Economy

European business groups and lawmakers have hit out at the White House after it announced fresh measures aimed at promoting investment in homegrown green technology. The support for American-made electric vehicle chargers, unveiled by the administration on Wednesday, comes after the US in August passed the $369bn Inflation Reduction Act, or IRA, containing hundreds of billions of dollars in subsidies and tax credits for US-manufactured clean technology.“Our most important trading partner decides things in their own interest,” said Luisa Santos, deputy director-general of BusinessEurope, which represents companies across the EU. “They keep doing this. But they want us to support them on China.”A spokesperson for DigitalEurope, which represents the continent’s technology sector, described the latest support as “like déjà vu”. Cecilia Bonefeld-Dahl, its director-general, said: “The way to achieve our common climate goal is not through more ‘Buy American’ but through joint action and common standards.” The European Commission said it would seek talks with the US over the subsidies. “We must look for synergies and work to avoid trade barriers in the transatlantic relationship,” a spokesperson for the commission said last week. “We will continue to raise concerns about discrimination or local content requirements with our US counterparts.”The latest package, part of the US’s Infrastructure Law, will see the US government invest $7.5bn in EV charging, $10bn in clean transportation and more than $7bn in EV battery components, critical minerals and raw materials. The White House last week described the support as “a tool to promote domestic production”. To qualify, products must have at least 55 per cent content manufactured domestically from next year. While business groups and lawmakers attacked Washington’s repeated reluctance to consult with its big trading partners on green subsidies, European companies with large US operations welcomed the additional support. Swiss-based technology company ABB, which is one of Europe’s leading EV charger makers and counts the US as its biggest market, said the measures were “expected to be beneficial”. “With our new manufacturing operations in South Carolina and our focus on the US market, we are looking forward to continuing to work with our partners and federal and state governments to deploy reliable and high-quality public chargers,” a spokesperson for the group said.German chemicals manufacturer BASF, which employs more than 16,000 workers on more than 150 sites in North America, said it would “look at what opportunities there are through the framework of the IRA and the Infrastructure Law”. “Such incentives can help support the advancement of electromobility in the US and North America and otherwise help to reduce emissions in the transportation sector,” a spokesperson said. The commission and White House have convened a task force to find ways to implement the Inflation Reduction Act to allow better treatment of EU manufacturers. But it has made little progress in the face of US congressional opposition, with Brussels instead allowing member states to subsidise domestic clean technology industries by relaxing state aid rules. Brussels has already threatened to complain to the World Trade Organization, whose rules forbid tying state support to domestic manufacturing, over the Inflation Reduction Act. Officials have also claimed the US is trying to lure companies away from the EU. BASF has said it will make about 15 per cent of its capital expenditure in North America over the next four years. The latest US move also raises questions about the Trade and Technology Council, a forum set up 18 months ago to harmonise transatlantic rules. The forum has delivered little despite being led by commerce secretary Gina Raimondo, secretary of state Antony Blinken and trade representative Katherine Tai on the US side and the EU’s trade and competition commissioners Valdis Dombrovskis and Margrethe Vestager.

“The EU and US should work together to promote resilient supply chains and support the transition to low carbon economies on both sides of the Atlantic,” the commission said last week. “This is one of the main purposes of our co-operation with the US in the framework of the TTC.” Before this week’s White House announcement, both sides said they were preparing a joint recommendation for state-funded EV charging networks and a common standard for truck chargers. Officials say they wanted to prevent China, the biggest market for electric vehicles, from setting global standards. Business groups are also keen for the TTC to take on a greater role in shaping trade relations. “We have the forum to discuss these issues and align with allies — the TTC,” said a spokesperson for DigitalEurope. “Let’s use it or lose it.” “The TTC needs to be on a higher political level,” Santos said. “Does the [US] president understand there is a logic behind it, that it should not be a talking shop but a place to discuss the consequences of US actions for Europe?” More

Datawatch showcases statistical insights that have grabbed the attention of our data journalists — anywhere and on any topic.At least 67 journalists and media support workers were killed around the world last year, the highest number since 2018 according to the Committee to Protect Journalists.The war in Ukraine was a big factor: 15 journalists were killed in the country, the highest number among the nations tracked by the committee. Mexico recorded almost as many killings as Ukraine: 13, the highest number for a single year in the Latin American nation, highlighting the dangers involved in reporting on topics such as corruption and gang violence.In Haiti, which recorded the third largest number of killings last year, journalists covering gang violence and civil unrest after the assassination of president Jovenel Moïse in 2021 “have faced an alarming upsurge in violent attacks”, the committee said.

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Between 2000 and 2021, a total of 1,689 journalists and media support workers were killed globally. The largest number of killings — 282 — were in Iraq. Syria, the Philippines and Mexico also recorded many deaths.Shotaro TaniOur other charts of the week . . . 

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The global art market last year returned to pre-pandemic price levels and some of the biggest increases were recorded by contemporary artworks created by women, according to research by Artsy, an online marketplace for art.The median price for an existing work by a female artist increased 663 per cent, from $48,000 for art sold between 2019 and 2021 to $738,000 in 2022. Work by male artists experienced a median price increase of 332 per cent from $17,000 to $323,000.Anna Weyant’s “Falling Women” sold for $1.6mn, up from its previous sale price of $37,800 in 2021. The largest price increase was logged by Rachel Jones’ “Splice Structure (7)” which sold for $1.2mn, up 6,157 per cent from its previous sale price of $19,000 in 2021.Justine Williams

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The number of fatalities per 100mn miles travelled in the US was 1.46 in 2020, down from 1.58 two decades ago. Although this is significantly less than it has been throughout the past century, fatalities were up year on year to their highest level since 2007. In 1923, the first year in the data set collated by the National Highway Traffic Safety Administration (NHTSA), the rate was more than 21. However, the opposite is true in low-income countries according to separate data from the World Bank. The mortality caused by road traffic injuries per 100,000 people has increased over the past decade from 27 to 28.Dan Clark

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Almost one in five teenagers in the US say they use YouTube “almost constantly” and three-quarters use it daily according to a recent survey by the Pew Research Center. TikTok is also popular with just under half saying they use it at least several times a day.A much smaller share use Facebook and more than two-thirds of teens said they never used it. This is a shift from 2015 when Facebook was the most used; at the time, 71 per cent said they used the platform on a regular basis.Dan ClarkThe number of people living in extreme poverty rose sharply in 2020, according to World Bank projections — the first increase since 1998. Globally, people in extreme poverty — defined as an income below $2.15 a day in 2017 prices — rose 11 per cent to 719mn, the Bank estimated. The rise was due to the onset of the coronavirus pandemic, as disruption to economic activity slowed growth around the globe. Before that, the number of people living in extreme poverty had fallen from 1.86bn in 1998 to 648mn in 2019. Until the pandemic struck, the long decline had been forecast to continue. Yet despite this, the world was not on course to achieve the World Bank’s goal of a global poverty rate of 3 per cent by 2030. The effect of the pandemic, as well as food price inflation due to the war in Ukraine, mean the extreme poverty rate will be 6.8 per cent by 2030, equivalent to 574mn people, the bank forecasts.Oliver HawkinsWelcome to Datawatch — regular readers of the print edition of the Financial Times might recognise it from its weekday home on the front page. Do you have thoughts on any of the charts featured this week — or any other data that has caught your eye in the past seven days? Let us know in the commentsKeep up to date with the latest visual and data journalism from the Financial Times:Data Points. The weekly column from the FT’s chief data reporter John Burn-MurdochClimate Graphic of the Week is published every week on our Climate Capital hub page.Sign up to The Climate Graphic: Explained newsletter, free for FT subscribers. Sent out every Sunday, a behind the scenes look at the most topical climate data of the week from our specialist climate reporting and data visualisation team.Follow the Financial Times on Instagram for charts and visuals from key storiesFollow FT Data on Twitter for news graphics and data-driven stories from across the Financial Times More

A flow of key data over the past 10 days suggests that the UK economy is showing a level of resilience that was not in evidence just a few months ago.Inflation has fallen more than expected and the labour market remained robust, according to the latest data, which has left many economists anticipating the end to further interest rate rises by the Bank of England and a milder recession than previously predicted. With most measures of underlying inflation easing in January, the headline figure fell to 10.1 per cent last month. Services inflation, a better measure of domestically generated price pressures, fell more than expected, including a slowdown in price growth in labour-intensive industries, such as hotels and restaurants.There are tentative signs that inflation “may not be as persistent and stubborn as some feared,” said James Smith, economist at the Resolution Foundation, a think-tank. Those figures released last week “increase the likelihood of a milder recession,” said George Moran, economist at the bank Nomura. “Less inflationary pressure should boost real incomes, and also means less financial tightening is required from the Bank of England,” he added.

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Markets are still pricing in a 0.25 percentage point interest rate rise when the Bank of England’s monetary policy committee meets on March 23 but expectations are growing that it could be the last.Other official data published last week showed that the labour market remained resilient at the end of last year, adding more jobs than expected and the fall in real wages easing. Inactivity, which tracks people outside the workforce, also fell after rising for most of the past three years, a trend that had aggravated labour shortages and added to inflationary pressures.“Whilst we still foresee a recession this year, we think that this is likely to be shorter and less pronounced than the Bank anticipates,” said Simon Harvey at Monex Europe. The uptick in labour force participation could result in output expanding faster than the central bank has forecast, he added.

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Elsewhere, the economy is also showing unexpected signs of resilience. Analysts were surprised by data released on Friday showing a rebound in retail sales in January, up 0.5 per cent compared with a month earlier. GDP data published earlier this month showed that the economy managed to dodge a recession in the last quarter of 2022, with real household spending marginally expanding despite high inflation and rising borrowing costs. “The economy is proving to be remarkably resilient to the dual drags of higher inflation and higher interest rates, and it certainly feels as though it isn’t as weak as most had feared,” said Ruth Gregory, deputy chief UK economist at Capital Economics. She thinks that the government energy support packages have been “effective” and “that households and businesses have been spending the cash reserves they built up during the pandemic”. The likelihood and depth of any recession depends on the choices made by Jeremy Hunt, the chancellor, in the upcoming Budget on March 15, not least whether he reverses plans to cut energy bill subsidies to households, which will see the cap for a household with typical usage rise by £500 to about £3,000 a year from April, Smith said.“Putting in place that sort of measure would be an effective way to bring down inflation, help boost households and, in that way, minimise your chances of a recession,” Smith explained. He added that the sharp fall in wholesale gas prices from their peak, although “not yet in the actual economic data”, was “incredibly good news” for the economic outlook. The price of European natural gas fell to an 18-month low last week.Despite the encouraging data, the UK economy remains the only one in the G7 not to have recovered to pre-pandemic levels, while UK inflation remains higher than in the US or the eurozone. “The picture we are getting from UK data is clearly better than economists expected a couple of months ago, but far from positive,” Moran said.

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Samy Chaar, chief economist at the bank Lombard Odier, said he did not see any change in the outlook for Britain relative to its peers. “We really expect the UK economy to continue to underperform its history” and other advanced countries, he said.Economists have identified several factors dragging on growth which many attribute in part to Brexit. Business investment remains weak in comparison with historical trends and peers. UK exports have not rebounded as much as in other advanced economies from the hit of the pandemic. And, unlike in the eurozone, the labour force has yet to return to its pre-pandemic levels. “We are expecting a relatively mild recession, while inflation worries should be largely behind us later this year, but some of the underlying weaknesses are still there,” said Yael Selfin, chief economist at the consultancy KPMG. More

The China Banking and Insurance Regulatory Commission and the People’s Bank of China on Saturday jointly released amended draft rules that they said aimed to help banks “continuously improve the precision of risk measurement and guide banks to better serve the real economy.”The draft rules, which bring the banking sector closer to global standards, will divide lenders into three groups based on business scale and risk level.The rules will apply a differentiated regulatory system to banks. Lenders with a relatively large scale of assets or relatively large cross-border business will be under stricter capital requirements and will have to disclose more information to regulators.In addition, the rules will include more specific factors to measure banks’ risk exposure to mortgage lending, such as the types of property, sources of repayments and loan-to-value ratios. China’s property market, once a pillar of growth, has slowed sharply over the past year, hobbled by fragile demand and mounting debt defaults by developers.The two regulators said implementation of the new rules would leave capital adequacy ratios in the banking sector generally unchanged, though the ratios for some banks would change slightly.The commission and central bank are seeking public comment before implementing the changes on Jan. 1, 2024. More

“The Prime Minister and Vice President Harris condemned those countries who have supported Putin’s efforts politically and militarily,” his office said in a statement after their meeting at the Munich Security Conference on Saturday.”They agreed that Putin’s war in Ukraine is a global war, both in terms of its impact on food and energy security and in terms of its implications for internationally accepted norms like sovereignty,” the statement added. More

A combination of supply chain chaos, higher costs and concerns about working conditions is forcing some western fashion brands to rethink their decades-old dependence on factories in China. Dieter Holzer, the former chief executive and a board member of Marc O’Polo, said the Swedish-German fashion brand started to swap some suppliers in the country in favour of factories in Turkey and Portugal in 2021. The decision was meant to “balance and take out risk from your supply chain and make it more sustainable”, he said. “I think many companies across the industry are reviewing their exposure [to China].”The shift away from mass textile production in the country, albeit still in its early stages, marks the reversal of years of outsourcing to a region that has come to dominate the textile supply chain.Big names such as Mango and Dr Martens have recently cut or signalled their intention to shift manufacturing out of China or south-east Asia. “The big message is reducing reliance on China,” Dr Martens’ chief executive Kenny Wilson said in November. “You don’t want all of your eggs in one basket.” The bootmaker has moved 55 per cent of its total production out of the country since he took over in 2018. Just 12 per cent of its production for the 2022 autumn/winter collection was manufactured in China compared with 27 per cent in 2020 and it estimated this will drop to 5 per cent this year.“We are being deafened by the sound of clothes manufacturers [moving] away from Asia,” said Rosey Hurst, director of ethical business consultancy Impactt. The relocation was also being driven by stricter laws being introduced in the US and Europe against labour abuses, she added, following the alleged use of forced labour in the cotton-rich territory of Xinjiang in China. A cotton field in Hami, Xinjiang. According to Rosey Hurst, brand relocation has been driven by US and EU laws against labour abuses following the alleged use of forced labour in Xinjiang © Sun Jihu/VCG/Getty ImagesMango’s chief executive Toni Ruiz said in December he was considering buying less from China “but we’ll be very alert to how things evolve”.“What we’re looking at is the extent to which all this global sourcing, developed over many years, might become more local,” he said.The shift was accelerated by continued supply chain disruption since the onset of the Covid-19 pandemic, which led to a jump in freight costs, as well as significant shipping delays as factory workers at manufacturing hubs across Asia fell ill or were forced to isolate. One industry consultant said that one retail client’s ski wear, from a previous season, arrived in the summer of 2022.

“For many, gone are the days of manufacturing only in China and shipping everywhere,” said Todd Simms, vice-president at supply chain intelligence platform FourKites. “Disruptions have increased costs to deliver finished goods, making it easier to justify operations in new countries in exchange for more resilience,” he added. The financial incentives to remain in the region are diminishing as wages go up after years of cheap labour — a major draw for many household names to outsource manufacturing to far-flung places. According to statistics from China’s National Bureau of Statistics, the average factory wage doubled between 2013 and 2021, from Rmb46,000 ($6,689) per year to Rmb92,000.Jose Calamonte, chief executive of online fashion retailer Asos, told investors at the company’s full-year results presentation last year that products manufactured in China were not as competitive as they seemed relative to Europe, once shipping and transport costs were taken into account. “We try to think about the final [profit] margin once we’ve made the final sale,” he said.European clothing retailers’ efforts to cut delivery times, as fashion trends and consumer needs change quickly, is another reason behind their decision to opt for suppliers closer to home. “We’ve been taking control of our manufacturing,” said a spokesman for a British luxury brand, adding that the industry has been consolidating in Europe for years now. “This has been a trend for reasons to do with speed and efficiency.”Plans to shift production away from Asian garment hubs, however, are not that advanced owing to their complexity. Countries such as China and Vietnam represent the lion’s share of textile exports, according to 2020 data from CEPII. For example, more than half of suppliers to Inditex, the world’s largest fashion retailer, were based in Asia in 2021, only a marginal reduction on 2018.

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Turkey has been positioning itself as a winner from western brands moving their production, not least because it is part of the EU customs union, allowing frictionless trade between member states.“It is a popular destination and already used by the likes of Hugo Boss, Adidas, Nike, Zara,” said Simon Geale, executive vice-president of procurement at supply chain consultancy Proxima.An increasingly important consideration for retailers is traceability in the supply chain after years of widely reported labour abuses. “[Because of US laws against cotton from Xinjiang], brands have to have much better traceability, ” said Impactt’s Hurst.A home textile enterprise in Binzhou, China. Countries such as China and Vietnam represent the lion’s share of textile exports according to CEPII © CFOTO/Future Publishing/ Getty Images“Then we have got European laws [on forced labour] coming up. It is putting pressure on the industry to get a grip,” she said.But she warned: “There isn’t enough money in [international supply chains] to run things the way they should be done. [Given the current economic crisis], that is only going to get worse.”Maximilian Albrecht, an analyst at AlixPartners, said that many fast fashion labels were also abandoning China in order to differentiate themselves from Shein, the rapidly growing Chinese fast fashion giant.“European brands can’t match Shein on their costs of production, their network of production, their relationships,” Albrecht said.“I think you’ll see some brands say ‘well, we can’t match that so we’ll move to Europe’. You can still sell the story that they have higher quality products. Whether that’s actually true is another thing.” More

ADDIS ABABA (Reuters) – African countries are getting a raw deal from the international financial system which charges them “extortionate” interest rates, the U.N. chief said on Saturday, as he announced $250 million in crisis funding, including for famine risk on the continent.The United Nations Secretary-General Antonio Guterres wants far-reaching reforms to the structure of international finance to serve the needs of developing countries more efficiently, he told the opening ceremony of the annual African Union summit in Ethiopia. “The global financial system routinely denies (developing countries) debt relief and concessional financing while charging extortionate interest rates,” he said.The U.N. will spend $250 million from its emergency fund, the largest ever allocation, to respond to several crises around the world, including helping communities at risk of famine in Africa, Guterres later told a news briefing.The coronavirus pandemic pushed many poor countries into debt distress as they were expected to continue servicing their obligations in spite of the massive shock to their finances.Public debt ratios in sub-Saharan Africa are at their highest in more than two decades, the International Monetary Fund said last year.Governments on the continent, including Ethiopia, sought debt restructuring deals under an IMF programme to help them navigate the crisis, but conclusion of the process has been delayed.Others, which have not sought to restructure their debt, like Kenya, have seen their debt sustainability indicators worsen after the pandemic hit their finances. “African countries cannot… climb the development ladder with one hand tied behind their backs,” Guterres said.Ethiopia’s Prime Minister Abiy Ahmed echoed the call.”Nearly all of us want to put our economies back on a growth trajectory but this will not happen without sufficient restructuring to make our external debt sustainable,” he said.The summit, which brings together leaders from the 55 African nations, is also focusing on deepening food and security crises on the continent.Armed conflict from the Sahel to the Horn of Africa and the impacts of droughts and floods have driven ever more Africans from their homes. Hunger, driven by the impact of the armed conflicts and also extreme weather that scientists have linked to climate change, has also worsened in several nations.Somalia is on the verge of famine after five failed rainy seasons, with hundreds of thousands of people suffering catastrophic food shortages.”We need to critically assess why one third of the hungry people in the world are in our continent,” Abiy said. More

The dollar has rebounded from a 10-month low as investors push up their forecasts for US interest rates after signs of stubborn inflation and unexpectedly strong economic activity. The world’s most important reserve currency rose to a 20-year high in September but tumbled 11.2 per cent over the following four months as US inflation declined from a multi-decade peak, allowing the Federal Reserve to slow the pace at which it raised interest rates towards the end of 2022. Tamer rate rises and the prospect of steady or even falling rates in 2023 removed one of the currency’s key supports.However, February has begun with a flurry of economic data suggesting the world’s biggest economy remains in rude health, pushing the dollar back up by 3 per cent against a basket of six other leading currencies since the start of the month and erasing January’s decline. The US last month added more than half a million jobs, almost triple the consensus forecast, while inflation fell to 6.4 per cent, a smaller decrease than expected.“The inflation report has ruined markets’ nice little disinflationary plan,” said Florian Ielpo, multi-asset portfolio manager at Lombard Odier, with central banks likely to maintain their upward pressure on rates as a result. Jordan Rochester, a foreign exchange strategist at Nomura, said February began “with everyone in the macroeconomic community assuming the dollar would sell off against the euro and the yen. Since then almost every single US data point has come in stronger than expected, and markets have slowly come around to what the Fed has been saying for a long time, that rates have further to go and will be kept on hold for a while.”Benchmark US interest rates stand in a range of 4.5 per cent to 4.75 per cent. At the start of February, futures markets were pricing in a rates peak close to 4.9 per cent, with two cuts in the second half of the year taking borrowing costs to about 4.4 per cent heading into 2024. Just over two weeks later, markets had shifted to predict a peak at 5.28 per cent, ending the year just above 5 per cent following a single cut.Still, some investors doubt the dollar rally has much longer left to run. The haven currency is likely to continue to rise this quarter but “resume its downward trajectory as global growth and risk sentiment improve,” said analysts at UBS. More