Trump signals further tariff retreat as CEOs warn of trade war damage

Today’s agenda: Trump attacks Zelenskyy; ex-Big Four bosses launch rival; Davos founder accused; UK CEOs in pay race with US; and the FT-Schroders book prize

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Good morning. We’re starting with the latest from Donald Trump’s trade war, with the US president signalling a further retreat on his tariffs as more CEOs warn about their fallout.

What’s happening: People with knowledge of the matter say Trump plans to spare some car parts from tariffs he imposed on Chinese imports to counter fentanyl chemicals production, as well as levies on steel and aluminium. The exemptions would leave in place a 25 per cent tariff Trump imposed on all imports of foreign-made cars. A separate 25 per cent levy on parts would also remain and is due to take effect from May 3. 

Why it matters: The reprieve, which comes after intense lobbying from carmaking executives, is the latest sign Trump is open to offering carve-outs to favoured industries after his tariff plans sparked a deep markets sell-off and recession fears. More US executives have been forced to publicly confront the effects of his policies, warning of escalating expenditures and gummed-up supply chains. New data shows tariffs were cited during about 90 per cent of recent earnings calls held by S&P 500 groups. Here’s what some of these company leaders said.

• The FT View: Trump’s unpredictability has already undermined the reputation of US assets and institutions. That won’t be easy to reverse, writes our editorial board.

• UK-US deal: Chancellor Rachel Reeves has opened the door to a cut in tariffs on US car imports, but insisted Britain would not dilute its food standards or vehicle safety rules.

For more analysis, sign up for Alan Beattie’s Trade Secrets newsletter if you’re a premium subscriber, or upgrade your subscription. Here’s what else we’re keeping tabs on today:

• Von der Leyen in London: The European Commission president will meet Prime Minister Sir Keir Starmer to finalise plans for a new UK/EU defence pact, paving the way for talks on a broader economic deal.

• Energy security summit: The UK and the International Energy Agency are jointly hosting the event in London, where the government is set to announce the final go-ahead for a carbon capture project with Italy’s Eni.

• Results: Alphabet, Asos, BNP Paribas, Hasbro, Intel, Merck, Nasdaq, PepsiCo and Procter & Gamble are among those reporting. See our Week Ahead newsletter for the full list.

Five more top stories

1. Factories in China have begun slowing production and furloughing some workers as Trump’s trade war dries up orders for products ranging from jeans to home appliances. With most Chinese goods now facing US duties of at least 145 per cent, one factory owner said: “We can only wait and see, there is nothing we can do.”

• Scott Bessent: The US Treasury secretary denied reports that Trump would unilaterally cut levies on Chinese goods, saying de-escalation had to be “by both sides”.

• China-EU ties: Beijing plans to lift sanctions on European lawmakers as it tries to revive an investment deal with the EU after losing most of its access to the US market.

2. Trump has attacked Volodymyr Zelenskyy for refusing to recognise Russia’s occupation of Crimea, accusing him of harming talks with Moscow. In a social media post, the US president described the situation for Ukraine as “dire”, saying its leader “can have Peace, or, he can fight for another three years before losing the whole Country”.

3. Exclusive: EY’s former UK head and PwC’s ex-chief operating officer are launching a rival firm with backing from private equity, vowing to peel off British clients and partners from the Big Four. The new venture, Unity Advisory, has quietly begun recruiting for a launch expected by June. Stephen Foley and Ellesheva Kissin have more details.

4. World Economic Forum founder Klaus Schwab allegedly manipulated the organisation’s research to curry favour with governments, according to whistleblower claims that led to his earlier resignation as chair. In a statement circulated yesterday, Schwab denied all the claims against him and said he was the victim of a “character assassination”.

5. Trump has accused leading US universities, including Harvard, of breaking federal laws on large foreign donations, although it was not immediately clear how, or if, any school had violated such rules. The president ordered officials “to conduct audits and investigations as appropriate”, escalating his attack on the country’s educational establishment.

The Big Read

Corporate whistleblowers in the UK take on considerable risk — ranging from the fear of losing their job and being blacklisted to the stress of hiring lawyers and going up against corporate giants with deep pockets. Despite that, regulators have resisted following countries such as the US, South Korea and Nigeria in offering financial rewards to insiders who uncover wrongdoing. Could Britain finally join them? 

We’re also reading . . . 

• US dollar: The currency has much further to fall, writes Jan Hatzius, chief economist at Goldman Sachs.

• Doge ‘blowback’: Elon Musk’s foray into US government has caused “massive brand damage” to Tesla and came at a time when his carmaker faced increased Chinese competition.

• FTC commissioners: Two former antitrust regulators suing Trump for moving to fire them, discuss what their case means for US regulation and the economy.

• Banking at the beach: Citigroup is closing its beachside Málaga office less than three years after opening the hub to offer bankers a better work-life balance.

Chart of the day

Pay packages for UK-based chief executives have grown faster this year than those of their US rivals as British companies seek to close the yawning gap. Median pay at FTSE 100 companies that have reported this year has increased 11 per cent, compared with 7.5 per cent for American CEOs.

Take a break from the news

With the FT and Schroders Business Book of the Year Award launching today, Andrew Hill looks at how the publishing industry is grappling with the debate over artificial intelligence.

Find out more about the award here.