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We have used an AI model to categorise the executive orders signed by Donald Trump in his second term into seven broad topic areas: trade and tariffs, economy, health, security, justice, energy and environment, and others. A large language model was given the full text of the executive order and prompted to assign it to one of the seven categories. Each categorisation was then manually checked by an FT journalist to ensure accuracy. More

This article is an on-site version of our Trade Secrets newsletter. Premium subscribers can sign up here to get the newsletter delivered every Monday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersWelcome to Trade Secrets. Another weekend with trade tension set at DEFCON 1. Last week, Trump threatened a big but ill-defined move on reciprocal tariffs. Yesterday he said he would also tax all aluminium and steel imports at 25 per cent. This sounds like reimposing the Section 232 national security tariffs he brought in during his first term but which were suspended via various deals, including one Joe Biden made with the EU. Except those had aluminium at only 10 per cent. If Trump wants to deprive his manufacturers of cheap basic inputs and invite retaliation, more fool him.His reciprocity plan, which is wildly at odds with the steel and aluminium tariffs, probably refers to the Reciprocal Trade Act that, quaintly enough, was actually in his policy platform. In today’s newsletter I recap why it’s a bad idea that is unlikely to happen, at least not fairly and honestly on the advertised scale. I also ask if the EU, the presumptive next target of Trump’s coercive tariff campaign, could match the lightning speed with which Mexico and Canada produced retaliatory threats last weekend.Oh yes, and Beijing’s actually quite restrained response to the 10 per cent tariff on imports from China comes in today. And in the spirit of remembering there are bigger things in life than trade policy, Elon Musk’s reckless dismantling of the US federal government last week involved the USAID development agency being all but abolished, and with it most of the US’s overseas HIV-Aids and food aid programmes. Also the US is detaching from even the basic frameworks of global economic governance. Citing this year’s G20 host South Africa’s commitment to “diversity, equality and inclusion” and combating climate change, and with Trump’s crony-in-chief Elon Musk obsessed with the plight of white South African farmers, the US won’t attend this year’s G20 summit and might also pull out of the IMF and World Bank. It’s like a fever dream. Today’s Charted Waters section, where we look at the data behind world trade, is on uranium demand.Get in touch. Email me at alan.beattie@ft.comThe porosity of Trump’s reciprocityHere’s what we know about Trump’s reciprocity plan, on which Kevin Hassett, head of the White House National Economic Council, seems particularly keen. It envisages the US mirroring its trading partners’ tariffs, hence encouraging high-tariff countries to reduce their protection if they want to maintain their current access to the US market. Even in theory it’s a bad idea. It will destroy the most-favoured-nation (MFN) basis of global trade — and as World Trade Organization director-general Ngozi Okonjo-Iweala recently reminded me, despite all the fuss about preferential trading agreements, more than 80 per cent of global goods trade takes place under MFN. It will also be impossibly complicated, involving thousands of product lines with hundreds of trading partners.It’s also pretty clear the US either doesn’t understand the plan’s implications or is acting in bad faith. The idea is based on the assumption that the US has the lowest tariffs, so other countries will be doing the reciprocal cutting. For industrial goods trade, that’s usually true. For agriculture, it often isn’t. As I wrote previously:According to calculations for the FT by the Global Trade Analysis Project (GTAP) at Purdue University, New Zealand dairy products encounter an average 14 per cent applied tariff (the New Zealand dairy industry itself reckons a bit higher) on sales to the US, the world’s third-largest dairy market after India and the EU.New Zealand itself maintains zero tariffs on almost all its own dairy imports. The second-biggest dairy-producing state after California is politically sensitive Wisconsin. It’s unlikely Trump (and certainly Congress) would want to match New Zealand by cutting its tariffs to practically nothing and expose swing-state dairy farmers to low-cost competition.It’s a similar situation with sugar. Brazil, a super-competitive exporter, maintains applied tariffs on American raw sugar of about 16 per cent, according to GTAP calculations, which it would be able to cut if that unlocked market access elsewhere. The US, which has a quota-and-tariff system, imposes duties on Brazilian exports of 44 per cent.The Florida cane-growers are notoriously fearsome lobbyists — as president Bill Clinton interrupted time with Monica Lewinsky in the Oval Office to take a call from one of the Fanjul family of sugar barons — and a reciprocal deal on sugar is similarly improbable. There is certainly no fair and comprehensive across-the-board reciprocity plan waiting to be implemented.And if it wants to apply this reciprocity to cars, is the US really going to cut the 25 per cent tariff on pick-up trucks that’s been there since Lyndon B Johnson was president? If the EU offers to cut its car tariffs to US levels, as the Financial Times has reported, it could put Trump on the spot by demanding that the light truck tax goes as well.One other thing: unless Trump thinks he can do all this by executive action, a reciprocal deal will require legislation. Congress might be supine in the face of Trump’s emergency tariffs, but requiring its approval for this will mean giving the farm lobby a veto. If a reciprocal trade act passes it will be partial and hypocritical. Don’t fall for it.Facing down Trump, the Mexican-Canadian waySpeaking of resisting bullies, what did we learn from the Canada-Mexico episode? We saw Trump suspend his threatened tariffs for a month after those governments offered him actions, in this case on fentanyl smuggling and immigration, they had already taken.Of course, the EU and China did a similar thing in Trump 1.0, but the innovation last week is that those negotiations took place with Canada and Mexico already having made counter-threats of tariffs with incredible speed. With just a couple of days’ notice, Trump issued an executive order on the Saturday that the US would impose emergency tariffs at the beginning of the next week using the International Emergency Economic Powers Act (IEEPA). They were to be published in the Federal Register, the legal precursor to implementing them, on the Monday, and put in place at one minute past midnight on Tuesday morning.What did Mexico and Canada do?Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau immediately threatened retaliation. The same day as Trump’s executive order, Trudeau published a list of US exports to Canada to be hit with tariffs and Sheinbaum cryptically alluded to a plan for tariffs and non-tariff measures. The two leaders also spoke to each other over the weekend to signal a united front. Trump agreed a deal with Sheinbaum to suspend the tariffs on the Monday morning before the notice of the tariffs on Mexico had even been published in the US Federal Register, and the deal with Trudeau came early on Monday evening. It’s not clear whether the counter-threats made a difference to Trump backing down, but they can hardly have hurt.How did they do it?(Thanks to Orlando Pérez Gárate of the TMI law firm and Juan Francisco Torres Landa Ruffo of Hogan Lovells in Mexico City for help with this: all errors are mine.) Sheinbaum used presidential powers (Article 131 of the constitution, if you’re taking notes) to impose countermeasures arising from the fact that Trump’s tariffs violated the US-Mexico-Canada (USMCA) trade deal. The powers were granted to the president by the Mexican Congress in the 1950s on the grounds that swift executive action might be needed to react to unfair treatment. They were used once before against the US under USMCA against Trump’s tariffs on steel and aluminium, and once under its predecessor Nafta in a dispute over trucking. The president has a lot of leeway: the powers can be challenged in Mexican courts, but it would take a year or so to do it. Of course a rogue president could use the powers recklessly, but then Mexico’s a sensible, grown-up OECD country. Not like its crazy, hot-headed, norteamericano neighbour.Canada, under its parliamentary system, used a so-called order in council — a decision taken by the cabinet using existing legal authority — to impose a “surtax” on countries whose actions adversely affect Canadian trade. This power has been criticised in the past by Canadian academics Wolfgang Alschner and Nicolas Lamp for allowing the government to act as “judge, jury and executioner”. As with the Mexican presidential powers you can certainly see how it might be misused, but it did the trick here. (Thanks to Robert Wolfe, emeritus professor at Queen’s University Canada and several former Canadian officials for illumination: ditto all mistakes mine.)The EU tortoise lumbers into actionCan the EU do what Mexico and Canada did? During the first Trump term, the EU met the US’s Section 232 tariffs on steel and aluminium with so-called rebalancing measures, which took a couple of months. But then they had some warning, as the Section 232s themselves involve a lengthy deliberative process. The near-instantaneous IEEPA tariffs are a different matter. As my Brussels colleagues wrote recently, the EU is looking at combating them with its shiny new “anti-coercion instrument” (ACI), a tool it started to design when Trump was threatening EU member states with tariffs in 2019 for bringing in digital services taxes.If the EU feels it’s being threatened with trade measures to coerce any kind of policy, it can deploy the ACI to authorise tariffs, regulatory changes, public procurement restrictions, whatever. The standard metaphor for the ACI in Brussels is “the bazooka”, but I’ve always thought of it as more like a special forces unit licensed to use a wide range of combat techniques. To be accurate, though, it’s a special forces unit bound by opaque and complex rules of engagement. Imagine a James Bond movie in which the opening bit where 007 spars with M over his assignment and gets new gadgets from Q and flirts with Miss Moneypenny and so on goes on for an hour before we get to the action.Before using the ACI, the European Commission would first have to negotiate with the US to ask it to back down. It would then have to get member states to agree on a list of retaliatory actions, with Trump no doubt trying to bully or bribe them out of doing so.How long would all this take? That’s really not clear. Reader, I tried. I asked commission officials past and present, lawyers, think-tankers, everyone: suppose you had immediate political and technical consensus across the EU to act, how quickly could you have ACI retaliation in place?Perhaps numbed by the un-European concept of instantaneous consensus, no one was confident of an answer. But it definitely wasn’t a couple of days. The most optimistic answer I got was two weeks. Bernd Lange, chair of the European parliament’s international trade committee, told the FT last week perhaps (gulp) six months.There’s a big gap in the armoury here. David Kleimann at the ODI think-tank points out that the EU doesn’t even have a rapid-response retaliation instrument in place for tariffs that severely breach WTO rules, even if they aren’t coercive as such.“But Alan, this is the EU, why are you expecting quick results?” was the general vibe from my interlocutors. Fair enough, except we’ve been here before with the rescue lending in the Eurozone debt crisis. Adherence to procedural niceties cost a lot of time, money and human suffering. The imperative of getting ahead of the market turmoil lost out to endless debates about what the treaties did and didn’t allow, the authorities fiddling while Greece burned. Bottom line: the EU can’t create an immediate, credible counter-threat as Canada and Mexico could. If Trump comes hurtling out of nowhere with a coercive menace, the EU needs either to buy him out of it or rely on the uncertain credibility of promising retaliation in the future.Charted watersIn the latest critical mineral news, the prospect of more nuclear power generation globally plus geopolitical uncertainty is likely to drive demand for uranium sharply higher.Trade linksThe EU is looking at exempting more than 80 per cent of EU companies from its carbon border adjustment mechanism in an attempt to reduce the bureaucracy involved.The farmers in states such as Iowa who mainly voted for Donald Trump are once again threatened by the damage caused by his tariffs. There’s no telling some people.Trump claimed that the Japanese company Nippon Steel had dropped its controversial bid for US Steel, but it seems quite possible that something with a similar effect to an acquisition but a different name will happen anyway.The academic Richard Baldwin points out how Trump’s manoeuvrings over tariffs on imports from China have managed to hand a competitive advantage to Canada and Mexico over the US.Time magazine has a nice history lesson from the 19th century about how using tariffs to try to pull Canada away from British influence and towards being part of the US didn’t work then either.The FT’s Rob Armstrong writes that global stock markets have seemed to shrug off Trump’s tariff threats in his Unhedged newsletter.Trade Secrets is edited by Harvey NriapiaRecommended newsletters for youChris Giles on Central Banks — Vital news and views on what central banks are thinking, inflation, interest rates and money. 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This article is an on-site version of our Unhedged newsletter. Premium subscribers can sign up here to get the newsletter delivered every weekday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersGood morning. Friday’s jobs report looked fine to Unhedged — a little light on new jobs in January, but December was revised up and the unemployment rate decreased — but markets didn’t love it. Stock and bonds fell. We seem to be in more of a glass-half-empty market than we were at the end of 2024. If your glass is half full, let me know why: robert.armstrong@ft.com. Stock markets shrug at Trump’s tariff threatsOn their face, global stock markets do not appear worried about a trade war. Since the start of this year, stock markets in Mexico, China and Europe have all outperformed the S&P 500 in dollar terms, and all three have more than recovered from the shock of Trump’s (as yet unfulfilled) threat of 25 per cent tariffs on the US’s immediate neighbours and China. Canada’s market has been somewhat weaker, but it remains up on the year, notable given that US exports amount to almost a fifth of GDP. This could mean a number of things. The market may think Trump is bluffing about imposing high tariffs, or that tariffs will not hit the profits of public companies particularly hard. Alternatively, the damage to profits may have been priced in months ago, as Trump’s odds of winning the presidency rose. What we can say for sure is that there is no evidence of a 2025 tariff shock at the index level. At the company level, things look somewhat different. It’s not as simple as looking at international stocks with the most revenue exposure to the US and seeing how they have performed. Many of the international companies with high US revenue exposure are in services or manufacture goods in the US, avoiding the tariff issue. One has to look for tariff impact on a quite specific subset of stocks.European auto and drinks companies fit the profile. Part of the point of products from Diageo (Guinness beer, Crown Royal whiskey, Casamigos tequila) and Pernod Ricard (Beefeater gin, Perrier-Jouët champagne) is that they are imported. And both companies cited tariff uncertainty — and poor demand — when they cut profit forecasts recently. According to Morgan Stanley, 25 per cent of Porsche’s unit sales are in the US, and the cars are 100 per cent manufactured in Europe. At BMW and Mercedes, 15 per cent of unit sales are in the US, and those units are 60 and 57 per cent internationally produced.  But it is only shares in the drinks companies, which have publicly cut profit targets, that have been hit hard this year:Jacob Pozharny, co-CIO of Bridgeway Capital Management, offers another way to look at this. He maps global stock markets on a matrix of expert sentiment (analysts’ earnings revisions, changes in short interest, and so on) and return performance. Most markets behave predictably, with performance tracking sentiment in a linear way. But there are outliers where sentiment is strong but performance has been mediocre. Here is his matrix from October through the end of January:It is notable that markets in China, Mexico and Hong Kong — all prime targets for tariff threats — are up and to the left of the trend line, indicating good sentiment and so-so performance. “Professionals are seeing a lot of positive things in the countries affected by tariffs but the market is not responding to that,” Pozharny says. “The experts see Trump’s discussions of tariffs as a bluff and yet the market is wary. I see that as an opportunity.”It is hard to know the degree to which the market judged Trump to be bluffing and to what degree it thinks tariffs, if imposed, will only have a limited impact. Either way, though, markets to date are not terribly concerned. Whether they are right to be so sanguine is a separate question.Energy prices and inflationTreasury secretary Scott Bessent wants 10 year Treasury yields to fall, and thinks lower energy prices will play a big part in making that happen. From Bloomberg:  For working-class Americans, “the energy component for them is one of the surest indicators for long-term inflation expectations,” [Bessent] said.“So if we can get gasoline back down, heating oil back down, then those consumers not only will be saving money, but their optimism for the future will” help them rebuild from the recent years of high inflation, Bessent said…The bond benchmark closed at a fresh low for 2025 on Wednesday . . . “The bond market is recognising that” under Trump “energy prices will be lower and we can have non-inflationary growth,” Bessent said of the drop in yields in recent weeks. “We cut the spending, we cut the size of government we get more efficiency in government. And we’re going to go into a good interest-rate cycle.”It is worth noting that this view is unconventional among economists. The reason that energy prices are excluded from core inflation measures is that they are volatile and poor predictors of future inflation. And the direct weighting of energy within the CPI and CPE inflation indices is less than 10 per cent. At the same time, though, energy prices are extremely visible: when people think about inflation in the US, they are often thinking about gasoline prices. What is more, there is a remarkably strong historical correlation between break-even inflation rates and energy prices. Joseph Lavorgna of SMBC Nikko Securities writes that Bessent “hits the mark” with his comments, and provides this chart of break-even inflation and the oil price:Real interest rates are the other half of Treasury yields, as Lavorgna notes, and those are sensitive to monetary policy, growth expectations, and expected government deficits. So, “if oil prices and projected budget deficits decline, long term interest rates can fall sharply — we estimate to well below 4 per cent. And remember this would be independent of monetary policy action.”My response to this line of thinking is that there is a third factor that affects both break-even inflation and oil prices: economic growth, particularly wages and consumer spending. Like energy prices and break-even inflation, growth and break-even inflation track each other nicely, and of course growth is a major determinant of energy prices. My suspicion is that the tight break-evens/energy correlation is in large part spurious, and that targeting energy prices in particular will not prove to be a particularly good strategy for bringing down long-term interest rates. I’m not confident about this by any means, however.I’m very curious to hear readers’ views — please email me.Something to note in passing. When Bessent says that the recent fall in long-term yields is the market recognising that energy prices are set to fall and bring inflation down with them, he is clearly wrong. On the contrary, break-even inflation is up. All the work in bringing yields down is being done by real rates:   Being wrong about what is happening now does not mean that he is wrong about how the energy-inflation link will evolve in the future, however. More on this topic tomorrow. One good readThe work from home puzzle.FT Unhedged podcastCan’t get enough of Unhedged? Listen to our new podcast, for a 15-minute dive into the latest markets news and financial headlines, twice a week. Catch up on past editions of the newsletter here.Recommended newsletters for youDue Diligence — Top stories from the world of corporate finance. Sign up hereFree Lunch — Your guide to the global economic policy debate. Sign up here More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Russian officials believe western pressure is hampering Moscow’s efforts to draw former Soviet nations closer into its orbit and build economic ties with the global south, according to a leaked government report.The internal presentation, shown at a strategy session led by Prime Minister Mikhail Mishustin last April, offers a rare insight into how Russia’s war in Ukraine has harmed ties with some of its closest allies. The analysis notably concedes that western sanctions pressure, as well as economic overtures, had succeeded in driving a wedge between Moscow and some of its nearest trade partners.Russia’s cabinet presented the report to several dozen senior government officials and top executives at some of Russia’s largest state companies, according to its website. Hardline experts such as Sergei Karaganov, who has called on President Vladimir Putin to use nuclear weapons against Europe, and Alexander Dugin, a proponent of radical violence against Ukrainians, also attended.Moscow’s ambition, the report says, is to restore its access to global trade by putting Russia at the centre of a Eurasian trade bloc that would aim to rival the US, EU, and China’s spheres of economic influence. Russia sees creating the “macroregion” as an important long-term project, which would outlast any talks with the west over the future of Ukraine, to help strengthen its footing on the “global arena”, the report says.The new bloc would connect Russia to the global south by giving each side access to raw materials, developing financial and transport ties, and uniting them through a common “world view . . . where we write rules for the new world [and have] our own sanctions policy”, the report claims.But it admits the obstacles to Russia’s global resurgence remain considerable. The report says western countries have successfully threatened central Asian countries into complying with sanctions through a “carrot-and-stick” approach while offering them access to global markets, transport corridors and supply chains that bypass Moscow. Russia’s allies, meanwhile, have profited from the sanctions by driving Russian businesses out of their home jurisdiction, taking control of import and export flows, and relocating production from Russia, according to the report. It adds that central Asian countries have also sought extra commissions to compensate for the risks of violating sanctions.The report admits Russia will have to “play the long game” to keep central Asian countries in its orbit. It suggests Moscow appeals to their shared history and respect their independence, while understanding a Russian victory in the war against Ukraine will not be enough to end western sanctions pressure. “Close relations with a country [like Russia] will be a source of difficulties,” the report says.Central Asian countries, it adds, are taking advantage of Russia’s “vulnerability” and looking to “integrate without Russia” in groups such as the Organization of Turkic States. The nations have “changed their world view” by “rethinking our collective history”, promoting English as a second language instead of Russian and moving to western educational standards, as well as sending their elites to be schooled in the west.The countries will have to “make a decision on their stance towards Russia”, the report concludes, without elaborating. Kazakhstan, the region’s largest economy, has condemned the invasion, refused to recognise Russia’s territorial gains and made an effort to demonstrate compliance with western sanctions. Neighbouring Kyrgyzstan, however, has thrown its lot in firmly with Russia and emerged as an important route for alleged sanctions evasion.The report highlights Belarus as Russia’s most successful example, comparing strongman President Alexander Lukashenko’s call to diversify away from Russia economically in 2018 with his declaration six years later that “we will always be united with Russia”.But the development of the Moscow-led Eurasian Economic Union, which includes Belarus, Armenia, Kazakhstan and Kyrgyzstan, is also struggling with “systemic problems”, according to the report. Those include sanctions risks, the use of different payment systems after western countries kicked Russia out of the Swift messaging system, and the currency controls Moscow introduced to help weather the impact of the sanctions.A spokesperson for Mishustin was contacted for comment, but did not respond. More

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President Trump on Sunday said that he would impose a 25 percent tariff on all foreign steel and aluminum imports into the United States as of Monday and would soon announce reciprocal tariffs on America’s trading partners.Speaking from Air Force One en route to the Super Bowl, the president said his metal tariffs would apply to “everybody,” including Canada and Mexico, America’s allies and its largest trading partners.“Any steel coming into the United States is going to have a 25 percent tariff,” Mr. Trump said. “Aluminum, too.”Mr. Trump’s decision to tax foreign metals and impose reciprocal tariffs comes in the wake of several other trade threats he has made since winning the White House.Since taking office, Mr. Trump has imposed an additional 10 percent tariff on all products from China, and came within hours of imposing sweeping tariffs on Canada and Mexico that would have brought U.S. tariff rates to a level not seen since the 1940s.Mr. Trump has also said in recent days that he planned to impose tariffs on Europe, Taiwan and other governments, as well as on a variety of critical industries like copper, steel, aluminum, pharmaceuticals and semiconductors.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