Trump softens automobile tariffs as high adviser struggled to assuage traders | Invesloan.com

Today’s agenda: Carney’s next steps; Huawei’s AI chip “cluster”; Starbucks profits fall; Belgium’s rotting courthouse; and how did Spain’s power grid collapse?

Good morning. We have the latest on Donald Trump’s tariffs, including some relief for carmakers and his administration’s recent attempts to soothe investors.

‘A little bit of a break’: The US president is sparing car manufacturers from some of his steepest duties and offering those that make their vehicles in the US small rebates to offset the cost of the levies. Carmakers importing parts will also avoid the administration’s tariffs on steel and aluminium. “We give them a little time before we slaughter them if they don’t do this right,” Trump told cheering supporters in Michigan, a car manufacturing hub. The heads of Ford, GM and Stellantis all welcomed the relief measures.

‘Out of his depth’: Trump’s top economic adviser Stephen Miran had a less positive reception when he met hedge funds and asset managers last week. Some at the meeting — attended by representatives from Citadel, PGIM and BlackRock — found the chair of the Council of Economic Advisers “incoherent” on tariffs and markets. A person familiar with the event said “it fell apart” when Miran was asked questions, adding: “When you’re with an audience that knows a lot, the talking points are taken apart pretty quickly.” Here’s more from the meeting convened by Citigroup.

• European ‘renaissance’: A KKR executive says a focus on self-reliance and economic reform has made Europe much more attractive as an investment destination in the wake of US tariffs.

• The tariff sales pitch: Companies from Tesla to mattress makers have rolled out new advertising campaigns urging shoppers to buy now, before the president’s levies raise prices.

Here’s what else we’re keeping tabs on today:

• Economic data: The US, EU and Germany report preliminary first-quarter GDP, while Germany also issues labour data for March and provisional inflation figures for April.

• Companies: Aberdeen and Glencore provide updates, while results are due from Airbus, Air France-KLM, ArcelorMittal, Aston Martin Lagonda, Banco Santander, Barclays, Crédit Agricole, GSK, Mercedes-Benz, Meta, Microsoft, Qualcomm, Stellantis, UBS and Volkswagen. See our Week Ahead newsletter for the full list.

How should central banks navigate the new world order? Pose questions to Chris Giles and other FT experts about monetary policy, and have them answered in a live Q&A next Wednesday.

Five more top stories

1. Canadian Prime Minister Mark Carney is now on track to lead a minority government, after his Liberal party surged ahead of the Conservatives in this week’s election. The former central banker has received a clear mandate from voters for his pitch, centred on Canadian sovereignty and opposition to Trump.

• Democracy’s unTrump: The US president has become an unwitting ally to Carney and non-populists everywhere else, writes Edward Luce.

2. Exclusive: Huawei has started delivery of its advanced AI chip “cluster” to Chinese clients who are increasing orders after Washington’s export curbs cut them off from Nvidia’s semiconductors. Analysts have been impressed by the rollout of the CloudMatrix 384, a system that connects 384 AI processors.

3. China’s manufacturing activity contracted by the most in 18 months in April, according to an official survey, in an early sign of the economic impact from Trump’s trade war. The country’s official purchasing managers’ index came in at its weakest level since December 2023.

4. Starbucks’ profits fell by half in its latest quarter amid mounting costs of its turnaround effort. The coffee chain now plans to spend more on baristas while putting the expansion of a three-year-old café technology system on ice, as it emphasises labour over gadgets as a way to bring customers back to stores. Here’s the latest from CEO Brian Niccol’s revival campaign.

5. Trump Media’s auditor has filed a lawsuit claiming it was wrongly kicked out of a national accountancy alliance for taking on work for the US president. Arizona-based Semple, Marchal & Cooper had stepped in as auditor in May after the social media company’s previous accounting firm was shut down for running what regulators called a “massive fraud”. Read the full story.

• More US news: Amazon has walked back a proposal to reportedly display price increases caused by Trump’s tariffs on its products, after the White House called the plans a “hostile and political act”.

News in-depth

A massive power outage that hit Spain and Portugal on Monday left trains stranded, office workers stuck in lifts and mobile phone services cut, in the biggest blackout in Europe for two decades. The catastrophic failure of the electricity supply has raised pressing questions about the resilience of infrastructure in Europe and implications for moves away from fossil fuels.

We’re also reading . . . 

• Live Nation: Today’s Big Read looks into the antitrust case against the events giant, and fears from rivals and competition experts that the White House will not pursue it.

• ‘Millions of flies’: Belgium’s rotting Palais de Justice has come to symbolise a “catastrophic” legal system marred by lack of funding and staff.

• Climate science: In terms of gathering and acknowledging crucial environmental data, the US is becoming a rogue state, writes Anjana Ahuja.

Chart of the day

Many significant powers already do more of their trade with China than with the US, writes Martin Wolf, one of the reasons why the US will lose its trade war against China.

Take a break from the news

As spring rolls on, London is abloom with edible plants — if you know where to look, what to pluck and how to cook them. Chef Chantelle Nicholson shows FT Globetrotter how to forage in the UK capital.