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Financial Times - April 24
These are the most popular stories from the Financial Times. These stories have not been verified and we cannot vouch their accuracy. Headlines UK announces final approval for flagship carbon-capture project Davos founder accused by World Economic Forum of manipulating research Bailey: BoE must "take seriously" the risk of Trump tariffs to growth London Metal Exchange to introduce premium for green metals View the full article The UK government and Italian energy giant Eni will announce the final approval for a 38 mile pipeline that will collect carbon dioxide from industrial facilities around Liverpool and Manchester, and bury it off-shore. The World Economic Forum's founder Klaus Schwab is accused of manipulating the research conducted by his organisation to curry favor with governments. Andrew Bailey, Governor of the Bank of England (BoE), said that the BoE must "take seriously" any risks posed to the growth of the economy by Donald Trump's policies on tariffs. He also indicated that the central banks was likely to reduce interest rates during its next meeting due to the uncertainty surrounding global trade. London Metal Exchange has drawn up plans to introduce a "green premium" for metals mined sustainably. This is in response to industry pressures aimed at distinguishing these from "dirty", more environmentally damaging supplies.
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Dalian iron ore at three-week high due to seasonal demand and US-China trade talks hopes
Dalian iron ore Futures reached their highest level in almost three weeks on March 13, boosted by the hopes that U.S. China trade talks will be successful and seasonal demand for this steelmaking ingredient. The price of the most traded September iron ore contract at China's Dalian Commodity Exchange grew by 2.11%, finishing at 727.5 Yuan ($99.73). In the early part of the session, prices reached 731 yuan - their highest level since April 3. As of 0708 GMT, the benchmark May iron ore traded on Singapore Exchange was 1.61 % higher at $100.2 per ton. In a recent note, Galaxy Futures said that the steel production in China continues to grow and that downstream demand has increased for building materials. "Increased purchases by mills and reduced imports have depleted inventories of iron ore," said ANZ. Mysteel, a consultancy, reported that the stocks of five major carbon products held by Chinese mills had fallen 5% week-on-week on April 17. It attributed this decline to the resilient domestic demand for steel. ANZ added that while China's property indicators have improved, the prospects for a significant recovery are still bleak. Hopes of a reduction in tensions over trade between the United States, and China also boosted sentiment. U.S. Treasury secretary Scott Bessent stated on Tuesday that the trade tensions between China and the United States will be eased, but he called future negotiations a "slog", which hasn't yet begun. U.S. president Donald Trump expressed his optimism that he could make significant progress with China in order to lower their tariffs. India imposed on Monday a temporary 12% tariff on certain steel imports. This is known locally as a "safeguard duty" and was aimed at curbing a rush of cheap shipments coming from China. Coking coal and coke, which are used to make steel, also increased in price, by 2.56% and 3.14 %, respectively. The benchmark steel prices on the Shanghai Futures Exchange rose. Rebar rose by 1.46%. Hot-rolled coil was up 1.41%. Stainless steel and wire rod both increased by 0.39%. $1 = 7.2948 Chinese Yuan (Reporting and editing by Eileen Soreng; Michele Pek)
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Sources say Sinopec has resumed its Russian oil purchases after a short break amid sanctions risk
Sinopec, Asia’s largest refiner, has resumed its purchases of Russian crude oil following a short pause in last month to assess the risks posed by sanctions imposed on Russian entities by the United States, according to trade sources on Wednesday. Sources said that Unipec, a trading division of China's state run Sinopec, had purchased Russian Far East ESPO blend oil for May loading, after being absent from the March and April loading ESPO cargoes. Unipec's decision to resume purchases was not immediately apparent. Sinopec didn't immediately respond to an inquiry for comment. Sources claim that the number of cargoes purchased by Unipec is significantly lower than it was before the January announcement. On January 10, the former Biden administration imposed harsh sanctions against Russian oil producers Gazprom and Surgutneftegaz, as well as insurers and over 100 vessels in order to reduce Moscow's revenue. Last month, it was reported that sanctions had caused a drop in Russian oil exports from China and India while Chinese state oil companies Sinopec Zhenhua Oil and Zhenhua Oil stopped purchasing Russian oil. Traders said that ESPO blend oil cargoes loaded in May were trading at a premium of around $2 per barrel over the ICE Brent benchmark, on a shipped basis to China. Reporting by Siyi Liu and Florence Tan in Singapore, Editing by Andrew Heavens and Kirby Donovan
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Markets take stock of Trump’s U-turns and the relief rally is stuttering
Investors struggled to sort through the noise of the Trump administration, its erratic stance on tariffs, and the Federal Reserve leadership. This week, U.S. president Donald Trump attacked Fed chair Jerome Powell. He then retracted his calls for the resignation of the chair, leaving investors in the dark about the final state of tariffs against China, despite the many headlines. A source said on Wednesday that, in the event of talks with Beijing, the Trump administration may consider lowering tariffs for imported Chinese products. This follows a Wall Street Journal article which stated that Trump's White House was considering reducing tariffs on Chinese imports. Treasury Secretary Scott Bessent said later that such a step would not be taken unilaterally. He was echoing remarks made by White House spokesperson KarolineLeavitt. I don't believe you'll ever be able to get used the flip-flopping and haphazard behavior we've seen. Tony Sycamore is a market analyst for IG. He said that it was extreme. "I think Trump is like that - he wants the best levers and he doesn't fear trying anything. He's not afraid to walk it back either if it fails." MSCI's broadest Asia-Pacific index outside Japan fell by 0.17%. This was in contrast to the Wall Street trend, which saw stocks rise on Wednesday amid hopes of a de-escalation in Sino-U.S. tensions. The Nasdaq 500 and S&P500 futures each rose by about 0.2%. The EuroStoxx 50 futures rose 0.16%. Japan's Nikkei gained 0.86%. NHK reported that the Trump administration informed Japan's trade delegation it couldn't give Japan a special treatment in regards to its tariff measures. This was in response Tokyo's demand for a revision during this month's ministerial talks. Salman Ahmed is the global head of strategic asset allocation and macro at Fidelity. He said: "Short-term volatilities are quite extreme. This high volatility will continue. You have elevated volatility moving forward because the fundamental rules of the game, the economic world, are changing." Ahmed said this on the sidelines the IMAS Investment Conference 2025 and Masterclass in Singapore. Investor confidence in U.S. asset prices remained fragile, and the dollar dropped on Thursday after a week of gains on Trump's U turn on firing Powell. The dollar dropped 0.15% against the yen to 143.24. The euro rose 0.15%, to $1.1331. Meanwhile, the Swiss franc increased by 0.2%. The 30-year yield was little changed, at 4.3675 percent. Trump's change of heart on Powell appeared to lessen the threat to the U.S. fiscal and monetary credibility. The benchmark 10-year rate was down by about 2 basis points, to 4.3675%. Beth Hammack, President of the Federal Reserve Bank of Cleveland, said that on Wednesday there is still a lot of uncertainty about the future. She urged the central bank to be cautious in its monetary policy and to monitor the economy's performance. The markets are expecting a rate cut of about 80 basis points by December. Oil prices have stabilized in other markets after a drop in the previous session. Sources said that OPEC+ will consider accelerating their oil production increases in June. Brent crude futures rose 0.2% to $66.26 per barrel while U.S. Crude also increased 0.18% to 62.38 per barrel. Gold continued its march towards a new record high. The yellow metal rose 1.2% to $3,329.03 per ounce.
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Oil prices steady after 2% decline on possible OPEC+ production increase
Oil prices rose early on Thursday, after falling by nearly 2% the previous day. Investors weighed a possible OPEC+ production increase against contradictory tariff signals from White House as well as ongoing U.S. Iran nuclear talks. Brent crude futures gained 6 cents or 0.09% to $66.18 per barrel at 0038 GMT. U.S. West Texas Intermediate Crude rose 7 cents or 0.11% to $62.34 per barrel. The previous trading session saw prices fall 2% after it was reported that three sources familiar with OPEC+ discussions said several OPEC+ member countries will suggest to the group that they increase oil production for a second consecutive month in June. The members had a dispute over the production quotas. Prices rose on signs that U.S.-China trade talks could be nearing completion. The Wall Street Journal reported the White House was willing to reduce its tariffs against China by as much as 50% to start negotiations. Scott Bessent, U.S. Treasury secretary said that the current tariffs of 145% for Chinese products and 125% for U.S. goods were not sustainable. He did not give a specific number but he stated that they would need to be reduced before any trade talks could take place between both sides. White House Press Secretary Karoline leavitt told Fox News in an interview on Wednesday that the tariffs on Chinese goods would not be reduced unilaterally. Rystad analysts believe that a prolonged U.S. China trade war would cut China's growth in oil demand by half, to 90,000. barrels per day. The Financial Times reported that Trump was also considering tariff exemptions for imports of car parts from China. The U.S. will meet with Iran for a third round this weekend to discuss a possible agreement that would impose restrictions on Tehran's nuclear enrichment program. This could put downward pressure on the oil price. The market is looking for signs that a U.S. and Iran rapprochement may lead to a easing of sanctions against Iran oil, which would boost supply. The U.S. imposed new sanctions on Iran's oil sector on Tuesday, a move that was criticized by the Iranian foreign ministry as demonstrating a lack of "goodwill and seriousness" in regards to dialogue with Tehran. (Reporting Colleen Waye; Editing Sonali Paul).
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Albanese, an Australian company, pledges to establish a strategic reserve for critical minerals
The Australian centre-left Labor Government pledged on Thursday an initial investment A$1.2 billion (roughly $763 million) in order to establish a strategic reserve for critical minerals. It is looking to create a different supply chain within a Chinese dominated market. The Prime Minister Anthony Albanese said that the reserve, which is expected to be established in nine days, would use the mineral deposits of the country and increase its economic resilience. Albanese stated in a press release that "we need to do more" with the natural resources needed by the world, which Australia can provide. After President Donald Trump imposed tariffs against Chinese goods, China placed restrictions on exports of minerals that are vital for everything from smartphones to EV batteries and infrared weapons. This has squeezed supply to the West. China is the top producer in the world of 30 out of 50 critical minerals, according to the U.S. Geological Survey. Australia also has some of its largest deposits of critical minerals. Albanese stated that the government will buy minerals critical to commercial projects, or create an option for a set price and hold security over assets. The government will establish stockpiles for some minerals produced in accordance with offtake agreements. Albanese stated that "it will allow us to deal with market and trade disruptions in a stronger position, as Australia will have access to a significant amount of resources for global demand." Minerals from the strategic reserve will be available to key domestic and international partners. Albanese stated that a task force would be formed to finalise and consult on the scope and design for the strategic reserve. This reserve is expected to become operational in the second quarter of 2026.
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Petrobras Board approves agreement with Unigel for fertilizer plants
Petrobras, the state-run Brazilian oil company, said that its board of directors had authorized it to sign a settlement agreement with Unigel Chemical Company to settle a legal dispute over two fertilizer factories in northeastern Brazil. Petrobras stated in a filing of securities that the agreement would restore Petrobras ownership over two fertilizer factories located in Sergipe state and Bahia state. Petrobras announced that the plants would resume operations after a process of bidding to contract for services to operate and to maintain them. The deal, however, still needs to be approved internally within Unigel, and it must also meet certain conditions before taking effect. Unigel didn't immediately respond to an outside of normal business hours request for comment. Petrobras leased two nitrogen fertilizer factories to Unigel under a 10-year contract in 2019. Unigel has shut down both plants since 2023 citing high gas prices as the reason for their closure. Both companies are involved in arbitration related to their lease agreement, which includes disagreements about the shutdown of the operations, Unigel’s investments and gas supply terms. Announcement comes after Report on Friday According to sources, the Petrobras board approved plans to select partners to restart operations at fertilizer plants. (Reporting andre Romani, additional reporting by Roberto Samora).
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The rosy outlook of chipmaker TI soothes tariff concerns for the moment
Texas Instruments announced a second-quarter revenue forecast that was above Wall Street expectations on Wednesday. The company attributed this to a robust demand for analog chips, despite the fact that the threat of U.S. Tariffs has created uncertainty in the semiconductor industry. TI shares rose more than 5% after-hours following the announcement. This was the first major U.S. semiconductor company to provide an outlook this earnings season. The stock price had dropped over 17% this year due to macroeconomic worries and trade tensions. LSEG data shows that TI estimates revenue for the quarter ending June between $4.17 and $4.53 Billion, compared to analysts' average estimate $4.10 Billion. The earnings per share is projected to be between $1.21-$1.47, which is also higher than the average estimate. Kinngai Chang, senior analyst with Summit Insights Group, says that the positive forecast is driven by "cyclical demand recovery" and possible tariff pull-ins. Haviv Ilan, the CEO of Haviv Group, sounded a cautionary note. On a call after earnings, Haviv Ilan said, "We'll have to wait and see" what happens in the second half 2025, as well as into 2026. He cited ongoing uncertainty regarding tariff policy. According to an April notice by the Chinese main semiconductor association, while President Trump has exempted for now semiconductors from further levies and tariffs, Beijing has imposed high tariffs on U.S. made chips. Analysts asked Ilan if customers were stockpiling the chips in anticipation of expected taxes. I would guess that in a time of uncertainty, you might want to stock up on a bit more inventory. He said. Tore Svanberg, Stifel's analyst, noted that it may be too soon to determine the impact of the increased tariffs and escalating Sino U.S. Trade tensions on the chip company and the industry as a whole due to the ongoing tariff negotiations. CHINA WORRIES TI, a company with significant manufacturing capacity in America, derives about a quarter of its revenue annually from China. This makes it vulnerable to ongoing tit for tat tariffs between Beijing & Washington. Ilan stated that the company could use its manufacturing facility in China to meet any needs. Since years, the legacy chipmakers have worked to adopt a “China-for China” policy. They set up fabs to meet domestic demand in the face of escalating tensions. TI is facing stiff competition in China, where state subsidies have boosted the production of mature-node chips. Ilan stated that "the competition in China has intensified." (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid)
Trump's trade tariffs and threats
Since returning to office in January, Donald Trump has issued numerous tariff threats. These range from a duty on all imports to tariffs targeted at specific countries or sectors.
Trump's threats changed over time. This left other nations and business unclear as to what was next. It also created uncertainty for consumers and triggered a recent stock-market sell-off.
Here's a summary of Trump’s threats and actions in relation to trade.
BROAD TARIFFS
Trump's vision is based on a gradual rollout of tariffs that will apply to all U.S. imported goods.
Last month, Trump asked his team of economists to devise plans for reciprocal duties on all countries that tax U.S. imports. They also had to come up with ways to combat non-tariff barriers, such as vehicle safety regulations that exclude U.S. automobiles and value added taxes that raise their costs.
In the past, tariffs were the primary source of tax revenue in the United States. However, they have been reduced to a small fraction over the last few decades. Economists claim that Trump's policies are inflationary, as businesses who import goods and pay tariffs will pass on the costs to consumers.
The potential counter-tariffs imposed by global trading partners on U.S. agricultural and energy exports, as well as machinery and equipment, could escalate into a world trade war and create uncertainty for investors and businesses.
Specific COUNTRIES
Trump's tariff proposal targets several key trading partners.
MEXICO AND CANADA : Mexico and Canada were the two largest trading partners of the U.S. from 2024 to November. Trump's new tariffs of 25% on imports from Mexico, Canada and the European Union took effect on 4 March as a response to migration and fentanyl.
Tariffs were imposed on the majority of goods imported from Mexico and Canada. A 10% tax was also imposed on Canadian energy imports. Canada exports mainly crude oil, other energy products and cars and auto components within the North American automotive manufacturing chain. Mexico exports a variety of goods to the U.S., including industrial and automotive products.
Canada retaliated with 25% tariffs against US imports worth C$30 billion (US$20.7 billion), including orange juice and peanut butter. Other products include beer, coffee, motorcycles, appliances, and motorbikes.
The Canadian government said that it would add additional tariffs to C$125 billion worth of U.S. products if Trump's Tariffs remained in effect in 21 days. This could include vehicles, steel and aircraft, as well as beef and pork.
In his address to Congress on March 4, Trump said that further tariffs will be implemented by April 2, including "reciprocal duties" and non-tariff measures to address trade imbalances.
U.S. Commerce secretary Howard Lutnick stated that U.S. officials could still work out a partial solution with the two neighboring countries, and added that they need to do more in the fentanyl arena.
Trump retracted his planned tariffs of 50% on Canadian steel and aluminum after a Canadian official backed down from plans to impose a 25% surcharge for electricity exported to the United States.
Canada, which is the largest foreign supplier of aluminum and steel to the United States (C$29.8 Billion), announced on March 12 that it would impose retaliatory duties on U.S. imports worth C$29.8 Billion ($20 Billion) as a response to Trump’s steel and aluminium tariffs.
CHINA: Trump imposed 10% tariffs on all Chinese imports to the U.S. effective February 4, after repeatedly warning Beijing that it was not taking enough measures to stop the flow of illegal drugs into the United States.
Trump then added another 10% tariff on Chinese products, which took effect on March 4. This is on top of the 25% tariffs that were imposed during Trump's initial term on Chinese imports.
China announced additional tariffs between 10% and 15% on some U.S. Imports starting March 10, as well as a number of new export restrictions for certain U.S. Entities. It then complained to the World Trade Organization about the U.S. Tariffs.
China announced on March 12, that it will take all measures necessary to protect its rights and interest, following the increase in tariffs by U.S. president Donald Trump on U.S. imports of steel and aluminum.
Trump has said that the EU, and other countries, have alarming trade surpluses against the United States. He said that the products of the other countries will be subject to tariffs, or he would demand they purchase more oil and natural gas from the U.S. despite the fact that U.S. export capacity for gas is close to its limit.
In a statement released on 14 February, the European Commission stated that the "reciprocal trade policy" was a step backwards.
Trump has threatened to impose a "reciprocal rate" of 25% on European goods. Pharmaceuticals are among the industries that could be affected, since U.S. companies such as Johnson & Johnson, Pfizer, and others have large facilities in Ireland. Ireland is also a leading exporter of medical equipment.
In response to the U.S. blanket tariffs on aluminum and steel, the European Union announced on March 12 that it would begin imposing counter-tariffs next month on goods worth 26 billion euros.
Trump announced on March 13 that he would impose a tariff of 200% on European wines and spirits as a response to the EU's plan to levy tariffs on American whisky and other products in April.
PRODUCTS
AUTOMOBILES: Trump announced on March 5, that he would exempt certain automakers, such as the Detroit Three - Ford, General Motors, and Jeep owner Stellantis - from his 25% tariffs against Canada and Mexico if they comply with a free trade agreement.
According to these rules, vehicles must contain 75% North American components to be eligible for duty-free entry into the U.S.
Some foreign automakers, such as Honda and Toyota with large U.S. manufacturing footprints would also benefit from the exemption, while others who don't comply will have to pay 25% of tariffs.
Trump also floated the idea that tariffs of up to 100% would be imposed on other vehicles including EVs. In 2024, the automobile industry will account for more than $200 billion in imports from Canada and Mexico.
METALS: Trump announced on February 9 that he would impose tariffs on all imports of steel and aluminum used by automakers and aerospace companies as well as in construction and infrastructure.
More than half of the U.S.'s aluminum and steel imports come from Canada, Mexico, and Brazil.
Trump ordered on February 25, a new investigation into the possibility of new tariffs on imports of copper to rebuild U.S. manufacturing of this metal, which is critical for electric vehicles, military equipment, semiconductors, and a variety of consumer goods.
Just over half of the refined copper that America consumes every year is produced domestically.
SEMICONDUCTORS : Trump stated that tariffs would start at "25%" or more, and increase substantially over a period of one year. However, he did not specify when they will be implemented.
Taiwan Semiconductor Manufacturing Co., the largest contract chipmaker in the world, produces semiconductors for Nvidia and Apple, among other U.S. customers. In 2024, it will generate 70% of its revenues from North American clients.
LUMBER: On March 1, Trump ordered a new investigation into trade that could add more tariffs to imported lumber. This would be in addition to the existing duties on Canadian Softwood Lumber and 25% tariffs for all Canadian and Mexican products.
ALCOHOL: Trump threatened on March 13 to slap 200% tariffs in response to the European Union's plan to impose tariffs next month on American whiskey, and other products. This is itself a retaliation for Trump's 25% tariffs that went into effect on steel and aluminium imports. Reporting by Anjana Anil in Bengaluru, Seher Dareen in London, Puyaan, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, An Mol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmo, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol
(source: Reuters)