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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.

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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’s biggest housebuilders to pay record sum after CMA investigation into sensitive information-sharing

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UK's biggest housebuilders to pay record sum after CMA investigation into sensitive information-sharing

The UK’s biggest housebuilders are set to pay a record sum to fund affordable housing after the competition regulator investigated sensitive information sharing among the firms.

A total of £100m, paid for by seven companies, will go to affordable housing programmes across England, Scotland, Wales and Northern Ireland, following a Competition and Markets Authority (CMA) investigation.

The inquiry was launched last year due to concerns that the companies were sharing commercially sensitive information, which could influence the prices of new homes.

There was concern that the housebuilders – Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry – exchanged details about property sales, including pricing, viewing numbers and buyer incentives such as upgraded kitchens or stamp duty contributions.

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It’s resulted in an agreement to make the combined £100m payment – the largest secured via a commitment from companies under CMA investigation. Hundreds of new homes could be funded with the money, the CMA said, helping low-income households, first-time buyers and vulnerable people.

The businesses have voluntarily agreed to pay the sum and have not acknowledged wrongdoing. No finding of rule-breaking or illegality has been made.

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What next?

They have also offered to sign up to legally binding commitments to prevent anticompetitive behaviour.

Among the proposals advanced by the companies was an agreement not to share some information, like prices houses were sold for, with other housebuilders, except in limited circumstances, and to work with the Home Builders Federation and Homes for Scotland to develop industry-wide guidance on information sharing.

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The CMA has said it will consult on the changes.

If accepted, the commitments will become legally binding, and the CMA will not need to decide whether the housebuilders broke competition law.

Initially, eight companies were under investigation, but following a merger of Barratt Homes and Redrow, the number became seven.

“Housing is a critical sector for the UK economy and housing costs are a substantial part of people’s monthly spend, so it’s essential that competition works well. This keeps prices as low as possible and increases choice,” the CMA chief executive, Sarah Cardell, said.

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At least 13 people may have taken their own lives linked to Post Office scandal, public inquiry finds

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At least 13 people may have taken their own lives linked to Post Office scandal, public inquiry finds

At least 13 people 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”.

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‘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.”

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Public finances in ‘relatively vulnerable position.’, OBR warns

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Public finances in 'relatively vulnerable position.', OBR warns

The UK’s public finances are in a “relatively vulnerable position”, the government’s official forecaster has warned.

The Office for Budget Responsibility (OBR) cited a drag from successive economic shocks, recent U-turns on spending cuts and higher-than-expected policy commitments.

It sounded alarm over the projected path for debt as a result, in its annual fiscal risks and sustainability report.

It saw total debt above 270% of gross domestic product (GDP) by the early 2070s – up from a current level of 96.5% – declaring that rising debts have led to “a substantial erosion of the UK’s capacity to respond to future shocks”.

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The OBR’s report highlighted damage from the COVID pandemic and cost of living crisis that followed Russia’s invasion of Ukraine.

But it raised fears that past and current government policies were further harming the sustainability of the public finances.

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The report said that the pension triple lock, for example, was now estimated to cost £15.5bn annually by 2029-30.

That was “around three times higher than initial expectations”, it said.

The lock, which rises each year in line with inflation, wage growth or 2.5% – whichever is higher – had risen by more than the 2.5% base in eight of the 13 years of operation to date, the report stated.

The watchdog said it reflected more volatile inflation than expected.

It also picked up on the latest government U-turns over planned welfare and winter fuel payment cuts in the face of rebellions by Labour MPs.

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Welfare U-turn ‘has come at cost’

The decisions are expected to leave Chancellor Rachel Reeves facing a black hole of £6.75bn while weaker-than-expected economic growth could add a further £9bn to that sum in the run-up to the autumn budget, according to Sky News projections that see a void of around £20bn.

The OBR highlighted future risks from rising defence spending and the impact of climate change.

Public sector pay demands could also prove a drag, with resident doctors voting in favour of strikes over pay.

While ministers acknowledge damage to the public purse from the U-turns, Ms Reeves has repeatedly ruled out a new wave of borrowing to fund a spending spree.

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Could the rich be taxed to fill black hole?

As such, the government has not ruled out the prospect of some form of wealth tax to help meet its commitments despite the top 1% of earners contributing almost a third of all income tax already – on top of other targeted taxes such as capital gains.

The report said: “Efforts to put the UK’s public finances on a more sustainable footing have met with only limited and temporary success in recent years in the aftermath of the shocks, debt has also continued to rise and borrowing remained elevated because governments have reversed plans to consolidate the public finances.

“Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned.”

Shadow chancellor Mel Stride said of the report: “The OBR’s report lays bare the damage: Britain now has the third-highest deficit and the fourth-highest debt burden in Europe, with borrowing costs among the highest in the developed world.

“Under Rachel Reeves’ economic mismanagement and Keir Starmer’s weak leadership, our public finances have become dangerously exposed – vulnerable to future shocks, welfare spending rising unsustainably, taxes rising to record highs and crippling levels of debt interest.

“Labour’s recklessness risks it all – your pension, your job, your home, your savings.”

A Number 10 spokesman said: “We recognise the realities set out in the OBR’s report and we’re taking the decisions needed to provide stability to the public finances.”

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