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Few materials matter quite as much as steel and aluminium.

Steel, an alloy of iron and carbon, is the main metallic ingredient in the structures we live in and the bridges we build. If it’s not made of steel it’s made with steel.

Aluminium, on the other hand, is a wonder material we use with wild abandon these days. A light metal we use in planes and trains, in the bodies of electric vehicles and in those high voltage power lines we’ll need so many of to provide electricity in the coming years.

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Prices to rise for planes, trains and automobiles

All of which is to say these metals are the bedrock for much of the world around us. And like most developed economies, the US is far from independent when it comes to these materials. The degree of dependence on other countries varies between them.

According to the US Geological Survey, America’s “net import reliance ratio” for aluminium is close to 50%, implying it is deeply dependent on imports to satisfy demand among its companies. The degree of dependence is considerably lower for steel – only a little over 10%.

At least part of the idea behind tariffs is to bring some production back to the US, but imposing them will have consequences.

Molten aluminium is poured on the day of the completion of a 330 million pound deal to buy Britain's last remaining Aluminium smelter in Fort William Lochaber Scotland, Britain December 19, 2016.
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Molten aluminium. Pic: Reuters

What kinds of consequences? Well, at its simplest, tariffs push up prices. This is, when you think about it, blindingly obvious. A tariff is a tax on a good entering the country. So if aluminium and steel are going up in price then that means, all else equal, that the cost of making everything from aircraft wings to steel rivets also goes up. That in turn means consumers end up paying the price – and if a company can’t make ends meet in the face of these tariffs, it means job losses – possibly within the very industrial sectors the president wants to protect.

Donald Trump stands on stage with steelworkers as he speaks at a campaign rally in Pennsylvania. Pic: AP
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Donald Trump stands on stage with steelworkers as he speaks at a campaign rally in Pennsylvania during the US election. Pic: AP

So says the economic theory. But in practice, economics isn’t everything. There are countless examples throughout history of countries defying economic logic in search of other goals. Perhaps they want to improve their national self-reliance in a given product; perhaps they want to ensure certain jobs in cherished areas or industries are protected. But nothing comes for free, and even if Donald Trump‘s tariffs succeed in persuading domestic producers to smelt more aluminium or steel, such things don’t happen overnight. In the short run, it’s hard to see how these tariffs wouldn’t be significantly inflationary.

Donald Trump spoke to reporters on Air Force One: Reuters
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Donald Trump on Air Force One: Reuters

There’s a deeper issue here, which comes back (as so many of Mr Trump’s economic measures do) to China. Both the steel and aluminium markets have faced enormous influxes of cheap Chinese metals in recent years – to the extent that in recent months those Chinese imports have actually been cheaper than the cost of production in Europe.

To some extent, that’s a consequence of high European energy costs, but it’s partly down to the fact that China subsidises its producers more than most other countries around the world. Indeed, of all the products in the world, few have had as many cases lodged at the World Trade Organisation as steel.

Read more:
Why China could benefit most from Trump’s tariffs
Tax hikes and financial gloom ‘acting as brakes’ on jobs

Donald Trump shakes hands with China's President Xi Jinping during a meeting on the sidelines of the G-20 summit in 2019. Pic: AP
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Donald Trump shakes hands with China’s President Xi Jinping in 2019 – as in his first term, many of his policies focus on China. Pic: AP

But while it’s worth being aware of these dynamics, which are pushing cheap steel into many markets, it’s also worth noting that the US actually imports far less from China than you might have thought. The vast majority of American aluminium imports, for instance, come from Canada rather than China. Any tariffs on the metal would further undermine the economic relationship between these parts of North America.

Much, of course, now depends on the structure and detail of these tariffs – and the extent to which they’re actually implemented. As with his threatened tariffs on Canada and Mexico, these ones raise as many questions as they answer. That is likely to be the way of things for much of this presidential term.

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UK to miss deadline to agree steel and aluminium tariffs

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UK to miss deadline to agree steel and aluminium tariffs

The UK will miss the White House-imposed deadline to agree a trade deal on steel and aluminium this week, according to insiders from government and industry.

Donald Trump had insisted that unless Britain could finalise the details of its metals trade deal with the US by 9 July, he would raise the tariffs faced by steel and aluminium imports from the 25% the UK currently pays to the 50% paid by other countries. If it could seal the deal, those tariffs could drop to zero.

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However, despite weeks of negotiations and promises that the deal would be completed by the end of June, talks have foundered on two key issues. First, the US is insisting that only steel “melted and poured” in the UK (in other words, forged in blast furnaces or electric arc furnaces) can be included in the deal. However, one of Britain’s biggest steel exporters to the US, Tata Steel, is not melting and pouring its UK steel because of the closure of its blast furnaces.

Second, the US is wary of the fact that while the government has taken control of British Steel, which operates Britain’s last remaining blast furnaces in Scunthorpe, the company itself still legally has Chinese owners.

Government insiders have told businesses they still expect to have a deal done by the end of this month, and that they are confident the White House will not impose the 50% tariffs for the time being. They say one of the chief challenges they face is that the administration is so overwhelmed by attempts to negotiate with other countries that they lack the bandwidth to deal with the small print on Britain’s deal.

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Inside the UK’s last blast furnaces

“As far as the Americans are concerned, the UK is already a done deal,” said one person close to the negotiations. The problem is that while a deal has been done on car and aerospace exports to the US, the metals element of the trade agreement is still some way from being signed. In the meantime, steel exports continue to incur tariffs – albeit lower than those imposed on other countries around the world.

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At least 13 postmasters may have taken their own lives, public inquiry into Post Office scandal finds

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At least 13 postmasters may have taken their own lives, public inquiry into Post Office scandal finds

At least 13 postmasters may have taken their own lives after being accused of wrongdoing based on evidence from the Horizon IT system that the Post Office and developers Fujitsu knew could be false, the public inquiry has found.

A further 59 people told the inquiry they considered ending their lives, 10 of whom tried on at least one occasion, while other postmasters and family members recount suffering from alcoholism and mental health disorders including anorexia and depression, family breakup, divorce, bankruptcy and personal abuse.

Follow latest on public inquiry into Post Office scandal

Writing in the first volume of the Post Office Horizon IT Inquiry report, chairman Sir Wyn Williams concludes that this enormous personal toll came despite senior employees at the Post Office knowing the Horizon IT system could produce accounts “which were illusory rather than real” even before it was rolled out to branches.

Sir Wyn said: “I am satisfied from the evidence that I have heard that a number of senior, and not so senior, employees of the Post Office knew or, at the very least, should have known that Legacy Horizon was capable of error… Yet, for all practical purposes, throughout the lifetime of Legacy Horizon, the Post Office maintained the fiction that its data was always accurate.”

Referring to the updated version of Horizon, known as Horizon Online, which also had “bugs errors and defects” that could create illusory accounts, he said: “I am satisfied that a number of employees of Fujitsu and the Post Office knew that this was so.”

The first volume of the report focuses on what Sir Wyn calls the “disastrous” impact of false accusations made against at least 1,000 postmasters, and the various redress schemes the Post Office and government has established since miscarriages of justice were identified and proven.

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‘It stole a lot from me’

Recommendations regarding the conduct of senior management of the Post Office, Fujitsu and ministers will come in a subsequent report, but Sir Wyn is clear that unjust and flawed prosecutions were knowingly pursued.

“All of these people are properly to be regarded as victims of wholly unacceptable behaviour perpetrated by a number of individuals employed by and/or associated with the Post Office and Fujitsu from time to time and by the Post Office and Fujitsu as institutions,” he says.

What are the inquiry’s recommendations?

Calling for urgent action from government and the Post Office to ensure “full and fair compensation”, he makes 19 recommendations including:

• Government and the Post Office to agree a definition of “full and fair” compensation to be used when agreeing payouts
• Ending “unnecessarily adversarial attitude” to initial offers that have depressed the value of payouts, ⁠and ensuring consistency across all four compensation schemes
• The creation of a standing body to administer financial redress to people wronged by public bodies
• Compensation to be extended to close family members of those affected who have suffered “serious negative consequences”
• The Post Office, Fujitsu and government agreeing a programme for “restorative justice”, a process that brings together those that have suffered harm with those that have caused it

Regarding the human impact of the Post Office’s pursuit of postmasters, including its use of unique powers of prosecution, Sir Wyn writes: “I do not think it is easy to exaggerate the trauma which persons are likely to suffer when they are the subject of criminal investigation, prosecution, conviction and sentence.”

He says that even the process of being interviewed under caution by Post Office investigators “will have been troubling at best and harrowing at worst”.

Read more:
Post Office inquiry lays bare heart-breaking legacy – analysis

‘Hostile and abusive behaviour’

The report finds that those wrongfully convicted were “subject to hostile and abusive behaviour” in their local communities, felt shame and embarrassment, with some feeling forced to move.

Detailing the impact on close family members of those prosecuted, Sir Wyn writes: “Wives, husbands, children and parents endured very significant suffering in the form of distress, worry and disruption to home life, in employment and education.

“In a number of cases, relationships with spouses broke down and ended in divorce or separation.

“In the most egregious cases, family members themselves suffered psychiatric illnesses or psychological problems and very significant financial losses… their suffering has been acute.”

The report includes 17 case studies of those affected by the scandal including some who have never spoken publicly before. They include Millie Castleton, daughter of Lee Castleton, one of the first postmasters prosecuted.

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Three things you need to know about Post Office report

She told the inquiry how her family being “branded thieves and liars” affected her mental health, and contributed to a diagnosis of anorexia that forced her to drop out of university.

Her account concludes: “Even now as I go into my career, I still find it so incredibly hard to trust anyone, even subconsciously. I sabotage myself by not asking for help with anything.

“I’m trying hard to break this cycle but I’m 26 and am very conscious that I may never be able to fully commit to natural trust. But my family is still fighting. I’m still fighting, as are many hundreds involved in the Post Office trial.”

Business Secretary Jonathan Reynolds said the inquiry’s report “marks an important milestone for sub-postmasters and their families”.

He added that he was “committed to ensuring wronged sub-postmasters are given full, fair, and prompt redress”.

“The recommendations contained in Sir Wyn’s report require careful reflection, including on further action to complete the redress schemes,” Mr Reynolds said.

“Government will promptly respond to the recommendations in full in parliament.”

Post Office minister Gareth Thomas said, “Sir Wyn’s report highlights a series of failings by the Post Office and various governments. His recommendations are immensely helpful as a guide for what is needed to finish the job”.

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Cyber attack on M&S involved ‘sophisticated impersonation’, chairman says

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Cyber attack on M&S involved 'sophisticated impersonation', chairman says

The chairman of Marks & Spencer has told MPs the company is “still in the rebuild mode” and will be for “some time to come” following a cyber attack which led to empty shelves and limited online operations for months.

Speaking publicly for the first time since the attack, Archie Norman declined to answer whether the business had paid a ransom.

“It’s a business decision, it’s a principal decision,” he told members of the Business and Trade Committee (BTC).

“The question you have to ask is – and I think all businesses should ask – is, when they look at the demand, what are they getting for it?

“Because once your systems are compromised and you’re going to have to rebuild anyway, maybe they’ve got exfiltrated data that you don’t want to publish. Maybe there’s something there, but in our case, substantially the damage had been done.”

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When asked again later in the BTC evidence session, Mr Norman said, “We’re not discussing any of the details of our interaction with the threat actor, including this subject, but that subject is fully shared with the NCA [National Crime Agency].”

“We don’t think it’s in the public interest to go into that subject on it, because it is a matter of law enforcement”, he added.

What happened?

The initial entry into M&S’s systems took place on 17 April through “sophisticated impersonation” that involved a third party, Mr Norman said.

It was two days later, on Easter Saturday, before the company became aware of the attack, and approximately a week after the intrusion, before the retailer heard directly from the attacker.

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Who is behind M&S cyberattack?

A day later, after learning of the attack, the authorities were notified, while customers were told on Tuesday, MPs heard.

As well as British authorities, the US FBI was contacted, who are “more muscled up in this zone” and were “very supportive”, Mr Norman said.

By the time the breach is clear, systems have already been compromised, the chairman said.

The group behind the attack may have been Scattered Spider, some of whom are believed to be English-speaking teenagers, but Mr Norman said M&S made an early decision that no one from the company would deal directly with the so-called “threat actor”.

“Anybody who’s suffered an event like ours, it would be foolish to say there’s not a thousand things you’d like to have done differently,” he added.

Advice for businesses

In a warning to other businesses, M&S’s general counsel and company secretary Nick Folland said firms should be prepared to operate without IT systems.

“One of the things that we would say to others is make sure you can run your business on pen and paper,” he said.

Awareness and planning for the threats of cybersecurity meant M&S had trebled the number of people working on cybersecurity to 80and doubled its expenditure.

“We curiously doubled our insurance cover last year”, Mr Norman added.

In a good position

The business was better positioned to deal with the strike than at the start of Mr Norman’s tenure, he said.

“The context of M&S is when I joined the business, it was a very broken business… our systems were in a pretty decrepit state.”

“So I have to say if this has happened then I think we would have been kippered.”

Read more:
UK to miss deadline to agree steel and aluminium tariffs
Flavour of what’s to come as first Post Office inquiry lays bare heart-breaking legacy

Recent profits meant the company was “muscled up”.

“Extensive” insurance cover means M&S expects to make an “unsurprisingly significant claim” and receive “substantial recovery”, though the process of finding out how much will take about 18 months.

The £300m sum M&S said it expected to lose as a result of the cyber attack does not include money it expects to claim via insurance. The financial hit was calculated at £300m as the chain department store was losing £10m a week by not operating online.

The incident has “not really” affected its future, Mr Norman said.

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