Aurelia Butler

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldSir Keir Starmer will send his top business adviser to Washington next week in a bid to resolve the outstanding trade issues surrounding steel and pharmaceuticals between the two countries, with hopes in London of an agreement in early July.Varun Chandra will join UK embassy trade experts in Washington for talks on steel, aluminium and medical drugs, after Donald Trump decided on Monday to sign off tariff cuts for British carmakers and aerospace firms under the US-UK trade deal.While Trump’s close relationship with Starmer has been instrumental to progress, British officials say that a key interlocutor on the details has been Howard Lutnick, the billionaire businessman and US commerce secretary.“Lutnick has come under some criticism in the US, but we have found him reasonable, engaged and a constructive counterpart in negotiations,” said one UK official. “He has worked at pace.”However, the toughest part of the talks lies ahead, with details to be agreed on steel and pharma tariffs.On Monday, Trump described the US-UK relationship as “fantastic” before brandishing a document confirming at the G7 summit in Canada that a deal on cars and aircraft parts had been concluded. Starmer had to pick up the document as a gust of wind blew it out of Trump’s folder, in an appearance that showed the unlikely chemistry between the two leaders. “He’s slightly more liberal than I am, to put it mildly,” Trump quipped. Asked if he could guarantee that the UK would be protected from future tariffs Trump replied: “The UK is very well protected. You know why? Because I like them.”Sir Keir Starmer picked up the document as a gust of wind blew it out of Donald Trump’s folder on Monday More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The writer is president and chief executive of Scotiabank The late Canadian prime minister Pierre Trudeau once said that the Canada-US relationship resembled “sleeping with an elephant. No matter how friendly . . . one is affected by every twitch and grunt.” Now the elephant has tossed and turned, and Canada has finally woken up. This could be the watershed year in which we redefine our role in the global economy.For much of its history, Canada has earned a global reputation for being a peaceful nation and trusted ally — but more recently a place where productivity falls, per capita GDP stagnates and investment is made difficult. The country’s potential has always been there, thanks to one of the most highly educated workforces in the world, a strong and stable financial system and vast and untapped resources. Adding to this is Canada’s enviable place within the North American trade corridor, which provides access to the largest economy in the world via the world’s longest land border.There is no question that the obstacles to being a natural resources powerhouse — a goal long characterised by more talk than action — have very much been of our own making. However, recent US tariff threats have galvanised Canada to act with urgency.At a time when polarisation is increasing in many nations, Canadians are doing the opposite, coalescing and seeking to unlock the country’s economic potential. Government leaders from across the political spectrum are working together to safeguard Canada’s long-term prosperity, so it never again feels cornered, economically or existentially. Whether it is agreements to tear down internal barriers to trade that add 8-15 per cent to the cost of goods, reductions in red tape that have stood in the way of unlocking Canada’s natural resources or concerted efforts to reverse the recent decline in GDP per capita, Canadians are increasingly unified. My conversations with clients and business leaders from Canada’s largest companies reveal a renewed optimism; these leaders are ready to invest in the future.Canada’s new prime minister, Mark Carney, was elected on a mandate to create growth and he is moving forward decisively. Carney calls it Canada’s “hinge moment”. His newly proposed legislation, known as the One Canadian Economy Act, will streamline approvals and speed the construction of major infrastructure projects, including critical mineral mines, pipelines, ports, highways, nuclear facilities, wind farms and carbon capture facilities. The bill furthers the removal of long-standing interprovincial trade barriers, with provincial governments equally aligned in their ambition to get resources out of the ground and goods moving across the country. Indigenous rights holders will also be key partners through increased involvement in the development, stewardship and ownership of major projects. At last, Canada is creating the conditions to build big infrastructure faster and more efficiently, and in a way that is sustainable and future-proof.Canada’s natural gas is produced in one of the most secure and stable jurisdictions in the world. As many countries rapidly shift away from a reliance on authoritarian trade partners like Russia, and markets look to diversify their critical mineral supply away from less reliable producers, Canada’s rich endowments of critical minerals are waiting to be unleashed. And within our own borders, sectors like electricity, transportation and clean technology are rife with opportunity for investment.A stronger Canada will make for an even stronger North America, which represents the second largest economic bloc globally. The next year will be critical as the country reorients its economy. A new economic trajectory for Canada will open doors for global trade and investment. The real hinge moment will be when investors wake up to this opportunity.  More

This article is an on-site version of our Chris Giles on Central Banks newsletter. Premium subscribers can sign up here to get the newsletter delivered every Tuesday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersThis has been a cruel month for statisticians. On June 3, the US Bureau of Labor Statistics admitted it had messed up the weights for its Current Population Survey, affecting the employment, unemployment and labour market participation figures for April. The following day, the UK’s Office for National Statistics came clean with its own weighting disaster, in which it had overstated April’s inflation statistics.The question for users of those statistics is: what should we do? The problem is especially acute for central banks, which make decisions that they boast are “data dependent” and which respond to specific, fine details in economies’ cycles. Bogus Labour SnapshotThe BLS has been in the wars recently because of increasing concerns about the quality of its data. Although the US statistical agency said its weighting error in the employment figures was minimal and would be corrected in the May data, it was far from its first embarrassment in recent weeks.The following day, the BLS announced that staff shortages had reduced the quality of the official US CPI inflation data, causing a suspension of price collection in some locations and more data than usual being imputed. The effects would be small, but could “increase the volatility of subnational or item-specific indexes”, it said. Last month it said it would stop collecting and publishing many items in its producer price index. Given the sudden interest in the “taco trade”, the suspension of tortilla manufacturing price indices will hurt.Painful as these errors and omissions have been for the BLS, its price and employment survey data are still highly regarded. The same should not be said for perhaps its flagship labour market product: non-farm payrolls. Each month analysts predict the gain in jobs numbers to the nearest thousand. The Federal Reserve also watches the figures extremely closely. Then everyone reacts positively or negatively depending on whether these expectations were met or not. By the following month, those figures are forgotten and the process starts again. The problem is that the BLS’s preliminary estimate for the change in non-farm payrolls is poor. Since 2023, for example, non-farm payroll growth has almost always been revised down. This happens in the following two months after the initial figures are released, and again some time later when the data is benchmarked against a more accurate survey, the Quarterly Census of Employment and Wages. This uses administrative data from US states’ unemployment insurance programmes. The revisions are large, at almost 50,000 a month between the latest data and the first estimate. That is more than a 20 per cent average downward revision to date.Some content could not load. Check your internet connection or browser settings.The latest QCEW has again shown jobs growth to be slower in the period between April and December 2024 than in the original non-farm payroll figures, so the downward revisions will grow. Analysts at Barclays reckon that once the latest benchmarking process has been completed early next year, the monthly job gains for the latest year will be revised down from about 150,000 a month to 80,000. Some content could not load. Check your internet connection or browser settings.Had those figures been published as a contemporary record last year, there would probably have been even more misplaced concern about rising unemployment and a coming US recession. Barclays says that the most likely cause is a fall in immigration reducing the sustainable pace of jobs growth. Of course, that judgment is for the Fed to make. But it would benefit from better data in doing so. Obviously Not SoundAcross the Atlantic, the UK’s Office for National Statistics would love to have the BLS’s problems. With a review into its culture and leadership pending, its chief statistician Ian Diamond quit suddenly in May. This has not stopped errors and unreliable survey data. The most embarrassing came in the inflation figures for April. Data on vehicle taxation was incorrectly weighted when given to the ONS, but no one appeared to check whether the figures passed the sniff test. Outside observers quickly said they did not and the statistical agency only confessed after the FT highlighted these concerns.This error will be corrected in the May inflation figures, published on Wednesday. As the chart shows, they are far from trivial. Some content could not load. Check your internet connection or browser settings.The surprise about the price data blunder was that it came from the part of the ONS thought to be reasonably well functioning. The known disaster area is the jobs data, where the ONS is battling with a broken Labour Force Survey. This prevents the Bank of England from knowing what is happening to participation in the labour market, where the LFS is the only source of information.The ONS has recently been boasting that there have been “clear improvements” in the data and survey response rates, shown in the chart below. I’ll leave you to judge whether a 35 per cent response rate for the first wave of interviews, falling to less than 14 per cent by the fifth, is good enough. Some content could not load. Check your internet connection or browser settings.If the ONS wants to avoid getting known as “Only Nearly Statistics”, its suggestion to its regulator last week that a badge of quality be removed from another of its products, the Wealth and Assets Survey, didn’t help. The WAS is used to assess how much wealth there is in the UK and who holds it. Dirty laundry The UK and the US’s statistical agencies should be praised for airing their dirty laundry so publicly. Economic statistics are getting harder to collect and, as UBS chief economist Paul Donovan says: “Just because some statistical agencies do not publicly admit their errors does not mean the errors do not exist.” China regularly deletes data series it finds uncomfortable, for example. While not an error, EU statistics can give mad results. The latest GDP growth figures for the first quarter doubled from 0.3 per cent to 0.6 per cent after the first revision. Most of this surprise jump came from Ireland, whose quarterly growth rate was first estimated at 3.2 per cent but then jumped to 9.7 per cent. Yes, you read those figures correctly. And, for US readers, these are not annualised. Some content could not load. Check your internet connection or browser settings.It’s all about front running tariffs, particularly in the pharmaceutical sector, alongside the regular problem of Ireland acting as something of a tax haven for US companies “locating” business activity there. The latter does not reflect genuine economic activity in Europe. And as Ireland’s Central Statistics Office highlights, a better measure of underlying activity called “modified domestic demand” grew only 0.8 per cent. What can we do?I’ll come back and look at some specific suggestions in future articles, but here is a quick guide to navigating the more difficult world of data we now confront.Do not get excited by or rely solely on a single statistic to make important decisions. In a world of dodgy data, you need to see corroborating evidence and broad trends to take decisions. In monetary policy, that might make you late.Governments should not skimp on funding statistical agencies, which are extremely cheap relative to the costs of data errors. They should also change laws and bang heads together so that the vast quantities of quality administrative data they hold can be used more easily for economic statistics.Do not use one source of data, but seek to extract a common signal from multiple sources. All central banks are now doing this. The models required will differ, depending on the problem that needs addressing, but modern econometrics helps generate unbiased indicators because humans are always prone to cherry-picking from a menu of competing statistics. Examples of this include the FT core inflation indices and the Chicago Fed’s new unemployment nowcast, “Churn”.What I’ve been reading and watchingA chart that mattersThe US CPI inflation figures for May were benign, with little sign of tariffs driving prices higher. The Fed will find this encouraging, but is still likely to think that it is too early to declare that tariffs’ effects will disappear somewhere in the supply chain. The monthly annualised change in banana prices shot up, as did prices of major appliances and toys. This is far from an inflationary surge in overall prices, but this early sign of aggressive pricing behaviour in a few areas should make us cautious. Some content could not load. Check your internet connection or browser settings.Central Banks is edited by Harvey NriapiaRecommended newsletters for you Free Lunch — Your guide to the global economic policy debate. Sign up hereThe Lex Newsletter — Lex, our investment column, breaks down the week’s key themes, with analysis by award-winning writers. Sign up here More

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereGood morning and welcome back to FirstFT. Here’s what’s on today’s agenda: Lutnick hails Trump’s $5mn investor visaUS president exits G7 summit early How the culture wars are remaking advertisingFT writers and critics choose their favourite reads of the year so farWall Street executives are counting on their traders to offset tepid deal fees this quarter, after Donald Trump’s trade war threats made markets gyrate.What is the evidence? Senior bankers say the market swings prompted by the US president’s “liberation day” declaration of higher tariffs led to a flurry of buying and selling by investors, even as corporate boardrooms put deals on ice. “Trading continues to be helped by volatility, with equity trading likely to continue to outperform fixed-income trading,” said Mike Mayo, a banking industry analyst at Wells Fargo.What about other business lines? The continued surge in equity trading is expected to be partly offset by slower growth in revenue from desks that trade fixed income, foreign exchange and commodities. Wall Street banks are also braced for a drop in fees from advising companies on mergers and acquisitions, share and debt sales, and IPOs, due to a reluctance to launch big deals without more clarity on US trade policy. Read the full story.Here’s what else we’re keeping tabs on today:G7 summit: World leaders will conclude talks in Canada without Trump, who left early to manage the US response to the Israel-Iran conflict. The FT blog has live updates here.Economic data: The US commerce department’s Census Bureau reports retail sales for May. Meanwhile, the labor department’s Bureau of Labor Statistics reports import and export prices for last month. Interest rates: Chile‘s central bank is likely to keep its benchmark interest rate unchanged at 5%.The FT Women in Business Summit 2025 takes place today. You can register here and watch it live here. Five more top stories1. Iran has told other countries in the Middle East that it will only agree to negotiate an end to the war with Israel and resume talks over its nuclear programme if Israeli forces halt their bombing campaign against the Islamic republic, according to diplomats. One diplomat in the region said Tehran’s message in discussions with neighbouring Gulf states was “very clear”. Here’s the latest on the diplomatic efforts to end the war.2. Senate Republicans released a long-awaited version of Donald Trump’s flagship tax bill yesterday, setting up a possible clash with House Republicans over the so-called “big, beautiful bill”. Here’s more on the draft bill, including keeping the “Salt” tax deductions at the current level of $10,000.3. The EU has refused to hold a flagship economic meeting with Beijing ahead of a summit next month because of a lack of progress on numerous trade disputes, people familiar with the matter said. The bloc’s stonewalling of the talks underlines the deep divisions between the sides despite Beijing’s efforts to court Europe.4. Nearly 70,000 people have signed up for the new golden Trump Card, a visa scheme led by commerce secretary Howard Lutnick that will grant the “world’s best and brightest” legal residency in the US at a cost of $5mn. The commerce secretary said the Trump Card will appeal to business leaders and companies seeking legal residency in the US for themselves or their employees. Here’s how the scheme works.5. Central banks expect to keep buying more gold this year, and anticipate their holdings of US dollars will fall over the next five years, according to a survey of global monetary authorities. Gold prices have surged 30 per cent since January and doubled in the past two years, as global uncertainty and market volatility have propelled investor demand for bullion.The Big Read© FT montage/DreamstimeAfter years of corporate messaging that highlighted purpose and inclusion, the advertising industry is shrinking away from making socially progressive statements as the movement intensifies against diversity, equity and inclusion. Daniel Thomas reports from the annual Cannes Lions advertising festival on how the culture war is remaking the sector.We’re also reading and listening to . . . Chart of the day Some content could not load. Check your internet connection or browser settings.Oil markets have shrugged off Israel’s threat to topple the Iranian regime, with crude exports from the Middle East so far unaffected by the escalating conflict. About 21mn barrels of oil from Iran, Iraq, Kuwait, Saudi Arabia, Qatar and the United Arab Emirates pass daily through the Strait of Hormuz, a narrow but critical waterway separating the Islamic republic from the Gulf states. About one-third of the world’s seaborne oil supplies pass through it and Iran has historically threatened to block it in times of conflict.Take a break from the newsFrom politics, economics and history to art, food and, of course, fiction — FT writers and critics choose their favourite reads of the year so far. More

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Chinese brands are reshaping the global marketplace and extending their influence among international consumers — even as US tariffs cast uncertainty over the year ahead. BYD’s electric vehicle sales have overtaken Tesla’s in Europe, and in Brazil seven out of 10 fully electric cars sold are made by BYD. Xiaomi, the world’s third-largest phonemaker, which has put its logo on everything from suitcases to smart washing machines, just added EVs to its list of planned exports. And this year’s must-have handbag accessory, the Labubu doll, is a Chinese export by Pop Mart, which generates almost 40 per cent of its sales outside China. According to agencies focused on Asia-Pacific brands, the number of Chinese companies pursuing international sales and entering new markets has grown significantly over the past 18 months. “There’s been a pretty massive acceleration led by companies seeking growth outside of China — a highly competitive market where growth has slowed,” says Chris Reitermann, chief executive of Ogilvy Asia-Pacific and China president at WPP.He adds that the shift towards ecommerce outside China has made it easier for Chinese brands to expand abroad without having to spend large sums on distribution. Equally, Chinese companies tend to be much more digital-focused and quick to incorporate artificial intelligence, which is reflected in their spending on digital marketing. “Platforms like TikTok and Facebook have been key to Chinese brands expanding abroad,” he adds. Ami Qian, chief transformation officer and head of client business at Japanese agency Dentsu, says Chinese companies’ overseas expansion has led to the “Chinese way” of digitally focused brand-building becoming more defined.More from this reportLast summer, the Paris Olympics and the Euro 2024 football tournament provided valuable opportunities for Chinese companies to boost their global profile. While Mengniu, the dairy company, and ecommerce group Alibaba have long-term sponsorship deals in place, newer sponsors included smartphone maker Vivo and BYD. Smaller brands, such as drinks companies Heytea and Chagee, set up tea rooms to entice Olympic spectators. At Euro 2024, five of the 13 official global sponsors were Chinese: BYD; Ant Group, the parent of Alipay; Vivo; television manufacturer Hisense; and AliExpress, Alibaba’s ecommerce arm, which also appointed former England footballer David Beckham as a brand ambassador for the competition.Reitermann, who has worked with Chinese companies for more than 20 years, says brands such as BYD, which are gaining significant global recognition and awareness, are just starting their branding journey. BYD’s marketing is based around “telling consumers about specific features” of the product rather than building the brand, he says. While the cars are relatively new and “super competitive” now, when the product is more established and perhaps less competitive, branding will help by having built loyalty among consumers.China’s global relations are a factor driving which markets brands are targeting. “They tend to go where there is less friction, where China has friendly relations,” says Scott Spirit, chief growth officer and executive director at marketing agency S4 Capital.That is the reason for the shift to the Middle East, Brazil, Indonesia and south-east Asia — where a few years ago Germany, the UK and Italy would have been the main focus. “The market sellers in Yiwu are all learning Arabic and Spanish now,” Spirit adds, referring to the vast wholesale market in China’s Zhejiang province.Last year, Alibaba’s fastest-growing division was international ecommerce, which includes platforms such as AliExpress, Lazada (south-east Asia), Daraz (south Asia) and Trendyol (Turkey). This year the group is pivoting towards AI and cloud services, but Alibaba remains the second-highest ranked global Chinese brand, at 29th out of 100 global brands, according to Kantar.Tencent holds the highest ranking, at 11th. The tech giant scored a brand win earlier this year when its WeChat platform was removed from the US Trade Representative’s list of counterfeit sellers, which it had been on since 2022. Danny Marti, head of public affairs and global policy at Tencent and intellectual property (IP) tsar under the Obama administration, says the removal recognised WeChat’s progress in IP protection. WeChat recently published a brand protection report for 2024 with details of how users report IP infringements in private chats and groups. “IP protection for the brands on our platforms is something we take seriously,” Marti says. Tencent’s broader brand recognition stems from its role as a major investor, creator, producer, distributor and licenser of TV, video, film, games, books and comic books, he adds. “Everything we do is dependent on a strong, well-functioning IP system within a regulatory framework. Effective IP protection underpins Tencent’s entire business model,” Marti says. Marti is optimistic about the global outlook for Chinese brands. “Consumers everywhere want high-quality content, great products and great user experience. Asia is home to most of the world’s population and the digital era has fundamentally shifted global influence,” he says. “It’s no surprise we’re seeing Asian brands in global markets. Why wouldn’t there be if they bring innovation and creativity that consumers value?” More