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Government officials will this week fly to China in an effort to convince the owner of British Steel to finalise plans for a state funding package amid hundreds of job cuts at the company.

Sky News has learnt that civil servants from the Department for Business and Trade are travelling to meet executives from Jingye Group amid protracted talks about a £300m grant to the Scunthorpe-based company.

Sources said the talks were expected to focus on the value of an energy subsidy package, which could take the overall value of government support for British Steel to approximately £1bn.

It comes just days after Kemi Badenoch, the new business and trade secretary, told Sky News’ economics and data editor, Ed Conway, that “nothing is ever a given” when asked whether Britain needed a steel industry.

A government spokesperson said: “The government recognises the vital role that steel plays within the UK economy, supporting local jobs and economic growth and is committed to securing a decarbonised, sustainable and competitive future for the UK steel sector.

“Government officials are engaging with Jingye regularly as part of the ongoing discussions with the company and our routine work with businesses across the steel sector.

“The Business and Trade Secretary considers the success of the steel sector a priority and continues to work closely with industry to achieve this.”

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Sky News revealed last month that Jingye was drawing up plans to cut around 800 jobs at British Steel, with the BBC reporting on Tuesday night that 300 redundancies would be announced this week arising from the closure of coking ovens at the Scunthorpe plant.

Mrs Badenoch’s predecessor, Grant Shapps, told Jingye last month that proposals to make hundreds of workers redundant were “unhelpful” amid negotiations over a £300m taxpayer support package.

British Steel confirmed recently that it was “reluctantly having to consider cost-cutting” but did not specify the number of jobs that were at risk.

Nusrat Ghani, the business minister, had told MPs that talks between the government and British Steel were ongoing, even though the conditions attached to the taxpayer aid include a six-month moratorium on redundancies and a guarantee to preserve an unspecified proportion of the company’s workforce for the next decade.

Jingye said in January that steelmaking in Britain was “uncompetitive” in an international context.

“Unfortunately, like many other businesses we are reluctantly having to consider cost cutting in light of the global recession and increased costs,” the company said.

Sky News revealed last month that British Steel and larger rival Tata Steel would be required to guarantee thousands of jobs until 2033 in return for £600m of government support to help decarbonise the industry.

Any taxpayer funding is to be linked to the replacement of blast furnaces at the company’s sites with greener electric arc furnaces, while Jingye would be obliged to invest at least £1bn in the business by 2030.

A decision to grant the state aid would not be without controversy, given British Steel’s Chinese ownership and doubts about its adherence to financial commitments made when it bought the business out of insolvency proceedings in 2020.

In a letter to Jeremy Hunt, the chancellor, in December, Mr Shapps and Michael Gove, the levelling-up secretary, warned that British Steel’s demise could cost the government up to £1bn in decommissioning and other liabilities.

They cautioned Mr Hunt that British Steel “does not have a viable business without government support”.

“Closing one blast furnace would be a stepping-stone to closure of the second blast furnace, resulting in a highly unstable business model dependent on Chinese steel imports,” Mr Shapps and Mr Gove wrote.

“Given the magnitude of the liabilities due to fall on HMG in the event of blast furnace closure, and following the PM’s steer, we would like officials to test whether net Government support in the region of £300m for British Steel could prevent closure, protect jobs and create a cleaner viable long-term future for steel production in the United Kingdom.”

British Steel employs about 4,000 people, with thousands more jobs in its supply chain dependent upon the company.

Tata Steel employs substantially more people in the UK, including more than 4,000 at its Port Talbot steelworks in Wales.

According to the ministers’ letter, British Steel had already informed the government that it could close one of the Scunthorpe blast furnaces as soon as next month, with the loss of 1,700 jobs.

This would be “followed by the second blast furnace closing later in 2023, creating cumulative direct job losses of around 3,000”, Mr Shapps and Mr Gove wrote.

In May 2019, the Official Receiver was appointed to take control of the company after negotiations over an emergency £30m government loan fell apart.

British Steel had been formed in 2016 when India’s Tata Steel sold the business for £1 to Greybull Capital, an investment firm.

As part of the deal that secured ownership of British Steel for Jingye, the Chinese group said it would invest £1.2bn in modernising the business during the following decade.

Jingye’s purchase of the company, which completed in the spring of 2020, was hailed by Boris Johnson, the then prime minister, as assuring the future of steel production in Britain’s industrial heartlands.

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Food inflation highest in almost a year – more to come, industry warns

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Food inflation highest in almost a year - more to come, industry warns

Food inflation has hit its highest level in almost a year and could continue to go up, according to an industry body.

The British Retail Consortium (BRC) reported a 2.6% annual lift in food costs during April – the highest level since May last year and up from a 2.4% rate the previous month.

The body said there was a clear risk of further increases ahead due to rising costs, with the sector facing £7bn of tax increases this year due to the budget last October.

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It warned that shoppers risked paying a higher price – but separate industry figures suggested any immediate blows were being cushioned by the effects of a continuing supermarket price war.

Kantar Worldpanel, which tracks trends and prices, said spending on promotions reached its highest level this year at almost 30% of total sales over the four weeks to 20 April.

It said that price cuts, mainly through loyalty cards, helped people to make the most of the Easter holiday with almost 20% of items sold at respective market leaders Tesco and Sainsbury’s on a price match.

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Its measure of wider grocery inflation rose to 3.8%, however.

Wider BRC data showed overall shop price inflation at -0.1% over the 12 months to April, with discounting largely responsible for weaker non-food goods.

But its chief executive, Helen Dickinson, said retailers were “unable to absorb” the surge in costs they were facing.

“The days of shop price deflation look numbered,” she said, as food inflation rose to its highest in 11 months, and non-food deflation eased significantly.

“Everyday essentials including bread, meat, and fish, all increased prices on the month. This comes in the same month retailers face a mountain of new employment costs in the form of higher employer National Insurance Contributions and increased NLW [national living wage],” she added.

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Five hacks to beat rising bills

While retail sales growth has proved somewhat resilient this year, it is believed big rises to household bills in April – from things like inflation-busting water, energy and council tax bills – will bite and continue to keep a lid on major purchases.

Also pressing on both consumer and business sentiment is Donald Trump’s trade war – threatening further costs and hits to economic growth ahead.

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A further BRC survey, also published on Tuesday, showed more than half of human resources directors expect to reduce hiring due to the government’s planned Employment Rights Bill.

The bill, which proposes protections for millions of workers including guaranteed minimum hours, greater hurdles for sacking new staff and increased sick pay, is currently being debated in parliament.

The BRC said one of the biggest concerns was that guaranteed minimum hours rules would hit part-time roles.

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Inside the Vietnamese factory preparing for the worst since Trump’s tariff threat

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Inside the Vietnamese factory preparing for the worst since Trump's tariff threat

On the outskirts of Ho Chi Minh City, factory workers at Dony Garment have been working overtime for weeks.

Ever since Donald Trump announced a whopping 46% trade tariff on Vietnam, they’ve been preparing for the worst.

They’re rushing through orders to clients in three separate states in America.

Sewing machines buzz with the sound of frantic efforts to do whatever they can before Mr Trump’s big decision day. He may have put his “Liberation Day” tariffs on pause for 90 days, but no one in this factory is taking anything for granted.

Staff have been working overtime
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Staff have been working overtime

Workers like Do Thi Anh are feeling the pressure.

“I have two children to raise. If the tariffs are too high, the US will buy fewer things. I’ll earn less money and I won’t be able to support my children either. Luckily here our boss has a good vision,” she tells me.

Do Thi Anh
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Do Thi Anh

That vision was crafted back in 2021. When COVID struck, they started to look at diversifying their market.

Previously they used to export 40% of their garments to America. Now it’s closer to 20%.

The cheery-looking owner of the firm, Pham Quang Anh, tells me with a resilient smile: “We see it as dangerous to depend on one or two markets. So, we had to lose profit and spend on marketing for other markets.”

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You asked, we listened, the Trump 100 podcast is continuing every weekday at 6am

That foresight could pay off in the months to come. But others are in a far more vulnerable state.

Some of Mr Pham’s colleagues in the industry export all their garments to America. If the 46% tariff is enforced, it could destroy their businesses.

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Doubts US will start making what Vietnam delivers

Down by the Saigon River, young couples watch on as sunset falls between the glimmering skyscrapers that stand as a testament to Vietnam’s miracle growth.

Cuong works in finance
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Cuong works in finance

Cuong, an affluent-looking man who works in finance, questions the logic and likelihood that America will start making what Vietnam has spent years developing the labour, skills and supply chains to reliably deliver.

“The United States’ GDP is so high. It’s the largest in the world right now. What’s the point in trying to get jobs from developing countries like Vietnam and other Asian nations? It’s unnecessary,” he tells me.

But the Trump administration claims China is using Vietnam to illegally circumvent tariffs, putting “Made in Vietnam” labels on Chinese products.

There’s no easy way to assess that claim. But market watchers believe Vietnam does need to signal its willingness to crack down on so-called “trans-shipments” if it wants to cut a deal with Washington.

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Vietnam can’t afford to alienate China

The US may also demand a major cutback in Chinese manufacturing in Vietnam.

That will be a much harder deal to strike. Vietnam can’t afford to alienate its big brother.

Luke Treloar, head of strategy at KPMG in Vietnam
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Luke Treloar, head of strategy at KPMG in Vietnam

Luke Treloar, head of strategy at KPMG in Vietnam, is however cautiously optimistic.

“If Vietnam goes into these trade talks saying we will be a reliable manufacturer of the core products you need and the core products America wants to sell, the outcome could be good,” he says.

But the key question is just how much influence China will have on Vietnamese negotiators.

Anything above 10-20% tariffs would be intensively challenging

This moment is a huge test of Vietnam’s resilience.

Anything like 46% tariffs would be ruinous. Analysts say 10-20% would be survivable. Anything above, intensely challenging.

But this looming threat is also an opportunity for Vietnam to negotiate and grow. Not, though, without some very testing concessions.

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UK-US trade talks ‘moving in a very positive way’, says White House spokesperson Karoline Leavitt

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UK-US trade talks 'moving in a very positive way', says White House spokesperson Karoline Leavitt

Trade talks between the UK and the United States are “moving in a very positive way”, according to the White House.

President Donald Trump’s press secretary Karoline Leavitt spoke about the likelihood of the long-discussed agreement during a press briefing.

In Westminster, there are hopes such a deal could soften the impact of the Trump tariffs announced last month.

Leavitt told reporters: “As for the trade talks, I understand they are moving in a very positive way with the UK.

“I don’t want to get ahead of the president or our trade team in how those negotiations are going, but I have heard they have been very positive and productive with the UK.”

She said Mr Trump always “speaks incredibly highly” of the UK.

“He has a good relationship with your prime minister, though they disagree on domestic policy issues,” she added.

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“I have witnessed the camaraderie between them first hand in the Oval Office, and there is a deep mutual respect between our two countries that certainly the president upholds.”

White House Press Secretary Karoline Leavitt speaks during a press briefing at the White House April 28, 2025. (Francis Chung/POLITICO via AP Images)
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White House Press Secretary Karoline Leavitt said she was positive about a deal. Pic: AP

Chancellor of the Duchy of Lancaster Pat McFadden gave the UK’s position on the talks when speaking to Sunday Morning With Trevor Phillips.

He said there was “a serious level of engagement going on at high levels” to secure a UK-US trade deal.

Mr McFadden is one of the most powerful members of Sir Keir Starmer’s government and a key ally of the prime minister.

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He was careful to not get ahead of developments, however, saying: “I think an agreement is possible – I don’t think it’s certain, and I don’t want to say it’s certain, but I think it’s possible.”

He went on to say the government wanted an “agreement in the UK’s interests” and not a “hasty deal”, amid fears from critics that Number 10 could acquiesce a deal that lowers food standards, for example, or changes certain taxes in a bid to persuade Donald Trump to lower some of the tariffs that have been placed on British goods.

Mr McFadden’s tone was more cautious than Chancellor Rachel Reeves’ last week.

She had been in the US and, speaking to Sky News business and economics correspondent Gurpreet Narwan, the chancellor said she was “confident” a deal could be done.

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‘We’re confident’, says Reeves

But she sought to play down fears that UK standards could be watered down, both on food and online safety.

“On food standards, we’ve always been really clear that we’re not going to be watering down standards in the UK and similarly, we’ve just passed the Online Safety Act and the safety, particularly of our children, is non-negotiable for the British government,” Ms Reeves said.

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