FirstFT: EU retaliates to US tariffs on steel and aluminium imports

Good morning and welcome back to FirstFT Americas. Here’s what we’re covering today:

• EU retaliates to US import tariffs

• Donald Trump Jr’s Maga investments

• Japan’s rocky ride to economic normalisation

• The new trend for infrared saunas

Within hours of the US government introducing 25 per cent tariffs on steel and aluminium imports the EU retaliated with measures that would affect up to €26bn of American goods, including bourbon whiskey, cosmetics and Harley-Davidson motorcycles.

Announcing the tariffs, which will take effect from April 1, European Commission President Ursula von der Leyen said they were “bad for business” and would disrupt supply chains, put jobs at stake and push up prices.

The introduction of the EU’s tariffs caps an unsettling 24 hours for the US and its trading partners. Earlier yesterday Donald Trump had threatened to double tariffs on Canadian steel and metal imports to 50 per cent before rescinding the move after Canada suspended a 25 per cent surcharge on exports of power to the US.

The US administration said the new steel tariffs were a response to “foreign players” that they say are responsible for “surging exports” of metals to America that are undermining domestic producers. The full list of steel and aluminium products subject to the levies represented $151bn of imported goods in 2024, according to an analysis by Simon Evenett and Johannes Fritz of the St Gallen Endowment for Prosperity Through Trade.

Ted Murphy, a partner at law firm Sidley Austin, said Trump’s sweeping new metals tariffs represented a “big change” from his approach when he introduced similar levies in 2018. Read more on the new tariffs.

Here’s what else we’re watching today:

• Economic data: The closely watched US consumer prices index is released. Brazil also publishes monthly inflation data.

• Monetary policy: The Bank of Canada announced its latest interest rate decision. The BoC’s benchmark overnight lending rate is currently 3 per cent.

• Results: Retailer American Eagle Outfitters publishes fourth-quarter results while software group Adobe updates on its first-quarter performance.

• Taoiseach meets Trump: Ireland’s leader Micheál Martin meets the president at the White House St Patrick’s Day celebrations.

Five more top stories

1. The US is to resume deliveries of weapons and ammunition to Ukraine and end its suspension of intelligence-sharing after Kyiv accepted a proposal for an immediate 30-day ceasefire in its war with Russia. The proposed ceasefire, which still needs to be agreed by Russia, capped several hours of talks between US and Ukrainian officials in the Saudi Arabian city of Jeddah. Here’s more on what was agreed.

• Live event: Join FT experts on March 27 for a subscriber-only webinar, as they discuss Ukraine’s future with Russia’s full-scale invasion entering its fourth year. Register for free.

2. The US House of Representatives has narrowly passed legislation to keep the federal government funded until the end of September. The bill now heads to the Senate, where it will require the backing of at least eight Democrats to secure passage. If it fails to pass by Friday, when current funding expires, the government will shut down.

3. Executives at the biggest US airlines yesterday warned of a slowdown in domestic demand, prompting some of them to slash their revenue and earnings expectations for the first quarter in the latest sign of waning consumer confidence. The comments by American Airlines, Delta Air Lines, Southwest Airlines and United Airlines triggered a sell-off of airline stocks.

4. Palantir’s Alex Karp has been catapulted to near the top of the wealthiest US tech company bosses after the unorthodox chief executive sold $1.9bn worth of stock in the data intelligence group. Karp has made a fortune thanks to a 350 per cent surge in Palantir’s share price last year, which made it the best-performing stock in the S&P 500.

5. More than half of the world’s most populated cities are getting wetter, according to new research on how water patterns are undergoing dramatic shifts in urban areas as climate change intensifies the atmospheric effects. Read more on the academic study, conducted on behalf of aid group WaterAid.

Today’s big read

Since his father’s 2024 election victory, Donald Trump Jr has joined forces with a small group of financiers who are devoted to the president’s vision of America. This means companies that promote environmental, social and governance or diversity, equity and inclusion are out — and investments based on “entrepreneurship, innovation and growth” are in. “Since 2021 I’ve been a vocal proponent of the parallel economy,” the president’s oldest son told the FT.

We’re also reading . . . 

• Elon Musk: The cost for Donald Trump of keeping the world’s richest man by his side is growing, argues Edward Luce.

• ‘We have to rebuild our country’: The team behind Donald Trump’s economic shock therapy aiming to radically reshape the world’s largest economy.

• Taking up America’s mantle: If Europe does not mobilise quickly in its own defence, liberal democracy might founder altogether, writes Martin Wolf.

• Daylight saving: Changing the clocks does not extend the light available to us, writes Anjana Ahuja, and it is time we abolished the twice-yearly switch.

Chart of the day

Japan is undergoing its biggest economic inflection in over three decades that has seen prices and interest rates rise. While many other countries have fought to keep inflation down, in Japan its return has been encouraged. Policymakers aim to foster a virtuous cycle of rising prices and wages that could spur demand and generate moderate and steady growth. But, despite some positive signs, it has been a bumpy ride.

Take a break from the news . . . 

The likes of Jack Dorsey, Cristiano Ronaldo, Gwyneth Paltrow and Dave Asprey seek self-optimisation with infrared longevity therapies — compact, next-generation saunas where the hot box potency comes from a spectrum of red and infrared light. HTSI explores some of the hottest options.

Source: Economy - ft.com