Good morning. The US is said to want tougher chip controls over China. Donald Trump talks tariffs and Ukraine. And Anthropic’s new AI model lets users choose how it should think. Listen to the day’s top stories.

The US is sketching out tougher versions of existing US semiconductor curbs against Beijing and is pressuring the Netherlands and Japan to escalate restrictions on China’s chip industry, people familiar said. The news sent equities on a roller coaster in Asia trading.

Donald Trump said tariffs due to hit Canada and Mexico next month were on time and “moving along very rapidly.” He reiterated that reciprocal tariffs are coming for Europe—while Brussels promised a swift response should the US take “unjustified measures” over the bloc’s tech rules.

The US president said he’s in serious talks with Vladimir Putin about ending the war in Ukraine, though the AP reported the Russian president downplayed the level of detail covered in the discussions. Chinese President Xi Jinping lent his support to the efforts to resolve the crisis, while reaffirming Beijing’s continued close ties to Moscow.

Germany’s leader-in-waiting Friedrich Merz has started talks with the Social Democrats about expediting approval for up to €200 billion in special defense spending, to get around the country’s tight restrictions on government borrowing and free up resources for the military.

Swati Dhingra, member of the monetary policy committee at the Bank of England. Photographer: Jose Sarmento Matos/Bloomberg

The Bank of England’s Swati Dhingra elaborated on her call for interest rates to be slashed, saying a “gradual” approach would mean monetary policy remains a drag on the economy this year.

Deep Dive: A Weaker Dollar?

Factors that slammed the dollar at the start of Donald Trump’s first term are threatening the US currency again in 2025, according to Morgan Stanley.

• A Bloomberg gauge of the currency notched its worst year on record in 2017 following a post-election surge.
• A month into Trump’s second term, many of those catalysts are again looming over the greenback.

The Big Take

Listen to the Big Take podcast here.

Opinion

BP’s board has a final chance to change direction this week after putting ideology ahead of profitability, writes Javier Blas. It needs to cut debt while increasing payouts to investors. If it doesn’t, an investor revolt will follow, and many executives may be out of a job by summer.

Before You Go

Photographer: Gabby Jones/Bloomberg

Anthropic’s new AI model lets users choose between quick answers and time-consuming responses that mimic human reasoning. The company wants to simplify the experience while still offering powerful capabilities.

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