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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.China’s Ministry of Commerce has summoned executives at Walmart over reports the US retailer asked its suppliers to cut prices in response to tariffs imposed by President Donald Trump, according to state media.The discussions, reported on Wednesday by a social media account affiliated with state-run China Central Television, highlight mounting geopolitical risks for big US companies in China.“Chinese companies shall not bear the blame for US tariffs,” the Yuyuantantian account, a frequent source of official commentary on trade, said in a post on the social media site Weibo.Walmart has expanded its presence in China in recent years despite a wider slowdown in domestic consumer demand, and its US stores rely heavily on goods imported from the world’s second-largest economy.US companies have been struggling to avoid the fallout from tariffs announced since Trump’s inauguration as president in January. The new administration initially introduced an additional tariff rate of 10 per cent on imports from China, then doubled it to 20 per cent last week.Escalating trade tensions with Washington have prompted a host of countermeasures by Beijing. As well as implementing retaliatory tariffs on US exports of energy and agricultural goods this week, China has also increasingly targeted American companies in the country.Chinese authorities added clothing maker PVH, the owner of Calvin Klein and Tommy Hilfiger, to an “unreliable entity list” in February alongside California-based biotech group Illumina, and launched an antitrust investigation into Google.The move represented the first time US companies with substantial interests on the ground in China had been blacklisted on national security grounds, and prompted a wave of concern through international business communities in Beijing and Shanghai. Earlier this month, China added 10 US companies to the list. All had sold arms to Taiwan or been involved with military technology co-operation with the island, state media said then, citing the commerce ministry.Walmart said its “purpose is to help people save money and live better. Our conversations with suppliers are all aimed at making our purpose a reality for millions of customers, and we will continue to work closely with them to find the best way forward during these uncertain times”. The commerce ministry did not immediately respond to requests for comment on the Yuyuantantian report. Bloomberg reported last week that Walmart had asked makers of kitchenware and clothing in China to cut prices by 10 per cent.Walmart has a presence in more than 100 cities in mainland China and is well-known in the country for its popular Sam’s Club, a chain of membership-only warehouse stores. In the quarter to January 31, its sales after returns, allowances and discounts in China were $5.1bn, up 28 per cent from the previous year.Walmart sold its stake in JD.com, one of China’s biggest ecommerce platforms, for $3.6bn last August to focus on expanding its own brands.Additional reporting by Gregory Meyer in New York More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldTwo of Wall Street’s most prominent executives have said there are upsides to Donald Trump’s policies, even as the US president presses ahead with protectionist measures including import tariffs that have fuelled fears of a slowdown in the world’s largest economy.Stephen Schwarzman, chief executive of Blackstone, told reporters in India on Wednesday that the tariffs would, “at the end of the day”, lead to a significant increase in manufacturing activity in the US.“Given the size of the US, that tends to be a good thing for the world,” said Schwarzman, a prominent Trump donor. “If we’re growing faster we can consume more things. So, you know, that’s one scenario . . . there are other scenarios, because it’s just way too early to play this out.”Meanwhile David Solomon, chief executive of Goldman Sachs, said the business community “understands what the president is trying to do with tariffs”, though he pleaded for more “certainty” on the Trump administration’s policy agenda.Trump’s 25 per cent tariffs on steel and aluminium imports came into effect on Wednesday, triggering countermeasures from the EU, which the bloc said would affect up to €26bn of American goods. Canada has also announced 25 per cent retaliatory tariffs on about C$30bn of US-made goods.The “business community is always going to want lower tariffs, everywhere in the world”, said Solomon. But he welcomed Trump’s wider agenda and his openness to dealing with executives, telling Fox News that he liked the way “the president is engaged with the business community”. “That’s a different experience than what we’ve had over the course of the last four years,” Solomon said.“CEOs are excited about some of the tailwinds, like the move to lower regulation,” he said, adding that red tape had been a “significant headwind to growth and investment”.Solomon said he expected the number of initial public offerings, which had been “muted” over the past couple of years, to increase in 2025.The Goldman chief was part of a group of business leaders who met Trump at an event held on Tuesday evening by the Business Roundtable, an association of 200 CEOs of large American companies. Many of the attendees have seen the market capitalisation of their companies slump in recent days amid fears of recession and a widening trade war.Trump told the gathering that tariffs would boost domestic jobs and industrial production in the US. “The biggest win is if [businesses] move into our country and produce jobs,” he said. “That’s a bigger win than the tariffs themselves.”As well as resuscitating US manufacturing, Trump’s aggressive moves on trade are designed to reduce the country’s trade deficit, and force Mexico and Canada to stem the flow of irregular migrants and fentanyl across America’s southern and northern borders.But the deepening frictions between the US and some of its closest allies are causing jitters throughout the business community.In addition to retaliatory tariffs by the EU and Canada, there is concern about the possibility that Trump will follow through on his threat to impose so-called reciprocal tariffs on all trading partners from April 2, to punish them for taxes, levies, regulations and subsidies that Washington considers unfair.Additional reporting by Antoine Gara and Oliver Barnes in New York More

The U.S. Treasury Building is seen from the Washington Monument on a cold, winter day on Jan. 21, 2025 in Washington, DC.
Kevin Carter | Getty Images

The U.S. debt and deficit problem worsened during President Donald Trump’s first month in office, as the budget shortfall for February passed the $1 trillion mark even though the fiscal year is not yet at the halfway point.
Government spending eased slightly on a monthly basis though it still far outpaced revenue, according to a Treasury Department statement Wednesday. The deficit totaled just over $307 billion for the month, nearly 2½ times what it was in January and 3.7% higher than February 2024.

Receipts and expenditures set records for the month, a Treasury spokesman said.
For the year, the deficit totaled $1.15 trillion through the first five months of fiscal 2025. The total is about $318 billion more than the same span in 2024, or roughly 38% higher, and set a record for the period.
Net costs to finance the $36.2 trillion national debt edged lower to $74 billion for the month. However, the total net interest payments year to date rose to $396 billion, just behind national defense and health. Social Security and Medicare are the largest costs in the U.S. budget.
The deficit swelled in the final three years of former President Joe Biden’s term, growing from $1.38 trillion to $1.83 trillion.
Trump has made getting the government’s fiscal house in order a priority since taking office. Since taking over, he created the so-called Department of Government Efficiency, led by Elon Musk. The advisory board has spearheaded job cuts across multiple departments in addition to early retirement incentives. A Treasury spokesman said there were no apparent impacts yet from the DOGE efforts but referred further comment to the Musk-led panel.
At the same time, Trump wants to extend the Tax Cuts and Jobs Act, spearheaded during his first administration. While Trump has touted growth that the tax reductions would bring, multiple think tanks say renewing the act also would add $3.3 trillion to the deficit over the next decade.

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Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldThe writer is associate professor of political science at Providence College and author of the forthcoming book ‘Extraction: The Frontiers of Green Capitalism’ Critical minerals have topped the agenda since Donald Trump’s return to the White House. On inauguration day, he released an executive order, “Unleashing American Energy”. With characteristic bluster, this seeks to secure “America’s mineral dominance”. He has also issued a related executive order (“Addressing the threat to national security from imports of copper”), threatened to seize Greenland and annex Canada, which have enviable mineral endowments, bullied Ukraine to accept a minerals deal (“they have great rare earth. And I want security of the rare earth”), and announced imminent additional action to “dramatically expand production of critical minerals and rare earths here in the USA”.Trump’s bellicose rhetoric and menacing behaviour has been rightly criticised but he is not acting in a vacuum. Last year, the EU signed a critical minerals deal with Rwanda. The European parliament voted to suspend the deal, however, because Rwanda is supporting a rebellion in the eastern Democratic Republic of Congo partly in order to seize and export the region’s coltan, tin, tungsten, tantalum and gold. Meanwhile, the government of the DR Congo, led by Félix Tshisekedi, has proposed a critical minerals deal to the US, modelled on the stalled Ukraine agreement. Tshisekedi pitched the idea of privileged access for US companies to abundant cobalt and copper reserves in exchange for security assistance in its fight with the M23 rebels. Vladimir Putin too saw the Ukraine deal as a model, offering Trump access to Russia’s minerals — as well as those in Ukrainian territories his military controls. These deals are part of a broader trend. Importing countries are racing to secure minerals, using a mix of onshoring (encouraging mining within their borders) and bilateral trade agreements. Producing countries are implementing export bans, establishing state-owned companies and in some cases nationalising entire mineral sectors. Whether justified on account of the energy transition, tech sectors or military preparedness, countries everywhere want their piece of the critical mineral pie.In the US, Trump’s moves mark the escalation of a bipartisan consensus that has been over a decade in the making. It was during Barack Obama’s presidency that federal officials first outlined a “critical minerals strategy”. In Trump’s first term, executive orders expanded the list of critical minerals and framed reliance on imports from foreign adversaries as a threat. Joe Biden’s administration increased domestic mining, established friendshoring alliances and imposed major tariffs on minerals from China. Some previous US policies bear an unsettling resemblance to Trump’s recent bluster too. Under Biden, for example, the state department lobbied the CEO of privately held Tanbreez to resist any offers from Chinese investors for its Greenland rare earth deposit.There is an even longer history at work here. The concept of “critical minerals” traces its origins to the lead-up to the second world war and was reinforced during the cold war race for atomic materials and the 1970s energy crisis. At each moment, labelling resources as “critical” has justified government support for extraction and access, deregulation of safeguards, and a preference for strong-arm tactics over co-operation. The consequences are deadly: mining ranks high among economic sectors for human rights violations.The idea of “critical minerals” shuts down debate. Critical for who? And extracted for whose benefit and whose expense? Instead of “mineral dominance” we need international agreements on environmental and social standards and policies that reduce mineral demand. Otherwise, the critical minerals consensus is liable to lead us to a 21st-century gold rush or resource war. More

Show video infoThe EU and Canada retaliated against US President Donald Trump’s 25 per cent tariffs on steel and aluminium within hours of them taking effect, escalating a trade war that has rattled financial markets and threatened the global economy.The European Commission said its measures would affect up to €26bn ($28bn) of American goods, matching the US tariffs on European exports, and would take effect in April, leaving some time to negotiate with Washington.Commission president Ursula von der Leyen said the EU regretted Trump’s decision and that tariffs were “bad for business, and even worse for consumers”. “These tariffs are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices will go up,” von der Leyen said.Canada also hit back swiftly as Ottawa announced tariffs on almost C$30bn ($21bn) of US goods. Dominic LeBlanc, the country’s finance minister, branded the US levies as “completely unjustified, unfair and unreasonable”. The retaliations came after the US tariffs came into force on Wednesday, as Trump pressed ahead with his protectionist trade agenda despite growing concern over the risk of a domestic recession.The move to impose the tariffs followed a turbulent day on Wall Street as the spectre of a deepening trade war and the administration’s erratic policymaking on tariffs shook investors.US and European stocks were up on Wednesday, snapping two days of declines, with the S&P 500 rising 0.8 per cent and the Stoxx Europe 600 climbing 0.8 per cent.As part of its retaliation, Brussels has reinstated measures introduced during Trump’s first term on €4.5bn of US exports from April 1. These include levies of up to 50 per cent on products such as bourbon whiskey, jeans and Harley-Davidson motorcycles.The EU has also drawn up levies on a further €18bn of US goods, which could include cosmetics, clothes, wood, soyabeans, chicken, beef and other agricultural produce. The measures, which could be expanded to include another €3.5bn of goods, require approval by EU countries and would come into force on April 13.A senior EU official said soyabeans were on the list of targets because they were grown in Louisiana, the home state of House of Representatives Speaker Mike Johnson.“We’re happy to buy our soyabeans from Brazil or Argentina,” they added.“We want to ensure there is pressure within the American system to lift their tariffs,” a second official said, referring to efforts to hit goods from Republican states. Trump’s tariffs are the latest salvo in an aggressive trade policy that the president has said will boost US manufacturing and penalise countries he claims have ripped America off.Last month the president announced that he would impose the duties on metals, tearing up agreements struck between his predecessor Joe Biden and US trading partners to allow certain quantities of steel and aluminium to enter the country duty free.US administration officials have framed the move as a response to “foreign players” that they say are responsible for “surging exports” of metals to America that are undermining domestic producers.Trump has also expanded the metals tariffs to apply to a wide range of products containing steel and aluminium, including tennis rackets, exercise bikes, furniture and air conditioning units.UK trade secretary Jonathan Reynolds said the tariffs were “disappointing” but Britain did not respond with immediate countermeasures. Despite the US being the UK steel industry’s second-biggest export market, Reynolds said the government was “focused on a pragmatic approach” as it sought to negotiate a broader economic deal with the White House.China, the world’s largest steelmaker and exporter, warned it would “take all necessary measures to safeguard its legitimate rights and interests” but did not immediately announce retaliatory tariffs.Australian Prime Minister Anthony Albanese said the tariffs were “entirely unjustified”, adding: “This is not a friendly act.” The country was exempt from similar tariffs implemented during Trump’s first term, and the country’s steel producers supply the American defence and manufacturing sectors.The full list of steel and aluminium products subject to the levies represented $151bn of imported goods in 2024, according to an analysis by Simon Evenett and Johannes Fritz of the St Gallen Endowment for Prosperity Through Trade.Ted Murphy, a partner at law firm Sidley Austin, said Trump’s sweeping new metals tariffs represented a “big change” from his approach when he introduced similar levies in 2018 and allowed exclusions for some products. “The product exclusions were vetted through a US government process to confirm the products weren’t available in the US,” said Murphy. “So taking that away will mean a lot of folks will have to pay the tariff because they can’t source these products domestically.”Additional reporting by Nic Fildes in Sydney, George Parker in London, Joe Leahy in Beijing and Ilya Gridneff in Ottawa More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Canada’s central bank has cut its benchmark interest rate to the lowest level since 2022, warning that a trade war with the US will probably slow the pace of Canadian economic growth and increase inflationary pressures.The Bank of Canada on Wednesday reduced rates by 0.25 percentage points, as expected, to bring its policy rate to 2.75 per cent. It marked the seventh consecutive cut in the BoC’s monetary policy easing cycle.The move came hours after US President Donald Trump’s tariffs on steel and aluminium imported from Canada took effect earlier on Wednesday. Trump has also imposed, then delayed, 25 per cent tariffs on Canada and Mexico, despite the US having a free-trade pact with the two countries.BoC governor Tiff Macklem told reporters that Canada’s economy ended 2024 in “good shape” but was now facing a “new crisis” due to the trade war with the US.“Depending on the extent and duration of the US tariffs the economic impact could be severe; the uncertainty alone is already causing harm,” he said. He added that a weaker Canadian dollar is adding costs to importing goods and unemployment is likely to rise over the coming months due to weaker consumer demand.Alongside its policy decision, the BoC published survey data that suggested threats of new tariffs and uncertainty about the US-Canada trade relationship were having a “big impact” on consumer and business confidence.Macklem said the survey indicated Canadian businesses, particularly those in manufacturing and sectors dependent on discretionary consumer spending, had lowered their sales outlooks.“Our surveys also suggest business intentions to raise prices have increased as they cope with higher costs related to both uncertainty and tariffs,” Macklem said. The BoC also cautioned that “monetary policy cannot offset the impacts of a trade war” and Macklem warned that the severity of the impact of new US tariffs on the Canadian economy would depend on their extent and duration.On Sunday the minority government’s Liberal party chose former Bank of England and Bank of Canada governor Mark Carney as their new leader and prime minister, replacing Justin Trudeau. Carney has pledged to “build the strongest economy in the G7”.Carney is expected to call an election that will be held probably in late April or early May. Canada must hold a national vote before October. More