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It is one of the great set-piece moments in the US industrial calendar.

At the start of pay negotiations, which take place every four years ahead of the expiry of existing contracts in September, the leaders of the big three US carmakers traditionally shake hands in front of the cameras with the leader of the United Auto Workers (UAW) union.

The tradition goes back almost a century: Wayne State University in Detroit, America’s car-making capital, has unearthed photographs dating back to the 1930s showing the UAW leaders of the time shaking hands with a leader from Ford, Chrysler or General Motors.

United Auto Workers President Ron Gettelfinger (L) and Ford Motor President & Chief Executive Alan Mulally take part in the ceremonial handshake that signals the start of contract negotiations between Ford and the UAW in Dearborn, Michigan July 23, 2007. General Motors Corp. and Ford Motor Co. began talks with the United Auto Workers union on Monday, hoping to win sweeping concessions that would slash labor costs for the struggling auto industry. REUTERS/Rebecca Cook (UNITED STATES)
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The then UAW president Ron Gettelfinger and Ford president Alan Mulally take part in the ceremonial handshake in 2007

This was the precursor to another established tradition under which the UAW would select a lead company with which to negotiate. Then, once a deal had been struck, the other carmakers would follow the first company’s lead in a process known as ‘pattern bargaining’.

So it was a seismic moment when, in July this year, the UAW’s new president, Shawn Fain, declined to take part in the handshake.

Instead, he held what were described as a “member’s handshake”, during which he met with workers at the big three (Chrysler is now owned by Stellantis, also the parent company of European carmakers Peugeot and Fiat) as they came off their shifts.

It was intended to lay down a marker to the carmakers that this was a very different UAW leadership.

Mr Fain, 54, was narrowly elected president of the UAW in March this year on a platform of promising a tougher approach to pay negotiations.

His victory, over the existing president Ray Curry, was historic in that it was the first in which the president, and other leading officials, were chosen by a direct ballot of members rather than in a proverbial smoke-filled room in which delegates chose the leadership.

United Auto Workers President Shawn Fain greets workers at the Ford Motor Michigan Assembly Plant, to mark the beginning of contract negotiations in Wayne, Michigan, U.S. July 12, 2023. REUTERS/Rebecca Cook
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Shawn Fain, pictured in July, shaking hands with members outside a Ford assembly plant in Michigan

Mr Fain, in winning, toppled a faction of the union that had controlled it for decades.

On being elected, Mr Fain – who began his career as an electrician with Chrysler – immediately served notice on the carmakers that he did not intend this to be business as usual, declaring: “We’re here to come together to ready ourselves for the war against our one and only true enemy: multibillion corporations and employers that refuse to give our members their fair share. It’s a new day in the UAW.”

If that didn’t make the carmakers sit up and take note, Mr Fain’s refusal to take part in the traditional handshake did, as he told the union’s 389,000 members on his social media feed: “I’m not shaking hands with any CEOs until they do right by our members, and we fix the broken status quo with the big three. The members have to come first.”

For good measure, he very publicly threw a Stellantis pay offer in a bin.

Mr Fain’s approach is making waves on Wall Street.

There are real concerns that Mr Fain – who carries around with him one of his grandfather’s payslips from Chrysler in 1940 – will bring out his members at all three carmakers if a deal is not reached by the time the existing contracts expire on 14 September. Such action would be unprecedented.

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Members at the three have voted for strike action in the event of negotiations breaking down, by an average of 97%.

Strikes would cause immense disruption at a time when the carmakers are having to invest billions in electrification while trying to cut their costs in response to inflation.

Yet, with Wall Street putting the odds of strike action at the big three as better than events, the two sides look set for collision.

The UAW is not only seeking to restore past benefits lost in previous pay negotiations, but also to cut the working week to 32 hours.

It is also seeking a significant pay rise, the extent of which it has not made public, but which has been reported by the Wall Street Journal as 46%.

That would severely hobble the big three’s competitiveness against foreign rivals, from Germany and Japan – which tend to have less union representation in their workforces, as well as the likes of non-unionised Tesla.

Some 150,000 of the UAW’s members work for Ford, GM and Stellantis but strikes at all three would be huge because the union has traditionally singled out an individual carmaker for strike action rather than attacking several targets at once. It would also be a risk.

The union has a strike fund of $900m (£716m) – half of which would be eaten by a six-week stoppage in which striking members at the big three were each paid $500 (£398) a week.

That is why it has been suggested that Mr Fain may adopt another tactic, bringing out its members at the car parts makers instead, in time depriving the big three of components and forcing them to temporarily close plants while still having to pay workers.

FILE PHOTO: UAW President Shawn Fain chairs the 2023 Special Elections Collective Bargaining Convention in Detroit, Michigan, U.S., March 27, 2023. REUTERS/Rebecca Cook/File Photo
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UAW President Shawn Fain

That, though, would also be a risk for the UAW, as it is not nearly as well represented among the parts makers.

Mr Fain’s election is not just rattling Wall Street – but also in Washington. Mr Fain has refused to say whether the union will endorse and provide support to Joe Biden as he seeks re-election to the White House next year.

He told the Boston Globe at the weekend: “I’ve tried to be clear with people: The days of us just freely giving endorsements are over. Our endorsements have to be earned.”

Those comments speak to his unease that, as the Biden administration offers huge subsidies to businesses involved in the transition to net zero, it is not doing so with sufficient protection for carmakers.

He was particularly unhappy at a $9.2bn (£7.3bn) loan awarded by the Biden administration in June to a joint venture between Ford and a South Korean company to build three battery factories in Kentucky and Tennessee.

Mr Fain felt the loan should have come with strings attached on wages and working conditions.

He told the Globe: “We support a green economy. We have to have clean air, clean water, but this transition has to be a just transition. Workers can’t be left behind.”

Mr Fain’s election must also be seen in the context of changing circumstances in America’s unions.

The powerful Teamsters union, like the UAW, has also jettisoned the ruling faction that has run it for decades in favour of more radical leadership. Its aggressive stance is credited with having won it a pay deal with United Parcel Services reckoned to be the most generous in the company’s history.

Part-time workers at UPS were awarded a reported 50% pay rise while other concessions agreed by the company included a promise to instal air conditioning in all of its trucks.

Mr Fain is clearly optimistic that he has the wind to his back and can secure similar wins for his members. If he succeeds, other union leaders will be taking note.

It is why the month of September promises to be a momentous one for US industry.

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Insurer Hiscox lines up chairman months after Bayesian sinking

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Insurer Hiscox lines up chairman months after Bayesian sinking

Hiscox, the London-listed insurer, is close to naming a new chairman nearly eight months after the drowning of Jonathan Bloomer on the luxury yacht of technology tycoon Mike Lynch.

Sky News has learnt that Hiscox has narrowed its search to candidates including Richard Berliand, who chairs the interdealer broker TP ICAP.

Insurance insiders said that Mr Berliand was among fewer than a handful of potential successors to Mr Bloomer.

The sinking of the Bayesian off the Sicilian coast last August claimed the lives of Mr Lynch and his daughter, along with five other passengers, including Mr Bloomer.

A former boss of Prudential, Mr Bloomer was a well-liked figure in the City.

He had chaired Hiscox for just a year when he died.

The identities of the other candidates being considered by the company were unclear on Monday.

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Hiscox, which has a market capitalisation of just over £3.8bn, has seen its shares slip by about 12pc over the last year.

It was founded as a single underwriter at Lloyd’s in 1901.

A Hiscox spokesperson declined to comment.

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Asian stock markets tumble – with Hong Kong’s Hang Seng index suffering worst fall for 28 years

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Asian stock markets tumble - with Hong Kong's Hang Seng index suffering worst fall for 28 years

Asian stock markets have fallen dramatically amid escalating fears of a global trade war – as Donald Trump called his tariffs “medicine” and showed no sign of backing down.

Hong Kong’s Hang Seng index of shares closed down 13.2% – its biggest drop since 1997, while the Shanghai composite index lost 7.3% – the worst fall there since 2020.

Taiwan’s stock market was also hammered, losing nearly 10% on Monday, its biggest one-day drop on record.

Elsewhere, Japan’s Nikkei 225 lost 7.8%, while London’s FTSE 100 was down 4.85% by 9am.

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US stock market futures signalled further losses were ahead when trading begins in America later.

At 4am EST, the S&P 500 futures was down 4.93%, the Dow Jones 4.32% and the Nasdaq 5.33%.

Markets are reacting to ongoing uncertainty over the impact of President Trump’s tariffs on goods imported to the US, which he announced last week.

A screen displaying the closing Hang Seng Index at Central district, in Hong Kong, China. Pic: Reuters
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A screen showing the Hang Seng index in central Hong Kong. Pic: Reuters

Speaking on Air Force One on Sunday, Mr Trump said foreign governments would have to pay “a lot of money” to lift his tariffs.

“I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said.

The US president said world leaders were trying to convince him to lower further tariffs, which are due to take effect this week.

“I spoke to a lot of leaders, European, Asian, from all over the world,” Mr Trump told reporters.

“They’re dying to make a deal. And I said, we’re not going to have deficits with your country.

“We’re not going to do that because to me, a deficit is a loss. We’re going to have surpluses or, at worst, going to be breaking even.”

Mr Trump, who spent much of the weekend playing golf in Florida, posted on his Truth Social platform: “WE WILL WIN. HANG TOUGH, it won’t be easy.”

President Trump believes his policy will make the US richer, forcing companies to relocate more manufacturing to America and creating jobs.

However, his announcement has shocked stock markets, triggered retaliatory levies from China and sparked fears of a global trade war.

Reality hits that trade war no longer just a threat

China’s announcement of its tariff retaliation came late afternoon on Friday local time.

Most Asian markets closed shortly after – and markets in China, Hong Kong and Taiwan were closed for a public holiday – meaning the scale of the hit did not play out until today.

This morning we are getting a sense of the impact. Dramatic falls across all Asian markets clearly signal a realisation a global trade war is no longer just a threat, but a reality here to stay, and a global recession could yet follow.

Up until Friday, China’s response to Donald Trump’s tariffs had been perceived as restrained and designed to avoid escalation, the markets had reacted accordingly.

But that all changed last week when Mr Trump’s new 34% levy on all Chinese goods was matched by China with an identical tax. Both sit on top of previous tariffs levied, meaning many goods now face rates in excess of 50%.

These are numbers that make most trade between the world’s two biggest economies almost impossible and that will have a global impact.

China has clearly decided any forthcoming pain will have to be managed, and not being seen to be cowed and bullied by Mr Trump is being deemed more important.

But the scale of the retaliation will have further spooked the markets as it makes the prospect of negotiation and retreat increasingly unlikely.

Mr Trump added to the atmosphere of intransigence when he told the media on Sunday the trade deficit with China would need to be addressed before any deal could be done. The complete lack of concern from the White House over the weekend will also not have helped.

While smaller economies like Japan, South Korea, Cambodia and Vietnam are all lining up to attempt to negotiate, there are a lot of nations in that queue.

There is a sense none of this will be easily rectified.

US customs agents began collecting Mr Trump’s baseline 10% tariff on Saturday.

Higher “reciprocal” tariffs of between 11% and 50% – depending on the country – are due to kick in on Wednesday.

Investors and world leaders are unsure whether the US tariffs are here to stay or a negotiating tactic to win concessions from other countries.

Richard Flax, chief investment officer at wealth manager Moneyfarm, said: “I guess there was some hope over the weekend that maybe we would see this as part of the start of a negotiation.

“But the messages that we’ve so far seen suggest that the President Trump is comfortable with the market reaction and that he’s going to continue on this course.

Goldman Sachs has raised the odds of a US recession to 45%, joining other investment banks that have also revised their forecasts.

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In the UK, Sir Keir Starmer has promised “bold changes” and said he would relax rules around electric vehicles as British carmakers deal with a new 25% US tariff on vehicles.

The prime minister said “global trade is being transformed” by President Trump’s actions.

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KPMG has warned tariffs on UK exports could see GDP growth fall to 0.8% in 2025 and 2026.

The accountancy firm said higher tariffs on specific categories, such as cars, aluminium and steel, would more than offset the exemption on pharmaceutical exports, leaving the effective tariff rate around 12%.

Yael Selfin, chief economist at KPMG UK, said: “Given the economic impact that tariffs would cause, there is a strong incentive to seek a negotiated settlement that diminishes the need for tariffs.

“The UK automotive manufacturing sector is particularly exposed given the complex supply chains of some producers.”

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Trump’s tariffs: A negotiating tactic or the start of an ‘economic nuclear winter’?

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Trump's tariffs: A negotiating tactic or the start of an 'economic nuclear winter'?

Traders called this morning a complete bloodbath as the UK’s FTSE 100 joined world indexes in turning red as uncertainty over Donald Trump’s tariffs continued to batter stock markets.

Across Asia and Europe, hundreds of billions have been wiped off companies’ values, particularly in banking and manufacturing.

The cause is not just the imposition of those tariffs (the largest the US has inflicted since the 1930s) and the very obvious drag this will have on global trade and growth, but also the uncertainty of ‘what next?’.

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Investors cannot work out if the Trump administration is genuinely wedded to tariffs on this scale, on the proviso that they will help re-shore companies and millions of jobs to the United States.

They don’t know if they are permanent or merely part of a negotiating tactic to address trade imbalances, and for America to use its economic heft to strike better deals.

If Mr Trump is open to deals (the first test comes later in a meeting with the Israeli prime minister), markets will calm, even if the midst of uncertainty hasn’t fully cleared.

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However, if this is a genuine rewiring of global trade and the end of globalisation as we know it, markets and economies will continue to get battered.

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As one Trump supporter, billionaire Bill Ackman – who opposes the tariffs – put it, President Trump has launched a “global economic war against the whole world” that will usher in an “economic nuclear winter.”

It’s time for all of us to buckle up.

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