Microsoft did not stop or suspend its services to the International Criminal Court, the company’s President Brad Smith said, following reporting that it canceled the email address of the court’s chief prosecutor targeted by American sanctions. 

The Associated Press reported in May that Microsoft “cancelled” the email address of Karim Khan, the prosecutor who was directly targeted by a February executive order by United States President Donald Trump that claimed the court had “engaged in illegitimate and baseless actions” against the U.S. and Israel.

Smith told reporters on Tuesday that Microsoft’s actions “did not in any way involve the cessation of services to the ICC.”

A Microsoft spokesperson said that it had been in contact with the court since February “throughout the process that resulted in the disconnection of its sanctioned official from Microsoft services.” The spokesperson added that “at no point did Microsoft cease or suspend its services to the ICC.”

Khan’s email disconnection has sparked Europe’s fears that Trump could flip a “kill switch” to cut digital services through American tech giants, as the continent seeks to become less dependent on U.S. technology. Companies like Microsoft, Google, Amazon and others dominate Europe’s cloud and digital services sectors.

Microsoft declined to comment further in response to questions regarding the exact process that led to Khan’s email disconnection, and exactly what it meant by “disconnection.” The ICC declined to comment. 

However, German business magazine WirtschaftsWoche reported Tuesday that Microsoft’s lawyers have now reached the view that it merely provides a technical platform and that its customers decide whether to give their employees access to its services. Microsoft would no longer intervene in scenarios similar to the ICC case, WirtschaftsWoche wrote.

Smith at the end of April said Microsoft would push back on orders to suspend European cloud operations, in an attempt to assuage fears about a Trump-ordered kill switch.

The company announced then that it would add a binding clause to its contracts with European governments and the European Commission, stating that it would keep the option open to go to court in the event other governments ordered it to suspend or cease cloud operations.

“People want to know that there’s more than words that we’re offering, that’s why we’re prepared to back this up with contractual commitments,” Smith said at the time.

Amazon and Google, Microsoft’s two main competitors on cloud services, also offer “sovereign” cloud services that seek to assuage Europeans’ concerns, though they have not publicly committed to challenging orders in the same way as Microsoft.

Khan’s email issue has also prompted calls for a major change of government policy in the Netherlands, where the ICC is based.

Bart Groothuis, a Dutch liberal member of the European Parliament, recently urged the creation of a European cloud, citing the ICC incident and saying “the world has changed.”

And Dutch national lawmakers on Monday petitioned the government to use 30 percent Dutch or European cloud services by 2029, as well as multiple other measures to wean the Dutch government off U.S. services like Microsoft.

It again signals a shift in the Netherlands, which has traditionally been one of the most Atlanticist, free-market and tech-friendly EU member countries. 

Britain’s political doom loop remains unbroken – perhaps one of the last things about us that is. A country whose economy has been too weak and growing too slowly to give people the living standards and services they believe they deserve, that chews up and spits out wildly different forms of leadership, year after year after year.

Now it’s Keir Starmer’s turn. YouGov reports that the proportion of voters with an unfavourable opinion of the Labour leader has risen to 69 per cent, giving him a net favourability rating of minus 46 – his worst so far. The good news is twofold: he still has four years left, and when it comes to unpopular British leaders, it’s “join the club”.

But that is about it. With a tough Spending Review on 11 June, and Labour MPs in mutinous mood about benefits cuts, gleeful speculation has already begun about how long Starmer will last, and about where the putsch is coming from. Let’s deal with that later, but start by asking: even during days dominated by the hugely important defence spending review, what is the biggest issue for Downing Street?

It is, simply, an electorate that feels skint. One key Starmer adviser tells me he thinks the very phrase “cost-of-living crisis”, popularised with the spike in energy prices after the invasion of Ukraine, grossly undersells the problem: “This is a profound living-standards crisis.”

He goes on to sketch a married couple in their fifties living in the suburbs. Their standard of living – the holidays they can take, the car they drive, the restaurants they can afford to eat at – is lower than it was 15 years ago, when annual pay rises came regularly, loans were cheap, the high street still worked, and technology was getting cheaper. Looking back, they are angry. Looking forward, they keep pulling the political levers to get change – Cameron, Brexit, Johnson, Labour – and nothing happens.

The causes are well known, from the financial crash to spiking energy costs, Vladimir Putin’s war, and decades of underinvestment. But voter rage, based on daily experience, doesn’t blow away. It leads, next, to Reform with its fantasy economics and further in-built disappointment. The only Labour answer, so it follows, is to invest, to bring good jobs and grow the economy. Increased defence spending helps. But refiring the growth engine is not something that any government can do in a single year.

So, cost of living is what dominates Downing Street strategy to the exclusion of all else. Until recently, that wasn’t clearly so: Keir Starmer was the (successful) Prime Minister for Abroad. If there was a prime minister for the home department, it was Rachel Reeves.

At the heart of government, perhaps the most significant shift has been a greater focus by the Prime Minister on domestic spending and economic decisions, following a series of bilateral meetings with Reeves in May. He is becoming steadily more assertive with those around him. When Liz Lloyd, the Blair-era policy chief, for instance, tried to get rid of Stuart Ingham, Starmer’s veteran policy adviser, she was rebuffed. It is Starmer who has driven a rethink on the two-child cap and a bigger autumn announcement on child poverty, and who buried the winter fuel allowance error so publicly himself.

To put it crudely, Starmer’s greater engagement has seen a slight tilt leftwards in different policy areas. The more involved he has been, the more backing Bridget Phillipson has received on her academy reforms. Similarly, he has been pushing back against the cancellation of net zero as a political distraction: see the use of 12,000 predicted new green energy jobs planned for Lincolnshire as a way of combating Reform.

This has immediate policy results. Soon we should see an intermediate package of extra help for families in poverty – more money for the household support fund, perhaps, and for breakfast clubs and school meals. That is not enough to make up for the two-child benefit cap, likely to be abolished when the poverty strategy is announced this autumn. But it is a direction-of-travel signal.

In the Spending Review, we should expect the announcement of the commercial competition to build Britain’s new, small modular reactors to be followed by some serious funding, including for the Acorn carbon capture project in Aberdeenshire, vital for Scottish Labour MPs stung by Reform’s rise there.

The way ahead begins with those policy reversals over winter fuel and the child benefit cap, then moves towards big infrastructure announcements across the north and Midlands of England. Summer will be difficult, but ministers believe the headroom exists to make the autumn feel a little easier.

Though cabinet members tell me the Spending Review will be “tough, not terrible”, none of the above cancels the brutal spending squeeze on non-priority departments, including, crucially, local government and housing. The Environment Secretary, Steve Reed, is, by all accounts, having a horrible time. Angela Rayner is still fighting – one of her allies reminds me: “Never forget, Angela is a trade union negotiator.”

Downing Street is open to suggestions for ways to raise more money. Rayner’s leaked tax memo had useful suggestions but would only have raised a few billion a year. The New Statesman has discussed ways of expanding National Insurance, a gambling or banking tax, and the case for a major rating revaluation – economically strong, politically dangerous. In cabinet, some want tax rises to focus minds towards “on your side, not their side” politics. That leads, inexorably, to sensitive discussions about wealth.

Louise Haigh, the former transport secretary, free to speak openly at a recent conference held by the think tank Compass, urged Reeves to “deliver a proper wealth tax. When the wealthy don’t pay their fair share, everyone else picks up the tab.” Such a tax, she argued, would reward work, close loopholes and give Labour the means to invest: “We must acknowledge that our tax system is perverse. It punishes earned income but barely touches the real driver of inequality – wealth.”

There is a fight ahead on tax and spend, as in a Labour government there should be. But it is practical, not ideological. As one senior figure puts it: “This isn’t Healey and Benn.” Crucially, there is no sign of a serious challenger to Starmer from inside the government. Ed Miliband to his left, has a deep personal loyalty. Rayner, hugely popular inside the Labour family, would struggle to reach voters outside it. Wes Streeting, for all his energy and eloquence, doesn’t have the union or constituency support to take colleagues in a Blairite direction. Only Andy Burnham, a mayor not a cabinet minister, has made serious public criticisms of the government, speaking at the same conference as Haigh.

And there is underlying agreement. After the local elections hammering, ministers and advisers from very different Labour factions say that living standards are their key test. “This is becoming a more lively cabinet, but it is a pretty loyal cabinet,” one member says, adding: “We have time, but it is a long, slow haul and we have to own our past policy mistakes.”

It is also, of course, a cabinet of politicians who watched the Tories destroy themselves in successive leadership fights which offered easy answers to deep problems. It’s a cabinet able to make its own mistakes, no doubt, but unlikely to make that one. Now that Starmer has at least a brief break from the pressure of overseas crises, some of the incoherence that his government has suffered from should begin to clear.

Anger in the country will not abate quickly and will probably get much worse during 2025. But it won’t be answered, this time, by major factional feuding, a putsch or a deep division in the cabinet.

[See also: Rachel Reeves should fear the bond market vigilantes]

Nigel Farage and Kemi Badenoch have much more in common with the failed Tory leader than either cares to admit

We need to talk about Liz Truss, although there are reasons not to bother. The prime minister who failed faster than any previous holder of the office has much to say about her dismal record, but nothing insightful. She cuts a pitiful spectacle padding out the schedule at rightwing conferences, chasing attention and relevance with an addict’s fervour.

Last week, Truss was at the Conservative Political Action Conference (CPAC) in Budapest, sharing the big lesson she learned in government. It was that British institutions have been captured by a leftist doctrine and that they “hate western civilisation”. She couldn’t possibly counter this threat from No 10 because supposedly the real power was wielded by a well-financed “globalist network”, operating through such engines of anti-democratic subterfuge as the International Monetary Fund and the World Health Organization.

Rafael Behr is a Guardian columnist

One year of Labour, with Pippa Crerar, Rafael Behr and more

On 9 July, join Pippa Crerar, Raf Behr, Frances O’Grady and Salma Shah as they look back at one year of the Labour government and plans for the next four years

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Exclusive: Letter to PM signed by retired supreme court justices among others says lack of action will imperil international legal system

The UK must impose sanctions on the Israeli government and its ministers and also consider suspending it from the UN to meet its “fundamental international legal obligations”, more than 800 lawyers, academics and retired senior judges, including former supreme court justices, have said.

In a letter to the prime minister, they welcome Keir Starmer’s joint statement last week with the leaders of France and Canada warning that they were prepared to take “concrete actions” against Israel. But they urge him to act without delay as “urgent and decisive action is required to avert the destruction of the Palestinian people of Gaza”.

Beneath all the tariff craziness — the taxes on islands inhabited only by penguins, the pseudo-profound mathematical definition of “reciprocal”, the idea that the settled trade policy of every other country on the planet somehow constitutes an emergency, and enough U-turns to make a ballerina dizzy — it is easy to lose sight of a basic fact: even a modest and predictable tariff is still a modest and predictable act of foolishness.

Let’s start with a simple truth about a complicated world. Everybody has to trade with somebody. Attempting complete self-sufficiency would, in the very best-case scenario, produce a Robinson Crusoe existence in which every waking minute had to be devoted to piercing coconuts or repairing the treehouse roof. The worst-case scenario would be to die simultaneously of starvation, exposure and an infected scratch.

A vivid example of this truth is The Toaster Project, the brainchild of conceptual artist Thomas Thwaites. Two decades ago, Thwaites decided to make a simple toaster from scratch. He found himself thwarted at every turn: iron smelting proved impossible without a microwave oven, starch-based plastic was eaten by hungry snails and nickel could be obtained only by purchasing commemorative coins. “I realised that if you started absolutely from scratch, you could easily spend your life making a toaster,” he told me. His toaster eventually cost about £1,000. It did not work.

The second truth about trade is that it’s beneficial even if you’re trading with someone who is better than you at everything. A classic example: your housemate can cook a meal in 30 minutes or do a load of laundry in 40 minutes. For you, cooking takes 90 minutes and laundry takes an hour. A Trumpian view of this interaction is that you’re doomed: the housemate is better at both cooking and laundry, so will do both while you do neither. A trade deficit! Sad! (Although exactly why this turn of events would be to your disadvantage is unclear.)

But if you offer to do three loads of laundry if your housemate cooks three meals, then both you and your housemate are getting clean clothes and home-cooked food for less effort. This, the principle of “comparative advantage”, is that rare idea in economics that is important, true, and far from obvious.

The third truth about trade is that, ultimately, it isn’t about all the stuff you get to sell. It’s about all the stuff you get to buy. Yes, jobs can give us a sense of meaning and purpose, but we do not do them in exchange for gold star stickers. We do them in exchange for money that we can spend on stuff.

The fourth truth about trade is that while deficits might not mean much, bilateral deficits mean nothing at all. The FT has a huge bilateral deficit with me: they send me money every month but they do not complain that I am failing to spend my salary on copies of the FT Weekend. Meanwhile, I have a large bilateral deficit with my local cheese shop, but it would be strange to insist that they bought more copies of my book How To Make The World Add Up. I’m not spending money at the cheese shop in the hope that they will buy my writing in return. I’m spending money in the confident expectation that what I will get in return is cheese.

At this point all the self-proclaimed Tariff Men who are still reading this might complain that I am cheating, because I have been talking about local trade rather than international trade. But economically speaking there is no difference. That is the fifth truth about trade: tariffs are imposed at national borders not for economic reasons but because national borders are an administratively convenient place to do so.

They are also culturally and rhetorically convenient. Politicians who otherwise wouldn’t dream of boasting about increasing taxes are happy to boast about increasing tariffs because tariffs seem to apply to foreigners. (The sixth truth: a tariff is nothing more than a tax.) Tariffs are actually a tax not on foreigners but on people who buy things from foreigners, but nevertheless that is an easier message than — say — taxing people from Birmingham who buy things from Manchester.

This is a question few Tariff Men have asked, let alone answered: if it is such a splendid idea to tax goods coming from Mexico into the US, why isn’t it a good idea for the government of Houston to tax imports from Dallas? Or to tax imports from Central Northwest Houston to East Downtown? In a modern economy something must be taxed, but transaction taxes are needlessly distorting, whether they are levied on a national border or somewhere else.

The seventh truth about trade is that it is often used as a scapegoat. There are many problems that look like they are caused by trade but are actually caused by something else. For example, the decline in US manufacturing jobs feels like it was caused by competition from China, and some of it was. But much of it was caused by competition from robots — which is why many of the jobs have gone but US manufacturing output keeps rising.

There are plenty of problems for which tariffs seem like they might be a solution — from encouraging a homegrown defence industry to discouraging the emission of greenhouse gases — but in almost all cases, there are better, more focused and less wasteful alternatives.

Yes, you may wish to support a homegrown industrial cluster, or to tax carbon dioxide emissions, or to diversify sources of energy. But pursuing complex economic objectives with a trade war is like trying to perform neurosurgery with a hammer. Even a skilled brain surgeon would struggle to produce a positive result — and I’m not sure the current team in the White House have yet earned that distinction.

Written for and first published in the Financial Times on 25 April 2025.

Loyal readers might enjoy the book that started it all, The Undercover Economist.

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