Can Italy jump-start tariff talks with Trump?

Buongiorno and welcome to White House Watch! Today let’s jump into:

• Trade negotiations

• Trump lashing out at Jay Powell

• Jamie Dimon’s warning

Italian Prime Minister Giorgia Meloni will pull up to the White House in just a few hours, and the EU hopes she can figure out what exactly Donald Trump wants in these tariff negotiations.

The US and EU held the first round of discussions this week, but the bloc’s negotiators said Washington didn’t actually present any demands. 

Meloni is a conservative nationalist who vibes well with Trump personally (she was the only European leader to attend his inauguration), making this a ripe opportunity for the bloc to jump-start negotiations. 

The Italian PM has called on Brussels not to retaliate against the US, and favours holding trade talks instead.

The EU is impacted by tariffs of 25 per cent on steel, aluminium and cars, and 10 per cent on all other exports during the 90-day pause of Trump’s so-called reciprocal levies. 

But diplomats briefed on the talks told the FT’s Amy Kazmin and Andy Bounds that Washington had shown no signs of willing to lower the tariffs, and that the 10 per cent duty was likely to be permanent. 

Should the talks fail, and Trump reimposes “reciprocal” tariffs, the EU would be hit with a 20 per cent duty on all goods.

“We know we are in a difficult moment,” Meloni told a group of Italian business people ahead of her departure for Washington. “We have overcome far greater obstacles.”

Yesterday, Japan was the guinea pig for US trade talks, which Trump attended. But it’s not clear whether being first in line was advantageous to Tokyo. 

People familiar with the situation told the FT’s Leo Lewis, Harry Dempsey and Demetri Sevastopulo that the US had signalled its priorities were for Japan to import more liquefied natural gas, rice and wheat from the US, and roll back some auto safety standards to make it easier for the US to sell its cars in Japan. Meanwhile, Tokyo was ready to discuss buying more US weapons, infrastructure investments and shipbuilding collaboration.

Stefano Stefanini, Italy’s former ambassador to Nato, said Trump would probably press Europe to move further away from China: “If the EU makes a deal with the US, it will be forced to further de-risk or decouple from China as a consequence. It’s either China or the US.”

The latest headlines

• Trump lashed out at Jay Powell this morning, saying that the end of the Federal Reserve chair’s tenure “cannot come fast enough”, a day after Powell’s warning that tariffs could complicate the central bank’s mandates.

• Trading in two little-known New York-listed stocks soared in the weeks before the companies announced the appointment of Trump family members to their advisory boards.

• The US dollar usually strengthens in times of economic and financial turmoil, but instead it has nosedived — is the world losing faith in the almighty greenback? [Free to read]

• The Trump administration’s attacks on America’s most venerable university are at the centre of the White House’s culture war.

• After Nvidia was blindsided by Trump’s export controls on its best-selling AI chip in China, CEO Jensen Huang visited Beijing for talks.

How has Trump changed the world order? FT journalists answered readers’ questions in a live Q&A yesterday. Read their responses here.

What we’re hearing

JPMorgan Chase CEO Jamie Dimon — one of the most influential voices on Wall Street — thinks Trump’s trade war risks eroding the US’s credibility.

The US is still a “haven”, in his view, but the country’s global economic prowess could come under threat from Trump’s attempt to overhaul the world trade order. Dimon told the FT’s Roula Khalaf and Joshua Franklin:

A lot of this uncertainty is challenging that a little bit. So you’re going to be reading about this nonstop until hopefully these tariffs and trade wars settle down and go away so people can say, ‘I can rely on America.’

The bank chief also urged Washington and Beijing to talk to each other: “I don’t think there’s any engagement right now . . . it doesn’t have to wait a year. It could start tomorrow.”

As stocks plunged and investors spurned US government debt in the wake of Trump’s so-called “liberation day” tariff announcement, Dimon was someone the president was watching.

As he weighed whether to pause the tariffs and give relief to roiling markets, the US president said he had seen Dimon on TV and that the CEO’s thoughts factored into his decision to offer a 90-day reprieve.

But will Trump keep listening to him?

Viewpoints

• Katie Martin, a Briton who has gone through Brexit, offers advice for Americans: first, heads up that foreigners will quiz you about Trump’s economic and trade policy like it’s your own fault.

• Trump could be the Achilles heel of Wall Street’s big banks and money managers, writes FT US managing editor Brooke Masters.

• Yale professor Stephen Roach breaks down the political war between Trump and Xi Jinping — and why China’s president won’t bend.

• The US has been part of a historical effort to tame arbitrary power, but under Trump’s “mad king” reign it’s an open question whether such constraints will endure, writes Martin Wolf.