Economy

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Boeing chief executive Kelly Ortberg said he was working with the Trump administration to ensure the company was not “an unintended consequence” of the trade war with China, suggesting countries buy more of its planes to reduce their trade deficits with the US.In an interview with the Financial Times, Ortberg, who took the helm in August, also said the launch of a new aircraft expected to replace its best-selling 737 Max was not an immediate priority, saying the “market is not ready now”. As America’s largest exporter, Boeing has been caught in the crossfire of Donald Trump’s volatile trade war, which has upended the aerospace industry’s decades-old tariff-free status, putting aircraft deliveries at risk and straining supply chains. Boeing was poised to restart deliveries of new planes to Chinese airlines next month, following a deal Washington struck with Beijing two weeks ago to reduce tariffs. But on Friday President Donald Trump accused China of backtracking on the agreement, raising the possibility of a Chinese response. The relationship between the countries is “dynamic,” Ortberg said, adding that he had learned not to “hyperventilate, because it’s probably going to change tomorrow”. “In the end, this is going to result in new trade agreements — that will be OK,” he said. Ortberg has said 2025 is Boeing’s “turnaround year”. More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldCanada’s steel industry warned of “catastrophic” job losses, factory slowdowns and supply chain disruption after US President Donald Trump doubled tariffs on imports to 50 per cent.Trump’s latest tariff move sparked anger across the border, as Canada’s Prime Minister Mark Carney had only last month travelled to the White House to repair relations frayed after Washington imposed heavy levies on its biggest trading partner.Canada is the largest supplier of steel and aluminium to the US, accounting for nearly a quarter of US steel imports in 2023 and about half of aluminium imports last year.“A 25 per cent tariff is difficult, but a 50 per cent one is catastrophic,” said Catherine Cobden, president of the Canadian Steel Producers Association.Steel is a C$15bn (US$11bn) industry that employs 23,000 Canadians and supports an additional 100,000 indirect jobs, according to the CSPA. “Steel tariffs at this level will create mass disruption and negative consequences across our highly integrated steel supply chains and customers on both sides of the border,” said Cobden.As newly elected prime minister, Carney went to the Oval Office in early May hoping to reset relations damaged by Trump’s threats to annex Canada and hit it with 25 per cent tariffs.The two leaders said they were open to renegotiating the US-Mexico-Canada Agreement, a trade deal that succeeded the North American Free Trade Agreement during Trump’s first term and is up for review next year.But on Friday, Trump told a rally in West Mifflin, Pennsylvania, that he would double steel and aluminium tariffs to 50 per cent, in an escalation of his global trade war.Cobden said Trump’s new threat “essentially closes the US market” to Canada and will “have unrecoverable consequences”.The Aluminium Association of Canada said they were waiting for “clearer and more formal legal confirmation” before commenting on the potential implications.International trade minister Dominic LeBlanc said Canada remained “resolute” in defending its workers and communities.“As we negotiate a new economic and security relationship with the US, Canada’s new government will stand strong to get the best deal for Canadians,” he said in a post on social media platform X on Saturday.The tariff announcement came in the same week Trump said it would cost Canada $61bn to be part of his ambitious “Golden Dome” missile defence shield but would be free if Ottawa gave up its sovereignty to become the 51st US state.A spokesperson said Carney “has been clear at every opportunity, including in his conversations with President Trump, that Canada is an independent, sovereign nation, and it will remain one”.The US president unveiled the increased levies on Friday as he touted a $15bn partnership between Nippon Steel and US Steel at a rally in Pennsylvania, promising to erect a tariff “fence” around domestic metals production.The new levies will come into effect on Wednesday, the president wrote in a Truth Social post following the event.Earlier in the week, a US federal appeals court paused a ruling that deemed Trump’s “liberation day” tariffs illegal.Canada has announced “a dollar-for-dollar” response to the US tariffs that will affect steel products worth C$12.6bn, aluminium products worth C$3bn and additional US goods worth C$14.2bn.These tariffs launched in March are on top of initial retaliatory levies on C$30bn of US goods. But in mid-April, Canada quietly softened its stance by easing some of the countermeasures on US carmakers and manufacturers.Canada’s ministers and provincial leaders are meeting in Saskatoon, Saskatchewan province, on Monday as part of Carney’s efforts to diversify the economy away from over-reliance on the US.“This isn’t trade policy, it’s a direct attack on Canadian industries and workers,” said Marty Warren, the United Steelworkers’ national director for Canada.“Thousands of Canadian jobs are on the line, and communities that rely on steel and aluminium are being put at risk. Canada needs to respond immediately and decisively to defend workers.”Goldy Hyder, president of the Business Council of Canada, said it was best “not to take the bait” from Trump’s statements and stay focused on a renewal of the USMCA.“These moving goalposts is just a strategy to try and get Canada to give more,” he said. More

The new blueprint shows that a vast array of education, health, housing and labor programs would be hit, including aid for college and cancer research.The Trump administration on Friday unveiled fuller details of its proposal to slash about $163 billion in federal spending next fiscal year, offering a more intricate glimpse into the vast array of education, health, housing and labor programs that would be hit by the deepest cuts.The many spending reductions throughout the roughly 1,220-page document and agency blueprints underscored President Trump’s desire to foster a vast transformation in Washington. His budget seeks to reduce the size of government and its reach into Americans lives, including services to the poor.The new proposal reaffirmed the president’s recommendation to set federal spending levels at their lowest in modern history, as the White House first sketched out in its initial submission to Congress transmitted in early May. But it offered new details about the ways in which Mr. Trump hoped to achieve the savings, and the many functions of government that could be affected as a result.The White House budget is not a matter of law. Ultimately, it is up to Congress to determine the budget, and in recent years it has routinely discarded many of the president’s proposals. Lawmakers are only starting to embark on the annual process, with government funding set to expire at the end of September.The updated budget reiterated the president’s pursuit of deep reductions for nearly every major federal agency, reserving its steepest cuts for foreign aid, medical research, tax enforcement and a slew of anti-poverty programs, including rental assistance. The White House restated its plan to seek a $33 billion cut at the Department of Housing and Urban Development, for example, and another $33 billion reduction at the Department of Health and Human Services.Targeting the Education Department, the president again put forward a roughly $12 billion cut, seeking to eliminate dozens of programs while unveiling new changes to Pell grants, which help low-income students pay for college.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

President Trump said that Beijing was not honoring the terms of a temporary agreement and warned of further confrontation.President Trump and his advisers on Friday leveled sharp attacks against China over trade, reviving an economic dispute that led to steep tariffs and a confrontation over critical next-generation technologies.In a post on Truth Social, Mr. Trump accused Beijing of violating the terms of a fragile truce struck earlier this month between the two countries that included rolling back tariffs and other trade barriers. The agreement was intended to give both sides time to reach a larger deal that would avert an all-out trade war.Mr. Trump’s accusations alluded to China’s promise to reduce export restrictions around rare earth minerals that are key components in many technology and military products. The president suggested that China had continued to limit access to those goods, as he appeared to adopt a more confrontational posture on trade.“So much for being Mr. NICE GUY!” he proclaimed.Speaking to reporters later in the day, Stephen Miller, the White House deputy chief of staff for policy, stressed that the president prefers cooperation. But, he warned, China’s behavior “opens up all manner of action for the United States.”The standoff between the two nations has created significant concern for businesses and investors, and has raised fears of a global economic downturn in recent months. Stocks were down slightly on Friday.The new dispute arrives at a moment of great uncertainty for Mr. Trump’s ability to brandish steep tariffs to force other countries to make trade concessions. A federal trade court earlier this week declared many of the president’s duties to be illegal, including some that he imposed on China on emergency grounds. An appeals court later restored that power temporarily until a panel of judges can hear the government’s arguments fighting the original ruling.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Made quickly and with minimal fuss, a park for skateboarders revived a downtown site — and offered a few lessons for urban revitalization.Two years ago, United Nations Plaza was vying for the title of “Saddest Place in San Francisco.” A sunny brick promenade surrounded by government buildings, the plaza had become a trash-strewn dumping ground for the city’s most vexing problems.A typical weekday scene might have included a team of paramedics reviving a limp teenager overdosing on fentanyl, against a backdrop of merchants selling stolen cellphones and a fountain being repurposed as a toilet.For a city struggling to recover after the Covid-19 pandemic, the images of suffering and bedlam could not have been more inconveniently placed: U.N. Plaza, a block from City Hall, has a busy rail station and is bordered by Market Street, a major thoroughfare that double-decker tour buses cruise daily. In 2023, after a big, international conference announced that it was coming to the hobbled city, the parks department scrambled to find a new life for the site.That turned out to be a skateboard park. On a recent sunny morning, kids in baggy pants slid the railings around a flagpole and cruised over a volcano-shaped embankment. The old granite ledges that used to be illegal to skate on were now open to grind and slide.An overview of U.N. Plaza.Inviting a bunch of skaters to rip around, scuffing ledges, is not the use San Francisco had in mind in 1975 when the plaza was dedicated to commemorate the founding of the United Nations in the city. U.N. Plaza was part of a larger redevelopment meant to attract affluent shoppers to San Francisco from the suburbs. Instead, for the next four decades, the city produced regular reports of failure that highlighted assaults and drug use on the plaza, and high vacancies in the buildings surrounding it. For all the thought that went into the open design and gushing fountain, it was never clear what people were supposed to do there.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Germany’s harmonized consumer inflation fell to 2.1% in May, according to preliminary data.
The rate is nearing the European Central Bank’s 2% target.
Economists polled by Reuters had been expecting the reading to come in at 2%.

19 May 2025, Berlin: Apricots are sold at a greengrocer for 7.98 euros per kilogram. Grapes and papaya are also on offer.
Photo by Jens Kalaene/picture alliance via Getty Images

Germany’s annual inflation hit 2.1% in May approaching the European Central Bank’s 2% target but coming in slightly hotter than analyst estimates, preliminary data from statistics office Destatis showed Friday.
The print compares with a 2.2% reading in April and with a Reuters projection of 2%.

The print is harmonized across the euro zone for comparability.
So-called core inflation, which strips out more volatile food and energy prices, dipped slightly from April’s 2.8% to 2.9% in May. The closely watched services print meanwhile eased sharply, coming in at 3.4% compared to 3.9% in the previous month.
Energy prices fell markedly for the second month in a row, tumbling by 4.6% in May.
Germany’s consumer price index has been closing in on the European Central Bank’s 2% target over recent months, in a positive signal amid ongoing uncertainty about the economic outlook for Europe’s largest economy.
This target should be met in the coming months, Carsten Brzeski, global head of macro at ING, said in a note on Friday.

“Looking ahead, at least in the nearer term, German inflation is likely to continue its downward trend, probably dropping below 2% over the coming months,” he said.
Opposing developments are expected to shape the outlook for inflation, and — paired with lower energy prices — lead to the print hovering around the 2% mark throughout the second half of the year, Brzeski noted.
“On the one hand, the cooling of the labour market should take away wage pressures and consequently inflationary pressures; on the other hand, the government’s fiscal stimulus is likely to push up inflationary pressure towards the end of the year and beyond,” he explained.
Domestic and global issues have mired expectations for Germany’s financial future.
One the one hand, U.S. President Donald Trump’s tariffs could damage economic growth, given Germany’s status as an export-reliant country, though the potential impact of such duties on inflation remains unclear. But frequent policy shifts and developments have been muddying the picture.
On the other hand, Germany’s newly minted government is starting to get to work and has made the economy a top priority. Questions linger about when and to what extent the new Berlin administration’s policy plans might be realized.
The ECB is set to make its next interest rate decision on June 5, with traders last pricing in an over 96% chance of a quarter point interest rate reduction, according to LSEG data. Back in April, the central bank had cut its deposit facility rate by 25 basis points to 2.25%.
ING’s Brzeski said Friday’s German inflation print should bring “relief” to the ECB as it suggests disinflation is continuing, and added that despite the latest developments regarding tariffs, the central bank has a stronger case for a further rate cut than a hold.
German bund yields were slightly higher after the data was released. The 2-year bund yield was up over one basis point to 1.719%, while the yield on the 10-year bund was less than one basis point higher to 2.521%. More

Inflation barely budged in April as tariffs President Donald Trump implemented in the early part of the month had yet to show up in consumer prices, the Commerce Department reported Friday.
The personal consumption expenditures price index, the Federal Reserve’s key inflation measure, increased just 0.1% for the month, putting the annual inflation rate at 2.1%. The monthly reading was in line with the Dow Jones consensus forecast while the annual level was 0.1 percentage point lower.

Excluding food and energy, the core reading that tends to get even greater focus from Fed policymakers showed readings of 0.1% and 2.5%, against respective estimates of 0.1% and 2.6%.
Consumer spending, though, slowed sharply for the month, posting just a 0.2% increase, in line with the consensus but slower than the 0.7% rate in March. A more cautious consumer mood also was reflected in the personal savings rate, which jumped to 4.9%, up from 0.6 percentage point in March to the highest level in nearly a year.
Personal income surged 0.8%, a slight increase from the prior month but well ahead of the forecast for 0.3%.
Markets showed little reaction to the news, with stock futures continuing to point lower and Treasury yields mixed.

People shop at a grocery store in Brooklyn on May 13, 2025 in New York City.
Spencer Platt | Getty Images

Trump has been pushing the Fed to lower its key interest rate as inflation has continued to gravitate back to the central bank’s 2% target. However, policymakers have been hesitant to move as they await the longer-term impacts of the president’s trade policy.

On Thursday, Trump and Fed Chair Jerome Powell held their first face-to-face meeting since the president started his second term. However, a Fed statement indicated the future path of monetary policy was not discussed and stressed that decisions would be made free of political considerations.
Trump slapped across-the-board 10% duties on all U.S. imports, part of an effort to even out a trading landscape in which the U.S. ran a record $140.5 billion deficit in March. In addition to the general tariffs, Trump launched selective reciprocal tariffs much higher than the 10% general charge.
Since then, though, Trump has backed off the more severe tariffs in favor of a 90-day negotiating period with the affected countries. Earlier this week, an international court struck down the tariffs, saying Trump exceeded his authority and didn’t prove that national security was threatened by the trade issues.
Then in the latest installment of the drama, an appeals court allowed a White House effort for a temporary stay of the order from the U.S. Court of International Trade.
Economists worry that tariffs could spark another round of inflation, though the historical record shows that their impact is often minimal.
At their policy meeting earlier this month, Fed officials also expressed worry about potential tariff inflation, particularly at a time when concerns are rising about the labor market. Higher prices and slower economic growth can yield stagflation, a phenomenon the U.S. hasn’t seen since the early 1980s. More

Trump administration officials are getting a second chance to try to sever ties with China by starting a trade war, imposing export controls and revoking student visas.The Trump administration has threatened to revoke the visas of many of the 277,000 or so Chinese students in the United States and to subject future applicants from China, including Hong Kong, to extra scrutiny.Cargo ships laden with goods from China stopped coming into American ports earlier this spring as President Trump escalated his trade war against Beijing.And the Trump administration is suspending sales of some critical U.S. technologies to China, including those related to jet engines, semiconductors and certain chemicals and machinery. Taken together, the actions by the Trump administration amount to an aggressive campaign to “decouple” the United States from China, as it seeks to break the close commercial ties between the world’s two largest economies and toss away what had been the anchor of the relations between the nations for decades.Aggressive decoupling would bolster American security, from the perspective of Mr. Trump and his aides. And it would also accelerate a trend toward each power being entrenched in its own regional sphere of influence.Officials in the first Trump administration spoke of the need to decouple from China, with the view that economic and educational ties across many fields equated to a national security threat. But while the efforts reframed the relationship as one of competition rather than cooperation, the volume of trade remained high, even through the pandemic.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More