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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Christine Lagarde has discussed cutting short her term as European Central Bank president to become chair of the World Economic Forum, according to WEF founder Klaus Schwab.Schwab, who left the WEF last month following misconduct allegations that he denies, said that practical arrangements — such as an apartment in Switzerland — had been made for Lagarde to take over the organisation before her tenure at the ECB ends in 2027.Any move by Lagarde to accelerate her departure from the ECB could trigger a succession race for the EU’s top monetary authority.Schwab told the Financial Times that Lagarde had been at the centre of a plan both had discussed for “several years” for her to replace him as head of the WEF, the body behind the annual meetings of the business and political elite at the Swiss ski resort of Davos.The latest conversation was in early April, when Schwab visited Lagarde in Frankfurt “to discuss with her the leadership transition [at WEF] with myself remaining chair until she was ready to take over, at the latest, early 2027”, he said in an interview.Schwab, left, and Lagarde at a WEF meeting in Davos in 2013 More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.European companies in China have ranked a domestic slowdown in the world’s second-largest economy as a bigger challenge for them than the trade war, underlining the hurdles for Beijing as it negotiates with the US on tariffs. A record number of the 503 companies surveyed by the EU Chamber of Commerce in China also said doing business in the world’s second-largest economy had become more difficult and were pessimistic about future profitability. “Now, by a wide margin, it is China’s economic slowdown that is seen as having the greatest impact on future business,” said Jens Eskelund, EU Chamber of Commerce in China president, ahead of the launch of the survey on Wednesday.China’s economy lost a big growth driver during the pandemic when Beijing cracked down on the property sector, leading to a slump in domestic demand and persistent deflationary pressures. The country’s producers have increased exports to offset weak onshore demand but tensions with trading partners, particularly the US, which has imposed tariffs of more than 40 per cent on Chinese goods, are threatening to curtail growth in the sector.Over the past decade, China has also extensively pursued industrial policies that have led producers to expand in sectors where European manufacturers were among the world leaders, ranging from machine tools to industrial robots, shipping and automotives. The EU study found that 73 per cent of members reported that doing business in China became more difficult in the past year — the fourth year in a row of deterioration. Of the survey respondents, 71 per cent cited China’s economic slowdown as having the largest impact on their businesses, followed by US-China tensions at 47 per cent. Optimism about near-term future growth and profitability in China reached record low levels, of 29 per cent and 12 per cent respectively.The importance of China for European businesses’ global profits also diminished. Seven of 10 respondents said earnings before interest and tax (Ebit) margins in China were less than or equal to their worldwide average. Despite this, many said they were still sourcing a growing number of components from China because of its highly competitive pricing. “So it’s a little bit counter-intuitive that you have this movement where companies are super pessimistic, they are not earning money, there is a politicisation, there are market access barriers, but for economic reasons we are beginning to see that you simply need to have a presence in China to source components in order to stay competitive,” said Eskelund.Despite government pledges to improve the business environment for foreign investors, a record 63 per cent said they had missed business opportunities last year owing to regulatory and market barriers. Over the next five years, 44 per cent expected the number of regulatory obstacles they faced to increase.The findings mirror some of those from other foreign chambers of commerce. The British Chamber of Commerce in China in a recent position paper said “major market access challenges remain”.It cited factors including China’s lack of recognition of professional qualifications to its licensing regimes and cross-border data rules as in need of reform.But British business had seen “an increased willingness on both sides to engage” to discuss the commercial relationship, said Chris Torrens, vice chair of the British chamber. 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. Today we’ll be covering:Musk’s rebuke of Trump’s “big, beautiful” billMcKinsey’s steep headcount cutsBrazil’s diplomatic battle against US sanctions on one of its judgesWhat makes the perfect cheeseburgerGood morning. Elon Musk has slammed US President Donald Trump’s “big, beautiful” tax bill, claiming it “undermines” the so-called Department of Government Efficiency’s cost-cutting work by increasing the fiscal deficit.What Musk said: In a preview of an interview with CBS Sunday Morning released late yesterday, the Tesla chief executive said he was “disappointed to see the massive spending bill, which increases the budget deficit . . . and undermines the work that the Doge team is doing . . . I think a bill can be big, or it can be beautiful. But I don’t know if it can be both.”Why it matters: The comments are Musk’s strongest rebuke of the Trump administration to date, and reveal one of the tensions within the GOP between Trump and Republicans who want the administration to be more hawkish on the deficit. The president had to browbeat several congressional holdouts to back the bill, which non-partisan groups say will increase public debt by $3.3tn. Musk pulled back from his role at Doge last month to focus on his business endeavours, saying he had “done enough” to support political causes. Art of the barter: The president has offered Canada free protection from the US’s ambitious “Golden Dome” missile defence shield if the country relinquishes its sovereignty.Touchdown troubles: Musk’s company SpaceX suffered another setback yesterday, after its Starship rocket failed to deliver its payload and exploded on re-entry.Here’s what else we’re keeping tabs on today:Economic data: The US Federal Reserve publishes minutes from its last rate-setting meeting.Oil: Opec and the non-Opec ministerial monitoring committee meet to review production output policy. Results: Nvidia, HP and Salesforce report.Five more top stories1. European Central Bank President Christine Lagarde discussed cutting short her term at the bank to become chair of the World Economic Forum, the think-tank’s founder Klaus Schwab said. Schwab told the Financial Times that a Switzerland apartment had already been reserved for her. An ECB spokesperson said Lagarde was “determined to complete her term”. 2. McKinsey has cut more than 10 per cent of its staff in the past 18 months, reversing a big expansion plan that peaked during the pandemic. The job cuts, among the largest in McKinsey’s nearly 100-year history, reflect the sharp slowdown in revenue growth across the consulting market.3. Listed companies are increasingly buying bitcoin, after its huge rally and the Trump administration’s favourable stance towards digital assets tempt investor appetite. Many firms are trying to emulate the success of software company Strategy, which has accumulated 580,000 bitcoin and commands a market value of more than $100bn.4. Saudi Arabia’s new state-owned artificial intelligence venture will seek investment from US Big Tech companies as it aims to turn the kingdom into a global AI hub. Humain’s chief executive said he was in talks with OpenAI, Musk’s xAI and Andreessen Horowitz. Andrew England and Ahmed Al Omran have more details from Riyadh.5. A US private military contractor has hired an obscure Palestinian group to staff its aid distribution centres in Gaza under a controversial, Israel-backed scheme. Safe Reach Solutions — run by an ex-CIA officer — had approached prominent local businessmen to run the hubs, but they refused to participate, arguing that doing so would amount to forced displacement of people in the enclave.The Big Read© FT montage/Getty Images/Rory GriffithsLaunched a decade ago, Beijing’s “Made in China” industrial policy sought to achieve 70 per cent domestic market share across Chinese manufacturing of “core basic components and key basic materials” by 2025. Today, its aggressive investments in domestic production have successfully established the country as a supply chain leader — but at what cost? We’re also reading . . . Curiosity’s value: We must recognise and protect the pipelines that lead from scientific research to real-world benefit, writes Anjana Ahuja. 401k plans: Should ordinary US retirement accounts be investing in private assets? Even some in private equity are worried, writes Brooke Masters.Brasília’s battle: Brazil is fighting to stop the US imposing sanctions on one of its supreme court judges, who is overseeing the prosecutorial case against ex-president Jair Bolsonaro for allegedly plotting a coup.Chart of the dayRussia’s wartime economy has padded out pay packets, according to FT analysis — and bolstered domestic support for the war in Ukraine.Some content could not load. Check your internet connection or browser settings.Take a break from the newsWhat makes the perfect cheeseburger? One chef says it’s all about the patty: “You need the perfect synthesis of aged beefy funk, bold assertive savour, a firm meaty density, but a forgiving and indulgent yield on the bite.” HTSI grills the experts.A double cheeseburger at Buster’s in Brixton More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.India has offered “deep” cuts to its import tariffs on a swath of goods in talks with the US, but is seeking to retain its high levies on sensitive agricultural commodities such as foodgrains and dairy products, according to two people with knowledge of the negotiations. The government of Prime Minister Narendra Modi is racing to secure a preliminary trade agreement with the US to forestall President Donald Trump’s threatened imposition of a 26 per cent “reciprocal tariff” on all Indian goods from July 9. “There is a possibility of a very deep tariff reduction from India under the bilateral trade agreement,” said one of the people familiar with India’s stance on the talks, who asked not to be identified because they were confidential. “But this is subject to a very balanced outcome for both sides.”The people with knowledge of the talks declined to give details of the range of US goods on which New Delhi had offered to substantially cut tariffs because the negotiations were at an “early stage” and might be complicated by any backlash from affected industries.But they said India’s trade negotiators had signalled flexibility on less sensitive farm products such as almonds, which are currently subject to tariffs of up to 120 per cent, and New Delhi might also cut its tariffs of 2.5 to 3 per cent on imported oil and gas. Indian trade officials have privately said any opening to the US would in large part mirror that seen in other recent trade pacts. In a deal with the UK agreed this month, India agreed to cut tariffs on alcoholic spirits, cars including electric vehicles and car parts, and engineering goods. Some content could not load. Check your internet connection or browser settings.The descriptions of India’s offer so far suggest it will fall far short of expectations voiced by Trump last month, when he said: “They’ve offered us a deal where basically they’re willing to literally charge us no tariff.”India’s trade negotiators were taking a firm line on retaining its hefty duties on core agricultural commodities such as wheat, rice and maize and on dairy products, sectors that employ millions of Indians, the two people said.India currently imposes tariffs of 70-80 per cent on US rice and of 30-60 per cent on American dairy products.India Business BriefingThe Indian professional’s must-read on business and policy in the world’s fastest-growing big economy. Sign up for the newsletter here For its part, New Delhi has pushed Washington to cut US tariffs for goods made by labour-intensive industries including gems and jewellery, textiles, footwear, leather and handicrafts, the people said. Modi’s government would also push for social security payment exemptions for Indian workers posted to the US on short-term visas. India has asked Washington to grant this before and won a similar concession from the UK in the agreement announced this month. Some content could not load. Check your internet connection or browser settings.India’s commerce ministry declined to comment. The White House, US commerce department and office of the US trade representative did not immediately respond to requests for comment.Trump in early April paused for 90 days the “reciprocal tariffs” he imposed on India and scores of other countries, but retained a blanket import duty of 10 per cent. India, which has some of the world’s highest average tariffs, is now rushing to secure a framework agreement with the US. Indian commerce minister Piyush Goyal met US counterpart Howard Lutnick and US trade representative Jamieson Greer in Washington last week.The two countries say they plan to agree the first tranche of a bilateral trade agreement by the autumn and to more than double bilateral trade to $500bn by 2030.India, the world’s largest milk producer, has successfully pushed to protect big, politically sensitive sectors such as dairy in other recent trade pacts, including one with Australia in 2022. India has almost 200,000 dairy co-operative societies totalling about 15mn members, mainly small herding families.Some content could not load. Check your internet connection or browser settings.India and the US have two of the world’s three largest farming sectors, but New Delhi has since independence in 1947 kept high tariff walls around agriculture, which employs nearly half of the workforce of the world’s most populous country. Agriculture is a sensitive topic for the Modi government, which was in 2021 forced to abandon legislation reforming the sector after mass farmer protests.India has made similar demands to protect dairy and other sensitive farming sectors in trade talks with the EU, according to senior European diplomats and Indian officials in New Delhi. However, the negotiations with Washington are particularly challenging as the US is India’s largest trading partner, and Trump has frequently criticised its high import levies, once even calling it a “tariff king”.Trump last week criticised iPhone maker Apple’s plans to expand manufacturing in India, which has already helped make mobile phones one of the country’s biggest exports to the US. More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldUS stocks rallied after President Donald Trump indicated that trade talks with the EU were progressing in a “positive” direction, a day after agreeing to delay his threatened 50 per cent levies on the bloc.The S&P 500 closed 2.1 per cent higher on Tuesday, with economically sensitive consumer cyclicals and technology companies among the biggest winners. All 11 of the benchmark index’s sectors ended the session in positive territory.The tech-heavy Nasdaq Composite added 2.5 per cent. In currency markets, the dollar index rose 0.4 per cent.The moves came as data released after the market open showed US consumer confidence rebounded in May after five consecutive months of declines, and hours after Trump said on social media that he had been informed “that the EU has called to quickly establish meeting dates” with the US.“This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America,” the president said in a post on Truth Social.Trump over the weekend agreed to delay his proposed 50 per cent tariffs on the EU and extend trade negotiations until July 9 following a conversation with European Commission president Ursula von der Leyen. On Friday he had attacked the EU for what he alleged were unfair trade practices. “It’s put a rocket on the negotiations and got the Europeans to respond in a much more proactive way,” said Caroline Shaw, portfolio manager at Fidelity International. “The pace of the deal seems important to the markets.”Europe’s region-wide Stoxx Europe 600 has risen 1.3 per cent this week, more than wiping out its decline on Friday after Trump’s first suggestion of the 50 per cent tariff.Germany’s Dax closed 0.8 per cent higher on Tuesday to hit a record high.“Everyone has become convinced that Trump’s tariff talk is all sound and fury that signifies nothing,” said Peter Tchir, head of macro strategy at Academy Securities.“There will be tariffs, but we’re not going to set up these massive tariffs that are going to be disastrous to the economy. We are not going to see 50 per cent levels.”A flurry of US tariff announcements beginning in early April had weighed on consumer and business sentiment across the world’s biggest economy, roiling American equity markets and dragging the dollar lower against other major currencies.But May’s consumer confidence survey, which was published on Tuesday, showed a sharp recovery in sentiment. “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards,” said Stephanie Guichard, senior economist at The Conference Board. “The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index — business conditions, employment prospects and future income — rose from their April lows.”Yields on US Treasuries were lower, indicating higher prices, across the spectrum of maturities. The yield on the 30-year Treasury, which has risen sharply over the past month amid fears about a ballooning US deficit, fell by 0.09 percentage points to 4.94 per cent on Tuesday.The Treasury moves followed a broader recovery in government bond prices on Tuesday after Japan said it was considering curbing its bond issuance. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Britain’s only two bioethanol production plants are facing closure after the UK agreed to remove tariffs on US ethanol imports under its recent trade pact with America, the industry has warned.The so-called “prosperity deal” signed with US President Donald Trump on May 8 offered US ethanol producers a 1.4bn litre tariff-free quota, equivalent to the UK’s entire annual demand for the product, which is used to make petrol greener.UK producers have been locked in talks with Sir Keir Starmer’s government over a support package to save the industry from being swamped by US imports when the current 19 per cent tariff wall is removed. Three major trade bodies reliant on UK bioethanol industry have written to business secretary Jonathan Reynolds, warning that unless ministers offer financial support the domestic industry will not survive.“If the government does not step in and provide the support that is needed by the end of June it will be too late, and the plants will inevitably close,” they said in a letter seen by the Financial Times. The industry intervention comes nearly two weeks after the Department for Business and Trade announced it was “open to discussion” over support for the plants, recognising the need for “urgent next steps”.Industry figures said the US-UK deal, which was the first to be signed with any trade partner by the Trump administration, had blindsided the Department for Environment, Food and Rural Affairs. In the deal, the UK won a partial reprieve on auto tariffs when a 25 per cent tariff on imported cars was cut to 10 per cent for the first 100,000 vehicles exported, but conceded tariff-free quotas on both ethanol and 13,000 tonnes of beef. The letter from the Renewable Transport Fuel Association was also signed by the Food and Drink Federation and the Agricultural Industries Confederation, which both rely on byproducts from the plants, including carbon dioxide gas and animal feed. Bioethanol is used in the E10 blend of petrol commonly used in Britain, high-protein animal food and CO₂, which is used in the soft drinks and meatpacking industries.The trade groups warned that allowing the plants to close would leave the UK vulnerable to CO₂ shortages of the kind seen in 2018, 2021 and 2022, and send a negative signal to investors about its plans to develop a sustainable aviation fuel industry.“We’re on the verge of losing critical UK infrastructure unless the government acts swiftly. These plants need to know there will be support and very soon,” added Gaynor Hartnell, chief executive of the Renewable Transport Fuel Association.“The impacts will be felt in the supermarket and at the pub because of the CO₂, by farmers in the North East whose feed wheat price will fall, by motorists and the environment, and certainly by the government in terms of its lost credibility,” she added.Bioethanol is produced primarily from local wheat, providing the country’s arable farmers with an important market, using about 1.2mn tonnes annually. The letter warned shutting the plants could cost farmers up to £200mn a year as a result of a feared price slump.The bosses of the two plants — Ensus in Wilton on Teesside, and Vivergo in Saltend, near Hull — have warned the deal posed an “existential threat” to their future. Grocery conglomerate Associated British Foods, which owns the larger Vivergo plant in East Yorkshire, cautioned on Tuesday that it would have to shut down production if the government did not intervene. “The removal of tariffs on US ethanol, combined with ongoing regulatory obstacles, has left us unable to compete on a level playing field,” said Vivergo Fuels managing director Ben Hackett in a statement. Prior to the deal, the UK’s industry was already struggling to compete against cheaper US bioethanol, which is produced primarily from maize in the corn belt states of the Midwest.The industry said it had requested both short-term financial support and regulatory changes from the government that would increase demand for bioethanol. “So far, nothing has been forthcoming,” Hackett added.The business department said it was “working closely” to understand the impact of the UK-US trade deal on the UK’s two bioethanol companies and was discussing options for support.“The business secretary has met members of the bioethanol sector and senior officials continue to consider what options may be available to support the impacted companies,” a spokesperson added. More