BRUSSELS — The European Commission has unveiled a new plan to end the dominance of planet-heating fossil fuels in Europe’s economy — and replace them with trees. The so-called Bioeconomy Strategy, released Thursday, aims to replace fossil fuels in products like plastics, building materials, chemicals and fibers with organic materials that regrow, such as trees and crops. “The bioeconomy holds enormous opportunities for our society, economy and industry, for our farmers and foresters and small businesses and for our ecosystem,” EU environment chief Jessika Roswall said on Thursday, in front of a staged backdrop of bio-based products, including a bathtub made of wood composite and clothing from the H&M “Conscious” range. At the center of the strategy is carbon, the fundamental building block of a wide range of manufactured products, not just energy. Almost all plastic, for example, is made from carbon, and currently most of that carbon comes from oil and natural gas. But fossil fuels have two major drawbacks: they pollute the atmosphere with planet-warming CO2, and they are mostly imported from outside the EU, compromising the bloc’s strategic autonomy. The bioeconomy strategy aims to address both drawbacks by using locally produced or recycled carbon-rich biomass rather than imported fossil fuels. It proposes doing this by setting targets in relevant legislation, such as the EU’s packaging waste laws, helping bioeconomy startups access finance, harmonizing the regulatory regime and encouraging new biomass supply. The 23-page strategy is light on legislative or funding promises, mostly piggybacking on existing laws and funds. Still, it was hailed by industries that stand to gain from a bigger market for biological materials. “The forest industry welcomes the Commission’s growth-oriented approach for bioeconomy,” said Viveka Beckeman, director general of the Swedish Forest Industries Federation, stressing the need to “boost the use of biomass as a strategic resource that benefits not only green transition and our joint climate goals but the overall economic security.” HOW RENEWABLE IS IT? But environmentalists worry Brussels may be getting too chainsaw-happy. Trees don’t grow back at the drop of a hat and pressure on natural ecosystems is already unsustainably high. Scientific reports show that the amount of carbon stored in the EU’s forests and soils is decreasing, the bloc’s natural habitats are in poor condition and biodiversity is being lost at unprecedented rates. Protecting the bloc’s forests has also fallen out of fashion among EU lawmakers. The EU’s landmark anti-deforestation law is currently facing a second, year-long delay after a vote in the European Parliament this week. In October, the Parliament also voted to scrap a law to monitor the health of Europe’s forests to reduce paperwork. Environmentalists warn the bloc may simply not have enough biomass to meet the increasing demand. “Instead of setting a strategy that confronts Europe’s excessive demand for resources, the Commission clings to the illusion that we can simply replace our current consumption with bio-based inputs, overlooking the serious and immediate harm this will inflict on people and nature,” said Eva Bille, the European Environmental Bureau’s (EEB) circular economy head, in a statement. TOO WOOD TO BE TRUE Environmental groups want the Commission to prioritize the use of its biological resources in long-lasting products — like construction — rather than lower-value or short-lived uses, like single-use packaging or fuel. A first leak of the proposal, obtained by POLITICO, gave environmental groups hope. It celebrated new opportunities for sustainable bio-based materials while also warning that the “sources of primary biomass must be sustainable and the pressure on ecosystems must be considerably reduced” — to ensure those opportunities are taken up in the longer term. It also said the Commission would work on “disincentivising inefficient biomass combustion” and substituting it with other types of renewable energy. That rankled industry lobbies. Craig Winneker, communications director of ethanol lobby ePURE, complained that the document’s language “continues an unfortunate tradition in some quarters of the Commission of completely ignoring how sustainable biofuels are produced in Europe,” arguing that the energy is “actually a co-product along with food, feed, and biogenic CO2.” Now, those lines pledging to reduce environmental pressures and to disincentivize inefficient biomass combustion are gone. “Bioenergy continues to play a role in energy security, particularly where it uses residues, does not increase water and air pollution, and complements other renewables,” the final text reads. “This is a crucial omission, given that the EU’s unsustainable production and consumption are already massively overshooting ecological boundaries and putting people, nature and businesses at risk,” said the EEB. Delara Burkhardt, a member of the European Parliament with the center-left Socialists and Democrats, said it was “good that the strategy recognizes the need to source biomass sustainably,” but added the proposal did not address sufficiency. “Simply replacing fossil materials with bio-based ones at today’s levels of consumption risks increasing pressure on ecosystems. That shifts problems rather than solving them. We need to reduce overall resource use, not just switch inputs,” she said. Roswall declined to comment on the previous draft at Thursday’s press conference. “I think that we need to increase the resources that we have, and that is what this strategy is trying to do,” she said.

The White House is exuding confidence heading into Wednesday’s Supreme Court hearing that the justices will uphold President Donald Trump’s sweeping tariff powers. But just in case, aides have a plan B. Aides have spent weeks strategizing how to reconstitute the president’s global tariff regime if the court rules that he exceeded his authority. They’re ready to fall back on a patchwork of other trade statutes to keep pressure on U.S. trading partners and preserve billions in tariff revenue, according to six current and former White House officials and others familiar with the administration’s thinking, some of whom were granted anonymity to share details of private conversations. “They’re aware there are a number of different statutes they can use to recoup the tariff authority,” said Everett Eissenstat, former deputy director of the White House’s National Economic Council during Trump’s first term. “There’s a lot of tools there that they could go to to make up that tariff revenue.” The contingency planning underscores how much is at stake for Trump, who has used the International Emergency Economic Powers Act, a 1977 law designed for national emergencies, to impose tariffs on nearly every U.S. trading partner — the foundation of his second-term economic agenda. The justices will weigh whether the law gives the president broad power to impose economic restrictions — or whether Trump has stretched it beyond what Congress intended. If the court curtails that power, it could upend not only the White House’s “America First” trade strategy but also the global negotiations Trump has leveraged it to shape. “This is all about foreign policy. This isn’t 1789 where you can clearly delineate between trade policy, economic policy, national security policy and defense policy. These things are all completely interconnected,” said Alex Gray, who served as National Security Council chief of staff and deputy assistant to the president during the first Trump administration. “To diminish the tools he has to do that is really dangerous.” Behind the scenes, trade and legal advisers have modeled what a partial loss might look like — where the court upholds the use of the 1977 law in some circumstances but not others — and what other legal means might be available to achieve similar ends. However, those alternatives are slower, narrower and, in some cases, similarly vulnerable to legal challenge, leaving even White House allies to acknowledge the administration’s tariff strategy is on shakier ground than it is willing to publicly concede. Even a partial loss at the Supreme Court would make it much harder for the president to use tariffs as an all-purpose tool for extracting concessions on a number of issues, from muscling foreign companies to make investments in the U.S. to pressuring countries into reaching peace agreements. “There’s no other legal authority that will work as quickly or give the president the flexibility he wanted,” said one supporter of Trump’s tariff policies, who was part of a group that filed an amicus brief in support of his tariffs. “They seem very confident that they’re going to win. I don’t see why they’re confident at all. Two different courts that have ruled extremely harshly on this.” Still, White House aides are telegraphing confidence, convinced the justices won’t strip Trump of his favorite negotiating tool, and certain that even if they do, he has plenty of backup plans. “Frankly, there’s a little bit of bravado, like, they’re not going to knock these down,” one person close to the White House said. A White House official, granted anonymity to discuss internal deliberations, said the administration sees it as “a pretty clear case.” “We’re using a law that Congress passed, in which they gave the executive branch the authority to use tariffs to address national emergencies,” the official said. Aides concede that other tariff authorities are not a “one-for-one replacement” for the emergency law, though they confirmed they are pursuing them. In fact, the White House has already laid some of the policy groundwork under those authorities, such as the 1970s-vintage Section 301, which the U.S. used against China in Trump’s first term, or the Cold War-era Section 232, which allows tariffs on national-security grounds. The administration has launched more than a dozen 232 investigations into whether the import of goods like lumber, semiconductors, pharmaceuticals and critical minerals from other countries impairs national security. Since January, Trump has used that authority to impose new tariffs on copper, aluminum, steel and autos. It has also opened a 301 investigation into Brazil’s trade practices, including digital services, ethanol tariffs and intellectual property protection. It’s a model officials say could be replicated against other countries if the court curtails IEEPA — and could be used to pressure countries into reaffirming the trade deals that they’ve already negotiated with the United States, or to accept the rates that Trump has unilaterally assigned them. But those tools come with challenges: Section 301 investigations can take months to complete, slowing Trump’s ability to impose tariffs unilaterally or tie them to unrelated goals like ending the war between Russia and Ukraine or stem the flow of fentanyl across the U.S. border. Section 232 offers broad discretion to impose tariffs on national-security grounds, but because the levies are sector-based, they are typically applied across a product category, limiting Trump’s ability to pressure individual countries. And imposing new duties on global industries like semiconductors or pharmaceuticals, as Trump has threatened, could upend recent agreements the administration has reached with trading partners, especially China, which negotiated a trade truce last week. “This detente may have weakened the president’s resolve to go forward with the 232s. We’re worse off than we were,” a second person close to the administration said. The U.S. has already promised to delay fees on Chinese vessels arriving at U.S. ports following the conclusion of a Section 301 investigation on China’s shipbuilding practices as a result of the Thursday meeting between Trump and Chinese leader Xi Jinping. The U.S. also agreed to delay an investigation into China’s adherence to its trade deal from Trump’s first term. Section 122, meanwhile, allows only short-term tariffs of up to 15 percent and for no more than 150 days unless Congress acts to extend them — a narrow clause meant to address trade deficit emergencies. The authority could potentially serve as a bridge between an adverse court ruling and new duties Trump wants to put in place using other authorities. Then there’s Section 338 — a rarely used provision that’s been on the books for nearly a century. In theory, it could let Trump swiftly impose tariffs of up to 50 percent on any country, if he can explain how they are engaging in “unreasonable” or “discriminatory” actions that hurt U.S. commerce. Section 338 does not require a formal investigation before a president can impose tariffs, but would likely face similar legal challenges. Major trading partners are betting that Trump will find a way to reimpose tariffs, somehow. Two European diplomats, granted anonymity to discuss trade strategy, said the countries believe that the Supreme Court won’t strike down the global tariffs and, if it does, it won’t do much to shift the dynamic. “Our working assumption is that the court rulings won’t change anything,” a European official said, adding that they are still hoping the law is overturned. Some are convinced the only way to address the tariffs permanently is for the president to appeal to Congress, arguing that only lawmakers can decide how much unilateral power any White House should permanently wield over global commerce. That would be an uphill battle. At least four Republicans are openly opposed to the global tariffs — bucking Trump in a series of symbolic votes last week. And it’s unclear whether there’s appetite for a vote on Trump’s tariffs in the House, which has been shielded from weighing in on the tariffs until the end of January, after Republican leadership blocked votes on Trump’s national emergencies. “At the end of the day, all this comes back to Congress,” Eissenstat said. “Maybe Congress will step up its role post hearing, post ruling. We’ll see.”

KANANASKIS, Alberta — Britain and the United States will “very soon” begin implementing their recently-signed trade agreement, Keir Starmer said on Monday. The U.K. prime minister told broadcasters he would meet with Donald Trump for a one-on-one later on Monday at the G7 summit in Canada to discuss the deal. Britain was the first country to secure a deal with Trump to remove some of the blanket tariffs he has implemented. The deal was announced back in May, but both sides have been formalizing details around trade quotas. “I’ll be having a lot of conversations with President Trump, but we will be talking about our trade deal, because that really matters for the vital sectors that are safeguarded under our deal, and so we’ve got to implement that now,” Starmer said. “I’m really pleased that we’re the only country that’s got a deal, and that we’re at those final stages of implementing it.” The deal is expected to cut tariffs on British autos from 25 percent to 10 percent. However, the 10 percent auto tariff rate has a quota and will only apply to the first 100,000 cars sold to the U.S. in any given year. In return, the U.K. agreed to remove tariffs on American imports of products like ethanol and beef. U.K. Trade Secretary Jonathan Reynolds signaled on Thursday that negotiations to lower U.S. tariffs on U.K. steel could take longer. The focus of current discussions is “not about who owns it — it’s the melt and pour rules,” he told reporters, referring to rules which would mean that steel must be melted and poured in the U.K. to qualify for tariff relief. Starmer also said that de-escalation of the Israel-Iran conflict will be the number-one issue at this G7 summit. World leaders are calling for both sides to step back from the brink of all-out war, after missile attacks continue to intensify in both directions. The prime minister announced the U.K. was on Monday setting up a portal for British citizens in Israel to register themselves. The prime minister said: “It is really important that we focus on de-escalation, because the risks of the conflict escalating are obvious across the region, beyond the region, the impact that this could and probably will have on Gaza, which is a tinderbox, and, of course, the impact on the economy. “That is why at the G7 there is such a focus on de-escalation.” Dan Bloom and Graham Lanktree contributed to this report.

The U.K. government has delayed the timeline for gaining exemptions from U.S. tariffs on British steel and cars, pushing it later into the week.  Trade Secretary Jonathan Reynolds previously said he would issue a written statement to members of parliament and table legislation on market access for U.S. beef and ethanol as soon as Monday.  British officials now hope Reynolds will update parliament on Tuesday.  Prime Minister Keir Starmer told journalists en route to the G7 summit in Canada that the two sides had “shaken on the deal and we’re at the implementing stage now, which doesn’t actually require another shake of the hand.” He added that “there will be many shakes of the hand.”  Rising tensions between Israel and Iran, and the conflict in Ukraine are set to overshadow discussions about U.S. President Donald Trump’s trade war at the June 15-17 G7 summit, with oil prices spiking and stoking fears of a deepening conflict that could further fuel global inflation.  Stopping the conflict in Ukraine from spiraling further, along with efforts to find a negotiated solution to end Russia’s invasion, are now expected to dominate the conversation, an EU diplomat told POLITICO.  Starmer is currently in Canada alongside Trump for the G7 summit, opening the door to potential movement on the stalled U.S.-U.K. trade deal. 

LONDON — Sporting a bow tie under the gold filigree ceiling of London’s 18th century Mansion House, Britain’s Jonathan Reynolds was in a good mood. Britain and India had sealed a (highly controversial) trade deal the previous day, and a pact with the U.S. seemed near. “This is not an easy time to be a trade minister,” the business and trade secretary told a banquet of ambassadors and business elite Wednesday night. “Weeks happen in hours.” He did not realize how right he was. At almost the exact minute Reynolds began his speech at 9:24 p.m., Keir Starmer took a surprise call from Donald Trump. The U.S. president had interrupted the second half of a football match between the prime minister’s team Arsenal and Paris Saint-Germain, which he was watching on TV in his Downing Street flat. Trump made an “11th-hour intervention … demanding even more out of this deal than any of us expected,” U.K. Ambassador to the U.S. Peter Mandelson revealed Thursday in the Oval Office, where Trump gripped his hand. Trump asked Starmer to cut U.K. tariffs on American ethanol and pork, said three people familiar with the details. Like other officials quoted in this piece, they spoke on condition of anonymity. Yet after another call to Reynolds from his negotiating team — which he took while still in a Mansion House drawing room — the deal was sealed. Britain agreed to Trump’s demand on ethanol, but not on pork. The two leaders appeared on split-screen speakerphone calls Thursday to announce the U.S.’s first bilateral carve-out deal from sweeping tariffs that Trump announced on Apr. 2. The made-for-TV pact was announced with Trumpian bombast on the 80th anniversary of VE Day, prompting Starmer to redraw his carefully-laid schedule and visit a Jaguar Land Rover plant. So last-minute was the trip that Downing Street accidentally invited journalists to the wrong car factory. The deal will cut tariffs from 27.5 to 10 percent for 100,000 U.S.-bound British cars per year and slash 25 percent tariffs on British steel and aluminum to zero, while allowing 13,000 tons of U.S. beef to enter the U.K. tariff-free. White House demands for Britain to water down a digital services tax on technology giants came to nothing — for now, at least. (Work will soon begin on a further technology partnership). Never mind that the terms are still worse than those Britain enjoyed before Trump’s “Liberation Day,” or that the president — hit by a domestic backlash to his tariffs — was under pressure to announce a deal, any deal. Nor that questions are yet to be answered, and that opposition MPs are already demanding a full vote on the deal. It left Starmer jubilant. The prime minister said it proved “performative politics” were not the answer, while allies hailed victory for his “warm relations, cool heads” strategy — a months-long buttering-up of the president that began in earnest when Starmer handed Trump an invitation to a state visit in the Oval Office in February. Nine years ago, Barack Obama said Brexit would put Britain at the “back of the queue” for a U.S. trade deal. On Thursday Britain was at the front of that queue — although notably not for a full free trade agreement — and Trump said it had “Brexit in particular” to thank. “Normally after Arsenal lose you don’t see him grinning the next morning,” one No. 10 official said of Starmer Thursday. “But he was definitely grinning this morning.” WEEKS IN THE NEGOTIATING TUNNEL While the details went down to the wire, most of the deal was finalized on the U.K. side this week by three organizations: Downing Street, the Department for Business and Trade (DBT) and the British Embassy in Washington. The softly-softly push came from across the government, including Chancellor Rachel Reeves, who made her case to U.S. Treasury Secretary Scott Bessent on Apr. 25. But the DBT and embassy led the show, in weeks of talks where — at times — only about half a dozen people were fully in the loop. Industry figures suspected something was afoot on Apr. 30, when senior figures — including Bryant Trick, assistant U.S. trade representative, and Graham Floater, the DBT’s director for U.S. trade — failed to show at a dialogue for the two nations’ small and medium-sized businesses in Charlotte, North Carolina. Officially the reason was a transport hiccup, but one person with knowledge of the meeting said: “I thought it was one of the signs that significant progress was being made. It really, really tightened up over the last couple of weeks.” Several people said a key figure in sealing the deal was civil servant Amanda Brooks, the DBT director general for trade negotiations. She was visibly buzzing in a red dress at Wednesday’s Mansion House gala — speaking in excited but hushed tones to the business elite — after working on the deals with India and the U.S. at the same time. “She is the engine room of DBT’s trade negotiations,” said one industry figure. A second added: “Amanda is a very cool operator. She of course was having to multitask to get the India agreement over the line as well.” Another figure at the center of negotiations was Varun Chandra, the former boss of the secretive advisory firm Hakluyt who is now Starmer’s business adviser in No. 10. Chandra was in regular contact with U.S. Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer, as was Reynolds. The Guardian reported that Chandra was in the U.S. to seal the deal this week. Mandelson — who flanked Trump in the Oval Office Thursday along with Mungo Woodifield, the British Embassy’s minister counsellor for trade — was also at the center of talks. The smooth-talking operator from the days of Tony Blair’s government asked business groups in private what he could offer the U.S., and used his lavish residence to full effect, hosting three parties in four days over the White House correspondents’ weekend. Something, somewhere must have worked. When the USTR’s team spoke to British industry groups in March, the U.S. appeared to have three priorities, said the first industry figure quoted above — the digital services tax, carve-outs from the U.K.’s 20 percent Value Added Tax rate, and some agreement on agricultural exports. Britain offered nothing on the first two in the deal, although agrifood became “probably the top” U.S. ask in the last month, the second industry figure said. U.S. officials also began by saying the “U.K. has a trade deficit with the U.S. and it needs to be rectified. The language softened on that point, where it became more ‘we’re equals and there’s not so much of a problem to be dealt with,’” the industry figure said. “That change in messaging is probably a reflection that the U.K. team were doing a really good job on working on the White House and trying to put the U.K. in a better light.” But Britain cannot solely thank itself. Trump was also suffering a domestic backlash to his wave of tariffs, putting him under pressure to telegraph some movement on trade talks amid fears that empty ports on the country’s West Coast will soon translate to reduced supply and higher prices on shelves. The shift in U.S. position was partly due to “pressure Trump was feeling on some of the economic issues,” conceded the first industry figure quoted above. The president has also been eager to telegraph strength and notch a win before he departs next week for the Middle East, in what was supposed to be the first foreign trip of his second term before Pope Francis’ funeral was scheduled late last month.  THE SPECIAL RELATIONSHIP Nonetheless Britain still managed to insert itself — rather than another ally — at the moment the president needed that deal. Starmer spent their Feb. 27 meeting in the Oval Office careful to lavish praise on Trump, and after their White House meeting the president returned the favor. “You are a very tough negotiator,” Trump told him. It is the same tactic Starmer has employed on the Russia-Ukraine war, where he picked up the phone to Trump and Ukrainian President Volodymyr Zelenskyy after their clash in the Oval Office, instead of condemning the scene online. Critics and opposition MPs say this is a sign of weakness, and that the PM should be more robust in public with the president, like Canada’s new PM Mark Carney. Starmer’s backers insist it has paid off, with Ukraine and the U.S. reaching a minerals deal, though a Ukraine-Russia peace deal still looks some way off. All this is while Starmer struggles with tanking poll ratings and the rapid rise of Nigel Farage’s right-wing party Reform UK. The second industry figure above said: “Generally I think the government are playing a blinder internationally at the moment. Domestic, a bit more difficult.” Officials insisted Britain was clear on its red lines in private — namely that American food imported into the U.K. would have to meet British rules, and that it needed help for Britain’s stricken car sector and steel industry. One MP who spoke to car industry executives in recent weeks warned the 25 percent tariffs were “existential.” Officials were also on alert not to water down rules on pharmaceutical products coming into the U.K. Mandelson told POLITICO: “I am very happy with the outcome. We have secured all our main asks and the agreement will now open the door to a deeper long-term U.K.-U.S. technology partnership.” NOW FOR THE DETAILS For all the jubilation, the deal still has a long time to potentially unravel. Starmer tacitly accepted that tariffs on U.K. exports to the U.S. were still higher than in the Biden era. “The question you should be asking is, is it better than where we were yesterday?” he told a reporter. Kemi Badenoch, leader of the opposition Conservative Party, said: “We cut our tariffs — America tripled theirs … we’ve just been shafted!” Starmer’s rural MPs, still smarting from the blowback over cuts to inheritance tax relief for farmers, had been on high alert as news leaked of agri concessions, but helpful statements from the National Farmers Union following the announcement calmed nerves. “The NFU is content with this deal, hormone beef and chlorinated chicken are still banned and SPS standards upheld. So that makes my worries melt away,” one MP said. The NFU did, however, raise concerns about the decision to slash tariffs on U.S. exports of ethanol. And U.S. Agriculture Secretary Brooke Rollins said the deal would “exponentially increase our beef exports,” despite U.K. officials insisting standards would be upheld. The details will be studied closely. Many other questions will only be answered later, after Trump accepted the final details are only being “written up in the coming weeks.”  MPs will not get a vote on the whole deal, even though some individual measures will be voted on as a part of the current U.K. process to ratify trade agreements. The Liberal Democrats have already demanded a full vote, while Conservative MP John Whittingdale said: “Parliament should not just debate but vote on a U.S. trade agreement. Not least as I will want to be sure that we are not surrendering vital measures such as IP protection, the Digital Markets Act and the Online Safety Act in order to get a deal.” Reynolds insisted Thursday that Britain’s legislation on digital services taxes and online safety had not been touched. But it was not immediately clear that they would remain untouched in future talks on tech co-operation.  “Everything’s on the table,” said one U.K. official, asked about the digital services tax. “If it’s something fantastically attractive … if the sum that goes into the deal outweighs what goes with the digital services tax, then let’s do it.” Mandelson said in the Oval Office that Thursday’s deal will be “the end just at the beginning.”  He may be right in more ways than one. Starmer for now is savoring a hard-won victory, but on the Trump rollercoaster, there will be many more ups and downs to come. Annabelle Dickson and Noah Keate contributed reporting.

LONDON — U.S. President Donald Trump and British Prime Minister Keir Starmer struck a trade pact Thursday to lower the White House’s punishing tariffs on the U.K.’s automotive and steel industries. The agreement leaves in place the president’s 10 percent baseline “Liberation Day” tariffs imposed on U.K. goods imports early last month and opens the door for ongoing negotiations. “We’ve opened up new market access, ethanol, beef, machinery — all the agricultural products,” Trump said as he announced the deal in the Oval Office. “I know our incredible trade team is looking at all the meats, all the produce, really, all of our agriculture exports,” Agriculture Secretary Brooke Rollins said alongside the president, indicating Starmer’s Labour government has made concessions opening market access for imports of U.S. agri products. “We are not going to lower British food standards,” said a No. 10 spokesperson, insisting the government has “always been clear on our red lines when it comes to food standards” with the Trump administration. Crucially, today’s deal lowers Trump’s additional 25 percent tariffs on the U.K.’s automotive, steel and aluminum sectors imposed in early April — a benefit to British automakers who produce the U.K.’s single largest goods export to the U.S. totaling £9 billion last year. The U.K. will be given a quota of 100,000 cars for export under Trump’s 10 percent tariff, Commerce Secretary Howard Lutnick told reporters during the Oval Office announcement Thursday. British cars above that level will again face the 25 percent tariff. Ongoing talks between Washington and London will attempt to tackle Trump’s threats to level tariffs on pharmaceuticals — the U.K.’s second-largest goods export to the U.S. at £6.6 billion — and threats to impose new 100 percent duties on foreign films. U.S. President Donald Trump and British Prime Minister Keir Starmer struck a trade pact Thursday. | Pool Photo by Darren Staples via EPA Lowering the White House’s 25 percent tariffs on steel will also help shore up Britain’s failing industry, which faltered further last month when the government deployed an emergency plan to put British Steel under state control. The U.K.-U.S. deal comes after months of negotiations leading up to the series of tariffs Trump announced in March and early April and is the first to be struck during the 90-day pause the White House placed on “Liberation Day” tariffs on April 9.

President Donald Trump described the U.S. as a patient recovering from a successful surgery. It did nothing to dissuade businesses, markets and millions of Americans from their belief the country is bleeding out on the table. Americans watched in horror as their 401(k)s plunged Thursday morning after the markets opened, with the Dow dropping 1,300 points and the S&P 500 losing 3.7 percent as of noon. Stellantis announced it is laying off 900 U.S. workers at five domestic facilities as it pauses manufacturing at two plants in Canada and Mexico. And defense and energy industry officials voiced private fears that the tariffs would take too long to jump-start domestic manufacturing of core components needed for their operations currently produced abroad. While Republicans have spent the last two months acquiescing to the president on a long list of issues, Sen. Chuck Grassley (R-Iowa) fired the GOP’s first serious shot across the bow at the administration on tariffs. Grassley and Sen. Maria Cantwell (D-Wa.) introduced legislation Thursday morning to “reaffirm Congress’ key role in setting and approving U.S. trade policy.” And many Republicans were left offering lukewarm defenses of Trump’s new tariffs. “I hope he is right. I hope the naysayers are wrong,” said Sen. Ron Johnson, (R-Wisc.). “I don’t know.” Sen. Rand Paul (R-Ky.), one of the Senate’s most vocal opponents of tariffs, called the stock market drops “a huge loss.” “That’s not just me saying tariffs don’t work. That’s millions and millions of people buying and selling stocks that are very, very concerned that tariffs are going to cause the economy to go in the wrong direction,” Paul said. But the White House isn’t flinching at the backlash — instead repeating its mantra that the trade barriers will help the U.S. economy in the long run. In addition to Trump’s triumphant post on Truth Social, top administration officials, including Vice President JD Vance, Commerce Secretary Howard Lutnick and White House press secretary Karoline Leavitt, made the rounds on television Thursday morning before the markets opened to assure the American people that everything is fine — and to trust the president. “What I’d ask folks to appreciate here is that we’re not going to fix things overnight,” Vance said in an early appearance on Fox & Friends. “We are fighting as quickly as we can to fix what was left to us, but it’s not going to happen immediately.” But there was one clear point of divergence in the White House’s message — whether the president is receptive to dealmaking with its trading partners — as administration officials, members of Congress and even the president’s own son offered conflicting views. A White House official, during a call previewing the tariffs on Wednesday, insisted that the policy was “not a negotiation, it’s a national emergency” — a point Lutnick underscored during a Thursday interview with CNN. “I don’t think there’s any chance … that President Trump is going to back off his tariffs,” Lutnick said. “This is the reordering of global trade.” But Eric Trump, in a post on X, suggested his father was open to negotiations and encouraged countries to run to the table. “I wouldn’t want to be the last country that tries to negotiate a trade deal with [the president],” he wrote. “The first to negotiate will win — the last will absolutely lose. I have seen this movie my entire life.” While the Trump administration has acknowledged that it expects the tariffs to result in some short-term pain for consumers in the form of higher prices, it has not said how long they expect it to last. Agriculture Secretary Brooke Rollins, speaking to reporters outside the White House, said that there “will be a short time of uncertainty, and then we’ll move back to the prosperity that this president has envisioned,” without offering a time frame. Economists and industry leaders have been dubious of that gamble, warning that a recession and higher prices are unlikely to birth a golden economic age. The White House has been pressing lobbyists not to complain about the tariffs publicly and to keep their remarks positive, according to two energy industry officials, granted anonymity to discuss private conversations. For as much time as the administration spent preparing for the public rollout of their tariff plan, many top economists were left scratching their heads at the specifics, especially as it applies to some smaller countries and territories that barely do any trade with the U.S. “This is basically gibberish,” said Ed Gresser, a former official in the Office of the U.S. Trade Representative now at the Progressive Policy Institute, a left-leaning think tank. “What they’re doing is sort of saying that this is a reciprocity policy that’s based on foreign trade barriers and so forth, but actually has nothing to do with that at all,” he said.https://datawrapper.dwcdn.net/9Dsh8/2/ Instead, the administration has applied a math formula using export figures and trade deficits to devise levies, he said. “It’s really divorced from economic analysis,” he said. Among those Trump has targeted with new tariffs: Lesotho, the tiny landlocked country that was slapped with a 50 percent tariff rate — the highest rate, shared also by the French territory of St. Pierre and Miquelon — and only has a trade imbalance with the U.S. because of a law that allows sub-Saharan African countries to ship thousands of goods duty-free; an overseas territory whose only inhabitants are workers at a military base operated jointly by U.K. and U.S. forces; and the Heard and McDonald Islands, home to no human, and mostly penguin, residents. The tariffs could be devastating for some of those small countries. Lesotho has one of the highest rates of HIV in the world and the clothing factories the tariffs target are a key source of access to HIV medicines in the country. “This could have really tragic implications for that country,” Gresser said. Many of the economists also remarked how basic and perplexing the formula used by the White House to calculate its reciprocal tariff rates was — and not at all correlated to the tariff rates or non-tariff barriers imposed by other countries. Despite efforts by White House officials to explain it with Greek letters that made it seem technically sophisticated, economists on Twitter quickly pointed out that the rate is still just a country’s trade deficit divided by its imports. “The vibe on Wall Street right now is a bit of chaos,” said a senior strategist on Wall Street granted anonymity to speak candidly about the collective reaction. “This was a botched and child-like formula used to enforce something with massive implications.” The person added that while Wall Street views Trump’s goals of boosting domestic production and holding its trading partners more accountable positively, they’re nervous about the methods and speed with which he’s going about it. A handful of countries, including Vietnam, Israel and India, have already made trade concessions in an attempt to stave off the new levies. Vietnam, for instance, announced Tuesday that it would reduce tariffs on a long list of goods, including cars, wood, ethanol, frozen chicken legs, pistachios, almonds, fresh apples, cherries and raisins — but the U.S. slapped them with a 46 percent reciprocal tariff anyway. The tariffs on Israel — which come amid the country’s ongoing war in Gaza — are also straining relations between the two countries, which signed a free trade agreement 40 years ago. Mark Mellman, president and CEO of Democratic Majority for Israel, compared the tariffs to the Boycott, Divestment and Sanctions movement, the Palestinian-led effort to punish Israel economically, saying that Trump “made a grave error in slapping a higher tariff on Israel than on Turkey and even Iran.” Ron Tomer, president of the Manufacturers Association of Israel, told the Jerusalem Post that if the decision stands, it is “a regression in the trade and investment relationship between the countries, especially considering the long-standing and deep, loyal friendship between the two nations.” It will likely be harder for smaller, poorer countries hit with tariffs, like Lesotho or Laos, to negotiate with the administration, according to trade experts. They do so little trade in the eyes of the U.S. that they likely fall to the back of the line when it comes to cutting deals. Other apparent contradictions in the policy touched on the scrambled nature of U.S. security alliances. The list of tariffed countries included Ukraine but excluded Russia and Belarus. Treasury Secretary Scott Bessent justified the two exclusions in an interview on Fox News Wednesday night by pointing to U.S. sanctions against Russia and Belarus over the war in Ukraine. But U.S. Census Bureau data show the United States imported $3 billion worth of goods from Russia last year and $20 million from Belarus. In the defense industry, where huge prime contractors like Lockheed Martin and Boeing have been relying on predictable funding from the Trump administration and the Pentagon to kickstart a major arms buildup, executives tuning into the president’s Rose Garden left with a sinking feeling that the tariffs would lead to more disruption — and possibly accelerate the rise of new entrants into the defense industry with Silicon Valley’s backing. “In the long run it may spur the growth of non-American defense contractors,” one defense industry official said. Doug Palmer, Jordain Carney, Adam Cancryn, Jake Traylor and Amanda Friedman contributed to this report.

President Donald Trump signed a presidential memorandum Thursday moving the United States one step closer to a “reciprocal” tariff system that could dramatically raise duties on certain imports from around the world. The memo lays out a process for Trump to impose reciprocal tariffs on trading partners, effectively raising tariffs on a country’s exports to the U.S. based on the level of tariff and non-tariff barriers that country imposes on U.S. goods. “On Trade, I have decided, for purposes of Fairness, that I will charge a RECIPROCAL Tariff meaning, whatever Countries charge the United States of America, we will charge them – No more, no less!,” Trump wrote on his social media platform Truth Social. ”America has helped many Countries throughout the years, at great financial cost. It is now time that these Countries remember this, and treat us fairly – A LEVEL PLAYING FIELD FOR AMERICAN WORKERS.” A White House official said top Cabinet officials would study the matter further before deciding on specific rates for each country. That process could take weeks or months, added the White House official, who was granted anonymity per the ground rules of the call with reporters. Howard Lutnick, Trump’s nominee to lead the Commerce Department, indicated the administration could move quickly after executive branch agencies deliver a number of trade reports to the White House. “Our studies should be all complete by April 1. So we’ll hand the president the opportunity to start on April 2,” Lutnick said at the White House. Ultimately, the new, higher tariff rates could result in steeper prices for countless goods Americans buy from abroad, something economists have warned will increase inflation. Trump and his top aides were quick to downplay the inflationary impact on Thursday, however. “Prices could go up short-term, but prices will also go down,” Trump said in remarks at the White House, according to the press pool. “Long-term it’s going to make our country a fortune.” Pressed in an interview on MSNBC about reciprocal tariffs driving up inflation, National Economic Council Director Kevin Hassett said that while he expected that “prices will fluctuate,” he is confident that “there won’t be strong evidence of a price effect of tariffs.” The new memo builds off the executive order the president issued on trade on his first day in office, the White House said. That order set an April 1 deadline for federal agencies and departments to deliver reports to the president that could be the legal basis of new sweeping duties. The White House official said the president could ultimately use a mix of trade authorities including Section 301 of the Trade Act of 1974, which was used by both the first Trump and Biden administrations to impose tariffs on hundreds of billions of dollars worth of Chinese trade. As well as Section 232 of the Trade Expansion Act of 1962, and the International Emergency Economic Powers Act, which grants a president sweeping economic power in an emergency. The White House said Lutnick and Trump’s pick for U.S. trade representative, Jamieson Greer, are being tasked with delivering a report to the president on a country-by-country basis, which will be completed in consultation with the treasury secretary and Homeland Security secretary and other senior officials. Trump’s proposal would mark a radical departure from the tariff regime that the United States has long used and be unlike any other tariff system in the world. Currently, the United States has one primary set of tariffs — known as the “most-favored nation” rate — covering thousands of products. Although the tariff rates vary by product, the basic structure is the same for almost every country in the world. “If President Trump does move the United States to a reciprocity-based tariff system, that would arguably be a fundamental change to U.S. trade policy, and among the biggest in more than 75 years — since the creation of the current multilateral trading system,” said Tim Brightbill, a trade attorney at the law firm Wiley Rein in Washington, D.C. Under Trump’s proposal, the U.S. would develop different tariffs rates for different countries based on an overall assessment of their trade openness, the White House official said. That would include an examination of both tariffs and non-tariff measures, such as value-added taxes, subsidies for local industries, regulations, exchange rate actions and any other practice that U.S. trade officials determine to be unfair, the official added. The expected result is an individual additional tariff rate for each country or trading partner, rather than attempting to set corresponding tariff rates on every product the United States imports from the trading partner, the White House said. “There’s two things that this memorandum draws attention to. One is tariffs, which everybody is well familiar with, but the president also is focusing like a laser beam on what he calls non-monetary barriers, or non-tariff barriers,” the White House official said. “For example, Japan has relatively low tariffs, but high structural barriers.” The senior official also took aim at value-added taxes used by members of the 27-nation European Union, which he said effectively increases the EU’s tariff on autos to almost 20 percent from its nominal level of 2.5 percent. He also charged that VAT rebates that EU exporters receive “act as a significant export subsidy.” However, mainstream economists dispute the idea that VATs are a trade barrier, saying they are merely a tax on domestic consumption, regardless of where a product is made, similar to the sales tax imposed by most U.S. states. In another example, the White House noted the U.S. tariff on ethanol is only 2.5 percent, while Brazil charges an 18 percent rate. India, it said, charges a 100 percent tariff on motorcycles, while the U.S. rate is only 2.4 percent. A White House fact sheet also took aim at digital services taxes imposed by many European countries as well as Canada. Those are seen as discriminatory because they primarily affect large U.S. tech companies such as Alphabet and Meta. “Though America has no such thing, and only America should be allowed to tax American firms, trading partners hand American companies a bill for something called a digital service tax. Canada and France use these taxes to each collect over $500 million per year from American companies,” the White House fact sheet said.

BRUSSELS — The European Union and Mexico wrapped up talks on Friday to overhaul their trade agreement, strengthening a partnership that is crucial for European auto makers three days before Donald Trump, who campaigned on a protectionist ticket, is due to be sworn in as U.S. president. The announcement represents a pre-emptive move to link arms after Trump threatened to hit U.S. neighbors Mexico and Canada with tariffs of 25 percent on taking office. The EU meanwhile faces U.S. tariffs of 10 percent to 20 percent — with analysts saying its car industry is at particular risk. The modernization of the “global agreement” between the 27-nation bloc and Mexico will expand opportunities in services, strengthen supply chains and bolster investment protections, the European Commission said in a statement after talks between EU trade chief Maroš Šefčovič and Mexican Economy Minister Marcelo Ebrard. “This landmark deal proves that open, rules-based trade can deliver for our prosperity and economic security,” European Commission President Ursula von der Leyen said. The bilateral trading relationship is worth more than €100 billion a year — four-fifths in the form of goods and one-fifth in services. Echoing the apprehension around Trump’s tariff ideas, the German car lobby VDA said “the conclusion of a modernization of the agreement is also an important political signal —especially in times of increasing protectionism.” Cars and spare parts are one of the largest export categories from Europe to Mexico. In 2022, Germany alone sold €2.5 billion worth of these products to Mexican importers. EU car exporters will be at an advantage over their Mexican counterparts in this deal, because they will qualify for certain lower tariffs in Mexico under less strict rules than the other way around. WIN FOR EU FOOD EXPORTERS The EU executive also trumpeted export opportunites for agri-food exporters, with the deal removing tariffs that had been as high as 100 percent on exports of products such as cheese, pork, pasta, apples, jams, and marmalades — as well as chocolate and wine. Protection of geographical indications — a kind of trademark brand for premium produce — will be expanded to 568 products. And export procedures will be simplified, the Commission said, outlining details of the agreement. The original deal between the two sides dates back to 2000, meaning it was due for a revamp. The EU also redid its agreement with Chile in a similar manner two years ago. A senior EU official admitted the latest deal was less ambitious than at a previous stage in the talks in 2020. The Commission wanted to avoid Mexico slipping away, the official said. If other trade partners would swoop in and do deals with Mexico, it could put the EU “in a worse position.” Ahead of Trump’s inauguration on Monday, the deal sends a signal to Washington that the EU has plenty of diplomatical clout — and trade options — around the world. A “process of reform in the energy dimension” allowed for the deal to be concluded now, though that also meant a key ask from the EU could no longer be granted by Mexico, the official explained. It boils down to how EU energy companies are treated in the Mexican market. “Mexico has come back from a 2013 law to liberalize the energy market, so Mexican companies will continue to be granted rights and priviledges.” On the flip side, the deal reduces maximum import volumes from Mexico to Europe on sensitive imports like beef and ethanol, by cutting the quota in half compared to a near deal in 2020. Additional reporting by Jordyn Dahl. This story has been updated.