Aurelia Butler

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.US ports have become increasingly clogged as American consumers order record numbers of products from abroad. The port operators say only one thing can help — robots.Much of the work of unloading and processing cargo at US coastal ports, which handled nearly half of US trade in 2020, is done manually, even though overseas terminals such as those in Rotterdam and Brisbane have long been automated.Port operators are pushing to expand the use of robotics in a bid to reduce the cost of global trade. Here’s a look at how port automation works. How does cargo move through ports today?When container ships carrying everything from food to clothing to electronics arrive at all but three US ports, they are greeted by human workers.Operators sit in the cabs of conventional cranes, lifting 8-foot wide shipping containers off ships and sorting them in the dock yard, before transferring them to trucks or trains.Some US terminals have added technologies that allow workers to “semi-automate” the process, with operators controlling the cranes remotely from an off-site office, monitoring via video link but letting the system do most of the work, according to a survey by the US Government Accountability Office. Proponents of automation say that computer modelling allows semi-automated cranes to stack containers closer together and in a more optimal order than humans can, allowing more cargo to pass through the port faster.Other workers monitor containers as they enter and leave terminals. Some US operators have sought to automate this as well, deploying gate systems with radio frequency identification systems (RFID), barcode readers and cameras to identify and track trucks through the terminals.These tools, along with extended operating hours, have helped reduce backlogs at port terminal gates that can leave trucks idling for hours, causing road congestion and air pollution, according to the US Environmental Protection Agency.But even with these tools, US ports are struggling to keep up with a surge in imports, says Jean-Paul Rodrigue, a professor of maritime business at Texas A&M University, driving interest in full automation.“You can do all sorts of tricks, operations research, information technologies, management systems, better equipment, but at some point you’re going to need to automate to increase productivity,” he says. Could robots speed up port automation?Rotterdam port, one of the most automated ports in the world More

US President Donald Trump is pushing Prime Minister Narendra Modi to do what India for decades could not or would not do: lower the high tariff walls that have surrounded its economy since independence. Piyush Goyal, India’s commerce minister, was in Washington last week for discussions on a bilateral trade agreement meant to fend off Trump’s threat last month of reciprocal tariffs.While Indian officials say discussions are “advancing”, Trump on Friday said New Delhi had agreed to cut its tariffs “way down”. US commerce secretary Howard Lutnick said India needed to buy more defence products and lower its tariffs for the two countries to sign a “grand” bilateral deal. The US ultimatum has prompted what some analysts say is a broader realignment on trade by New Delhi, which has traditionally been a tough negotiator. India in February relaunched its long-running free trade agreement talks with the UK and pledged to complete an FTA with the EU within the year. “India’s political leadership understands the Trump disruption and the opportunity for reworking our relationships with the US, the EU and the UK,” said Raja Mohan, a visiting professor at the Institute of South Asian Studies in Singapore. “If there is political will, it is possible that India will soon have these three trade agreements that will reshape our ties with the west.”Already, Modi has promised to buy more US oil and gas, though it has closer and cheaper suppliers in the Middle East and Russia. The two countries also agreed to conclude the first tranche of a “mutually beneficial, multisector” bilateral trade agreement by autumn. But India, which has protected its industries fiercely since independence in 1947, has some of the world’s highest average tariffs, and the cost of cutting them will be politically sensitive, particularly in agriculture, where nearly half of Indians work. The negotiation could well fail, which could bring retaliatory tariffs as soon as April, Indian analysts said. Speaking to Fox News host Sean Hannity after his February 13 meeting with Modi, Trump said he told India’s prime minister: “Whatever you charge, I’m charging”. Some content could not load. Check your internet connection or browser settings.The Modi government has since 2014 signed FTAs with Australia, the United Arab Emirates and the European Free Trade Association. However, it has also since 2020 introduced tariffs to protect emerging industries such as solar equipment and electronics and support what Modi calls Atmanirbhar Bharat (“self-reliant India”), in an echo of past protectionist governments. In FTA talks with EFTA and the UK, the Modi government has been a hard negotiator, analysts said, demanding that its trading partners reduce their tariffs more than India does on the basis that it is growing faster and presents rich economies a bigger future market opportunity than they do. However, they noted that India’s trade stance vis-à-vis Washington has been meeker, perhaps reflecting America’s status as a strategic defence and economic partner. The US is India’s largest trading partner, with $129bn of mutual trade in 2024, though EU countries collectively account for more. The US’s India trade deficit reached more than $45bn last year — less than half of the “almost $100bn” deficit Trump claimed at the White House, but the 10th largest of America’s trade partners. Some content could not load. Check your internet connection or browser settings.The tariffs India imposes on US goods are higher than America’s, in some cases by a big margin. While the gap for industrial products is 3.3 per cent, for agricultural products it stands at 32.4 per cent, according to the Global Trade Research Initiative (GTRI), a New Delhi think-tank. Before and after Modi’s Washington visit, India announced a round of largely symbolic tariff cuts on bourbon whiskey, luxury cars, and large motorcycles, the last to address a long-running Trump complaint about tariffs on Harley-Davidson. The two sides also agreed to increase US exports of industrial goods to India and Indian-manufactured products to the US and pledged to “work together to increase trade in agricultural goods”, reduce tariffs and non-tariff barriers and deepen supply chain integration. Some content could not load. Check your internet connection or browser settings.It is in agriculture that Modi faces the most politically sensitive challenges. India’s protected dairy industry, which enjoys import tariffs of 30-60 per cent, played a critical role in prompting the country to pull out of talks to form the Regional Comprehensive Economic Partnership the year before its ratification by 15 Asia-Pacific countries, including China, in 2020. The biggest dairy company Amul petitioned Modi’s government, warning that RCEP would hurt India’s approximately 100mn dairy farmers, many of them smallholders. India’s powerful farming lobby also forced New Delhi into a rare retreat on three farming bills meant to overhaul agriculture by staging mass protests in 2020-21. “There are certain sectors in which cutting tariffs could be problematic, notably agriculture,” said Biswajit Dhar, a former negotiator for India with the World Trade Organization and distinguished professor at the Council for Social Development.“The US-India joint statement mentions agricultural products, but the onus is on India to cut,” Dhar said. Lutnick said India had to “open up” its agriculture market.Some content could not load. Check your internet connection or browser settings.While India’s agricultural goods tariffs are higher, the US spends much more on subsidies, Dhar added. Indian analysts also believe that Washington may push New Delhi to open government procurement to US companies and remove restrictions on data flows — sensitive demands for a developing country that values its economic sovereignty. The trade talks promise to be fraught, they said.  “The best option for India is that we make tariffs on almost all industrial tariff lines ‘zero for zero’,” said Ajay Shrivastava, founder of GTRI, the research group. “But any discussion of agriculture has to be very nuanced, because it’s a livelihood issue for us.” More

Wall Street stocks tumbled as concerns over the economic effects of Donald Trump’s tariffs intensified and Tesla led a powerful sell-off in previously high-flying technology stocks. The S&P 500 index lost 2.7 per cent on Monday, after falling 3.1 per cent last week in its worst weekly performance in six months, as big US banks ditched their previous bullish forecasts for stocks this year.The tech-focused Nasdaq Composite sank 4 per cent, its worst day in two and a half years. The tech-heavy index is down more than 13 per cent from its December peak, leaving it in correction territory. “This big sell-off feels ugly, it feels nasty,” said Drew Pettit, an equity strategist at Citigroup. “We were coming off very high sentiment and very high growth expectations. All of this is just recalibrating to the new risks that are in front of us,” he said, referring to worries about the health of the US consumer and Trump’s aggressive trade policy.The sell-off spread to Asian markets on Tuesday, where Japan’s exporter-oriented Nikkei 225 index and Topix both shed 2.3 per cent in early trading. South Korea’s Kospi dropped 1.9 per cent and Australia’s S&P/ASX 200 declined 1.4 per cent. Hong Kong’s Hang Seng index fell 1.5 per cent.US tech stocks — which had driven Wall Street markets higher in the previous two years — were among the biggest laggards, extending a recent rout. Tesla, the electric-car company headed by Trump ally Elon Musk, plummeted 15.4 per cent. It has now given up all of those post-election gains and has fallen more than 50 per cent since its December high.Chipmaking giant Nvidia, which has been one of the biggest winners from recent investor enthusiasm for artificial intelligence, fell 5.1 per cent.Banks stocks also fell, with Morgan Stanley and Goldman Sachs slipping 6.4 per cent and 5 per cent, respectively. Shares in private investment groups KKR and Ares shed 6.2 per cent and 8.9 per cent, respectively. “What we’re seeing today is that people are selling what they own,” said Shep Perkins, chief investment officer at Putnam Investments. “And people own a lot of AI-related companies.”The latest jolt of volatility, which also dragged down markets in Europe and Asia, came after the US president on Sunday declined to rule out a recession or a rise in inflation as he dismissed business concerns over lack of clarity on his tariff plans.The White House on Monday said “we’re seeing a strong divergence between animal spirits of the stock market and what we’re actually seeing unfold from businesses and business leaders, and the latter is obviously more meaningful than the former on what’s in store for the economy in the medium to long term”.Still, business and consumer surveys have pointed to rising concerns over the economic outlook. Delta Air Lines late on Monday cut its profit and sales forecasts, citing economic “uncertainty”. Its shares dropped more than 13 per cent in after-hours trading. Some content could not load. Check your internet connection or browser settings.In Europe, where shares have outperformed the US this year, the Stoxx Europe 600 index lost 1.3 per cent, dragged down by banks and technology shares. Germany’s Dax, which hit a string of record highs last week after the country agreed a historic spending package, fell 1.7 per cent.US Treasuries rallied on Monday, as investors sought safe-haven assets. The 10-year yield, which falls as prices rise, was down 0.1 percentage points at 4.22 per cent.The Vix index, known as Wall Street’s fear gauge, climbed to its highest level since mid-December.Investors are concerned Trump’s on-off trade war is hurting the US economy, with Friday’s disappointing jobs numbers the latest in a run of weak data. Retaliatory tariffs from China on about $22bn of US goods, including agricultural exports, came in to effect on Monday.Over the weekend, Treasury secretary Scott Bessent provided little in the way of reassurance to worried investors as he acknowledged signs of US economic weakness. “Could we be seeing that this economy that we inherited starting to roll a bit? Sure,” he told CNBC. Trump and Bessent seem to be prepared for “some pain to reorientate the economy”, said Deutsche Bank’s Jim Reid. “Taken at face value, these quotes suggest that their pain level is higher than most would’ve believed a few weeks ago.”Goldman Sachs on Monday downgraded its growth prediction for the US economy to 1.7 per cent, compared with 2.4 per cent at the beginning of the year, as its trade policy assumptions have become “considerably more adverse”. The equity market falls of recent weeks mark a sharp reversal from the mood late last year and earlier this year, when hopes of deregulation and tax cuts under Trump fuelled a market rally.Instead, duties on goods from trading partners such as Canada, Mexico, China and the EU have led investors to rein in their bets and driven many into cutting risk.The S&P could drop almost 20 per cent from its current level if “growth falls off more significantly and recession becomes likely”, said Morgan Stanley’s chief US equity strategist Michael Wilson in a note to clients on Monday. “We are not there, but things can change quickly.”JPMorgan believes the index could fall as low as 5,200 — a near-10 per cent drop from current levels — owing to “trade uncertainty”, while analysts at Citi believe the fallout from Trump’s policies can push the S&P down to 5,500 points. In December, an average of 10 global banks expected the index to climb roughly 10 per cent in 2025 to about 6,550 points. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.UK retail sales registered only a modest rise last month and failed to keep pace with inflation, as bad weather and “cautious” consumers hit spending. The value of retail sales increased at an annual rate of 1.1 per cent in February, below the 2.4 per cent average of the previous three months, according to the British Retail Consortium. Non-food sales registered zero growth in February compared with the same month in 2024, data published by the trade body showed on Friday, below 2.5 per cent average annual growth in the previous three months.BRC chief executive Helen Dickinson said retail sales “saw more modest growth in February”, with fashion performing “poorly due to the gloomy weather throughout the month”. But she added that retailers were “hopeful the early March sunshine kick-starts spending on spring and summer wardrobes”. The value of sales growth, collected by the BRC with consultancy KPMG, was also well below the rate of inflation, which rose more than expected to 3 per cent in January. This indicates that consumers continued to cut the volume of goods they purchased as they have done throughout most of the cost of living crisis. Linda Ellett, UK head of consumer, retail and leisure at KPMG, said: “Consumers remain cautious with their spending and many are continuing to prioritise saving, travel and experiences.“Nervousness about the economy is deferring other big ticket purchasing, but occasions and offers are still tempting shoppers into some impulsive spending,” she added.The economy grew only marginally in the second half of 2024, and employers have in recent months warned about job cuts following rises in the minimum wage and national insurance contributions. Announced in the autumn Budget, the increases will take effect in April. The BRC data chimes with figures from Barclays, which on Tuesday reported that consumer spending rose at an annual rate of 1 per cent last month. This is down from 1.9 per cent in January and also well below the rate of inflation. Barclays said spending on electronics bucked the trend, with growth of 6.7 per cent in February, citing “upgrades to home-entertainment” products bought between 2020 and 2021 and new product launches as possible contributors. However, most other categories, including supermarkets, sports and outdoor, and bars and pubs, reported outright contractions. The BRC and Barclaycard data add to evidence that low consumer confidence and concerns about the labour market are hitting household spending and economic growth. This is despite official figures showing that wages have outpaced inflation since mid-2023. Whether weak economic growth is the result of poor demand — which lessens underlying price pressures — or supply issues is a key question for the Bank of England as it weighs the future path of interest rates. BoE governor Andrew Bailey last week played down the risks of a self-reinforcing acceleration in price growth. “The demand weakness argument may be getting a bit stronger relative to last year,” he told MPs.Dickinson said the latest BRC data would leave many retailers “uneasy” as they braced for £7bn of new costs from the Budget and packaging levies in 2025.“The industry is already doing all it can to absorb existing costs, but they will be left with little choice but to increase prices or reduce investment in jobs and shops, or both,” she added.  Video: The shoplifting threat to the retail industry | FT Transact  More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldCanada’s Ontario province has hit US power exports with a 25 per cent surcharge as the nation steps up its retaliation against Donald Trump’s tariffs. The levy will have an impact on 1.5mn homes and businesses in Michigan, Minnesota and New York and cost families and businesses in the three states up to $400,000 a day, Ontario premier Doug Ford said on Monday. “On an average, this will add around $100 per month to the bills of hard-working Americans,” Ford said, adding that “until the threat of tariffs is gone for good, Ontario will not relent”. He also said that, “if necessary, if the United States escalates, I will not hesitate to shut the electricity off completely”.Ontario’s threat to the North American power grid highlights how the president’s tariffs on Canada and Mexico, the US’s two biggest trading partners, are taking a growing economic toll on the US economy. Trump last week imposed 25 per cent tariffs on most Canadian and Mexican goods, but eventually U-turned by creating a carve-out for those subject to the sweeping United States-Mexico-Canada Agreement. Several other Canadian provinces supply US states in the Midwest and west through cross-border transmission lines. The premier of the oil-rich province of Alberta, Danielle Smith, on Monday said the country’s oil hub would “continue to provide energy to the United States and support America’s vision of global energy dominance”. But she cautioned Canada should prioritise the expansion of infrastructure to export its crude to other markets in Europe and Asia. “We want to get more products from the west coast of Canada to the east coast as well and to the northern coast. We need to find new markets for that extra oil and gas, and we want to be a safe, secure and reliable supplier for European and Asian allies,” she said at S&P Global’s CERAWeek conference in Houston. The North American Electric Reliability Corporation, a regulatory body that monitors the reliability of the power systems in the US and Canada, warned last week that energy stability could be imperilled if the two countries restricted cross-border electricity and gas supplies in a trade war. “If some of the sabre-rattling around ‘turning off exports’ occurs, it could create a significant resource adequacy problem for the Canadian provinces that benefit from US exports as well as the [US] states along the border that benefit from Canadian imports,” said Jim Robb, Nerc’s chief executive. Ontario’s Independent Electricity System Operator confirmed it had implemented the charge Ford requested on all electricity exports to US jurisdictions.“As requested in the minister’s letter, the IESO is applying a charge of $10/MWh to electricity exports, which equates to a charge of approximately 25 per cent,” it said. The US consumed $2.1bn worth of electricity imports from Canada last year, according to BloombergNEF, a research group. 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.Almost two-thirds of the arms imported by European members of Nato over the past five years were produced by the US, according to new research that underlined the continent’s deep reliance on American-made weapons. Arms imports by the European nations more than doubled between 2020 and 2024 compared with the previous five years, as the region responded to Russia’s full-scale invasion of Ukraine in 2022, according to data from the Stockholm International Peace Research Institute (Sipri). The US supplied 64 per cent of these arms, up from 52 per cent between 2015-2019. Mathew George, director of the Sipri Arms Transfers Programme, said states moved forward with decisions to buy US arms despite public calls “to take steps to reduce their dependence on arms imports and to strengthen the arms industry in Europe”. The figures emphasise the scale of the challenge facing European leaders as they seek to reduce their military dependence on the US, as President Donald Trump has demanded that Europe become more responsible for its own security.Although the continent’s Nato allies have been looking to bolster their national capabilities since Russia’s invasion three years ago, Trump’s return to the White House has added fresh momentum.Some content could not load. Check your internet connection or browser settings.Leaders from the EU’s 27 members last week endorsed new defence funding initiatives proposed by Brussels, including an instrument that would provide €150bn in loans to capitals to spend on military capabilities.European Commission President Ursula von der Leyen said on Sunday that she wanted to use the loans to reduce reliance on arms bought outside the bloc. She said it was “very important” that the injection was used to deliver “on research, development and good jobs here in Europe”. The €150bn fund has become a new flashpoint in a long-standing battle between France and Germany over the continent’s rearmament drive and whether it should include countries outside the bloc. The commission chief believed it was important to be “smart” and keep good connections with Norway and the UK. Industry executives have echoed calls that the region needed to reduce dependency on non-European suppliers in order to boost its resilience. There are growing concerns that the US could even decide to withhold critical support for key weapon systems, such as the advanced F-35 fighter jet.Pieter Wezeman, senior researcher at Sipri, said that faced with an “increasingly belligerent Russia and transatlantic stress during the first Trump presidency, European Nato states had taken steps to rescue their dependence on arms imports and to strengthen the European arms industry”. Some content could not load. Check your internet connection or browser settings.But he also stressed the “deep roots” of Europe’s arms relationship with Washington, noting how European Nato capitals had “almost 500 combat aircraft and many other weapons still on order from the US”.Throughout the postwar era, European governments spent lavishly on expensive American weapons, seeing this as the price of keeping Washington committed to the continent’s security. Władysław Kosiniak-Kamysz, Poland’s defence minister, told journalists last month: “Europe should invest more in security to retain the presence of the Americans in Europe, and not to replace them.” He added that this “insurance policy” would show the new administration that they were meeting the two conditions that Trump frequently underlines as the quid pro quo for US support — higher defence spending and “mutual economic relations for American business”. Sipri’s annual analysis of global arms transfers also underlined how the US had cemented its position as the world’s top arms exporter, increasing its share of exports from 35 per cent to 43 per cent over the five-year period.Some content could not load. Check your internet connection or browser settings.Ukraine, meanwhile, became the world’s largest importer of major arms over that timeframe, with imports rising nearly 100 times as the country sought to fight off Russia’s forces. For the first time in two decades, the largest share of US arms went to Europe rather than the Middle East, although Saudi Arabia was the top single recipient of US weapons.The US remained the supplier of choice for advanced long-range strike capabilities like combat aircraft, Sipri said. The data also showed that the top 10 arms exporters in the past five years were the same as those in the previous period, but that Russia fell to third place behind France as exports slid. Italy jumped from tenth to sixth place. Russian arms exports fell by 64 per cent between 2015 and 2019, and 2020 and 2024, as the Ukraine war “accelerated” the decline in Moscow’s ability to export weaponry.Wezeman said this was because Russia needed to keep more of its domestic production to use on the battlefield, as well as the challenge of sanctions and western pressure on other countries not to buy from Moscow.Two-thirds of Russian arms exports went to India, China and Kazakhstan, according to the research. China’s imports of arms shrunk by 64 per cent between the two periods as the country increasingly substituted imports — mainly from Russia — with locally designed and produced weapon systems. China’s arms imports are likely to keep falling as the capacity of its domestic arms industry grows, according to Sipri. Additional reporting by Henry Foy in Brussels More