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Today’s agenda: Deutsche Bank faces €152mn lawsuit; Dimon backs Powell; FT investigation on US detention facilities; Trump’s $50bn tariff haul; and UK Afghan files leak
Good morning. We start in Brussels, where the European Commission is trying to win France’s backing for a trade deal with the Mercosur bloc of South American economies.
Why was France opposed? Paris has claimed the deal would cause environmental damage and subject EU farmers to unfair competition. France has a powerful farming lobby, and is backed in its criticism of the deal by Poland, Austria and other countries that fear for their agricultural sectors.
What is Brussels proposing? A “political protocol” that spells out “circuit breakers” to protect EU producers should imports of some products breach certain limits. The safeguards would apply to the volume and prices of beef, chicken and sugar, officials familiar with the talks told the Financial Times.
What’s at stake? The deal would create a shared market of 700mn consumers by combining the EU with Brazil, Argentina, Uruguay and Paraguay. Two decades in the making, the agreement is part of a renewed push in Brussels to diversify its trade partnerships, fuelled by the return of Donald Trump as US president and his protectionist worldview.
Here are more details on the deal, which the EU hopes to finalise by December.
‘Made in Europe’: The European Commission will propose that fruit, vegetables and milk in schools should be produced in the region as part of a wider push to favour domestic industries.
Here’s what else we’re keeping tabs on today:
Economic data: The Federal Reserve publishes its Beige Book on economic conditions across the US while the UK releases its consumer price index.
US banks: Goldman Sachs, Morgan Stanley and Bank of America report earnings, after JPMorgan Chase and Citigroup struck an upbeat tone on American consumer spending yesterday.
Five more top stories
1. Trump has pledged billions of dollars in energy and AI investments in Pennsylvania, as he sought to deliver on his economic promises and turn around his faltering approval rating. Speaking at a business event in the battleground state, the US president also promised speedy permits for electric plants and “lots of jobs”.
2. Exclusive: Deutsche Bank chief executive Christian Sewing has become embroiled in a €152mn lawsuit that alleges he was involved in a decade-old cover-up of financial crisis-era transactions. A new civil case in Germany brought against Deutsche by Dario Schiraldi, a former senior banker, claims that Sewing presided over a flawed internal audit which formed an important part of the evidence used to convict Schiraldi in Italy in 2019.
3. Jamie Dimon has warned that the independence of the US Federal Reserve is “critical” as the Trump administration increases its pressure on Jay Powell, the central bank’s chair. The JPMorgan chief executive’s comments came as Treasury secretary Scott Bessent said a “formal process” to select Powell’s successor had begun.
4. Rachel Reeves has vowed to extend a purge on City of London red tape to the rest of the economy. Writing in the FT after her annual Mansion House speech, the chancellor said an excessive safety-first approach was not seen in any of Britain’s global competitors, adding: “It is bad for businesses, bad for growth and bad for working people.”
5. An international probe into the human body’s proteins has revealed new clues about ageing and how to track and treat diseases such as Parkinson’s. Bill Gates, who part-funded the work, said research on the largest-ever protein library is helping bring humanity “closer than ever to the day when a diagnosis of Alzheimer’s disease stops being a death sentence”.
Visual investigation
Trump has launched the largest domestic deportation operation in US history, and his administration is establishing more facilities to take in a record number of detainees. The majority are run by for-profit companies — a multibillion-dollar industry that has exploded over four decades. An FT investigation found a number of sites housing hundreds more people than they were designed to hold, while lawyers and detainees said some people have been sleeping on the floor.
We’re also reading . . .
Afghan files: A historic UK government data security breach put thousands at heightened risk of reprisal from the Taliban. Read the FT View on the leak.
Zohran Mamdani: The socialist mayoral candidate won over some of his critics at a private meeting with New York’s business elites.
‘Fire’ and ‘ice’: Markets will be closer in the future to a singe from inflation than a freeze in growth and prices, writes Pimco co-founder Bill Gross.
Bidding for fossils: Science will suffer as more rare curios such as meteorites get auctioned off to wealthy buyers, writes Anjana Ahuja.
Chart of the day
America’s trading partners have largely declined to retaliate against Trump’s tariff war, with only China and Canada hitting back so far. This has allowed a US president taunted for “always chickening out” to raise nearly $50bn in extra customs revenues at little cost, US Treasury data shows.
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Take a break from the news
Maxed out on matcha lattes? Hojicha, a new Japanese green tea trend, is coming to a café near you.
