Australia is hoping for an exemption from US steel and aluminium tariffsThe United States will be imposing a 25% tariff on steel imports and a 10% tariff on aluminium imports.Related: Australia can still win exemption on metal tariffs, Trump hintsRelated: Global alarm bells sound over full-blown trade war Continue reading...

US president says Australia is a ‘great country’ but stops short of saying it will be spared the 25% levyDonald Trump has given his strongest hint yet that Australia will be exempt from US tariffs on steel and aluminium imports.Related: Anyone, anyone? What happened when the US last introduced tariffsRelated: Donald Trump's tariffs 'highly regrettable', Reserve Bank governor says Continue reading...

All the day’s economic and financial news, as Trump presses on with tariffs despite criticism and fears of a trade war

Trade is not a zero-sum game: all should benefit from engaging in it. But the world that exists has not been designed this way

Previously leaked document finds poor economic growth in all models for future UK-EU relationshipAnti-Brexit campaigners have seized on a bleak Whitehall assessment of the economic impact of leaving the European Union, published following a battle over government secrecy.MPs voted in January for the document to be released in full, but its publication was resisted by the Brexit secretary, David Davis.Related: What is in the EU's Brexit guidelines document?Staying in the single market and customs unionRelated: Hammond: UK could reject any Brexit deal excluding financial services Continue reading...

A raft of reports shows a collective neglect of children, with their wellbeing in reverse. They are the silent victims of Tory austerityThis is no country for children. Pious politicians pretend “children are our future”. But the UK seems to prefer its past. In rights and priorities, children are standing at the counter waiting to be served, as adults shove them out of the way, with a cascade of reports revealing our collective neglect of children.The National Audit Office on Thursday reports on the crippled finances of local government, funding cut by half, despite skyrocketing demand for social services, especially for children. Vanishing early prevention with overstretched social workers causes an alarming rise in children in care reaching an unprecedented 72,670 last year. Every study shows why: poverty, lack of housing, neglected parental mental health.Related: Ofsted head seeks more powers to inspect unregistered schoolsRelated: The Tories never cared about eliminating the deficit. It was just a pretext to slash the state | Frances Ryan Continue reading...

David Cameron and George Osborne are celebrating this week. But their austerity programme has left lives in ruinsThey say that a picture looks different, depending on the viewers’ perspective. The same can be said for politics. The continuing, unprecedented cuts to Britain’s public services, for example, will appear quite different to a disabled person unable to get to the toilet because their social care has been halved than they will to, say, a former prime minister reading the news at his mansion.Two events from the past week display this stark contrast. In response to news that Britain has eliminated its day-to-day deficit budget, the delayed target originally set by George Osborne when he imposed austerity on public services in 2010, the former chancellor tweeted: “We got there in the end – a remarkable national effort. Thank you.” David Cameron followed self-congratulatory suit with: “It was the right thing to do.”We got there in the end - a remarkable national effort. Thank you. https://t.co/8D23AKbuwHFar from revelling in success, the Conservatives should be considering the consequences of their failureRelated: The Tories’ obscene joke: shred the safety net, then toss people into it | Frances Ryan Continue reading...

Foreign minister Wang Yi warns that the only outcome from Trump’s protectionist measures will be ‘harmful’The prospect of a trade war between China and the United States has increased after Beijing’s foreign minister said it would make a “necessary response” in the event of Donald Trump introducing punitive tariffs on steel and aluminium imports.The US president was expected to approve the 25% levy on steel and 10% on aluminium imports this week, possibly as early as Thursday.Related: A perfect economic storm made Italy ripe for a protest voteRelated: Trump's tariff plan a black day for the world, BHP boss saysChina has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon! Continue reading...

Boasting about avoiding technical recession for 26 years rings pretty hollow when growth is so persistently anaemic

Other countries may also avoid import taxes amid reported concern in administration about national security alliancesDonald Trump could exempt Canada, Mexico and other countries from stiff import taxes he is expected to impose this week, the White House said on Wednesday.The US president and his allies previously indicated that there would be no exceptions to the trade tariffs, which have been condemned by the European Union (EU) and led to the resignation of the president’s chief economic adviser, Gary Cohn.Related: Gary Cohn: experienced Democrat was singular figure in Trump's White HouseRelated: Donald Trump's top economic adviser Gary Cohn quits Continue reading...

The EC has drawn up a list of American products to target if Donald Trump doesn’t back down over steel tariffs

‘I was given a leaflet on how to apply for benefits and “rewarded” with 10 yoga classes,’ writes one woman, whose husband died last year. Plus Keir Harding questions the zero suicide policy

Halifax data comes days after Nationwide reported that UK house prices fell in FebruaryThe annual rate of house price growth has fallen to 1.8%, its lowest level for almost five years, according to the Halifax.With the most recent official data showing earnings growth averaging 2.5%, that means that unusually, wages are currently outpacing house prices.

Encouraging continued studying would tap into the potential of black and minority ethnic people, adding billions to the UK’s wealthAs the Brexit deadline creeps closer and closer, like a looming fog over the country, the UK economy is struggling. But there is a solution – pointed to in Ruby McGregor-Smith’s independent review, Race in the Workplace (February 2017). “The potential benefit to the UK economy from full representation of BME [black, minority and ethnic] individuals across the labour market … is estimated to be £24bn a year, which represents 1.3% of GDP.”The report indicates that “14% of the working age population [is] from a BME background”, but “many ethnic minorities [are] concentrated in lower-paying jobs”. As such, they may not have access to certain facilities or skills, and so may require extra help in order to obtain access to certain careers.Related: 14,000 British professors – but only 50 are blackRelated: Employers admit there’s a gender pay gap. What about race? | Omar Khan Continue reading...

State attorney general says of agreement: ‘While the financial crisis may be behind us, New Yorkers are still feeling the effects’Royal Bank of Scotland on Tuesday agreed to pay $500m to settle charges of using deceptive practices while marketing and selling mortgage-backed securities before the 2008 financial crisis.Announcing the agreement, the New York attorney general, Eric Schneiderman, said: “While the financial crisis may be behind us, New Yorkers are still feeling the effects of the housing crash. Home values plummeted. Vacant homes consumed neighborhoods. And for many New Yorkers, affordable housing fell out of reach.Related: Elizabeth Warren attacks 'dangerous, wrong' bill to relax rules on US banks Continue reading...

Chancellor disputes French minister’s claim that trade deal cannot include financial sectorPhilip Hammond will insist on Wednesday that Britain can overcome EU opposition and include financial services in a post-Brexit free trade deal.The chancellor is expected to use a speech in the City to challenge the idea – voiced strongly by France’s finance minister on Tuesday – that financial services have never been included in trade deals because of their complexity and the risks to stability. Continue reading...

All the day’s economic and financial news, as hopes of a breakthrough between North and South Korea cheer investors

Democratic senator says Congress has forgotten the ‘devastating impact of the financial crisis’ and vows to stop bill passing the SenateCongress has forgotten the “devastating impact of the financial crisis”, Senator Elizabeth Warren said on Tuesday as Republicans moved closer to relaxing banking regulations implemented after the financial crash of 2008.Related: Three ways to remake the American economy for all | Elizabeth Warren Continue reading...

People want to shop but inflation means they cannot afford non-essential items, says retail bodyRetailers suffered tough trading in February after a squeeze on household incomes forced consumers to spend more money on food and essential items.The British Retail Consortium, the lobby group for high street shops, said more of consumers’ monthly salaries were being swallowed up by higher prices for food, leaving little cash leftover to spend on other items.

All the day’s economic and financial news, as World Trade Organisation and House speaker Paul Ryan warn that a trade war would be very damaging

WTO chief warns Trump not to spark first trade war since 1930s after US president talks up tariffsFears of the first full-scale tariff war since the 1930s have been raised by the head of the World Trade Organisation, in a direct warning to Donald Trump that his proposed levies on steel and aluminium will trigger a domino effect that will lead to global recession.In a sign of growing international alarm at the possible consequences of Trump’s protectionist measures, Roberto Azevedo, the WTO’s director general, said “in the light of recent announcements on trade policy measures, it is clear we now see a much higher and real risk of triggering an escalation of trade barriers around the world”. Continue reading...

Stagnant wages, slow growth and high unemployment delivered the election’s populist uprisingToo little and far too late. Six words that sum up the performance of the Italian economy in the decade since the financial crisis, and that go a long way towards explaining the support for populist parties in the election.Indeed, if ever there was a country that was ripe for a protest against the political mainstream it was Italy, where four years of modest growth have not been nearly enough to repair the damage caused by a deep slump in 2008-09 and a second two-year recession in 2012-13.Related: Italy's voters ditch the centre and ride a populist waveRelated: Italy's voters issue warning to Europe Continue reading...

Plane maker fears future customs and paperwork delays will make UK plants uncompetitiveAirbus has warned it would have to consider its position in the UK without imminent clarity over customs rules after Brexit.The European aerospace manufacturer said it would soon have to decide whether to start stockpiling parts to avoid border delays, adding costs that could make its British operations uncompetitive. Continue reading...

Factory output expected to rise by 2% this year as demand for British exports grows, says EEFBritain’s manufacturers are set to outpace the rest of the economy this year with help from booming global demand for exports, according to a survey showing British firms started the year on a strong note.According to the manufacturers’ organisation EEF and the accountancy firm BDO, factory output is on course to increase by 2% this year – beating the 1.5% GDP growth forecast for the wider economy.Related: How has the Brexit vote affected the economy? February verdict Continue reading...

All George Osborne’s great project has done is destroy growth, and escalate poverty. Is that what austerity was for?Congratulations, everyone! We did it! The deficit has been eliminated! George Osborne, the architect of austerity, emerged from one of his non-jobs as the editor of the London Evening Standard to tell us all it was a “remarkable national effort” on Twitter, as if he’d ever broken a sweat over it. David Cameron, who will go down as arguably the worst prime minister in history thanks to the gigantic power move of doing a Brexit and running away, simply added: “It was the right thing to do” – safe in the knowledge that he was now out of the line of fire from tough questions.Related: A triumph for George Osborne’s austerity plan? Not when our social fabric is in tatters | Ann PettiforDeficits aren’t only not bad, they’re necessary – without them we get deflation and an explosion in inequalityRelated: How language duped us into austerity | Zoe Williams Continue reading...

Lord Willetts pushes measures to prevent a 15p rise in income tax being imposed on the younger generationA senior Conservative is to urge Theresa May to target the wealth of baby boomers to prevent their children’s generation being forced to stomach a 15p rise in income tax to cover the spiralling cost of healthcare, education and welfare.Former minister David Willetts will argue that public spending on the three areas is due to rise by £60bn a year by 2040, which could be funded by either taxing the homes of wealthy pensioners or by squeezing younger people’s take-home pay. Continue reading...

Taxing the rich will address inequality and secure the welfare state’s future. It’s a Tory peer’s call, and he’s rightTax may as well be a four letter word. Politicians have found little public support for raising taxes over the years. Think of the poll tax riots, the furore over Ed Miliband’s mansion tax or George Osborne’s “omnishambles” budget and the pickle he was in over the humble pasty.Usually the most resistance is reserved for wealth taxes, not least for their doom-laden names given by the media: no voter wants to pay for death tax or dementia tax. Denis Healey, the Labour chancellor misquoted for wanting to “squeeze the rich until the pips squeak”, came closest, with a 1974 election wealth tax pledge but was forced to backtrack. The pips would have squeaked a little too loud for comfort.

Expanding economic power will be crucial to China, but can the new ‘empire’ thrive?It was breathtaking even if inevitable. China has abandoned its constraints on one-party rule. In 1980 Deng Xiaoping, the author of the Chinese miracle, wrote into China’s constitution 10-year term limits for its presidents and committed the country to the rule of law. Certainly China would continue as a one-party state, but it would be one that operated within constitutional bounds. Never again would the country suffer the depredations of a despot like Mao. Deng even held out the possibility that by 2030 China might become a democracy with a properly independent judiciary.No more. Last Sunday the People’s Daily announced that President Xi would be carrying on in office indefinitely. Equally ominously, the constitutional commitment to the rule of law – in any case more observed in the breach – was to be transformed into a commitment to “wielding the law to rule”. No prizes for guessing who would wield that law. A newly drafted first clause in the constitution, in line with the “thoughts of Xi Jinping”, declares that the “leadership of the Chinese Communist party is the most essential feature of socialism with Chinese characteristics”. Continue reading...

If jobs return to town centres, shops can prosperThe past decade has witnessed the collapse of several celebrated British high street brands, from Woolworths to BHS. Last week, two more familiar names – Toys R Us and Maplin – headed for the retail graveyard, just the latest indicator of the far-from-rosy outlook that faces the sector. A number of other famous names, from Debenhams, to Mothercare, to House of Fraser, appear to be teetering on the brink.The trends driving this are familiar. Shopping habits have changed profoundly; while consumers are spending less in shops, internet sales have been steadily growing, with one pound in five now being spent with online retailers. The fragile economy means less consumer cash to be spread around: real wages have been falling as the weak pound has driven up inflation post-Brexit. Many high street brands overexpanded during more auspicious economic times, leaving them burdened with debt and underperforming outlets.The Observer is the world's oldest Sunday newspaper, founded in 1791. It is published by Guardian News & Media and is editorially independent.

The ex-chancellor rejoices as his target is finally hit, but austerity has taken a terrible tollGeorge Osborne, cheered on by the Institute for Fiscal Studies, basked in self-admiration last week. With a tweet, Osborne joined in celebrations around the elimination of the deficit on Britain’s current budget – used for day-to-day spending on, for example, the NHS, housing, education and local government.The cheerleaders ignored the consequences of that “achievement”, not least of which is the threat to Britain’s economy and social fabric caused by the turmoil of Brexit.While employment revived, jobs have been recast as part-time, temporary and insecureWe got there in the end - a remarkable national effort. Thank you. https://t.co/8D23AKbuwHWhat is austerity? Continue reading...

Financial impact of the ‘beast from the east’ and storm Emma worst since Christmas 2010Gridlocked motorways, empty restaurants and idle diggers seen across Britain last week cost the economy at least £1bn a day and could halve GDP growth in the first three months of the year.Analysts said the impact of the “beast from the east” sweeping in from Siberia and the arrival of Storm Emma hitting the south coast was likely to be the most costly weather event since 2010, when freezing temperatures and snow brought the economy to a standstill a week before Christmas.Related: Beast from the East meets Storm Emma, causing UK's worst weather in years Continue reading...

With the Bank of England controlling inflation, and the Treasury enslaved to pensioner votes, policies that would share wealth with younger generations don’t stand a chanceThe greatest threat to our economy comes from its ageing population. With the baby-boomer generation making up a large proportion of society, we find ourselves in a situation where public policy is mostly geared towards shoring up the gains made by boomers over the past 40 years, and industrial disputes are driven by an ageing union membership most worried about its pension entitlements.It is a problem that Britain shares with its continental cousins, the US and Japan, now that all are struggling with a situation where a fifth of their populations is aged over 65 and the proportion is rising fast. Ageing populations have many effects on an economy, not least the desire among those nearing retirement age to save excessively.The glut of stocks, bonds and property savings will maintain the trend of too much money chasing too few opportunities Continue reading...

IMF joins China in warning of potential harm from 25% tariff imposed on metal imports but Trump insists ‘trade wars are good’

Donald Trump’s plan to impose tariffs on steel and aluminium imports have caused international criticism, and sent markets sliding

Readers respond to the week’s bitterly cold weather and the effect it has had on the nationFrank Field (Letters, 2 March) draws our attention to the rise of destitution in the UK today as children from poor families arrive at school hungry and ill-prepared to learn. The impact of the recent snow and sub-zero temperatures on these children’s lives cannot be underestimated. With their schools closed, they must remain in their unheated homes for days on end without the comfort of a warm classroom or a hot meal. Government austerity and welfare cuts are cold comfort indeed to these poor children.

Threat of a trade war with China led investors to sell off US manufacturers including Caterpillar and Boeing

Why aren’t wages growing in Australia? For Guardian Australia’s series The pay paradox Gareth Hutchens and Greg Jericho examine the long-term and short-term reasons for the trend, including high unemployment and weaker employee bargaining power, with experts John Buchanan, from Sydney University, and Saul Eslake, former chief economist at ANZ. ‘Employers have changed the whole nature of work,’ says Buchanan• Whatever happened to wage rises in Australia? Continue reading...

Uncertainty over Brexit and strengthening pound hitting British factories, survey showsBritain’s factories suffered a slowdown in growth to an eight-month low last month as manufacturers were hit by the twin headwinds of Brexit uncertainty and a stronger pound.The IHS Markit/CIPS survey showed that manufacturing output remained robust and above the historic average, but the purchasing manager’s index (PMI) that measures activity across the sector slipped to 55.2 in February, its second-lowest reading since the June 2016 Brexit vote. A figure above 50 indicates growth. Continue reading...

Another home furnishings firm feels effects of falling consumer confidenceMore high street store closures could be on the cards after Carpetright warned it would slump into the red this year and said it was asking its banks for help to ride out the financial storm.The floor covering chain’s third profit warning in four months comes the day after Toys R Us and Maplin, two of the high street’s best known retailers, went into administration, casting doubt over the future of 5,500 jobs and 300 stores.Like-for-like sales have become the benchmark in the City for judging the current performance of retailers. Typically represented as percentage growth rates, like-for-like sales measure sales at stores that have been open for at least a year, stripping out the impact of sales at newer stores. The idea is that they allow a more transparent comparison of a retailer’s sales performance over a certain period of time, when compared with the same period of time a year earlier. Continue reading...

UK retail gloom as two chains employing 5,500 people call in the administrators

The latest article in our new economics series looks at what happened when a German utilities contract expired, and one man thought his neighbours could take over

Aditya Chakrabortty speaks to Iris Degenhardt-Meister, who is part of a cooperative energy company that runs the electricity grid in Wolfhagen, Germany, and asks Prof Andrew Cumbers from the University of Glasgow if such a model could work in BritainSubscribe and review on Apple Podcasts, Soundcloud, Audioboom, Mixcloud and Acast, and join the discussion on Facebook and TwitterIn Britain, rip-off energy prices have become politically toxic, with the major parties vying to offer price caps, heating allowances and a transition to lower-carbon technologies. But truly radical plans – such as taking the supply of energy back into the hands of local communities – have never been given serious consideration. It is a model that has been trialled in the German town of Wolfhagen and is now a source of local pride. Aditya Chakrabortty hears from Iris Degenhardt-Meister, who sits on the board of the local energy cooperative, which not only replaced a major multinational in running the town’s energy supply but is now aiming to make it 100% renewable. Continue reading...

Cash-strapped council says up to 2,000 cases involving older and disabled people are unassignedCare services for older and disabled adults are on the verge of being unsafe in Northamptonshire, the crisis-ridden county council has said, with as many as 2,000 cases unassigned because of major budget cuts.The Tory-run council, which declared it was close to effective bankruptcy earlier this month, was given the prognosis by senior officials as it sought to agree a additional £10m cuts programme that would include the closure of 21 of its 36 libraries. Continue reading...

A council bankruptcy exposes how the Treasury hijacked devolution as a way of palming off responsibility to local councils for making cuts, while keeping the power to make policy. That has to changeNorthamptonshire county council’s bankruptcy was made in Downing Street. Up and down the country there are increasing numbers of local examples of the ruinous effects of austerity. Each is unhappy in its own way but, when aggregated together, they reveal how an entire social infrastructure is being shredded. In the case of Northamptonshire, the most eye-catching measure is that all bus subsidies will be cut on Wednesday. This does not mean buses will stop running across 900 square miles in the east Midlands, but it will almost certainly see many socially needed routes scrapped. Bus services paid for by councils in England and Wales are mostly used by older people, schoolchildren, and the less well-off. It is these groups that will end up marooned and isolated, with few other options for getting around.Northamptonshire is just the tip of the iceberg: cuts to public funding have helped shrink Britain’s bus network to levels last seen in the late 1980s. The National Audit Office estimated that bus budgets have been slashed by 40% since 2010. Routes have been either scrapped or shortened and timetables have been reduced. At the same time bus fares have gone up. The austerity of David Cameron and Theresa May has meant bus services faced death by a thousand cuts. Unlike the railways, buses are fading silently. Despite more journeys being made on buses than trains outside of London, they rarely appear on Westminster’s radar. Rail commuters are voters who politicians understand: largely middle class and found in marginal constituencies. Bus users are numerous, but constitute a less politically noisy base. Continue reading...

Sheffield councillor Bryan Lodge and others respond to protests against the city’s tree replacement programmeIn Sheffield – with 4.5 million trees, still Europe’s greenest city – we know that a small band choose to ignore the facts in their protests against our lawful tree replacement programme (The roots of resistance, G2, 26 February). But we remain happy to let the facts speak. There will be more trees at the end of this work than at the beginning, as we plant trees for tomorrow. Opponents are entitled to their opinions; but they are not entitled to their own facts. The facts are at sheffieldnewsroom.co.uk/street-trees-mythWe continue to welcome peaceful protest, but it cannot be acceptable for a tiny minority of hardcore protesters to attempt the imposition of their views against the wishes of the majority of local residents who want the council to complete its programme of highways improvements, and the consequent wasting of large amounts of taxpayers’ money in additional programme costs and legal bills.

Things might have turned out differently had President Nixon not been reminded of Speenhamland, says David Beake. Plus Mike Higgins on how today’s student loan system shows the feasibility of the sort of large taxation shift necessary for a UBIA basic income (Beveridge was cradle-to-grave: who could sell that these days?, Polly Toynbee, 26 February) came close to fruition in the US in 1969 through the unlikely offices of President Nixon, who wanted every American family of four to have, from the state, at least $1,600 dollars a year – that’s $10,000 today. Until, that is, Nixon was reminded of events in Speenhamland, Berkshire, in 1795; there every citizen had a basic income against rising food prices and, by most accounts, it all worked well but a royal commission falsely claimed that all manner of social evils befell the town. Nixon’s advisers, including one Milton Friedman, recalled this and the idea was swiftly dropped. As Rutger Bregman says in his excellent Utopia for Realists, until Nixon heard bad reports about 18th-century Berkshire, the “fallacy that a life without poverty is a privilege you have to work for, rather than a right we all deserve” was, very nearly, dismissed even by capitalism’s HQ.

US cable giant Comcast has made a dramatic move to take control of UK broadcaster Sky; new Fed chair Powell hints at US rate rises