Monday 28/04/25

Trump steps up criticism of Putin over continuing attacks on Ukraine (Financial Times, Myles McCormick) highlights Trump now criticising Putin over its ongoing attacks on Ukraine whilst also maintaining that a peace deal is close. Tomorrow will mark Trump’s first 100 days in office and despite all the hype, we’re still waiting for a peace deal. Secretary of state Marco Rubio said yesterday that the administration will decide this week “whether this is an endeavour in which we want to continue to be involved in or whether it’s time to focus on some other issues”.

Meanwhile, on tariffs, America Inc. Slashes Spending as Tariff Uncertainty Swirls (Wall Street Journal, Chip Cutter) shows that CEOs are cutting down on travel, postponing construction projects and implementing hiring freezes in a bid to do what they can in order to limit the damage being caused by tariffs. Chemicals company Dow is delaying the construction of a new plant, Boston Scientific is cutting all discretionary spending where it can and railway operator Norfolk Southern is clamping down on consultant fees. Large-scale layoffs haven’t yet materialised, but you’d imagine that they can’t be far away. Demand slump fuelled by Trump tariffs hits US ports and air freight (Financial Times, Peter Foster, Chan Ho-him, Patricia Nilsson, Rafe Uddin and Patrick Temple-West) shows that Trump’s tariffs are now hitting container ports operators and air freight managers as goods volumes transported from China have collapsed. Slapping 145% tariffs on Chinese imports is going to do that…and then Trade war hits foreign companies in China with double tariffs (Financial Times, Joe Leahy, Haohsiang Ko and Chan Ho-him) shows that foreign manufacturers in China are being hit twice – by paying duties of 125% to import components and then 145% to export to the US. International companies and joint ventures make up almost one third of China’s total trade (although it used to be about 55% back in 2008%) and because many of them manufacture there, companies like Apple and Tesla face a double-whammy in taxes. Going the other way, Shein raises prices by up to 377pc for American shoppers (Daily Telegraph, Louis Goss) shows that Shein has jacked up prices for American shoppers to take into account Trump’s new tariff regime, meaning that they’ll be paying over double what British customers are paying for the same thing.

And it doesn’t stop there! In energy, LNG companies say they cannot comply with Trump rules on Chinese ships (Financial Times, Jamie Smyth and Aime Williams) shows that the rules that US trade representative Jamieson Greer imposed on them on April 17th are unworkable as LNG shippers are now seeing new taxes being levied on Chinese-built ships docking at US ports. * SO WHAT? * US exporters believe that the new rules will cause the cost of contracting vessels to skyrocket. Apparently, there are no US-built vessels that are capable of shipping LNG – and there’s no capacity to build any before a 2029 deadline. The implication here is that such increased costs could scupper plans for the US to become an LNG energy powerhouse…

Then in China and South Korea extend battery battle from EVs to grid storage (Financial Times, Christian Davies, Song Jung-a and Edward White) we see an interesting contest emerging from the world’s rising demand for alternative power sources. Along with demand for power generation, the boom for power storage is also increasing as batteries are being used to store power on electricity grids and there’s now a battle going on between Chinese and South Korean companies for supremacy in this area. * SO WHAT? * At the moment, Chinese batteries represent almost 90% of global capacity for energy storage systems (ESS) with a share of over

80% in the US and over 75% in Europe. Chinese battery companies saw an increased tariff last year but Trump’s new regime means that they are now facing an effective rate of 155.9% which is on track to increase to 173.4% next year. This SHOULD give some hope to Korean battery companies who want to get their market share back up in the US and Europe. ESS is vital for our energy needs because the technology will prevent blackouts over the coming years. Companies like LG Energy Solution and Samsung SDI could benefit as non-Chinese companies with American manufacturing capacity but it is debatable as to whether they can compete with Chinese giants like CATL on cost. That being said, they could REALLY benefit if the administration decides that Chinese batteries should be banned from grid-scale energy projects completely on security grounds. If you have access to the full version of this article, it’s well worth a read as it goes into more detail about the batteries themselves…

Then in Vestas warns wind industry is falling behind global climate goals (Financial Times, Rachel Millard) we see that Europe’s biggest wind turbine manufacturer reckons that there could be a “big discrepancy” between ambitious targets set for the industry and the actual situation on the ground. In order to meet such targets, steep growth will be required from here – and one way to help this along is to streamline the process of getting permits. The EU and the UK are aiming, for instance, to hit net zero by 2050 but that is looking increasingly unlikely given delays to planning permission or grid connections. Food for thought for Ed Miliband and chums…

In British nuclear fusion pioneer wipes millions off its value after quitting reactor plans (Daily Telegraph, Matt Field) we see that First Light Fusion has given up on building its first nuclear fusion reactor and will instead supply other nuclear power companies with one of its inventions, called an “amplifier”, which contains a nuclear fuel capsule and increases the power of fusion reactions. * SO WHAT? * The company has burned through tons of cash to make a reactor – and the UK government even announced £410m of funding for fusion research as recently as January – but the sheer expense and fact that China seems to have leapt ahead in recent breakthroughs has led to the company deciding to pivot from its original strategy to become more “capital light”. This sounds fair enough for the company, but it’s a pity that a British company is having to give up on its ambitions.

In terms of other effects of Trump’s tariffs, UK growth forecast to slow sharply as Trump tariffs push confidence to record low (The Guardian, Mark Sweney) cites forecasts from the EY Item Club which say that the UK economy will suffer a major slowdown over the next two years as the tariffs filter down and affect consumer spending and business investment. Elsewhere, a poll by Ipsos Mori showed consumer confidence hitting its lowest level since it started collecting such data in 1978! This follows on from the IMF cutting its growth forecasts for the UK last week. * SO WHAT? * This is not surprising – but we still don’t know the full effects of the tariffs so at the moment, everyone is flying blind.

Then in Swiss franc surge sparks bets on return to negative interest rates (Financial Times, Emily Herbert, Ian Smith and Mercedes Ruehl) we see that investors are continuing their “flight to safety” to such an extent that the Swiss franc is now its highest level against the dollar since 2015! This is prompting speculation that the country’s central bank will have to lower interest rates or even revert to zero-or-less interest rates.

Brands target AI chatbots as users switch from Google search (Financial Times, Cristina Criddle and Hannah Murphy) shows that advertising groups and tech start-ups have been trying to optimise brands’ chances of popping up on AI chatbots such as OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Overviews. Companies such as Profound and Brandtech have software that that monitors how often brands are appearing on these chatbots. * SO WHAT? * It looks like this is ushering in a new post-Search Engine Optimisation era as LLMs are fast becoming the ultimate influencer! It also shows that there are now powerful alternatives to traditional search engine advertising and received wisdom is going to have to change. Brandtech offers way of tracking appearances and offers advice on how to adjust website text and images to get more AI search love.

The labour market is buoyant, so why are recruiters doing so badly? (The Times, Tom Howard and Jack Barnett) is a really interesting article which goes into why recruiters are having a nightmare at the moment despite the labour market still being quite tight. Basically, it’s all down to two things: firstly, candidates staying in their current roles because they’re worried that they could be “last in, first out” if they get a new job in the current market and, secondly, because firms have frozen hiring and/or they’re keeping employees on the books – a phenomenon known as “labour hoarding. This leads to fewer vacancies. * SO WHAT? * The upshot of all this is that the likes of Pagegroup, Robert Walters and SThree have been almost universally pulverised. This

state of affairs won’t last forever but for the moment, given all the economic uncertainty, I don’t see things changing any time soon…

BlackRock boss wants London growth but can’t find office space (The Times, Patrick Hosking) is a really interesting article that highlights a lack of big top-grade office space in London for big tenants as the chief exec of BlackRock wants to put all of his employees in one building but can’t do it in the City (he doesn’t want to do Canary Wharf). It seems that the market is now suffering from developers pausing their plans during the pandemic due to economic uncertainty. This shortage has pushed rents of prime property up to record highs…

In Charity shops sell online to compete with second-hand clothes apps (The Times, Lara Wildenberg) we see that even the humble charity shop is adapting to the modern ways of “doing” retail! Given rising rental costs on the high street and rising competition from second-hand apps like Vinted, charities like Oxfam and the British Heart Foundation are increasingly going online to sell their wares! According to the Charity Retail Association (CRA) in-store incomes are falling while online sales are rising steadily. It is also interesting to note that the quality of donations has deteriorated in the last couple of years because people are selling more on other apps and taking their less saleable stuff to charity shops.

In a quick scoot around some of today’s other interesting stories, Will Shu set for £172m payout if Deliveroo takeover goes ahead (The Times, Emma Powell) takes a look at what Deliveroo’s founder might get if he manages to sell Deliveroo to Door Dash, which has made an offer valuing the company at £2.7bn. Door Dash approached Deliveroo on April 5th and now has until May 23rd to make a firm offer or recede back into the shadows. It’s now doing its due diligence with Deliveroo’s books. If a deal went ahead, Will Shu’s 5.9% stake in the company would get him a payout of over £172m! Deliveroo floated in 2021 at a valuation of £7.6bn.

Then in UK warns British lawyers about possible US sanctions over advice to ICC in Israel case (Financial Times, Lucy Fisher, Anna Gross and Suzi Ring) we see that the UK foreign office has now warned senior British lawyers that they could face sanctions by the Trump administration for giving advice to the International Criminal Court on Israel’s behaviour in Gaza. Trump’s meddling in the law continues…

Here is just one example of Jack Black’s maniacal intensity – this time in his rendition of Steve’s Lava Chicken…