Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
In a dramatic twist, Donald Trump has stepped back from launching a trade war that could have destabilised the global economy and hurt growth.
Overnight, the US president reached “agreements in principle’ with Argentina, Australia, and Brazil to exempt them from the steel and aluminium tariffs announced earlier this year.
And it what could be a narrow escape for Britain’s steel industry, the US administration has postponed the decision on whether to slap tariffs on EU imports for another month.
In a last-minute twist worthy of Trump’s time on The Apprentice, the White House announced it had:
….reached agreements in principle with Argentina, Australia, and Brazil with respect to steel and aluminium, the details of which will be finalized shortly.
The Administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days.”
The decision came just hours before 25% penalty on steel imports into America, and 15% on aluminium, would have come into force.
Our Washington correspondent David Smith explains that Trump’s decision delays a trade war with Europe — at least for another few weeks.
Trump, who ran on a nationalist “America first” agenda, claims the tariffs are needed to protect American metal producers from unfair competition and enhance national security amid a worldwide oversupply of steel and aluminum largely blamed on excess production in China.
At a joint press conference with Merkel at the White House last week, the president said: “We need a reciprocal relationship, which we don’t have … We’re working on it and we want to make it more fair and the chancellor wants to make it more fair.”
But the move threatens to spark a trade war that could cause turmoil in financial markets. The EU – which is the biggest US trading partner – has warned that, if it is subject to tariffs on the 6.4bn euros’ ($7.7bn) worth of the metals it exports annually to the US, it will retaliate with its own tariffs on 2.8bn euros’ ($3.4bn) worth of US goods imported into Europe including Harley-Davidson motorcycles, Levi’s jeans and Kentucky bourbon.
We’ll be tracking reaction to the move today.
Also coming up…
Data firm Markit is releasing its healthcheck on Britain’s factory sector. April’s manufacturing PMI may show that growth weakened last month.
In the City, oil giant BP has just posted a 71% jump in profits, thanks to rising crude prices. Takeaway ordering chain Just Eat is also reporting results – with revenues up 49% in the first three months of 2018.
There could be drama at Barclays annual general meeting; corporate raider Ed Bramson may show up and call for the bank to be shaken up.
We’ll also be tracking any developments the Sainsbury-Asda merger, which took an unusual twist last night when Sainsbury CEO Mike Coupe was caught singing on camera.
It’s a remarkable gaffe, especially given concerns that the deal will hurt suppliers and cost jobs.
Here’s the agenda
- 9.30am BST: UK manufacturing PMI for April
- 10am BST: Treasury committee holds hearing on digital currencies