistently refusing to resettle more Palestinian refugees, would “give us the kind of land we need to get this done”.

He described the new sites as a “beautiful area to resettle people, permanently in nice homes, where they can be happy and not shot… and killed… like what’s happening in Gaza”.

He said “neighbouring countries of great wealth” could finance them – without stipulating to what extent this would involve the US.

There were no details on whether the plans change the current US position of a two-state solution for the Israeli and Palestinian people.

Who controls Gaza – and who has occupied it in the past?

Gaza has been under the control of Hamas since 2007 – after it dominated the 2006 elections and subsequent violent clashes with fellow Palestinian group Fatah.

The area made up of Gaza, Israel, and the West Bank has a long and complicated history – with both Israel and Palestinians laying claim to various parts of it.

In 1917, the British took control of what was then known as Palestine from the Ottoman Empire.

Under the Balfour Declaration, they promised to create a Jewish homeland there.

Jewish people then began migrating to the region in large numbers – accelerated by the threat of Nazism in Europe and the Second World War, which created tension with the Palestinian people already living there.

When the United Nations was set up after the war in 1947, it proposed a partition plan – whereby roughly 45% of the land would belong to the Palestinian people and 55% to Jewish people. Jerusalem, which has particular sensitivities because of its religious significance to both sides, was proposed as a separate international territory.

This plan was never actioned – and instead – the state of Israel was declared in 1948.

The Arab-Israeli war that broke out immediately after the declaration saw 750,000 Palestinian people forced from their homes in what was known as the Nakba – or “catastrophe” in English. They were given refugee status by the UN and fled to neighbouring countries.

The Palestinians retained control of two small areas – what we now know as Gaza and the West Bank.

During the Six-Day War in 1967, Israel occupied Gaza, the West Bank, and East Jerusalem. They also took control of the Golan Heights, an area belonging to Syria. This saw hundreds of thousands more Palestinians forced from their homes.

During his first presidency, Donald Trump recognised Israel’s control of the Golan Heights.

Different groups have fought for control of Gaza since then – including Hamas and the Palestinian Authority.

There was hope for a two-state solution – one Israel and one Palestine – when their leaders signed the Oslo Accords committing to peace in the region within five years.

This never materialised, however, and Gaza has become increasingly cut off from outside resources.

The UN runs refugee camps for millions of displaced Palestinians – both inside Gaza and the West Bank – and in the neighbouring countries of Jordan, Lebanon, and Syria.

Before the 2023 war broke out between Israel and Hamas, tensions were high among Palestinian communities as Israel continued to expand settlements in the West Bank and East Jerusalem.

Trump Gaza plan ‘absurd’ and US has ‘no authority’

Egypt, Jordan, and Saudi Arabia, which as fellow Arab nations support the Palestinian cause, immediately rejected Mr Trump’s ideas.

They, along with Syria and Lebanon, are already struggling to support millions of displaced Palestinians.

Hamas described the proposals as “ridiculous and absurd” in a statement from one of its officials Sami Abu Zuhri.

The Palestinian Liberation Organisation reiterated its support for a two-state solution.

Sky News Middle East correspondent Alistair Bunkall said the plans have left politicians and diplomats across the region “speechless”.

“It’s entirely unrealistic for so many reasons,” he says.

Forcing Palestinians from Gaza would breach their right under international law to self-determination – and would constitute ethnic cleansing, he adds.

It would also, according to the chair of the UK’s Defence Select Committee, Conservative MP Tobias Ellwood, require “a minimum of 50,000” US troops in the region for several years.

This would prove a “massive logistical challenge”, as US military resources in other parts of the world have to be redirected there.

It is also out of step with Mr Trump’s previous indications he wants to scale back US involvement in the Middle East – and adopt a more protectionist foreign policy.

Many Gazans have endured horrendous living conditions in the hope Gaza will be rebuilt as part of an independent Palestinian state.

As such, most would not want to leave, Bunkall says, adding: “Ask any Gazan and they will tell you it is their home, however hellish.”

The international community has been involved in the rebuilding of war-torn countries throughout the 20th and 21st centuries. In this sense, the US could be mandated as a “reconstruction power” in Gaza.

However, in cases such as post-Second World War Germany or Japan – allies handed back the territory after rebuilding – not resettled their residents elsewhere.

US

Financial markets were always going to respond to Trump tariffs but they’re also battling with another problem

Published

1 day ago

April 4, 2025

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Global markets have given Trump a clear no-confidence vote - and his fickleness is making the problem worse

Global financial markets gave a clear vote of no-confidence in President Trump’s economic policy.

The damage it will do is obvious: costs for companies will rise, hitting their earnings.

The consequences will ripple throughout the global economy, with economists now raising their expectations for a recession, not only in the US, but across the world.

Tariffs latest: FTSE 100 suffers biggest daily drop since COVID

Financial investors had been gradually re-calibrating their expectations of Donald Trump over the past few months.

Hopes that his actions may not match his rhetoric were dashed on Wednesday as he imposed sweeping tariffs on the US’ trading partners, ratcheting up protectionism to a level not seen in more than a century.

Markets were always going to respond to that but they are also battling with another problem: the lack of certainty when it comes to Trump.

He is a capricious figure and we can only guess his next move. Will he row back? How far is he willing to negotiate and offer concessions?

These are massive unknowns, which are piled on to uncertainty about how countries will respond.

China has already retaliated and Europe has indicated it will go further.

That will compound the problems for the global economy and undoubtedly send shivers through the markets.

Much is yet to be determined, but if there’s one thing markets hate, it’s uncertainty.

US

Stock markets suffer sharp drops after Donald Trump announces sweeping tariffs

Published

2 days ago

April 4, 2025

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Stock markets suffer sharp drops after Donald Trump announces sweeping tariffs

Stock markets around the world fell on Thursday after Donald Trump announced sweeping tariffs – with some economists now fearing a recession.

The US president announced tariffs for almost every country – including 10% rates on imports from the UK – on Wednesday evening, sending financial markets reeling.

While the UK’s FTSE 100 closed down 1.55% and the continent’s STOXX Europe 600 index was down 2.67% as of 5.30pm, it was American traders who were hit the most.

Trump tariffs latest: US stock markets tumble

All three of the US’s major markets opened to sharp losses on Thursday morning.

By 8.30pm UK time (3.30pm EST), The Dow Jones Industrial Average was down 3.7%, the S&P 500 opened with a drop of 4.4%, and the Nasdaq composite was down 5.6%.

Compared to their values when Donald Trump was inaugurated, the three markets were down around 5.6%, 8.7% and 14.4%, respectively, according to LSEG.

Worst one-day losses since COVID

As Wall Street trading ended at 9pm in the UK, two indexes had suffered their worst one-day losses since the COVID-19 pandemic.

The S&P 500 fell 4.85%, the Nasdaq dropped 6%, and the Dow Jones fell 4%.

It marks Nasdaq’s biggest daily percentage drop since March 2020 at the start of COVID, and the largest drop for the Dow Jones since June 2020.

‘Trust in President Trump’

White House press secretary Karoline Leavitt told CNN earlier in the day that Mr Trump was “doubling down on his proven economic formula from his first term”.

“To anyone on Wall Street this morning, I would say trust in President Trump,” she told the broadcaster, adding: “This is indeed a national emergency… and it’s about time we have a president who actually does something about it.”

Later, the US president told reporters as he left the White House that “I think it’s going very well,” adding: “The markets are going to boom, the stock is going to boom, the country is going to boom.”

He later said on Air Force One that the UK is “happy” with its tariff – the lowest possible levy of 10% – and added he would be open to negotiations if other countries “offer something phenomenal”.

Economist warns of ‘spiral of doom’

The turbulence in the markets from Mr Trump’s tariffs “just left everybody in shock”, Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions in Boston, told Reuters.

He added that the economy could go into recession as a result, saying that “a lot of the pain, will probably most acutely be felt in the US and that certainly would weigh on broader global growth as well”.

Meanwhile, chief investment officer at St James’s Place Justin Onuekwusi said that international retaliation is likely, even as “it’s clear countries will think about how to retaliate in a politically astute way”.

He warned: “Significant retaliation could lead to a tariff ‘spiral of doom’ that could be the growth shock that drags us into recession.”

It comes as the UK government published a long list of US products that could be subject to reciprocal tariffs – including golf clubs and golf balls.

Running to more than 400 pages, the list is part of a four-week-long consultation with British businesses and suggests whiskey, jeans, livestock, and chemical components.

Meanwhile, Prime Minister Sir Keir Starmer said on Thursday that the US president had launched a “new era” for global trade and that the UK will respond with “cool and calm heads”.

It also comes as Canadian Prime Minister Mark Carney announced a 25% tariff on all American-imported vehicles that are not compliant with the US-Mexico-Canada trade deal.

He added: “The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over. This is a tragedy.”

US

Trump’s tariffs are about something more than economics: power

Published

2 days ago

April 3, 2025

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Trump's tariffs are about something more than economics: power

Tanking stock markets, collapsing world orders, devastating trade wars; economists with their hair ablaze are scrambling to keep up.

But as we try to make sense of Donald Trumps’s tariff tsunami, economic theory only goes so far. In the end this surely is about something more primal.

Power.

Understanding that may be crucial to how the world responds.

Yes, economics helps explain the impact. The world’s economy has after all shifted on its axis, the way it’s been run for decades turned on its head.

Instead of driving world trade, America is creating a trade war. We will all feel the impact.

Donald Trump says he is settling scores, righting wrongs. America has been raped, looted and pillaged by the world trading system.

But don’t be distracted by the hyperbole – and if you think this is about economics alone, you may be missing the point.

Above all, tariffs give Donald Trump power. They strike fear into allies and enemies, from governments to corporations.

This is a president who runs his presidency like a medieval emperor or mafia don.

It is one reason why since his election we have seen what one statesman called a conga line of sycophants make their way to the White House, from world leaders to titans of industry.

The conga line will grow longer as they now redouble their efforts hoping to special treatment from Trump’s tariffs. Sir Keir Starmer among them.

President Trump’s using similar tactics at home, deploying presidential power to extract concessions and deter dissent in corporate America, academia and the US media. Those who offer favours are spared punishment.

His critics say he seeks a form power for the executive or presidential branch of government that the founding fathers deliberately sought to prevent.

Whether or not that is true, the same playbook of divide and rule through intimidation can now be applied internationally. Thanks to tariffs

Each country will seek exceptions but on Trump’s terms. Those who retaliate may meet escalation.

This is the unforgiving calculus for governments including our own plotting their next moves.

The temptation will be to give Trump whatever he wants to spare their economies, but there is a jeopardy that compounds the longer this goes on.

Malcolm Turnbull, the former Australian prime minister who coined the conga line comparison, put it this way: “Pretty much all the international leaders I have seen that have sucked up to Trump have been run over. The reality is if you suck up to bullies, whether it’s global affairs or in the playground, you just get more bullying.”

Trading partners may be able to mitigate the impact of these tariffs through negotiation, but that may only encourage this unorthodox president to demand ever more?

Ultimately the world will need a more reliable superpower than that.

In the hands of such a president, America cannot be counted on.

When it comes to security, stability and prosperity, allies will need to fend for themselves.

And they will need new friends. If Washington can’t be relied on, Beijing beckons.

America First will, more and more, mean America on its own.