Good morning. Our top story today is about the EU’s two-step trade strategy to deal with Donald Trump if he wins a second term as US president.
Negotiators are planning to approach the Trump team, if he wins the election in November, before he takes office to discuss which US products the EU could buy in bigger quantities.
Should talks over improving trade fail and Trump applies higher tariffs, the European Commission’s trade department is drawing up lists of imports it could hit with duties of 50 per cent or more.
“We have to show we are a partner for the US, not a problem,” said a senior EU official. “We will look for deals, but we are ready to defend ourselves if it comes to it. We won’t be guided by fear.”
In designing the measures, Brussels opted to go after Trump’s core voters with swingeing duties on bourbon whiskey, Harley-Davidson motorcycles and power boats. Those tariffs are suspended until March, part of a temporary deal with the Biden administration to pause metals tariffs. Here’s the full story.
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Here’s what I’m keeping tabs on today:
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New UK listings regime: The biggest overhaul of rules for London-listed companies in three decades comes into force.
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Companies: Updates are expected from Alliance Pharma, Cranswick and Pearson, while Heineken, Loews, McDonald’s and Philips have results. Blackstone’s acquisition of Hipgnosis is expected to become effective after the deal was approved by shareholders last month.
Five more top stories
1. Unexpected strength in UK services inflation has left the Bank of England’s meeting on Thursday on a knife edge as policymakers weigh whether to push ahead with the first reduction in interest rates since 2020. With headline inflation sitting at the 2 per cent target for two successive months, the Monetary Policy Committee has an opening to deliver a quarter-point interest rate cut to 5 per cent. But policymakers have been wavering.
2. Venezuela’s state-controlled election authority has declared authoritarian leader Nicolás Maduro the winner of Sunday’s presidential vote, as the opposition denounced what it said were serious irregularities in the count. Opinion polls before the vote and quick counts on the day had forecast a big opposition win. Here are the latest developments in the crucial election.
3. Exclusive: The UK space agency has come under fire from industry over its latest funding awards, which allocated £33mn to more than 20 companies, including £5mn to the UK subsidiary of HyImpulse, a Germany launcher start-up. “HyImpulse have had more funding from the UK than they have had from the German government,” Phillip Chambers, chief executive of rocket start-up Orbex, told the Financial Times. Peggy Hollinger has more.
4. Chinese state-owned financial institutions are clawing back bonuses and cutting pay as Beijing broadens its scrutiny of the finance industry to include mutual funds and Hong Kong-based bankers. A senior economist said the latest moves “show that Hong Kong, because of its close economic connections, will not be immune to mainland China’s financial and regulatory reform”.
5. NatWest is suing a mortgage finance company formerly backed by General Motors for more than €155mn over soured securitisation deals struck in the run-up to the financial crisis. The High Court in London last week heard a case brought by the UK bank against CMIS, in which NatWest’s lawyers complained that CMIS had “failed to pay the sums falling due” since 2017. Here’s the full report.
The Big Read
BlackRock’s Larry Fink has been grooming a new top team for more than a decade. But the recent departures of several second- and third-tier executives, as well as a substantial acquisition and a reorganisation in January that the 71-year-old head described as “transformational”, have increased anxiety internally and among investors about the future of the $10.6tn money manager.
We’re also reading and listening to . . .
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Carlyle’s oil strategy: While rivals have backed away from fossil fuel projects, the US buyout group’s London-based energy division has persisted.
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The Economics Show 🎧: In this week’s episode, Soumaya Keynes talks to journalist Amy Goldstein about what the rebound of one town in Wisconsin can tell us about the US economy.
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US solar research: First Solar, America’s largest photovoltaics manufacturer, aims to commercialise the next generation of technologies to harness power from the sun before China does.
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West Bank lenders: Bank earnings in the Palestinian territory have been hit and theft is rising as Israeli curbs and war fallout leave more than $1bn idling in vaults.
Chart of the day
The annual number of claims involving public interest disclosures — or whistleblowing — in the UK’s employment tribunal system nearly doubled between 2015 and 2023. The worrying trend suggests that those who blow the whistle are facing serious repercussions in the workplace — and that the issues they are exposing are not being dealt with properly.
Take a break from the news
David Honigmann recounts the rich and enjoyable moments during the world music festival’s first two days. From Tanzanian grooves and Malian funk to Vietnamese ska, Womad brings music from less familiar parts of the world.
Additional contributions from Benjamin Wilhelm
Read the full article here