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Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldContainer ships are some of the biggest and heaviest vessels on the sea. But piloting a container shipping line recently has been akin to being on a fishing boat in the roughest of weather.The squalls have included US President Donald Trump’s on-off tariffs, port congestion, the Israel-Iran war, and the Houthi rebels in Yemen threatening to close off the Red Sea, not to mention the lasting effects of the disruption caused by Covid-19. Simon Heaney, senior manager for container research at maritime consultancy Drewry, says: “Supply chains are meant to be boring and predictable.”The latest deadline for Trump’s tariffs falls on July 9 but few in the container shipping industry — which serves as a proxy for both trade and globalisation due to the sheer volume of goods carried by ocean — believe it will be the final word.One senior container shipping executive says the uncertainty around tariffs is making it difficult for customers. “They are going to order as much as possible now because they just don’t know what will happen in the rest of the year. It’s injecting a whole extra layer of complexity in supply chains.”Both freight rates and share prices of listed container lines such as Denmark’s AP Møller-Maersk and Germany’s Hapag-Lloyd have been on a similar rollercoaster ride in recent months and years as fears of too much supply or demand have ebbed and flowed.But now questions are being raised about whether the industry has become too reliant on shocks to keep it profitable, storing up problems for when conditions eventually normalise. Lurking in the background is a more philosophical question — how does an industry that built and benefits from globalisation survive when its main cheerleader turns on it?Container shipping lines enjoyed extraordinary profits in the aftermath of the first wave of Covid. Drewry calculated that from 2020 until 2022, the industry made more money than in its previous 60 years combined. Much of that was ploughed back into buying new ships, particularly by the industry’s new number one player, Mediterranean Shipping Company. Regular warnings of impending oversupply have surfaced ever since, but events have kept conspiring to put off judgment day. Heaney says a record amount of capacity in terms of containers is currently on order — about 30 per cent of the current active fleet — but that lines are not generally getting rid of their “clunkers” when new vessels arrive.“The order book is a massive risk for the industry. They seem to be relying on the fact that there’s constant disruption. If and when the market normalises, they will be in massive trouble. They will have way too much capacity on their hands,” he adds.Some in the shipping industry may be banking on Trump causing more disruption. After his first term, many companies responded to the threat of a trade war with China by diversifying their supply chains into south-east Asian countries such as Vietnam, Cambodia and Thailand. But this could be hit by the president’s swingeing tariffs. “It’s hard to make any big supply chain decisions just now,” explains one of Europe’s largest manufacturers.Heaney says of the current mood: “There’s a level of exhaustion or fatigue over tariffs. There’s no sense of permanence to any decision. We’ve been strung along from one pause to another.”Equally, however, shipping bosses feel somewhat protected from Trump’s broader assault on globalisation and his desire to bring back manufacturing to the US by just how entrenched many supply chains are. Vincent Clerc, Maersk’s chief executive, told the Financial Times in May that it would take Trump “a decade or two of persistent effort” to redraw global trade routes. Many also believe that China and India will power a new era of globalisation. “It could be globalisation 2.0, at the same time as we are de-risking globalisation 1.0,” says the container executive.For now, despite all the disruption and the criticism of container shipping lines for elevated freight rates and profitability, there are signs of the system working. Rates between China and the US are falling at record pace after lines upped capacity in the wake of surging demand sparked by Trump’s so-called liberation day. “It’s a good sign that the industry is reactive, that there’s competition,” says Heaney.Still, other potentially bigger problems loom. Container shipping is likely to keep sailing on stormy seas for some [email protected] More

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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 to FirstFT Asia. On today’s agenda: Donald Trump has threatened to increase levies on Japan and cast doubt that the US would reach a deal with its Asian ally, as he escalated his trade rhetoric days before his pause on some steep tariffs is set to expire. What happened: Speaking to reporters yesterday, Trump said he would impose new levies on countries that failed to agree a trade deal by July 9, when the “reciprocal” tariffs unleashed in April are set to resume. He singled out Tokyo, saying: “We’ve dealt with Japan. I’m not sure we’re going to make a deal. I doubt it.”Rice stand-off: Trump’s comments came after trade talks between the US and Japan stalled amid a row over rice. The US president accused Tokyo of being “spoiled” and refusing to commit to buying more American rice or to allow US-manufactured cars into its market. Japan’s chief cabinet secretary Yoshimasa Hayashi said yesterday that Tokyo was “not thinking about doing anything that would sacrifice the farm sector”. Hayashi’s comments came as the latest round of trade negotiations in Washington ended without clear progress.Read more trade coverage below, as countries race to sign agreements with Washington by next week’s deadline.India: New Delhi is on track to seal an interim trade agreement with Washington as soon as this week to avert Trump’s “liberation day” tariffs.EU: European capitals are insisting the US reduces its tariffs on the EU immediately as part of any framework deal before the looming deadline on July 9.US narrows focus: Trump’s top trade officials are scaling back their ambitions for comprehensive reciprocal deals with foreign countries.Here’s what else we’re keeping tabs on today:Economic data: South Korea publishes June inflation figures. Singapore and Australia report PMI data for the month.China-EU relations: Chinese Foreign Minister Wang Yi meets European Council President António Costa in Brussels.Five more top stories1. Thailand’s constitutional court has suspended Prime Minister Paetongtarn Shinawatra following a leaked phone call with former Cambodian leader Hun Sen, in which she allegedly disparaged the powerful Thai military while discussing a border dispute. The political turmoil threatens a truce between the powerful Shinawatra family and Thailand’s conservative establishment. Read the full story.2. Trump’s landmark tax and spending legislation moved a step closer to becoming law yesterday after the US Senate ended days of haggling and narrowly passed the so-called big, beautiful bill. The bill’s passage through Congress’s upper chamber now leaves its fate in the hands of the House of Representatives, where it could still face considerable opposition.What’s in the bill?: The legislation would cut taxes by $4.5tn over 10 years while slashing welfare spending and clean energy subsidies.Opinion: Trump’s “big, beautiful bill” is an act of self-harm, writes Edward Luce.3. Taiwan’s dollar jumped more than 2 per cent in volatile trading yesterday, as the country’s massive life insurance and export sectors rushed to contain the fallout from a weak US currency. The New Taiwan dollar made its biggest single-day gain since a rapid appreciation at the start of May that exposed Taiwanese life insurers to huge losses on their US assets.4. Liquidators who are trying to recoup billions of dollars siphoned initially from Malaysia’s sovereign wealth fund are seeking more than $2.7bn from Standard Chartered, in a lawsuit filed against the UK-based bank over its alleged role in the scandal. The suit represents the latest attempt to recover money taken from 1MDB in a decade-long hunt that has involved several of the world’s largest banks.5. Jay Powell said a July interest rate cut was not “off the table” for the US Federal Reserve, in an apparent softening of his position that the central bank should wait until the autumn to start lowering borrowing costs. The Fed chair has been under relentless pressure from Trump to slash rates.Visual storyFrom Norway’s Arctic region to Poland’s border with Belarus, Nato allies are working together to predict what a Russian attack might look like — and how the alliance would respond to one. Explore how Nato nations are fortifying the eastern frontier in this visual story.We’re also reading and listening to . . . Chinese economy: Beijing could use this moment of stability to rally people around needed reforms that tackle deep structural issues, writes Eswar Prasad.Tech Tonic 🎧: Meta chief executive Mark Zuckerberg has undergone a transformation, both physical and political. But is this all an act?Ghosts of Brexit: Switzerland’s deal to keep access to the EU’s single market includes all the same thorny issues that have bedevilled the UK-EU relationship.Chart of the day The intense battle to poach top artificial intelligence researchers and engineers from rivals has spurred a rapid escalation in wages, as tech groups such as Meta and OpenAI race to gain the competitive edge. Top tech staff are being lured with far higher pay than computer engineers without AI experience, data shows.Some content could not load. Check your internet connection or browser settings.Take a break from the newsAs part of its Wimbledon special, FT Globetrotter sits down with the All England Lawn Tennis Club’s head gardener to find out what it takes to get the courts immaculately green.Displays often follow the Wimbledon palette of purple, green and white 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 threatened to increase levies on Japan and cast doubt that the US would reach a deal with its Asian ally, as he escalated his trade rhetoric days before his pause on some steep tariffs is set to expire. Speaking to reporters on Tuesday, the US president said he would impose new levies on countries that failed to agree a trade deal by July 9, when the “reciprocal” tariffs unleashed in April are set to resume. He also singled out Tokyo, a crucial trading partner that had been among the first countries to seek a deal with Trump after he shocked global markets in April by launching a global trade war on “liberation day”.“We’ve dealt with Japan. I’m not sure we’re going to make a deal. I doubt it,” Trump said.Show video info“I’ll write them a letter to say ‘we thank you very much, and we know you can’t do the kind of things that we need, and therefore you pay a 30 per cent, 35 per cent’ or whatever the number is that we determined,” he said. “Because we also have a very big trade deficit.”The comments from the president suggested Trump remained willing to take a hard line on negotiations with trading partners, despite backing down on his higher global tariffs earlier this year in the face of deep market turmoil.The US imposed a tariff of 24 per cent on all imports from Japan on Trump’s so-called liberation day on April 2, before temporarily lowering it to 10 per cent for 90 days to allow talks to take place. The threat to increase tariffs on the world’s fourth-largest economy will heighten fears that Trump will reignite a global trade war if his officials fail to line up countries before his own deadline next week.US and Japanese trade officials have been locked in intense negotiations since earlier this year. Trump also told reporters on Air Force One on Tuesday that he was not considering extending next week’s deadline for any countries to allow talks to continue. The US president announced a 90-day pause to his reciprocal tariffs in April after his trade war triggered a bout of severe market turmoil and a steep sell-off of US bonds. Trump claimed at the time that he would sign 90 deals during the hiatus, although only the UK has struck a new trade agreement with the US. On Monday, the president suggested that some countries would be barred from trading altogether with the US. “But for the most part, we’re going to determine a number,” he added, referring to tariffs. Trump has accused Japan of being “spoiled” and refusing to commit to buying more American rice or to allow US-manufactured cars into its market. Japan already faces a 10 per cent tariff on most of its exports to the US, but Japanese cars and car parts are also subject to a 25 per cent border tax tariff. Steel and aluminium face a 50 per cent levy. Earlier on Tuesday, Japan’s chief cabinet secretary Yoshimasa Hayashi said the country would not sacrifice its farmers to secure tariff relief from the US.The yen strengthened 0.4 per cent against the US dollar to ¥143.42 on Tuesday while the Nikkei 225 stock index, which had closed before Trump announced his latest tariff threat, lost 1.2 per cent. US stocks ended the day lower, with the S&P 500 down 0.1 per cent. The two-year Treasury yield, which moves inversely to prices, rose 0.05 percentage points to 3.78 per cent.Additional reporting by George Steer in New York More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldIt was only a matter of time before Donald Trump’s war on what we used to know as the global economy spilled over from trade to other areas. Sure enough, while his trade war is set for a new phase next week — when the US president’s “liberation day” tariff schedule is supposed to come into effect — we have just witnessed the first skirmish on the second front, over taxes. In 2021, countries led by the G7 and the OECD reached a compromise on how to reform tax rules for international companies. A failure to update an old web of bilateral tax treaties aiming to avoid double taxation had led, too often, to a situation of double non-taxation, with loopholes too easily allowing corporations to pretend their profits were made in low- or zero-tax jurisdictions. The “base erosion and profit shifting” efforts eventually arrived — in no small part thanks to Trump’s first Treasury secretary Steven Mnuchin — at new rules by which countries may tax companies active in their jurisdictions if those companies are inadequately taxed elsewhere. But giving other countries taxing rights to US corporates’ profits was never going to go down well with the president. Insistence on tax sovereignty for America and opposition to extraterritoriality by others are a bipartisan matter in Washington. Given Trump’s pugilism, a conflict was bound to come to a head. The question is how other countries choose to respond.On Saturday, other G7 countries accepted a US demand for its companies to be exempted from two rules it sees as particularly unjustifiable. In return, Washington has arranged the removal of section 899 from the One Big Beautiful Bill Act. This section — which may have been inserted precisely to create leverage to force this outcome — would have imposed new US taxes on corporations from countries deemed to discriminate against American companies. The OECD has welcomed the agreement.Giving in to the US may not have been the wisest choice. After all, it has demonstrated that blackmail can work. At the same time, it is never clear with the Trump administration what commitments it will stand by. In this case, the US Treasury has reassured counterparts that it is committed to addressing any “substantial” profit-shifting risks within its domestic system, “side by side” with the international scheme others have signed up to in full. But it is unclear how this commitment will be followed up and enforced.The other G7 nations may, however, have reasoned that among many battles, this was not one to pick. That was certainly true of Canada, which surrendered quickly in another tax fight. It swiftly withdrew a digital services tax after Trump called off trade negotiations and threated higher tariffs on Canadian goods. DSTs will become flashpoints with European countries, too: the UK, France, Spain and Italy all have a version of it. The UK’s DST survived the first trade announcements with the US, but may still be in Washington’s crosshairs. The EU countries, shielded by the size of their big trade bloc, should find it easier to resist. As they seek a resolution to trade negotiations with Trump, they ought to resist any pressure to compromise on tax sovereignty for a quick deal.What is clear is that business does not benefit from these kinds of tussles. Instead of a hard-won compromise, some multinational corporations will now have to face a more complex dual system that ostensibly will levy just as much tax. The very fact that tax rules have turned into legitimate targets for economic coercion adds a layer of policy uncertainty. Whether it was Trump’s intention or not, the cost of doing business across borders has just gone up yet another notch. More

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