The US has held top-level talks with the UK on how the two nations can co-operate more closely to reduce the chances of war with China over Taiwan. It is the first time the countries have explored conflict contingency plans.

Kurt Campbell, the White House Indo-Pacific co-ordinator, and Laura Rosenberger, the top National Security Council China official, held a meeting on Taiwan with UK representatives in early March, according to people familiar with the situation. It is said to have spanned everything from how the UK could do more diplomatically with Taipei to what role the UK would play if the US ended up in a war with China over Taiwan.

People familiar with the stepped-up engagement said the US wanted to boost co-operation with European allies, such as the UK, to raise awareness about what the administration regards as Beijing’s increasingly assertive attitude towards Taiwan, which it considers part of China.

One UK official said the restricted meeting was the “highest-level” and “most significant” discussion between the countries on Taiwan to date.

Thanks for reading FirstFT Americas. Here’s the rest of today’s news.

Five more stories in the news

1. Pelosi visits Ukraine and Poland Nancy Pelosi, Speaker of the US House of Representatives, met President Volodymyr Zelensky in Kyiv this weekend. Pelosi, who was leading a congressional delegation, became the highest-ranking US official to visit the Ukrainian capital since Russia launched its invasion in February, and released a statement saying “America stands firmly with Ukraine”. Today Pelosi met Polish president Andrzej Duda to discuss continued support for the beleaguered country.

2. EU steps up action on Russian oil sanctions Germany has called for a phased-in ban on Russian oil imports to the EU, stepping up pressure on Brussels to find a deal between divided member states ahead of a crunch week for the bloc’s policy on Russian energy. The EU is discussing its toughest sanctions yet on Moscow this week, so Berlin’s willingness to speed up its timetable increases the likelihood of a full EU oil embargo.

3. Republicans warm to climate change Recognising their bad reputation on climate change, a group of US House Republicans has formed the Conservative Climate Caucus — but the group has work to do to change climate-conscious voters’ perceptions about their party, which has resisted government action on global warming and opposed limits on emissions.

4. ArcelorMittal celebrates green hydrogen milestone The world’s second-largest steelmaker tested the use of green hydrogen to reduce iron ore at one of its industrial sites in Contrecoeur in Quebec, in what it claims is a milestone for the industry. The initiative marks another step in the global effort to improve the green credentials of an industry that accounts for 7 to 9 per cent of all direct fossil fuel emissions.

5. Beijing teeters on edge of Covid lockdown The coronavirus pandemic is creeping closer to the halls of power in Beijing as authorities rush to avoid an uncontrolled Shanghai-style Omicron outbreak in China’s capital. Beijing is tightening coronavirus restrictions after reporting 41 cases yesterday. Officials in the city of 22mn closed gyms and cinemas and raised Covid-19 testing requirements in an effort to avoid the situation in Shanghai, where tens of millions have been restricted to their apartments.

The day ahead

Economic data S&P Global releases purchasing managers’ indices for the eurozone, Italy, France, Germany and the US, where April preliminary data showed economic growth slowing. The US also has construction spending figures for March and the Institute for Supply Management issues its April manufacturing activity index.

Corporate earnings Italian vehicle maker Piaggio publishes first-quarter financials. “The revenue trend doesn’t seem to explain why the share price is down,” Simply Wall Street noted last week.

What else we’re reading

How bad can the global stagflation shock of 2022 get? Only last year, many economists were expecting 2022 to be a period of strong economic rebound, but fast forward a few months and stagflation — a painful mix of high prices and low growth — is on the cards. The prospect strikes fear into policymakers because there are few monetary tools to address it and, according to Anatole Kaletsky, economist at the investment research company Gavekal, it is the US that faces “by far [the] greatest risk of dramatic inflation and wage-price spirals”.

Musk’s Twitter deal rewards risk-taking at Morgan Stanley When Twitter’s board agreed to sell the company to Elon Musk last week, one Wall Street bank was at the centre of the deal: Morgan Stanley. Its role in the $44bn bid caps a years-long effort to cultivate ties with the world’s richest person. But why did Morgan Stanley extend financial firepower to Musk that goes beyond anything provided to other private clients?

• If you are interested in what’s happening with Twitter, do join us on May 4 for our subscriber-only Elon Musk Twitter Takeover Webinar. Register here for our free virtual briefing on the consequences of the world’s richest man acquiring the social media platform he describes as the “bedrock of a functioning democracy”.

Carbon credit demand creates boom time for brokers Demand for carbon credits has exploded as corporate buyers look to burnish their environmental credentials. Mark Carney, UN climate envoy, told the COP26 summit that offset schemes could result in “$150bn going to . . . the world’s emerging and developing economies”. But the opaque and unregulated market has drawn accusations of resellers cashing in at the expense of environmental causes.

Investors face volatility as demand stalls amid supply disruptions Central banks belatedly recognise the problem with markets is not one of weak demand but, rather, insufficient supply, argues Mohamed El-Erian. Looking forward, an even more complicated possibility is taking shape: that of stalling demand in the midst of persistent supply disruptions.

Business cannot brush off ESG as a mere PR challenge ESG — environmental, social and governance — is everywhere, notes Stefan Stern. You cannot discuss a business’s operations or prospects without the initials ESG cropping up. Sceptical (and seasoned) observers of business know to be on alert when another Three Letter Acronym (TLA) achieves widespread popularity.

Do sign up for Moral Money, our award-winning newsletter on ESG, which our expert team send out three times a week.

The sound of silence

Pilita Clark explains why it’s more than OK to be quiet in meetings.