VW investment, creating 4,500 jobs in Georgia, comes amid Trump’s damaging tariffs, intense Chinese competition and costly shift towards EVs

Audi has said it will spend $4bn (£3bn) to build its first factory in the US, as its parent company, Volkswagen, struggles with the impact of steep tariffs imposed by Donald Trump.

The German brand’s chief executive, Gernot Döllner, joined Trump on stage at a campaign rally on Saturday night to announce the factory in Macon, Georgia, in an unusual move by a big European brand just days before the US midterm elections.

Trade minister warns there is no room to renegotiate, saying ‘we’ve got to either accept or reject this offer’

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After a decade of tough negotiations, the Albanese government does not yet have the numbers it needs to get a hard-won free trade deal over the line.

Talks with the European Union were finalised in March, and Labor expects to introduce the agreement to parliament early in the new year. But the deal, worth $10bn a year, is already facing opposition from the Coalition and meat producers urging the government to go back to the drawing board.

Ukraine’s Zelenskyy expects Trump to lift more sanctions against Russia. What we know on day 1,698

US secretary of state Marco Rubio has said that US President Donald Trump’s waiver of sweeping sanctions and tariffs on Russia would be a 60-day pause to “analyse” their impact on the global economy. Rubio said also no one at the White House ordered the slow down of the speed of Ukraine’s access to Starlink to prevent it from being used on drones flying faster than 100mph, referring to Starshield, the military version of Elon Musk’s Starlink satellite internet network.

“The president wants to take the 60-day period of time to sort of analyse what imposing both sanctions and tariffs will mean to the global economy and even to the US economy,” Rubio said, noting that the economic restrictions involved a number of countries, not just Russia. Pointing to high energy prices and the Iran war, “we need that period of time to sort of study all this and figure out what the right combination is,” he said.

Trump’s abrupt decision to waive sanctions on Russia days before they were to take effect drew outrage Saturday from members of Congress, which had overwhelmingly passed the legislation. Republican Senator Rick Scott said it was clear Russia was the aggressor, and said the US had “to do everything we can to put economic pressure on Russia”. On social media, fellow Republican Thom Tillis described the move as “beyond irresponsible” and a capitulation “to a Russian dictator who illegally invaded Ukraine”.

The Ukrainian president, Volodymyr Zelenskyy expects the Trump administration to lift more sanctions against Russia in the future and has called for Europe to establish its own negotiations with Moscow as the US has sought better ties and business deals with the Kremlin. “Unfortunately, the lifting of sanctions will continue, and I believe that the ‘diesel deal’ is the first step,” said Zelenskyy on Saturday. “Unfortunately, it seems to me that this cannot stop Putin; on the contrary, he feels joy and happiness that he has such support.”

Zelenskyy said Ukraine’s lead negotiator, Rustem Umerov, had met Friday with US presidential envoy Jared Kushner, Trump’s son-in-law. Zelenskyy said the US was working to arrange a three-way meeting involving him, Trump and Putin, potentially in the Middle East, Europe or the US.

Russian air defence ⁠units intercepted and destroyed nearly ⁠200 Ukrainian ⁠drones ​headed for Moscow on Saturday, ⁠Mayor Sergei Sobyanin said on Telegram. Sobyanin, ⁠in a long ​series ‌of ‌online posts, noted ‌that 195 drones had been destroyed since midnight, with emergency crews examining debris on ‌the ground. Russia’s civil aviation authority, ​Rosaviatsia, said two Moscow airports – Domodedovo and Vnukovo – had ⁠suspended flight operations.

Romania said Saturday it shot down two Russian drones over the Black Sea, the latest in a spate of incidents believed to be spillover from Russia’s invasion of Ukraine. Ships have been attacked in recent days by drones in the Black Sea off the coast of Romania and Bulgaria.

President signed the legislation championed by late senator Lindsey Graham last month but has waived the restrictions as they were due to come into effect

Donald Trump has put on hold a sweeping new sanctions package targeting the Russian economy, telling Congress the pause on the legislation passed by both chambers was in the national interest.

In an executive order on Friday, the US president said he was waiving many ⁠sanctions, restrictions and duties ⁠on Russia, in a move that comes as he has been publicly criticising ⁠Ukrainian president Volodymyr Zelenskyy, including suggesting that Ukraine needs a ​new leader.

Beijing warns against ‘discriminatory’ step after France drops opposition to British role in Made in Europe package

No 10 has left the door open to imposing tariffs on Chinese-made electric vehicles as part of the Made in Europe package, prompting a warning from Beijing that such a move would be “discriminatory”.

Downing Street said on Friday that it would “welcome the objective to have the UK included in the Industrial Accelerator Act” after France dropped its opposition to Britain joining the scheme.

Voters’ opposition to the state of Trump’s economy is well established – despite his desperate attempts to deflect

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It’s indisputable that the political polarization of our time has reduced (and confused) the influence of economic conditions on US elections.

In September of 2024, in the waning weeks of the Joe Biden presidency, 65% of Republicans believed the US economy was getting worse. About six months later, as Donald Trump launched a trade war on the rest of the world with his “liberation day” tariffs, the share of Republican pessimists had dropped to 33%.

Ola Källenius says it will ‘weaken the industry on both sides’ ahead of act intended to counter non-EU competition

Locking the UK out of the EU’s flagship industrial “Made in Europe” legislation would amount to a “deliberate choice” by EU leaders to “hurt” the car industry across the bloc, the head of Mercedes-Benz has said.

Speaking in his capacity as president of the European Automobile Manufacturers’ Association (ACEA), Ola Källenius said such a move would “weaken the industry on both sides”.

Brussels uses WTO rules to quickly impose quota, which will halve Chinese market share to 3%

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The EU is to limit the number of hybrid electric vehicles imported from China to 350,000 cars a year, the European Commission has confirmed.

Imports have been soaring in the past two years; about 800,000 battery and plug-in hybrids are likely to be sold this year.

Mood in trade talks said to have changed as EU member states harden demands for protection against Chinese imports

EU trade negotiators are heading to China for two days of crunch talks aimed at sealing a breakthrough deal tackling Beijing’s record £1bn-a-day trade surplus by curbing its exports of cheap hybrid electric cars into Europe.

Trade commissioner Maroš Šefčovič and his team fly out on Wednesday and will be negotiating up to the wire in talks scheduled to start the following day and continue late into Friday.

Move would strengthen Britain’s case to be included in new legislation to protect European manufacturing

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The UK is considering whether to impose tariffs on Chinese car imports to align itself with the EU and strengthen its case to be included in new legislation designed to protect the European manufacturing sectors including autos and chemicals.

It is understood the EU has raised the question of tariffs with the UK as part of the discussions on the upcoming “Made in Europe” legislation, known as the Industrial Accelerator Act.

The US president has taken credit for far-right victories across Latin America, but those wins have had more to do with fears of gang crime than his meddling

Donald Trump has enjoyed very few foreign policy victories since returning to power. From failed wars to failed peace processes, his second term in office has been marked by one costly blunder on the world stage after another. In Latin America, though, the US president has a different story to tell.

His administration’s national security strategy outlined how the US wanted to “restore American preeminence in the Western Hemisphere”. It was a brazen document, laying out how his government would interfere in the political life of countries it considered part of its sphere of influence, rewarding governments and movements that are “broadly aligned with our principles and strategy”.

Britain under pressure to put tariffs on cheap Chinese vehicle imports ahead of protectionist trade measures

Britain’s car industry is grappling with a “difficult trade-off” between China and Europe, as manufacturers struggle to balance the benefits of both markets ahead of looming trade measures that could restrict UK exports to the EU.

The UK is an outlier in choosing not to put import taxes on Chinese vehicles, even as the US has shut them out almost entirely, and the EU imposes duties of up to 45%.

World’s biggest economies release lists of products in latest move away from trade war – but no strategic goods are included

The US and China have released reciprocal lists of goods worth about $30bn each on which they plan to cut tariffs, ranging from consumer electronics and agricultural products to artificial flowers and live dolphins.

The announcements are the latest tack away from the intense trade war between the world’s two largest economies that dominated much of last year, though major strategic products are not included and no timeline has yet been given for the reductions.

Legislators sent letter to Marco Rubio saying US interference is weakening Brazil’s democratic institutions

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A group of 31 Democratic members of the US Congress has sent a letter to the secretary of state, Marco Rubio, criticising the Trump administration over “an apparent effort to interfere with, and potentially undermine” Brazil’s elections.

Latin America’s largest country will hold the first round of its presidential election on 4 October, with polls showing a technical tie between the incumbent leftist president, Luiz Inácio Lula da Silva, and the far-right senator Flávio Bolsonaro.

Xi arrived at the White House on Thursday morning ahead of major talks, which are expected to cover trade, AI, Taiwan and more

In the first row in front of the leaders sit US vice-president JD Vance and his wife Usha Vance, Trump’s daughter Ivanka Trump and her daughter Arabella, US secretary of state Marco Rubio, treasury secretary Scott Bessent, defence secretary Pete Hegseth and commerce secretary Howard Lutnick.

Donald Trump is speaking now. He notes that Xi is the first Chinese leader to make a second formal visit to the White House, and says the two have “forged a truly great friendship” since Trump was first elected in 2016.

Trump’s announcement on Russia ally comes as he steps up his trade war with Canada, a long-term US ally and top supplier of potash

President Donald Trump has said he is working on a “massive” deal to buy fertiliser from Belarus, pivoting away from main supplier Canada amid an escalating trade dispute, and moving instead toward an ally of Russia.

“The United States is working on a massive deal with respect to the purchase of Potash from Belarus,” Trump said on his Truth Social network. “The pricing would be for substantially less than we are currently paying to Canada, very good news for our farmers and ranchers.”

Two leaders meet in French territory off Canada as Ottawa seeks stronger relations with EU while fighting trade war with US

The leaders of France and Canada have pledged closer ties to grapple with rising geopolitical tensions, climate change and the erosion of democratic values, after ⁠they met in a ⁠French territory off Canada’s Atlantic coast.

The two leaders’ visit to Saint-Pierre ​and Miquelon – the first by a French president since 2014 and the first by a Canadian prime minister – came just weeks ⁠after Donald Trump posted an image showing the islands, as well as all of Canada and other countries in North America, covered by the US flag.

Coming midterm elections are starting to be framed not as right versus left but instead the ‘well-fed versus the fed-up’

Brian Leeland, a 79-year-old Democratic voter in Detroit, had enough. Frustrated by the way the US media covers this febrile political era, from Donald Trump’s Washington to political campaigns across the country, he contacted the Guardian.

“Your decision to frame the race here as a simple progressive versus establishment choice is overly simplistic verging on lazy,” he wrote to this reporter, after our coverage of progressive Abdul El-Sayed’s campaign in the Democratic US Senate primary in Michigan. “As an electorate, we are not binary for the convenience of the media.”

Lindsey O Graham Sanctioning Russia and Iran Act signed into law two days after House passed it in bipartisan vote

Donald Trump on Friday signed legislation enabling sweeping sanctions on Russia aimed at pressing it into ending its war with Ukraine, and also giving him the power to impose additional tariffs on countries breaking the embargo.

The US president signed the Lindsey O Graham Sanctioning Russia and Iran Act into law two days after it passed the House of Representatives in a bipartisan 262-159 vote, amid concerns the legislation gives him too much power.

Trump himself has acknowledged the US need for Canadian aluminum – and has largely exempted metals from new tariffs

As trade talks with Canada shambled toward collapse in late August, Donald Trump brayed on Truth Social: “WE DON’T NEED CANADA, THEY NEED US!” But in fact, Canada, like China, has something the US needs badly: critical metals that undergird modern military technology.

Canada is the United States’s biggest foreign source of minerals, supplying about $47bin worth each year. Sixty per cent of all the aluminum the US uses each year, for instance, comes from Canada, where mighty, remote rivers provide smelting plants vast quantities of cheap, low-carbon electricity. The US military uses the lightweight metal for everything from shell casings to ship hulls and aircraft fuselage. The Pentagon’s cutting-edge F-35 fighter jet’s airframe is about 40% aluminum. “This country desperately needs aluminum,” Trump complained last month. “We get it all from Canada for the most part, and we need it badly.”