Good morning. Today we're talking about Trump’s latest tariff announcements, Rishi Sunak’s new role and the Kellogg’s takeover.

Big Stories

Trump unveils new tariffs

In a significant move escalating global trade tensions, President Donald Trump announced new tariffs on goods from Japan, South Korea, Canada, and Brazil, effective next month. Further underscoring this shift, Trump sent a letter to European Commission President Ursula von der Leyen on Friday. In it, he stated, "We have had years to discuss our trading relationship with the European Union, and have concluded that we must move away from these long-term-large, and persistent, trade deficits, engendered by your tariff, and non-tariff, policies and trade barriers." He further asserted that the relationship has been "far from reciprocal." In letters also sent to the EU and Mexico, Trump issued a stern warning: any retaliatory import duties imposed against the US would be met with an aggressive counter-response, involving a proportional increase in US tariffs above the initial 30%. This aggressive stance indicates a readiness to engage in a tit-for-tat trade war, potentially disrupting global supply chains and impacting international economic stability.

Sunak returns to Goldman Sachs

Former British Prime Minister Rishi Sunak has rejoined Goldman Sachs as an advisor, marking a return to the investment bank where he began his career as an analyst. This move comes a year after the Conservative Party's bruising defeat in the 2024 general election, which saw Sunak step down as party leader. While he remains a Member of Parliament, this pivot strongly suggests a departure from frontline politics for the time being. Goldman Sachs CEO David Solomon stated that Sunak will bring "a unique geopolitical perspective," likely translating to advising on macroeconomic trends and engaging with sovereign wealth funds. Sunak's experience as both Chancellor of the Exchequer and Prime Minister provides him with insight into global financial landscapes. However, the appointment is not without scrutiny. The UK government's ethics watchdog approved Sunak’s new role but with strict guardrails: for the next year, he is barred from lobbying for the bank or advising on any matters overlapping with his time as Prime Minister. This measure aims to prevent any perception of "unfair access" to government. Notably, Sunak's Goldman Sachs earnings will be donated to his charity, The Richmond Project, which focuses on boosting numeracy skills across the UK.

Ferrero buys Kellogg's cereal

Italian confectionary giant Ferrero, the family-owned maker of Nutella, has agreed to acquire WK Kellogg, the North American cereal business that includes iconic brands like Froot Loops and Frosted Flakes. This $3.1bn deal will combine two of the world's most storied sweet brands and marks Ferrero's entry into the breakfast aisle, diversifying its snack-heavy portfolio. This deal offers a vital boost to WK Kellogg, which was spun off from its parent company (the former Kellogg Co.) two years ago. The other half of the original Kellogg Co. – the snacking business with Cheez-Its and Pop-Tarts – was last year sold to Virginia-based Mars (maker of M&Ms) in a massive $36bn deal. Ferrero's expansion into the US food market comes as American consumer habits shift, with some opting for healthier, less sugary options, while budget-conscious shoppers increasingly choose cheaper store-brand cereals. For Ferrero, this diversification also mitigates risks associated with volatile cocoa prices, which have surged due to crop disease and extreme weather.

Elsewhere...

Economic retreat: The UK economy unexpectedly shrank in May, even after the worst of Donald Trump's tariffs were paused, official figures showed.

New high: Bitcoin has surged past the $120,000 level for the first time, with its new record value being attributed to progress in cryptocurrency regulation under Donald Trump.

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Number of the Day

$4 trillion

The market value reached by AI chipmaker Nvidia last week becoming the first public company to reach the milestone.

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