We all know Donald Trump loves a tariff. Not long ago he said it was his favourite word in the English language.

But one thing that might perplex people somewhat is why he is quite so keen on imposing tariffs on Mexico and Canada. After all, in his first term, his main focus when it came to trade was China.

It was under Donald Trump that swingeing new tariffs were imposed on China and Vietnam (often seen as a backdoor conduit for Chinese goods). Canada and Mexico, on the other hand, got a brand new trade deal to take the place of the long-standing NAFTA agreement.

Money blog: Wine could be more expensive to buy tomorrow

So what changed? While the president has talked repeatedly about how the tariffs will deter Mexico and Canada from sending opioids into the US, a more compelling explanation comes when you look at the American trade data.

There you see that since those tariffs were imposed in his first term, imports from China to the US have fallen quite considerably. Meanwhile, imports from Mexico and Canada have risen sharply, with Mexico now overtaking China as the biggest importer into the US.

If there’s one thing Donald Trump hates, about as much as he loves tariffs, it’s trade deficits – where you import more goods from a country than you export. Economists see deficits as an inevitable function of being a modern developed economy; Trump sees them as a kind of punishment – a subsidy for foreign countries.

Trump’s odd way of looking at the world

This is, to put it lightly, an odd way of looking at the world. While there are very legitimate concerns about the structure of the US economy, its inability to build its manufacturing sector and the impact of Chinese manufacturing overcapacity on the rest of the world, seeing all deficits as inherently bad is bizarre. Nonetheless, if you view the world that way, you won’t like the look of the US trade position with Mexico.

Look at those numbers and you see that the trade deficit has ballooned in recent years – and not just because of America sucking up lots of Mexican oil. The US is also importing far more cars from Mexico than it sends there.

That is, to a large extent, a function of that free trade deal, which has encouraged car manufacturers (including some American manufacturers) to assemble their cars in Mexico. However, there are also suspicions that the Mexican deficit with the US is, to some extent, a function of the way the global trading system has shifted in the past half-decade.

👉 Listen to Sky News Daily on your podcast app 👈

Where once goods would flow directly from China to the US, there’s evidence to suggest many of them are instead flowing, mostly in the form of components, to “third countries”, including Mexico, and then being assembled into finished products and sent into the US. And this process might accelerate in the coming years.

Read more:
British businesses stop shipping to Northern Ireland
Muslim charities still being debanked despite Farage furore

Look at the number of cars flowing from China to Mexico in recent years and it’s rising rapidly.

All of which is to say, there are some intriguing dynamics in international trade which have raised eyebrows in the White House.

What’s going to happen?

What would the impact of tariffs be? Well, most economic models suggest they would lift inflation and reduce economic growth. In short, they would be bad – especially if levied on nearly all goods.

But, this being Donald Trump, there are still big questions about precisely how these tariffs would actually be applied. The past few weeks have been chaotic for the normally dull world of trade economics. The coming years will be more chaotic still.

A group of technology billionaires including the bosses of Google and Microsoft have triumphed in an auction of the Lords-based London Spirit cricket team in a deal which will set a record benchmark for the sale of a sporting franchise.

Sky News can exclusively reveal that the consortium led by Nikesh Arora, the chief executive of Palo Alto Networks, and including Google’s Sundar Pichai and Microsoft’s Satya Nadella, saw off fierce competition during a live auction conducted by the England and Wales Cricket Board on Friday afternoon.

The deal dwarfs a £123m transaction struck on Thursday for the Oval Invincibles franchise by the ultra-rich Ambani family, and means the ECB will receive proceeds from London Spirit of about £145m.

That will take the total proceeds to the ECB – for distribution throughout the sport – after three of the eight franchise sales to close to £250m.

Money blog: Cheap supermarket tea beats Yorkshire

The blockbuster price underscores the intensity of the bidding for the most prestigious name in the Hundred tournament, allied to Lords’ enormous sporting heritage.

One source said the deal represented a world record for the price it attached to London Spirit as a multiple of the asset’s five-year forward profit projections.

Other investors in the winning consortium are said to include Egon Durban, co-chief executive of Silver Lake, the west coast-based private equity backer of New Zealand Rugby and the RAC breakdown recovery service.

The other bidders in the London Spirit process were a vehicle controlled by Todd Boehly, a shareholder in Chelsea Football Club; members of the Manchester United-owning Glazer family; and RPSG Group, the owner of the Indian Premier League team Lucknow Super Giants.

RPSG Group and the tech billionaires are understood to have engaged in a bidding war for nearly three hours before the latter group won, according to insiders.

The ECB’s stake in Birmingham Phoenix was sold to the owners of Birmingham City Football Club, Knighthead Capital, on Thursday in a deal worth over £80m.

Stakes in Northern Superchargers and Southern Brave, among others, will be auctioned next week.

Under the ECB’s plans, it intends to sell its 49% holding in each of the eight teams with the counties left to decide whether they wish to offload any of their 51% stakes.

The price of London Spirit means the ECB’s original financial projections will be blown out of the water, with the three franchises sold to date valued in aggregate at around £500m.

Bidders in auctions with at least three participants are able to submit binding offers at 15-minute intervals, and in increments of at least £3m.

Losing bidders in each franchise may be given the opportunity to participate in the remaining processes, although the mechanics of such a scenario were unclear on Wednesday.

For franchises with only two shortlisted bidders, the auction will involve a straightforward sealed bid shootout.

The proceeds will be distributed between the hosts, non-host counties and the grassroots game.

A bigger-than-expected windfall from the process could offer a financial lifeline to a number of cash-strapped counties, with part of the proceeds likely to be used to pay down debt.

Concerns have been raised, however, that windfalls from the Hundred auction will not deliver a meaningful improvement in counties’ long-term financial sustainability.

The outcome of the Hundred auction is also likely to intensify other searching questions about the future of cricket, as the Test format of the game struggles for international commercial relevance against shorter-length competition.

The Hundred auction is being handled by bankers at Raine Group, the same firm which oversaw the sale of large stakes in both Manchester United and Chelsea in recent years.

The ECB declined to comment.

The UK’s benchmark stock index has reached another all-time high, in a month of record breaking.

The FTSE 100 index of most valuable companies on the London Stock Exchange closed at 8,666.65, breaking the record set on Thursday night after four consecutive days of rises.

January has been the best month in more than two years for the FTSE 100.

Money blog: Cheap supermarket tea beats Yorkshire to be named tastiest

Not since November 2022, during a stock market rebound after the Liz Truss’s mini-budget, has the top flight index performed so well.

It comes as investors have looked to move away from tech stocks after new Chinese artificial intelligence chatbot Deepseek proved such technology can be created with less investment and more quickly than its US rivals.

Those companies developing AI had soared in value in recent years.

Read more:
British businesses stop shipping to Northern Ireland
Muslim charities still being debanked despite Farage furore

But the multinational mining and oil and gas companies that make up the FTSE 100 benefitted from that move to shelter.

Also behind the latest record high are the market expectations for more interest rate cuts in 2025, something which would make borrowing cheaper and likely kickstart spending. Three rate cuts are now expected this year.

A series of record-breaking closes were recorded in mid-January after a weak pound made buying shares with sterling cheaper. The cheaper cost increased demand and boosted share prices.

What is the FTSE 100?

The index is made up of many mining and international oil and gas companies, as well as UK banks and supermarkets. Familiar to a UK audience are lenders such as Barclays, Natwest, HSBC and Lloyds and supermarket chains Tesco, Marks & Spencer and Sainsbury’s.

Other well-known names include Rolls-Royce, Unilever, easyJet, BT Group and Next.

FTSE stands for Financial Times Stock Exchange.

If a company’s share price drops significantly it can slip outside of the FTSE 100 and into the larger and more UK-based FTSE 250 index.

The inverse works for the FTSE 250 companies, the 101st to 250th most valuable firms on the London Stock Exchange. If their share price rises significantly they could move into the FTSE 100.

It wasn’t just the FTSE 100 that did well, the latest record is part of a broader gain for European stock markets.