Trump delays EU tariffs after ‘nice call’ with von der Leyen #JapanFinance

Today’s agenda: Chinese bank mergers; Fed chair praises US universities; Reeves under pressure; Robert F Kennedy Jr vs Big Food; and Martin Wolf on why UK trade deals won’t matter

Good morning, and welcome back to FirstFT. We start with news that Donald Trump has delayed his threat of more tariffs on the EU to extend trade talks until July 9. Here’s what we know.

What happened: After Trump on Friday threatened to impose 50 per cent tariffs on EU imports from June 1, European Commission president Ursula von der Leyen called him yesterday. She said the bloc was ready to advance trade talks “swiftly and decisively” but needed him to return to his original 90-day negotiation period. Trump said his call with von der Leyen was “very nice”.

What this means: The development signals a shift in the EU’s stance towards finding a compromise. After Trump’s escalation on Friday, the EU’s top trade official had said the bloc would “defend our interests” and called for “mutual respect, not threats”. An outside adviser to Trump called von der Leyen’s statement “a promising sign” that the EU was “ready to negotiate”, adding: “It may not be as rapidly as Trump would like to see, but I think this is a peace offering.” We have more details on the call between the two leaders.

• More I Dipomacy: French President Emmanuel Macron is on a south-east Asia trip, where he will tout Europe as a trade and security partner of choice for a region buffeted by US-China tensions.

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

• King Charles: The monarch visits Canada, where he will address the state opening of parliament in Ottawa.

• Oil: A bitter dispute between ExxonMobil and Chevron over $1tn oilfields in Guyana is set to be heard before an arbitration court in London.

• Markets closed: The UK has a bank holiday while the US marks Memorial Day.

Join us for a subscriber-only webinar on Wednesday for insights into the most consequential geopolitical rivalry of our time: the US-China showdown. Register now and put questions to our panel.

Five more top stories

1. China is accelerating efforts to build a series of giant banks and brokerages, data shows, in a push to increase resilience against economic shocks. The consolidation campaign aims to transform the country’s historically fragmented financial sector and produce a few strong, dynamic companies that can compete with the likes of JPMorgan and Morgan Stanley.

• Chinese military: Beijing has increased its ability to launch a sudden attack on Taiwan, say US and Taiwanese officials and experts.

2. Jay Powell called on students to protect democracy while praising American universities as “a crucial national asset”, days after the Trump administration escalated its attacks on higher education. “Our great universities are the envy of the world,” said the Federal Reserve chair. Here’s more from his commencement address at Princeton.

3. A global bond market sell-off sparked by US debt fears has put new pressure on Britain’s chancellor, with yields on the 30-year gilt nearing a 27-year high. With UK economic growth still sluggish, investors have warned that Rachel Reeves will need to cut public spending further or raise taxes again to meet her self-imposed fiscal rules.

• UK economy: Canada’s second-largest pension fund plans to invest more than £8bn in the UK over the next five years, in a boost to Reeves.

4. Russia has carried out its largest aerial attack on Ukraine, shattering any hopes that a record prisoner exchange completed yesterday could lead to a cessation of hostilities. At least 12 people were killed and dozens more injured in what the Ukrainian air force said was the single-largest aerial assault of the war so far.

5. Poland’s presidential race is going down to the wire, with rival mass rallies in Warsaw yesterday. Pro-EU candidate Rafał Trzaskowski and his rightwing opponent Karol Nawrocki are making a final push ahead of the June 1 vote, with polls showing them neck-and-neck.

• The FT View: Europe’s far right is hammering at the door of power, writes our editorial board.

• Austria: The EU needs to overhaul its asylum rules, which are no longer fit for purpose and have helped fanned support for the far right, the country’s new chancellor told the FT.

The Big Read

Many public health experts were aghast when Robert F Kennedy Jr was appointed as US health secretary. But some have welcomed his efforts to “Make America Healthy Again” by tackling the links between the American diet and diseases such as obesity and diabetes. “The problem is, industry is making money on keeping us sick,” Kennedy has said. Can he take on the country’s powerful $2.4tn food industry?

We’re also reading . . . 

• ‘Maga deep state’: Critics say competent foreign service veterans are being purged from the US state department in favour of Trump loyalists.

• Finance talent tussle: Wall Street and private equity firms are locked in a fierce competition for graduates in a recruitment cycle that creeps forward yearly.

• UK ‘open banking’: London was a world leader for remittance technology, but it has so far failed to deliver the promise of powering a payments revolution.

• CEO videos: More executives are filming themselves for social media as a way to talk directly to staff, customers and shareholders.

Chart of the day

The UK’s recent trade pacts with India, the US and the EU should be reason to feel less depressed about Britain’s outlook. But Martin Wolf explains why the deals, while better than none, might not merit even one cheer.

Take a break from the news

Why should you bother making fresh pasta this summer? Giulia Scarpaleggia offers an explanation in three recipes for FT Magazine.