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As Donald Trump kicks off his threatened trade war by slapping tariffs on both friends and foes alike, Number 10 is preparing for the moment he turns his attention to the UK.

The unpredictability of the returning president, emboldened by a second term, means the prime minister must plan for every possible scenario.

Under normal circumstances, the special relationship might be the basis for special treatment but the early signs suggest, maybe not.

Donald Trump and Keir Starmer.
Pic:Reuters
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Donald Trump and Keir Starmer. Pic: Reuters

It was never going to be an easy ride, with Sir Keir Starmer’s top team racking up years of insults against Trump when they were in opposition.

The bad feeling continued when Peter Mandelson was proposed as the UK’s new ambassador to the US – prompting speculation he might even be vetoed.

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Tariffs against Canada ‘will put US jobs at risk’

Amid all of this, the much-anticipated call between the two leaders seemed slow to take place, although it was cordial when POTUS finally picked up the phone last Sunday, with a trip to Washington to come “soon”.

It is against this slightly tense backdrop that the future of transatlantic trade will be decided, with Westminster braced for the impact of the president’s next move.

So, it’s unsurprising that as he waits, Sir Keir will spend the next few days resetting a different trading relationship – with Europe.

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Sky’s Ed Conway explains Donald Trump’s plan for tariffs

In this area, he is on slightly firmer ground, as the spectre of a global trade war makes European leaders want to huddle closer together to weather the storm.

And conversely, the Labour government’s track record works in their favour here, as they cash in their pro-EU credentials and wipe the slate clean after the bad-tempered Boris Johnson years.

Read more:
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Home secretary’s warning about recruiting from abroad

Ursula von der Leyen and  Keir Starmer address the media in Brussels.
Pic: Reuters
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Ursula von der Leyen and Keir Starmer address the media in Brussels in October. Pic: Reuters

It is still, however, an ambitious and risky endeavour to begin the delicate process of removing some of the most obstructive post-Brexit bureaucracy.

For minimal economic benefits on both sides, the UK must convince the Europeans that they are not letting Britain “have its cake and eat it”.

At the same time, Brexiteers back at home will cry betrayal at any hint that the UK is sneaking back into the bloc via the back door.

Donald Trump takes questions as he speaks to reporters.
Pic Reuters
Image:
Pic: Reuters

To make it even trickier, it must all be done with one eye on Washington, because while a united Europe may be necessary in the Trump era, the prime minister will not want to seem like he is picking sides so early on.

As with so many things in politics, it’s a delicate balancing act with the most serious of consequences, for a prime minister who is still to prove himself.

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Japan’s FSA backs joint stablecoin initiative by nation’s top banks

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Japan’s FSA backs joint stablecoin initiative by nation’s top banks

Japan’s financial regulator, the Financial Services Agency (FSA), endorsed a project by the country’s largest financial institutions to jointly issue yen-backed stablecoins.

In a Friday statement, the FSA announced the launch of its “Payment Innovation Project” as a response to progress in “the use of blockchain technology to enhance payments.” The initiative involves Mizuho Bank, Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, Mitsubishi Corporation and its financial arm and Progmat, MUFG’s stablecoin issuance platform.

The announcement follows recent reports that those companies plan to modernize corporate settlements and reduce transaction costs through a yen-based stablecoin project built on MUFG’s stablecoin issuance platform Progmat. The institutions in question serve over 300,000 corporate clients.

The regulator noted that, starting this month, the companies will begin issuing payment stablecoins. The initiative aims to improve user convenience, enhance Japanese corporate productivity and innovate the local financial landscape.

Related: Japan regulator proposes crypto rule overhaul in line with securities law

The participating companies are expected to ensure that users are protected and informed about the systems they use. “After the completion of the pilot project, the FSA plans to publish the results and conclusions,” the announcement reads.

The announcement follows the Monday launch of Tokyo-based fintech firm JPYC’s Japan-first yen-backed stablecoin, along with a dedicated platform. The company’s president, Noriyoshi Okabe, said at the time that seven companies are already planning to incorporate the new stablecoin.

Related: Japan’s finance Minister endorses crypto as portfolio diversifier

Japanese regulators focus on crypto

Recently, Japanese regulators have been hard at work setting new rules for the cryptocurrency industry. So much so that Bybit, the world’s second-largest crypto exchange by trading volume, announced it will pause new user registrations in the country as it adapts to the new conditions.

Local regulators seem to be opening up to the industry. Earlier this month, the FSA was reported to be preparing to review regulations that could allow banks to acquire and hold cryptocurrencies such as Bitcoin (BTC) for investment purposes.

At the same time, Japan’s securities regulator was also reported to be working on regulations to ban and punish crypto insider trading. Following the change, Japan’s Securities and Exchange Surveillance Commission would be authorized to investigate suspicious trading activity and impose fines on violators.