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Donald Trump briefly threatened to escalate his trade war with Canada by doubling his planned tariffs on its steel and aluminium from 25% to 50%.

The US president stepped back from his order after the provincial government of Ontario rowed back on a plan to charge 25% more for electricity it supplies to over 1.5 million American homes and businesses.

Canada’s most populous province provides electricity to Minnesota, New York and Michigan.

As a result, White House trade adviser Peter Navarro said Mr Trump would not double steel and aluminium tariffs – but the federal government still plans to place a 25% tariff on all steel and aluminium imports from Wednesday.

Donald Trump with Elon Musk in a Tesla after he promised to buy one of the electric cars. Pic: Reuters
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Donald Trump with Elon Musk in a Tesla after he promised to buy one of the electric cars. Pic: Reuters

Ontario’s response

In his initial response to Mr Trump’s threat, Ontario’s premier Doug Ford said he would not back down until the US leader’s tariffs on Canadian imports were “gone for good”.

But he later suspended the change temporarily, saying “cooler heads need to prevail” and he was confident the US president would also stand down on his plans.

Meanwhile, Canada’s incoming prime minister Mark Carney said he will keep other tariffs in place until Americans “show respect” and commit to free trade.

Mr Carney called the new tariffs threatened by Mr Trump an “attack” on Canadian workers, families and businesses.

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‘Canada will win’, country’s next prime minister says

Why is Trump threatening tariffs?

A worldwide 25% tariff on steel and aluminium is due to come into effect on Wednesday as a way to kickstart US domestic production.

Separate tariffs on goods from Mexico and Canada covered by a previous trade agreement (the US Mexico Canada, or USMCA deal) were delayed by a month to 2 April.

President Trump seems to bear a particular grudge against Canada because of what he sees as rampant fentanyl smuggling and high Canadian taxes on dairy imports, which penalise US farmers.

He has called for Canada to become part of the United States as its “cherished 51st state” as a solution, which has angered Canadian leaders.

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What’s the impact of US tariffs?

Economic impact

Mr Trump’s turnaround comes after markets fell in response to his threat of doubling tariffs.

The stock market has fallen over the last two weeks and Harvard University economist Larry Summers put the odds of a recession at 50-50.

“All the emphasis on tariffs and all the ambiguity and uncertainty has both chilled demand and caused prices to go up,” the former treasury secretary for the Clinton administration posted on X on Monday.

“We are getting the worst of both worlds – concerns about inflation and an economic downturn and more uncertainty about the future and that slows everything.”

Investment bank Goldman Sachs revised down its growth forecast for this year from 2.2% to 1.7% and moderately increased its recession probability to 20% “because the White House has the option to pull back policy changes if downside risks begin to look more serious”.

Mr Trump has tried to reassure the American public that his tariffs will cause a bit of a “transition” to the economy as taxes spur more companies to begin the years-long process of relocating factories to the US to avoid tariffs.

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Trump refuses to rule out recession

Mr Trump did not rule out the possibility of a recession during an interview with Fox News on Sunday, where he said: “I hate to predict things like that.”

On Tuesday, he was asked about a potential recession and said “I don’t see it at all” and claimed the US is “going to boom”.

On Monday, the S&P 500 stock index fell 2.7% and on Tuesday it was around 10% below its record set last month.

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Aberdeen in exclusive talks to sell investment tips site Finimize

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Aberdeen in exclusive talks to sell investment tips site Finimize

Aberdeen is in exclusive talks to sell Finimize, the investment insights platform it bought just four years ago, as its new chief executive unwinds another chunk of his predecessor’s legacy.

Sky News understands the FTSE-250 asset management group has narrowed its search for a buyer for Finimize to a single party.

The exclusive talks with the buyer – whose identity was unclear on Sunday – have been ongoing for at least a month, according to insiders.

City sources said Brave Bison, the London-listed marketing group that operates a number of community-based businesses, was among the parties that had previously held talks with Aberdeen about a deal.

Finimize charges an annual subscription fee for investment tips, and had more than one million subscribers to its newsletter at the time of Aberdeen’s £87m purchase of the business.

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The sale of Finimize would represent another step in chief executive Jason Windsor’s reshaping of the company, which now has a market capitalisation of £3.6bn.

Mr Windsor, who replaced Steven Bird last year, also ditched the company’s much-ridiculed Abrdn branding, with the group having been formed in 2017 from the merger of Aberdeen Asset Management and Standard Life.

Investors were left underwhelmed by the merger, which originally valued the enlarged company at about £11bn.

On Friday, Aberdeen shares closed at 194.7p, up 30% during the last year.

Aberdeen declined to comment.

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City veteran Kheraj in contention to chair banking giant HSBC

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City veteran Kheraj in contention to chair banking giant HSBC

Naguib Kheraj, the City veteran, has been shortlisted to become the next chairman of HSBC Holdings, Europe’s biggest bank.

Sky News can reveal that Mr Kheraj, a former Barclays finance chief, is among a small number of contenders currently being considered to replace Sir Mark Tucker.

HSBC, which has a market capitalisation of £165.4bn, has been conducting a search for Sir Mark’s successor since the start of the year.

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In June, Sky News revealed that the former McKinsey boss Kevin Sneader was among the candidates being considered to lead the bank, although it was unclear this weekend whether he remained in the process.

Mr Kheraj would, in many respects, be seen as a solid choice for the job.

He is familiar with HSBC’s core markets in Asia, having spent several years on the board of Standard Chartered, the FTSE-100 bank, latterly as deputy chairman.

He also possesses extensive experience as a chairman, having led the privately held pensions insurer Rothesay Life, while he now chairs Petershill Partners, the London-listed private equity investment group backed by Goldman Sachs.

Mr Kheraj’s other interests have included acting as an adviser to the Aga Khan Development Board and The Wellcome Trust, as well as the Financial Services Authority.

He spent 12 years at Barclays, holding board roles for much of that time, before he went on to become chief executive of JP Morgan Cazenove, the London-based investment bank.

HSBC’s shares have soared over the last year, rising by close to 50%, despite the headwinds posed by President Donald Trump’s sweeping global tariffs regime.

In June, the bank said that Sir Mark would be replaced on an interim basis by Brendan Nelson, one of its existing board members, while it continued the search for a permanent successor.

Ann Godbehere, HSBC’s senior independent director, said at the time: “The nomination and corporate governance committee continues to make progress on the succession process for the next HSBC group chair.

“Our focus is on securing the best candidate to lead the board and wider group over the next phase of our growth and development.”

Sky News revealed late last year that MWM, the headhunter founded by Anna Mann, a prominent figure in the executive search sector, was advising HSBC on the process.

Since then, at least one other firm has been drafted in to work on the mandate.

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Sir Mark, who has chaired HSBC since 2017, steps down at the end of next month to become non-executive chair of AIA, the Asian insurer he used to run.

He will continue to advise HSBC’s board during the hunt for his long-term successor.

As a financial behemoth with deep ties to both China and the US, HSBC is deeply exposed to escalating trade and diplomatic tensions between the two countries.

When he was appointed, Mr Tucker became the first outsider to take the post in the bank’s 152-year history – which has a big presence on the high street thanks to its acquisition of the Midland Bank in 1992.

He oversaw a rapid change of leadership, appointing bank veteran John Flint to replace Stuart Gulliver as chief executive.

The transition did not work out, however, with Mr Tucker deciding to sack Mr Flint after just 18 months.

He was replaced on an interim basis by Noel Quinn in the summer of 2018, with that change becoming permanent in April 2020.

Mr Quinn spent a further four years in the post before deciding to step down, and in July 2024 he was succeeded by Georges Elhedery, a long-serving executive in HSBC’s markets unit, and more recently the bank’s chief financial officer.

The new chief’s first big move in the top job was to unveil a sweeping reorganisation of HSBC that sees it reshaped into eastern markets and western markets businesses.

He also decided to merge its commercial and investment banking operations into a single division.

The restructuring, which Mr Elhedery said would “result in a simpler, more dynamic, and agile organisation” has drawn a mixed reaction from analysts, although it has not interrupted a strong run for the stock.

During Sir Mark’s tenure, HSBC has also continued to exit non-core markets, selling operations in countries such as Canada and France as it has sharpened its focus on its Asian businesses.

On Friday, HSBC’s London-listed shares closed at 946.7p.

HSBC has been contacted for comment.

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Bank shares take fright as budget tax hike is floated

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Bank shares take fright as budget tax hike is floated

Shares in UK banks have fallen sharply on the back of a report which urges the chancellor to place their profits in her sights at the coming budget.

As Rachel Reeves stares down a growing deficit – estimated at between £20bn-£40bn heading into the autumn – the Institute for Public Policy Research (IPPR) said there was an opportunity for a windfall by closing a loophole.

It recommended a new levy on the interest UK lenders receive from the Bank of England, amounting to £22bn a year, on reserves held as a result of the Bank’s historic quantitative easing, or bond-buying, programme.

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It was first introduced at the height of the financial crisis, in 2009.

The left-leaning think-tank said the money received by banks amounted to a subsidy and suggested £8bn could be taken from them annually to pay for public services.

It argued that the loss-making scheme – a consequence of rising interest rates since 2021 – had left taxpayers footing the bill unfairly as the Treasury has to cover any loss.

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Why taxes might go up

The Bank recently estimated the total hit would amount to £115bn over the course of its lifetime.

The publication of the report coincided with a story in the Financial Times which spoke of growing fears within the banking sector that it was firmly in the chancellor’s sights.

Her first budget, in late October last year, put businesses on the hook for the bulk of its tax-raising measures.

Ms Reeves is under pressure to find more money from somewhere as she has ruled out breaking her own fiscal rules to help secure the cash she needs through heightened borrowing.

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Is Labour plotting a ‘wealth tax’?

Other measures understood to be under consideration include a wealth tax, new property tax and a shake-up that could lead to a replacement for council tax.

Analysts at Exane told clients in a note: “In the last couple of years, the chancellor has been protective of the banks and has avoided raising taxes.

“However, public finances may require additional cash and pressures for a bank tax from within the Labour party seem to be rising,” it concluded.

The investor flight saw shares in Lloyds and NatWest plunge by more than 5%. Those for Barclays were more than 4% lower at one stage.

A spokesperson for the Treasury said the best way to strengthen public finances was to speed up economic growth.

“Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms,” they added.

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