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      Pharmaceutical stocks slide as Trump vows to cut US prescription drug prices ‘by 30-80%’

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      Donald Trump has promised to use his executive powers to cut the price of prescription drugs in the US in an attempt to bring them more in line with other countries, triggering a sharp fall in drugmakers’ share prices.The US president has said he will sign an order on Monday that will reduce prescription drug and pharmaceutical prices “almost immediately” by “30% to 80%”.Writing on Truth Social, his social media platform, Trump said on Sunday it was “difficult to explain and very embarrassing” why drug prices in the US were higher compared with many other countries.“The Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, ALONE,” he wrote.He said he would introduce a “most favoured nation” policy whereby the US pays “the same price as the nation that pays the lowest price anywhere in the World”.The comments triggered a sell-off in pharmaceutical stocks on Monday amid worries profits could be hit if firms have to cut prices in the US.In London, shares in the pharmaceutical companies AstraZeneca and GSK fell in early trading by as much as 5% and 3.2% respectively. Shares in Denmark’s Novo Nordisk which makes the weight loss and anti-diabetes drugs Wegovy and Ozempic, dropped by 7.5% in Copenhagen, while the Swiss group Roche Holdings fell by 3.6%.In South Korea, shares in SK Biopharmaceuticals and Samsung Biologics fell by 2.1% and 4.7% respectively. In Hong Kong, the cancer drug maker BeiGene dropped by nearly 9% and Innovent Biologics fell by 5.7%.In Japan, the pharmaceutical sector index fell by more than 4%, while Indian pharma stocks also dropped.Alex Schriver, a senior vice-president at Pharmaceutical Research and Manufacturers of America, said: “Government price-setting in any form is bad for American patients. At a time when we are facing growing competition from China, policymakers should focus on fixing the flaws in the US system, not importing failed policies from abroad.”European drugmakers have been urging the EU to allow higher medicine prices, warning that without stronger investment incentives, Europe would fall further behind the US.Threats of US tariffs on pharmaceutical products have prompted a number of firms to announce manufacturing investments in the country, including Switzerland’s Novartis and Roche, and the US firms Johnson & Johnson and Gilead Sciences. Trump has hinted at a reprieve for companies, saying they would be given “a lot of time” to shift operations to the US before facing levies.skip past newsletter promotionafter newsletter promotionTrump targeted high drug costs during his first administration, which aimed to cap prices for certain medicines under Medicare. However, the move was struck down in federal court after a challenge from drug companies.The American government already negotiates prices for some of the most expensive medicines used in Medicare, a federal health insurance programme, under Joe Biden’s Inflation Reduction Act. Medicare covers 66 million Americans, mostly aged 65 or over.Trump did not specify on Sunday whether his executive order would apply to Medicare, Medicaid or other government health programmes.He suggested that industry lobbyists had been unsuccessful in the White House despite the fact that big pharmaceutical companies and industry bodies had made donations to his inauguration.“Campaign Contributions can do wonders, but not with me, and not with the Republican party. We are going to do the right thing, something that the Democrats have fought for many years,” he said. More

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      White House claims China trade deal reached after ‘productive’ Geneva talks

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      The White House has announced that a trade deal with China has been struck after two days of talks in Geneva.The announcement on Sunday came after the US treasury secretary, Scott Bessent, told reporters that there had been “substantial progress” in talks between his team and that of the Chinese vice-premier, He Lifeng, in Geneva on defusing the trade war between the world’s two largest economies sparked by Donald Trump’s 145% tariffs.At a news conference later on Sunday, He, the top Chinese trade official, called the talks “candid” and said substantive progress had been made to reach an “important consensus”, according to China’s state-run media. The two sides will issue a joint statement agreed during the talks, the vice-premier said.In televised remarks that were posted on social media by the White House, Bessent said he would give more details on Monday, “but I can tell you that the talks were productive”.“I’m happy to report that we’ve made substantial progress between the United States and China in the very important trade talks,” Bessent told reporters.The US trade representative, Jamieson Greer, who spoke alongside Bessent, suggested more strongly that a deal had been reached.“It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought,” Greer said.“Just remember why we’re here in the first place,” he added. “The United States has a massive $1.2tn trade deficit, so the president declared a national emergency and imposed tariffs, and we’re confident that the deal we struck with our Chinese partners will help us to resolve, work toward resolving that national emergency.”Bessent said he had informed Trump of the progress of the talks.The meeting was the first face-to-face interaction between Bessent, Greer and He since the world’s two largest economies imposed tariffs well above 100% on each other’s goods.Although Bessent has said the bilateral tariffs were too high and needed to come down in a de-escalation move, he did not offer any details of reductions agreed and took no questions from reporters.On Saturday night, Trump wrote on his social media platform that the two sides were working on “a total reset … in a friendly, but constructive, manner.”“Many things discussed, much agreed to,” Trump posted. “We want to see, for the good of both China and the U.S., an opening up of China to American business. GREAT PROGRESS MADE!!!,” Trump added. Trump’s rhetoric, that China needs to be “opened” to US business seemed to ignore a half century of trade between the two nations since one of his political heroes, Richard Nixon, visited China in 1972.The US commerce secretary, Howard Lutnick, confirmed to CNN that the US will continue to keep “a 10% baseline tariff to be in place for the foreseeable future” even on imports from nations the US strikes new trade deals with.On Sunday, Kevin Hassett, the director of the National Economic Council, said: “What’s going to happen in all likelihood is that relationships are going to be rebooted. It looks like the Chinese are very very eager to play ball and renormalise things … they really want to rebuild a relationship that’s great for both of us.”Last week, Trump and the UK prime minister, Keir Starmer, announced a limited bilateral trade deal.Hassett said the UK agreement provided a “really exciting blueprint” and that he had been briefed on 24 deals with other countries that are in the works. “They all look a little bit like the UK deal but each one is bespoke,” he said.Meanwhile, Lutnick dismissed reports of dock workers and truckers losing their jobs as a result of the tariffs.“This is just a China problem right now,” Lutnick said. “The rest of the world is 10% [tariffs]. So don’t overdo it.”“Prices are going to stay stable once this policy is done,” Lutnick added.Reuters contributed reporting More

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      ‘Really a mess’: US’s air traffic control system suffering from years of neglect

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      Twice in the past two weeks, communications between air traffic controllers and airplanes at Newark Liberty, one of the US’s busiest airports, have failed – leaving controllers unable to communicate with pilots.The outages have, thankfully, only led to massive delays, not disaster. But they have also once again focused a harsh light on the persistent safety problems at US airports, which handle over 50,000 flights a day.As a result of that estimated 90-second communications breakdown on 28 April, many air traffic controllers said they felt traumatized, and thousands of passengers suffered from the hundreds of canceled and delayed flights. A brief radar outage on Friday morning left radar screens black for another 90 seconds – underlining a growing crisis.Political leaders were quick to criticize the rickety state of the air traffic system. Senator Charles Schumer of New York said the Federal Aviation Administration (FAA) was “really a mess”, while New Jersey’s governor, Phil Murphy, decried “decades of underinvestment” in air traffic control infrastructure, “delays” in modernizing technology, and “inadequate air traffic control staffing”.The transport department’s inspector general has found that at 20 of the nation’s 26 most critical airports, air traffic control staffing falls below the 85% minimum level, with many controllers forced to work 10-hour days and six-day weeks. After the communications breakdown in Newark, several air traffic controllers there was so shaken that they went on “trauma leave”, leaving that airport even more understaffed.The Trump administration moved swiftly to respond after the alarming episode at Newark. On Thursday, Sean Duffy, the secretary of transportation, unveiled a plan to build a new state-of-the-art system that would overhaul the technology used by the nation’s air traffic controllers. Duffy said his plan would replace “antiquated telecommunications, with new fiber, wireless and satellite technologies at over 4,600 sites”.“A lot of people have said: this problem is too complicated, too expensive, too hard,” Duffy said on Thursday. “But we are blessed to have a president who actually loves to build and knows how to build.”Airlines and the air traffic controllers’ union applauded Duffy’s proposal, but several airline industry experts voiced fears that it would fall short, as have many past plans to fix the system. In a statement, the Modern Skies Coalition, a group of industry associations and experts, said: “We are pleased that the secretary has identified the priorities of what must be done to maintain safety and remain a leader in air navigation services.”The air traffic control system has been through some tough months. In January, a commercial jet collided with an army helicopter near Reagan Washington National airport, killing 67 people in the deadliest aviation disaster in the US since 2001. Trump upset many aviation industry experts and outraged many Americans when he, even before an investigation was begun, rushed to blame the crash on diversity, equity and inclusion.On 1 May, another army helicopter forced two flights to abort their landings at Reagan airport. Newark airport has suffered at least two other similar communications breakdowns since last August. A New York Times investigation in 2023 found that close calls involving commercial airlines occurred, on average, several times each week – with 503 air traffic control lapses occurring in the 12 months before 30 September 2023.For some these latests issues are part of a much older story. “The system’s staffing problems started when Ronald Reagan fired over 10,000 air traffic controllers,” after they went on strike in 1981, said Sara Nelson, president of the Association of Flight Attendants.“And those problems were worsened by his pushing the hatred of government and the dismantling of government. That’s what’s put us on the track to where we are today. There were budget cuts and tax cuts for the rich, and all that stopped us from doing the infrastructure projects and hiring and training that we needed to have a stable system.”The nation’s air navigation system has just under 10,800 certified controllers, but their union, the National Air Traffic Controllers Association, says there needs to be more than 14,300, the number recommended by an arm of the FAA, called the Collaborative Resource Workgroup. There are over 2,000 controllers in training, and the union has urged the Trump administration to increase the number in the pipeline. Training usually takes 18 to 24 months, and getting up to speed to work at the most demanding airports such as JFK and Newark can take more than three years.“There is a shortage of controllers nationwide, but not to the degree it’s occurring at Newark,” said Jeff Guzzetti, an industry consultant who was an investigator for the FAA and National Transportation Safety Board.“There’s been a shortage of controllers for years, if not decades. That shortage was exaggerated by Covid; they couldn’t conduct training for new controllers. Beyond that, they’ve always had a problem finding the right people with the right skills to control traffic and to get people to pass the course work at the training academy and then to get them up to speed.”Many trainees drop out and don’t pass their exams, and many controllers don’t stay in the job because it is so stressful. In recent years, the number of controllers has been relatively flat. The total has declined by 10% since 2012 due to retirements and trainees failing to finish their requirements.“It’s not only the shortage of air traffic controllers. It’s antiquated facilities and equipment and software,” Guzzetti said. Many facilities still rely on floppy disks and copper wire.He said: “It’s all coming to a head now in New York and Newark. Newark has always been the worst in terms of air traffic staffing and modernizing its equipment.”Last September, the Government Accountability Office said the FAA needed to take “urgent action” to deal with its antiquated air traffic control systems. It said 51 of the FAA’s 138 air traffic control systems were unsustainable.On Thursday, Duffy did not say what his modernization plan would cost. The House transportation and infrastructure committee says it would cost $12.5bn to overhaul the air traffic control system, but Duffy says his plan would cost more than that. “Decades of neglect have left us with an outdated system that is showing its age,” he said. “Building this new system is an economic and national security necessity.”On May 1, Duffy announced a related plan filled with incentives that he said would “supercharge the air traffic controller work force.” It includes $5,000 bonuses to new hires who successfully finish the initial training.Joseph McCartin, a labor historian at Georgetown University who wrote a book about the 1981 air traffic controllers’ strike, said that ever since Reagan fired 11,345 striking controllers, “the system has been out of sync”.“The natural rhythm of the system broke down and we never fully recovered,” he said. “We’ve improved over time, but the FAA still has grave difficulty staffing facilities.”McCartin added: “[Elon Musk’s] Doge has made things only worse. The entire system that federal employees operate under has been terribly destabilized. The FAA exists in a world where this entire project of the federal government is teetering.”Robert W Mann Jr, an aviation industry analyst, said that for 40 years there have been FAA reauthorizations approved by Congress, but they haven’t fixed the problems. “Unless you do it right, it doesn’t make a difference what you spend,” he said. “You won’t have solved the root causes.”Nonetheless, Mann said he remained confident about airline safety. He said: “There’s a primacy in this business. Whether you’re working at airlines or the FAA, safety is the first thing.”Mann said that days when an airport faces severe understaffing of air traffic controllers or a crush of airplanes eager to take off as bad weather lifts, there will often be delays to ensure safety. “I’m not worried about safety,” Mann said, “but I might be worried that my flight will be four hours’ late.”Nelson, the flight attendants’ president, said that the US should be thankful to air traffic controllers because their job is so hard, stressful and important. “They should be commended for working in a system that’s crumbling,” she said. “They’re the ones we all need to applaud right now. They’re like the nurses during Covid, when everyone came out at 6 o’clock to bang pots and pans.”A big question now is whether Congress will approve the money for Duffy’s ambitious modernization plan. Nelson said: “I hate to say we’re a canary in the coalmine, but those of us in the airline industry have known for a long time that a lot of this [the air traffic control equipment] has been a problem. What happened in Newark is a sign of what will come in other airports if we don’t get the budget we need.” More

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      Protecting democracy is not enough: five things Americans must fight for | Huck Gutman

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      A recent dinner was peaceable until it was just about over, when a friend’s son spoke up in praise of a middle-of-the-road columnist and how his opposition to Donald Trump’s attack on democracy revealed that we were all on the progressive left now.“Not true,” I responded with more vehemence than I expected. “Wanting democratic norms is not sufficient; it is merely a precondition for meaningful change.” Making sure the US’s plumbing was secure did not mean that anything of importance would pass through the pipes.There has been a great outcry about the erosion of democratic practices during these first hundred days of the second Trump presidency. Many Americans, probably a solid majority, are appalled at the attack on our courts and judges, at the willful ignoring of habeas corpus, at the intrusion of unelected figures – not just Elon Musk, but his whole “department of government efficiency” (Doge) team – into the privacy of American lives, at the undoing of the independence of agencies intended to protect the public.But protecting democracy is not enough. It is a rearguard action, one that fights against incursions that would transform the United States into an oligarchic state serving special interests. It does not address the needs of the larger public. Fighting for procedures and not substance is insufficient.Those who fight for the future of our nation need to fight not just against threats, but for a just and equitable future. Too often the well-deserved plaudits for those who fight against do not extend to articulating a program of what the American nation needs, in addition to democratic institutions.Here are five specific suggestions for what we should be fighting for. Without these reforms, defenses of democracy ring hollow, elevating a defense of form while denying any attention to substance.First, the nation needs a new minimum wage, a living wage, not the residue of 1938 legislation called the Fair Labor Standards Act. No one can live on $7.25 an hour, which translates to about $15,000 a year.Second, Americans deserve healthcare as a right. A Medicare for All system would extend healthcare to every person. Its cost would be more than offset by eliminating the 25% of healthcare spending that goes for overhead in our private-insurance-dominated system. Cutting $1tn of needless bureaucratic expenses and bill-keeping would ensure that we have the money to provide healthcare to everyone.Third, Americans should find it easy to join unions if they wish. The decline in unionization is a major reason why, as the wealthy get ever wealthier, wages have been flat or declining for almost 50 years. As it stands, the table is tilted toward management. Corporations regulate all employee concerns, from wages to healthcare to retirement benefits, leaving workers little to no chance to say what they actually want. We must level that playing field so that workers together can fight for their needs.Fourth, we need to increase taxes on the wealthy. There is no reason that Warren Buffett, as he has said, should pay a lower tax rate than his secretary. Increasing the marginal tax rate for the highest earners, limiting the exorbitant pass-throughs of the inheritance tax, and ending the unhealthy practice of taxing paper gains in wealth, or capital gains, less than the money earned by workers would diminish the federal deficit and at the same time fund many needed services to Americans. Removing the cap on income subject to social security taxes would ensure the solvency of the nation’s pension program for generations.Fifth, we should reverse the deeply damaging Citizens United decision, which enabled the wealthy and their special interests to buy elections. Currently, money and not votes determines the priorities of the United States. If the supreme court does not reverse this decision, a constitutional amendment limiting contributions – one person, one vote, with a low limit on individual contributions and no contributions by corporations – would fix this loophole, which has corrupted all of American politics.skip past newsletter promotionafter newsletter promotionThere is, rightly, much concern about the undemocratic moves made by the Trump administration. But unless we demand changes in what the United States does, unless we do more than just defending the practices of democracy, our society will remain dysfunctional. Those who focus only on the process of maintaining the pipes required for quenching our thirst, without giving us actual water to drink, are fighting only a small part of the battle.What’s giving me hope nowWe need to fight for democracy, but we also need to fight for the achievable goals democracy can bring us, particularly economic justice for all Americans. Raising wages, providing healthcare to all, fostering unions, taxing the wealthy and corporations, preventing big money from buying elections: these are the things the renewal of democracy can and should bring us.

      Huck Gutman is a former chief of staff to Senator Bernie Sanders and an emeritus professor at the University of Vermont More

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      Donald Trump expected to announce framework of US-UK trade deal – UK politics live

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      Good morning. I’m Andrew Sparrow, picking up from Martin Belam.Here is a timetable for what we are expecting today. We will be mostly focused on the US-UK trade deal announcement, but there will be some other politics too.9am: Keir Starmer gives a speech at the London defence conference. He is not expected to take questions.9.30am: Steve Reed, the environment secretary, takes questions in the Commons.10.30am: Lucy Powell, the leader of the Commons, takes questions on next week’s Commons business.11.30am: Downing Street holds a lobby briefing.Noon: Starmer and other political leaders join the king and queen in Westminster Abbey for the service to commemorate the 80th anniversary of VE Day.After 12pm: After the two minutes’ silence to commemorate the 80th anniversary of VE Day, the Bank of England announces its interest rate.After 12pm: John Swinney, Scotland’s first minister, takes questions from MSPs.3pm (UK time): Donald Trump is due to make his announcement in the White House about the US-UK trade deal. He posted this on his Truth Social account earlier.Afternoon: Starmer is expected to make a statement about the trade deal.There will be a ministerial statement in the Commons this afternoon on the US-UK trade deal, Lindsay Hoyle, the Speaker, told MPs at the start of business questions. But he said he did not know yet when this would be.Steve Reed, the environment secretary, has accused the opposition of trying to “weaponise” tragedy after his Tory opposite number claimed farmers are taking their lives because of Labour’s inheritance tax policy.The government announced in the budget last year that more valuable farms will lose their exemption from inheritance tax. Older farmer have complained that, having planned on the basis that they will be able to leave their farms to their children without an inheritance tax liability, they have had little time to make alternative arrangements before the tax change comes into force in April next year.Speaking during environment questions in the Commons, Victoria Atkins, the shadow environment secretary, said:
      Before Christmas, I warned the secretary of state that a farmer had taken their own life because they were so worried about the family farm tax. He responded with anger and later stopped the farming resilience fund, which helped farmers with mental ill health.
      This week, I have received the devastating news that several more farmers have taken their own lives because of the family farm tax. This is the secretary of state’s legacy, but he can change it, because it is not yet law.
      Will he set out these tragedies to the prime minister, demand that Labour policy is changed, or offer an appointed principal his resignation?
      In his reply, Reed said he was sorry that Atkins was seeking “to politicise personal tragedy in this way”. He went on:
      I think it’s immensely, immensely regrettable that she would seek to do that. None of us have been sure what happens in matters of personal tragedy. But I think it’s beneath her, actually, to try to weaponise it in a way that she has done this.
      This government takes the issues of mental health very, very seriously indeed. That is why we are setting up mental health hubs in every community so that we can support farmers and others who are suffering from mental health, which I would again remind her is a problem that escalated during her time in office the secretary of state for health, where she failed to address the problems people are facing.
      Keir Starmer used his speech to the London Defence Conference to announce a £563m contract for Rolls-Royce for the maintenance of Britain’s fleet of Typhoon fighter jets. “The work to maintain 130 Typhoon engines will take place at Rolls-Royce’s sites, supporting hundreds of jobs in Bristol and beyond,” No 10 said.He also said that British workers would gain from what he described as the “defence dividend” – the benefits to be had from the government’s decision to increase defence spending. Starmer said:
      Our task now is to seize the defence dividend – felt directly in the pockets of working people, rebuilding our industrial base and creating the jobs of the future.
      A national effort. A time for the state, business and society to join hands, in pursuit of the security of the nation and the prosperity of its people.
      An investment in peace, but also an investment in British pride and the British people to build a nation that, once again, lives up to the promises made to the generation who fought for our values, our freedom and our security.
      The phrase “defence dividend” is an allusion to the term “peace dividend” – which referred to the advantage Britain and other western countries gained at the end of the cold war when they could cut defence spending, meaning more government money was available for other priorities.What Starmer refers to as the “defence dividend” has been funded in part by huge cuts to aid spending. But Starmer has repeatedly sought to show that his policy will bring, not just defence gains, but employment gains too.Keir Starmer has said that acting in the national interest has been his priority in the talks on the UK-US trade deal expected to be announced later.Speaking to the London Defence Conference, Starmer:
      Talks with the US have been ongoing and you’ll hear more from me about that later today.
      But make no mistake, I will always act in our national interest, for workers, businesses and families, to deliver security and renewal for our country.
      The conventional wisdom at Westminster is that trade deals are a good thing, and that voters welcome them. But the US-UK deal could challenge this assumption because at least some of its features may look like protection racket payments handed over to an administration using tariffs as an instrument of extortion.In a post on social media, Robert Peston, ITV’s political editor, says British voters might not necessarily applaud what has been agreed.
      The UK’s soon-to-be announced tariff deal with the US matters hugely for two reasons.
      First, it is the first since Trump announced his coercive global tariffs on the whole world. So it will be a template for further such deals with bigger manufacturing nations and areas like Japan and the EU.
      Second, it can only be judged against the yardstick of how far the UK has been forced to grant the US better terms of trade in response to the American president’s gangsterish bullying.
      The prospect of the UK being seen as a net winner from a deal that would abuse the meaning of “free trade” is nil.
      The question, soon to be answered, is how far we have surrendered – on access to the UK for US farmers, on reducing the tax for the likes of Google and Amazon – to save the bacon of our motor and steel manufacturers.
      Politically in the UK for the prime minister I am not sure how it will play out. British voters don’t like Trump. They won’t want Starmer to have capitulated to him.
      The Green party is joining the Liberal Democrats (see 8.05am) in demanding that MPs get a vote on the proposed US-UK trade deal (as well as the UK-India one). The Green MP Ellie Chowns posted this on Bluesky.
      Reports that Labour may scrap the Digital Services Tax to secure a trade deal with Trump are deeply concerning. I’m urging the govt to guarantee MPs get a vote on any such deal. MPs must have a say in decisions that affect our digital economy and ability to tax corporate giants.
      In 2021 the Labour party published a policy paper saying it would give MPs a vote on trade deals. It said:
      We will reform the parliamentary scrutiny of trade agreements, so that MPs have a guaranteed right to debate the proposed negotiating objectives for future trade deals, and a guaranteed vote on the resulting agreements, with sufficient time set aside for detailed scrutiny both of the draft treaty texts, and of accompanying expert analysis on the full range of implications, including for workers’ rights.
      In the Commons, Ed Davey, the Lib Dem leader, has repeatedly pressed Keir Starmer to confirm that he will give MPs a vote on the proposed US-UK trade deal. But Starmer has refused to commit to this. When this last come up, he told Davey: “If [a deal] is secured, it will go through the known procedures for this house.”This was a reference to the CRAG (Constitutional Reform and Governance Act 2010) process – which does not guarantee MPs get to vote on treaties.Unlike Donald Trump, Keir Starmer does not have his own social media platform. He still uses X, and this morning he has been tweeting, not about the US-UK trade deal, but about the 80th anniversary of VE Day.
      Their victory will always be one of our finest hours.
      Today we come together to celebrate those who fought for our freedom.
      #VEDay80
      He has also posted a link to an article he has written for the Metro about the VE Day generation, and his own grandfather. Here is an extract.
      This is the thing about our greatest generation.
      Not only did they sacrifice so much, they often bore their burden in silence.
      I think of my own grandfather, who fought during the Second World War. We never did find out exactly what he saw. He simply didn’t want to talk about it.
      But this VE Day and every VE Day, we must talk about them. Because without their bravery, the freedom and joy of today’s celebrations may never have come to pass.
      Good morning. I’m Andrew Sparrow, picking up from Martin Belam.Here is a timetable for what we are expecting today. We will be mostly focused on the US-UK trade deal announcement, but there will be some other politics too.9am: Keir Starmer gives a speech at the London defence conference. He is not expected to take questions.9.30am: Steve Reed, the environment secretary, takes questions in the Commons.10.30am: Lucy Powell, the leader of the Commons, takes questions on next week’s Commons business.11.30am: Downing Street holds a lobby briefing.Noon: Starmer and other political leaders join the king and queen in Westminster Abbey for the service to commemorate the 80th anniversary of VE Day.After 12pm: After the two minutes’ silence to commemorate the 80th anniversary of VE Day, the Bank of England announces its interest rate.After 12pm: John Swinney, Scotland’s first minister, takes questions from MSPs.3pm (UK time): Donald Trump is due to make his announcement in the White House about the US-UK trade deal. He posted this on his Truth Social account earlier.Afternoon: Starmer is expected to make a statement about the trade deal.Defence secretary John Healey has just appeared on the BBC Radio 4 Today programme, where he did not have much to add to his earlier comments about the prospect of a UK-US trade deal, repeating that negotiations had been “hard” and that ministers had refrained from offering a running commentary in order to give negotiators space.He was asked whether ministerial silence on some of the more controversial things Donald Trump’s administration had said or done since coming to office was part of the UK trying to secure a trade deal, and also asked why it did not appear to be “a full deal, as opposed to something responding to tariffs, as it seems to be.”Healey essentially side-stepped those questions, saying “the single purpose of the government is to get a good economic deal. And this discussion reminds us that the US is an indispensable ally for our economic security and our national security.”The Liberal Democrats treasury spokesperson Daisy Cooper has reiterated the party’s position that any trade deal with the US should be put to parliament for approval before being ratified, saying Labour “should not be afraid” of a vote if they are confident a deal is in the country’s best interests.Cooper, the MP for St Albans, said in a statement:
      Parliament must be given a vote on this US trade deal so it can be properly scrutinised.
      A good trade deal with the US could bring huge benefits, but Liberal Democrats are deeply concerned that it may include measures that threaten our NHS, undermine our farmers or give tax cuts to US tech billionaires.
      If the government is confident the agreement it has negotiated with Trump is in Britain’s national interest, it should not be afraid to bring it before MPs.
      Shadow defence secretary James Cartlidge has appeared on Times Radio this morning, and the Conservative MP for South Suffolk said “the devil is in the detail” over prospects for a US-UK trade deal.He told listeners the Conservatives “obviously” would support a deal “in principle”. He continued:
      If it’s correct, and you know, whilst we haven’t been named publicly, it does sound like something’s happening, nevertheless, it would be wholly speculative [to comment].
      As you appreciate and know full well, with any deal like that, the devil is in the detail. What is the nitty gritty? What does it mean for individual sectors and so on.
      So obviously, yes, we wanted to see a trade deal with the US. It’s a big benefit of our position with an independent trade policy since we left the EU but as I say, the devil will be in the details. So should there be an agreement, we would then need to study that in depth.
      Asked by presenter Kate McCann if there was anything the Tories would not want to see in any deal, he said:
      I think if we don’t know at all what’s in it, or even if it’ll definitely happen, I think to try and sort of pre-judge what might or might not be in is not something I’m going to get into respectfully. I totally understand why you’re asking that. I think it’s an incredibly important issue, particularly with the wider challenge of tariffs and so on. I’m a big free trader. Our party wants us to see the UK growing by striking trade deals. But I just think you’ve got to wait and see, because who knows, quite frankly.
      In 2021, then prime minister Boris Johnson said his Conservative government was “going as fast as we can” to secure a post-Brexit trade deal with the US, but the successive administrations of Liz Truss and Rishi Sunak failed to secure one.The defence secretary has said he is confident that UK negotiators will secure “a good deal with the US”, describing the country as “an indispensable ally for our economic security.”John Healey declined to comment on the timing of any update from Keir Starmer, which No 10 said would happen today. Asked whether it was correct that Donald Trump was going to make an announcement at 3pm UK time, and whether Starmer would speak at the same time, Healey said “I don’t account for the movements in Downing Street.”Appearing on Sky News the defence secretary reiterated his lines from an earlier Times Radio interview, saying:
      We’ve been conducting hard negotiations with the US ever since Keir Starmer went to the White House in February, trying to secure any good economic deal for Britain.
      And during that time, I have to say, ministers like me have stepped back and refrained from commenting on those discussions in order to give the negotiators the space to secure the best possible deal for Britain. So any live discussions or timelines really aren’t for me.
      He was pressed on Sky News on whether a US trade deal would have repercussions for the NHS, farm workers and steelworkers in the UK. He said:
      I’m not going to comment on potential content of any economic deal or timelines. What I will say is that for steelworkers like those in sconthorpe, they’ve seen now a UK Government, a Labour government, willing to step in to secure the future of their industry.
      And as defence secretary, you know, I’m going to make sure that the increased defence spending that we will use to secure our defence for the future also brings a premium – a dividend, if you like – and is measured in more British jobs, more British apprentices, more successful British firms right across the country.
      Keir Starmer will give an update on the prospects for a UK-US trade deal later today, it has been announced.PA Media reports a Number 10 spokesperson said:
      The prime minister will always act in Britain’s national interest – for workers, for business, for families. The US is an indispensable ally for both our economic and national security. Talks on a deal between our countries have been continuing at pace and the prime minister will update later today.
      Defence secretary John Healey is appearing on Sky News at the moment, speaking from Westminster ahead of VE Day commemorations later today.He has already appeared earlier on Times Radio, where he was coy about commenting on the prospects for a UK-US trade deal. PA Media report he told listeners of that station:
      It’s certainly true that the US is an indispensable ally for the UK, both on economic and national security grounds. It’s also true that since the prime minister visited the White House in February we have been in detailed talks about an economic deal.
      But I have to say, throughout that period, ministers like me have been keen to give the negotiations the space to get the best possible deal for the UK. So, we just haven’t been giving a running commentary on developments or timelines, so I’m not going to start now.
      In the morning Politico newsletter, Andrew McDonald makes the following point worth bearing in mind. He writes:
      This was never meant to be a comprehensive free trade agreement (FTA) with the US, of the sort that previous Tory governments tried and failed to win. Instead, this had been pitched by UK officials as a narrow economic pact to avoid tariffs and work together on AI and critical tech. How narrow or otherwise, we should know soon.
      Here is our earlier report from my colleague Hugo Lowell in Washington …Labour’s defence secretary John Healey and the Conservative shadow defence secretary James Cartlidge are on the media round this morning. They are likely to be questioned about the prospects for a US-UK trade deal announcement, as well as the conflict this week in Kashmir. I’ll bring you the key lines that emerge.In its report suggesting that a trade deal between the US and UK would be the subject of Donald Trump’s promised announcement, the New York Times quotes Timothy C Brightbill, an international trade attorney at Wiley Rein, who suggested any announcement would consist of “an agreement to start the negotiations, identifying a framework of issues to be discussed in the coming months.“We suspect that tariff rates, non-tariff barriers and digital trade are all on the list –and there are difficult issues to address on all of these,” he added.The UK government is likely to have in its sights a reduction in the 25% tariff on automobile sales that the Trump administration imposed. That has led to some British manufacturers pausing shipments across the Atlantic.A team of senior British trade negotiators is in Washington in the hopes of seucuring the trade deal. Last night, government sources said the recent announcement by the US president, Donald Trump, of film industry tariffs had proved a significant setback.One person briefed on the talks said: “We have a senior team on the ground now, and it may be that they are able to agree something this week. But the reality is the Trump administration keeps shifting the goalposts, as you saw with this week’s announcement on film tariffs.”Another said Trump’s threat of 100% tariffs on films “produced in foreign lands”, which could have a major impact on Britain’s film industry, had “gone down very badly in Downing Street”.UK officials say they are targeting tariff relief on a narrow range of sectors in order to get a deal agreed before they begin formal negotiations with the EU over a separate European agreement. A draft deal handed to the US a week ago would have reduced tariffs on British exports of steel, aluminium and cars, in return for a lower rate of the digital services tax, which is paid by a handful of large US technology companies.Officials from the trade department hoped to reach an agreement on two outstanding issues, pharmaceuticals and films. Trump has said he will impose tariffs on both industries, mainstays of the British economy, but has not yet given details.Keir Starmer has ruled out reducing food production standards to enable more trade of US agricultural products, as officials prioritise signing a separate agreement with the EU, which is likely to align British standards with European ones.Donald Trump is expected to announce the framework of a trade agreement with the UK after teasing a major announcement with a “big and highly respected, country.”The specifics of any agreement were not immediately clear and there was no comment from the White House or the British embassy in Washington on whether an actual deal had been reached or if the framework would need further negotiation. Any agreement would mark the first such deal for the administration since it imposed sweeping tariffs against trade partners last month.In a post on Truth Social previewing the announcement, Trump was vague and did not disclose the country or the terms.“Big news conference tomorrow morning at 10:00am, the Oval Office, concerning a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!!!” Trump wrote in a post on Truth Social. More

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      Federal Reserve warns of inflation and jobs risks amid Trump’s erratic trade strategy

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      The Federal Reserve kept interest rates on hold and called out growing dangers in the US economy amid Donald Trump’s erratic rollout of an aggressive trade strategy.Jerome Powell, the US central bank’s chair, cautioned that the president’s tariffs were likely to raise prices, weaken growth and increase unemployment if maintained.Fed policymakers cautioned that “the risks of higher unemployment and higher inflation have risen” as they opted to maintain the benchmark interest rate for the third time in a row. “Uncertainty about the economic outlook has increased further,” they said in a statement.With inflation expectations – how consumers think prices will move – rising,Powell, the Fed chair, said the “driving factor” appeared to be Trump’s tariffs.At a press conference, he said: “If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment.”The US president has repeatedly demanded in recent months that the Fed cuts rates – and even raised the prospect of firing Powell, before walking back the comments – as Trump’s tariffs plan appeared to knock the US economy.The Fed has been sitting on its hands for months, however, citing heightened uncertainty. It last cut rates in December, to a range of between 4.25% and 4.5%.As Trump pushed ahead last month with sweeping tariffs on imported goods from much of the world, Powell cautioned this would probably raise prices and slow growth – despite the administration’s pledges to revitalize the US economy and reduce the cost of living for millions of Americans.US gross domestic product (GDP) shrank for the first time in three years during the first quarter, raising fears of recession as Trump’s tariffs – and threats of tariffs – cast a shadow over the world’s largest economy.Asked whether he was trying to take responsibility for stronger parts of the economy, while blaming his predecessor, Joe Biden, for any sign of weakness, Trump told NBC’s Meet The Press: “I think the good parts are the Trump economy, and the bad parts are the Biden economy. Because he’s done a terrible job.”After Fed policymakers finished their latest two-day meeting on Wednesday, the central bank reiterated in its statement that they would “carefully assess incoming data, the evolving outlook, and the balance of risks” ahead of future meetings.Its callout of greater risks in the US economy amounted to “a thinly veiled critique of the new administration’s import tariffs”, said Samuel Tombs, chief US economist at Pantheon Macroeconomics, “and represents an assertion of independence”.Addressing reporters after the meeting, Powell said he could not provide a timeframe for rate cuts. “We are going to need to see how this evolves,” he said. “There are cases in which it would be appropriate for us to cut rates this year. There are cases in which it wouldn’t. And we just don’t know.”While concern over the economic outlook is mounting, Powell stressed there had been no “big economic effects” in the data so far. “People, they are worried now about inflation, they are worried about a shock from the tariffs,” he said. “But they really haven’t – that shock hasn’t hit yet.”Asked how Trump’s demand for rate cuts affected the Fed’s latest decision, and the difficulty of his job, Powell responded bluntly. “Doesn’t affect doing our job at all,” he said.He reserved perhaps his briefest response for when a reporter asked what he thought when Trump said last month he had “no intention” of firing him – days after saying his termination could not come fast enough. “I don’t have anything more for you on that,” said Powell. More

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      Why Donald Trump’s plan to weaken the dollar is flawed | Kenneth Rogoff

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      Now that US President Donald Trump’s tariff war is in full swing, investors around the world are asking: what’s next on his agenda for upending the global economic order? Many are turning their attention to the “Mar-a-Lago Accord” – a plan proposed by Stephen Miran, chair of Trump’s Council of Economic Advisers, to coordinate with America’s trading partners to weaken the dollar.At the heart of the plan is the notion that the dollar’s status as the world’s reserve currency is not a privilege but a costly burden that has played a major role in the deindustrialisation of the American economy. The global demand for dollars, the argument goes, drives up its value, making US-made goods more expensive than imports. That, in turn, leads to persistent trade deficits and incentivises US manufacturers to move production overseas, taking jobs with them.Is there any truth to this narrative? The answer is yes and no. It’s certainly plausible that foreign investors eager to hold US stocks, bonds, and real estate could generate a steady flow of capital into the United States, fuelling domestic consumption and boosting demand for tradable goods such as cars and non-tradables such as real estate and restaurants. Higher demand for non-tradable goods, in particular, tends to push up the dollar’s value, making imports more attractive to American consumers, just as Miran suggests.But this logic also overlooks crucial details. While the dollar’s reserve-currency status drives up demand for Treasuries (Treasury bills, Treasury bonds, and Treasury notes), it does not necessarily increase demand for all US assets. Asian central banks, for example, hold trillions of dollars in Treasury bills, to help stabilise their exchange rates and maintain a financial buffer in the event of a crisis. They generally avoid other types of US assets, such as equities and real estate, since these do not serve the same policy objectives.This means that if foreign countries simply need to accumulate Treasury bills, they don’t have to run trade surpluses to obtain them. The necessary funds can also be raised by selling existing foreign assets such as stocks, real estate, and factories.That is precisely what happened in the 1960s through the mid-1970s. By then, the dollar had firmly established itself as the global reserve currency, yet the US was almost always running a current account surplus – not a deficit. Foreign investors were accumulating US Treasuries, while American firms expanded abroad by acquiring foreign production facilities, either through direct purchases or “greenfield” investments, in which they built factories from the ground up.The postwar era was hardly the only time when the country issuing the world’s reserve currency ran a current account surplus. The British pound was the undisputed global reserve currency from the end of the Napoleonic wars in the early 1800s until the outbreak of the first world war in 1914. Throughout that period, the UK generally ran external surpluses, bolstered by high returns on investments across its colonial empire.There is another way to interpret the US current account deficit that helps explain why the relationship between the exchange rate and trade imbalances is more complicated than Miran’s theory suggests. In accounting terms, a country’s current account surplus equals the difference between national savings and investment by the government and the private sector. Importantly, “investment” here refers to physical assets such as factories, housing, infrastructure, and equipment – not financial instruments.When viewed through this lens, it is clear that the current account deficit is influenced not just by the exchange rate but by anything that affects the balance between national saving and investment. In 2024, the US fiscal deficit was 6.4% of GDP, significantly larger than the current account deficit, which was under 4% of GDP.While closing the fiscal deficit would not automatically eliminate the current account deficit – that would depend on how the gap is closed and how the private sector responds – it is a far more straightforward fix than launching a trade war. Reducing the fiscal deficit would, however, involve the difficult political task of convincing Congress to pass more responsible tax and spending bills. And unlike a high-profile trade confrontation, it wouldn’t cause foreign leaders to curry favour with Trump; instead, it would shift media attention back to domestic politics and congressional negotiations.Another key factor behind the current account deficit is the strength of the American economy, which has been by far the most dynamic among the world’s major players in recent years. This has made US businesses particularly attractive to investors. Even manufacturing has grown as a share of GDP. The reason employment has not kept pace is that modern factories are highly automated.skip past newsletter promotionafter newsletter promotionMiran’s plan, clever as it might be, is based on a flawed diagnosis. While the dollar’s role as the world’s leading reserve currency plays a part, it is just one of many factors contributing to America’s persistent trade deficits. And if the trade deficit has many causes, the idea that tariffs can be a cure-all is dubious at best. Kenneth Rogoff is professor of economics and public policy at Harvard University. He was the IMF’s chief economist from 2001-03.© Project Syndicate More

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      Trump’s tariffs get one thing right: capitalism is changing | Avram C Alpert

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      Trying to understand Donald Trump’s across-the-board tariffs based solely on economic theory won’t work. As the US president himself said: “Chronic trade deficits are no longer merely an economic problem, they’re a national emergency that threatens our security and our very way of life.” That may be why, as many economists have pointed out, there’s simply no good economic case for his plans.But few commentators have understood that facts and figures aren’t the whole point of the tariffs. As always, economics is part of a broader political vision. The tariffs help Trump make his claim that a way of life is under threat and he alone can protect it.Indeed, the political meaning of Trump’s tariffs is in the idea itself: “protectionism”. He is not just telling people that he’s going to improve the economy. He’s signaling that he’s going to protect a way of life, even – or especially – if it hurts others, by creating, in theory, good-paying factory jobs that could sustain local communities. (Never mind that the key to any industry’s ability to sustain communities are the practices of labor organizing Trump opposes.) On the campaign trail, he said: “Whether the women like it or not, I’m going to protect them.” He’s now saying the same thing to the country as a whole.Such non-economic justifications for economic policy are nothing new. They are part of what the sociologist Max Weber called “the spirit of capitalism”. Weber argued that capitalists had to justify a claim unique in human history: profit is good. For millennia before, philosophers had argued the opposite. Jesus, for example, told his disciples that it was likelier for a camel to go through the eye of a needle than for a rich man to get into heaven.But with capitalism, the pursuit of profit became good. How did it justify this? Weber said that’s where “spirit” comes in. He pointed to notions of work as a holy value in Protestantism and Calvinist ideas about how monetary success proved you were among God’s chosen few. These spiritual views engendered a work ethic and made capitalist excess palatable. At least for a time.When capitalist greed becomes unpalatable, new spirits emerge. To understand Trump’s protectionist spirit, we have to understand this preceding history.After the Great Depression, people saw that they might lose everything no matter how hard they worked and so the work ethic spirit lost its power. In its place, social democratic states gave a new collectivist spirit to capitalism. Social democracy limited excess and provided a moral logic by offering stability to all through a linked system of jobs and life-long public services.This collectivist spirit began to break down in the 1960s under the pressures of stagflation, oil shocks, and criticisms of a conformist, consumerist lifestyle. In response, capitalism’s spirit transformed itself again. According to two scholars of this transitional period, Luc Boltanski and Ève Chiapello, it did so by ingeniously incorporating the criticisms: it became about nomads, connections, flexibility, creativity.It was no longer the staid cubicle office man; it was now the exciting creative entrepreneur who knows no allegiances and is at home in the chaos of disruption. Hence Silicon Valley. Hence the destroyed manufacturing bases where jobs were converted to low-wage poverty traps and where Trump now finds many of his most loyal supporters. Hence his protectionist vision of a new spirit of capitalism.There is some merit in this desire to help those who lost out, but, as Weber noted, the spirits of capitalism can mask more sinister desires. By also pushing massive tax breaks for the wealthy, Trump is hoping that tariffs can provide rhetorical appeal without radically changing the social order.The tariffs say: we will protect your community by hurting those who profited off your pain and became rich through globalization. That’s why Trump blamed “globalists” for the dip in the stock market after the tariffs were announced: “A lot of [those selling stocks] are globalist countries and companies that won’t be doing as well … Because we’re taking back things that have been taken from us many years ago.” But that ignores the real ways in which jobs have been lost and communities upended. What the tariffs leave unsaid is that they won’t address the real issues underlying today’s economic pain: gutting welfare, failing to retrain workers, under-utilizing technology, and letting inequality rise relentlessly.Trump is right that capitalism, in a period of untrammeled greed and injustice, needs a new spirit to show it the way. But the trouble with a protectivist spirit is that it implies that some get protected while others get hurt. That will just create new cycles of dismay – as we are already seeing with the tariff whiplash and draconian immigration policies.What we need is a democratizing spirit, one that isn’t about protecting some and hurting others, but instead guides us to work collectively to ensure that all people can lead decent and meaningful lives even in a chaotic world. There are economic policies for this, such as fair trade, meaningful industrial policy, more worker representation on corporate boards, and more cooperatively owned businesses.But Democrats also need to learn from Trump and emphasize the spirit. They need to show that their democratic vision is not just technocratic, but as powerful and affirming as the feeling of being protected.The desire for this spirit may be why the rallies of Bernie Sanders and Alexandria Ocasio-Cortez have drawn record crowds. Most attenders say they aren’t there to hear the policies, which they already know. They’re there for the “community”, and to experience the “closest thing to a version of America you actually want to live in”, one that works for all of us. If the Democratic party can catch that spirit, they will not only win elections; they might just bring an end to decades of destruction.

      Avram Alpert is a lecturer in the Princeton Writing Program. His most recent book is The Good-Enough Life More