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US President Donald Trump on Friday threw his support behind a new “partnership” between US Steel and Japan’s Nippon Steel, sending the American firm’s share price skyrocketing on hopes of an end to the long-running saga over foreign ownership of a key national asset.  While the details of the deal remained unclear, the Pennsylvania-headquartered firm’s share price popped after Trump took to Truth Social to hail the new arrangement, closing up more than 21 percent and then rising further in after-hours trading.”US Steel will REMAIN in America, and keep its Headquarters in the Great City of Pittsburgh,” the US president said in his social media post. He added that the new “planned partnership” between America’s US Steel and Japan’s Nippon Steel would create at least 70,000 jobs and add $14 billion to the US economy. Trump’s remarks are the latest in a long saga which began in December 2023, when US Steel and Nippon Steel announced plans for a $14.9 billion merger. That deal was bitterly opposed by unions in part because it would have transfered ownership of the critical asset to a foreign company. – ‘Massive investment’ -In a statement, Nippon Steel said it “applauds” the bold action taken by Trump, adding it shared the administration’s “commitment to protecting American workers, the American steel industry, and America’s national security.”US Steel praised Trump’s “bold” leadership on the deal, noting that it would “remain American” and expand in size due to the “massive investment” that Nippon would make over the next four years as part of the deal.Neither the White House nor the two companies, have so far published the details of the new partnership.  The United Steelworkers’ union (USW), which represents US Steel employees and has long opposed the deal, said on Friday that it could not “speculate” on the impact of Trump’s announcement without more information about the deal. “Our concern remains that Nippon, a foreign corporation with a long and proven track record of violating our trade laws, will further erode domestic steelmaking capacity and jeopardize thousands of good, union jobs,” USW International President David McCall said in a statement shared with AFP. Nippon’s acquisition of US Steel was originally meant to close by the end of 2024’s third financial quarter, but was then held up by former president Joe Biden, who blocked it in his last weeks in office on national security grounds.The two firms then filed a lawsuit against the Biden administration’s “illegal interference” in the transaction.Trump previously opposed Nippon Steel’s takeover plan, calling for US Steel to remain domestically owned. But he has since softened his tone and has suggested he is open to some form of investment from Nippon.The US president recently ordered his own review of the existing deal, directing the government’s Committee on Foreign Investment in the United States (CFIUS) to look into the proposed acquisition.CFIUS, tasked with analyzing the national security implications of foreign takeovers of US companies, was given 45 days to submit its recommendations to Trump.

US President Donald Trump rekindled his trade war with the European Union on Friday by threatening 50 percent tariffs, as Brussels reacted with a call for “respect.”Trump also unleashed a broadside against smartphone makers including US tech giant Apple, threatening them with new duties of 25 percent if they do not move production to the United States.Stock markets fell as the Republican’s comments fueled fears of global economic disruption, after a relative lull in recent days after Trump reached deals with China and Britain.Trump first raised the issue of EU tariffs in an early morning post on his Truth Social network. “Our discussions with them are going nowhere!” Trump said. “Therefore, I am recommending a straight 50 percent Tariff on the European Union, starting on June 1, 2025.”He doubled down later in the day, telling reporters in the Oval Office that there was nothing the 27-nation bloc could do to change his mind.”I’m not looking for a deal. I mean, we’ve set the deal. It’s at 50 percent,” Trump said. “They haven’t treated our country properly. They banded together to take advantage of us.”Billionaire property tycoon Trump, 78, also denied that his tariffs would hurt American businesses.”They’re not hurting, they’re helping,” he said.Trump’s new tariffs would, if imposed, dramatically raise Washington’s current baseline levy of 10 percent, and fuel simmering tensions between the world’s biggest economy and its largest trading bloc.The EU’s trade chief said the bloc would work for a trade deal with Washington based on “respect” not “threats.””The EU’s fully engaged, committed to securing a deal that works for both,” trade commissioner Maros Sefcovic posted on X, after a previously planned call with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.In a separate message posted Friday that also unnerved markets, Trump blasted Apple boss Tim Cook for failing to move iPhone production to the United States despite repeated requests.Trump said he had “long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else.” “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”Trump later stepped up his threats, saying he would hit all smartphones not made in the country.”It would be also Samsung and anybody that makes that product, otherwise it wouldn’t be fair,” Trump told reporters, adding that the new tariffs would come into effect from the end of June.- Market worries -Trump imposed sweeping tariffs on most of the world on what he called “Liberation Day” on April 2, with a baseline 10 percent plus steeper duties including a 20 percent levy on the EU.Markets were thrown into turmoil but calmed after he paused the bigger tariffs for 90 days.Trump has since claimed some early successes in deals struck with Britain and with China, the world’s second biggest economy.But talks with the EU have failed to make much progress, with Brussels recently threatening to hit US goods worth nearly 100 billion euros ($113 billion) with tariffs if it does not lower the duties on European goods.US Treasury Secretary Scott Bessent told Bloomberg Television on Friday the lower 10 percent tariff rate was “contingent on countries or trading blocs coming and negotiating in good faith.”Wall Street’s main indexes were all down around one percent two hours into trading, with the tech-heavy Nasdaq at one stage losing 1.5 percent before rallying while Apple shares sank 2.5 percent.Paris and Frankfurt ended with losses of around 1.5 percent, while London’s FTSE 100, which initially rose, also ended in the red.”The administration had kind of hinted that they were considering imposing reciprocal tariffs on countries that weren’t negotiating in good faith,” Barclays senior US economist Jonathan Millar told AFP. 

Shares of steelmaker US Steel skyrocketed on Friday after President Donald Trump announced his support for a “partnership” with Japan’s Nippon Steel. Trump’s remarks are the latest in a long saga which began in December 2023, when US Steel and Nippon Steel announced plans for a $14.9 billion merger under a deal bitterly opposed by the unions. “US Steel will REMAIN in America, and keep its Headquarters in the Great City of Pittsburgh,” the US president posted on Truth Social, adding that the “planned partnership” between America’s US Steel and Japan’s Nippon Steel would create at least 70,000 jobs and add $14 billion to the US economy. The Pennsylvania-headquartered firm’s share price popped on the news, closing up more than 21 percent and then increasing further in after-hours trading.It was not immediately clear what the terms of this new partnership were, and neither company, nor the White House, responded to a request for comment.The United Steelworkers’ union (USW), which represents US Steel employees and has long opposed the deal, said it could not “speculate” on the impact of Trump’s announcement without more information. “Our concern remains that Nippon, a foreign corporation with a long and proven track record of violating our trade laws, will further erode domestic steelmaking capacity and jeopardize thousands of good, union jobs,” USW International President David McCall said in a statement.  Nippon’s acquisition of US Steel was originally meant to close by the end of 2024’s third financial quarter, but was then held up by former president Joe Biden, who blocked it in his last weeks in office on national security grounds.The two firms then filed a lawsuit against the Biden administration’s “illegal interference” in the transaction.Earlier this month, Trump ordered his own review of the deal, directing the government’s Committee on Foreign Investment in the United States (CFIUS) to look into the proposed acquisition.CFIUS, tasked with analyzing the national security implications of foreign takeovers of US companies, was given 45 days to submit its recommendations to Trump.

Stock markets dropped Friday after US President Donald Trump ended a lull in his trade war with threats of massive tariffs on Apple products and imports from the European Union.Wall Street’s main indexes spent the entire session in the red. The biggest loser of the three was the Nasdaq, weighed down by a three percent fall in Apple.Paris and Frankfurt ended with losses of around 1.5 percent, with shares in luxury and car companies taking a hit after Trump threatened 50 percent tariffs on EU goods.London’s FTSE 100, which initially rose, also ended in the red.Germany’s DAX had also been higher earlier in the day as German economic growth data was revised up.”What is somewhat of a surprise is the fact that the EU will now face a considerably higher tariff rate than China, an almost unthinkable scenario just a matter of weeks ago,” said Lindsay James, investment strategist at Quilter.”It is highlighting that much of this policy is designed to be punitive, rather than having any economic credibility to it.”Oil prices rebounded, meanwhile, having earlier dropped by around one percent, while the dollar remained under pressure.Trump’s new threats revived investor concerns about his trade policies after a recent deal with Britain and a tariffs truce with China.”All the optimism over trade deals wiped out in minutes –- seconds, even,” said Fawad Razaqzada, market analyst at StoneX.Trump said on his Truth Social platform that he was “recommending a straight 50% Tariff on the European Union” from June 1 as “discussions with them are going nowhere!””The EU is one of Trump’s least favorite regions, and he does not seem to have good relations with its leaders, which increases the chance of a prolonged trade war between the two,” said Kathleen Brooks, research director at trading platform XTB.The US president had announced 20 percent tariffs on EU goods last month but suspended the measure to give space for negotiations.Trump, however, maintained a 10 percent levy on imports from the 27-nation bloc and nearly every other nation around the world, along with 25 percent duties on the car, steel and aluminium industries.He also threatened on Friday to hit Apple with a 25 percent tariff if its iPhones are not manufactured in the United States.Trump initially said the tariff would apply only to Apple — an unusual move in singling out a specific company in trade policy. However, he later expanded the threat to include all smartphone manufacturers, telling reporters the levy could also hit Samsung.Trump’s social media outburst rocked stock markets which had steadied following losses over concerns about the ballooning US debt and rising US borrowing costs.- Key figures at around 2050 GMT -New York – Dow: DOWN 0.6 percent at 41,603.07 (close)New York – S&P 500: DOWN 0.7 percent at 5,802.82 (close)New York – Nasdaq Composite: DOWN 1.0 percent at 18,737.21 (close)London – FTSE 100: DOWN 0.2 percent at 8,717.97 (close)Paris – CAC 40: DOWN 1.7 percent at 7,734.40 (close)Frankfurt – DAX: DOWN 1.5 percent at 23,629.58 (close)Tokyo – Nikkei 225: UP 0.5 percent at 37,160.47 (close)Hong Kong – Hang Seng Index: UP 0.2 percent at 23,601.26 (close)Shanghai – Composite: DOWN 0.9 percent at 3,348.37 (close)Euro/dollar: UP at $1.1369 from $1.1281 on ThursdayPound/dollar: UP at $1.3535 from $1.3412Dollar/yen: DOWN at 142.57 yen from 144.01 yenEuro/pound: DOWN at 83.96 pence from 84.06 penceBrent North Sea Crude: UP 0.5 percent at $64.78 per barrelWest Texas Intermediate: UP 0.5 percent at $61.53 per barrel

President Donald Trump rekindled the US trade war on Friday, threatening to impose a 50 percent tariff on the European Union ahead of planned trade talks — and drawing a strong response from European politicians. The new duties on Brussels would, if imposed, dramatically raise Washington’s current baseline levy of 10 percent, and fuel simmering tensions between the world’s biggest economy and its largest trading bloc.Lamenting that negotiations with the EU “are going nowhere,” Trump said on Truth Social on Friday that he is recommending “a straight 50% Tariff on the European Union, starting on June 1, 2025.”The EU had been “formed for the primary purpose of taking advantage of the United States on TRADE,” he said, taking a swipe at “difficult” negotiations.European leaders and senior politicians reacted with dismay to Trump’s announcement, and called for de-escalation. “We are sticking to our position: de-escalation, but ready to respond,” France’s trade minister Laurent Saint-Martin posted on the X social media platform. Irish Prime Minister Micheal Martin called Trump’s announcement “enormously disappointing,” writing on X that “tariffs are damaging to all sides.””We do not need to go down this road,” he said, without spelling out how Europe might respond.An EU spokesperson declined to comment on Trump’s latest tariff threats on Friday, telling reporters that there was a pre-planned call later in the day between EU Trade Commissioner Maros Sefcovic and US Trade Representative (USTR) Jamieson Greer. Wall Street stocks fell on the news, before paring some losses.”The administration had kind of hinted that they were considering imposing reciprocal tariffs on countries that weren’t negotiating in good faith,” Barclays senior US economist Jonathan Millar told AFP. “And this kind of tweet this morning by the president suggests that that’s becoming a more likely possibility,” he said in an interview. – ‘Difficult’ negotiations -Trump imposed a new sweeping “baseline” tariff of 10 percent against most countries last month, and even steeper duties on dozens of trading partners — including a 20 percent levy on the EU — which have since been paused for 90 days to allow for trade talks. The Trump team has claimed some early successes in its deals struck with Britain and China, but talks with the EU have failed to make much progress, with Brussels recently threatening to hit US goods worth nearly 100 billion euros ($113 billion) with tariffs if it does not lower the duties on European goods.The United States ran a trade deficit with the EU totalling $235.6 billion last year, up 12.9 percent from a year earlier, according to data from USTR. The EU has noted that the overall trade deficit — including services — is much smaller, in the region of 50 billion euros, or around $56 billion. Speaking to Bloomberg Television on Friday, US Treasury Secretary Scott Bessent said the lower 10 percent tariff rate was “contingent on countries or trading blocs coming and negotiating in good faith.””And I think the president was getting frustrated with the EU,” he said.Spokespeople for USTR, the Commerce Department, the White House, and the Treasury Department did not respond to a request for comment on the details of Trump’s tariff plans. – US-made iPhones ‘not feasible’ -In a separate message posted Friday, Trump blasted Apple for failing to move iPhone production to the United States despite his repeated requests, and threatened new duties of “at least” 25 percent if they did not comply.Trump’s criticism of the US tech titan revived the pressure on Apple’s chief executive Tim Cook to do more to bring manufacturing jobs back to the United States from Asia. Most of Apple’s iPhone assembly happens in China, although the company has in recent years been shifting assembly to other countries, including India.Apple did not respond to a request for comment. One problem with Trump’s proposal, according to Wedbush Securities analyst Dan Ives, is that reshoring iPhone production to the United States “is a fairy tale that is not feasible.”Ives predicted moving assembly back across the Pacific Ocean could push up iPhone prices to $3,500. Another issue Trump may face is that he cannot impose tariffs — a form of import taxes — on a specific company, according to Georgetown University law professor Jennifer Hillman.If he wanted to, Trump could impose economic sanctions against a company like Apple, she told AFP by email. But, she added, those measures would “not take the form of tariffs.”   burs-da/md

Stock markets tumbled Friday after US President Donald Trump ended a lull in his trade war with threats of massive tariffs on Apple products and imports from the European Union.Wall Street’s main indexes fell at the open, with the broad-based S&P 500 shedding 1.2 percent and the tech-heavy Nasdaq falling by 1.5 percent as Apple shares sank 2.5 percent.The Paris CAC 40 index was down 2.3 percent in afternoon deals while the Frankfurt DAX retreated by 1.8 percent, with shares in luxury and car companies taking a hit.London’s FTSE 100, which had been up earlier, fell into the red. The DAX had also been higher earlier in the day as German economic growth data was revised up.Oil prices also reversed course to fall by around one percent while the dollar remained under pressure.Trump’s new threats revived investor concerns about his trade policies after a recent deal with Britain and a tariffs truce with China.”All the optimism over trade deals wiped out in minutes –- seconds, even,” said Fawad Razaqzada, market analyst at StoneX.Trump said on his Truth Social platform that he was “recommending a straight 50% Tariff on the European Union” from June 1 as “discussions with them are going nowhere!””The EU is one of Trump’s least favourite regions, and he does not seem to have good relations with its leaders, which increases the chance of a prolonged trade war between the two,” said Kathleen Brooks, research director at XTB trading platform.The US president had announced 20 percent tariffs on EU goods last month but suspended the measure to give space for negotiations.Trump, however, maintained a 10 percent levy on imports from the 27-nation bloc and nearly every other nation around the world, along with 25 percent duties on the car, steel and aluminium industries.He also threatened on Friday to hit Apple with a 25 percent tariff if its iPhones are not manufactured in the United States.”Trump’s attack on Apple looks like one of his negotiating tactics to us,” Brooks said, noting that the threat comes as his tax-cut plan faces Senate debate after passing the lower house of Congress.”This looks like a negotiating maneuver to get Apple to pay the bulk of their tax in the US, including taxes for non-US sales,” she said.”If this happens, then we would not be surprised to see the iPhone tariff disappear.”Trump’s social media outburst rocked stock markets which had steadied following losses over concerns about the ballooning US debt and rising US borrowing costs.Investors were already on edge after Moody’s stripped the United States of its top-tier credit rating and the House of Representatives approved Trump’s tax cut plan, which critics say would add to the country’s debt pile.The yield — or borrowing costs — on 10-year and 30-year US government bonds surged this week as investors worry about the fiscal health of the world’s biggest economy.The yields eased late Thursday.Trump’s tax package, which now goes to the Senate, had faced scepticism from fiscal hawks who fear the country is headed for bankruptcy.Independent analysts warn it would increase the deficit by as much as $4 trillion over a decade.But the White House insists it will spur growth of up to 5.2 percent, ensuring it adds nothing to the $36 trillion national debt — growth projections that are well outside the mainstream consensus.- Key figures at around 1330 GMT -New York – Dow: DOWN 1.0 percent at 41,427.91 pointsNew York – S&P 500: DOWN 1.1 percent at 5,778.02New York – Nasdaq Composite: DOWN 1.5 percent at 18,644.41London – FTSE 100: DOWN 0.6 percent at 8,683.32Paris – CAC 40: DOWN 2.3 percent at 7,685.87Frankfurt – DAX: DOWN 1.8 percent at 23,568.04Tokyo – Nikkei 225: UP 0.5 percent at 37,160.47 (close)Hong Kong – Hang Seng Index: UP 0.2 percent at 23,601.26 (close)Shanghai – Composite: DOWN 0.9 percent at 3,348.37 (close)Euro/dollar: UP at $1.1326 from $1.1281 on ThursdayPound/dollar: UP at $1.3500 from $1.3419Dollar/yen: DOWN at 142.81 yen from 143.99 yenEuro/pound: DOWN at 83.91 pence from 84.07 penceBrent North Sea Crude: DOWN 1.0 percent at $63.83 per barrelWest Texas Intermediate: DOWN 1.0 percent at $60.62 per barrel

European stock markets tumbled Friday after US President Donald Trump ended a lull in his trade war as he raised the spectre of hitting imports from the European Union with a massive 50-percent tariff.The Paris CAC 40 index and Frankfurt DAX fell by around three percent at one point, with shares in luxury and car companies taking a hit, before paring back some losses.London’s FTSE 100, which had been up earlier, fell into the red. The DAX was also higher earlier in the day as German economic growth data was revised up.US stock futures — contracts that indicate how markets will open — were also in negative territory.Trump’s new threats revived investor concerns about his trade policies after a recent deal with Britain and a tariffs truce with China.”All the optimism over trade deals wiped out in minutes –- seconds, even,” said Fawad Razaqzada, market analyst at StoneX.Trump said on his Truth Social platform that he was “recommending a straight 50% Tariff on the European Union” from June 1 as “discussions with them are going nowhere!”The US president had announced 20 percent tariffs on EU goods last month but suspended the measure to give space for negotiations.Trump, however, maintained a 10 percent levy on imports from the 27-nation bloc and nearly every other nation around the world, along with 25 percent duties on the car, steel and aluminium industries.He also threatened on Friday to hit Apple with a 25 percent tariff if its iPhones are not manufactured in the United States.His social media outburst rocked stock markets which had steadied following losses over concerns about the ballooning US debt and rising US borrowing costs.Investors were already on edge after Moody’s stripped the United States of its top-tier credit rating and the House of Representative approved Trump’s tax cut plan, which critics say would add to the country’s debt pile.The yield — or borrowing costs — on 10-year and 30-year US government bonds surged this week as investors worry about the fiscal health of the world’s biggest economy.The yields eased late Thursday.Trump’s tax package, which now goes to the Senate, had faced scepticism from fiscal hawks who fear the country is headed for bankruptcy.Independent analysts warn it would increase the deficit by as much as $4 trillion over a decade.But the White House insists it will spur growth of up to 5.2 percent, ensuring it adds nothing to the $36 trillion national debt — growth projections that are well outside the mainstream consensus.Oil prices also reversed course to fall by around one percent following Trump’s new tariff threats.- Key figures at around 1235 GMT -London – FTSE 100: DOWN 0.9 percent at 8,658.03 pointsParis – CAC 40: DOWN 2.3 percent at 7,684.35Frankfurt – DAX: DOWN 2.1 percent at 23,501.11Tokyo – Nikkei 225: UP 0.5 percent at 37,160.47 (close)Hong Kong – Hang Seng Index: UP 0.2 percent at 23,601.26 (close)Shanghai – Composite: DOWN 0.9 percent at 3,348.37 (close)New York – Dow: FLAT at 41,859.09 (close)Euro/dollar: UP at $1.1337 from $1.1281 on ThursdayPound/dollar: UP at $1.3506 from $1.3419Dollar/yen: DOWN at 142.53 yen from 143.99 yenEuro/pound: DOWN at 83.94 pence from 84.07 penceBrent North Sea Crude: DOWN 1.0 percent at $63.81 per barrelWest Texas Intermediate: DOWN 1.1 percent at $60.55 per barrel

Equities mostly rose Friday following the previous day’s US bond-fuelled sell-off with traders tracking a slight pullback in Treasury yields as Donald Trump’s signature tax-cutting budget passed a key congressional vote.Worries about the US budget deficit have returned to the fore this week after Moody’s removed its top-tier credit rating and the president pushed ahead with a budget that some suggest will expand the country’s ballooning debt.A tepid auction of 20-year Treasuries on Wednesday ramped up those concerns, dealing a blow to stocks that had just recovered from the April fireworks of Trump’s tariff blitz.Still, sentiment stabilised on Thursday, with yields pulling back after the Republican-led House narrowly passed Trump’s “One Big, Beautiful Bill Act”, which shrinks social safety net programmes to pay for a 10-year extension of his 2017 tax cuts.The package, which now goes to the Senate, had faced scepticism from fiscal hawks who fear the country is headed for bankruptcy, with independent analysts warning it would increase the deficit by as much as $4 trillion over a decade.But the White House insists it will spur growth of up to 5.2 percent, ensuring it adds nothing to the $36 trillion national debt — growth projections that are well outside the mainstream consensus.There is a feeling that “perhaps the fiscal worries have gone a bit too far”, said Pepperstone’s Chris Weston.”Many have crunched the numbers on the tax bill and see the raft of measures to not be overly stimulatory and to therefore result in a major blowout of the deficit in 2026 and 2027 and is, in fact, quite neutral in its effect.”The drop in Treasury yields — suggesting improving demand for US debt — was helped by upbeat data on the jobs market, home sales and factory activity that observers said indicated the economy remained healthy.A mixed day on Wall Street was followed by a slightly better performance in Asia.Tokyo, Hong Kong, Sydney, Mumbai, Bangkok, Manila and Jakarta rose with London, Paris and Frankfurt.But Shanghai, Singapore, Taipei and Wellington struggled.There was a little cheer from comments by Federal Reserve Governor Christopher Waller, who said interest rates could be cut in the second half of the year if Trump’s tariffs come back down to around 10 percent.”If we can get the tariffs down closer to 10 percent and then that’s all sealed, done and delivered somewhere by July, then we’re in good shape for the second half of the year,” he told Fox Business.The dollar slipped against the yen as figures showed Japanese inflation rose more than expected owing to a surge in food prices, particularly a near doubling in the cost of rice.The reading turns the focus on the Bank of Japan as it considers its next move on monetary policy after a recent spate of interest rate hikes and in light of Trump’s tariffs. Bitcoin pressed on with its latest rally, hitting a record of $111,980.33, on hopes for a cryptocurrency bill on the regulation of so-called stablecoins, digital coins with value tied to the dollar. This has led to optimism for future regulatory clarity in the sector, including for bitcoin, which is not directly linked to the dollar.- Key figures at around 0810 GMT -Tokyo – Nikkei 225: UP 0.5 percent at 37,160.47 (close)Hong Kong – Hang Seng Index: UP 0.2 percent at 23,601.26 (close)Shanghai – Composite: DOWN 0.9 percent at 3,348.37 (close)London – FTSE 100: UP 0.4 percent at 8,771.35Dollar/yen: DOWN at 143.34 yen from 143.99 yen on ThursdayEuro/dollar: UP at $1.1335 from $1.1281 Pound/dollar: UP at $1.3474 from $1.3419Euro/pound: UP at 84.11 pence from 84.07 penceWest Texas Intermediate: DOWN 1.0 percent at $60.62 per barrelBrent North Sea Crude: DOWN 0.9 percent at $63.89 per barrelNew York – Dow: FLAT at 41,859.09 (close)

Japanese inflation spiked to a two-year high in April, data showed Friday, as rice prices almost doubled, turning focus on the central bank as it mulls more interest rate hikes amid the Trump administration’s trade war.The uptick heaps pressure on Japan’s Prime Minister Shigeru Ishiba ahead of July’s elections and after a minister was forced to resign over a gaffe about the staple while officials dipped into emergency stockpiles.Core inflation excluding fresh food hit 3.5 percent last month, the internal affairs ministry said, its highest since January 2023 and well up from the 3.2 percent in March.Rice prices soared an eye-watering 98.4 percent year-on-year, slightly more than the previous month’s increase.The rocketing cost of the staple is growing into a crisis for the government, which was already struggling to win back the public after losing its parliamentary majority in an election last year.Factors behind the shortfall include poor harvests due to hot weather in 2023 and panic-buying prompted by a “megaquake” warning last year.Record numbers of tourists have also been blamed for a rise in consumption while some traders are believed to be hoarding the grain.The government began auctioning its stockpile in February, having previously tapped them during disasters. This is the first time since the stores were built in 1995 that supply chain problems are behind the move.Excluding energy and fresh food, the consumer price index rose 3.0 percent, from 2.9 percent in March, Friday’s data showed, while the overall unadjusted figure was unchanged at 3.6 percent. – Tariff threats -Underlying inflation has been above the BoJ’s target rate of two percent for around three years, and while the central bank began lifting interest rates last year, it has paused them recently as it assesses the impact of Trump’s tariffs.With Japanese officials heading to Washington for more talks on slashing the US president’s tariffs, the Bank of Japan is holding off any more increases for now.The BoJ warned at its last meeting this month that tariffs were fuelling global economic uncertainty and revised down its economic growth forecasts for the country.”Consumer price inflation will slow very gradually,” said Stefan Angrick at Moody’s Analytics.”US tariffs and tariff threats will dampen growth in Japan and globally, further weighing down demand-driven price pressures. The Bank of Japan isn’t done hiking, but it’s not moving just yet. Tariff haze will keep the central bank on hold for the time being. “We expect another rate hike in early 2026.”Adding to the problems for Ishiba, his farm minister resigned this week after comments that caused public fury.Taku Eto told a gathering over the weekend that he had “never bought rice myself because my supporters donate so much to me that I can practically sell it”.After Eto’s resignation, the prime minister said: “I apologise to Japanese people” as “it is my responsibility that I appointed him”.”That rice prices are remaining high is not a one-time phenomenon but is a structural one, I think. We have to have thorough discussions on this and they (rice prices) have to fall, of course,” he said.Marcel Thieliant at Capital Economics said that “weekly rice prices are showing signs of stabilisation so rice inflation should start to soften again before long”. Jun Takazawa at HSBC added: “The various government measures as well as an ongoing moderation in global energy and import prices are expected to bring inflation down to more sustainable levels in the second half of this year.”  

Japan’s Prime Minister Shigeru Ishiba said Friday that he had again pressed US President Donald Trump on tariffs, in a phone call ahead of fresh talks on easing the levies.Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium.Trump also announced 24 percent “reciprocal” tariffs on Japan in early April, but later paused them along with similar measures on other countries until early July.Ishiba said he spoke with Trump for 45 minutes on Friday morning — Thursday evening in Washington — and that a “broad range of topics were discussed, including tariffs and economic security”.”I conveyed to him Japan’s position on US tariffs,” Ishiba told a news conference in Tokyo, adding that there was “no change to our calls for the removal of tariffs”. “As I’ve said before, it’s not just about tariffs but about investment. There will also be no change to our position that Japan and the US will cooperate on generating employment in the US,” he said.The comments came as Japan’s tariffs envoy, economic revitalisation minister Ryosei Akazawa, left for Washington for a third round of talks.”The series of tariff measures taken by the US are regrettable. We’ll strongly demand a review of these measures,” Akazawa told reporters at Tokyo’s Haneda airport. “But we have to reach an agreement, so it has to be win-win for both sides. We’ll listen carefully to the various proposals and ideas of the US side, and look for common ground between the two sides,” he said.Public broadcaster NHK and other Japanese media reported, citing government sources, that US Treasury Secretary Scott Bessent would not attend the talks this time. Akazawa would travel again to Washington on May 30, the reports said.Trump’s 25-percent auto tariffs are particularly painful for Tokyo, with roughly eight percent of all Japanese jobs tied to the sector.Early this month, the Trump administration also slapped a new 25 percent import tax on auto parts including engines and transmissions.At the White House in February, Ishiba had promised Trump that yearly Japanese investment would increase to $1 trillion.”Although the recent US-China and US-UK trade deals indicate that Washington is aiming to de-escalate trade tensions, Japan-US negotiations have made little headway,” said Stefan Angrick at Moody’s Analytics.”Japan’s position as the world’s largest foreign investor in the US hasn’t shielded it from tariff threats, so promising more investment is an unconvincing bargaining chip,” he added.