Aurelia Butler

The UK is having an immensely confusing debate about the steel industry and rule-following. This is partly because, in the moral morass that is Downing Street, it was steel tariffs that reportedly prompted the resignation of Boris Johnson’s ethics adviser Lord Christopher Geidt. He has since said this was merely one example of a broader disregard for international law.And it is partly because the government’s approach to both trade and the steel industry is being reimagined for political reasons on the hoof.To recap: after the Trump administration imposed 25 per cent tariffs on steel in 2018, the EU took steps to stop metal shut out of the US from washing into Europe. After Brexit, a new body — the Trade Remedies Authority — was charged with looking at those safeguards to check they were suitable for buccaneering, free trade-loving Global Britain.The TRA was set up as an independent entity making evidence-based decisions. In other words, it was designed to be as divorced from political meddling as possible. This lasted until it delivered a finding the government didn’t much like. When the body last year suggested scrapping nine of 19 safeguards on steel products, the government took back control of the process, passing emergency legislation to allow it to extend five of those measures temporarily while four lapsed. It then asked the TRA to rerun its analysis and reconsider the work on a new, broader basis.Anyone attempting to read the 271-page result, released last week, would have some sympathy with Geidt in heading for the door. But, noted Sam Lowe, director of trade policy at Flint Global, the TRA effectively stood by the methodology and results of its original analysis. But with different questions come different answers: it said the new directions from the government did indeed produce results that justified keeping the tariffs in place. The only thing more inherently political than trade policy is steelmaking, particularly for a government elected on a promise of levelling up the areas that do it. Still, the disintegration of the post-Brexit commitment to lower trade barriers has been quick and definitive — and it involves staying more aligned with the EU than the original analysis (which the steel sector maintains was flawed) suggests is merited.Whether or not this constitutes a breach of World Trade Organization rules isn’t at all clear — and won’t be unless someone brings a lengthy case and wins. Turkey has already challenged the EU safeguards unsuccessfully. But it is, at the very least, unhelpful to have overhauled your rigorous process of analysis and decision-making midway through in order to get a different answer.Boris Johnson’s comments when asked about plans for tariffs (including a related issue about reassessing the exemptions offered to developing nations) have muddled things further. The industry, he said, needed “much cheaper energy and cheap electricity” and “until we can fix that” UK steelmakers should have the same protection as in other European countries. These are two separate issues. The steel industry has complained, with some justification, for years about high UK electricity prices compared with France and Germany. The disparity, with UK prices at £35 per MWh — or 60 per cent — higher than Germany’s on UK Steel’s latest numbers, has historically been down to domestic policy and network costs, according to the trade body. The government, having long resisted this kind of intervention, has lately taken action: it has increased the relief on carbon pricing for heavy energy users, currently worth a few pounds a megawatt hour, and pledged to review network costs. This pleases the sector immensely. But it falls short, argues David Bailey at the University of Birmingham, of the kind of comprehensive industrial policy that is needed to boost investment and decarbonise the industry.What it doesn’t do is justify tariffs to protect the steel sector while the UK attempts to get its domestic policy in order. No wonder everyone is [email protected]@helentbiz More

G7 members are to explore ways of curbing energy costs, including via possible caps on the price of oil and gas, at a summit that has been overshadowed by fears of a recession induced by rising inflation. Officials on Monday evening settled on summit conclusions that seek to develop solutions to reducing Russia’s hydrocarbon revenues while minimising the negative impacts of high energy prices, officials said.According to a draft text seen by the Financial Times, leaders will explore the “feasibility” of introducing temporary price caps on imports of energy — a reference to a US-led push for a ceiling on the Russian oil price. A G7 official said earlier that capitals agreed it was a good idea, but a “great deal of work” remained to be done to make it a reality. The G7 leaders were meeting four months into a war in Ukraine which has pushed up the price of food and hydrocarbons, triggering fears of a global recession. The summit, hosted by Germany in the Bavarian Alps, is due to conclude on Tuesday. The leaders condemned Monday’s “abominable attack” on a shopping mall in the Ukrainian city of Kremenchuk, in a statement soon afterwards, and warned that indiscriminate attacks on innocent civilians “constitute a war crime”. “Russian President Putin and those responsible will be held to account,” they said.The G7 leaders, who were addressed by Ukraine’s president Volodymyr Zelenskyy earlier in the day via video link, also said they would continue to provide financial, humanitarian and military support for Ukraine “for as long as it takes”. “We will not rest until Russia ends its cruel and senseless war on Ukraine,” their statement said.The move on price caps on Russian oil comes alongside a French proposal for higher global oil production, an idea that arose as G7 leaders sought ways to ease the looming energy crunch and alleviate the pressure on energy-importing economies. French officials focused during discussions on Monday on ways of moderating prices via higher oil output. In particular, France wants to explore ways of bringing production from Venezuela and Iran, both subject to US sanctions, back on the market. US president Joe Biden has already courted Nicolás Maduro’s authoritarian regime in Venezuela in an attempt to cool the market. The G7’s conclusions underscore the deep alarm among its members’ leaders about the toll the Ukraine war is wreaking on their economies. They are set to agree to have their ministers evaluate the feasibility of a price cap as a matter of urgency.

Officials say the cap could be enforced via limits on the availability of European services, including insurance for Russian oil shipments. Officials caution that the scheme is highly complex and will need intensive technical work. It could face challenges in the EU where sanctions require the consent of all 27 member states. “We are supportive of the basic structure,” said one G7 official about the ceiling on the Russian oil price. “But the details need to be hammered out.”Another said that all G7 states agreed with the “basic idea that we have to reduce the sources of revenue for Russian oil”.Macron’s calls for higher production came after Opec and its allies agreed earlier this month to accelerate oil production in July and August. The US has been putting pressure on the cartel’s linchpin, Saudi Arabia, to cool the crude price rally as it hangs over the global economy. Biden is undertaking a trip to the Middle East in July, including a planned stop in Saudi Arabia. Additional reporting by Victor Mallet in Paris More

A Russian missile hit a busy shopping mall in central Ukraine on Monday, triggering a blaze in which the number of dead may be “impossible to imagine”, said the country’s president, who described the attack as a “terrorist” act. Hours after Volodymyr Zelenskyy pleaded with G7 leaders for more missile defence systems following a series of attacks at the weekend, Ukraine’s president posted a video on Telegram of the missile attack in Kremenchuk, about 320km south-east of Kyiv on the Dnipro river, that showed the shopping mall ablaze. “The occupiers fired missiles at the mall, where there were more than a thousand civilians,” Zelenskyy said in the post. “The mall is on fire, rescuers are fighting the fire, the number of victims is impossible to imagine,” he added. In a speech on Monday night, Zelenskyy said the Russian state had “become the largest terrorist organisation in the world”, adding that buying Russian oil and maintaining ties with its financial institutions was “giving money to terrorists”.Dozens of strikes have rocked Ukrainian cities in recent days, including areas far from frontline battles, just as leaders of G7 countries started their summit in the German Alps. In Schloss Elmau, G7 leaders vowed to impose new sanctions on Russia’s ability to import technologies for its arms industry as they promised to step up their security commitments to Ukraine. The group of seven advanced economies said they would “align and expand targeted sanctions to further restrict Russia’s access to key industrial inputs, services and technologies”.More from the G7 summit: Energy: Emmanuel Macron wants to see a drive for higher global oil production as the French president seeks ways of bringing down the cost of energy.Climate change: Major global companies are pushing world leaders to step up action to tackle climate change at the G7 summit, calling for large-scale carbon pricing and measures to boost demand for clean technology.

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Thanks for reading FirstFT Asia and here’s the rest of the day’s news — Emily Five more stories in the news1. Japan tries to avert Tokyo blackout The Japanese government on Monday called on businesses and the public in the Tokyo area to cut electricity use, saying a lack of generating capacity risked plunging the capital into a power blackout. The blackout alert, the second this year, is likely to revive contentious debate about restarting Japan’s nuclear plants.2. Trump’s plans for Spac deal suffer blow after subpoenas Donald Trump’s plans to take his media business public have suffered a further blow after a federal grand jury issued subpoenas to a blank-cheque company that is set to merge with Trump Media and Technology Group.3. Credit Suisse found guilty over Bulgarian drug money failings Credit Suisse has become the first domestic bank to be found guilty of a corporate crime by Swiss authorities after a court found the lender failed to stop the laundering of Bulgarian drug money. The verdict was handed down in the southern Swiss city of Bellinzona by the country’s highest criminal court on Monday4. Naspers to sell more of Tencent stake in bid to revive shares The South African internet group Naspers, Tencent’s biggest shareholder, has abandoned a pledge not to sell stock in China’s most valuable company as it seeks to finance a buyback to help its struggling share price.5. Hajj flights from Israel to Saudi Arabia included in talks Discussions are under way on a deal that would allow Palestinians with Israeli citizenship to fly directly to Saudi Arabia to perform the hajj and umrah religious pilgrimages, according to people familiar with the matter. The initiative is one of several being discussed ahead of US president Joe Biden’s trip to Israel and Saudi Arabia next month.The day aheadAustralian foreign minister visits Malaysia Penny Wong will visit Malaysia to meet her counterpart Saifuddin Abdullah, defence minister Hishammuddin Hussein, and trade and industry minister Azmin Ali. (The Diplomat) Nato meeting Officials will gather in Madrid on Tuesday for three days of discussions, including Nato’s expansion in the wake of Russia’s invasion of Ukraine. Yesterday Nato announced it is increasing its forces on high alert by more than sevenfold to 300,000.Scottish first minister outlines independence plan Nicola Sturgeon is expected to set out in detail how she plans to hold a second independence referendum. Join the FT in partnership with Seismic at Strategies For Dealing With The Great Resignation on June 30 where we will discuss the challenges and opportunities presented by the Great Resignation, with a focus on training and coaching successful sales teams. Register for free today.What else we’re readingXi’s fraying relationship with the middle class After a return to gruelling lockdowns under President Xi Jinping’s zero-Covid policy, a new trend has emerged: runxue, the study of how to get out of China for good. Trapped in a web of unpredictable and chaotic lockdown rules, many Chinese are now dreaming of a permanent escape.

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What’s a good (and bad) way to leave your job? We too often fail to manage job endings well. The consequences not only affect the person leaving, but can also harm staff remaining — and the company itself. Naomi Shragai, a business psychotherapist and author, shares her top tips for amicable endings. ‘Sanctuary states’ for abortion as US legal battles loom The overturning of Roe vs Wade, triggered automatic abortion bans in 13 Republican states, with more expected. Meanwhile, pro-choice legislators have proposed or already passed legislation to codify abortion rights and legal protections. The moves add to an increasingly complex patchwork of abortion rules across the US based on party lines. Explainer: Our reporter parses the crucial passages from the ruling on abortion rights.Crypto and meme corporate bonds may follow their own path The crash of some of the flagbearers of the equity bubble has been painful for investors. Less noticed are the losses of their bonds. Such gaps illuminate differences in the ownership and returns for stocks versus bonds, writes Ellen Carr at Barksdale Investment Management.Can we avoid disasters, and should we even bother trying? In his book The Precipice, philosopher Toby Ord argues that humanity has reached a dangerous moment in its existence. One in which it has developed the means to subject itself to an existential catastrophe but not yet the wisdom or the knowledge to say for certain that we will avoid it.Summer reads Looking for a page-turner? Check our Laura Battle’s 10 top fiction recommendations.

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