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Today’s agenda: McKinsey job cuts; Musk slams Trump’s tax bill; Saudi AI plans; Made in China lessons; and what makes the perfect cheeseburger?
Good morning. We start in Washington, where the possibility of additional sanctions being imposed on Russia seems to be growing, fuelled by Vladimir Putin’s recent drone and missile attacks on Ukraine.
What’s happening: Donald Trump’s most recent remarks reveal a growing frustration with Russia’s leader over the war, with Putin offering no concessions and showing no interest in the ceasefire demanded by Kyiv and its western allies. In a social media post, the US president said Russia’s leader was “playing with fire” and added: “What Vladimir Putin doesn’t realise is that if it weren’t for me, lots of really bad things would have already happened to Russia, and I mean REALLY BAD.”
Why it matters: Trump might be close to taking action against Russia, a state department spokesperson has hinted: “There is a point that [Trump] looks at things differently, and how that manifests, just like with everything else in this administration, it will happen quickly.” The president had said earlier that he would “absolutely” consider new sanctions on Moscow. Meanwhile, Republicans have also stepped up calls for sanctions, with a bill written by one of Trump’s most prominent legislative allies continuing to amass support on Capitol Hill. Read the full story.
German aid: Chancellor Friedrich Merz has backed Ukrainian military strikes deep into Russian territory, following his earlier commitment to supply Kyiv with German long-range missiles.
Russian economy: A Financial Times analysis shows a boom in living standards is ending, but the slowdown may not affect Russians’ support for the war. Here’s why.
Here’s what else we’re keeping tabs on today:
Economic data: France has its first-quarter GDP estimate while Germany releases labour data for April. The US Federal Reserve publishes minutes from its last rate-setting meeting.
Oil: Opec and the non-Opec ministerial monitoring committee meet to review production output policy.
Results: Nvidia’s suppliers have resolved issues that delayed shipments of its highly anticipated Blackwell AI servers ahead of its quarterly earnings today. HP and Salesforce also report.
Join FT experts at 12pm BST as they discuss the most consequential geopolitical rivalry of our time: the US-China showdown. Register now.
Five more top stories
1. Exclusive: McKinsey has cut more than 10 per cent of its staff in the past 18 months, reversing a big expansion plan that peaked during the coronavirus pandemic. The job cuts, which are among the largest in McKinsey’s nearly 100-year history, reflect the sharp slowdown in revenue growth across the consulting market.
2. Elon Musk has strongly criticised Trump’s showpiece tax bill, claiming it “undermines” the work done by his government cost-cutting team. In comments likely to widen the rift between the two men, Musk said: “A bill can be big, or it can be beautiful. But I don’t know if it can be both.”
More Trump: The president has offered Canada free protection from the US’s ambitious “Golden Dome” missile defence shield if the country gives up its sovereignty.
More Musk: The billionaire’s company SpaceX has suffered another setback, after its Starship rocket failed to deliver its payload and exploded on re-entry.
3. US stocks rallied after Trump indicated that trade talks with the EU were progressing in a “positive” direction, a day after agreeing to delay his threatened 50 per cent levies on the bloc. The S&P 500 closed 2.1 per cent higher yesterday, with all 11 of the benchmark’s sectors ending the session in positive territory. Here’s what analysts are saying.
4. Exclusive: Saudi Arabia’s new state-owned artificial intelligence company is launching a $10bn venture capital fund as it leads the kingdom’s effort to become a global AI hub. The company’s CEO also said he was in talks with top US tech groups such as OpenAI, Elon Musk’s xAI and Andreessen Horowitz about its plans. Andrew England and Ahmed Al Omran have more details from Riyadh.
5. A US private military contractor has hired a little-known Palestinian group to staff its new distribution centres in Gaza under a controversial Israel-backed overhaul of aid. Safe Reach Solutions — run by an ex-CIA officer — had also approached prominent local businessmen, but they refused to take part in the scheme, arguing it amounted to forced displacement of people in the enclave.
More on Gaza: Waves of desperate Palestinians overwhelmed a humanitarian distribution hub yesterday, as a controversial new aid system began operations.
Middle East: Syria and Israel have held several rounds of direct talks in recent weeks aiming to quell spiralling tensions, according to people familiar with the matter.
The Big Read
© FT montage/Getty Images/Rory Griffiths
Launched a decade ago with the aim of dominating sectors from aerospace equipment to electric vehicles, Beijing’s Made in China plan sought to achieve 70 per cent domestic market share across Chinese manufacturing of “core basic components and key basic materials” by this year. Today, these aggressive investments in domestic production have successfully established China as a global leader in manufacturing, but strained trade ties with the west. What can the world learn from it?
We’re also reading . . .
Curiosity’s value: We must recognise and protect the pipelines that lead from scientific research to real-world benefit, writes Anjana Ahuja.
401k plans: Should ordinary US retirement accounts be investing in private assets? Even some in private equity are worried, writes Brooke Masters.
Reform UK: Nigel Farage’s party has been accused of pursuing “fantasy economics” with its tax and spending plans. Do they add up?
Sign up for Stephen Bush’s Inside Politics newsletter for more analysis on British policy and politics.
Chart of the day
With borrowing costs and political pressure against welfare cuts growing, UK chancellor Rachel Reeves is facing a summer of speculation that she will be forced to increase taxes or borrowing — or both — to stick to her fiscal rules.
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Take a break from the news
What makes the perfect cheeseburger? One chef says it’s all about the patty: “You need the perfect synthesis of aged beefy funk, bold assertive savour, a firm meaty density, but a forgiving and indulgent yield on the bite.” HTSI grills the experts.
A double cheeseburger at Buster’s in Brixton © Anton Rodriguez
