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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The dollar slid towards a three-year low and US government bonds came under pressure on Monday as weak manufacturing data combined with growing warnings over the sustainability of the country’s debt pile to unnerve investors.The dollar was down 0.7 per cent against a basket of its trading partners, taking it close to the three-year low it hit in the wake of President Donald Trump’s “liberation day” tariff blitz in early April. The blue-chip S&P 500 index also dipped after an ISM survey of purchasing managers in the manufacturing sector came in weaker than expected at 48.5 for May — below the 50 level that separates expansion and contraction. The stock benchmark then regained some ground to close the session 0.4 per cent higher.Gordon Shannon, a fund manager at TwentyFour Asset Management, said the ISM data provided a “hint of tariff uncertainty’s impact on US growth”.Francesco Pesole, a forex strategist at ING, said the survey was adding pressure to “already very weak dollar momentum”, compounded by “soft” demand for US Treasuries and a re-escalation in trade tensions.The yield on 30-year US government bonds rose 0.03 percentage points to 4.97 per cent as the price of the debt fell, in the first trading after Treasury secretary Scott Bessent moved to reassure the markets that the country was “never going to default”, amid growing warnings over debt sustainability.JPMorgan Chase chief executive Jamie Dimon had warned on Friday that the US bond market could “crack” under the weight of Washington’s rising debt load.The ISM survey was a weaker showing than the previous month, and the fourth consecutive fall in the index, in the latest sign that Trump’s unpredictable trade war was weighing on the world’s largest economy. The US and China have traded accusations in recent days that the other side was violating their trade truce.The survey also revealed slowing deliveries, as an index based on supplier delivery times climbed to its highest level since June 2022.“The confusion of trade policies is making it near-impossible for supply managers to source goods efficiently,” said Joe Brusuelas, chief economist at tax and consulting firm RSM US.“That tells me that we may run into bottlenecks in terms of production, leading to shortages.”Imports also declined sharply and producers drew down the inventories they had amassed over several months of stockpiling ahead of the new trade levies. Economists warned that these diminishing stockpiles provided only a temporary shield to rising import costs. “You can only rely on that frontloading for so long,” said Veronica Clark, an economist at Citi.US metals prices also rose on Monday after Trump’s announcement on Friday that the US would impose a 50 per cent tariff on steel and aluminium imports, double the previous level that his administration had put in place in March. The new levies are set to take effect on June 4.Prices for aluminium surged, with the regional premium for aluminium delivered into the US Midwest jumping 54 per cent. Steel futures traded on Comex had a more muted reaction, rising 14 per cent in Monday trading. Shares in US steel producers Nucor and Steel Dynamics climbed 10.1 per cent and 10.3 per cent, respectively. More

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Campell’s reported the highest rate of consumers cooking at home since early 2020, when the pandemic was first taking hold.
This comes as President Donald Trump’s tariffs raise fears of a recession and weigh on consumer sentiment.

A worker arranges cans of Campbell’s soup on a supermarket shelf in San Rafael, California.
Getty Images

Campbell’s has seen customers prepare their own meals at the highest rate in about half a decade, offering the latest sign of everyday people tightening their wallets amid economic concerns.
“Consumers are cooking at home at the highest levels since early 2020,” Campbell’s CEO Mick Beekhuizen said Monday, adding that consumption has increased among all income brackets in the meals and beverages category.

Beekhuizen drew parallels between today and the time when Americans were facing the early stages of what would become a global pandemic. It was a period of broad economic uncertainty as the Covid virus affected every aspect of everyday life and caused massive shakeups in spending and employments trends.
The trends seen by the Pepperidge Farm and V-8 maker comes as Wall Street and economists wonder what’s next for the U.S. economy after President Donald Trump’s tariff policy raised recession fears and battered consumer sentiment.
More meals at home could mean people are eating out less, showing Americans tightening their belts. That can spell bad news for gross domestic product, two thirds of which relies on consumer spending. A recession is commonly defined as two straight quarters of the GDP shrinking.
It can also underscore the souring outlook of everyday Americans on the national economy. The University of Michigan’s consumer sentiment index last month fell to one of its lowest levels on record.
Campbell’s remarks came after the soup maker beat Wall Street expectations in its fiscal third quarter. The Goldfish and Rao’s parent earned 73 cents per share, excluding one-time items, on $2.48 billion in revenue, while analysts polled by FactSet anticipated 65 cents and $2.43 billion, respectively.
Shares added 0.8% before the bell on Monday. The stock has tumbled more than 18% in 2025. More

Poland’s lurch to the right has imperilled the EU’s trade ambitions and cast into doubt billions of euros in funds earmarked for Warsaw, officials said, while boosting a growing Eurosceptic trend in central Europe.The victory of rightwing nationalist Karol Nawrocki in Poland’s presidential election has shocked Brussels, which fears that it will fatally wound the country’s pro-EU government under premier Donald Tusk, stymie reforms required to access EU funds and prompt Warsaw to help block a landmark trade deal with the South American Mercosur countries.Nawrocki, a former football hooligan with no political experience, campaigned under a slogan of “Poland First”, and criticised EU policies on climate change, Ukraine and social issues. “Let’s help others, but let’s take care of our own citizens first,” Nawrocki, who was backed by US President Donald Trump, said on the campaign trail.Orsolya Raczova, central and eastern Europe analyst at Eurasia Group, said Tusk’s reform agenda would now “be paralysed . . . Nawrocki will prevent him from implementing an overhaul of the judiciary in line with EU demands”.“Nawrocki will join other sovereigntists leaders led by Hungarian Prime Minister Viktor Orbán in resisting Brussels,” Raczova added.Tusk’s election as prime minister in October 2023 was seen by Brussels as a welcome return to a pro-EU government in Poland, the bloc’s sixth-largest economy and most important eastern flank member, after eight years of Eurosceptic rule. Demonstrators in Warsaw protesting against EU policies More

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 newslettersDonald Trump’s tariff announcements are giving him less and less Taco time to put them into reverse. Following an ill-evidenced accusation last Friday that China was breaking its promises on an unspecified deal, he subsequently threatened to double steel and aluminium (aluminum, whatever) tariffs to 50 per cent by this coming Wednesday. Trump said there would be no deals with trading partners to avoid them, but he always says that. Speaking of special deals, it’s seriously bad news for the UK, which supposedly negotiated the last lot of steel tariffs away but with no date decided for lifting them. Today I look at what last week’s explosive court ruling against Trump’s tariffs means for his broader protectionist campaign. Charted Waters, where we look at the data behind world trade, is on imports to the US. Today’s reader question: will the 50 per cent steel tariffs go ahead? A simple yes or no, and only answers sent by 12 noon US eastern time count.Get in touch. Email me at [email protected] wouldn’t like Trump when he’s angryLast week, there was a bit of variety from the endless Trump announcements and retreats: a big tariff shock that didn’t emanate from the president directly. In this case it was the Court of International Trade declaring Trump’s use of the International Emergency Economic Powers Act (IEEPA) to be unreasonably broad.Older readers may recall I said a while back that the courts were unlikely to rule against Trump and it probably wouldn’t stop him if they did. Well, it’s certainly true that last week’s ruling was a surprise, though not an inconceivable one. There were some exceedingly eminent scholars (the most obvious being Trade Secrets favourite Jennifer Hillman, former US trade representative general counsel) who cogently argued a couple of months ago that Trump’s use of the tariffs was an abuse of power. But at the time Hillman told me that hers was a minority view and there was no guarantee a court would agree.I’m absolutely not going to start cosplaying a US trade or constitutional lawyer and try to predict where this goes on appeal, let alone if it eventually ends up in the Supreme Court. You can read here a long interview with Ilya Somin, the academic who deserves a lot of credit for helping bring the case to court, and a somewhat contrasting view here from the law professor Jack Goldsmith, who argues that the ruling rested on weak grounds that might not hold up in subsequent hearings.Instead, here are my thoughts on where the political economy takes Trump from here. When he is thwarted in any way — remember the “Trump as toddler” trope from his first term? — his reaction is to lash out wildly and without logic. His outburst against the Federalist Society’s former leader for recommending to him the wrong kind of judge was particularly weird. The member of the court’s judicial panel he seems to be referring to, Tim Reif, is a Democrat who was USTR general counsel under Barack Obama and continued to work there during Trump’s first term. None of my conversations with Reif in the past convinced me he was some hardline conservative ideologue.Where does an angry Trump go?Trump’s habitual response to a constraint, after venting, is to ignore it or find a way round. It’s notable that his reaction to the court’s decision was to threaten to double steel tariffs, which, being “Section 232” national security duties, were not covered by the ruling. He loves tariffs, but I’ve long suspected that if that weapon turns out to be ineffectual or gets blocked, he will quite quickly turn to other tools of international economic warfare. In fact, he already has. The nasties in his budget bill that will allow reprisals against foreign companies invested in the US were, of course, there before last week’s ruling. But they’re a warning of what happens when Trump widens the field of fire.Despite the briefing that he’s winding up for some big, beautiful, bro-mantic deal with President Xi Jinping, Trump is already ratcheting up export controls on technology by prohibiting the sale to China of software used to design semiconductors. Export controls are a much more Joe Biden-style, technical and targeted policy (“small yard, high fence”) than broad tariffs. But even Biden, with a massively more competent and reality-based administration, couldn’t make them very effective. Trump isn’t going to make them work any better.My fear is that Trump then moves on to something that both won’t work and will do massive economic damage if he tries. The obvious one is the dollar payments system, which he already tried to use during his first term to increase pressure on Iran and go after Huawei. This is a fairly terrifying prospect. If the Trump administration can’t competently manage to execute the task of taxing physical goods as they go through American ports — something governments have been doing literally for millennia — the thought of his administration trying to precision-target payments sanctions to reorder the world economy is chilling. This is a good time to re-read Abraham Newman and Henry Farrell’s magisterial Underground Empire, a book on how the US weaponised various aspects of the networks connecting the global economy, including finance, data, semiconductors and data centres. (I interviewed Newman on the FT’s Economics Show podcast earlier this year.) As the authors are at pains to point out, their work is supposed to be a cautionary tale. Instead, it seems it’s being used as an operations manual.Charted watersNot exactly unexpected but still scary to see: US goods imports dived in April following the bogus “reciprocal tariffs” of April 2, even though some were suspended a week later.Trade linksCanada’s steel producers and steelworkers are understandably furious at Trump’s latest tariff threats.Investors are beginning to treat the US more like an emerging market than an advanced economy, with bond prices and the dollar falling simultaneously. Inventor of the Taco trope Rob Armstrong looks at the impact of tariff revenues on Trump’s tax plans in the FT’s Unhedged newsletter.Shahin Vallée at the German Council on Foreign Relations, a former adviser to Emmanuel Macron, argues that the EU should have chosen a much more aggressive response to Trump’s tariffs. The FT’s India Business Briefing looks at the effect of Trump’s proposed tax on remittances sent out of the US to India. Trump’s trade policy is so absurd it’s quite hard to parody it, but this excellent tariff tracker run by the German satirical website Der Postillon has a good shot.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

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldThanks to Donald Trump and my FT colleague, Robert Armstrong, many of the world’s investors are now talking about the “Taco trade”.It was Robert who coined the phrase “Trump always chickens out” (Taco). The pattern is that the US president will promise to impose massive tariffs on a chosen target. But he will then later cut or delay the tariffs, often in response to an adverse reaction from the markets. So far this has happened with Canada and Mexico, then with the “reciprocal tariffs” imposed on most of humanity (and some penguins), then with the 145 per cent rate on China. A threat to raise tariffs on the EU to 50 per cent lasted all of a weekend. Hence — Taco.The Taco phrase was drawn to Trump’s attention in a press conference last week. He was not amused and called it a “nasty question”.All the nastier, perhaps, for being accurate. In fact, “Taco” is not just a useful heuristic for investors. It also turns out to be a key to analysing Trump’s foreign policy. As Jeremy Shapiro of the European Council on Foreign Relations points out in a recent paper, Trump enjoys issuing blood-curdling threats of the use of force. But he very rarely follows through.In his first term in office, Trump famously threatened North Korea with “fire and fury” and also mused about the possibility of wiping Afghanistan “off the face of the earth” within 10 days. And what happened? He entered into negotiations with North Korea about its nuclear programme. When the talks ultimately failed, they were followed not with fire and fury, but with amnesia. North Korea has accelerated its nuclear weapons programme over the past five years. Trump seems to have forgotten about the problem.When it came to Afghanistan, Trump ultimately agreed to pull US troops out of the country without securing any real concessions from the Taliban — setting the stage for the fall of Kabul during the Biden administration. The most striking use of force in Trump’s first term was the killing of Qassem Soleimani, the head of Iran’s Quds force, in January 2020. But Trump authorised that drone strike only after receiving reassurances that the risk of Iranian retaliation was low. Looking at Trump’s two periods in office, Shapiro finds 22 occasions so far in which he has threatened the use of force — but only two in which he has actually followed through. There have been 25 actual uses of force — mainly limited strikes against terrorist groups such as Isis or al-Qaeda. But only on two occasions were they preceded by a presidential threat.Surveying the record, Shapiro comes to a clear conclusion: “Trump uses threats and force much like a playground bully: while large and outwardly powerful, he actually fears the use of force in any situation even vaguely resembling a fair fight . . . Actual violence only occurs against much weaker foes that have no hope of striking back.”Applying the Taco principle to today’s foreign policy crises is instructive. Trump has threatened to authorise attacks on Iran, if the current talks to limit its nuclear programme end in failure. But the record suggests that he is likely to remain very reluctant to strike Iran whatever happens in the negotiations.When it comes to Ukraine, Trump is likely to be even more wary than the Biden administration of anything that risks escalation with Russia. Despite last week’s warning from Pete Hegseth, the US defence secretary, that a Chinese attack on Taiwan could be “imminent” — it also seems unlikely that Trump would risk a war over Taiwan, whatever China does. There has been talk in Trump circles about using the US military to go after Mexican drug cartels. But he may even be wary of tangling with them if there is a risk that the cartels could strike back on US territory.The places that need to worry are those that look vulnerable or unlikely to fight back. Greenland may fall into that category — which suggests that Denmark and the EU need to find ways of letting Trump know that there will be a price to pay if he makes a move on the island.Trump, of course, is not unique in his reluctance to use force. Both Joe Biden and Barack Obama were also notably wary of committing US troops to battle. Like Trump, their outlook as presidents was shaped by the bitter experiences of the Iraq and Afghan wars.What sets Trump apart is not his reluctance to go to war — but the striking contrast between his tough-guy rhetoric and his real-world caution. The current president seems to have inverted Teddy Roosevelt’s famous maxim about speaking softly and carrying a big stick. Trump prefers to shout loudly, while brandishing a pencil.There is, however, one obvious problem with making too much of the Taco principle. Now that it has been pointed out to him, Trump may be goaded into trying to demonstrate that he genuinely is a tough guy. A day after the nasty “Taco” question, Trump increased America’s tariff on foreign steel to 50 per cent.It is rarely a good idea to mock a bully. Countries that suspect Trump’s ferocious threats won’t amount to much, would probably do best to keep that thought to [email protected] More