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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 writer is chief executive of the CBI, the employers’ organisationAs the spectre of protectionism casts its shadow over the world economy, now is a moment to leave old arguments behind. Instead, we should take action. Leaders are currently preparing for the EU-UK summit next week. Markus Beyrer, director-general at BusinessEurope, and I, bolstered by the strength of the 25mn businesses we speak for across Europe, call on them to choose prosperity over politics. This is the first time that the CBI, the UK’s leading business voice, and BusinessEurope, representing over 40 European federations (of which we are one), have come together to publicly outline the business priorities for a refreshed EU-UK strategic partnership. In a formal letter to UK Prime Minister Sir Keir Starmer and president of the European Commission Ursula von der Leyen, we have set out the concrete steps needed to improve this crucial relationship.With war on our doorstep in Europe, co-ordinated and collaborative action on defence and industrial capabilities is a priority. However, uniting against common threats cannot be the ceiling of our ambition; renewing the UK-EU economic relationship must not be left to “any other business” on the agenda.Business has no desire to rehash the Brexit referendum, nor trample on the red lines negotiators have already outlined. Both sides bring baggage to the table. But we can’t afford the legacy of the past decade to determine the future of the next — this summit must deliver critical progress.The EU and the UK share the North Sea and have aligned their net zero ambitions. Energy co-operation between them could deliver both energy security and a resilient, low carbon economy. The EU-UK Trade and Cooperation Agreement committed to “giving serious consideration to linking respective carbon pricing systems”. But progress has been glacially slow. With both our emissions trading schemes phasing out free allowances, this is the moment to link them, to create a deeper, more liquid and effective market. A mutual exemption to our respective carbon border adjustment mechanisms would prevent new trade barriers hindering electricity imports and stalling joint grid projects in the North Sea. Neither the UK’s clean power target nor the EU’s vital electrification needs can be met without this.Mobility has become an overly politicised issue and risks trapping us in stagnation. But people travelling across borders is very different to permanent migration if they are doing so to deliver services, which represent 48 per cent of our total bilateral trade. Everyone wants our powerhouse services sector to thrive and grow. That’s not cakeism, it’s pragmatism. Both sides need to focus on making this happen, whether by enhancing short-term business travel or through mutual recognition of professional qualifications.The UK leaving the EU’s regulatory and customs regimes has left companies on both sides of the Channel with their own Brexit red tape to deal with. For those hit with the resulting higher costs, failing to make progress now would be a lost opportunity to create an environment where businesses thrive.  Reducing those costs doesn’t require re-entering the customs union. A sanitary and phytosanitary and a veterinary agreement would support agricultural and food products moving with less friction across borders but without compromising high standards of food safety and animal health. Such an agreement would also ease the flow of trade between mainland Britain and Northern Ireland. Recognising each others’ testing and certification would also reduce barriers to trade in goods. The EU already has such agreements with the US, Canada, and several other countries, so why not the UK?None of this would infringe on political red lines in London or Brussels. This is pragmatism to unlock prosperity — the sort of leadership and vision that businesses on both sides of the Channel want to see from the summit next week.   More

JPMorgan CEO Jamie Dimon said there is still “uncertainty” on the tariff front but the pauses are a positive for the economy and market.
Michael Feroli, the firm’s chief U.S. economist, said in a note to clients on Tuesday that the recession outlook is “still elevated, but now below 50%.”
“Even at this level, you see people holding back on investment and thinking through what they want to do,” Dimon told Bloomberg Television.

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., speaks during the 2025 National Retirement Summit in Washington, DC, US, on Wednesday, March 12, 2025.
Al Drago | Bloomberg | Getty Images

Wall Street titan Jamie Dimon said Thursday that a recession is still a serious possibility for the United States, even after the recent rollback of tariffs on China.
“If there’s a recession, I don’t know how big it will be or how long it will last. Hopefully we’ll avoid it, but I wouldn’t take it off the table at this point,” the JPMorgan Chase CEO said in an interview with Bloomberg Television.

Specifically, Dimon said he would defer to his bank’s economists, who put recession odds at close to a toss-up. Michael Feroli, the firm’s chief U.S. economist, said in a note to clients on Tuesday that the recession outlook is “still elevated, but now below 50%.”
Dimon’s comments come less than a week after the U.S. and China announced that they were sharply reducing tariffs on one another for 90 days. The U.S. has also implemented a 90-day pause for many tariffs on other nations.
Thursday’s comments mark a change for Dimon, who said last month before the China truce that a recession was likely.
He also said there is still “uncertainty” on the tariff front but the pauses are a positive for the economy and market.
“I think the right thing to do is to back off some of that stuff and engage in conversation,” Dimon said.

However, even with the tariff pauses, the import taxes on goods entering the United States are now sharply higher than they were last year and could cause economic damage, according to Dimon.
“Even at this level, you see people holding back on investment and thinking through what they want to do,” Dimon said.
— CNBC’s Michael Bloom contributed reporting.

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Walmart has warned Americans will pay higher prices because of Donald Trump’s trade war, despite this week’s deal between the US and China to slash punitive tariffs.The world’s biggest retailer is particularly exposed to the president’s sweeping global trade levies. A third of the goods it sells in the US come from other countries, with China one of its largest sources of imports. Washington and Beijing agreed this week to a cut in tariffs for 90 days, reducing US levies on Chinese imports to about 40 per cent, from as high as 145 per cent. Doug McMillon, Walmart’s chief executive, said the reprieve was not big enough to avert price rises for its hundreds of millions of customers. “We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure,” he said. “The higher tariffs will result in higher prices.” Walmart sells about a quarter of US groceries, and has long served as a benchmark for the lowest overall prices in the industry. McMillon was among the retail bosses to argue against tariffs at the White House last month, warning Trump of higher prices and empty store shelves. Trump pulled back from the trade war under pressure from business leaders and a market rout. He paused sweeping levies on dozens of trading partners in April after a week, and has promised a rush of new trade deals. The deal with China, which followed an agreement with the UK last week, marked Trump’s most significant climbdown. But McMillon said the retreat would not be enough to protect US consumers from price increases, threatening the economy and a resurgence of inflation. Walmart would try to keep a lid on food prices after years of grocery inflation, McMillon said. But he said there were new tariff pressures for products it needs to import, such as bananas from Costa Rica and coffee from Colombia. The warning from McMillon on Thursday came as Walmart reported a 4.5 per cent annual increase in comparable sales at its namesake US business in the three months to the end of April, surpassing the 3.7 per cent rise forecast by Wall Street analysts, according to Visible Alpha. The retailer maintained its financial guidance for the full year, which includes a projection of 3 to 4 per cent growth in net sales. However, it withheld guidance on profits in the second quarter, citing the uncertain trade picture. Shares fell less than 1 per cent. John David Rainey, chief financial officer, said it was difficult to predict how consumers would react to the tariffs, and what level of price rises would start to reduce demand. The heavy tariffs on China were already raising prices for products including electronic and toys, McMillon said. The Walmart boss said cost pressure began in April, and increased in May. He said price increases for goods other than groceries were likely to continue all year. Walmart will try to shift the sourcing of manufactured goods away from tariff-hit locations and change some product components, such as using fibreglass instead of aluminium, a metal subject to US duties. Mexico, Canada, Vietnam and India are major sources of Walmart’s imports, alongside China. Walmart is the first big-box retailer to report earnings since Trump’s April tariff announcements. Target and Home Depot will follow next week. Amazon this month warned tariffs and trade policies posed risks to earnings, but the company did not report any slackening of demand or any significant rise in average selling prices on its platform. Walmart reported that its ecommerce business — which includes sales from its own inventory and from third-party merchants using its platform — grew 22 per cent year on year and was profitable in both the US and globally for the first time. Trade war jitters prompted shoppers to speed up purchases of some items in an attempt to beat the tariffs, potentially distorting the picture of consumer demand. Walmart reported quarterly revenue of $165.6bn, up 2.5 per cent year on year and slightly below forecasts of $166bn, according to Visible Alpha. Net income fell 12.6 per cent to $4.6bn, marginally more than the consensus. More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldTo prosper, businesses need to take calculated risks. Relocations, hiring decisions and product launches are based, in part, on boardrooms making calls on how economic trends will play out. Yet, in Donald Trump’s America, it is difficult to have any conviction on where the economy will be next month, let alone next year. References to “uncertainty” and “tariffs” have dominated US companies’ earnings calls this season. Executives cannot commit to decisions when the range of outcomes stemming from the US president’s global trade war remains so vast. Numerous businesses including Ford, American Airlines and Mattel have even decided to curb guidance on their sales and profits.In the three months since Trump’s second-term inauguration, indices of US economic policy uncertainty — based on references in media articles — have shot up well beyond highs set during even the Covid-19 pandemic. The president embraces unpredictability. Last month, Treasury secretary Scott Bessent said that Trump created “strategic uncertainty” to gain leverage in trade negotiations. Stoking frenzied anticipation, more broadly, helps him garner attention. In the past, these tactics may have helped the real estate developer turned media personality to steamroller through deals or boost ratings. But when managing the world’s largest economy, they are deeply damaging.Trump’s open-ended approach to tariff negotiations, in particular, has sapped American businesses. Year-ahead investment expectations have plunged. Import duties on countries and sectors that could fluctuate by tens of percentage points, in the space of a month or so, make it impossible for executives with global supply chains to plan ahead. Duties are essential components in calculating profit margins and are among the most complex elements of compliance for international organisations.Trade agreements have a proven record of raising cross-border commerce and investment. But that is because they usually provide long-term confidence in stable and transparent trading terms. Trump is operating on months-long deadlines. Even if the president strikes further deals on his “reciprocal” tariffs, following recent settlements with the UK and China, faith that those duty rates will endure will be low. Trump is, after all, the self-anointed “tariff man”.As long as that uncertainty lingers, the president’s ambition to impel foreign manufacturers, with the threat of duties, to invest in America will not be fully realised. The volatility will also stymie US companies. Producers with domestic supply chains tend to welcome Trump’s tariffs, as they help to block cheap imported competition. But these organisations cannot make decisions to expand either unless they know where trade policy — and hence their competitors — will end up. Indeed, as the FT reported, this week’s ceasefire in the US-China trade war is already driving early Christmas stockpiling as US retailers try to beat the potential expiry of the truce.If businesses cannot plan, investors cannot accurately price equities or corporate bonds either. Policymakers are also perplexed. The US Federal Reserve’s April Beige Book mentioned the word “uncertainty” 80 times — more than during the Covid pandemic. In turn, financial stability risks from market volatility and mis-steps in monetary policy remain elevated.The most rational response for organisations is to “wait and see”. The largest companies and those with the president’s ear may still thrive. But for most, trying to operate in real time, by updating decisions and exposures with each social media post, and every twist and turn in trade policy, is a fool’s game. Only when policy stability returns can the American economy bounce back to its dynamic best. More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldDonald Trump’s trade war risks sparking capital flight from the US as the president’s unpredictable tariff policies cause “enormous” damage, hedge fund Elliott Management has warned. The activist firm, founded and co-led by Republican megadonor Paul Singer, said in a letter to investors seen by the Financial Times that the Trump administration’s economic programme could tarnish the appeal of the dollar and of doing business in the US. That would risk “capital flight” and a “significant” fall in value of the currency and US assets, Elliott said in a section of the late April letter titled “Bonfire of the American era?”Elliott declined to comment.The warning comes after Trump’s tariff blitz triggered weeks of turmoil in financial markets, and marks the latest criticism of the White House from the $73bn-in-assets hedge fund, which earlier this year said the president’s embrace of cryptocurrencies was fuelling a speculative mania.The tariffs contemplated by the administration were “likely more stringent than the ones that exacerbated the Great Depression in the 1930s”, Elliott wrote in the letter, which was sent to investors after Trump announced a 90-day pause to his sweeping “reciprocal” tariffs on US trading partners last month, but before this week’s US-China trade deal fuelled a further recovery in markets.“Such tariffs will generate a lengthy, complicated process of negotiation, retaliation and uncertainty for businesses around the globe” that could cause “enormous” damage, the firm added. Singer has been a major donor to Republicans in recent years, donating $56mn to the party’s candidates in the last election cycle, according to website OpenSecrets. A small group of top Wall Street figures have spoken out against Trump’s economic policies. Citadel founder Ken Griffin, another major Republican donor, said last year that the president’s tariff plans would put the US “on a slippery slope to crony capitalism”. Bill Ackman, a supporter of Trump in the 2024 presidential campaign, has described the tariffs as “a major policy error”, while billionaire investor Stanley Druckenmiller has said he does not support tariffs exceeding 10 per cent.Elliott also said in the letter that the sell-off that followed Trump’s “liberation day” tariff announcements caused “capital destruction on a large scale”. The S&P 500 index was down by as much as 15 per cent in 2025 in early April, but has since recovered all of those losses as trade tensions receded. Nevertheless, Elliott said the episode highlighted the “brittleness” of a “massively overvalued stock market”.The hedge fund was up about 2.5 per cent in the first quarter of the year, according to figures in the letter. The turmoil sparked by tariffs was likely to create greater opportunities for activist investing, as market stress “exposes weakness at companies in need of course correction”, the firm added. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Europe needs less regulation and a better industrial strategy to sustain car manufacturing in the face of the “very clear direction” set by Donald Trump’s administration and growing Chinese competition, the chiefs of Stellantis and Renault have warned.“Europe needs to decide what it wants to do in terms of its industrial policy,” Stellantis chair John Elkann told the FT’s Future of the Car summit on Thursday. “Does it want to be a [bloc] that builds cars or [one that] buys cars? That’s a decision that the political forces need to make.”In a joint interview with Renault chief executive Luca de Meo, Elkann added that the Trump administration had been more effective in setting out a policy to boost car manufacturing despite the chaotic implementation of his tariffs. “President Trump is very clear in what he wants to achieve for the car industry,” said Elkann. “The intentions are clear, but more importantly, the actions are being put in place that are going to make that possible.”De Meo said the car industry faced more than 100 regulations in the EU from now to 2030, raising the costs to meet them and making it harder to build small cars profitably. “We need to talk strategy rather than regulation,” he said. “We need to be able to cope with the new competition that is coming, not only from China but in general.”The comments come as Stellantis and other global carmakers have rushed to respond to Trump’s evolving tariff policy and disruptions to supply chains. Meanwhile, European companies face sluggish vehicle demand at home and the influx of more affordable Chinese vehicles into the continent. Shares in Stellantis, which is particularly exposed to potential new trade barriers between the US and Canada and Mexico have dropped 24 per cent this year on the back of tariff threats. But Elkann stressed that the objective of Trump’s policy to increase manufacturing in the US had been consistent.Europe aims to phase out new sales of combustion engines by 2035. But it has recently offered carmakers relief from stricter emissions targets due to come into force at the end of 2025.However, Elkann and De Meo called for a more supportive policy environment, especially for small cars. The pair have said that current legislation is focused on larger vehicles and adds requirements that make building smaller cars less profitable.Saying that the bloc should lower the legislative burden on companies and have a greater impact analysis of policies to phase out combustion engines, De Meo added: “We want packages of regulation so that they don’t come every three months because it’s keeping everybody busy.”Elkann added: “If we have less regulations, we can make sure that we build cars that are less expensive and so they’ll be more affordable.” More