Aurelia Butler

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. The meeting to discuss the future of Ukraine between US and Russian representatives is under way. We’ll bring you the latest. Here’s what else we’re covering: OpenAI considers ways to fend off hostile bidsMilei’s memecoin scandalApple’s push into India And the impact of the USAID cuts US and Russian officials have started talks in Riyadh about the war in Ukraine, amid fears in Kyiv and in European capitals that Donald Trump wants to settle the conflict on Vladimir Putin’s terms.The talks in the Saudi capital are the first high-level effort to broker an end to Putin’s full-scale invasion of Ukraine and represent a major shift in US foreign policy which, under former president Joe Biden, had sought to isolate and punish Russia for its invasion of Ukraine. Today’s meeting is expected to pave the way for a Trump-Putin meeting also in Riyadh.The US already appeared to make significant concessions to Putin before the negotiations began by dismissing Ukraine’s aspirations to join Nato and restore control over land at present occupied by Russia.Ukraine is not present at the talks and President Volodymyr Zelenskyy has pledged to reject any deal imposed by the US and Russia, saying “we cannot recognise . . . any agreements about us without us”. Our reporters will be following developments closely throughout the day.Here’s what else you need to know ahead of today’s meeting. ‘Boots on the ground’: European countries have clashed over sending troops to Ukraine with Germany, Italy, Spain and Poland expressing reluctance after the UK said it is prepared to commit forces.Rheinmetall warning: The chief of Germany’s largest defence contractor has said decades of under-investment in the military has left the region isolated in US-Russia negotiations. Ukraine’s mineral riches: Trump has the country’s vast estimated deposits of lithium, titanium and rare earths in his sights, but these have yet to be developed.Europe faces an era-defining moment. How should policymakers and business leaders prepare? Hear from experts from the Financial Times on what lies ahead in this exclusive webinar on February 27. Save your spot here. Here’s what else we’re keeping tabs on today:Market preview: US markets are set for a lacklustre start after yesterday’s public holiday. In Europe, the pan-European STOXX 600 index hit an all-time high on the back of gains for defence and aerospace stocks.Companies: Tech groups Baidu and Bumble publish fourth-quarter results. Economic data: Mexico’s national statistics agency publishes its preliminary economic growth figures for January and Statistics Canada releases January inflation figures. Argentina releases its January trade balance.Fed speak: Federal Reserve Bank of San Francisco president Mary Daly will take part in a public event in Arizona and Federal Reserve vice chair for supervision Michael Barr will be speaking on artificial intelligence and the economy at an event in New York.Charlie Javice case: The trial of Frank’s founder starts today. She faces charges over the $175mn sale of the student finance company to JPMorgan in 2021. Israel-Hizbollah ceasefire agreement: Israel has announced its forces will temporarily remain at five locations inside south Lebanon ahead of today’s deadline to withdraw from the country. Five more top stories1. OpenAI is considering granting special voting rights to its non-profit board in order to preserve the power of its directors, as the $157bn start-up fends off an unsolicited takeover bid from Elon Musk. The takeover offer, rejected on Friday by the board, has focused minds at the start-up on how to retain control once its conversion to a more conventional for-profit business is completed. Read the full report.2. A Delta Air Lines plane crash-landed and flipped upside down at Toronto Pearson International Airport yesterday, the latest aviation accident involving a regional jet operated by a US carrier. Photos and videos from the scene showed the aircraft lying belly-up on a snowy, windswept tarmac. All 76 passengers and four crew were evacuated safely. 3. Argentina’s libertarian president Javier Milei has been buffeted by a scandal over his promotion of a memecoin called $LIBRA that soared in value before collapsing, triggering impeachment calls and lawsuits. Buyers accused the coin’s creators of a possible “rug pull” scheme. Here’s what we know about the scheme.4. Israel has set up a “special directorate” to facilitate the “emigration” of Palestinians from Gaza, as it steps up its public embrace of the plan by US President Donald Trump for residents to leave the devastated territory. The new offer, which would include “among other things, special departure arrangements by sea, air, and land”, underscores how Prime Minister Benjamin Netanyahu is capitalising on Trump’s proposal.5. Deutsche Bank has undertaken a three-year hiring spree that has reversed almost all of the steep cuts to jobs imposed by chief executive Christian Sewing at the start of his tenure. Bloated levels of staffing have been an intractable problem for Deutsche, hampering the bank’s efforts to control costs. Here’s what the Financial Times analysis found. Today’s big readMobile phones have now surpassed diamonds as India’s biggest product export and Apple is key. About 15 per cent of iPhones are currently made in India and that is expected to rise to 25 per cent by 2027, analysts say. The production shift has not gone unnoticed in Beijing, where it is treated with suspicion. The FT spoke to current and former executives and employees at the company’s suppliers, Indian government officials, and analysts to piece together Apple’s growing footprint in India.We’re also reading . . . Peter Navarro: The China hawk was thwarted in Trump’s first term but is now putting his vision of US trade protectionism into action.Maga SWF: Trump’s proposal for a sovereign wealth fund should be taken seriously. The potential cumulative investment returns can be huge, writes Stephen Jen, Eurizon SLJ Capital’s chief executive.Paul Weiss’s London raid: The UK expansion of the quintessential New York firm is a long-term bet on the importance of English commercial law, writes John Gapper.Vance’s real warning to Europe: If the US vice-president hoped to persuade his audience in Munich, rather than insult it, he failed, argues Gideon Rachman.Chart of the daySome content could not load. Check your internet connection or browser settings.Donald Trump’s administration has slashed US international aid commitments. The planned shrinking of the US Agency for International Development (USAID) is the headline move in a wave of overlapping actions that global institutions and recipient countries are scrambling to address. This piece explains how the cuts are affecting aid projects around the world.Take a break from the news . . . Photographer Valentin Hennequin is constantly mistaken for Serbian tennis player Novak Djokovic — on the Eurostar, in bars, on holiday, it happens everywhere, he says. But what would he do if he met his doppelgänger?Thank you for reading and remember you can add FirstFT to myFT. You can also elect to receive a FirstFT push notification every morning on the app. Send your recommendations and feedback to [email protected] newsletters for youOne Must-Read — Remarkable journalism you won’t want to miss. 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Last summer, Harvard-trained economist Peter Navarro was released from a federal prison in Miami just in time to fly to Milwaukee and deliver a fiery speech at the Republican National Convention.“The January 6 committee demanded that I betray Donald John Trump to save my own skin,” he bellowed, referring to the Congressional subpoena he ignored, resulting in a four-month prison sentence for contempt of Congress.“I refused!” The crowd roared.Navarro’s rock star moment illustrated how the former economics professor, who has returned to the White House as President Trump’s senior counsellor for trade and manufacturing policy, had become Maga royalty.“There is a clear premium put on loyalty in this administration,” said one Washington lobbyist. “And there’s no doubting, whatsoever, Navarro’s loyalty to Trump — that’s why he’ll always have a lot of influence.”An often-thwarted adviser in Trump’s first administration, Navarro has been catapulted into the trade hot seat, orchestrating an early suite of tariffs and probes that bear the hallmarks of his particular enthusiasms.These include protecting the US steel and aluminium industry against subsidised Chinese metal, putting tariffs on all Chinese imports, and using sweeping “reciprocal” tariffs in an effort to reduce the country’s trade deficit and boost manufacturing. Whereas in the last administration Navarro was often hamstrung by more free market-minded Trump advisers such as Treasury secretary Steven Mnuchin or National Economic Council director Gary Cohn, he faces far less opposition in Trump 2.0.People familiar with the administration’s inner workings say Navarro is working closely with Howard Lutnick, Trump’s nominee for commerce secretary, and Jamieson Greer, the president’s pick for trade representative. Lutnick, a billionaire Wall Street financier, has become an unexpected advocate of tariffs, the people say, while Greer, a trade lawyer, has long been a proponent of tariffs and other protectionist trade measures. People describe Trump as trusting Navarro, referring to him as “my Peter”, and allowing him broad leeway over trade policy.Often described as a “trade hawk”, Navarro has long been known for his protectionist streak and hostility to China. In his 2011 book Death by China, he argued Beijing violated global trade rules by using illegal export subsidies and manipulating its currency.During Trump’s first time in the Oval Office, Navarro campaigned internally for the imposition of high tariffs on Chinese imports, and in 2018 pushed him to block visas for Chinese students — a move the president declined to make.“He’s a guy who basically sees an existential threat to the US economically, militarily, geopolitically from China,” said one person who has observed him for decades. “He is a guy who is super focused on that.”Navarro was sentenced to four months in prison after he refused to comply with a subpoena related to the January 6 2021 Capitol attack More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Australia’s central bank on Tuesday cut interest rates for the first time in more than four years, as inflation pressures began to show signs of easing more quickly than expected.  The Reserve Bank of Australia cut its cash rate by 0.25 percentage points to 4.10 per cent in what governor Michele Bullock said was a carefully balanced decision given the country’s tight labour market and global uncertainty caused by US President Donald Trump’s trade war.“We cannot declare victory on inflation yet,” she said, adding that the bank was alert to the risks of cutting “too much, too soon” and questioning market views that it could enact three further reductions this year.The rate cut, the RBA’s first since November 2020, came as Australia prepares for a nationwide election against a backdrop of elevated costs of living.Show video infoThe central bank has been under pressure to begin easing its monetary policy, with some economists warning that the strain of higher borrowing costs on mortgage holders could push the country into recession.In a statement, the RBA said it would retain a restrictive policy. “While today’s policy decision recognises the welcome progress on inflation, the board remains cautious on prospects for further policy easing,” it said, noting that other central banks, including the US Federal Reserve, have slowed their pace of rate cuts in recent months. Australia is due to hold an election by mid-May, but Prime Minister Anthony Albanese has yet to set a date. Political strategists had seen a rate cut as a critical moment ahead of the polls. Jim Chalmers, Australia’s Treasurer, welcomed the move as “the rate relief Australians need and deserve”, but that it was not yet “mission accomplished”, noting: “It won’t solve every problem in our economy or in household budgets but it will help.”Some content could not load. Check your internet connection or browser settings.The cut on Tuesday began the process of reversing a run of 13 rate rises since May 2022. The RBA, which was more cautious in raising rates two years ago, has also been slower to begin reducing them, and the move came as other central banks have shifted to a more hawkish stance as inflation has persisted.But economists had pencilled in the long-awaited cut after official data released last month showed headline inflation in Australia fell to 2.4 per cent in the December quarter from 2.8 per cent in the previous three months.The upcoming election is expected to be contested over the cost of living and the Labor government’s economic management.The country’s largest banks committed to passing the rate cut on to mortgage holders. Bullock said she understood that thousands of Australians were “hurting” as a result of the RBA’s rate caution, but said the central bank’s focus remained getting goods and services inflation under control, adding: “That’s hurting you, too.”Andrew Grant at the University of Sydney Business School said the rate cut would ease some of the pain of the cost of living for Australians, particularly those holding large mortgages. “Anything that puts a few dollars back in people’s pockets each month is going to be a huge relief.”Gareth Aird, an economist with Commonwealth Bank, said it would have been a “harder sell” for the RBA to hold rates, with inflation trending lower and wage growth cooling. He added that the timing ahead of the election had created an unusually “emotionally charged” environment around the rate decision. The central bank had held rates at 4.35 per cent since November 2023 over concerns about inflation, which has remained above its target range of 2-3 per cent. The RBA’s preferred “trimmed mean” measure of inflation, which excludes volatile factors such as petrol prices, dropped to 3.2 per cent year on year in the December quarter, from 3.6 per cent in the previous quarter. More

US gas exports are the most likely beneficiaries of a pledge by Donald Trump and Narendra Modi to make India a leading buyer of American energy, analysts said, as the world’s fastest-growing big country sucks in more fossil fuels from around the world.Modi and Trump, meeting last week for the first time since the US president’s inauguration, agreed to increase American oil and gas exports as part of efforts to rebalance the two countries’ trade relationship.At the moment, Russia is the main supplier of crude to India, while Qatar is the biggest provider of liquefied natural gas.The US is the world’s largest LNG exporter, and already accounted for about a fifth of India’s supplies in 2024. But the leaders’ commitment, which came after Trump called India a “tariff king” and “big abuser” and threatened reciprocal tariffs, has the potential to expand the market for US suppliers, experts say. “Gas will be the real deal. India is one of the last untapped markets for gas globally which has scale,” said Rajeev Lala, director of upstream solutions at S&P Global. Some content could not load. Check your internet connection or browser settings.At a time of more benign prices for US gas exports, “we are ready to take more natural gas”, said Arvinder Singh Sahney, chair of the Indian Oil Corporation, one of India’s top importers. In a report released last week, the International Energy Agency said India’s natural gas consumption would increase by nearly 60 per cent by 2030, with LNG imports set to more than double in the same period driven by steady demand growth and a much slower rise in domestic production.India Business BriefingThe Indian professional’s must-read on business and policy in the world’s fastest-growing large economy. Sign up for the newsletter hereIn 2023, India’s total net gas production met just about half of its demand.“There’s potential for India to buy more from all sources,” India’s oil and gas minister Hardeep Singh Puri told the Financial Times in an interview shortly before the leaders’ meeting. “In India there’s great appetite for more energy.”The government’s “primary policy decision is to take the share of natural gas in our energy mix from 6 per cent to 15 per cent by 2030”, for which India would need to import more gas, he said. A liquefied natural gas storage tank at the Dhamra LNG terminal near Dhamra port in India More

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This article is an on-site version of our Trade Secrets newsletter. Premium subscribers can sign up here to get the newsletter delivered every Monday. Standard subscribers can upgrade to Premium here, or explore all FT newsletters“Reciprocity”: yeah, right. Do me a favour. Don’t believe a word of it. He’s having a laugh. Sorry, where was I? Ah yes. Welcome to Trade Secrets. If you’re one of my new readers, you’ve chosen an exciting time to join. We start week five of the Trump administration with the president having threatened five sets of wildly destructive tariffs (Colombia, China, Canada and Mexico, steel and aluminium and so-called “reciprocal”) and deferred all but one to some time in the next couple of months. The last of these, unveiled last week, is undoubtedly the wackiest yet. In today’s newsletter I explain why it’s best seen as Trump discarding even a token attempt at rules-bound consistency and simply making it up as he goes along. Meanwhile, a much bigger threat to globalisation (as I’ve written about before) escalated last week with Trump’s alignment with Russia over the Ukraine invasion, increasing the likelihood of indefinite chaos on Europe’s eastern flank and weakening the EU. The Charted Waters section, which looks at the data behind world trade, is on the dollar.Get in touch. Email me at [email protected] trade policy is turning a bit ChineseA shout-out to my colleagues on the reporting side (who are performing utter heroics, it looks like a lot of work) for putting the R word in quote marks in the headlines of our news coverage and analysis, and I’ll follow their lead. This plan isn’t “reciprocity”. It’s mercantilism laced with narcissism and caprice.As I’ve written before, the Trump campaign platform contained a plan for a somewhat logical — if prohibitively complicated and destructive — policy where the US matches the tariffs its trading partners impose on US goods with equivalent tariffs of its own. The idea has some historical symmetry: it somewhat resembles Franklin D Roosevelt’s Reciprocal Trade Agreements Act of 1934, which was designed to reverse out of the high-tariff Smoot-Hawley era and ended up paving the way for the postwar multilateral trading system. Of course, by destroying the most-favoured nation basis of said system, Trump’s plan would be going the other way.I said it was either politically impossible — because it would mean cutting US tariffs for highly protected American producers, such as sugarcane growers — or it would be partially and hypocritically implemented. SURPRISE! It’s the latter. In fact, it’s worse than the latter.The plan, bearing the heavy imprint of White House trade warrior Peter Navarro, allows the US to punish a trading partner not just for tariffs higher than the US equivalent, but also for using a value added tax (a long-standing obsession of some trade folk in Washington) or other taxes Trump doesn’t like, maintaining inconvenient regulations, being mean to the US tech industry, having a misaligned currency, looking at the US in a funny way, wearing white after Labor Day and so on and on. It’s the toxic stew from a cauldron of trade grievances which has been bubbling away for years.Here’s the way I think about it. “Reciprocity” is simply what Trump and Navarro say it is. The US is giving itself multiple tools to impose whatever tariffs it likes for whatever reason it can make up on a highly flexible, legal basis, with a series of arbitrary and eminently mutable deadlines. On top of the tariffs it already has on China, the US now has 25 per cent fentanyl-and-immigration tariffs supposedly now due on Canada and Mexico on March 4; across-the-board steel and aluminium tariffs on March 12; and this “reciprocal” nonsense, which is to be discussed in the light of various reports Trump has commissioned for April 1 and imposed God knows when after that. The ad hoc assembly of such tariff weaponry appears largely designed to create negotiating leverage for concessions or bribes, and if carried through, marks the end of the US domestic rules-based system.Being slightly fanciful, in some ways the US is turning a bit Chinese. It’s got an increasingly centralised, crony-ish presidency running export-oriented mercantilism, while dishing out support through trade restrictions and sometimes subsidies to favoured industries. It’s also willing to use tariffs and blocks on imports as a coercive tool of foreign policy — in President Xi Jinping’s case, Australia and Lithuania; in Trump’s case, Colombia, Mexico, Canada and now apparently everyone else.There’s one somewhat obvious difference. China has been honing the ability of its bureaucracy literally for centuries, having held its first competitive civil service written exams in the sixth century CE. Trump is allowing Elon Musk and his vandals to rampage through the US federal civil service, wantonly destroying its administrative capacity. I sense this will not end well for the US.How do you solve a problem like Navarro?OK, so enough of the horror story. What are multinationals and trading partner governments to do?First of all, let’s remember that all of this might come to nothing, or to not very much. Of the five sets of tariffs Trump has so far threatened, he’s only implemented one of them (China). It remains notable — far from definitive, since investors can be completely wrong, but at least notable — that financial markets clearly don’t believe there will be some massive, dislocating change.Second, it’s surely going to be a bad idea to play the “reciprocal” game. Cutting tariffs to match the US equivalent will destroy the most-favoured nation basis of the multilateral trading system. If the rest of the world is going to try to trade more among themselves, that system, very imperfect though it is, will be the bedrock of it. And what’s the guarantee the US would keep its side of the bargain anyway? This is Trump we’re talking about. It seems even less wise for governments to do anything as drastic as dismantling their VAT systems in the hope of getting an easier ride.Third, it’s not going to be very practical to co-ordinate retaliation between different trading partners, given their different capacities and trading patterns. The idea of everyone tariffing Elon Musk’s Teslas is a nice one, though tricky for the EU and China, which both have Tesla factories. But governments could at least (as did Canada and Mexico, as I wrote the other week) have a plan for what they’re likely to do and have it ready to go into action as soon as possible.Something that hits Trump hard without doing immediate damage to the retaliator’s economy is obviously ideal: the EU can do something on tech regulation, for example. Imagine if Trump and Navarro announce a start date for the “reciprocal” tariffs and are immediately met with a global array of retaliation threats bristling with trade, investment and regulatory weaponry. Even they might balk at starting a generalised trade war with the rest of the world.Fourth, if the US signals clearly enough that it’s about to hit their exports, foreign companies (perhaps with support from their government) can plan to do exactly what the Chinese did last time — find their way round through a connector country. If I were an Indian manufacturer dependent on US consumers, I’d be planning contingencies for how I could route my exports or even invest in stop-off countries. We could end up with a truly global game of whack-a-mole. And although there will be a lot of disruption in the short run, in the medium term I’d bet on the world’s supply chain superheroes to outfox Navarro.Overall, the thing is this. To haul out the old saying attributed to one or other French wits of the 18th and 19th centuries, for the US to start a generalised global trade war against the rest of the world is more than a crime — it’s a blunder. If the US genuinely tries to close its overall deficit with big tariffs all round, it will cause a crunching recession. If Trump discriminates between trading partners, the heavily tariffed ones can nip through the side door of those who escaped more lightly. Charted watersThere’s not much sign yet of the weak dollar on which Trump is intermittently keen, nor much clear direction from the administration. His Treasury secretary Scott Bessent last week quixotically decided to try to wrestle a tautology into submission by making the splendidly meaningless claim that the US having a strong dollar policy didn’t mean other countries could have a weak currency policy. I know, right? Me neither.Trade linksThe FT explains how Trump’s savaging of USAID is affecting development assistance worldwide. The think-tank MERICS looks at how well China is positioned for a trade war with the US.The EU is considering banning more imports of food products not made to EU regulatory standards, particularly as regards the use of pesticides.Hosuk Lee-Makiyama for the ECIPE think-tank looks at the trade and security situation in the far north Atlantic.I was a guest last week on the FT’s peerless Unhedged markets and finance podcast to talk about tariffs, steel and the uselessness of the giant panda. Trade Secrets is edited by Harvey NriapiaRecommended newsletters for youChris Giles on Central Banks — Vital news and views on what central banks are thinking, inflation, interest rates and money. Sign up hereFT Swamp Notes — Expert insight on the intersection of money and power in US politics. Sign up here More

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$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More