Happy Thursday and welcome to your morning wrap of the latest business and political headlines from around the world.
First this morning, the US economy has contracted for the first time in three years, as the front loading of imports by domestic businesses in light of trade tariffs has weighed on growth.
Reuters reports that the economy fell at an annualised pace of 0.3% in the three months ended March, after expanding by 2.4% in the prior quarter. Economists polled by Reuters expected the economy to grow by 0.3% over the period.
According to the Commerce Department, the GDP figure was driven by a wider trade deficit, caused by a wave of imports that companies have made to get ahead of Trump’s promised tariffs, and cut backs to federal spending. Imports rose from -1.9% in the fourth quarter of 2024 to 41.3% in the March quarter.
As CNBC reports, US President Donald Trump has blamed his predecessor Joe Biden for the result and suggested during a cabinet meeting at the White House he will blame Biden again for the second quarter’s GDP figure.
Meanwhile, High Frequency Economics chief economist Carl Weinberg was quoted in Reuters saying if the blowout in first quarter trade was the result of firms pre buying, then it will likely reverse in the second quarter.
"That will generate some GDP growth. However, corrosive uncertainty and higher taxes – tariffs are a tax on imports – will drag GDP growth back into the red by the end of this year."
Wall Street’s main indices have all slipped into the red in light of the news.
Donald Trump.
In other news, CNN reports a last-minute disagreement could derail a minerals deal between Ukraine and the United States.
The deal, which has been in the works for weeks, would see Ukraine share its mineral wealth with the US in exchange for past US aid, investment and possibly future security guarantees.
A source familiar with the Ukrainian position told CNN that while the US “offered” to sign all three documents on Wednesday, Ukraine believed more work was needed on the technical side.
But a source familiar with the US position said that all three documents needed to be signed on Wednesday, and that the Ukrainians were trying to reopen terms which have already been agreed upon as part of the package.
US Treasury Secretary Scott Bessent said the US was ready to sign a deal “this afternoon” if Ukraine wanted to. Ukraine’s economy minister Yulia Svyrydenko is currently on her way to Washington.
To Europe, where the United Kingdom is in discussion with France and Saudi Arabia over the recognition of a Palestinian state, the UK foreign secretary has said.
The Guardian reports that David Lammy’s comments mark the first time the UK has acknowledged that discussions with France about a recognition process is underway.
Two permanent members of the UN security council recognising Palestine would be a powerful statement, but would face many diplomatic hurdles, the report said.
Meanwhile, Al Jazeera reports that at least 35 Palestinians have been killed in Gaza over the past 24 hours.
Devastation in Gaza.
In business news, the head of chipmaker Nvidia has warned that China is “not behind” the US in the development of artificial intelligence, CNBC reports.
Speaking to reporters at a tech conference in Washington DC, Jensen Huang also said that Huawei is “one of the most formidable technology companies in the world”.
Nvidia has become key to the world economy over the past few years as it makes chips powering the majority of recent advanced AI applications. But the company faces emerging hurdles, including tariffs and specific restrictions that prevent it from shipping its most advanced chips to many countries, including China.
Huawei is reportedly working on an AI chip of its own and Huang said the company was “incredible” in computing and network technology.
“They have made enormous progress in the last several years,” he said.
Finally, this morning, reports that the Brazilian Football Confederation (CBF) is considering introducing a crimson away jersey for the national team ahead of the 2026 World Cup has sparked outrage.
According to The Guardian, the report has been met with stiff opposition from right-wing football fans who consider red the anti-patriotic colour of Brazil’s left-wing president, Luiz Inácio Lula da Silva.
“Our team’s shirt will never be red – and neither will our country!” said Romeu Zema, a conservative governor, who faces jail for allegedly masterminding a failed rightwing coup after losing the 2022 election.
But left-wing voters have also voiced their concern.
Walter Casagrande, a former player and commentator who is associated with Brazil’s left and pro-democracy movement, called the scheme “idiocy”.
The fracas over the jersey is seen by some as a welcome distraction for the CBF, who recently failed to hire Real Madrid manager Carlo Ancelotti as Brazil’s next manager, as well as a recent expose on the organisation’s finances.
