Trump pressures Ukraine with military aid freeze

Today’s agenda: Trump confirms Canada, Mexico tariffs; TSMC’s $100bn US investment; Big Read on aid in a crumbling world order; and global government borrowing surges

Good morning. Hours ago, the US announced it was suspending military aid to Ukraine. Here’s what we know.

Why it happened: Tensions between Donald Trump and Volodymyr Zelenskyy have been growing, with the US president pushing his Ukrainian counterpart to rapidly settle the conflict with Russia. The two leaders publicly sparred at the White House on Friday, and Trump yesterday renewed his verbal attack on Zelenskyy, suggesting he might be out of office if he fails to “make a deal”. US secretary of state Marco Rubio appeared to suggest the aid freeze was tied to a wider diplomatic effort “to get the Russians to a negotiating table”, though he did not directly mention the suspension.

What are the implications? Trump’s decision will add urgency to efforts in many European capitals to bolster their own military support for Kyiv, because an extended pause in US assistance could give Russian forces a big advantage on the battlefield. Former US officials have estimated Ukraine could fight on without American military aid for between weeks and months. A Washington think-tank said Russia would “leverage the cessation of US aid to Ukraine to seize more territory in Ukraine and attempt to exhaust European support”.

Here’s more on the US decision, and we have more on Europe’s efforts below:

• Frozen Russian assets: Europe’s biggest powers are swinging behind efforts to seize more than €200bn of the assets, as they draw up plans for a ceasefire deal in Ukraine.

• Starmer praised: The UK prime minister’s diplomacy on Ukraine has won him plaudits at home from across the political spectrum.

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

• US politics: Trump will address a joint session of Congress in his first such speech since his inauguration earlier this year.

• Results: Abrdn, Fresnillo, Greggs, Prada and Saudi Aramco are among those reporting. See our Week Ahead newsletter for the full list.

• Pre-Lent: Various celebrations, including Carnival, Fat Tuesday, Mardi Gras, Shrove Tuesday and Pancake Day, are held across the world.

On Thursday, join consumer editor Claer Barrett for a webinar on tackling debt to mark International Women’s Day. Register for free.

Five more top stories

1. Trump said he would press ahead with imposing tariffs of 25 per cent on all imports from Canada and Mexico from today, adding that there was “no room” for last-minute negotiation. Canada said it would immediately retaliate with its own tariffs, with Prime Minister Justin Trudeau saying there was “no justification” for the US move.

• Market reaction: Global stock markets fell after Trump confirmed the tariffs, with the S&P 500 closing almost 2 per cent lower.

• America’s ills: Tariffs alone will not reduce the trade deficit or restore manufacturing jobs, writes Maurice Obstfeld, former IMF chief economist.

2. China’s leading electric-vehicle maker BYD has pledged to work with rival Tesla to combat petrol cars, while insisting that Beijing was “more open” to foreign business than the west. Speaking to the Financial Times, BYD executive vice-president Stella Li said: “Our common enemy is the internal combustion engine car.”

3. Taiwan Semiconductor Manufacturing Company said it would invest $100bn in the US, in a move designed to placate Trump and head off threatened tariffs. At a news conference with TSMC chief CC Wei yesterday, the president said the money would go towards state-of-the-art chip fabrication plants in Arizona. Here are more details on the chip giant’s US plans.

4. Exclusive: BP plans to hire two new directors to help it pivot back to oil and gas, as its chair Helge Lund responds to pressure from investors to strengthen the board. Lund wants the BP board to reflect the company’s new strategy, after it abandoned a drive towards green energy last week to refocus on its core oil and gas business.

• Oil prices: Opec+ said it will proceed with a plan to increase oil production from April, in an unexpected move by the cartel that sent crude prices tumbling.

5. Exclusive: The number of Americans applying for UK citizenship rose to the highest on record last year, with applications climbing 26 per cent to 6,100. Immigration lawyers say the surge has been driven by UK tax changes and Trump’s return to power.

The Big Read

The west’s waning appetite for international aid raises several questions, most immediately the impact on the world’s poorest and the possible implications for global health and security, including pandemic preparedness. Beyond that, it could weaken western influence in the so-called global south, particularly if China, Russia and others seek to fill the vacuum. What will aid look like in a crumbling world order?

We’re also reading . . . 

• Trump’s ‘kicking ass’: The suburban voters who propelled him into a second term are keeping the faith as the president tears up the rule book.

• Crypto: Lesser-known coins such as XRP and Solana soared on Trump’s plan to create a strategic reserve of digital assets. But what are these tokens, and who’s behind them?

• Mindless ‘machine-minders’: Generative AI is a tempting short-cut that can prevent university students from gaining foundational skills, writes Sarah O’Connor.

Chart of the day

Global government borrowing is expected to reach a record $12.3tn this year, as a rise in defence and other spending by major economies and higher interest rates combine to push up debt levels.

Take a break from the news . . . 

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