Economy
Trump threatens to backtrack on UK trade deal over Iran war
U.S. President Donald Trump has threatened to renege on a trade agreement with the United Kingdom that limits the impact of U.S. tariffs, as he again criticized Britain’s lack of support in the Iran war.
But Trump, who has repeatedly slammed the policies of British Prime Minister Keir Starmer, said strains in the relationship with the U.S. NATO ally would “not at all” negatively affect King Charles III’s state visit to the United States later this month.
“We gave them a good trade deal, better than I had to, which can always be changed,” the president was quoted as saying by Sky News on Wednesday. The comments came in a phone interview with Sky News U.S. reporter Mark Stone.
London and Washington concluded a trade agreement last year capping U.S. tariffs at 10% on most British manufactured goods. In return, the U.K. agreed to open its markets further to American ethanol and beef, sparking domestic concerns.
At the time, the agreement was advantageous for London, which benefited from the lowest tariffs granted by the U.S. That advantage has since weakened after the Supreme Court struck down some U.S. tariffs and Washington retaliated by imposing a temporary 10% tariff on nearly all imports pending a new tariff regime by July.
While Trump praised his relationship with Starmer at the time of the agreement, transatlantic ties have since deteriorated, particularly over the war in the Middle East.
Starmer angered Trump by refusing to allow British bases to be used for the initial U.S. strikes on Iran last month. He later agreed to a U.S. request to use two British military bases for a “specific and limited defensive purpose.”
“It’s a relationship where when we asked them for help, they were not there,” Trump told Sky News. “When we needed them, they were not there. When we didn’t need them, they were not there. They still aren’t there.”
Starmer’s Labour government, which has sought to build bridges with Trump since his return to the White House in January 2025, has recently hardened its rhetoric toward its historic ally.
Treasury chief Rachel Reeves on Tuesday hit out at the “folly” of Trump launching a war with Iran “without a clear exit plan.”
Starmer told Parliament on Monday that Trump was wrong to threaten to destroy Iranian civilization, while Health Minister Wes Streeting on Sunday criticized the president’s language as “incendiary, provocative, outrageous.”
Against this backdrop, Reeves was scheduled to meet with U.S. Treasury Secretary Scott Bessent on Wednesday as part of an International Monetary Fund (IMF) meeting set to detail the economic impact of the conflict.
Oil prices slipped nearly 6% to two-week lows on Monday, as optimism grew that the United States and Iran were moving closer to a peace deal, even though they remain at odds over key issues such as blockades on the Strait of Hormuz.
Brent crude futures were down $6.01, or 5.8%, at $97.53 a barrel by 1125 GMT and U.S. West Texas Intermediate futures were down $5.65, or 5.9%, at $90.95. Both contracts traded at their lowest since May 7.
U.S. President Donald Trump had said on Saturday that Washington and Iran had largely negotiated an understanding on a peace deal that would reopen the Strait of Hormuz trade route that carried a fifth of global shipments of oil and liquefied natural gas before the conflict.
However, several difficult issues remain, with Trump saying on Sunday that he had told his representatives not to rush into any deal.
“The underlying supply shortfall of 10-11 (million barrels per day) of crude oil does not go away immediately and will see markets still drawing inventories until Middle Eastern crude production is back online, which is months away,” said Sparta Commodities analyst June Goh.
Both sides played down hopes for an imminent breakthrough on Monday, with U.S. Secretary of State Marco Rubio saying there will either be a good agreement or Washington would deal with Iran in “another way.”
Iran’s foreign ministry spokesperson Esmaeil Baghaei said on Monday that Iran was negotiating an end to the war and was not currently discussing nuclear issues.
Analysts expect a return to normal oil flows through the strait to take months, while damaged oil and gas facilities are repaired.
“We continue to believe that the key factors for the oil market to watch should be the physical oil flows; and so far, flows through the Strait remain restricted,” said UBS analyst Giovanni Staunovo.
Two liquefied natural gas tankers were exiting the Strait on Monday, heading to Pakistan and China, and a supertanker with Iraqi crude left the Gulf for China on Saturday after being stranded for nearly three months, shipping data showed.
U.S. energy companies responded to higher local energy prices by adding oil and natural gas rigs for the fifth week in a row, for the first time since February 2025.
The rig count, an early indicator of future output, rose by seven to 558 in the week to May 22, its highest since June 2025. Even so, Baker Hughes said the total count was still down eight rigs, or 1%, from this time last year.
Türkiye’s economic confidence rose in May after falling to a nine-month low in the previous month, driven mainly by stronger consumer retail and manufacturing sentiment, official data showed on Monday.
The economic confidence index increased 0.8% month-over-month to 97.2 in May from 96.4 in April, according to the Turkish Statistical Institute (TurkStat).
April’s reading marked the lowest level for the index in nine months.
The index combines assessments from consumers and businesses across multiple sectors, including manufacturing, services, retail trade and construction, to provide a broader picture of economic sentiment.
A reading above 100 indicates optimism about the overall economic outlook, while levels below 100 signal pessimism.
The consumer confidence index rose 0.3% in May to 85.8, the data showed.
Meanwhile, the real sector confidence index, which reflects sentiment in the manufacturing industry, climbed 2.4% to 101.
The services sector confidence index fell 0.6% month-over-month to 109 in May, while the construction sector confidence index declined 1.7% to 82.1.
Retail trade sentiment, however, improved during the month, with the sector confidence index rising 0.8% to 112.5.
Türkiye is reinforcing its position as a strategic hub in global cruise tourism as passenger numbers hit record levels worldwide and demand continues to grow across the Mediterranean, according to industry data and officials.
Global cruise passenger numbers reached 37.2 million in 2025, marking an all-time high, according to the Cruise Lines International Association.
The association’s latest Cruise Industry Status Report projects that global cruise passengers will rise to 38.3 million in 2026 and nearly 42 million by 2029, driven by expanding fleet capacity and sustained consumer demand.
Mediterranean demand drives growth
Industry expansion is being led by strong demand in the Mediterranean, Caribbean and Asia-Pacific regions, with the Mediterranean alone hosting 5.96 million passengers in 2025.
The region recorded a 3.4% annual increase, underscoring its continued importance as one of the world’s leading cruise destinations.
“This confirms the strength of the market and the importance of Istanbul as a homeport for Mediterranean itineraries,” said AROYA Cruises President Sture Myrmell.
Istanbul’s role as homeport
Türkiye’s largest city, Istanbul, is increasingly positioned as a key homeport in the Mediterranean cruise network, supported by infrastructure investments and its geographic location bridging Europe, Asia and the Middle East.
Myrmell says the Mediterranean trips are important in terms of international growth, with Türkiye being a big part of this plan.
Myrmell noted what he described as a new dynamic between the Mediterranean, the Gulf, and Türkiye.
“Türkiye’s success both as a destination and as a homeport market further strengthens its role in the Mediterranean,” he told Anadolu Agency (AA).
Connectivity
He said Istanbul’s connectivity with Saudi Arabia and the broader Gulf region is a key advantage, especially for cruise passengers originating from Gulf markets.
“Türkiye has continued to be an attractive destination for passengers from the Gulf region for many years,” he noted.
This, combined with Galataport’s homeport capacity and the appeal of its waterfront area, creates a strong foundation for cruise itineraries that connect Gulf demand with the Mediterranean, he added.
He noted that AROYA Cruises will launch Istanbul-based seasonal operations on June 6, offering seven-night itineraries departing from the city. “These routes place Türkiye at the center of the journey and add value to the broader Mediterranean experience,” he said.
Galataport boost
Myrmell highlighted the role of state-of-the-art Galataport, which he says significantly contributed to Istanbul’s transformation from a major tourism destination into a powerful cruise homeport in the Mediterranean.
“Galataport supports the entire ecosystem by combining modern cruise infrastructure with direct access to one of Istanbul’s most attractive waterfront areas,” he noted.
The port combines cruise infrastructure with retail, dining and waterfront experiences.
Guests do not just transit through Istanbul but make it a direct part of the reason for choosing the itinerary, Myrmell said.
He stated that Galataport supports Türkiye’s position as a key cruise destination and strengthens Istanbul’s role as a hub where international cruise journeys begin and end.
Looking at the booking and occupancy rates, Myrmell said they see a positive outlook for the remainder of the season.
Huawei Technologies announced on Monday that it expects to produce industry-leading semiconductors within five years using new technology, highlighting Beijing’s drive to overcome U.S. sanctions that have hampered China’s ability to develop advanced chips.
Huawei, in a semiconductor symposium in Shanghai, said its high-end chips will have transistor density equivalent to 1.4-nanometre processes by 2031, but did not provide independent performance data.
The target is significant as China’s most advanced proven chipmaking capability is widely seen at around 7 nanometres, while 1.4 nm is expected to be close to the global frontier for advanced chipmaking around the end of the decade.
China is generally viewed as unlikely to reach that level through conventional manufacturing alone because Washington has restricted its access to advanced lithography tools and other key semiconductor technologies.
Taiwan’s TSMC, the world’s largest producer of the most advanced chips, currently uses a 2-nm manufacturing technology and plans to introduce a 1.4-nm process for mass production in 2028.
‘Tau Scaling Law’
Huawei unveiled on Monday a new principle for improving chips, noting the industry can no longer rely on shrinking transistors for computing breakthroughs, a pattern known as Moore’s Law, as they have become so small that their dimensions are measured in only a few atoms.
The Tau Scaling Law, as the principle is called, instead focuses on cutting the time it takes signals and data to move through chips and computing systems, Huawei said.
While the global chip industry is increasingly investing in post-Moore’s Law solutions, from advanced packaging to chiplets, the search has become especially urgent for China.
U.S. export controls have restricted Chinese companies’ access to the most advanced chipmaking tools, particularly the equipment needed to make chips at leading-edge process nodes.
That has made alternative routes to higher performance central to Beijing’s goal of building a world-leading and self-sufficient semiconductor industry.
“What Huawei is proposing is a shift from traditional node-driven scaling to system-level efficiency scaling,” said He Hui, director of semiconductor research at Omdia.
“Rather than depending solely on smaller transistors, the company is focusing on shortening interconnect, lowering latency and improving data movement inside the chip, which is a credible way to extract more performance when leading-edge lithography is constrained.”
AI boom raises stakes
The stakes of Huawei’s chip breakthroughs are doubly high, as frontier technologies have become an increasingly important pillar of future economic development and geopolitical leverage for China.
Huawei’s Ascend chip series is central to powering Chinese AI models, including DeepSeek’s latest flagship model V4, released last month.
Huawei said its Kirin smartphone chips scheduled to launch later this year would be the first to use a Tau Scaling architecture called LogicFolding, which the company said would shorten wiring inside chips and considerably improve performance.
LogicFolding will also be applied to Ascend chips by 2030, as well as large AI clusters made up of hundreds or thousands of chips that power data centers, the company said.
It added that its chip division has designed and mass-produced 381 chips over the past six years based on Tau Scaling Law for use in industries including smartphones and AI computing.
Domestic alternative to Nvidia
Huawei was placed on a U.S. trade blacklist in 2019 that cut it off from many U.S.-origin technologies, including chips and software, and restricted its ability to rely on global contract chipmakers.
Huawei entered what it described as an “extreme survival mode” after the restrictions were imposed. A secret backup chip project led by He Tingbo, president of Huawei’s semiconductor business and director of its Scientist Committee, became central to its survival strategy.
The company mounted a surprise comeback in 2023 with the launch of its 5G-capable Mate 60 series smartphones, powered by a system-on-chip produced by China’s biggest contract chipmaker, Semiconductor Manufacturing International Corp. (SMIC), using 7-nm technology.
SMIC shares rose 7.6% on Monday after Huawei’s announcement of its LogicFolding architecture. SMIC has also recently invested in post-Moore’s Law pathways, setting up an advanced packaging research institute in Shanghai in January.
Demand for Ascend chips has risen in China this year, as domestic tech firms seek alternatives to the U.S. company Nvidia, whose most advanced AI processors are restricted from sale to China.
Nvidia CEO Jensen Huang said earlier this month that the company had “largely conceded” China’s AI chip market to Huawei.
While acknowledging progress, analysts say China remains behind global leaders in the most advanced process technology.
“Cost, power, heat, and system integration remain major challenges, especially for Cloud AI servers,” said Brady Wang, associate director at Counterpoint Research.
“In the short term, China may narrow the gap with global leaders, but a technology gap with the most advanced nodes will still remain,” he added.
Huawei’s chip head He acknowledged that its latest approach still faces major hurdles, including the need for new chip-design tools suited to Tau Scaling and the challenge of preventing overheating, from mobile chips to large AI data centers.
“Given all the various constraints, we have found some pretty good solutions… I can confidently say in the coming 10 years our solutions for mobile computing and AI computing will be competitive,” said He.
Toshifumi Suzuki, the Japanese businessman credited with creating the 7-Eleven convenience chain’s global retail empire, has died at the age of 93, the company announced Monday.
“Suzuki, an honorary adviser at Seven & i Holdings, died on May 18 of heart failure at his Tokyo home,” the company said.
He founded the Japanese unit that operates the seemingly ubiquitous 7-Eleven “conbini” outlets, where busy people can hop in and grab sandwiches, rice balls, drinks, chips and other meals on the run, use ATMs, pay utility bills and copy documents.
The 7-Eleven stores, now numbering more than 80,000 worldwide, are the biggest convenience-store chain in Japan.
The business started in Japan under a franchise agreement with the U.S. 7-Eleven in 1973. The first store opened in Japan the following year.
After The Southland Corp., which founded 7-Eleven, ran into financial difficulties, the Japanese company bought a majority stake in the 1990’s. It made the American counterpart its 100% owned group company in 2005.
Several years ago, the Canadian retailer Alimentation Couche-Tard, which runs the global Circle K convenience store chain, sought to acquire Seven & i Holdings. But it dropped the effort in 2024, citing frustration with negotiations that showed “a lack of constructive engagement.”
Suzuki, born in Nagano Prefecture, northern Japan, in 1932, graduated from the prestigious Chuo University in Tokyo.
Before beginning his career in the convenience store business, he worked at Ito-Yokado, a major Japanese retail chain that sells a variety of products, including groceries, cosmetics and clothing, which is also owned by Seven and i Holdings.
Apart from leading 7-Eleven, Suzuki engineered the acquisition of Barney’s Japan in 2015 and added banking functions to the empire.
He said he wanted to provide customers with what he called a lifestyle shopping experience. Over the years, the retailing giant also brought under its wing the Sogo and Seibu department stores.
Suzuki became the chief executive of 7-Eleven Japan in 1978. He is widely seen as having innovated how Japanese consumers shop. Convenience stores have led retailers in Japan in implementing new retail technologies.
Funeral services are being held privately with family, and messages, flowers and other condolence gifts were politely declined, according to the company. Details of a public ceremony will come later, it said.
Suzuki is survived by his wife and two children.
Oil prices slipped more than $5 to two-week lows on Monday, as optimism grew that the United States and Iran were moving closer to a peace deal, even though they remain at odds over key issues such as blockades in the Strait of Hormuz.
Brent crude futures were down $5.09, or 4.9%, to $98.45 a barrel at 0705 GMT, while U.S. West Texas Intermediate futures were at $91.38 a barrel, down $5.22, or 5.4%. Both contracts touched their lowest since May 7 earlier in the session.
On Saturday, U.S. President Donald Trump said Washington and Iran had “largely negotiated” an understanding on a peace deal that would reopen the Strait of Hormuz, which carried a fifth of global shipments of oil and liquefied natural gas before the conflict.
“Notwithstanding all the caveats and risks that remain to the peace deal and Strait of Hormuz, there is now some light at the end of the tunnel, which will bring some near-term oil price relief,” said MST Marquee analyst Saul Kavonic.
However, the two sides remain at odds over several difficult issues, with Trump saying on Sunday he had told his representatives not to rush into any deal.
“We’ve been at this stage before, only for talks to break down. Therefore, the market will likely be more cautious about overreacting,” said Warren Patterson, head of commodities strategy at ING.
Analysts expect a return to normal oil flows through the strait to take months, while damaged oil and gas facilities are repaired.
“The longer the crisis stretches, the more debatable it becomes whether world leaders genuinely want a quick end to disruptions,” said Phillip Nova analyst Priyanka Sachdeva.
U.S. energy firms responded to higher local energy prices by adding oil and natural gas rigs for the fifth week in a row, for the first time since February 2025.
The rig count, an early indicator of future output, rose by seven to 558 in the week to May 22, its highest since June 2025. Even so, Baker Hughes said the total count was still down eight rigs, or 1% below this time last year.
“Momentum indicators suggest markets are attempting to stabilise after last week’s aggressive selloff, but conviction remains weak,” Sachdeva said.
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