FirstFT: US threatens Russia with ‘severe’ tariffs

At present’s agenda: Frozen Russian belongings; EU funds plan’s eastward shift; Loro Piana case; UK tax reform; and the ‘cat bond’ market

Good morning. We start in Washington the place Donald Trump has threatened Russia with “severe” tariffs and different monetary penalties if the battle in Ukraine doesn’t finish quickly.

What occurred: Throughout a gathering with Nato secretary-general Mark Rutte within the Oval Workplace yesterday, the US president stated he was “very unhappy” with Moscow over the dearth of progress in direction of a deal to finish the battle. “I’m disappointed in President [Vladimir] Putin, because I thought we would have had a deal two months ago,” Trump stated.

“We’re going to be doing very severe tariffs if we don’t have a deal in 50 days, tariffs at about 100 per cent, you’d call them secondary tariffs,” he added.

Secondary tariffs: A White Home official later stated the US was ready to make use of “severe sanctions and tariffs” in opposition to Russia. Washington can leverage its position on the coronary heart of worldwide finance to chop individuals and international locations off from the worldwide financial system by its sanctions programme.

Secondary tariffs or sanctions would ratchet up the strain on Moscow by punishing third-party entities, industries or international locations that do enterprise with Russia. Learn the complete report.

Right here’s what else we’re preserving tabs on in the present day:

• Financial information: Spain, Canada and the US publish shopper value indices for June.

• UK: Financial institution of England governor Andrew Bailey and chancellor Rachel Reeves are scheduled to talk at Mansion Home.

• US: Arizona holds a particular main election to fill a vacant US Home seat; Trump is anticipated to talk at a Pennsylvania power summit.

• Wall Road: JPMorgan Chase and Citigroup report second-quarter earnings. Merchants are as a consequence of come to the rescue of their funding banking colleagues, who’re heading in the right direction to increase a report streak of underperformance.

5 extra prime tales

1. EU plans to boost extra money for Ukraine by placing frozen Russian state funds into riskier investments would quantity to “expropriation”, the establishment holding the majority of the belongings has warned. Euroclear chief government Valérie Urbain advised the Monetary Occasions that plans to reinvest money generated by the belongings to yield increased income might threat additional retaliation from Moscow.

• EU frequent funds: Brussels is to unveil a brand new strategy to allocate greater than €750bn of EU farming and growth funds, favouring newer member states.

2. One in all Hungary’s richest males is pushing again in opposition to accusations that political connections helped him make his fortune, because the nation’s chief Viktor Orbán faces public anger over cronyism and falling residing requirements. Learn Marton Dunai’s interview with the prime minister’s son-in-law István Tiborcz.

3. Metropolis grandees have warned that additional tax will increase might immediate extra rich individuals to go away Britain and deter many from saving for retirement, calling on Rachel Reeves to supply “stability”. The feedback come forward of the UK chancellor’s Mansion Home speech in the present day, during which she is anticipated to stipulate her imaginative and prescient for the nation’s monetary providers.

• Overhaul: A clear sweep on tax reform is the best choice for the UK authorities, writes Martin Sandbu. Such a transfer might ship three large wins.

• Extra UK information: Starling Financial institution is analyzing the case for itemizing in New York, because the digital financial institution presses forward with an enlargement into the US.

4. A Milan courtroom positioned Loro Piana beneath judicial administration for subcontracting manufacturing to suppliers that allegedly exploited employees, making the LVMH-owned cashmere model the most recent trend home to be caught up in a sequence of investigations into labour rights violations. Silvia Sciorilli Borrelli has particulars of the case.

5. Measles instances in Europe and Central Asia have climbed to their highest stage for greater than 1 / 4 of a century, in accordance with the World Well being Group. Outbreaks of the viral illness have killed youngsters within the US and UK, stoking fears that vaccine hesitancy in high-income international locations is threatening hard-won good points from mass immunisation programmes.

The Huge Learn

China’s BYD is catching up with Tesla and is poised to overhaul its US rival in electrical car gross sales for the primary time. Previously three years, the Chinese language auto group has narrowed the know-how hole between the 2 carmakers, together with in autonomous driving. Learn what’s powering BYD’s headway within the EV market.

​​We’re additionally studying . . . 

• Instantaneous supply wars: Chinese language on-line retail teams JD.com and Alibaba are luring customers with reductions in push to seize market share from rival Meituan.

• Synthetic intelligence: As an alternative of retraining those that lose work, politicians might assist individuals take issues into their very own palms, writes Sarah O’Connor.

• Uncommon earths: A small mining firm received Pentagon backing as Trump sought to counter China and take a brand new method to nationwide defence.

• ​China GDP: The world’s second-largest financial system grew 5.2 per cent yr on yr within the second quarter as resilience in exports helped to offset sluggish home demand.

Chart of the day

Insurers are promoting so-called disaster bonds at a report price as they search to dump the rising threat from local weather change on to buyers keen for top returns. Issuance of the devices, which switch a part of the danger for occasions equivalent to wildfires, hurricanes and earthquakes to bondholders, has surged to $18.1bn this yr. Learn extra on the “cat bond” market.

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