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Does Europe have a strategy for coping with Donald Trump? His “America First” attitude to foreign policy has destabilised longstanding alliances and demolished old certainties. What was once seen as extraordinary by allies in Europe has become the new normal. But what if Trumpism outlasts President Trump? How should Europe respond to looser commitments from America?

Philip Stephens argues in his latest column that waiting out the Trump presidency is not a realistic option. The midterm elections this week highlighted the deep divisions in American society. Crucially, they did not suggest Mr Trump is on course for defeat in 2020. While his domestic agenda will be complicated by the Democrats’ takeover of the House, his foreign policy is not going to become any more emollient. Those yearning for a return to American-led multilateralism will need to think again.

The FT editorial board says that conflict between the US and China is not inevitable. Washington could prove Thucydides wrong by being tough yet engaged with Beijing.

Gillian Tett writes that investors are starting to fret  about the ballooning size of US public sector debt. The servicing costs alone will triple to near $1tn in the next decade. 

Chris Giles thinks the economic effects of a Brexit deal are already known. The most plausible short-term forecasts are, well, pretty dull.

David Sproul, chief executive of Deloitte in the UK, argues that breaking up the Big Four is not the answer to the audit sector’s problems.

Miranda Green visits one of Britain’s chatty cafes set up to combat loneliness to see if the scheme can help save the dying high street.

What you’ve been saying

Bernanke warned that a fiscal response was needed: letter from Harry Thorn, Philadelphia, PA, US 

RC Whalen ( Letters) places too much blame for increasing risk on former Federal Reserve chairs Ben Bernanke and Janet Yellen. Mr Bernanke repeatedly warned that recovery from the 2008 crash required both fiscal and monetary policy, and that excess austerity supported in the US Congress and Europe blocked the needed fiscal response. After a crash, we invest to rebuild and recover. That is the fastest way to bring down the annual deficit that results following a collapse in tax revenues.

In response to “US midterm elections: Democrats must not overplay their hand”, Chris says:

For now, the Democrats control of the House is both a benefit and a shackle. They have the power to effect change but they can also no longer play the part of the ‘resistance’. Should they continue to do so, they will have squandered an opportunity and may do long term damage to their future electoral prospects.

Wrapping and recycling: a postwar guide: letter from Patrick Uden, London, UK

Plastic? Back to the future, mate. Brought up in postwar south London, milk came in glass bottles delivered by electric “floats”. Meat or fish was skilfully wrapped in two sheets of rough paper — sometimes yesterday’s newspaper. Brown paper bags were for fruit and some veg, but mostly tipped into our collection of rush bags: always bought at the seaside. Sweets were weighed into white paper bags, some printed with the shop name. What we didn’t eat, the dog, cat, urban birds and squirrels got.

Today’s opinion

FTfm: ‘Bottom-feeding’ hedge funds are big winners on Puerto Rico bonds

Markets Insight: Cobalt’s supply shock a painful warning to carmakers
It is unwise to rely on a supply chain dominated by the Democratic Republic of Congo

Lex: Yelp: under review
Flexible contracts add to cost of sales

Markets Insight: Japan’s M&A wave risks rolling over minority shareholders
All eyes on expert panel tasked with making domestic mergers ‘fair and healthy’

Lombard: Sainsbury’s tries to hit right notes to win over Asda deal critics
Mike Coupe needs to stress how competitive and unprofitable supermarkets can be

Lex: CommScope/Arris: unhappy talk
A big takeover after weak earnings will not please shareholders

Chatty cafés try to ease Britain’s loneliness epidemic
As the high-street falters, retailers attempt to strengthen their community role

Inside Business: Big tech should brace for more pressure from Washington
Amazon, Facebook and Alphabet face further regulation from Republicans and Democrats

Lex: AstraZeneca: back from the abyss
Results may appear unimpressive but there is reason to be cheerful

Lex: AJ Bell: ready to ruck
Investment platform must price its IPO carefully to ensure it is not booted into touch

Breaking up the Big Four is not the answer to audit problems
The UK professional services sector is one of the crown jewels of the economy

Investors start to fret about ballooning US public debt
The CBO calculates that servicing costs will triple in size to nearly $1tn by 2028

Lex: UniCredit: performance anxiety
On the evidence of its recent numbers, the Italian bank has a lot of work to do

beyondbrics: The enduring benefits of trade
EU deals with developing countries show gains on both sides

We already know what the economic effects of a Brexit deal will be
A plausible short-term forecast for the post-agreement UK economy is as dull as dishwater

The FT View: Conflict between the US and China is not inevitable
Washington could prove Thucydides wrong by being tough and engaged with Beijing

Global Insight: Watch out for an even more erratic Donald Trump abroad
Setback at home will intensify US president’s ‘America First’ foreign policy stance

FT Magazine: America’s real epidemic? Entitlement
‘I sometimes wonder if my younger colleagues could do with a dose of tough’

FT Alphaville: The collapse in public ownership of land

FT Magazine: The Stagg Inn, Titley, ‘It’s a hell of a lot more gastro than pub’ — review
Tim Hayward visits the Herefordshire restaurant that helped start a revolution — and delights in every course

Lex: Zillow: realty check
Overhaul of business model was well conceived and poorly executed

FT Alphaville: Wage brain

FT View

The FT View: Conflict between the US and China is not inevitable
Washington could prove Thucydides wrong by being tough and engaged with Beijing

The Big Read

The Big Read: Washington unnerved by China’s ’military-civil fusion’
The US is trying to prevent the transfer of AI-powered dual-use technologies that can be adapted for weapons

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