Wednesday, February 1, 2023

FirstFT: UK criticises Biden’s green subsidies package

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Britain has joined international criticism of US president Joe Biden’s massive package of green subsidies, warning they are protectionist and will hit UK-based makers of electric vehicles, batteries and other renewables.

Kemi Badenoch, the UK’s international trade secretary, has written to her US counterpart, Katherine Tai, to protest against the structure of the Biden administration’s $369bn attempt to green the economy.

The Inflation Reduction Act (IRA), which passed Congress in August, includes tax credits for green technologies aimed at luring investment to the US and cutting carbon emissions.

The EU, South Korea and Canada are among those that claim the act breaches World Trade Organization rules by tying aid to US domestic production but until now Britain has kept a low profile on the issue.

Badenoch claimed in her letter, seen by the Financial Times, that the US plan would “harm multiple economies across the world and impact global supply chains in batteries, electric vehicles and wider renewables”.

Although she welcomed efforts by the US to address climate change, Badenoch warned they should not be at the expense of free trade and that both sides should stick to the rules of the international trading system.

Thank you for reading FirstFT Europe/Africa. We wish you a Merry Christmas and will be back in your inboxes in a shortened form on Tuesday, December 27. Here’s the rest of today’s news — Gary

1. Bankman-Fried to be released on $250mn bond The FTX founder made his first appearance in Manhattan federal court yesterday, with a federal magistrate judge agreeing to his release on the “largest ever pre-trial bond”. He will be confined to his parents’ home in California and be fitted with a location-tracking bracelet.

Sam Bankman-Fried is escorted from the Manhattan federal courthouse after his initial appearance © Bloomberg

2. TSMC in talks over first European plant The world’s largest chipmaker is in advanced talks with key suppliers about setting up its first potential European plant in the German city of Dresden, a move that would allow the world’s largest chipmaker to capitalise on booming demand from the region’s car industry.

3. Big investors warm to bonds after 2022 sell-off Big investors are wading back into the bond market, with fund managers favouring debt relative to other asset classes for the first time since the wake of the 2008 financial crisis.

Column chart of Annual return of Bloomberg global aggregate index (%) showing A historic sell-off for bonds

4. M&S and Waitrose fight it out for middle England Marks and Spencer has gained ground against Waitrose at the top end of the UK’s grocery market, according to NielsenIQ data. The two bastions of middle England are in a battle for hearts and shopping baskets against the backdrop of the cost of living crisis, with M&S gaining about 0.7 percentage points of market share over the past two years and Waitrose losing a full percentage point.

5. Meta and Alphabet lose US digital ad dominance Meta and Alphabet have lost their dominance over the digital advertising market they have ruled for years, hit by competition from Amazon, TikTok, Microsoft and Apple. The share of US ad revenues held by Facebook’s parent Meta and Google owner Alphabet is projected to fall by 2.5 percentage points to 48.4 per cent this year.

The days ahead

Economic data Canada is due to publish October GDP figures today.

UK strikes Various sectors of the UK workforce will go on strike over the holiday period. Postal workers will start a two-day strike today over pay, jobs and conditions. Border Force officers will also begin eight days of strikes, and rail workers will begin a three-day strike tomorrow. Nurses and ambulance workers are also on strike, causing disruptions in the NHS.

Christmas Day Countries around the world will hold Christmas celebrations over the weekend. Charles III will deliver his first royal Christmas message as king on Sunday afternoon.

FT Live at Davos will host a number of in-person and digital events alongside the World Economic Forum Annual Meeting in January. The sessions will gather leaders in policy, business and finance to share insights into the big issues being debated and the solutions that may pave the way to renewed growth, stability and resilience. View the events and register for free here

What else we’re reading

How Adidas lost its lustre Having ended its lucrative partnership with Kanye West in October after an outcry over his anti-Semitic remarks, and with sales down in China and its withdrawal from Russia, Adidas shares have fallen 54 per cent in a year. When Puma boss Björn Gulden steps up to the top job at the sports apparel maker next month, he will inherit a company in crisis.

Kanye West and trainers from his Yeezy range
‘Behind the scenes, things with Ye were bad already for a long time,’ one former Adidas manager told the Financial Times. ‘He was constantly misbehaving — changing his mind, postponing projects, not respecting Adidas timelines’ © FT Montage/Radarpics/Shutterstock/Alamymy/Dreamstime

Ukraine and Poland forge ‘special relationship’ About 1.3mn Ukrainians lived in Poland before Russia’s invasion, and the number has more than doubled since then. Their presence has given Poles a new sense of kinship with and respect for their neighbours, with the focus shifting away from the practicalities of housing refugees towards longer-term cultural integration.

‘We have no beds, we have no oxygen’ Just weeks after China abandoned its tough coronavirus containment measures, with little preparation for the exit wave that would rip through the country, hospitals in Beijing — arguably the best of the country’s healthcare system — are being overwhelmed by sick elderly Covid patients.

‘I tried to buy a Rolex and fell into a grey market’ Attempting to purchase a Rolex Oyster Perpetual for his wife’s birthday proved much trickier for Jeff Maysh than expected. Though the luxury manufacturer reportedly produces more than a million timepieces a year, securing one can require navigating the mysterious world of grey market dealers.

Five financial new year resolutions for 2023 As part of the FT’s Financial Literacy and Inclusion Campaign, Claer Barrett explores five practical ideas to help get your finances in shape for a challenging year ahead.

Video games

From medieval mysteries and robot dinosaurs to gentle ginger cats, there is something for everyone in the FT’s “best video games of 2022” list.

Screenshot of the ‘Citizen Sleeper’ game
‘Citizen Sleeper’ offers a stimulating tech dystopia

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