‘We Love Japan,’ Says Trump as He Welcomes Ishiba amid Simmering Trade Tensions

 President Donald Trump greets Japanese Prime Minister Shigeru Ishiba in the Oval Office of the White House, Friday, Feb. 7, 2025, in Washington. (AP)
President Donald Trump greets Japanese Prime Minister Shigeru Ishiba in the Oval Office of the White House, Friday, Feb. 7, 2025, in Washington. (AP)
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‘We Love Japan,’ Says Trump as He Welcomes Ishiba amid Simmering Trade Tensions

 President Donald Trump greets Japanese Prime Minister Shigeru Ishiba in the Oval Office of the White House, Friday, Feb. 7, 2025, in Washington. (AP)
President Donald Trump greets Japanese Prime Minister Shigeru Ishiba in the Oval Office of the White House, Friday, Feb. 7, 2025, in Washington. (AP)

US President Donald Trump welcomed Japanese Prime Minister Shigeru Ishiba at the White House on Friday as two allies wary of China's rise work to boost business and security ties while an escalating trade war threatens to rupture the global economy.

"We love Japan!" Trump said as he greeted Ishiba and the two shook hands.

Trump, whose first three weeks in office have shredded norms and shaken foreign capitals from Ottawa to Bogota, has taken a more conventional approach to Washington's longstanding Asia-Pacific allies, including Japan, South Korea, Australia and the Philippines.

But those friendships may be tested as Trump's early fight with China over synthetic opioids and warnings of tariffs against other countries - Japan included - threaten to disrupt commercial relations in Asia and beyond.

A senior Trump administration official told reporters the leaders would discuss military training exercises, increased cooperation on defense equipment and technology, foreign investment and energy.

They will also discuss cybersecurity, space and joint business opportunities in the artificial intelligence and semiconductor sectors, the official said.

"The United States is proud of our long and close alliance with Japan," the official said. "Our two nations will continue to work together to ensure we deter threats in the region through our full range of military capabilities," the official said.

Asked about the US trade deficit with Japan and the threat of tariffs, a second senior Trump administration official said: "We all know that President Trump pays a lot of attention to deficits as an indication of the economic fairness and strength of the relationship so I'm sure discussions will happen about that."

Trump told Republican lawmakers he plans to announce more reciprocal tariffs on foreign imports as early as Friday, two sources familiar with the plans told Reuters.

Trump put a 10% tariff on all imports from China in what he called an "opening salvo" in a clash between the world's two largest economies, sending consumers and businesses scrambling to adjust.

Japan is especially trade-dependent: it is a major exporter and counts on imports for much of its food and natural resources, and many of its firms are deeply invested in and reliant on China.

Tokyo shares the hawkish outlook towards China of Trump's national security team over Beijing's global ambitions and extensive territorial claims in Asia, including the vital chip-producing island of Taiwan.

At the same time, Japanese officials are wary of possible efforts by Beijing to court the US president with promises of cooperation on key global issues, including trade. Trump spoke to Chinese President Xi Jinping days before taking office and has said he will discuss tariffs with him soon.

Japanese officials speaking privately say they are comfortable in dealing with Trump's China hawks, including Secretary of State Marco Rubio and national security Michael Waltz, but less so with those in the administration with strong business ties with Beijing, such as billionaire Elon Musk, who has developed a significant Washington power base.

Trump and Ishiba are due to hold a joint press conference on Friday afternoon.

BRACING FOR TRUMP DEMANDS

For Tokyo, the early White House visit is a promising signal from the new Trump administration.

"There's two foreign heads of state that have been received in the Oval Office," said Rahm Emanuel, Biden's ambassador to Tokyo. "That's Bibi Netanyahu of Israel, and Japan. So that's a good thing, and that's a good sign."

Trump was close with the late Japanese Prime Minister Shinzo Abe but has no relationship with Ishiba, who took office in October. That is something Japanese officials want to change, and they plan to invite Trump to visit Japan.

Japan is girding for Trump to demand concessions to reduce the $56 billion bilateral trade surplus and stave off the threat of tariffs.

Tokyo has been preparing some concessions, officials told Reuters, including considering to buy more LNG from the United States and offering support for a $44 billion gas pipeline in Alaska. SoftBank CEO Masayoshi Son has also promised to invest hundreds of billions in artificial intelligence in the US.

"The Japanese are definitely thinking of ways to both reduce the deficit and create jobs in the United States in industrial sectors that are of particular interest to Donald Trump," said Kenneth Weinstein, head of Japan program at Washington's conservative Hudson Institute think tank.

There are tensions beyond trade, including the attempted takeover of US Steel by Japan's Nippon Steel. Former President Joe Biden blocked this but delayed enforcement pending legal action; Trump has also vowed to block the deal.

However, there are also solid signs of stability and the two leaders are expected to agree language on security issues, including China and Taiwan, according to another official familiar with the discussions.

Discussions are also expected on North Korea, and the Trump official noted that the administration was committed to the complete denuclearization of North Korea, while the President had voiced his openness to engaging with North Korea. Trump did this in his first term, although little came of the effort.



UK Suffers OECD's Biggest Growth Downgrade as Iran War Pushes Up Energy Costs

This overhead view shows buildings along the River Thames in London on March 25, 2026. (Photo by JUSTIN TALLIS / AFP)
This overhead view shows buildings along the River Thames in London on March 25, 2026. (Photo by JUSTIN TALLIS / AFP)
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UK Suffers OECD's Biggest Growth Downgrade as Iran War Pushes Up Energy Costs

This overhead view shows buildings along the River Thames in London on March 25, 2026. (Photo by JUSTIN TALLIS / AFP)
This overhead view shows buildings along the River Thames in London on March 25, 2026. (Photo by JUSTIN TALLIS / AFP)

Britain's economic ‌growth prospects this year received the sharpest downgrade of any major economy in the OECD's interim forecast update on Thursday following the US-Israeli war ​on Iran, while inflation is set to rise faster too.

The Paris-based international body cut its 2026 forecast for British economic growth by half a percentage point to 0.7%, compared with a 0.4 percentage point downgrade for the euro zone and a 0.3 percentage point upgrade for the United States.

"Planned fiscal tightening and higher energy prices ‌are anticipated to keep ‌growth subdued in the United ​Kingdom, ‌though the ⁠impact ​will be ⁠attenuated by lower policy rates next year," Reuters quoted the OECD as saying in its report.

Following are further highlights from the report and other context:

Britain's growth forecast for 2027 is unchanged at 1.3%.

Britain's inflation forecast for 2026 is revised up by 1.5 percentage points from December to 4.0%, the ⁠biggest upward revision of any large, advanced ‌economy.

UK inflation in 2027 ‌is forecast to be 2.6%, 0.5 percentage ​points higher than in ‌December and above the Bank of England's 2% target.

Poorer UK households spend more on gas and electricity than in other rich countries, though total energy spending makes up a smaller share of UK inflation than elsewhere.

The OECD expects the ‌BoE to keep interest rates unchanged this year then cut in Q1 2027 as inflation ⁠eases.

⁠Britain's Office for Budget Responsibility, in forecasts finalized just before the start of the conflict, predicted GDP growth of 1.1% this year and 1.6% in 2027.

The BoE this month forecast inflation would rise to 3.0-3.5% over the next couple of quarters.

Prime Minister Keir Starmer has made boosting growth and reducing the cost of living top goals for his government.

Finance minister Rachel Reeves said the forecasts showed the war in the Middle East ​was affecting Britain but ​she would still focus on "regional growth, embracing AI and innovation, and establishing a closer relationship with the EU."


Gold Drops More than 1% as Markets Assess Mideast Ceasefire Prospects

FILED - 16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. Photo: Sven Hoppe/dpa
FILED - 16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. Photo: Sven Hoppe/dpa
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Gold Drops More than 1% as Markets Assess Mideast Ceasefire Prospects

FILED - 16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. Photo: Sven Hoppe/dpa
FILED - 16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. Photo: Sven Hoppe/dpa

Gold prices fell on Thursday, weighed down by increased expectations of US Federal Reserve rate hikes this year as elevated oil prices stoked inflation worries, with investors awaiting clarity on Middle East de-escalation efforts.

Spot gold fell 1.2% to $4,451.47 per ounce by 0811 GMT. US gold futures for April delivery lost 2.3% to $4,448.

"You're ‌seeing an ‌acceleration of the idea that... this war will ‌mean ⁠inflation and inflation ⁠will mean a response from central banks, which will mean higher interest rates," said Ilya Spivak, head of global macro at Tastylive.

Brent crude futures climbed back above $100 a barrel on concerns that protracted fighting in the Middle East will further disrupt energy flows.

Higher crude prices tend to fuel inflation, and while rising inflation typically boosts gold's appeal ⁠as a hedge, high interest rates weigh on ‌demand for the non-yielding asset.

Markets see ‌a 37% chance of a US rate hike by December this year ‌with almost no chance of a cut now, according to ‌CME Group's FedWatch Tool. Before the conflict, markets were expecting at least two rate cuts.

US President Donald Trump said Iran was desperate to make a deal to end nearly four weeks of fighting, contradicting the Iranian foreign ‌minister who said his country was reviewing a US proposal but had no intention of holding talks ⁠to wind down ⁠the conflict.

"In the next 24 to 48 hours, (gold prices) will just be about reacting to headlines about negotiations," said Kyle Rodda, a senior financial market analyst at Capital.com.

"The really big moves will happen probably at the start of next week when it becomes clearer whether the US launches a ground invasion in Iran over the weekend."

Trump has vowed to hit Iran harder if Tehran fails to accept that the country has been "defeated militarily", White House press secretary Karoline Leavitt said on Wednesday.

Spot silver fell 2.7% to $69.36 per ounce. Spot platinum was down 2.3% at $1,874.90, while palladium dropped 2.5% to $1,387.53.


Oil Climbs and Equities Sink amid Mixed Messages on 'Talks'

FILE PHOTO: An oil refinery in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026.  REUTERS/Issei Kato/File Photo
FILE PHOTO: An oil refinery in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo
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Oil Climbs and Equities Sink amid Mixed Messages on 'Talks'

FILE PHOTO: An oil refinery in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026.  REUTERS/Issei Kato/File Photo
FILE PHOTO: An oil refinery in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo

Oil prices jumped and equities fell Thursday as investors tracked developments in the Middle East amid hopes that US and Iranian officials will bring an end to a conflict that has ramped up fears of an unprecedented global energy crisis.

Markets have been buoyed since late Monday after Donald Trump backed down on a threat to destroy Iran’s energy infrastructure and said the two sides were in peace talks.

But while crude prices are down from last week and the mood on trading floors has been better than most of March, uncertainty and the virtual closure of the Strait of Hormuz -- through which around 20 percent of oil and gas passes -- continue to cast a dark shadow.

Washington presented a 15-point plan to end the war, including Iran giving up its enriched uranium and opening up the waterway, while Tehran's state-run TV reported officials had put forward their own five conditions for hostilities to end.

Trump on Wednesday threatened to "unleash hell" if Iran did not strike a deal, but Foreign Minister Abbas Araghchi said his country does not intend to negotiate.

But the US president also said Iran was taking part in peace talks and the denials were because negotiators feared being killed by their own side.

"Pressure on energy prices, shipping flows and broader financial conditions remains one of the few meaningful sources of leverage (Iran) retains," said Saxo Markets' Charu Chanana.

"There is therefore little incentive to relinquish that leverage prematurely, particularly if market stress strengthens its negotiating position.

However, she added: "It would be imprudent to assume diplomacy is absent simply because it is not visible. In conflicts of this nature, public rhetoric and private negotiation often diverge materially.

"Markets understand this dynamic, and they also tend to inflect before the political endgame is formally in place."

With investors holding on to hope that a deal can be struck, oil prices have stabilized this week, with Brent just above $100 and WTI around $90.

Both contracts rallied Thursday.

Stocks in Wall Street and Europe rose but Asian markets struggled after a two-day rally.

Tokyo, Hong Kong, Shanghai, Seoul, Sydney, Taipei, Singapore, Manila, Bangkok and Jakarta fell along with London, Paris and Frankfurt.

City Index's Fiona Cincotta said for any recovery to gain traction, "investors will want to see clearer signs of de-escalation, including the reopening of the Strait of Hormuz".

Her remarks come after the head of the International Chamber of Commerce, John Denton, warned the conflict could cause the "worst industrial crisis" in decades.

"The head of the International Energy Agency has warned that the world is facing an energy crisis more severe than the oil shocks of the 1970s," he added.

"From a business perspective, we believe this could yet become the worst industrial crisis in living memory."

Meanwhile, the World Trade Organization said disruptions to fertilizer supplies posed a double threat to global food security through scarcity and high prices, with a third of the global fertilizer supply normally transiting the Strait of Hormuz.