Economy

A deal would be a positive sign for both governments, which have eyed an agreement since President Trump’s first term.President Trump is expected to announce on Thursday that the United States will strike a “comprehensive” trade agreement with Britain.Mr. Trump teased a new trade agreement in a social media post on Wednesday night, though he did not specify which nation was part of the deal. On Thursday, a senior British official confirmed that a deal with the United States had been reached.And on Thursday morning, Mr. Trump was back on social media to confirm that it was, in fact, a deal with the U.K.“The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come,” he wrote. “Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!”Mr. Trump is expected to announce the deal at 10 a.m. from the Oval Office.The British official, who spoke on the condition of anonymity because of the sensitivity of the issue, did not offer details, beyond saying that the deal would be good for both Britain and the United States.The agreement would be the first deal announced since Mr. Trump imposed stiff tariffs on dozens of America’s trading partners. He later paused those temporarily in order to allow other nations to reach agreements with the United States.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

The nuclear-armed rivals are also wrangling over Pakistan’s access to desperately needed foreign aid, as India explores ways to use its soft power and relationships to bedevil its old enemy.Even as India was gearing up to use its military to strike at Pakistan this week, calling it revenge for a terrorist strike in Kashmir last month, the government was pursuing other forms of power projection as well: bloodless and more refined, and mostly aimed at Pakistan’s economic vulnerability.On Friday, May 9, the executive board of the International Monetary Fund is scheduled to meet three blocks from the White House. Indian officials have suggested that they will make a new case there: that the Fund should refuse the extension of a $7 billion loan to Pakistan described as crucial to getting the country on more solid footing financially and to fund desperately needed services for its people. And though Indian officials will not confirm it, other potential sources of Pakistani aid may also be in India’s sights, according to domestic media reports.In two weeks before its strikes against Pakistan on Wednesday, India was already testing new ways to aggrieve its old enemy.On April 23, India pulled out of a river-sharing treaty that has safeguarded Pakistan’s vulnerable water supply since 1960. Pakistan called it an act of war.India turned to its softer power, as well. As tensions rose after the terrorist attack in Kashmir, India tinkered with its internet controls to cut off Pakistani musicians and cricketers from their audiences on Indian social media, much as it blocked Indians from using Chinese-owned TikTok after a clash with China in 2020.India also announced that it would sever all trade between the two countries. In practice, there wasn’t much to begin with. India exports mainly sugar, medicines and some other chemicals to Pakistan. Some Indian exporters said they never got a legal notice from the government — so they are still fulfilling contracts.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

As he proposes ever stiffer tariffs, President Trump has normalized his merely big ones.There has been a mantra spreading among weary corporate executives who are becoming resigned to President Trump’s tariffs while still hoping to avoid the worst of their effects: Ten percent is the new zero.The statement refers to the 10 percent tariff that Mr. Trump put in place on most U.S. imports one month ago. Such a significant increase in U.S. tariffs would have been unthinkable a few years ago. But it no longer seems like such a big deal, compared with the truly large tariffs that Mr. Trump has already imposed or threatened elsewhere.Mr. Trump’s “Liberation Day” announcement on April 2 that he was planning tariffs of 10 percent to 60 percent on dozens of America’s trading partners set off a rout in the bond markets and a flight from the U.S. dollar as investors panicked at the prospect of an economically devastating trade war. Mr. Trump also ratcheted up tariffs on China to a minimum of 145 percent amid a trade spat with Beijing, bringing much of the trade between the countries to a halt.That turmoil appears to have moderated Mr. Trump’s impulses somewhat. The president quickly paused tariffs on most countries, giving them 90 days to negotiate trade deals instead.Mr. Trump also granted a lucrative exemption from China tariffs for makers of electronics and offered some limited relief for automakers. And he has hinted that he could do more, saying he likes to be “flexible.”Investors have lapped up any signs of good news, even insubstantial ones. Stock markets have now regained nearly all of the losses they sustained after April 2, buoyed by comments from Trump administration officials that they are working to close trade deals with allies and planning to meet with Chinese counterparts to discuss their standoff.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

Historians make their names by persuading people to see patterns in the chaos. In the late 1970s, the French historian Fernand Braudel thought that one of those patterns was about to repeat. Braudel was a student of the slow-moving currents that shape events. He wanted people to pay less attention to great men like Napoleon and more to seemingly humble things like the potato, a New World import that made it easier for European farmers to grow more food than they needed; this surplus, in turn, gave a wider array of Europeans time to engage in new hobbies like complaining about their rulers. One might say that he regarded the potato as the cause of Napoleon.Listen to this article, read by Malcolm HillgartnerIn the third volume of his epic “Civilization and Capitalism,” published in 1979, Braudel explored the forces that made one city at a time the economic center of the Western world, from Venice to Amsterdam to London, and then inexorably lifted up another in its place. He wrote that cities rose as centers of commerce, and then, as they prospered, they began to invest their surpluses in building new centers, engineering their own declines. Commerce moved on, leaving a financial hub behind.Braudel’s account ended with the decline of Amsterdam, the entrepôt of Europe through the 17th and into the 18th century, a city of astonishing wealth and diversity. Wide-eyed visitors wrote of its wonders with the same astonishment as later generations would write of New York. The young czar of Russia went home so impressed that he built St. Petersburg in its image. But as Amsterdam grew fat and happy, its merchants became bankers and began to seek better returns in fast-growing London. Amsterdam, Braudel wrote, became “a society of rentier investors on the lookout for anything that would guarantee a quiet and privileged life,” a society that had moved on “from the healthy tasks of economic life to the more sophisticated games of the money market.”Braudel noted that London, too, eventually ceded its role, underwriting the rise of New York in the early 20th century. And in the late 1970s, he judged that New York was entering the “autumn” of its era as the center of the global economy. Commerce and industry were fleeing the city, leaving behind a thriving financial center — a sure sign in Braudel’s view that New York, and the nation it anchored, were on the edge of decline.Donald Trump became Donald Trump in that city, building towers and bankrupting casinos as Wall Street boomed and the working class faded away, and he emerged with a similarly bleak view of America’s prospects. His career as a political figure has been built on his conviction that America is losing its wealth and its power. If Ronald Reagan filled voters with hope, Trump offers to keep them company in their misery. He has an intuition for the things that people fear and is comfortable saying what other politicians won’t. Where other presidents intone that it’s still Morning in America, Trump has touched a nerve by insisting that it’s not long before midnight.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

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Washington and Beijing will this week hold their first trade talks since US President Donald Trump launched a trade war against China that has rattled financial markets and triggered concerns about supply chains.Treasury secretary Scott Bessent and US trade representative Jamieson Greer will meet their Chinese counterparts in Geneva this week. China said vice-premier He Lifeng, its top economy official, would lead its delegation.The meeting will be the first high-level interaction between the two sides since vice-president Han Zheng attended Trump’s inauguration in January.Bessent told Fox News on Tuesday evening that the two teams would meet on Saturday and Sunday. He said they had a “shared interest” in talking because the high level of tariffs “isn’t sustainable”. But he cautioned that the discussions would be an effort to lower tensions rather than negotiations about a broader trade deal.“My sense is that this will be about de-escalation, not about the big trade deal,” Bessent said during the interview. “We’ve got to de-escalate before we can move forward.”The meeting marks the first real effort to tackle the trade war that has seen Washington impose a 145 per cent tariff on imports from China and Beijing slap a retaliatory tariff of 125 per cent on American goods.It is the first positive sign for businesses that have been concerned about the record level of tariffs both sides have placed on each other. It also comes after Trump on multiple occasions said the countries were holding negotiations, which have been contradicted by his own team.“We all knew that the US and China would need to re-engage, but today’s announcement of a face-to-face meeting in Geneva at such a senior level is greater than expected,” said Wendy Cutler, a former US trade official who now serves as vice-president at the Asia Society Policy Institute.Cutler cautioned that it was important to “keep expectations in check”, saying that it was “a lot easier to impose tariffs against each other than work together on a joint plan to re-engage and stabilise relations”.Washington and Beijing had been mired in a stand-off. Trump has wanted to talk directly to his counterpart President Xi Jinping, but China had made clear that it would not hold a leader-level call to start negotiations.Beijing had earlier said the US should cut tariffs as a precondition for negotiations but appeared to soften its position last week when state media said there would be “no harm” in holding talks with Washington.Asked on Fox News which side had requested the meeting, Bessent said: “There isn’t a first call, there are a lot of contact points over time.”Testifying before Congress earlier on Tuesday, the Treasury secretary had told lawmakers that although the administration was negotiating with 17 of its 18 major trading partners, it had not held any talks with Beijing.The Chinese commerce ministry said Beijing decided to hold talks after US officials recently hinted on several occasions about possible tariff relief and sent messages about their desire to have negotiations.“Based on thorough consideration of global expectations, China’s own interests, and calls from US businesses and consumers, China has decided to agree to engage with the US,” the ministry said in a statement.It also warned the US not “use talks as a cover for coercion and blackmail”. Noting that other countries were already negotiating with the Trump administration, the ministry added: “It must be emphasised that appeasement does not bring peace, and compromise does not earn respect.”Last month, Trump triggered a sell-off in global stock markets after imposing “reciprocal” tariffs of up to 50 per cent on almost every US trading partner. He then lowered the levies to a 10 per cent baseline for 90 days.The Trump administration has also indicated it is preparing to announce more tariffs on several sectors that it deems important. In recent weeks, it has launched national security probes that could lead to levies on chips and consumer electronics, lumber, copper, pharmaceuticals and critical minerals. Over the weekend, Trump threatened to put tariffs on foreign motion pictures. More

Scott Bessent, the Treasury secretary, and Jamieson Greer, the United States trade representative, will discuss trade and economic matters with the officials this week.Top officials from the Trump administration will meet with their Chinese counterparts in Switzerland this week, the first formal meeting about trade between the United States and China since President Trump raised tariffs on Chinese imports to triple-digit levels last month.Scott Bessent, the Treasury secretary, and Jamieson Greer, the United States trade representative, plan to meet with Chinese officials during a trip to Geneva, where they will discuss trade and economic matters, according to separate announcements from the office of the trade representative and the Treasury Department.A spokesperson for the Chinese Ministry of Foreign Affairs said that He Lifeng, the vice premier for economic policy, would visit Switzerland from Friday to Monday and hold talks with Mr. Bessent. Mr. Bessent said on Fox News that the talks would be held on Saturday and Sunday.The meeting could help to defuse an economically damaging trade standoff that has persisted between the world’s largest economies for a month. In early April, Mr. Trump escalated tariffs on Chinese exports to a minimum of 145 percent, to punish Beijing for retaliating against his earlier levies.While both sides appear to be interested in reducing those tariffs, neither has wanted to make the first move. It remains unclear how quickly the United States and China might strike any kind of agreement, or what its contents could be.The Trump administration has criticized China for its role in bringing fentanyl and ingredients to make the drug to the United States, as well as a bevy of unfair trade practices. Mr. Trump and his advisers have also censured China for failing to stick to the terms of a trade deal the president negotiated in his first term. China, in return, has called Mr. Trump’s tariffs “illegal and unreasonable.”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

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldShow video infoCanadian Prime Minister Mark Carney told Donald Trump that his country was “not for sale” as he rejected the US president’s push to make Canada the 51st US state during a meeting at the White House on Tuesday. “As you know from real estate, there are some places that are never for sale,” Carney told Trump in a mostly convivial exchange in the Oval Office. “Having met with the owners of Canada over the course of the campaign . . . it’s not for sale. It won’t be for sale, ever.”But in a sign that tensions are likely to persist between Washington and Ottawa, Trump responded by saying: “Never say never.”“I’ve had many, many things that were not doable, and they ended up being doable, and only doable in a very friendly way,” Trump said, adding: “Over time, we’ll see what happens.” The meeting at the White House was the first in-person encounter since Carney won the Canadian election last month on a staunch anti-Trump platform. The US president’s hostility to his northern neighbour — with repeated threats to annex Canada and the imposition of tariffs in violation of a free trade agreement — dominated the Canadian election campaign and helped propel Carney’s Liberal party to victory.But Trump opened the conversation with a friendly quip about Carney’s victory. “I think I was the greatest thing that happened to him,” he said, adding: “It was probably one of the greatest comebacks in the history of politics, maybe even greater than mine.” He then described the prime minister as a “very talented person, a very good person”. “I have a lot of respect for this man,” he added. Carney, who joked he was on “the edge of my seat” during the meeting, said he was focused on improving defence, strengthening the border and fighting fentanyl trafficking. Both he and Trump said they were open to renegotiating the USMCA trade agreement, which succeeded Nafta during Trump’s first term and is up for review next year.“The USMCA is a good deal for everybody,” Trump said. “It was actually very effective and still very effective but people have to follow it, and that’s been a problem.” Carney said: “[The USMCA] is a basis for a broader negotiation. Some things about it are going to have to change.”But the US president made clear that he remained sceptical of free trade with his Canadian neighbours, especially in the automotive and metals sectors.“We want to make our own cars. We don’t really want cars from Canada,” Trump said. “And we don’t want steel from Canada because we’re making our own steel, and we’re having massive steel plants being built right now as we speak.”Speaking at the Canadian embassy after the meeting, Carney told journalists the talks with Trump were “wide-ranging” and “very constructive”, adding “this is the point at which a serious discussion begins”. “We’re having a very complex negotiation about a wide range of issues and as I said before I came here, I wouldn’t have expected white smoke coming out of this meeting,” he said.The prime minister said he and Trump had discussed how they could enhance the Canadian and US auto industry “versus foreign competition, including from Asia”. He added that while Trump was willing to renegotiate the USMCA trade deal and drop tariffs “that does not presuppose an outcome”. “There’ll be zigs and zags, difficult aspects to it but the prospect is there. We discussed it in more detail and as I said, we’ll be following up . . . between officials, but also he and I in the coming weeks.” More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Britain and India on Tuesday announced a “landmark” trade deal that included concessions to New Delhi on access to UK employment markets in return for big cuts to Indian tariffs on exports of whisky and cars.The deal will exempt the UK operations of Indian employers from paying national insurance on Indian staff relocating to the UK for up to three years, making it cheaper to move people to Britain than previously.The UK’s Labour government hailed the deal as a “bright shining light” at a time when US President Donald Trump’s tariffs have roiled the world economy.But it faced domestic criticism over the national insurance move, just days after the anti-immigration Reform UK party swept local elections in England.Reform leader Nigel Farage claimed that UK Prime Minister Sir Keir Starmer had “betrayed working Britain”.India pushed hard during the three-year long negotiations for the “Double Contribution Convention”, which will give Indian employers in the UK relief from Britain’s 15 per cent national insurance levy paid by companies. The deal to avoid double taxation also covers national insurance contributions paid by employees.New Delhi has agreed to cut whisky and gin tariffs, which will be halved from 150 per cent to 75 per cent before falling to 40 per cent by the tenth year of the deal. Car tariffs will fall from more than 100 per cent to 10 per cent, subject to a quota.Talks on the deal accelerated in the wake of Trump’s imposition of global tariffs last month, with London and New Delhi keen to seal closer trade ties.Indian Prime Minister Narendra Modi posted on X that the deal was “ambitious and mutually beneficial”, adding that Starmer would visit India soon.British ministers hope the India trade deal could be a prelude to the signing of an agreement with Trump in the coming days, ahead of a deal with the EU to start improving bilateral trade links at a summit on May 19.The UK government estimates the India deal will boost Britain’s economy by 0.1 per cent by 2040. Officials insisted it would not involve changes to the British visa system or broader immigration strategy, at a time when Reform and the Conservatives are campaigning hard on the issue.British officials said Indian employees relocating to the UK would still be subject to salary thresholds for visas and have to pay the NHS surcharge for immigrant workers, despite the national insurance exemption.The agreement comes after UK chancellor Rachel Reeves controversially raised national insurance contributions for employers at her first Budget last October.Dame Harriett Baldwin, the Conservative party’s shadow minister for business and trade, said in parliament that the deal “looks like it’s subsidising Indian labour while undercutting British workers”.The centrist Liberal Democrats also questioned the national insurance agreement, saying the move needed careful scrutiny by MPs.Trade minister Douglas Alexander told MPs the national insurance part of the trade deal was “reciprocal” and would “benefit UK workers and their employers as the opportunity within India expands”.The UK government said the national insurance agreement was similar to arrangements it had with countries such as Switzerland, Norway and Canada. Indian employers are among the biggest users of intra-company transfer visas into the UK.Some content could not load. Check your internet connection or browser settings.The UK government said cuts in tariffs on Indian products would help provide British shoppers with “cheaper prices and more choice” in areas including clothes, footwear and food products such as prawns.India will keep tariffs in place for dairy products, while the UK is keeping restrictions in place on some agriculture products such as milled rice.Although full details are not yet available, the trade pact is expected to be one of the most significant new agreements signed by Britain since it left the EU, following accords with Australia and Japan. Based on 2022 trade, the deal would involve India cutting tariffs worth more than £400mn a year when the agreement came into force, rising to about £900mn after 10 years, said the UK government.It added that it expected the deal to increase bilateral trade by £25.5bn and UK GDP by £4.8bn in the long run. Bilateral trade between the UK and India was £42.6bn in 2024 while UK GDP was £2,851bn.The announcement said the deal would bring “market certainty” to UK services exports currently worth £500bn a year. However, the Law Society of England and Wales said the deal had failed to include legal services and was a “missed opportunity”.Sam Lowe, trade lead at consultancy Flint Global, said that being among the first countries to strike a trade deal with India was a win for the UK, but the ultimate benefits would only become clear over time. Additional reporting by Amy Borrett More