Trump tariffs halt global dealmaking recovery

We apologise for delaying today’s FirstFT to bring you breaking news on Poland’s presidential election.

Today’s agenda: Polish polls; Ukraine strikes Russian airfields; Colorado attack; and Ruchir Sharma on the Swiss franc

Good morning. This just in: a nationalist candidate backed by Donald Trump has won Poland’s presidential run-off vote — we have more on this below. But first, we start with a look at private equity as new forecasts indicate Trump’s trade war has halted a long-awaited global recovery in dealmaking.

What’s happening: The value of deals for buyout funds to purchase companies in the second quarter is on course to fall by 16 per cent from the first three months of 2025, according to projections from Bain & Company. The figure for April was down 24 per cent on the monthly average for the first quarter. The value of assets fully or partially sold by buyout funds is on track to fall 9 per cent in the April-June quarter.

Why it’s happening: The private equity industry had hoped for a dealmaking boom under the second Trump administration, with a more business-friendly attitude and regulatory easing expected to put an end to a two-year downturn in the sector. But, instead, the uncertainty from the US president’s trade and tax policies has cut short the resurgence, making many assets impossible to value and slowing dealmaking in all but the most insulated sectors.

We have more on the mounting difficulties facing the private equity industry, and more on tariffs below.

• China: Beijing has accused the US of “seriously violating” their trade truce and vowed to take strong measures to defend its interests.

• UK: Business secretary Jonathan Reynolds will seek to persuade the Trump administration to cut taxes on UK steel exports to zero.

• Canada: The country’s steel industry has warned of “catastrophic” job losses and factory slowdowns from Trump’s recent doubling of tariffs on imports.

Here’s what else I’m keeping tabs on today:

• Economic data: Canada, Eurozone, France, Germany, Italy, the UK and US have manufacturing purchasing managers’ indices.

• UK military: Britain will build up to a dozen attack submarines, Sir Keir Starmer is set to announce, as the prime minister launches a strategic defence review.

• Poland: EU and US justice and home affairs ministers meet in Warsaw.

Five more top stories

1. Nationalist candidate Karol Nawrocki has won Poland’s presidential election, according to the country’s electoral commission, after a tight run-off vote against pro-EU rival and Warsaw mayor Rafał Trzaskowski. Nawrocki’s win could scuttle Prime Minister Donald Tusk’s reform agenda, and weaken Poland’s role within the EU and as staunch backer of Ukraine in its war against Russia. More on this developing story.

2. US authorities are investigating a possible terrorist incident in Boulder, Colorado, after a man allegedly attacked a demonstration in support of Israeli hostages in Gaza. Six people were injured in the assault. The FBI said the attacker was armed with a “makeshift flame-thrower” and was heard to shout “Free Palestine” during the incident.

3. Ukraine’s forces launched a drone attack on four airfields deep inside Russia that were home to strategic bombers used in air raids, officials said yesterday. “More than 40 aircraft have reportedly been hit,” one official said, in what could be Kyiv’s most audacious attack of the war.

4. Exclusive: Deutsche Bank’s retail unit has pledged to deliver an extra €50mn in cost savings from IT next year, after telling investors last month it would fall short of a long-standing target for 2025 because of further delays to the integration of its Postbank subsidiary. Read the full story.

5. Treasury secretary Scott Bessent has insisted the US would never default on its debt as he sought to assuage Wall Street concerns over the state of the country’s public finances. Investor jitters over the size of the US federal debt have mounted as Trump has urged Congress to push through his budget bill, which is expected to ratchet up the federal deficit.

• Federal Reserve: The US central bank faces a tough summer ahead with a hostile White House, writes Mohamed El-Erian.

• Go deeper: The close relationship between US government bond yields and the dollar has broken down as investors cool on American assets.

The Monday Interview

Laurene Powell Jobs’ friendship with Sir Jony Ive has endured beyond the death of her husband Steve. After Apple, and its game-changing products such as the iPhone, the Silicon Valley visionaries are now looking to artificial intelligence to shape tech’s next chapter. “We deserve better. Humanity deserves better,” Ive tells the Financial Times.

We’re also reading . . . 

• ‘Forever chemicals’: Industry executives warn about the cost of EU efforts to eradicate a man-made molecule seeping into waterways across the region.

• Switzerland: The world’s strongest currency is not the dollar, but the Swiss franc — and it has not undermined the Alpine country’s competitiveness, writes Ruchir Sharma.

• Israel: It is in the EU’s interest to put sanctions on the country and show it is willing to act independently of the US, writes Martin Sandbu.

• Stanley Fischer: The former top policymaker at the IMF, World Bank and US Federal Reserve, whose students included Mario Draghi and Ben Bernanke, has died. He was 81.

Graphic of the day

Palestinians are being squeezed into an ever denser sliver of land in Gaza, an FT analysis of hundreds of Israeli evacuation orders and satellite imagery shows.

Take a break from the news

Can ChatGPT find words for our feelings? As more and more people use AI chatbots for personal communications, novelist Thomas McMullan considers the consequences.