Trump halts tariffs on Mexico and Canada

Good morning. In today’s newsletter:

• Trump pauses tariffs on Mexico and Canada

• Samsung chair secures legal victory

• South Korea’s deepfake crisis

The US will pause tariffs on Canada and Mexico for 30 days after the countries reached eleventh-hour deals with President Donald Trump, causing markets to whipsaw as investors and companies struggled to keep up with the White House’s plans for sweeping tariffs on key trading partners.

Trump agreed to delay tariffs for a month following phone calls with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau.

Sheinbaum said Trump had delayed the 25 per cent tariffs after she promised to send 10,000 National Guard troops to the border with the US to combat drug trafficking.

Trudeau, meanwhile, agreed to send “10,000 frontline personnel” to the border to “stop the flow of fentanyl” in exchange for a pause on US tariffs.

The S&P 500, which had earlier fallen almost 2 per cent, closed 0.8 per cent lower. Currency markets also whipsawed, as the Mexican peso and Canadian dollar both rebounded from earlier declines.

Investors said Trump’s apparent U-turn underlined how difficult it was for markets to keep up with the fast-changing tariff plans.

“My head hurts,” said one FX trader at a large European bank. “It’s almost impossible to trade, there’s too much [news] to process. Buy. No wait, sell. No, actually buy. [Or] just give up,” the person added.

Follow our live blog for the latest developments. And for more coverage of global trade, I recommend Alan Beattie’s weekly Trade Secrets newsletter. Sign up for it here if you’re a premium subscriber, or upgrade your subscription.

Here’s what else we’re keeping tabs on today:

• Israel-Hamas war: Benjamin Netanyahu is set to meet US President Donald Trump at the White House, with the discussion expected to centre on whether the temporary truce agreed last month will become a permanent ceasefire.

• India-EU relations: The IIC-Bruegel Annual Seminar, a two-day closed-door workshop focusing on key aspects of India-EU ties, begins in New Delhi.

• Results: Alphabet, Nintendo and Mitsui are among the companies reporting earnings.

Five more top stories

1. Samsung chair Lee Jae-yong has secured a major legal victory with an appeals court clearing him of long-running accounting fraud and stock manipulation charges. The ruling comes at a critical time for Samsung, which has been under pressure over its struggling chip business.

2. Secretary of state Marco Rubio announced yesterday he had taken over as acting director of the US Agency for International Development. It was the latest blow against the country’s main foreign assistance agency, which Trump has said is run by “radical lunatics”. Earlier in the day the agency’s headquarters was unexpectedly closed with staffers ordered to work from home.

• Corporate America cosies up to Musk: The largest US companies are cutting deals with Elon Musk’s businesses or touting links with the world’s richest man as he solidifies his power within Trump’s administration.

3. Artificial intelligence start-up Anthropic has demonstrated a new technique to prevent users from eliciting harmful content from its models. The development by Anthropic comes amid growing industry concern over “jailbreaking” — attempts to manipulate AI models into generating illegal or dangerous information.

4. Trump yesterday said he wanted a deal granting the US access to Ukraine’s rare earths resources in exchange for continued military and economic aid to Kyiv as it struggles to halt Russia’s invasion. The proposal appears to align with a strategy Ukraine has been developing to deepen ties with the Trump administration. Here are more details.

5. Sir Keir Starmer yesterday night urged EU leaders to re-engage with Britain five years after Brexit, as he refused to “choose” between closer relations with Brussels or Washington. Starmer, the first British premier to address the European Council of EU leaders since Brexit, said he wanted a new defence and security pact to be at the heart of a “reset” relationship.

The Big Read

Since leaving Washington as a senior adviser to his father-in-law Donald Trump, Jared Kushner has built up a global portfolio of company stakes and property, across eastern Europe, the Gulf and Latin America. Many of those deals have been facilitated by contacts he made while in government — or by the high profile that comes from having been one of the US president’s most trusted aides. Kushner has demonstrated an ability to convert relationships and proximity to power into big investments.

We’re also reading . . . 

• South Korea’s deepfake crisis: A wave of AI-generated deepfake porn reveals the country’s ongoing lack of gender equality, writes Song Jung-a.

• Global development: Amid a flurry of disruptive executive orders since Trump took office, the future of international economic institutions is up for grabs, writes Adam Tooze.

• DEI: While some companies are retreating from initiatives set up to improve the representation of their workforces, executive teams and boardrooms, others are doubling down.

Map of the day

Trump’s demands to buy Greenland have triggered a surge of interest in the Arctic island’s mining companies and their potential to produce key elements used in everything from electric vehicles to missile guidance systems, investors said.

Take a break from the news . . . 

Museums in major cities are increasingly “pairing” high art with top food, and Melbourne is no different. FT Globetrotter has compiled a list of the top gallery restaurants in the Victorian capital.