Trump to impose metals tariffs and new retaliatory levies

Good morning and welcome back to the working week. Today we’re covering:

• An escalation in Trump’s trade war

• Activist stake building in BP

• Presidential elections in Ecuador

• And 2024 M&A advisory fees confirm Wall Street shift

Donald Trump has threatened to impose 25 per cent tariffs on all steel and aluminium imports from today, in a new burst of protectionism from the White House as Beijing’s tariffs on select US goods come into force.

The US president also warned he would introduce new reciprocal tariffs on a range of countries later in the week as he spoke to reporters on a flight from his Mar-a-Lago estate in Florida to New Orleans where he attended the Super Bowl last night.

Canada, China and Mexico are the biggest exporters to the US of steel and aluminium products, but Trump’s proposed levies would potentially ensnare countries from Brazil to Germany and South Korea.

The latest announcement sent shockwaves across the world’s financial markets. The dollar rose 0.3 per cent against a basket of currencies, including the yen, euro and pound. Aluminium prices climbed on the London Metal Exchange while shares of South Korean steelmakers Hyundai Steel and Posco Holdings fell in Seoul and ArcelorMittal, one of Europe’s largest producers, was down.

There was also a flurry of diplomatic activity. South Korea’s Ministry of Trade, Industry and Energy held an emergency meeting with steel industry executives and the European Commission said it would react “to protect the interests of European businesses, workers and consumers from unjustified measures”. Read the full story.

For more analysis on Trump’s protectionist policies, sign up for Alan Beattie’s weekly Trade Secrets newsletter if you’re a premium subscriber or upgrade your subscription. You can also follow the latest trade data with the FT’s Trump tracker. 

And here’s what else we’re keeping tabs on today:

• AI: Vice-president JD Vance and OpenAI CEO Sam Altman will be among the guests at an AI summit in Paris. Emmanuel Macron announced more than €100bn worth of investments in the technology ahead of the event.

• Results: McDonald’s and pharmaceutical company Incyte report fourth-quarter earnings and cosmetics group Coty reports second-quarter revenue.

• Economic data: Brazil’s central bank releases the results of a weekly economic survey with more than 100 financial institutions while the country’s automakers association Anfavea releases auto production, sales data relative to January.

• Steve Bannon: Donald Trump’s former adviser faces a pre-trial conference in the criminal case stemming from a non-profit’s push to build a wall on the US-Mexico border.

Five more top stories

1. Donald Trump said he would seek to cut billions of dollars from US defence spending as the next big target in the effort led by Elon Musk to slash spending by US government agencies. In an interview on Sunday, the president said the defence department had an annual budget of $800bn and would be next in the billionaire’s sights. Potential conflicts of interest concerns are growing.

• More on Trump’s government cost-cutting: A federal judge has temporarily blocked Elon Musk and his team from accessing the US Treasury department’s payments data.

• Russell Vought: While Musk’s “Department of Government Efficiency” is on the front lines in the battle to cut government spending, Donald Trump’s budget director is arguably the commander of the operation.

2. Shares in BP rose almost 7 per cent this morning as activist hedge fund Elliott Management’s acquisition of a stake raised hopes of a shake-up at the struggling oil major. BP shares have underperformed rival Shell in the past year and investors have complained about the company’s financial underperformance, high levels of debt and lack of strategic clarity. Here’s more on Elliott’s move.

3. Russian officials believe western pressure is hampering Moscow’s efforts to draw former Soviet nations closer into its orbit and build economic ties with the global south, according to a government report presented by Russia’s cabinet. Here are more details from the leaked paper.

4. Colombian President Gustavo Petro called on members of his front bench to quit yesterday following a stream of resignations triggered by a chaotic televised cabinet meeting last week. Petro, Colombia’s first leftist president, took office in August 2022 promising to overhaul the country’s market-friendly economic model but he has been frustrated by lawmakers who have pushed back against his radical agenda. Here’s more on the chaos in Bogotá.

5. Ecuador’s presidential election is set to head to an April run-off between incumbent conservative President Daniel Noboa and leftist former lawmaker Luisa González, the country’s electoral council said after the first round of voting yesterday. The run-off will be a repeat of 2023’s snap election that put Noboa into office. Read more on how the candidates stand after the first round of voting.

Today’s big read

The nuclear power industry has a “negative learning” problem, says academic Bent Flyvbjerg. The industry, which has become infamous for cost overruns and endless delays, is desperate to find ways to keep costs in check. How does the industry solve the cost and timeline problems? The construction of a new site on England’s East Anglia coast tells us a lot about the current thinking.

We’re also reading . . . 

• Ruchir Sharma: Why are speculators still running wild when money is no longer free? Something even bigger than AI and the Trump effect is at work.

• US politics: Only the courts stand between Musk and a Treasury takeover, writes Rana Foroohar.

• WFH puzzle: Businesses are tightening hybrid work rules but homeworking levels have so far barely budged, writes Pilita Clark

• Weekend essay: Nobel-winning economist Daron Acemoglu on trade wars, tech industry hubris — and how loss of faith in US institutions could spiral.

Chart of the day

JPMorgan Chase and investment banking boutique Evercore have displaced Morgan Stanley as the chief rivals to Goldman Sachs in the core Wall Street business of dealmaking advice. The 2024 M&A fees data confirms a shift in Wall Street’s pecking order in the past decade.

Take a break from the news . . . 

Chess grandmaster Hans Niemann sits down for lunch with the FT. Niemann ought to be enjoying the shine of a bright young chess career. But a 2022 cheating scandal has made him the game’s pre-eminent anti-hero. The 21-year-old tells Oliver Roeder how he plans to restore his reputation and become world champion.