Economy

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldShow video infoDonald Trump has imposed a swath of tariffs on Canada, Mexico and China, sparking retaliation from Beijing and sending stock markets lower as fears mount over a trade war.In the most sweeping trade measures since returning to the White House in January, the US president hit imports from Canada and Mexico with a 25 per cent tariff that went into effect on Tuesday.The White House also imposed an additional 10 per cent tariff on Chinese imports on top of a 10 per cent levy imposed last month. Trump has accused the three countries of failing to clamp down on the trafficking of the deadly opioid fentanyl while also demanding that Mexico and Canada tighten their borders.The moves drew an immediate response from Beijing, which said it would levy a 10-15 per cent tariff on US agricultural goods, ranging from soyabeans and beef to corn and wheat, from March 10. Show video infoCanada also unveiled tariffs on $107bn of US imports, starting with $21bn of imports immediately. “Canada will not let this unjustified decision go unanswered,” Prime Minister Justin Trudeau said in a statement. Mexican President Claudia Sheinbaum said on Tuesday that the government would wait until Sunday to unveil countermeasures, which would include tariffs and other actions. The tariffs against the US’s three largest trading partners raised duties to some of the highest levels in decades, and come after Trump last month gave Canada and Mexico a 30-day reprieve from the measures.“Investors have started to really fear Trump’s policies,” said Emmanuel Cau, an analyst at Barclays. “If there is a growth problem in the US, that will be hard to ignore . . . People are nervous, with some even starting to fear a recession [in the US].” US stocks fell on Tuesday, extending the previous day’s heavy declines and wiping out all the gains made since Trump’s election victory in November. The S&P 500 dropped 1.6 per cent, while the Nasdaq Composite lost 1.4 per cent.In Europe, the benchmark Stoxx Europe 600 dropped 2 per cent. Germany’s exporter-heavy Dax, which on Monday posted its best performance in more than two years, tumbled 3.3 per cent. Carmakers, which are among the most exposed given several of them export vehicles from Canada and Mexico for sale in the US, were hit, with Volkswagen falling 4.3 per cent and Stellantis dropping 10.6 per cent.Japan’s exporter-heavy Nikkei 225 slid 1.2 per cent, while Australia’s S&P/ASX 200 retreated 0.6 per cent. Hong Kong’s Hang Seng index, which fell nearly 2 per cent during the session, closed down 0.3 per cent, while mainland China’s CSI 300 benchmark dropped 0.1 per cent. In foreign exchange markets, the dollar fell 0.5 per cent against a basket of currencies, including the euro, yen and pound, following a 0.8 per cent drop on Monday.Mexico’s peso weakened 0.7 per cent against the US dollar to 20.85, while the Canadian dollar fell 0.2 per cent to C$1.451 versus the US currency.The European Commission warned of far-reaching repercussions. “These tariffs threaten deeply integrated supply chains, investment flows, and economic stability across the Atlantic,” it said. The levies against Ottawa are set at 25 per cent except for Canadian oil and energy products, which face a 10 per cent tariff. Canada accounts for about 60 per cent of US crude imports.In its response, China also targeted US companies, placing 10 companies on a national security blacklist and slapping export controls on 15 others. It also banned US biotech company Illumina from exporting its gene-sequencing equipment to China. Beijing had added Illumina to its “unreliable entities” list last month in response to Trump’s initial barrage of tariffs. China’s commerce ministry earlier hit back at the US justification of the tariffs over fentanyl flows, saying the claim “disregards facts, international trade rules and the voices of all parties, and is a typical act of unilateralism and bullying”.Lynn Song, greater China economist at ING, said Beijing’s action — together with countermeasures last month — targeted a total of about 25 per cent of US exports to China, amounting to “a relatively muted response compared to the 10 per cent broad-based tariffs implemented by the US”. Additional reporting by Andy Bounds in Brussels More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.French car parts supplier Forvia has said it expects an “enormous” hit for the industry from Donald Trump’s tariffs, in one of the clearest signs yet of the likely impact of new US trade restrictions on the automotive sector. The group, whose clients include Stellantis, Tesla and China’s BYD, has estimated that tariffs could raise annual costs by between €200mn and €450mn before it takes defensive measures. The figures come from details of internal discussions obtained by the Financial Times and confirmed by the company on Tuesday.US President Donald Trump on Monday confirmed that he would substantially raise trade barriers in North America by going ahead with threatened 25 per cent tariffs on goods coming from Canada and Mexico. Tariffs represent a particularly severe problem for the automotive sector, which has one of the most complex and international supply chains.Olivier Durand, Forvia’s chief financial officer, said in an interview that the tariffs were “enormous for the automotive industry”.“Putting 25 per cent on significant flows of purchases for the sum of the industry automatically has a very significant impact,” he said.Forvia, which makes products from car seats to battery packs, has a market capitalisation of €1.7bn. It has a large manufacturing presence in Mexico, which the company has said is the part of the business most exposed to the new tariffs.The €450mn upper estimate for the costs would equate to more than two-thirds of Forvia’s 2024 cash flow of €655mn.Durand said the estimated figures were a “mechanical total” of the extra costs that tariffs would represent. He added that the company expected the impact to be closer to the €200mn lower figure and that it anticipated measures to pass on costs would mitigate the effect.The €450mn estimate factors in the potential effect of tariffs on “mandated” parts — components and other items that manufacturers specify Forvia must use when making certain products for them.However, Forvia expects that manufacturers will pay tariffs on such products, rather than Forvia.“The mandated part doesn’t concern us,” Durand said, adding that the “raw figure” for exposure before the company took any action to mitigate it would be closer to €200mn than €450mn.The handling of any extra costs from tariffs on mandated products would be subject to negotiations between carmakers and suppliers, Durand added.“It will be up to the carmakers to see with their providers how they deal with the subject,” he said.On Tuesday, Durand said the company was preparing to take measures to tackle tariffs, including increasing the capacity and number of shifts for workers at its US manufacturing plants. It would also negotiate with clients and providers to raise prices.In the interview, Durand said the business could reduce the “final impact” to between zero and €20mn after it took measures to tackle the tariffs.“It’s clear that these are high totals because activity is integrated, but we are prepared to respond,” he said.He added that Trump’s last-minute decision in early February to delay the imposition of tariffs by 30 days had helped Forvia to prepare detailed plans.However, he acknowledged that tariffs could also lead to inflation that would affect sales. He accepted that Forvia would have to negotiate with customers the level of any price increases it wished to levy to offset the effects of tariffs. When it reported results on Friday, Forvia included in its financial guidance for 2025 measures “already enforced” by the US, but did not provide guidance on additional tariffs on Mexico and Canada.On Friday, after Forvia reported annual results, concerns over tariffs and its debt levels prompted a fall in the company’s shares of more than 20 per cent. Shares in rival Valeo also dropped more than 10 per cent. Durand also confirmed that 4,000 people in Europe had left the company in 2024. The company stated in its results that 2,900 people had left under ongoing reduction plans, but the larger figure also included employees whose contracts were not renewed, he added. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Investors are starting to imagine a financial system without the US at its centre, handing Europe an opportunity that it simply must not miss.This exercise in thinking the unthinkable comes despite a cacophony of noise in markets. Mansoor Mohi-uddin, chief economist at Bank of Singapore, recently travelled to clients in Dubai and London. To his surprise, not one of them asked him about short-term issues like tech stocks or tweaks to interest rates. Instead, he says, “people were saying, ‘What’s going on?’ The free trade, free markets, globalisation era is over, and nobody knows what’s going to replace it.”They refer, of course, to the new US administration. Within a month of retaking his seat at the White House, Donald Trump & co had all but trashed the transatlantic alliance, and ridden roughshod over the key checks, balances and institutions on which true US exceptionalism is built.“It’s such a momentous change going on. If it continues like this, capital allocators will wonder: ‘Do I want to stay allocated to the US?’” Mohi-uddin says. This cuts across asset classes. In stocks, the preference for Europe is clear — markets are streaking ahead of the US in a highly unusual pattern. But flighty stock markets are just the surface. The bit that really matters is the international use of the dollar, and dollar bond markets, as the supposedly risk-free bedrock of global finance. This is already starting to show. On Tuesday, for instance, despite the shock of new US trade tariffs on Canada and Mexico, the dollar is not climbing in its usual fashion. Deutsche Bank says this in part reflects “the potential loss of the dollar’s safe-haven status”. “We do not write this lightly,” wrote currencies analyst George Saravelos. “But the speed and scale of global shifts is so rapid that this needs to be acknowledged as a possibility.” What was once outlandish is now becoming plausible.Economists close to Trump have been clear that they view the dollar’s status as the world’s pre-eminent reserve currency as a blessing and a curse — “burdensome” as adviser Stephen Miran put it. It remains a possibility — again unthinkable just a few weeks ago — that the US could seek to pull the dollar lower in an effort to support domestic manufacturing. But the US could also dismantle its own exorbitant privilege through accident rather than design by pushing the big beasts of bond markets — foreign central banks and other official reserve managers — into the arms of other nations.The dollar makes up more than 57 per cent of global official reserves, according to benchmark data from the IMF, far in excess of the US’s slice of the global economy. The euro accounts for 20 per cent, and everyone else is picking up scraps.Starry-eyed optimists have argued for years that the euro’s slice of the pie should be bigger, but they have been fighting reality. Europe’s bond markets are fragmented into constituent states, with Germany at the centre. The monetary cohesion is there but not the fiscal or strategic cohesion. No national market is simultaneously large, safe and liquid enough to suit a reserve manager’s needs. Super-sized trades leave a mark and in an emergency, these big hitters find only the slick US government bond market will do. The EU has struggled to offer an alternative. That is where this moment in history comes in. Its urgent need for defence spending simply overwhelms the capacity of its individual national bond markets. Joint borrowing — easily said but devilishly tricky to do — is the obvious answer. The result could well be that Europe is thrust further to the centre of the global financial system.The Covid-19 pandemic offered a taste of how pooling resources might work at scale. Then, bonds issued by the EU itself, rather than individual states, were met with enormous demand. The urgency of the present situation offers little choice but to move fast. “Collective action could be an answer, even if consensus has not built yet,” said analysts at rating agency S&P Global in a note last month. If the EU could seize this moment, it would tap in to a deep well of willing buyers keen to trim US exposure. “Plenty of reserve managers could shift very quickly,” says Mohi-uddin. “There would be huge take-up.”US dominance of global debt markets does not have to end with a bang. Large, slow-moving investors would simply have to accumulate other assets rather than necessarily dumping their Treasuries. But over time, the result would be the same. Regime shifts of this kind do not happen often. But they do happen. Sterling was the global reserve currency once [email protected] More

This article is an on-site version of our Chris Giles on Central Banks newsletter. Premium subscribers can sign up here to get the newsletter delivered every Tuesday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersThe rupture in the transatlantic security alliance over the past few weeks is leaving Europe with some unpleasant choices. After any ceasefire arrangement between Russia and Ukraine, should the continent return to buying gas from Moscow using a Baltic pipeline with US blessing, as the FT reported over the weekend? Alternatively, should it seek to wean itself off dependence on any Russian fossil fuels? For Europe, the economic questions regarding natural gas are as difficult as the strategic issues. The natural gas price shock of 2022 following Russia’s invasion of Ukraine was the primary force behind Europe’s great inflation. Worse, as importers of gas, European nations automatically become poorer if energy prices rise and no one enjoys the fights involved in distributing the losses. Energy prices are also some of the most salient for consumers and companies, so rises in gas prices threaten the stability of inflation expectations and are likely to foster higher wage demands, keeping inflation higher for longer. Since 2021, the rise in European gas prices made some industries uncompetitive, such as bulk chemical and fertiliser production, amplifying the need for economic restructuring. In this context, three years of German economic stagnation was a creditable outcome, Erik Nielsen of UniCredit convincingly argued at the weekend. There is no doubt that gas matters. So what is happening in this market? First, the good news. As the chart below shows, gas prices in continental Europe are nothing like as high or volatile as they were in 2022. The wholesale price on Monday of around €46 per megawatt hour is more than double the pre-2022 price, but also way down on the crisis costs soon after Russia’s assault on Ukraine. Some content could not load. Check your internet connection or browser settings.The bad news is that European wholesale gas prices have nearly doubled over the past year, raising heating and electricity costs for households and companies alike. Energy prices are again pushing inflation higher. The chart below shows that European prices have come down about 20 per cent compared with the recent peak on February 10. Worse news is that they have risen more than 10 per cent since a recent trough last Wednesday, February 26. Volatility is, therefore, still high. The chart is doubly useful because it compares wholesale prices in the same units and currency (€ per MWh) across the Eurozone, UK and US. It demonstrates that Europe now in effect has a unified market with the UK, with price trends and levels almost identical to those on the continent over the past year. The same is far from true with the US. Although American wholesale prices have also doubled, the cost of wholesale natural gas is less than a third of that in Europe. Given this differential, there is no doubt that, when it comes to negotiating with President Donald Trump, Europe should offer to buy more US liquefied natural gas. Since it is far from clear that Trump knows its price or that these are private markets where governments have limited powers, Europe should also offer to purchase at a comparatively generous premium. The faster Europe can boost its LNG import capacity, the quicker it can diminish its gas price disadvantage with the US, increase imports from the US and reduce its bilateral trade surplus in goods. That is entirely in European interests and might please Trump, even though narrowing the gas price differential between the US and Europe does not necessarily benefit the US. Some content could not load. Check your internet connection or browser settings.Apart from a doubling in price, another problem in wholesale prices in Europe has been some troubling trends in futures prices, raising the expected cost of gas this summer (2025) compared with next winter (2025-26). The problem is that a winter price premium is needed to provide incentives to replenish European gas storage when heating is not needed in the summer. Since late last year there has been a summer price premium, discouraging traders from buying gas this summer to put in storage and sell next winter, as the chart below shows. Normally prices in winter are about 10 per cent higher than in summer. Some content could not load. Check your internet connection or browser settings.That said, as we are getting to the end of a colder than usual European winter, storage levels have fallen, but we should not get alarmed. This year gas storage in Europe is down significantly on last year, but not much below the average level between 2011 to 2025 for this time of year. Until the winter price discount disappears, storage is unlikely to fill quickly. We should also remember that storage is not everything. It represents only about a third of EU annual gas consumption. The price mechanism is likely to resolve these temporary difficulties in boosting storage, albeit potentially at the cost of higher gas prices next winter. Some content could not load. Check your internet connection or browser settings.The immediate question is what this means for inflation and interest rates in Europe. The near doubling of gas prices over the past year has removed the pleasant downward force on annual inflation rates, replacing it with something much less benign, pushing inflation higher across Europe compared with autumn last year. Headline inflation has risen above the 2 per cent target in both the Eurozone and the UK. For the Eurozone the immediate question this week is what gas price assumptions the European Central Bank will include in its new forecasts, published on Thursday. The previous forecast was based on a gas price in the mid-€40s per MWh and gradually declining, which is similar to today’s futures prices. The ECB convention is to take average futures prices for gas over 10 working days with a cut-off roughly three weeks before the meeting. That would put the assumed gas price close to the recent peak, around 15 per cent higher than they are today and 22 per cent higher than assumed in the December forecasts. The ECB’s calibration of this difference from its last forecasts is that the change would add roughly 0.6 percentage points to 2025 forecast inflation and 0.4 percentage points to 2026 forecast inflation. Do not be surprised, therefore, if the ECB’s inflation outlook is bad on Thursday. The fall in the gas price since early February implies reality is not as difficult. The Bank of England recently forecast that higher energy prices would add 0.4 percentage points to UK inflation by the summer, with CPI inflation rising to 3.7 per cent. The chart below shows that on February 26, gas prices had fallen back to the levels in the BoE’s previous forecasts from November 2024 and would have removed the entire 0.4 percentage point uplift. Gas prices have risen since, but not back to the level in the monetary policy report. This demonstrates the importance of gas prices for Europe and how no one can have a good forecast for headline inflation when the wholesale price remains volatile.Some content could not load. Check your internet connection or browser settings.(Re) defining data dependenceECB officials have been having fun defining the concept of data dependence. The common understanding of “data dependence” had been that central bankers were opting to look more at published data, especially inflation figures, rather than their models because these had become unreliable. This was inevitably backward looking, since inflation data is published with at least a month’s lag.ECB President Christine Lagarde introduced the concept of data dependency in March 2023 as a response to an “elevated level of uncertainty”. At the time, she said monetary policy would be set from that time forward on the basis of the ECB’s “assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission”.It was clear that the “dynamics of underlying inflation” meant various measures of core inflation and was backward-looking, otherwise the first two of the three prongs would be tautologous. Of course, this backward-looking data had relevance for the future. That was the point. Policymakers thought it had more relevance than their models.All this was well understood, but recently ECB executive board member Isabel Schnabel and Finnish central bank governor Olli Rehn have attempted to say data dependency always was and will only ever be a forward-looking concept. “I never saw data dependence as a backward-looking concept. It was always forward-looking because we use incoming data to learn more about the credibility of our inflation outlook,” Schnabel told the FT. It is clear that the credibility of central bankers matters. But Schnabel is testing that very credibility by saying that data dependence was always and only a forward-looking concept. Indeed, the “robust control” policy Schnabel favoured in 2022, suggested reacting more strongly with interest rates to high inflation even if that carried risks for the future. You can make an argument that was also forward-looking, but the logic is pretty convoluted.As ECB chief economist Philip Lane told the FT — in my view with more historical accuracy — the challenge for the ECB as inflation comes down is “making a transition from a backward focus to a forward-looking focus”.What I’ve been reading and watchingIf you want the latest information on tariffs (as far as anyone knows), read Alan Beattie’s Trade Secrets newsletter. You’ll find all the important trade consequences there. You won’t find what is going to happen because no one knows Whoop whoop, Turkish inflation has fallen below 40 per cent. Seriously though, orthodox economics, including a policy rate of 45 per cent, has been workingThe failure of G20 finance ministers even to produce an empty communique demonstrates the lack of co-operation in global economic affairs (and the irrelevance of the G20) This time next week, the showdown between former Bank of England governor Mark Carney and my former colleague Chrystia Freeland to become the next Canadian Liberal party leader will be resolved. Trump has made them both more popular than thought possible before he entered the White HouseA chart that mattersEconomic models can give nonsense results. An example came last Friday when the Atlanta Fed’s excellent GDPNow model said its forecast for US annualised growth in the first quarter had plunged from a rate of 2.3 per cent to minus 1.5 per cent and then dropping further to a rate of -2.8 per cent yesterday.The proximate cause was a surge of goods imports ahead of prospective tariffs. Because imports subtract from GDP, the model interpreted the move as negative for output. The truth is that these imports will be offset by a surge in stockpiling, which is unusual and positive for GDP.There is little doubt that Trump is harming the US economy, especially with his imposition of tariffs on Canada and Mexico today. But that does not mean the model is correct. It assumes the surge in imports is negative for growth because that is normally true and would have been true in the data on which it was estimated.We know better. The US economy might be faltering. But do not be fooled that it is slumping. Some content could not load. Check your internet connection or browser settings.Recommended newsletters for you Free Lunch — Your guide to the global economic policy debate. Sign up hereThe Lex Newsletter — Lex, our investment column, breaks down the week’s key themes, with analysis by award-winning writers. Sign up here More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Target has warned that Donald Trump’s tariffs could cut into profits as it grapples with consumer fears over the state of the US economy and anger over its recent pullback from diversity goals.The big-box US retail chain said it expected “meaningful year-over-year profit pressure” in the first quarter that began on February 2, blaming a handful of factors including “tariff uncertainty” and a decline in net sales last month, as it reported fourth-quarter results on Tuesday.Anxieties have been rising across multiple industries as the US president increases duties on goods from China, Canada and Mexico. The largest US retail federation this week raised concerns that Trump’s tariffs and planned immigration curbs could be a drag on the economy.Target, with almost 2,000 stores, is vulnerable to tariffs as more than three-quarters of its sales come from general merchandise such as apparel, electronics and home decor, much of it imported. The company forecast comparable sales growth would be “around flat” in 2025, which would mark a third straight year of stagnant or declining sales. Comparable sales rose 0.1 per cent in 2024, just above Wall Street’s expectations.Fourth-quarter net profit came in at $1.1bn — near the high end of the company’s guidance and beating a Visible Alpha-compiled consensus of $1bn — thanks in part to sales of toys, electronics and apparel. Target last month reported stronger than expected traffic during the holiday season.But some consumers and advocacy groups have more recently called for boycotting Target after the company ended diversity, equity and inclusion initiatives. Surveys of US consumer sentiment also deteriorated in February, in part reflecting worries over the effects of tariffs.Target’s shares have declined 20 per cent in the past year, compared with a 17 per cent rise in the S&P 500 consumer staples index, as inflation-strained consumers spend less on discretionary goods. They fell a further 4.9 per cent on Tuesday.The retail chain has also encountered a tougher challenge from rivals such as Walmart, which is making inroads with the higher-income shoppers who traditionally visit Target.Footfall to Target stores slowed throughout February, outpacing declines at Walmart, according to Placer.ai, which aggregates location data from consumers’ mobile phones. Rick Gomez, Target’s chief commercial officer, said at an investor event on Tuesday that about half of the company’s merchandise is made in the US. China now accounts for about 30 per cent of items Target sells — down from 60 per cent in 2017, he said. Target has shifted more production to countries in the western hemisphere such as Guatemala, he added.“During February, we saw record performance around Valentine’s Day. However, our top-line performance for the month was soft, as uncharacteristically cold weather across the US affected apparel sales, and declining consumer confidence impacted our discretionary assortment overall,” said Jim Lee, Target’s chief financial officer. For the fourth quarter, Target reported a 1.5 per cent rise in comparable sales, matching a forecast that the company updated in January. The increase was driven by online shopping. Sales made inside stores open for at least a year fell 0.5 per cent year on year, while digital sales grew 8.7 per cent.The company’s net sales totalled $30.9bn, 3.1 per cent less than in the fourth quarter of 2023, which was one week longer under the retail industry calendar. Net profit dropped 20 per cent in a decline that was also exaggerated by the extra week.For the full year, Target reported an operating profit margin of 5.2 per cent, down from 5.3 per cent in 2023 and below management’s goal of 6 per cent. The company forecast a “modest increase” in its operating margin this year. More

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereGood morning and welcome back. The US has imposed 25 per cent tariffs on imports from two of its biggest trading partners, Mexico and Canada. We’ll bring you all the reaction and here’s what else we’re covering today: Trump suspends Ukraine military aid Oil prices fall after Opec+ agrees to increase outputChinese EV maker BYD pledges to work with TeslaRecord number of Americans apply for UK citizenshipAnd have quirky meeting room names gone too far?Fears of a full-blown trade war are mounting after Donald Trump made good on his promise to slap 25 per cent tariffs on imports from Canada and Mexico to the US. He also imposed an additional 10 per cent tariff on imports from China.The introduction of the most serious trade measures since Trump returned to the White House drew an instant response from China. Beijing said it would impose a 10 to 15 per cent levy on US agricultural goods, including soyabeans, beef, corn and wheat, from March 10. Canada said it would immediately retaliate with a 25 per cent tariff on $30bn of US imports, and vowed similar action against a further $125bn of US goods 21 days later.Investors reacted with horror, selling risky assets as they priced in the risk of a global economic slowdown. Stocks in Europe and Asia fell, with carmakers, which have complex cross-border supply chains, being particularly hard hit. The falls on European and Asian stock markets follow a late sell-off on Wall Street, triggered by the White House announcement of new trade measures. The S&P 500 and Nasdaq indices had their worst session of the year. But futures contracts suggest a calmer open when trading begins in New York later this morning.Elsewhere, Mexico’s peso and the Canadian dollar were both trading lower against the dollar but against a basket of internationally traded currencies, including the euro, yen and pound, the dollar was lower. The US claims the tariffs were introduced because Mexico and Canada are not doing enough to stop illegal immigration and fentanyl flows across the US border. Here’s more reaction to the brewing trade war.Here’s what else we’re keeping tabs on today:State of the Union: Donald Trump will address a joint session of Congress for the first time since returning to power in January.Results: The impact of tariffs on businesses will be in focus when retailers Target, Best Buy, Ross Stores and Nordstrom report fourth-quarter results. Monetary policy: Federal Reserve Bank of New York president John Williams participates in moderated discussion in New York.Pre-Lent: Various celebrations including Carnival, Fat Tuesday, Mardi Gras, Shrove Tuesday and Pancake Day, are held across the world.On Thursday, join consumer editor Claer Barrett for a webinar on tackling debt to mark International Women’s Day. Register for free.Five more top stories1. The US is to suspend all military aid to Ukraine as Donald Trump seeks to increase pressure on Ukraine’s President Volodymyr Zelenskyy to make concessions and bring the conflict with Russia to a rapid end. The move comes after Friday’s White House confrontation between the two leaders and comments yesterday from the US president that Ukraine needs to be more “appreciative” of his country’s support. 2. Opec+ yesterday said it would proceed with a plan to increase oil production from April, in an unexpected move by the cartel that sent crude prices tumbling. The price of Brent crude, the international benchmark, dropped a further 1 per cent today to a five-month low of $70.60 a barrel. The price has now fallen more than 10 per cent from this year’s high.Saudi Aramco: The world’s largest oil company said this morning that technology from Chinese artificial intelligence company DeepSeek is “really making a big difference” as it reported a drop in annual profits.BP: The UK oil major plans to hire two new directors to help it pivot back to oil and gas after pressure from shareholders. 3. China’s leading electric-vehicle maker BYD has pledged to work with rival Tesla to combat petrol cars, while insisting that Beijing was “more open” to foreign business than the west. Speaking to the Financial Times, BYD executive vice-president Stella Li said: “Our common enemy is the internal combustion engine car.”4. Global government borrowing is expected to reach a record $12.3tn this year, as a rise in defence and other spending by major economies and higher interest rates combine to push up debt levels. The 3 per cent rise in sovereign bond issuance across 138 countries would take the total debt stock to a record $76.9tn, according to estimates by S&P Global Ratings. The higher borrowing comes as debt-servicing costs are rising.5. US-listed advertising group Stagwell is aiming to double the size of its business, in part through an aggressive strategy of mergers and acquisitions that seeks to capitalise on what it believes is upheaval at rival US and UK agencies. Mark Penn, the firm’s founder and chief executive, told the Financial Times he wanted to increase group revenues to as much as $5bn from $2.3bn in 2024. Read the full interview.Today’s big read© FT montage/Bloomberg/ReutersThe west’s waning appetite for international aid raises several questions, most immediately the impact on the world’s poorest and the possible implications for global health and security, including pandemic preparedness. Beyond that, it could weaken western influence in the so-called global south, particularly if China, Russia and others seek to fill the vacuum. What will aid look like in a crumbling world order?We’re also reading . . . Trump’s ‘kicking ass’: The suburban voters who propelled the president to a second term are keeping the faith as he tears up the rule book.Crypto: Lesser-known coins such as XRP and Solana soared on Trump’s plan to create a strategic reserve of digital assets. But what are these tokens, and who’s behind them?Global Insight: For many in Latin America Trump’s political instincts are reminiscent of the region’s strongmen or ‘caudillo’, writes Michael Stott.Mindless ‘machine-minders’: Generative AI is a tempting short-cut that can prevent university students from gaining foundational skills, writes Sarah O’Connor.Chart of the daySome content could not load. Check your internet connection or browser settings.The number of Americans applying for UK citizenship rose to the highest on record last year, driven by a late surge in the final months of 2024. Immigration lawyers said the record numbers of applicants were driven by UK tax changes and Trump’s return to power.Take a break from the news . . . From Death Star to Raccoon Feet, have quirky meeting room names gone too far? The practice can backfire, especially when clients or colleagues are not in on the joke.© FT montage/DreamstimeThank you for reading and remember you can add FirstFT to myFT. 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“Paradise” and “Silo” have opposing takes on the future of urban organization, echoing the debate over America’s housing shortage today.“Paradise” is a TV show on Hulu about a postapocalyptic society that lives underground in a suburb. “Silo” is a TV show on Apple TV+ about a postapocalyptic society that lives underground in an apartment tower.Both are propelled by mysteries. Both feature curious heroes. Both have shifty leaders who lie, blackmail and murder to keep their secrets hidden and their denizens in line.The shows have much in common, in other words.But somehow they find opposing answers to a question that seems increasingly relevant in a warming world: If the planet goes to hell and humanity heads to a bunker, what sort of neighborhood will we build inside it? A spacious holdout that tries to approximate a comfortable standard of living, or a cramped locker that saves more lives but leaves the survivors miserable?By imagining wildly different landscapes in response to the same end-of-the-world conceit, the shows use cinematic extremes to show how civilization and class divisions are constructed through the apportionment of space. People like to live around other people right up to the moment they feel their neighborhood has been overrun by others, at which point the hunger for togetherness becomes an impulse to exclude.A good amount of today’s housing politics fall within these parameters, whether it’s a proposal to build apartments in a suburb or a plan to cover farms with a new city. The fact that this debate now extends to fictional bunkers has me convinced that in the aftermath of global calamity, people will be at some dystopian City Council meeting arguing about zoning.Curious how they came up with their underground cities, I called writers of the two works — Dan Fogelman, the creator and showrunner of “Paradise,” and Hugh Howey, author of the novels on which “Silo” is based. I wanted to understand the inspiration for each world and what those worlds tell us about the societal trade-offs between accommodating a lot of people and trying to make those people happy.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