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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Amazon denies planning to publish tariff costs on main site, as White House blasts ‘hostile and political’ act – as it happened

HSBC United States Donald Trump
White House press secretary Karoline Leavitt holds a news article on Amazon CEO Jeff Bezos that reads
White House press secretary Karoline Leavitt holds a news article on Amazon CEO Jeff Bezos that reads "Amazon partnered with China propaganda arm". Photograph: Mandel Ngan/AFP/Getty Images

Closing post

Time to recap.

Amazon has denied that it planned to show the cost of new US tariffs on products on sale on its website, after being heavily criticised by the White House.

An Amazon spokesperson has insisted that it never considered listing tariffs on its main retail site and nothing was implemented on any company site, saying:

“The team that runs our ultra low cost Amazon Haul store considered the idea of listing import charges on certain products. This was never approved and (is) not going to happen.”

Amazon commented after White House press secretary Karoline Leavitt claimed the plan to disclose tariff costs was “a hostile and political act by Amazon,” and “Another reason why Americans should buy American”.

Leavitt responded to a question from the media about a report on Punchbowl News that claimed Amazon will soon display how much of an item’s cost is derived from tariffs.

That report prompted president Trump to phone Jeff Bezos, Amazon’s founder, to complain, CNN reports.

She was speaking at a press briefing today, where Treasury Secretary Scott Bessent warned that China risks losing millions of jobs unless it agrees a deal to cut tariffs soon.

Bessent told reporters:

“I think that over time we will see that the Chinese tariffs are unsustainable for China.

I’ve seen some very large numbers over the past few days that show if these numbers stay on, Chinese could lose 10 million jobs very quickly. And even if there is a drop in the tariffs that they could lose 5 million jobs.”

Bessent also said that negotations with India, South Korea and Japan are progressing well.

But we’ve seen more signs today of the economic harm caused by Donald Trump’s trade war:

Companies have also been reporting the impact of new tariffs:

  • HSBC raised its provisions for bad debts

  • Adidas warned that the price of its goods in the US will rise

  • UPS didn’t issue new financial guidance

  • GM postponed a conference call with top management and investors until Thursday

  • Electrolux cut its forecast for the US market this year

Updated

Economics professor Justin Wolfers suggests, tongue-in-cheek, that the White House should show Amazon some gratitude!

Here’s a video clip of White House press secretary Karoline Leavitt laying into Amazon:

FTSE 100 posts longest winning streak in over eight years

Back in London, the stock market has recorded its longest run of gains in over eight years.

The FTSE 100 index of blue-chip shares rose by 46 points, or 0.55% today, to end at 84,63 points, its highest close in three weeks.

This means the Footsie has now risen for 12 days in a row, beating the 11-day winning streak in December 2019 (when there was a rally after Boris Johnson’s Conservative Party won the general election).

It’s the longest run since January 2017, when the FTSE 100 managed a 14-day run of gains.

HOWEVER, this still leaves the Footsie down 1.3% in April – it hasn’t quite recovered all its losses earlier this month, when the trade war exploded.

CNN: Trump called Bezos to complain

CNN’s White House reporter, Alayna Treene, has learned that president Trump phoned Jeff Bezos to complain that Amazon reportedly planned to show the cost of US tariffs on its site.

That call was made shortly after Trump was made aware of the story on Punchbowl – and before Amazon insisted the plan was never considered for its main site.

Amazon: Suggestion of showing tariffs was 'never approved'

Amazon are insisting that while its Amazon Haul team considered the idea of listing import charges on certain products, this was “never approved and not going to happen.”

A company spokesperson says:

“The team that runs our ultra low cost Amazon Haul store considered the idea of listing import charges on certain products. This was never approved and is not going to happen.”

Updated

Investors Observer has calculated that California is the state most exposed to the US-China trade war.

California importing almost $123 billion worth of goods from China in 2024 – almost triple the amount imported by the next state, and 25% of imports to the state.

It’s followed by Illinois, Texas and Tennessee.

Meanwhile in Scotland, trade union leaders have accused the Scottish and UK governments of betraying thousands of oil and supply chain workers after PetroIneos announced on Tuesday that production at Scotland’s only oil refinery had ended.

PetroIneos, jointly only by Jim Ratcliffe’s Ineos and PetroChina, announced late last year it was phasing out oil refining at Grangemouth, arguing the aged refinery, the oldest of six across the UK, was haemorrhaging money and no longer viable.

It said the first phase of more than 400 direct job losses would take effect on 30 April, but the announcement that refining had totally ended on Tuesday morning surprised unions meeting in Dundee for the Scottish TUC’s annual congress.

Roz Foyer, the STUC’s general secretary, told delegates the closure was symbolic of the failure by the UK’s governments to protect workers and the wider economy from the transition to a low carbon economy.

She said John Swinney, Scotland’s first minister, and Anas Sarwar, the Scottish Labour leader, both of whom addressed this year’s congress, were full of “warm words and platitudes” yet seemed powerless. “The failure to keep the refinery open is an inexcusable and unforgiveable failure [that] cannot be ignored,” she said, to applause from delegates.

PetroIneos has spent £50m on an expanded fuel terminal, importing petrol and diesel from other refineries, protecting around 70 jobs. Even so, the union Unite fears that around 2,822 jobs in the wider supply chain and amongst local businesses will be affected by the refinery’s closure.

Scottish union leaders are angry that UK ministers intervened to stop British Steel’s Scunthorpe steel furnaces from being shut down, but failed to nationalise Grangemouth.

Chris Hamilton, the Unite convenor at Grangemouth oil refinery, who was at the congress, said they knew refinery production would end around now.

“It doesn’t make today any less devastating and any less emotional, because ultimately, what we’ve campaigned for for the last 18 months was to continue operations at the refinery, to then invest and then transition to future stuff.

“18 months ago, when this announcement was first made, it certainly wasn’t inevitable. Look what’s happened at Scunthorpe: the closure of that site clearly wasn’t inevitable. So for us, if there was a will, there’d be a way. But ultimately for Grangemouth it looks like there’s not been a will, and therefore there has not been a way. And today Scotland loses its last refinery.”

Global commodity prices tipped to fall in 2025

Global commodity prices are set to fall by 12% this year and continue declining in 2026, putting pressure on the finances of many developing countries, the World Bank warns today.

The Bank’s experts expect the slowdown in global growth resulting from escalating trade tensions, to outweigh the inflationary impact of the tariffs.

Oil prices are expected to drop particularly sharply, as the Opec+ producers’ cartel keeps output high in a bid to maintain market share. The Bank is predicting an average Brent Crude oil price of $64 a barrel for 2025 - down from the $73 it was predicting before the tariffs were introduced.

The report’s authors point out that the downturn, induced by US policy, is only the latest shock to hit commodity markets in what they call, “a remarkably turbulent decade so far”.

The Bank’s deputy chief economist, Ayhan Kose, warned that with many emerging economies already in debt distress, plunging commodity prices are likely to make life harder for those that depend heavily on exports.

He said:

“These countries already went through a series of shocks over the last five years. So in terms of having fiscal space, they are not in in a good shape.”

The report also warns of what it calls, “marked downside risks to the outlook for global economic growth amid rising trade tensions, and therefore also to commodity demand”.

To quantify these risks, the World Bank’s economists take the gloomiest 10% of growth forecasts from other experts. If things get this bad, it reckons, the Brent Crude oil price would drop another 7%, to $59 a barrel.

Another economic blow today – Americans’ confidence in the economy slumped for the fifth straight month to the lowest level in five years.

The Conference Board’s consumer confidence index fell 7.9 points in April to 86, its lowest reading since May 2020, early in the Covid-19 pandemic.

Worryingly, the survey’s Expectations Index – which measures consumers’ short-term economic outlook – dropped to the lowest level since October 2011, to levels that usually signals a recession ahead.

Amazon’s share price has recovered most of its early losses, after it denied planning to disclose the cost of tariffs on the goods it sells on its main site.

Amazon’s stock is now down just 0.5% today – they were initially down 2.2% in premarket trading after the White House let rip.

Updated

US job vacancies fall

Back in the US economy, there are more worrying signs that America’s labor market may be weakening.

The total number of job openings at US companies dropped last month to 7.192m, according to the latest JOLTS report, down from 7.48m in February, and almost 8.1m in March 2024.

That suggests a slowdown in hiring in March, a month in which Donald Trump imposed tariffs on China, Canada and Mexico.

You can read the original report that sparked the White House’s ire here, on Punchbowl News.

It claimed:

Amazon doesn’t want to shoulder the blame for the cost of President Donald Trump’s trade war.

So the e-commerce giant will soon show how much Trump’s tariffs are adding to the price of each product, according to a person familiar with the plan.

Amazon: Never considered listing import charges on our main site

Heads-up: Amazon is denying that it planned to display tariff costs on its main website, reports Jeff Stein of The Washington Post.

The retailer is saying that its Amazon Haul store, which sells low-cost items had considered listing import charges on “certain products”.

“Nothing has been implemented on any Amazon properties,” the company added, shortly after the White House accused it of a ‘hostile and political’ act (see earlier post).

Updated

It’s not hard to understand why the White House is cross with Amazon.

Donald Trump has repeatedly claimed that the tariffs he imposes on imports are paid by other countries, despite economists pointing out that actually US businesses – and ultimately consumers – stump up the money when goods arrive.

If consumers are seeing a ‘tariff cost’ on their Amazon orders, they might realise how the system works.

Gavin Baker, CIO of investment firm Atreides Management, suggests other companies may adopt the same plan too:

Analyst: White House is targeting US companies who question their moves

The White House’s attack on Amazon is a “significant” move which could alarm the financial markets, says Kathleen Brooks, research director at XTB.

She writes that it’s a sign that the US administration is targeting comapnies who disagree with them – that means an increase in political risk.

Brooks explains:

The US administration has changed its tone towards tariffs yet again on Tuesday. The White House Press secretary and the Treasury Secretary accused Amazon of a ‘hostile political act’, after Amazon planned to expose the cost of tariffs to its consumers. This comes days before Amazon reports earnings on Thursday, and its stock price fell ahead of the US open and is down more than 2% so far.

The US administration has mostly saved its ire for other countries that it believes gives the US a raw deal in global trade. Now it appears that the US administration is targeting US companies who question the logic of its moves. This is significant. Financial markets have been roiled by political interference in the global economy in recent weeks. Investors do not digest political risks well, so if the Trump administration is now publicly accusing US companies of hostile acts if they disagree with the President’s US economic policy then this could stop the recent recovery rally in risky assets.

Political analyst Ian Bremmer isn’t convinced by the White House’s argument against Amazon.

He suggests telling a customer the cost of tariffs on their goods is no different than flagging the sales tax on a receipt:

Updated

Capital Economics: Pre-tariff import boom points to sizeable Q1 GDP contraction

Blimey. The surge of imports into the US last month are a sign that America’s economy probably contracted at the start of this year, consultancy Capital Economics suggest.

Paul Ashworth, their chief North America economist, explains:

The advance economic indicators revealed a massive surge in consumer goods imports in March, as firms raced to beat the imposition of reciprocal tariffs in early April.

As a result, we now estimate that Q1 GDP contracted at a 2.0% annualised pace, down from our most recent estimate of a 0.1% gain.

We’re expecting the first estimate of US GDP for the last quarter to be released tomorrow…..

Shares in Amazon have dropped 1.3% at the start of trading, after the White House accused it of a ‘hostile’ act for showing consumers the cost of tariffs….

White House accuses Amazon of 'hostile and political' act for showing tariff costs

The Trump White House is furious with Amazon over reports that it plans to display the cost of tariffs on items it sells.

Press secretary Karoline Leavitt has just given the company both barrels, at her briefing with the media today.

Leavitt claims the move is “a hostile and political act by Amazon”, and asks why Amazon didn’t take a similar step when inflation hit 40-year highs under the Biden administration.

She also adds that it’s “not a surprise”, citing a report (from 2021) that Amazon partnered with a Chinese propaganda arm.

Leavitt argues:

So this is another reason why Americans should buy American. It’s another reason why we are onshoring critical supply chains here at home, to shore up our own critical supply chain and boost our own manufacturing.

Q: Is Jeff Bezos still a Trump supporter?

Leavitt declines to comment on the president’s relationships with Jeff Bezos, but reiterates that “this is certainly a hostile and political action by Amazon”.

Updated

Bessent: We are very close in talks with India

America’s Asian trading partners and allies have been “the most forthcoming” in terms of doing trade deals, Treasury secretary Scott Bessent says.

He adds that vice-president Vance made some very good progress during his trip to India last week, and that the contours of a deal with South Korea are coming together.

Bessent then gives some “inside baseball” know-how in India, saying they are easier to negotiate with than many other countries because they have many very high tariffs.

So it’s much easier to confront the direct tariffs…than the non-tariff trade barriers which can be much more insidious and also harder to detect.

So a country like India, which has the posted and ready tariffs, it’s much easier to negotiate with them. So I think the India negotiations are moving well.

Bessent not worried about supply chain shocks

In what may prove a hostage to fortune, Treasury secretary Scott Bessent says he doesn’t expect supply chain shocks due to the slowdown in shipments from China.

Bessent says retailers have managed their inventory in front of this, explaining to the press pack:

I speak to dozens of companies, sometimes daily, but definitely weekly.

They know that President Trump is committed to fair trade and have planned accordingly.

Scott Bessent is then asked why Donald Trump has decided to cushion the impact of his tariffs on US carmakers by easing some duties on foreign vehicle parts.

The Treasury Secretary explains that Trump is committed to bringing back auto production to the US, so his administration wants to give automakers a path to do that “quickly, efficiently and create as many jobs as possible”.

Bessent: Tariffs are unsustainable for China

Over at the White House, Treasury secretary Scott Bessent is facing the press, and taking questions about the trade war.

Quizzed about the situation with Beijing, Bessent argues that the Chinese tariffs are “unsustainable for China”, and could cost million of jobs very quickly [he may be citing a Goldman Sachs prediction that 16 million jobs are at risk].

Bessent says:

Remember that we are the deficit country.

They [China] sell almost five times more goods to us than we sell to them. So the onus will be on them to the take off these tariffs. They’re unsustainable for them.

Bessent is also asked who the Trump administration is talking to Beijing specifically about tariffs, but he says he won’t talk about who’s talking to whom – joking that his role doesn’t include running the White House switchboard.

Some snap reaction to the jump in the US trade deficit last month:

US trade deficit widen as imports surge

Ouch! America’s trade in goods deficit has widened sharply last month, jumping by over 9%.

The US trade deficit with the rest of the world rose to $162bn in March, up $14.1bn compared with February, when the deficit was $147.8bn.

New data from the Census Bureau shows that US exports rose by $2.2bn to $180.8bn in March.

But that was firmly outpaced by a surge in imports, which rose by $16.3bn during March to $342.7bn.

That might indicate that US businesses and consumers raced to import goods last month before Donald Trump announced new tariffs on 2 April.

Updated

India prepared to 'future-proof' US trade deal

In other trade war news, India is reportedly prepared to include a sweetener in trade talks with Washington that would “future-proof” a deal by ensuring no other trade partners could have superior terms.

The “forward most-favoured-nation” clause, rarely granted by India in previous trade negotiations, would automatically apply to the U.S. any more-favourable tariff arrangements that might be agreed with other countries, two officials with direct knowledge of the matter told Reuters.

One official explained:

“This clause, in a sense, future-proofs the U.S. deal and is the only way to do so.”

China: We won't kneel down to 'paper tiger' US

China has insisted that it will “never kneel down” in the trade war with the US, in a propaganda video that compares the US to “a small, stranded boat”.

The video, released on social media today by Beijing’s foreign ministry, claims that China is standing up for the rest of the world against American “bullying”.

The video suggests the current relative calm in the trade was is just “the eye of the storm”, declaring:

Bowing to a bully is like drinking poison to quench thirst. It only deepens the crisis.

The video then outlines how the US accused Japan of dumping semiconductors, forced Toykoto sign the Plaza Accord (to weaken the dollar against the yen), and forced the break-up of France’s Alstom.

Pitching China bravely carrying a torch against US imperialism, the video says:

History has proven compromise won’t earn you mercy. Kneeling only invites more bullying. China won’t kneel down because we know standing up for ourselves keeps the possibility of cooperation alive while compromise snuffs it out.

China won’t back down, so the voices of the weak will be heard. Bullying will be stopped, and justice will not disappear from the world. All bullies are just paper tigers.

GM pulls financial guidance due to tariff uncertainty

Car giant General Motors is also struggling to get a grip on the economic outlook.

GM has pulled its annual forecast, blaming uncertainty created by Donald Trump’s trade war.

GM’s chief financial officer Paul Jacobson told a press call:

“We believe the future impact of tariffs could be significant.”

“We’re telling folks not to rely on the prior guidance, and we’ll update when we have more information around tariffs.”

Jacobson was speaking after GM reported net income of $499m in the first three months of this year down from $536m for the quarter ending on 31 March, 2024.

The company has also delayed a call with analysts that had been scheduled for today, until Thursday.

GM says:

Based on recent reports regarding updates to trade policy, GM Chair and CEO Mary Barra and GM Chief Financial Officer Paul Jacobson will now host a conference call for the investment community at 8:30 a.m. ET Thursday, May 1 instead of Tuesday, April 29 to discuss these results and GM’s updated 2025 full-year guidance. The company’s initial full year 2025 financial guidance does not contemplate the potential impact of tariffs.

UPS won't give new guidance due to economic uncertainty

Donald Trump’s trade war is making it hard for delivery companies to assess their future prospects.

Today, United Parcel Service (UPS) said the “current macro-economic uncertainty” means it is not updating its outlook for this year.

UBS, which could be hit if shipments to US consumers fall, made the comments as it reported a 0.7% rise in revenues in the first three months fo this year, with operating profits up 3.3%.

Ireland's GDP grew 3.2% in Q1 2025

Ireland’s economy has grown for the third quarter running, driven by major international companies based in the Republic.

Irelands’ Central Statistics Office has reported that Gross Domestic Product (GDP) increased by 3.2% in the first quarter of 2025.

Enda Behan, Statistician in the National Accounts Integration Division, said:

“In today’s release, GDP is estimated to have expanded by 3.2% in January, February and March (Q1) 2025 in volume terms when compared with Q4 2024.

This was driven by an increase in the multinational dominated sectors in Q1 2025 with a more modest increase in the domestic sectors. GDP is estimated to have risen by 13.3% when compared with Q1 2024.

Updated

UK regulators stepped up monitoring of banks after trade war turmoil

The Bank of England’s stability watchdog has increased its scrutiny of Britain’s banks following the turmoil triggered by Donald Trump’s trade war, MPs have heard today.

Sam Woods, head of the Prudential Regulation Authority, told the Treasury Committee this morning that the PRA has “stepped up” its monitoring of the firms, as is typical in such situations.

Woods told MPs that “we consider ourselves still to be in the middle of this thing”, as he outlined the response to the jittery markets of recent weeks.

He says the PRA is watching “very closely”, but has not taken its monitoring to the highest level of ‘daily liquidity monitoring’, as it doesn’t think that is necessary.

Woods adds that the regulator is also watching for the “macro impact” of the trade war, reminding MPs that the IMF downgraded its growth forecasts last week.

I think it would be interesting to see whether our banks in the next period, choose to provide more for a different economic environment, because they do forward looking provisions. That’s where our focus is now.

Reminder: HSBC raised its expected credit losses by $200m to around $900m for the first quarter of 2025 this morning.

Woods also told MPs that the PRA did not see any signs that the market turmoil after ‘Liberation Day’ had spread into bank funding, and that there was also no sign that customer behaviour was affected.

But, he did flag the ‘very unusual move’ in the financial markets, which was the selloff in the US dollar and in US government debt.

Woods says that was a worry:

Normally we see the opposite in these risk off type of conditions. Normally we see a flight into those types of assets. So that was quite concerning.

He added that it is “notable” that after this move, president Trump decided to announce his 90-day pause which settled the markets.

Updated

Economic sentiment across Europe has weakened this month, as the Trump trade war hit financial markets.

The European Commission’s Economic Sentiment Indicator, just released, declined by 1.4 points in both the European Union (to 94.4) and the euro area (to 93.6).

A measure of employment expectations also fell across the EU.

Adidas: Trump tariffs will mean more expensive trainers

German sportswear group Adidas has warned today that Donald Trump’s tariffs will push up costs for American consumers.

In its latest financial results, Adidas told shareholders that it faces increased uncertainty due to US tariffs and higher macroeconomic risks.

It reported a 13% jump in sales, and increased operating profits.

Adidas chief executive Bjørn Gulden would said that the uncertainty created by new tariffs imposed by the US had “put a top” to an upgrade to the company’s guidance this year.

Gulden added:

Although we had already reduced the China exports to the US to a minimum, we are somewhat exposed to those currently very high tariffs. What is even worse for us is the general increase in US tariffs from all other countries of origin. Since we currently cannot produce almost any of our products in the US, these higher tariffs will eventually cause higher costs for all our products for the US market.

Given the uncertainty around the negotiations between the US and the different exporting countries, we do not know what the final tariffs will be.

Therefore, we cannot make any ‘final’ decisions on what to do. Cost increases due to higher tariffs will eventually cause price increases, not only in our sector, but it is currently impossible to quantify these or to conclude what impact this could have on the consumer demand for our products.

Primark-owner ABF is hoping that new tariffs on small shipments into America might encourage shoppers to visit its US stores.

ABF currently has 29 Primark stores in the US, and hopes to raise that to 60 by the end of 2026.

CEO George Weston has told Reuters today that the company remains committed to that plan, and suggests that the end of the ‘de minimis’ rule (under which packages worth less than $800 did not qualify for any taxes or tariffs) could help sales.

Weston says:

“De minimis imports in the U.S. are very, very large, they supply a lot of Americans who don’t know about Primark yet but are looking for value.

“With prices going up from this part of the trade, I wonder if some Americans might start going back to shopping centres to find value there.”

UK grocery inflation rises to 3.8%

UK grocery inflation has edged up this month, as consumers are hit by rising food prices.

Data provider Kantar has reported that supermarket prices rose by 3.8% per year in the four weeks to April 20, up from 3.5% a month earlier.

Despite this squeeze, spending on Easter eggs was up 11% year-on-year.

Fraser McKevitt, head of retail and consumer insight at Kantar, explains:

“Chocolate confectionery prices rose by 17.4% this period, the fastest of any category, but that didn’t stop the British public treating themselves this Easter. The volume of chocolate eggs sold through supermarket tills still grew by 0.4% on last year, while at the dinner table lamb was the most popular fresh meat joint, followed by beef and pork.

Some households chose to indulge in less seasonal fare as the sun came out and they dusted off the barbecue, with burger sales shooting up by 31% over the last month.”

A separate report from the British Retail Consortium today has shown that food inflation increased to 2.6% year on year in April, up from 2.4% in March.

Updated

ABF are also threatening to shut their UK bioethanol plant, Vivergo, unless the government relaxes regulations on the industry.

ABF told the City this morning that Vivergo, located in the East Riding of Yorkshire, has cut its production levels in response to continued low prices for bioethanol, leading to lower sales and an operating loss in the first half of the financial year.

The company says:

The way in which regulations are being applied to bioethanol is undermining the commercial viability of our business. We are having constructive discussions with the UK Government to explore regulatory options to improve the position. There is no guarantee that these discussions will be successful, and we will either mothball or close the Vivergo plant if necessary.

Groceries-to-clothing firm Associated British Foods has added its voice to the chorus of warnings about the economic outlook.

ABF told shareholders this morning that the “geopolitical landscape continues to be fragile”, citing the Russian war in Ukraine as well as trade polic changes in the US.

ABF flagged the risk of a US recession, saying:

Consumer sentiment remains cautious and trading activity within elements of our shopper base has been weak. Sentiment is unlikely to improve as markets continue to face uncertainty and instability following recent tariff announcements by the US, retaliatory actions by China and the risk of further tariff trade wars.

Consumer confidence could deteriorate further as a number of countries, including the US, face the risk of recession that could increase individuals’ debt problems. The impact on our businesses will depend on the extent of government intervention, the extent of increased taxation on individuals and businesses and the duration of any economic downturns.

The company reported a 2% drop in revenues for the six months to 1 March, with pre-tax profits down 21%.

CEO George Weston told shareholders he was “frustrated” with the results at its sugar business, which made an adjusted operating loss of £16m due to lower prices in Europe.

ABF, which owns the clothing chain Primark, also warned that trading has been challenging in the UK, saying:

The UK clothing retail market declined in the period, reflecting cautious consumer sentiment and a lack of seasonal purchasing catalyst in the autumn months due to mild weather.

Shares in the company are down almost 9% this morning, the top faller on the FTSE 100 index.

BP green energy chief to exit as it retreats from low-carbon investments

The architect of BP’s failed green energy agenda will leave the embattled oil company within months as it continues its retreat from low-carbon investments following this morning’s sharp fall in profits (see last post).

The oil company said Giulia Chierchia, the executive in charge of BP’s sustainability ventures, would step back from her role from 1 June 2025 to “pursue other opportunities” outside the company. She will not be replaced.

BP profits halve in last quarter

Oil giant BP has missed profit forecasts this morning, adding to the pressure on the company’s executives.

BP reported an underlying profit of $1.38bn for the first quarter of 2025, missing forecasts of $1.53bn, and much weaker than the $2.7bn it earned in January-March 2024.

The company blamed “weak” trading at its gas trading division – gas prices have fallen this year, on concerns that a global trade war will hurt demand for energy.

Shares in BP have dropped by 2.3% in early trading.

The company has been under growing pressure from activist investor Elliott Management this year to make spending cuts, to increase its free cash flow.

Murray Auchincloss, BP’s chief executive officer, says:

In February, we announced a fundamental reset of our strategy - to grow the upstream, focus the downstream and invest with discipline in the transition - and we have already made significant progress.

So far this year we have started up three major projects, made six exploration discoveries and have progressed our divestment programme - all while delivering strong operational performance, with over 95% upstream plant reliability supporting the best operating efficiency* on record, and over 96% refining availability. We continue to monitor market volatility and changes and remain focused on moving at pace.

I’m confident that our plans to strengthen the balance sheet, reduce costs, and improve cash flow and returns will grow long-term shareholder value and strengthen the resilience of bp.

In what could be a nod to Elliott, BP says it will lower its planned spending for 2025 by $500m (£373m) to about $14.5bn this year.

It also plans to divest between $3bn and $4bn of assets.

Patrick Galey, Interim Head of Fossil Fuel investigations at Global Witness, is unimpressed, saying:

“BP has spent the last year flip-flopping on its climate commitments, lurching back towards fossil fuels just as the world needs a clean energy transition.”

“The fact that its returns are now dwindling and investors seem to be losing confidence shows BP’s climate u-turn is not only planet-wrecking but financially wrong-headed too.”

“Now is the time for investors to change direction. Continuing to back fossil fuel giants as the world moves towards safer, cleaner, home-grown energy is a decision that could leave them empty-handed in the years ahead, with falling demand and billions’ worth of stranded assets.”

FT: Amazon pressures suppliers to cut prices to limit Trump tariff shock

Amazon is seeking steep discounts from suppliers and setting tough terms to protect its margins amid the Trump trade war, the Financial Times reports this morning.

According to the FT, Amazon had sought low double-digit price cuts from the sellers of goods ranging from homeware to consumer electronics, according to three vendor consultants — who negotiate on behalf of multiple brands and suppliers.

You can read the story here.

German airline Lufthansa is sticking with its forecasts for this year, despite the rising trade tensions and tougher US immigration processes under Donald Trump.

CEO of Lufthansa, Carsten Spohr, struck an upbeat tone this morning, telling investors:

“Global demand for air travel continues to grow. Despite all the geopolitical uncertainties, we therefore remain on course for growth, are optimistic about the summer, and are sticking to our positive outlook for 2025.

In the first quarter, our airlines were able to sell their expanded capacity at higher yields in the market.

There have been reports in recent weeks that tourism to the US has fallen due to a backlash against Trump, and high-profile deportations and detentions at the border.

Lufthansa, though, has seen an increase in transatlantic demand; Spohr says:

On the North Atlantic, the number of guests rose by more than seven percent in the first quarter, with higher load factors and better yields. Demand continues to be robust for the second quarter.

Electrolux cuts US outlook as uncertainty rises

Swedish appliances maker Electrolux is also counting the cost of the Trump trade war.

Electrolux, which makes white goods and household appliances, warned this morning that the demand outlook for home appliances is “increasingly uncertain”.

The company has lowered its North America market outlook for 2025 from “Neutral” to “Neutral to negative”, and cut its assessment of external factors from “Negative” to “Significantly negative”.

Summing up the last quarter, Electrolux’s president and CEO, Yannick Fierling, says:

The market environment was characterized by increased uncertainty as the quarter progressed. In North America and Europe, market demand was largely unchanged. However, consumer confidence declined throughout the quarter due to economic uncertainty and concerns around U.S. trade policy developments. In Latin America, consumer demand increased marginally, primarily driven by Brazil, in a market characterized by rising competitive pressure.

Effects from changes in U.S. trade policies had a minor impact in the first quarter. It is impressive how our entire organization is acting with speed and agility to mitigate and adapt to the rapidly-changing market environment.

Trump to reduce impact of auto tariffs

There are sounds of another handbrake turn from the White House in its trade war.

President Donald Trump is expected to soften the impact of his automotive tariffs, by tweaking them so that duties on foreign-made cars are not stacked on top of other tariffs, such as those on steel and aluminium.

Trump is also expected to ease some levies on foreign parts used to manufacture cars in the US.

The change was first reported by the Wall Street Journal, and now appears to have been confirmed by the administration.

Commerce Secretary Howard Lutnick said in a statement:

“President Trump is building an important partnership with both the domestic automakers and our great American workers,”

“This deal is a major victory for the President’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing.”

US treasury secretary Scott Bessent is expected to speak to the US press pack later today at the White House daily briefing – perhaps this might be discussed….

Introduction: HSBC sounds alarm on tariffs as bad debt provisions rise

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Companies around the world are calculating the impact of Donald Trump’s trade war, and today we’re hearing from one of the world’s largest banks.

HSBC has set aside more money for bad debts this morning, warning that the economic outlook has deteriorated due to “geopolitical tensions and higher trade tariffs”.

HSBC has increased its expected credit losses (ECL) to $900m in the first quarter of 2025, which is $200m higher than in January-March 2024, as it lifted its provisions for debts going sour.

This helped to knock HSBC’s profits for the quarter down by around a quarter, to $9.5bn, compared with 1Q 2024 (when the bank’s results were flattered by the sale of its businesses in Canada and Argentina).

HSBC also told shareholders that it had modelled scenarios in which tariffs are “significantly higher”, hurting growth – and found it would hurt its revenue and push up bad debt provisions by another $500m.

HSBC also warns, in its latest financial results, that the US trade war has increased the risks facing the global economy.

It told shareholders:

Risks for the global economy have been heightened by new trade policies announced by the US and potential measures that may be adopted by several countries globally, including in the markets in which the Group operates.

This uncertainty poses downside risks to economic growth and impacts economic forecasts, financial markets and business and consumer sentiment. A further escalation of tariffs and trade tensions could lead to lower trade volumes, investment, consumer spending and, ultimately, weaker global GDP growth.

Supply chains could also come under renewed pressure from a fragmented trade landscape, which could cause inflation to rise again.

There are already signs that this slowdown is occuring – the number of vessels scheduled to arrive at the Port of Los Angeles next week is down by almost a third on the same period a year earlier.

The agenda

  • 8am BST: Kantar survey of UK grocery inflation

  • 10am BST: UK Treasury Committee to question senior officials at the Prudential Regulation Authority

  • 3pm BST: JOLTS report on US vacancies

  • 3pm: US consumer confidence report

Updated

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