Aurelia Butler

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.UK entrepreneurs and business owners remain in limbo following the announcement of the trade deal between the US and UK, as the plan to help small and medium enterprises “remains unclear”, according to one UK business organisation.The agreement announced on Thursday was described by US President Donald Trump as a “landmark economic deal” between the two countries. But, while it included cuts to punitive tariffs on car and steel exports, the ultimate scope of the deal was limited for the UK business sector, since it failed to reverse the flat 10 per cent levy that applies to most goods. The Federation of Small Businesses, a trade body, said small businesses are reporting “low confidence” as they are forced to carry out “damage control” in the aftermath of the disruption caused by Trump’s April 2 tariff announcements. Tina McKenzie, policy chair at FSB, said: “We welcome the fact that an initial US-UK economic agreement has been achieved, which is significant in and of itself. “But with broad 10 per cent tariffs likely remaining in place, we need to see what’s in the plan to boost SME trade — and that remains unclear.”McKenzie said that small firms have faced widespread disruption since the tariffs came in. “They are dealing with a falling demand for their goods and have had to cut their range — something that’s turning what should be growth into damage control,” she added.McKenzie’s thoughts were echoed by FSB international affairs director, Lucy Monks, who added it was “difficult” seeing the continuation of the barriers put in place last month with the introduction of tariffs.Global trade tensions caused the Bank of England to downgrade some of its UK economic forecasts this week. In a speech on Friday, governor Andrew Bailey said: “When I go around the country in the UK, businesses say to me: ‘We are delaying investments because we are just too uncertain about what the world is going to look like’,”.However, for larger firms the initial deal has been welcomed as a sign of improvement in trade relations with the US, with the British Chambers of Commerce noting that many businesses will meet this news with a “huge sigh of relief,” but acknowledged that a push is needed to assist all sectors.“This must not be the end of the process; we must continue to push the argument for free and fair trade across all economic sectors and that tariffs are a lose-lose position,” Shevaun Haviland, director-general of the BCC, said.Andreas Adamides, chief executive of entrepreneur network Helm, was optimistic about the deal. “For UK businesses, this agreement opens floodgates of opportunity previously held back by tariffs and regulatory friction.”“The removal of customs red tape means British innovation can move more efficiently into the world’s largest economy, creating a powerful current that will lift businesses on both sides of the Atlantic,” he added.Speaking to workers at the Jaguar Land Rover factory in the West Midlands on Thursday, UK Prime Minister Sir Keir Starmer said this deal was the start of the process. “This is jobs saved, jobs won, but not job done, and our teams will continue to work to build on this agreement,” he said. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Germany’s Dax index climbed to a record high on Friday, becoming the first major European benchmark to recoup the losses sparked by Donald Trump’s tariff threats, as investor optimism over US trade deals boosted the region’s markets.The Dax rose 0.6 per cent, after Thursday’s announcement of a US-UK trade deal was followed by a call between the US president and Germany’s new chancellor, Friedrich Merz, in which they agreed on the need to resolve trade disputes quickly. Merz, who warned after his election victory that Europe needed to “achieve independence” from the US, also struck a conciliatory tone with Trump, saying Washington remained an “indispensable friend and partner”. Both leaders had agreed to meet in the near future, the German government said.Officials from the US and China are also scheduled to meet this weekend for talks over the trade war. Treasury secretary Scott Bessent and trade representative Jamieson Greer will represent the US, while China’s delegation will be led by vice-president premier He Lifeng.Trump wrote on his Truth Social network that an 80 per cent tariff on China “seems right”, signalling a potentially smaller reduction in the punitive levies than investors had anticipated. The S&P 500 gave up early gains to trade little-changed on Friday. The Dax’s return to all-time highs also reflects the wave of enthusiasm for German stocks sparked earlier this year by Merz’s plans to increase borrowing and inject hundreds of billions of euros into the country’s military and infrastructure.Emmanuel Cau, head of European equity strategy at Barclays, said the trade news had given a broad boost to stock markets.But he added: “There is an extra degree of excitement in Germany as part of this revival narrative and the arrival of the new government. There’s more and more interest in Germany.”German bonds, which have rallied in recent weeks while investors were seeking havens from market turmoil, gave up some of those gains as riskier assets outperformed.The yield on 10-year German government bonds increased 0.04 percentage points by Friday afternoon, rising to 2.56 per cent. Bond yields move inversely to prices. European stocks have outshone their Wall Street peers this year because of optimism over defence spending combined with growing fears over the impact of Trump’s trade war on the US economy. The Dax is up nearly 18 per cent this year. Defence stocks have performed strongly following the spending commitments, with Rheinmetall up more than 170 per cent.The German stock market has also benefited from a strong performance from European banks. Deutsche Bank shares have risen 43 per cent this year. While US stocks have also recovered their losses since Trump’s “liberation day” tariff announcements in early April, the S&P 500 benchmark remains well below its February all-time high and is down nearly 4 per cent so far in 2025.Europe’s outperformance of Wall Street this year has partially narrowed a large valuation gap between US and European equities that had widened in recent years due to a relentless rally in US tech stocks.“Peak trade fear is behind us,” said Laura Cooper, global investment strategist at Nuveen. But she added that “bouts of choppy price action” should be expected as the disruption from tariffs washes through the global trading system.But asset managers have also urged caution, given Trump’s strong rhetoric on tariffs and broader concerns about US policymaking. “For now, this [rally] is holding,” said Kevin Thozet, a member of Carmignac’s investment committee. “But it is not evident that it will continue this way for a very long time. Peak Trumpism may be behind us but uncertainty is still there.” More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldDonald Trump has said an 80 per cent tariff on Chinese imports “seems right” as the US president stakes out a position ahead of talks between Washington and Beijing this weekend.Trump posted on his Truth Social platform on Friday: “80% Tariff on China seems right! Up to Scott B” — a reference to a meeting due to start on Saturday in Geneva between US representatives led by Treasury secretary Scott Bessent and Chinese officials.Trump also posted: “CHINA SHOULD OPEN UP ITS MARKET TO USA — WOULD BE SO GOOD FOR THEM!!! CLOSED MARKETS DON’T WORK ANYMORE!!!”Washington and Beijing have been locked in an escalating trade war since Trump launched steep tariffs on all major trading partners in early April, rattling the global economy. Many US allies chose to try and negotiate with the Trump administration rather than hit back with their own tariffs. However, Beijing retaliated with levies on US goods, prompting Trump to ratchet up tariffs on China to 145 per cent.Speaking from the Oval Office on Thursday, Trump suggested the US was open to lowering its tariffs on Chinese goods following the meeting between US and Chinese officials in Switzerland this weekend. Earlier reports had indicated that the Trump administration was aiming to cut tariffs below 60 per cent.People familiar with the matter said the figures Trump floated in his Truth Social post were probably a negotiating tactic ahead of Saturday’s talks rather than an actual target.Trump’s comments on the US-China trade war in recent months have repeatedly proved unreliable, including claims that he spoke to China’s President Xi Jinping since imposing tariffs — which people familiar with the situation said was not the case.  Bessent said earlier this week that his meeting with his Chinese counterpart He Lifeng was not intended to negotiate a big deal but was an effort to de-escalate the trade war. Bessent has said that the current high level of tariffs that the US and China have imposed on each other were “not sustainable”.The meeting with Chinese officials comes just days after the US struck a limited trade deal with the UK. The US has been locked in negotiations with multiple countries for the past month, since Trump paused his tariffs for 90 days on most trading partners. On Friday, Trump wrote on social media that there were “Many Trade Deals in the hopper, all good (GREAT!) ones!”Privately, however, many foreign officials have indicated that talks with the US appear to be progressing slowly, with US officials unable to articulate specific demands.The US’s deal with the UK left Trump’s 10 per cent baseline tariff in force, although the UK will be allowed to export 100,000 cars to the US free from Trump’s extra 25 per cent tariff on auto imports.Despite the US’s steep tariffs on China, data on Friday showed that China’s exports grew sharply in April, strengthening Beijing’s hand ahead of the talks.The strong performance came as Chinese companies diverted trade flows to south-east Asia, Europe and other destinations following the imposition of the tit-for-tat tariffs. Exports rose 8.1 per cent in dollar terms compared with a year earlier, China’s customs said. More

This article is an on-site version of our Swamp Notes newsletter. Premium subscribers can sign up here to get the newsletter delivered every Monday and Friday. Standard subscribers can upgrade to Premium here, or explore all FT newsletters“History is bunk”, Henry Ford is alleged to have said. One can easily imagine Donald Trump saying the same thing. With the exception of Russia’s Vladimir Putin, who pores over czarist maps in search of land grabbing pretexts, those with authoritarian impulses tend to revile scholarship, including history. As Swampians might by now be tired of hearing, my biography of Zbigniew Brzezinski (Zbig: The life of Zbigniew Brzezinski, America’s Great Power Prophet) is published next Tuesday, May 13. I began this mammoth research project during Covid. At weekends, in the evenings, on vacation, and during several leaves of absence from the FT, I have immersed myself in the lengthiest research of my life so far, and the most intellectually enriching. Astonishingly, my marriage survived and my daughter does not hate me. But my wife, Niamh King, without whom I could not have done this, often joked that there were three people in our marriage. You have to be a little obsessed to write a biography. She used to quip that whenever she asked me to pass the salt, I would ask “SALT I or SALT II?”, referring to the 1970s Strategic Arms Limitation Treaties. I didn’t but she was not far wrong. But now the book, which was own private Idaho for five years, is in the hands of others. And I must convince people that the story of an American grand strategist who died eight years ago is relevant to today. Here is my case.The present is child of the past. Without knowledge of how we got here, we are Trumpian orphans shaking our fists at the world we do not understand. Brzezinski, like his fellow immigrant scholar-practitioner, Henry Kissinger, and George Kennan, America’s original great cold war thinker, was a student of history and a scholar of America’s adversaries. His knowledge of Russia, and the Soviet Union, was almost as great as his ignorance of Iran, which proved to be his — and president Jimmy Carter’s — nemesis. As the Miami property developer, Steve Witkoff, jumps from Moscow to Riyadh in search of deals to solve the world’s thorniest problems, it is hard to avoid the contrast between today’s ignorance and yesterday’s knowledge. Marco Rubio, who now has the unexpected distinction of being the first person since Kissinger to be both secretary of state and White House national security adviser, is far better informed than Witkoff. But he got the job by playing Greek chorus to whatever Trump says, even if it is the opposite by dinner time to what it was at breakfast. A yes man cannot be a strategist. But as Kissinger quipped about himself, the secretary of state and national security adviser are now likely to get along with each other. Mike Waltz, Trump’s first national security adviser, who has been banished to the Siberian exile of the UN, had disagreed with Trump over Iran and Russia.Brzezinski was intimately knowledgeable about America’s cold war adversary. As he had forecast, and had helped sow the seeds during the Carter years, the USSR collapsed under the weight of its ossification eight years after Carter left office. In a piece for Time magazine under the headline, “Vindication of a hardliner”, Strobe Talbott explained how everything Brzezinski had predicted and tried to facilitate had come to pass with the demise of the Bolshevik empire. Those years following the collapse of the Berlin Wall were the moment of peak US triumphalism. Instead of joining America’s prolonged ovation to itself and to liberal capitalist democracy, Brzezinski wrote a book, Out of Control, forecasting why the US would be undone by its hubris. He argued that America was developing a one-size-fits-all toolkit that was serenely ignorant of the audience for which it was meant. Unipolar America did not feel it needed to study the world: quite the contrary, the world must study America. Brzezinski forecast that the US would inadvertently spawn an “alliance of the aggrieved” that would include Russia, China, Iran and others resentful powers that felt they were on the losing side of history. It was a cacophonous message in 1993. It was also prophetic.Now we are dealing with the consequences of an America that gave up grand strategy more than three decades ago. To master the multi-polar, unstable, ever-shifting new global landscape — known by some as the “revenge of geopolitics” — we must relearn the lesson that knowledge is power. Trump 2.0 is peak US ignorance. Today especially is a good time to understand how we got here and what we are missing. I should underline that this is no hagiography. Like Kissinger, Brzezinski got plenty wrong. But he studied and engaged with the world in a relentless itinerary that is exhausting simply to chronicle. He died in May 2017 just a few months into Trump’s first presidency. He had been born into a privileged Warsaw family in 1928, the year that Stalin consolidated power. That is where my book begins.Thank you to any Swampians who want to pre-order my book.I am turning this week to Jonathan Derbyshire, my New York-based colleague, who is the FT’s US opinion editor. Jonathan, I’m sorry to inflict my extracurricular musings on you. It won’t happen again. As a philosopher by training, you are exceptionally well placed to answer the following question: what is the best case for studying history? Am I overstating its value?Recommended reading My column this week looked at Elon Musk’s painful exit from Washington. I do not know what will happen to his so-called department of government efficiency. But I conclude that if there is such a thing as a chainsaw that boomerangs, Musk invented it.I was in London this week for Tina Brown’s Truth Tellers conference, which she set up in memory of her late husband, Sir Harold Evans, the storied editor of the Sunday Times, and pioneering investigative journalist. While there, I had a really absorbing podcast conversation with “The Two Matts” — Matthew D’Ancona and Matt Kelley of the New European — on Zbig and the revenge of geopolitics. And talking of the revenge of geopolitics, do read this cool-headed analysis of the current Indo-Pakistani security crisis by my ex-colleague Farhan Bokhari, formerly the FT’s Pakistan correspondent. Finally, if you happen to be in Washington DC this Saturday, consider dropping into the FT Weekend Festival at the Kennedy Center, where I’ll be in (no doubt contentious) conversation with Donald Trump’s former chief strategist and avowed enemy of “globalism”, Steve Bannon. Other speakers include my colleagues Roula Khalaf, editor of the FT, and columnist Gillian Tett, as well as Peter Mandelson, the UK’s ambassador in Washington, who’ll no doubt be keen to spill the beans on the trade deal Britain has just struck with the US.Jonathan Derbyshire respondsThanks, Ed. I remain in awe of your ability to write a weekly column while composing your magnum opus, which I can’t wait to read. As for your question, I’ve never studied history formally, though the 19th-century German thinker Hegel, with whom I suspect Brzezinski would have been familiar, did say that philosophy, my old academic discipline, is its own time apprehended in thought. Which strikes me as also not a bad description — a self-flattering one, at any rate — of the trade you and I now both practice. But perhaps the best philosophical case for the study of history comes not from Hegel but from his predecessor, Leibniz, who famously wrote that “the present is saturated with the past and pregnant with the future”. And if he was right about that, then wilful historical ignorance of the sort you see in the Trump administration is worse than idle.I wonder, though, if it is in fact a besetting temptation for great powers and their emissaries, at least in their decadent phase, to believe not only that they shape history, rather than are shaped by it, but that they can leave it behind altogether? And we know what comes after such hubris.Your feedbackWe’d love to hear from you. You can email the team on [email protected], contact Ed on [email protected] and Jonathan on [email protected], and follow them on X at @jderbyshire and @EdwardGLuce. We may feature an excerpt of your response in the next newsletterRecommended newsletters for youTrade Secrets — A must-read on the changing face of international trade and globalisation. Sign up hereUnhedged — Robert Armstrong dissects the most important market trends and discusses how Wall Street’s best minds respond to them. Sign up here More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldThe UK has accepted strict US security “requirements” for its steel and pharmaceutical industries, in what diplomats see as a template that Washington could use to exclude China from other countries’ strategic supply chains. Thursday’s trade deal offered tariff relief to both industries, but only on the condition that Britain “work to promptly meet US requirements” on their supply chain security and the “ownership of relevant production facilities”.UK officials said the provision applied to some third countries but acknowledged that Trump had signalled that China was the intended target.As industry groups sought to clarify the nature of the US requirements on supply chain security and ownership, trade experts argued that the deal indicated that the Trump administration was stepping up long-standing demands to restrict Chinese inputs to strategically important goods.“Washington wants the UK and other countries to open up their books and ultimately move away from Chinese trade and investment, particularly in sensitive areas like steel,” said Allie Renison, a former UK trade department official.The text of the five-page US-UK deal, which was hastily put together in seven weeks after Trump announced global import duties on April 2, specifies that tariff relief for British products will depend on so-called Section 232 investigations — probes to determine whether and how specific imports affect US national security.It adds that the US’s plans to reduce tariffs for the UK are based on “shared national security priorities” as well as what it describes as the countries’ “balanced trading relationship”.Sam Lowe, trade lead at consultancy Flint Global, said he expected “to see similar conditions replicated in other deals, particularly in export hubs in south-east Asia such as Vietnam and Cambodia”.But senior EU trade officials said the conditions pertaining to China had potentially serious ramifications for their efforts to agree the bloc’s own deal with Washington.Two officials involved in the negotiations with the Trump administration told the Financial Times that the bloc would struggle to replicate such economic security elements of the US-UK trade agreement.“There is no unity on how to approach China,” one of the officials said of the EU’s 27 members.Britain’s Labour government has rejected as “complete nonsense” accusations by the opposition Conservatives that this week’s deal, which also offers tariff relief for UK aluminium, hands Washington a “veto” over supply chains. “There is no such thing as a veto on Chinese investment in this trade deal, this is not what this trade deal is about,” Darren Jones, Treasury chief secretary, told Times Radio.One British official said: “The US do not want, given that the UK will have much lower tariffs than the rest of the world, to become somewhere where countries or companies could circumvent their rules via UK exports to the US. Details of that will be worked through.”Renison, now at consultancy SEC Newgate, said the US demands were in line with an accelerating trend, noting that the Biden administration had demanded to see the UK audit on a Chinese-owned steel company before lifting Trump’s previous steel tariffs.She said Beijing was likely to retaliate in some form if the UK’s final agreement with the US — which will be subject to further negotiations — binds Britain into more comprehensive alignment with the US’s approach to trade with China.UK industry groups said they were pushing the government for more information having been given no immediate indication of what the proposed US tariff reductions or supply chain demands might be. British pharma industry insiders said the final terms will depend on the outcome of the US investigation announced in April into the national security implications of pharmaceuticals imports. “Clearly, the US and UK are set for further negotiations following the conclusion of pharma Section 232,” said one.  UK Steel, the industry lobby group, highlighted the lack of clarity in the five-page text, including the failure to refer to any reduction in tariffs to zero, as well as questions over the supply chain conditions and a suggestion that quotas would be applied.“The terms of the deal highlight a number of hoops to jump through before the UK steel sector can see the benefits of this deal,” UK Steel said. “To fully assess the impact on our sector, we will need to fully understand the supply chain conditions that need to be met, how the quotas will be defined and when these will take effect.” More

In the aftermath of US President Donald Trump’s “liberation day” tariffs, consumer goods companies were divided over the severity of the impact. Some ripped up their financial forecasts, while others told analysts and investors in recent weeks they could weather the storm.However, companies producing everything from PlayStation consoles to mayonnaise and laundry detergent for the western world largely agreed on one thing: Trump’s tariffs mean prices for consumers will have to rise.But the problem for Procter & Gamble, Nestlé, Unilever and the other giants of the consumer goods industry is that after three years of hefty inflation, and with US consumer confidence at its lowest level since 2020, shoppers may not be willing to bear any more pain.“The consumer is fatigued,” said Rob Holston, EY’s global consumer products lead. “They’re not just seeing the price of cornflakes go higher, it’s also their life has got more complex . . . the uncertainty of job losses, recession, and how long all this will last.”Some content could not load. Check your internet connection or browser settings.After unveiling steep tariffs on US trading partners on April 2, Trump subsequently announced a 90-day pause to allow room for new trade deals to be thrashed out. A baseline 10 per cent tariff on the majority of imports remains in place, apart from those from China, which are subject to a prohibitive 145 per cent tariff. As a result, companies ranging from Adidas to luxury group Hermés and Sony have all warned that US consumers will be paying higher prices. Seven major luxury brands raised prices around the world in April, according to analysts at Citi. Dior and Louis Vuitton, both owned by LVMH, increased prices by 4 and 5 per cent respectively on a selection of products tracked by the bank, while Richemont-owned jeweller Van Cleef & Arpels increased prices by 5 per cent on nearly its entire range.Producers of household goods — including Colgate-Palmolive, Nestlé and Unilever — have also indicated they will raise their prices to offset the impact of tariffs.Rich Shepherd, an analyst at Mintel, said price rises would probably be steeper for US consumers than those in other countries. PlayStation controllers on display in a store in California in December More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Britain’s trade deal with the US is “good news” but still leaves the effective tariff rate higher than before Donald Trump began increasing barriers on America’s partners, the governor of the Bank of England has said.Andrew Bailey on Friday warned that the impact of the trade war on the UK economy would depend in part on other countries’ deals with the US president, and stressed that uncertainty was hitting British businesses. “It will leave the effective tariff rate higher than it was before all of this started. I do think we need to bear that in mind,” Bailey told a conference in Reykjavik. “The impact of all this development on the trade front on the UK outlook is conditional not only on the UK trade agreement but also what the rest of the world agrees as well,” he added, even as he welcomed the deal as “good news”.The BoE on Thursday cut its benchmark interest rate by a quarter point to 4.25 per cent as it unveiled forecasts that showed the wider global trade conflict will have “quite a negative impact on the UK outlook”, according to Bailey. This had been partly offset by financial market movements that eased some of the pressure, he said. In its latest forecasts on Thursday, the BoE estimated that global trade tensions would lower the level of UK GDP by 0.3 per cent in three years’ time. The central bank predicted UK economic growth of 1 per cent this year and 1.25 per cent in 2026. The UK on Thursday clinched the first deal with the US since Trump started imposing high tariffs, agreeing cuts to punitive levies on car and steel exports, but failing to reverse a flat 10 per cent levy that applies to most goods.“When I go around the country in the UK, businesses say to me: ‘We are delaying investments because we are just too uncertain about what the world is going to look like’,” Bailey added. Two members of the BoE’s Monetary Policy Committee — Swati Dhingra and Alan Taylor — voted for a half-point cut this week, while chief economist Huw Pill joined Catherine Mann in backing no change. Bailey voted with the majority in favour of a reduction to 4.25 per cent, a level last seen in 2023. On Friday, he said there had been a case for a larger half-point cut because of the trade uncertainty but that such a reduction risked being “out of proportion”, since inflation was primarily driven by domestic factors.  More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldThe US unveiled a “fast track” investment process for allied countries, days before President Donald Trump visits Gulf nations that have pledged to sink billions of dollars into US businesses and infrastructure including AI. Gulf states, which are estimated to manage 40 per cent of the world’s sovereign wealth and are some of the biggest investors in the US, have long lobbied to ease what they consider onerous administrative requirements that can slow down their spending in the US. The United Arab Emirates in particular is in a hurry to partner with American technology firms as it pushes to become the region’s pre-eminent hub for artificial intelligence. The UAE announced in March that it would invest $1.4tn in the US over 10 years.The US Department of Treasury on Thursday said it would launch a portal where its Committee of Foreign Investment in the US (Cfius) would gather information from overseas investors before they file for an investment. It also said the department was “focused on increasing efficiencies in the Cfius process” to allow more investment from partner countries where “there is verifiable distance and independence from foreign adversaries or threat actors”.Abu Dhabi has sought to convince US officials that it has opted to partner with America on AI and has shunned China, and wants better access to powerful semiconductors made by US firms such as Nvidia. US Treasury secretary Scott Bessent said the agency was “committed to maintaining and enhancing the open investment environment that benefits our economy while making sure that process efficiencies do not diminish our ability to identify and address national security risks that can accompany foreign investment”.President Trump will next week visit Saudi Arabia, Qatar and the UAE, accompanied by US executives. Although Riyadh has already pledged to invest $600bn in the US over the next four years, and the UAE has touted $1.4tn worth of investments in the coming decade, analysts anticipate that details of investment plans are likely to be discussed during the presidential visit. President Trump signed an America First Investment Policy directive in February, promising to make the US “the world’s greatest destination for investment dollars” while preventing investment from Chinese government entities and other “foreign adversaries”.   More