Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Donald Trump’s trade war is weakening the US economy and causing a plunge in trade with China, economists and logistics firms are warning.
Nearly four week’s after Trump’s ‘Liberation Day’ announcement of higher tariffs triggered a trade war with Beijing, evidence is mounting that businesses and consumers are cutting back.
Torsten Sløk, chief executive at asset managerApolloGlobalManagement,explains:
Sløkhas pulled togethera chartbookhighlighting the damage to company earnings…
…on new orders…
…and notably on trade with China.
A trade war is a “stagflation shock”,Sløkfears.
He explains that it typically takes between 20 and 40 days for a sea container to travel from China to the US. That means that the slowdown in container departures from China to the US which started in early April will be felt at US ports in early and mid-May.
That would hit demand for trucking from mid-May, leading to empty shelves and layoffs in trucking and retail industry, causing whatSløkdubs “The Voluntary Trade Reset Recession”.
Sløkwarned on Friday:
There are signs today that this trade slowdown is underway, due to the 145% tariff imposed on Chinese imports to the US.
The Financial Times reports this morningthat the Port of Los Angeles, the main route of entry for goods from China, expects scheduled arrivals in the week starting 4 May to be a third lower than a year before.
The new higher tariffs announced on other countries are currently paused, of course, while the US negotiates new trade deals.
Trumphas claimed to Time Magazine that he’s made 200 deals. But this appears to be, well, an exaggeration.
US Treasury secretaryScottBessenttold ABC News he believes Trump is “referring to sub deals within the negotiations we’re doing.”
Bessentinsisted, though, that progress is being made, arguing:
Last week, shipping giant Hapag-Lloyd reportedthat its customers have cancelled 30% of shipments to the United States from China….and there has been a “massive increase” in demand for consignments from Thailand, Cambodia and Vietnam instead.
11am BST: CBI’s distributive trades survey of UK retailing
11am BST: France’s unemployment data for March
3.30pm BST: Dallas Fed manufacturing index for April
Marks & Spencer are leading the FTSE 100 fallers this morning, as it reels from the damage caused by a cyber attack.
Shares in M&S are down 2.3% this morning at 376p, as traders digest the ongoing disruption at the company.
On Friday it halted all orders through its website and apps, andencouraged customers to visit its stores instead.
The cyber incident began a week ago, on Easter Monday, affecting contactless payments and click-and-collect orders in stores across the UK. M&S disclosed it on Tuesday, saying a “cyber incident” affected contactless payments and the pick up of online orders in its stores in recent days.
Shares in M&S have dropped by over 8% since then, having closed at 411p before Easter.
Susannah Streeter,head of money and markets atHargreaves Lansdown,says the ongoing problems underline how difficult the breach has been to get a handle on.
Streeterpoints out that the suspension of online orders will be hugely damaging for sales, adding:
Shares in food delivery group Deliveroo have jumped by 17% at the start of trading in London, after receiving a takeover approach from US rival DoorDash.
On Friday night, the news broke that DoorDash had offered to buy Deliveroo for $3.6bn (£2.7bn).
Deliveroo said that received an indicative proposal from DoorDash for a possible cash offer worth 180p per share, and that it would be “minded to recommend such an offer to Deliveroo shareholders”.
Its shares have jumped to 170p this morning….
This morning, Deliveroo also announced that it has suspended its £100m share buyback programme, due to the approach from DoorDash.
DoorDash’s interest comes four years after Deliveroo floated on the London stock market, in what has been called the City’s worst IPO ever.
Deliveroo’s shares were priced at 390p each, but slumped by a quarter on the first day of trading – causing the firm to be dubbed “Flopperoo”.
The Times points out todaythat if the DoorDash deal goes through at 180p, Deliveroo founder Will Shu would receive a payout of more than £172m, based upon his 5.9% stake
The UK economy is set to slow sharply for the next two years as Donald Trump’s global tariff war weighs on consumer spending and business investment, a study by a leading forecaster has predicted.
The EY Item Club is now forecasting that UK gross domestic product (GDP) will grow by 0.8% this year, down from a projection of 1% in February, and has cut its 2026 forecast from 1.6% to 0.9% as longer-term effects hit the UK.
American customers of fast-fashion giant Shein are now feeling the impact of the trade war.
Sheinraised the US prices of a swathe of products on Friday,Bloomberg reported, in anticipation of new tariffs on small parcels.
Over to Bloomberg for the details:
This follows Donald Trump’s decision to end the “de minimis” exemption for small packages from mainland China and Hong Kong. which had meant that packages under $800 did not qualify for any taxes or tariffs.
China’s policymakers are insisting today that they will hit this year’s growth targets, despite the impact of Donald Trump’s tariffs.
The vice head of China’s state planner said on Monday he was “fully confident” that the world’s second-largest economy would achieve itseconomic growthtarget of around 5% for 2025.
Zhao Chenxin, vice chair of theNationalDevelopmentandReformCommission, told a press conference that new policies will be rolled out over the second quarter, based on changes in the economic situation.
Zhaosaid:
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Donald Trump’s trade war is weakening the US economy and causing a plunge in trade with China, economists and logistics firms are warning.
Nearly four week’s after Trump’s ‘Liberation Day’ announcement of higher tariffs triggered a trade war with Beijing, evidence is mounting that businesses and consumers are cutting back.
Torsten Sløk, chief executive at asset managerApolloGlobalManagement,explains:
Sløkhas pulled togethera chartbookhighlighting the damage to company earnings…
…on new orders…
…and notably on trade with China.
A trade war is a “stagflation shock”,Sløkfears.
He explains that it typically takes between 20 and 40 days for a sea container to travel from China to the US. That means that the slowdown in container departures from China to the US which started in early April will be felt at US ports in early and mid-May.
That would hit demand for trucking from mid-May, leading to empty shelves and layoffs in trucking and retail industry, causing whatSløkdubs “The Voluntary Trade Reset Recession”.
Sløkwarned on Friday:
There are signs today that this trade slowdown is underway, due to the 145% tariff imposed on Chinese imports to the US.
The Financial Times reports this morningthat the Port of Los Angeles, the main route of entry for goods from China, expects scheduled arrivals in the week starting 4 May to be a third lower than a year before.
The new higher tariffs announced on other countries are currently paused, of course, while the US negotiates new trade deals.
Trumphas claimed to Time Magazine that he’s made 200 deals. But this appears to be, well, an exaggeration.
US Treasury secretaryScottBessenttold ABC News he believes Trump is “referring to sub deals within the negotiations we’re doing.”
Bessentinsisted, though, that progress is being made, arguing:
Last week, shipping giant Hapag-Lloyd reportedthat its customers have cancelled 30% of shipments to the United States from China….and there has been a “massive increase” in demand for consignments from Thailand, Cambodia and Vietnam instead.
11am BST: CBI’s distributive trades survey of UK retailing
11am BST: France’s unemployment data for March
3.30pm BST: Dallas Fed manufacturing index for April