Economy

President Trump and members of Congress want to revive U.S. shipbuilding with subsidies and penalties against Chinese-built ships. But there are obstacles.President Trump and some members of Congress want to revive a depleted American shipbuilding industry to compete with China, the world’s biggest maker of ships by far.It is such a daunting goal that some shipping experts say it is destined to fail. More hopeful analysts and industry executives say the Trump administration and Congress could succeed but only if they are willing to spend billions of dollars over many years.One of the places where Washington’s maritime dreams might take shape or fall apart is a shipyard on the southern edge of Philadelphia that was bought last year by one of the world’s largest shipbuilding companies, a South Korean conglomerate known as Hanwha.“The shipbuilding industry in America is ready to step up,” David Kim, the chief executive of Hanwha Philly Shipyard, said in an interview.But to do that, he said, the yard must have a steady stream of orders for new vessels. And the federal government will need policies that subsidize American-built ships and penalize the use of foreign vessels by shipping companies that call on U.S. ports.Last month, Mr. Trump issued an executive order aimed at revitalizing American shipbuilding. “We’re going to be spending a lot of money on shipbuilding,” he said when announcing the order. “We’re way, way, way behind.”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

<!–> [–><!–> –><!–> [–><!–> –><!–> –>Bloomberg News<!–> –><!–> [–><!–>Mr. Trump’s interest in the gold reserves has been largely overshadowed by his family’s involvement in variouscryptocurrency ventures, which has raised ethical concerns about potential conflicts of interest.–><!–> –><!–> [–><!–>The president has a long history ofembracing conspiracy theories, and is known to be a fan of golden […] More

Inflation expectations are controversial for obvious reasons.You go to the public, ask them how they think prices will change over a selection of different time periods, and then draw conclusions about what might actually happen.Capturing this data is a core function of the Bank of England’s Inflation Attitudes Survey, carried out quarterly by pollster Ipsos via its “proprietary panel” and “trusted partners”. The survey’s methodology says a “rigorous set of quality procedures” ensure that these panellists are “real, unique, fresh (not over surveyed on the topic), and engaged”. It does not particularly care whether they know the slightest thing about inflation.We recently wrote about the oddness of questions 11 to 14 of the Bank of England’s IAS, which appear designed to confuse, embarrass and frustrate participants. What we didn’t clock at the time is that Ipsos releases individual responses to those questions, allowing us to create the macroeconomic survey version of Takeshi’s Castle — look at the cohort as a collection of individual humans, and watch them struggle through this cruel and unusual questionnaire. So, obviously, we did that.Ipsos’ press release says about 2,000 people take the IAS, but in reality it seems to be roughly double that. February’s outing had 4,270 respondents, with unique IDs from #235864 to #240133. Let’s get to know them:Some content could not load. Check your internet connection or browser settings.Round 1: Slippery Wall Rate-setter RelayWe start, of course, with Question 11: Q11: Each month a group of people meets to set Britain’s basic interest rate level. Do you know what this group is?Here are the options:Monetary Policy CommitteeBank of EnglandThe GovernmentThe TreasuryParliamentOtherDon’t knowFrom that selection, we’d argue that Monetary Policy Committee is the only truly correct answer. How many respondents got that? Some content could not load. Check your internet connection or browser settings.It’s a brutal first round, taking our plucky 4,270 down to 648. Hit the cog icon on the right to filter the results and confirm/refute your own biases.So, just under one in seven respondents are left. On to round two.Round 2: Square Maze Inflationary TrapQ12: Which of these groups do you think sets the interest rates? Government ministersCivil servantsBank of EnglandHigh street banksEuropean Central BankDon’t knowQuestion 12 is a tough one. As we discussed in our previous piece, in the context of Question 11 there’s no clearly-correct answer here. Also note the vagueness — where Q11 refers to “Britain’s basic interest rate”, this is a far more nebulous “the interest rates”. Government ministers and civil servants surely aren’t correct answers, but — depending on the interpretation of the question — Bank of England, high street banks and European Central Banks are all close. But if Monetary Policy Committee was the answer before, surely we should demand the same specificity here?Therefore, the only correct answer is don’t know. As Marla Daniels says in The Wire: The game is rigged, but you cannot lose if you do not play[embedded content]How many people stuck with their convictions and avoided the trap?Some content could not load. Check your internet connection or browser settings.Yikes, just ten people left. On to round three.Round 3: Uphill Garden Bad AttitudesQ13: In fact the decisions are taken by the Monetary Policy Committee of the Bank of England. Which of these do you think best describes the Monetary Policy Committee?Part of the GovernmentA quango, wholly appointed by the governmentAn independent body, partly appointed by the governmentA completely independent bodyDon’t knowHaving acknowledged cruelly trapping their respondents, Ipsos throws another curveball here.As we see it, part of the government is arguably correct, as is an independent body, partly appointed by the government. The MPC certainly isn’t itself a quango, and if we’re going to be brutal it also can’t fairly be described as a completely independent body. We think don’t know is once again an acceptable answer.Let’s see how our respondents did:Some content could not load. Check your internet connection or browser settings.So… seven survivors — three men, and four women — who correctly made it through the BoE/Ipsos survey trap and survived to tell the tale. Finally, Britain has its magnificent seven:Some content could not load. Check your internet connection or browser settings.What can we learn about these heroes? Well, all except #239763 describe themselves as neither satisfied nor dissatisfied with the job the Bank of England is doing on inflation (even though, really, they know it’s the MPC’s job). As for #239763, she’s chuffed, giving a “very satisfied” response.Round 4: Wipe Out The Final FiltrationCan we further whittle down this group? One of the few other questions where there’s a correct answer is 1:Q1: Which of these options best describes how prices have changed over the last 12 months? Taking the position that respondents would, without any other information, treat this as a UK-specific question, the answer in February was 2.8 per cent (assuming you believe the ONS).Of our seven, only one got this correct: #240130, who answered “Up by 2% but less than 3%”. All the others picked at least 4 per cent, or said they didn’t know.So . . . we have a winner! #240130 is the one IAS respondent with what FT Alphaville would sufficient savvy to bother listening to.Some content could not load. Check your internet connection or browser settings.#240130, who we’re going to call Hannah, is a Scottish woman aged 16–24. She’s a student, but earns £20,000 to £34,999 a year. She has A-level equivalent qualifications but no degree (yet!), and probably privately rents or lives with her parents. Hannah, we salute you.Triumph, illustrated More

This article is an on-site version of our Europe Express newsletter. Premium subscribers can sign up here to get the newsletter delivered every weekday and fortnightly on Saturday morning. Standard subscribers can upgrade to Premium here, or explore all FT newslettersGood morning. A scoop to start: EU regulators are planning their first stress test of non-bank financial institutions, people involved in the talks told the Financial Times, in a move likely to spark concern among hedge funds, private credit groups and money market funds that could be subjected to greater scrutiny and restrictions.Today, our trade supremo assesses the EU’s waning appetite for a full-fat trade fallout with the US, and our finance correspondent reports on the efforts by Brussels to lower the price cap on Russian crude exports.Now we’re talkingAfter a whirlwind 72 hours in EU-US trade talks the message from member states last night was to keep calm and carry on, writes Andy Bounds.Context: Irritated by what he saw as stalled negotiations with Brussels, US President Donald Trump on Friday threatened to impose 50 per cent tariff on EU imports. On Sunday, he delayed that threat until July 9 following a call with European Commission president Ursula von der Leyen in which she pledged to use that time to reach a “good deal”.Urged on by key member states, there was little time wasted in turning that promise into action. Yesterday, EU trade commissioner Maroš Šefčovič spoke to US commerce secretary Howard Lutnick and trade representative Jamieson Greer, the second such call in four days. Šefčovič posted on social media afterwards that the commission “remains fully committed to constructive and focused efforts at pace towards an EU/US deal”.Gone was his bravado of Friday, when he urged the US not to issue threats and stressed the EU would “defend our interests” — a change of tone also noted in von der Leyen’s brief statement on Sunday night.The markets certainly prefer jaw-jaw to trade war-war. Germany’s Dax index gained 1.7 per cent yesterday, France’s Cac 40 rose 1.2 per cent, and the FTSE MIB in Milan closed 1.3 per cent higher.Still, the EU is refusing to give way on key US demands, such as scrapping digital taxes and reducing food standards to accept more American products.There was no change in Brussels’ position, according to one diplomat briefed on a meeting of EU ambassadors last night. “Our united stance remains the same,” the diplomat said. “We are standing firm and united, with full trust in the Commission,” said another.Some diplomats and officials think Trump’s threat is a bluff, given the damage tariffs would cause to his own economy. But others believe tariff retaliation, such as the €95bn list of goods proposed this month, might be necessary to force a deal.But almost all agree that whatever deal they get, it will probably leave tariffs higher than they were before he came into office.Chart du jour: Nuts and boltsFour of Europe’s oldest industrial groups have added more than €150bn to their market caps on the back of soaring demand for data centres that power artificial intelligence.Tighten upThe European Commission and the EU’s most powerful member states are pushing to lower the price cap on Russian oil as part of a broader tightening of sanctions against Moscow, but it’s unclear if they have enough support at home and abroad, writes Paola Tamma.Context: Brussels is seeking to hit Moscow with more substantial measures, including lowering a $60 per barrel price cap on crude oil exports to $45 per barrel, according to people briefed on initial discussions on the EU’s 18th sanctions package in response to Russia’s full-scale invasion of Ukraine.But the idea has yet to convince all the EU’s 27 member states and its G7 partners. At a gathering of G7 finance ministers last week in Banff, rotating chair Canada suggested including explicit language on tightening the oil price cap in the joint statement. The motion was supported by the EU and its G7 members France, Germany and Italy as well as the UK, but was not included at the request of US treasury secretary Scott Bessent, according to three officials briefed on the meeting.The US Treasury declined to comment. The final communiqué settled for language that committed G7 nations to “continue to explore all possible options, including options to maximize pressure such as further ramping up sanctions” in case no ceasefire is agreed. Separately, EU countries which were previously reluctant to embrace the oil price cap idea, such as Hungary and Greece, are still evaluating the proposal, officials said.“We are ready to apply more pressure from Russia on the European side and we’re hoping other partners will be ready to follow,” commission spokesperson Anitta Hipper said yesterday.What to watch today Meeting of EU general affairs ministers in Brussels.Polish President Andrzej Duda meets German President Frank-Walter Steinmeier in Berlin.Now read theseRecommended newsletters for you Free Lunch — Your guide to the global economic policy debate. Sign up hereThe State of Britain — Peter Foster’s guide to the UK’s economy, trade and investment in a changing world. Sign up hereAre you enjoying Europe Express? Sign up here to have it delivered straight to your inbox every workday at 7am CET and on Saturdays at noon CET. Do tell us what you think, we love to hear from you: [email protected]. Keep up with the latest European stories @FT Europe More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The writer is chief economist at ING The dollar is losing its status as an all-purpose haven, highlighted by Moody’s recent downgrade of its last remaining triple A credit rating from one of the big three agencies. The EU now has a unique chance to capitalise on investor doubts and promote the euro as a reserve currency, a move that would yield significant economic benefits. It is time to break the taboo around issuing common debt by the EU backed by member states.The dollar’s decline is partly due to President Donald Trump’s trade and budget policies, but there is a structural shift too: foreign holdings of US debt dropped from 50 per cent of the outstanding debt pile in 2014 to only a third by 2024. Meanwhile, foreign interest in European bonds, especially German Bunds, is rising: over the years 2023 and 2024, foreign holders increased their holdings by about €160bn, the equivalent of 8 per cent of currently outstanding Bunds.  The EU should accelerate this trend for two reasons. First, greater demand for euros means cheaper borrowing costs for the bloc’s governments, corporations and homeowners. The Bank for International Settlements found that $100bn in foreign purchases of US Treasuries lowered interest rates by 0.20 percentage points using conservative estimates, illustrating the substantial beneficial impact of having increased foreign holdings.Second, positioning the euro as an alternative haven brings stability during downturns. In times of economic stress, a flight to euro assets would lower financing costs for European governments, giving them more fiscal ammunition to stabilise their economies. At moments such as that, European banks would also receive a boost in the value of their government debt assets, breaking the bank-sovereign “doom loop” that spooked markets during the Eurozone crisis of the early 2010s when sell-offs in national debt weakened bank securities and vice versa. More resilience in a crisis would allow lenders to continue to support the real economy, rather than break it at the worst possible moments.To capitalise on this singular historical moment, Europe needs to act fast. Playing a stronger role as a haven requires increased availability of safe assets. This includes both highly rated national government bonds but also Eurozone bonds backed by member states and issued at a predictable rate.For some governments, particularly those with lower debt-GDP ratios, Eurozone bonds are rife with moral hazard: they fear that backing common debt would merely encourage more profligate peers to freeload and keep spending. That is a fair criticism — but opposing Eurozone bonds outright would mean missing out on a much bigger opportunity that would benefit frugal countries.One way to mitigate improvidence is to make Eurozone bonds conditional. For example, they could replace national debt, rather than add to the overall stock. As Hélène Rey, professor of economics at London Business School, has argued: there is no need to run very high government deficits to be the world’s reserve currency. It is about a sufficiently large stock of debt being available. As it happens, here in Europe there is a bountiful stock at our hands that common bonds could replace. A stronger restriction on breaking the EU rule that government deficits should not exceed 3 per cent deficit to GDP as part of the plan would lower the moral hazard risks.Even with conditionalities, there may be concerns among stakeholders in Finland, the Netherlands and Germany that issuing debt together with, say, Italy and Greece, would increase their individual government borrowing costs. However, this perspective is unduly pessimistic. European institutions already issue debt with a triple A rating, which is superior to the median government rating of low double A. Furthermore, if European governments jointly finance a small portion of their debt — for example, the first 10 per cent — this implies risk pooling. Consequently, this would reduce the overall risk associated with European sovereign debt, and potentially lead to improved ratings for all national governments. In addition, increased liquidity and regular issuance of Eurozone bonds can result in their inclusion in sovereign indices and help grow a futures market. This brings us back to the overall impact on financing costs. For context, the EU at present pays a premium of 0.15 to 0.20 percentage points to finance itself for seven to 10 years versus the Dutch government. The increased popularity at home and abroad could easily bring future common financing costs below the current price paid by a relatively frugal country such as the Netherlands. Needless to say that the southern EU countries may benefit more — an impact that would indirectly also benefit the rest as the internal market would grow faster.The economic case is clear for the EU to begin to design acceptable frameworks for issuing Eurozone bonds if it wishes to capitalise on US weakness. More

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This month, South Korea and the US staged their latest joint naval drills. Destroyers and patrol aircraft rehearsed responses to potential incursions by North Korean drones and special forces across the maritime border.“With the overwhelming power of the South Korea-US combined fleet, we will strongly retaliate against any enemy provocation,” South Korean navy commander Ryu Yoon-sang declared.But behind the boilerplate expressions of common resolve, experts describe a series of possible crises brewing in US-South Korea relations. Despite an alliance that goes back decades, the two countries are threatening to diverge on sensitive questions of trade, regional security and the growing North Korean nuclear threat.When US President Donald Trump announced a 25 per cent “reciprocal” tariff on Korean imports, South Korean officials were shocked. They had believed a long-standing, comprehensive free trade agreement under which South Korea in effect does not levy tariffs on American goods would set them apart.Policymakers in Seoul also worry that America’s fixation on the rise of China will lead it to neglect deterrence efforts against Pyongyang, while also pressuring South Korea into a more confrontational stance towards Beijing.While many of these fears reflect long-standing tensions, they have been exacerbated by the return to power of Trump, whose repeated declarations of admiration for North Korean dictator Kim Jong Un stand in contrast with his often contemptuous attitude towards the South.During his first term, Trump threatened to pull out of the Korea-US (Korus) free trade agreement that came into force in 2012, and to withdraw US troops from the Korean peninsula in a dispute over cost-sharing. The fact that South Korea has a record trade surplus with the US has only added fuel to the fire.Some content could not load. Check your internet connection or browser settings.Since returning to office in January this year, Trump has declared his intention to reopen negotiations with Kim, fuelling South Korean fears of a deal between Washington and Pyongyang over Seoul’s head that could leave it even more vulnerable to North Korean nuclear blackmail.And South Korean anxieties have been compounded by economic weakness and political instability at home. Even before then-president Yoon Suk Yeol’s ill-fated declaration of martial law in December, growth in Asia’s fourth-largest economy was slowing amid persistently weak domestic demand and intensifying competition from China. Seoul’s ability to respond to these escalating challenges has been undercut by the prolonged political crisis that followed the martial law debacle.Yoon was removed from office by South Korea’s constitutional court in April, and this month both acting president Han Duck-soo and finance minister Choi Sang-mok resigned within hours of each other. That has left the country in the hands of a weak caretaker administration led by the education minister until fresh presidential elections are held next week.The frontrunner, leftwing opposition leader Lee Jae-myung, has in the past described the US as an “occupying force”, and more recently advocated for South Korea to take a more conciliatory line with China. Whether Lee or his conservative challenger Kim Moon-soo prevail, highly sensitive discussions that have been put on hold in recent months cannot be postponed for much longer. The results could have ramifications for economic and security relationships across east Asia.“The alliance is in a state of quiet crisis that few people have noticed,” says Victor Cha, a former White House official and Korea chair at the Center for Strategic International Studies (CSIS) think-tank in Washington. “But . . . the crisis is unlikely to remain quiet for long.”At first, South Korean officials were confident they would be spared the worst of the US president’s aggressive trade policies, Seoul-based diplomats recall. In addition to their long-standing security relationship, dating back to the Korean war, and the trade agreement, Korean companies including chipmaker Samsung and auto giant Hyundai are investing tens of billions of dollars in manufacturing facilities in the US.But that illusion was shattered in March, when Trump singled South Korea out for censure during his State of the Union address. Claiming falsely that the east Asian country imposes tariffs “four times higher” on the US than vice versa — because of the free trade agreement, the correct number is in effect zero on both sides — the US president suggested that Seoul was benefiting unfairly. “We give so much help militarily and in so many other ways to South Korea,” Trump said. “This system is not fair to the United States and never was.”Since then, Korean exporters have been hit by Trump’s tariffs on steel and autos, and are bracing themselves for levies that target chips, smartphones and pharmaceuticals. Trump’s “reciprocal” 25 per cent tariff rate is suspended only until July.Donald Trump claimed, incorrectly, that South Korea imposed tariffs ‘four times higher’ on the US than vice versa, before hitting the country with tariffs on steel and autos More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldSeveral EU governments have signalled they want a quick deal with the US to head off Donald Trump’s threat of 50 per cent tariffs on the bloc, urging the European Commission to keep talking to Washington rather than taking the path of confrontation.Italian Prime Minister Giorgia Meloni had an emergency call with Trump hours after the US president delivered his threat on Friday, Italian officials said.They added that Meloni subsequently spoke to commission president Ursula von der Leyen, calling on her to resolve differences with Trump through negotiations.The Brussels body added that the Italian leader was one of several EU leaders who spoke to the commission president at the weekend.Von der Leyen then persuaded the US president to delay the increased levies by more than a month to July 9 in a phone call on Sunday.France, Spain, Ireland and Belgium have also welcomed the bid to accelerate talks and avoid escalation of the transatlantic trade war.Trump said in a post on his Truth Social network he had been told by von der Leyen that “talks will begin rapidly”. He added that it was his “privilege” to delay the increased tariffs from the previous date of June 1. Meloni, who has established a rapport with both Trump and von der Leyen and has tried to act as a bridge between Washington and Brussels, has proposed a summit between leaders of the big EU economies, top commission officials and the US president next month to defuse tensions.Trump is due to visit the Netherlands for the Nato summit on June 24-25, a trip that could provide an opportunity for further face-to-face talks.In comments on Monday, French President Emmanuel Macron welcomed the “good exchange” between Trump and the commission president. “I hope we can continue on this road and return to the lowest possible tariffs that will allow for fruitful exchanges,” he told reporters on a visit to Vietnam.José Manuel Albares, Spain’s foreign minister, added that the phone call meant talks were going in the “right direction”, while his Irish counterpart Simon Harris, whose country’s pharmaceutical industry is exposed to potential new US tariffs, called for a deal to “protect jobs and investment”. Belgium, whose relatively small economy is reliant on exports, also welcomed von der Leyen’s “constructive” approach.Von der Leyen’s spokeswoman Paula Pinho said that the commission president and Trump had agreed to “fast-track” talks, with a second call in four days between their two lead negotiators on Monday.EU trade commissioner Maroš Šefčovič said he had also held “good calls” with US commerce secretary Howard Lutnick and trade representative Jamieson Greer. The commission was “fully committed to constructive and focused efforts at pace” towards a deal, he wrote on X. “We continue to stay in constant contact.”While the commission conducts trade policy, Pinho said von der Leyen was in “regular contact” with EU leaders to seek their views. The commission president made no mention of defending EU interests, a line used by Šefčovič after he has talked to US counterparts. Member states have approved a €21bn package of up to 50 per cent tariffs on US goods such as maize, wheat, motorcycles and clothing, which will kick in on July 14 without a deal. The commission is also consulting member states on a €95bn list of other targets, including Boeing aircraft, cars and bourbon whiskey.When Trump made his threat of 50 per cent tariffs on EU imports on Friday he said the bloc had not made enough progress responding to US demands to cut its trade surplus.He originally announced 20 per cent on EU imports on April 2, his self-styled “liberation day”, but halved them later that same month for the duration of a 90-day negotiation period due to end on July 9.Additional reporting by Laura Dubois in Brussels More