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Today’s agenda: US push to downgrade climate risk project; India and Pakistan’s nuclear rivalry; ‘lawfare’ in Spain; and what America’s first pope means for the Catholic church
Good morning, happy Friday and welcome back to FirstFT. After months of talks, the UK has finally clinched the first deal with the US since Trump ignited a trade war. Here’s what we know.
What is the scope of the deal? The pact unveiled on Thursday is limited. Many of the details have to be ironed out and the end result still leaves Britain facing a tougher trading relationship with America than before Trump introduced sweeping global tariffs last month. It crucially offers the UK a reprieve from the extra 25 per cent tariffs on cars and metals but will keep in place the 10 per cent levies on most British exports.
Market reaction: US stocks rose after the announcement, with investors encouraged by the prospect of further deals — including with China — to limit the damage of the levies that have choked trade. The S&P 500 rose more than 1 per cent to its highest intraday level since March 27 before ending the day 0.6 per cent higher. While the White House and Downing Street celebrated the deal, critics warned of a thin agreement that could face legal challenge.
Here’s what else we’re keeping tabs on today and over the weekend:
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Europe Day: The continent today marks the 75th anniversary of the 1950 Schuman Declaration, the bold proposal that sparked the birth of the EU.
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China-Russia relations: Xi Jinping is expected to attend a “Victory Day” parade in Moscow today marking the anniversary of the end of the second world war.
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Companies: British property listings group Rightmove holds its annual meeting, while German lender Commerzbank reports results.
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Economic data: China reports April inflation on Saturday.
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Albania: Voters go to the polls on Sunday, with incumbent Prime Minister Edi Rama seeking a fourth term.
How well did you keep up with the news this week? Take our quiz.
Five more top stories
1. Exclusive: US regulators are calling on financial rulemakers to downgrade a flagship project to tackle the risks of climate change in the latest sign of America’s retreat from environmental causes since Donald Trump became president. Read more on the proposal to dilute a high-level task force.
2. Exclusive: Mid-tier UK law firms are offering lawyers higher bonuses for working longer hours as they look for ways to compete with deep-pocketed rivals. Find out which London-based firms have updated their policies to provide extra payouts, which in some cases amount to as much as 40 per cent of base salary.
3. Trump has proposed raising taxes on the wealthiest Americans, in a breach of Republican orthodoxy that he hopes could pay for broader tax breaks being debated in Congress. The US president also signalled his willingness to end the preferential tax treatment of hedge fund and private equity profits known as “carried interest”, in a potential blow to Wall Street.
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Tariff threat on films: “At this stage, it’s still too early to gauge any potential impact”, said Cannes Film Festival president Iris Knobloch, as she urged the film industry not to panic.
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Opinion: Until the Democrats are trusted on the economy, they won’t win again, writes Jim Messina, former campaign manager for Barack Obama.
4. Top fund managers have urged ministers to consider mandating UK pension funds to allocate at least 5 per cent of their investments to domestic equities, as they warned that sentiment towards the London stock market was at “rock bottom”. Here are the concerns outlined during the Downing Street meeting.
5. Exclusive: Substack has added more than 1mn subscribers since the US election last November, as the online platform benefits from the shift towards creator-led journalism. “There has definitely been a big moment of interest around the election and then the first 100 days [of the Trump presidency]. There’s been a spate of people in that universe coming”, said co-founder Chris Best. Read the full report.
News-in-depth
With roughly 170 nuclear warheads apiece, India and Pakistan have evolved to approach armed conflict cautiously and according to unwritten rules that aim to prevent escalation. In recent years, however, those informal rules have been loosened, with both countries testing the red lines of their nuclear rivalry.
We’re also reading . . .
Chart of the day
Portugal is enduring a dramatic surge in electricity prices after deciding to temporarily slash its power imports from Spain, whose grid collapse last week triggered widespread blackouts. Here’s how the power wipeout created tensions on the Iberian peninsula.
Take a break from the news
The world is full of opportunities for mutual benefit, so zero-sum thinking is a tragedy and a trap. But it is not a mystery, writes Tim Harford, as he explains why Stefanie Stantcheva’s economic survey of US citizens deserves the acclaim it has received.
