The US’ sanctions on Russian oil last week are beginning to be felt by at least one of Russia’s major firms, but this week the White House is building bridges elsewhere, with a new critical minerals deal signed with Japan after a similar agreement with Australia.
In other news today (28 October), UK chancellor Rachael Reeves’ visit to the Persian Gulf continues as she talks up the possibility of a trade deal with countries in the Middle East.
Japan strikes US minerals deal
After last week’s agreement with Australia, the US has now struck another deal on critical minerals, this time with Japan.
The Telegraph reports that Sanae Takaichi, Japan’s new prime minister, was told by US president Donald Trump that she would “do a fantastic job” as she takes on the role. He also congratulated her on becoming her country’s first female PM.
The two hailed a “new golden age” for the US-Japan relationship, with an agreement signed to accelerate production and processing of rare earth minerals – though there was a shortage of detail on the deal.
Trump also said that Japan had purchased “a very large amount of new military equipment” from the US as it seeks to strengthen its military.
Japan provided a fact sheet at the talks that also suggested there could be renewed US-Japanese cooperation on the construction of nuclear reactors, with involvement from major Japanese firms including Mitsubishi Heavy Industries and Toshiba Group.
UK-GCC deal and EU steel hopes
UK chancellor, Rachel Reeves, has expressed her expectations for a trade deal between the UK and the Gulf Cooperation Council (GCC).
“I am really confident we can get that deal over the line,” Reeves said at a forum in Riyadh yesterday (27 October). She expects a conclusion to negotiations "very soon", she added. The chancellor is making the first visit to Saudi Arabia by a UK finance minister for six years.
It follows remarks from trade minister Chris Bryant in Parliament earlier this month in which he said that discussions with the GCC were at "an advanced stage".
The UK is also currently in talks to build a new consensus with the EU on steel, as it seeks to counter Chinese dominance in the sector. An EU official told Politico yesterday that the idea of a “steel club” including the UK and EU – which could nix new EU tariffs on UK steel – had been voiced for “quite some time” but was now “more appealing.
Russian oil exit
The second-largest Russian oil company, Lukoil, has announced it will sell its international assets in the wake of the US’ imposition of fresh sanctions.
In a press release, the firm stated that “owing to introduction of restrictive measures against the company and its subsidiaries by some states, the company announces its intention to sell its international assets”.
It is a major shift for the firm, whose largest foreign asset is the West Qurna 2 oil field in Iraq. It also has holdings in Bulgaria, Romania, Kazakhstan, Africa and Latin America.
Russian foreign ministry spokeswoman, Maria Zakharova, told Russian news agency TASS yesterday that “the unwillingness of Western countries to acknowledge that their production and financial models are losing the competitive battle against the global majority is leading to chaos”. She also accused the West of trying to inflict the “maximum possible damage on citizens” of Russia with the sanctions.
Trump, meanwhile, said over the weekend that he is no longer interested in meeting Russian president Vladimir Putin until the latter is willing to agree a ceasefire in Ukraine.
What else is in the news
- The Office for Budget Responsibility has downgraded its forecast for UK productivity growth by more than expected, cutting it by 0.3% in a move that could put a £20bn dent in the UK government finances ahead of next month’s Budget
- The owners of Facebook, Snapchat and TikTok have voiced opposition to – but promised compliance with – a groundbreaking Australian law that would ban social media for under 16s
- Trump hailed the success of Argentine president Javier Milei in recent elections, calling him a “wonderful Trump Endorsed Candidate” and stating that he is “making us all look good” in a Truth Social post
Yesterday in trade
There were hints that Trump and Chinese leader Xi Jinping could agree a new trade truce at their meeting this week
Reeves began her visit to the Gulf states with a reaffirmation that “our number one priority is growth”
We looked ahead to this week’s interest rate decisions, which are due in the US and EU
