Economy

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldSteve Daines, a senator with close ties to Donald Trump, is trying to get the president to name him as a special envoy to China to help secure a meeting with Xi Jinping that could pave the way for a summit between the leaders.The Montana Republican will travel to Beijing next week to attend the China Development Forum (CDF), a high-profile annual event in Beijing that is attended by dozens of US, European and Japanese chief executives. Several people familiar with the situation said Daines wanted the envoy designation to facilitate a meeting with the Chinese president after the forum — which would be much more difficult without Trump’s backing.Two people said Daines had floated the proposal to people in Trump’s orbit. But none of the people who spoke to the Financial Times on the condition of anonymity could confirm whether Daines had spoken directly to Trump. The White House declined to comment. Daines’s office said he “does not have the title of special envoy” but was co-ordinating closely with the White House about his trip to China. Asked prior to publication whether Daines was trying to arrange a meeting with Xi and was still trying to get the special envoy designation, his office did not comment.After publication, his office said he was not seeking the designation and has not requested it.“Senator Daines is planning to travel to China next week and will carry the president’s ‘America First’ message on the need to protect US jobs, establish fair trade between the two countries, and stop the flow and financing of fentanyl coming from China,” his office said.Daines, who spent six years in China with Procter & Gamble, has told associates that a meeting with Xi on behalf of Trump could help improve US-China relations, according to the people familiar with the idea.His idea has been welcomed by some US companies who want to prevent more turbulence in relations with Beijing. Trump has imposed a 20 per cent tariff on imports from China, but he has struck a less hostile tone with Beijing than he has with allies such as Canada and Mexico and the EU.Beijing uses the CDF to promote investment in China. The event also provides chief executives with an opportunity to engage with top Chinese officials. Last year, Apple chief Tim Cook met Chinese Premier Li Qiang. While dozens of corporate leaders participate in the forum each year, US politicians have typically not attended.People familiar with discussions between Washington and Beijing since Trump took office said the two sides had not engaged in serious talks about a possible summit between the two presidents. Daines was one of the first Republican senators to endorse Trump for president ahead of his 2024 campaign. Trump last year returned the favour by urging the Montana lawmaker to run for Senate Republican leader.The senator and his private sector backers wanted to keep the envoy proposal quiet to make it less likely that hawkish administration officials, such as White House trade adviser Peter Navarro, would try to persuade the president that it was a bad idea, according to people familiar with the situation.Some US chief executives fear they could face a backlash in Washington for attending the CDF, which will be held on March 23 and 24, given the hawkish sentiment towards China on Capitol Hill. Business leaders are holding out hope for a possible meeting with Xi after the CDF event.While Trump has appointed several vocal China hawks, including Marco Rubio as secretary of state and Mike Waltz as national security adviser, experts in Washington are struggling to work out what stance Trump will take on a range of national security-rated issues. More

Chickens stand next to stacks of eggs in a henhouse at Sunrise Farms on February 18, 2025 in Petaluma, California. 
Justin Sullivan | Getty Images News | Getty Images

Egg prices have fallen sharply so far in March on some progress in ending a shortage, giving consumers some much-needed relief with the supermarket staple.
The cost of white large shell eggs declined to $6.85 per dozen, on average, last week, according to data from the U.S. Department of Agriculture. That represents a decline of $1.20 per dozen, and a 15% pull back the USDA’s prior update on Feb. 28.

“Demand for shell eggs continues to fade into the new month as no significant outbreaks of HPAI [highly pathogenic avian influenza] have been detected in nearly two weeks,” the USDA wrote in its March 7 weekly update. “This respite has provided an opportunity for production to make progress in reducing recent shell egg shortages.”
Egg prices have become a key pressure point for consumers that are tired of sticky inflation and worried about more potential price increases due to President Donald Trump’s tariffs on a wide array of imports. While it is still unknown the full ramifications of the duties on Canada, China and Mexico, stocks have so far pulled back in 2025 on concern the moves could further raise prices of goods and tip a sagging economy into a recession.
To be sure, the price of eggs have still skyrocketed more than 170% from a year ago, USDA data shows. The rise has spurred an investigation by the U.S. Department of Justice into allegations of anticompetitive practices from some of the largest egg producers in the country. Firms including Cal-Maine Foods have touted a crushing avian flu outbreak, which has forced the culling of millions of egg-laying hens, as the major catalyst for the rise in egg prices.
“The primary reason for the drop is actions taken by the administration’s Department of Justice to investigate the companies for possible antitrust violations,” said Joe Maxwell, president of Farm Action Fund, told CNBC. “The dominant firms have so much control over the market that they can increase prices and lower prices almost at will.”
“There has been a softening of demand for eggs by consumers, but we do not see this as a significant factor, considering this has been an ongoing trend,” Maxwell added.
Egg prices were a key factor in the February consumer price index report, with the Bureau of Labor Statistics noting prices advanced 10.4% last month and 58.8% year-over-year. The marked-up price tag for eggs has even pushed consumers to begin shifting their breakfast habits. More

Ongoing U.S. tariffs could push Europe’s largest economy into a recession, German central bank President Joachim Nagel warned.
“Now we are in a world with tariffs, so we could expect maybe a recession for this year, if the tariffs are really coming,” he said during a BBC podcast interview.
The tariffs-led uncertainty come at a time when the EU nations could be set to loosen their budgetary strings and accommodate additional defense expenses, with Germany also planning a potential reform of key fiscal policies.

The German parliament building, the Reichstag, which has been the seat of the Bundestag since 1999.
Fhm | Moment | Getty Images

U.S. tariffs could push Europe’s largest economy into a recession, German central bank President Joachim Nagel warned Thursday, as Berlin faces a debate over the potential overhaul of its fiscal policies.
“Now we are in a world with tariffs, so we could expect maybe a recession for this year, if the tariffs are really coming,” Nagel, who leads the Bundesbank and serves as a member of the Governing Council of the European Central Bank, said during a BBC podcast interview.

Global tariffs are set to exacerbate the existing symptoms of what Nagel described as Germany’s “stagnating economy,” which has contracted for two consecutive years amid the combined aftershocks of the Covid-19 pandemic and the energy crisis triggered by Western sanctions on Russia for its three-year invasion of Ukraine.
Mere months after inflation and interest rates began descending in the euro zone last year, returning U.S. President Donald Trump’s tariff-heavy strategy, aimed at reducing his country’s perceived deficits with trade partners, is rattling markets – and fracturing Europe’s traditionally strong relationship with its transatlantic ally.
On Wednesday, the European Union retaliated against Trump’s 25% duties on steel and aluminum imports that came into effect that day with a spate of counter-tariffs set to affect 26 billion euros ($28.26 billion) worth of U.S. goods, starting in April.
“This is not a good policy,” Nagel said, bemoaning the “tectonic changes” now facing the world at large. “I hope that there is understanding within the Trump administration that the price that has to be paid is the highest on the side of the Americans.”
As the world’s third-largest exporter, according to 2023 data, and numbering the U.S. as the foremost importer of its goods, Germany is especially vulnerable to tariffs, which could erode its automative and machinery sectors.

Cripplingly, exports of good and services accounted for 43.4% of Germany’s gross domestic product in 2023, according to World Bank data, although federal statistics office data indicate its typically high foreign trade surplus most recently slimmed to 16 billion euros in January, compared with 20.7 billion euros in December.
The tariffs-led uncertainty come at a time when the EU nations could be set to loosen their budgetary strings and accommodate additional defense expenses, under the bloc’s ‘ReArm’ plan revealed last week amid uncertainty over the U.S.’ ongoing commitment to assist Ukraine.
Fitch Ratings on Thursday warned that the initiative, which could mobilize close to 800 billion euros of defense expenditures, risks lowering the headroom of the EU’s current AAA rating because of the additional debt likely to be undertaken, without leading to an outright downgrade.

Foot on ‘debt brake’ pedal

Germany set the tone last week as the Conservatives’ Friedrich Merz, who is expected to emerge as chancellor in the country’s upcoming ruling coalition, announced plans to overhaul the national so-called “debt brake” to allow for higher defense spend – in a move that sparked a rally in German bund yields and broader stocks.
The initiative, which combines the fiscal change proposals with a 500 billion euro fund for infrastructure, has been met with resistance from the Green Party – which Merz’s conservatives and probable future coalition partner, the Social Democrats, must sway in a bid to clinch a two-thirds majority needed to change the constitutionally-enshrined debt brake.
Ahead of a parliament session debating the potential reform, senior Green official Britta Hasselmann flagged “serious gaps and errors in the conception” of the debt plans toward items like climate change prevention, according to comments reported by Reuters. The Thursday session will only lead to a draft law, while the March 18 reading will likely be decisive for the legislation.

In a Wednesday note, Deutsche Bank analysts retained their base case of the reforms ultimately undergoing what is “unlikely to be a smooth passage” in parliament over the course of the next week, signaling that a “compromise proposal would not significantly alter the expected fiscal stimulus of 3-4% of GDP by 2027 at the latest” that the bank previously calculated based on the Conservatives’ original proposal.
The analysts also factored in the possibility of a splintered fiscal package, with the immediate passage of defense and debt brake policies and the later adoption of the infrastructure plans under a new parliament.
“This would potentially change the composition of the infrastructure package and gear it more towards social housing,” they noted. More

The producer price index, considered a leading indicator for pipeline inflation pressures, showed no gain for the month after jumping an upwardly revised 0.6% in January.
Excluding food and energy, core PPI decreased 0.1%, also against an estimate for a 0.3% increase.

Wholesale prices were flat in February providing some more welcome news for inflation amid tariff fears, the Bureau of Labor Statistics reported Thursday.
The producer price index, considered a leading indicator for pipeline inflation pressures, showed no gain for the month after jumping an upwardly revised 0.6% in January, seasonally adjusted figures showed. Economists surveyed by Dow Jones had been looking for a 0.3% increase.

Excluding food and energy, core PPI decreased 0.1%, also against an estimate for a 0.3% increase and the first negative reading since July. Core prices also excluding trade services showed a gain of 0.2%.
Stock market futures pared losses following the report while Treasury yields remained higher.
The report comes a day after the BLS reported that the consumer price index rose 0.2% for February, putting the headline inflation rate at 2.8%, a slight easing from January and some encouraging news at a time when markets are concerned over the impact that President Donald Trump’s tariffs will have on costs.
Whereas CPI measures what consumers pay at the register for goods and services, PPI is a gauge of final demand prices that producers get for their products.
Federal Reserve officials more closely rely on a Commerce Department inflation measure that will be released later this month, though PPI and CPI figures feed into that report.

On a year-over-year basis, headline producer prices increased 3.2%, well ahead of the Fed’s 2% goal though below the 3.7% pace in January. Core PPI was up 3.4% in February, down 0.4 percentage point from January.
Markets are assigning near 100% odds that the Fed again will stay on hold when it’s two-day policy meeting concludes next Wednesday.
Policymakers have said repeatedly that they are taking a cautious approach, particularly when it comes to Trump’s fiscal and trade policy. Current market expectations are for the Fed to cut rates next in June and follow up with the equivalent of two more quarter percentage point reductions before the end of the year.
A 0.2% drop in services prices offset a 0.3% increase in goods. Two-thirds of the increase in goods came due to a 53.6% surge in chicken egg prices, the BLS said. Eggs have soared in part because of avian flu that has hit supplies, though there is some evidence that prices have eased in March as outbreaks have slowed.
On the services side, more than 40% of the decline came from a 1.4% decrease in margins for machinery and vehicle wholesaling. More

This is an on-site version of the White House Watch newsletter. You can read the previous edition here. Sign up for free here to get it on Tuesdays and Thursdays. Email us at [email protected] morning and welcome to White House Watch! Our dignitary of the day is Nato secretary-general Mark Rutte, who will visit Donald Trump at the White House in a hugely consequential meeting. Europe’s security is on the line.In the meantime, let’s talk about:Trump is sticking to his guns as he wages his trade wars.He and his advisers are moving to radically reshape the US economy, aiming to transform the country from a black hole of consumption with a huge trade deficit to a manufacturing beast. His primary tools in this economic pivot — aggressive tariffs and government spending cuts — have roiled the stock market and raised fears about a potential slowdown in growth. Yesterday the EU and Canada retaliated against Trump’s steel and aluminium levies, escalating the trade war. And this morning, Trump threatened to slap 200 per cent retaliatory tariffs on alcohol imports from the EU if the bloc doesn’t get rid of its duty on US whiskey, which kicks in on April 1.The president has so far shrugged all this off, with the White House dubbing it a period of “economic transition”.The cadre of former business leaders administering his economic shock therapy are not interested in moderating the president. Instead, they’re backing his message that the US may need a recession before reaping what they claim are the sweeping benefits of Trumponomics.Treasury secretary Scott Bessent, a former hedge fund manager that Wall Street was really excited about, has signalled that the new administration won’t come rescue the market.Meanwhile, Howard Lutnick, the commerce secretary, has privately expressed scepticism about imposing significant tariffs on imports, according to people familiar with the matter.This has emboldened Trump loyalist Peter Navarro, who is a staunch supporter of aggressive trade policy.The increased power of more radical figures in the White House has helped turn an initial bump in stock prices — amid promises of tax cuts and rapid deregulation — into a market rout as investors realise that the administration has not come to play.Investors are also worried about the so-called Mar-a-Lago Accord, a plan by Stephen Miran, chair the Council of Economic Advisers, to weaken the dollar, which could further destabilise markets. Kevin Hassett, director of the National Economic Council, has not been a check on the president the way Gary Cohn, who did the job in Trump’s term, was. Also egging Trump on are the financial elite. Two of Wall Street’s most powerful executives — Goldman Sachs chief executive David Solomon and Blackstone chief executive Stephen Schwarzman — have vaunted the upsides to Trump’s policies.The latest headlinesSome content could not load. Check your internet connection or browser settings.What we’re hearingSince his dad won the election, Donald Trump Jr has rapidly expanded his business interests.He has investments across industries including the financial, media, pharmaceutical, gun, cryptocurrency, betting and alcohol sectors — all with an anti-woke twist. Trump Jr is focused on companies that draw conservative audiences, capitalising on the backlash to DEI and ESG that is a hallmark of his father’s second administration.Out of the president’s five children, Trump Jr, who helps run the family’s golf and resort business, is the most politically active. He was instrumental in the selection of JD Vance as his father’s running mate and promotes their “America First” worldview on his podcast, Triggered.Donald Trump’s fortune is closely intertwined with his eldest son’s. The president has made Trump Jr the sole trustee of what’s thought to be his largest financial asset: his $3.2bn stake in Trump Media & Technology Group Corp (TMTG), the parent company of Truth Social. Trump Jr is a board member of TMTG too.Trump Jr told the FT that despite his control of his father’s businesses, he works “very carefully to ensure that we have proper conflict protocols”.He’s also entrenching himself further in the so-called parallel economy — a nascent ecosystem targeting consumers with conservative or Christian values who are critical of “woke businesses”. He has become an adviser to three publicly traded US companies: drone manufacturer Unusual Machines, conservative online marketplace PublicSquare and fintech Dominari Holdings. In each case, the company’s share prices jumped on the news. Some content could not load. Check your internet connection or browser settings.ViewpointsRecommended newsletters for youFT Exclusive — Be the first to see exclusive FT scoops, features, analysis and investigations. Sign up hereBreaking News — Be alerted to the latest stories as soon as they’re published. Sign up here More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldDonald Trump has threatened a 200 per cent retaliatory tariff on alcohol imports from the EU if the bloc imposes a duty on US whiskey, in the latest salvo in his escalating trade war.Posting on his Truth Social platform on Thursday, the US president said the move was a response to the EU’s decision to impose a “nasty” 50 per cent tariff on whiskey.“If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.,” Trump wrote.Shares of drinks companies sank following Trump’s message. Pernod Ricard tumbled 2.9 per cent, LVMH dropped 1.7 per cent and UK-listed Diageo fell 1.8 per cent.US equities were set to open lower on Thursday, with futures tracking the blue-chip S&P 500 down 0.3 per cent and those following the tech-heavy Nasdaq 100 off 0.5 per cent.Since his inauguration in January, Trump has imposed a series of escalating tariffs on the US’s biggest trading partners. The chaotic rollout of these levies, which has been marked by several sudden U-turns, has rattled businesses and financial markets.Earlier this week, the US imposed tariffs of 25 per cent on all imports of steel and aluminium, ripping up several country-specific agreements that had been struck by former President Joe Biden.The European Union on Wednesday announced it would retaliate against the metal tariffs by applying duties of up to 50 per cent to $28bn of US goods, including bourbon whiskey, jeans and Harley-Davidson motorbikes, from April 1.EU officials have said they deliberately targeted products made in the states of Republican senators in a bid to boost opposition among lawmakers to Trump’s aggressive trade measures.This is a developing story More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Investors are souring on America’s riskiest corporate borrowers as fears deepen that Donald Trump’s aggressive trade agenda is slowing growth in the world’s largest economy.The gap in borrowing costs between junk-rated companies and the US government has jumped by 0.56 percentage points since the middle of February to a six-month high of 3.22 percentage points, according to a closely watched index collated by Intercontinental Exchange.The pressure on the junk bond market comes as Trump’s chaotic rollout of tariffs on the US’s biggest trading partners has alarmed businesses and rattled stocks.The reversal in investor sentiment follows a prolonged rally in the riskiest part of the corporate bond market fuelled by a buoyant US economy and record highs for stocks.“Credit spreads have widened over the past couple of weeks, driven by fears over a US recession and tariff uncertainty,” said Eric Beinstein, head of US credit strategy at JPMorgan.Investors and analysts said that steep declines in some of the most highly valued tech stocks, including Palantir and Tesla, had also chilled appetite for the debt of the riskiest corporate borrowers.Neha Khoda, a credit strategist at Bank of America, said that junk bond investors were no longer able to shrug off the declines in equities after they accelerated in March. The S&P 500 has fallen 6 per cent, putting it on track for its worst month since 2022, and the tech-heavy Nasdaq is down 6.4 per cent.The increase in the spread, or the extra yield investors demand to own US junk bonds over Treasuries, this month is “payback for the lack of movement in February”, said Khoda.Federal Reserve chair Jay Powell last week played down concerns over growth, saying the economy remained in “good shape”. But Powell acknowledged that the central bank was “focused on separating the signal from the noise” amid the turmoil from tariffs.Analysts at Goldman Sachs this week raised their forecast for junk bond spreads at the end of the third quarter to 4.4 percentage points, up from 2.95 percentage points previously. The Wall Street bank noted that spreads were still too low given the risks of a “significant deterioration” in the economic outlook.High-grade US corporate bonds have also come under selling pressure. The spread on the Ice index tracking investment-grade debt has risen 0.13 percentage points over the past month to 0.94 percentage points, the highest level since the middle of September.Despite the recent rises, spreads on both investment-grade and junk bonds remain low by historical standards. But bankers say the recent tumult has prompted investors to be choosier on corporate bond deals.“Investors are walking away from transactions quicker if they think they’re priced too tight,” said Maureen O’Connor, global head of high-grade debt syndicate at Wells Fargo.A steadier performance in European credit markets this year had also led to some US groups issuing debt in euros rather than dollars, Beinstein said. There has been $37bn in “reverse Yankee” issuance this year, on track for the biggest first quarter for such deals since 2020. More

Americans use a lot of aluminum.
The metal is both lightweight and an effective conductor of electricity, giving it countless applications in transportation and energy systems alongside culinary work and more.

“It really is the magic metal,” said Charles Johnson, president and CEO of the Aluminum Association.
Aluminum is one of 50 “critical minerals” identified by the U.S. Geological Survey. But most production of aluminum occurs in other countries.
The Trump administration would like to bring some of that production into the U.S. Its main policy tool here will be tariffs, which are taxes on imported goods.
Since 2018, the U.S. has levied a 10% tariff on aluminum imports. During the Biden years, various trading partners were exempted from those fees. As a result, the effective rate for aluminum entering the U.S. was just 3.91% in February 2025, according to S&P Global. In March 2025, President Donald Trump raised existing tariffs on steel and aluminum to 25%.
Canada is by far the largest source of U.S. imports of aluminum.

The full price-level effects of these tariffs are unknown and any analysis is subject to revision as trade negotiations unfold. Still, some experts believe that price increases for consumers potentially could be small.
“When you consider a $40,000 car or something like that, it might increase the price by about $75,” said Scott Paul, president at the Alliance for American Manufacturing, an advocacy and lobbying group.
The administration says that these tariffs are necessary to fight trends in the global economy that disadvantage the U.S, primarily the rising importance of China.
“The subsidies allowed China to come in at an artificially low price. And that has roiled the aluminum industry globally and in particular in the United States,” said Paul.
The Aluminum Association, a U.S. organization comprised of industry decision makers, believes that rebuilding domestic smelting capacity could take large provisions of electricity and potentially have a net negative effect on the domestic labor force. In an interview with CNBC, the group also noted that it could take around eight to 10 years to build new industrial facilities like “smelters” which convert alumina into its final, consumer-friendly form.
“In the meantime we will import,” Johnson said.
Watch the video above to see why President Trump is taxing imports of aluminum. More