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Americans wounded in rocket attack on Iraq base

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Americans wounded in rocket attack on Iraq base

Seven US personnel were wounded in a rocket attack by Iran-backed militias on a base in Iraq, underscoring the threat to American forces amid intensified diplomatic efforts to ease tensions between Iran and Israel.

US defence secretary Lloyd Austin said the attack on Ain al-Assad, the main base hosting American forces in Iraq, “marked a dangerous escalation and demonstrated Iran’s destabilising role in the region”, according to a Pentagon readout of a call with his Israeli counterpart.

The assault on Monday was the first time in months that American troops in Iraq have been wounded, and followed a US strike against Iran-backed Iraqi militias last week.

Two rockets hit the airbase at about 9pm local time on Monday, wounding five US soldiers and two American contractors, a US defence official said. Two were evacuated from Iraq for further treatment and all are in a stable condition, the official said.

The Ain al-Assad attack took place as Washington and its Arab allies sought to reduce soaring regional tensions following the back-to-back assassinations of senior leaders of the Lebanese militant movement Hizbollah and Hamas last week.

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Both Iran and Hizbollah have vowed to retaliate against Israel after Fuad Shukr, a Hizbollah commander, was killed by an Israeli strike on Beirut, and Ismail Haniyeh, Hamas’s political leader, was assassinated in Tehran.

US secretary of state Antony Blinken said Washington was “engaged in intense diplomacy pretty much around the clock with a very simple message: all parties must refrain from escalation, all parties must take steps to ease tensions”.

An Iranian official told the Financial Times that the US had sent messages to Tehran through Jordan, Oman and Qatar urging the republic not to escalate the situation, saying that would not be in its interests. But Iran’s response has been that “we have made our decision”, the official said. 

US defence secretary Lloyd Austin said the attack ‘marked a dangerous escalation and demonstrated Iran’s destabilising role in the region’ © Chip Somodevilla/Getty Images

Hizbollah’s leader on Tuesday said the group would respond to the killing of its most senior military commander, regardless of international diplomacy and “no matter the consequences”.

“Our response will come. Alone, or with the Axis [of Resistance],” Hassan Nasrallah said, referring to the network of Iran-backed groups in the region, in a speech marking a week since Israel’s assassination of Shuk.

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“These are all possibilities,” he said, adding that the uncertainty over the retaliation was psychological warfare and was part of Israel’s punishment.

Blinken said to “break this cycle”, there needed to be a ceasefire to end the 10-month war between Israel and Hamas in Gaza, urging the sides to accept a deal.

The US, along with Qatar and Egypt, have for months been seeking to broker a deal to secure the release of hostages in Gaza and halt the war in the besieged strip, which is considered vital to ending the regional hostilities that erupted after Hamas’s October 7 attack.

But they have struggled to get the parties to agree a deal, and mediators have warned that the killing of Haniyeh, Hamas’s main negotiator, has further set back the talks.

The fear is that a robust retaliation to the assassinations by Iran and Hizbollah will trigger an Israeli counter-response and push the region closer to a full-blown war.

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Hizbollah and Israel continued to trade fire on Tuesday, with Lebanese authorities saying at least six people were killed in Israeli strikes, one of which targeted the town of Mayfadoun, some 30km inside Lebanon. At least four of those people were Hizbollah fighters. 

Israeli health authorities said seven people were wounded, including one critically, after a Hizbollah barrage, although the Israel Defense Forces later clarified that one of its own air defence interceptor missiles “missed the target and hit the ground, injuring several civilians”. The IDF said the incident was under review. 

There are also concerns that Iran could mobilise the militant groups in the so-called Axis of Resistance, which includes Houthi rebels in Yemen and militias in Iraq and Syria, as well as Hizbollah and Hamas.

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The US has moved additional military assets, including warships and fighter jets, to the region to help defend Israel and in a show of deterrence. But there is a risk that its forces are sucked into combat.

There are about 2,500 American troops in Iraq and about 900 in Syria, where they have been part of an international coalition fighting Isis, the jihadi group.

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Iran-backed militias have launched multiple rocket and drone strikes against US forces since the October 7 attack and Israel’s retaliatory offensive in Gaza triggered a wave of regional hostilities.

Those attacks had diminished in intensity after the US launched air strikes against Iran-affiliated targets in Syria following an attack on a US base on the border between Jordan and Syria that killed three American soldiers in January.

Ain al-Assad base has been targeted at least twice in the past month.

The Houthis have also launched attacks against US navy vessels that have been patrolling the Red Sea in an effort to prevent the Yemeni rebels’ assaults on merchant shipping in the key maritime trade route.

Iranian leaders stepped up their threats against Israel on Monday as the region braced for the Islamic republic’s response, with President Masoud Pezeshkian warning that Tehran would “definitely” respond to Haniyeh’s killing.

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He said Iran was not seeking to “expand the scope of war” in the region but Israel “will definitely receive a response for its crimes and insolence”.

Israel has neither denied nor confirmed responsibility for Haniyeh’s killing.

Additional reporting by Raya Jalabi in Beirut and Neri Zilber in Tel Aviv

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Trump’s China deal leaves world exposed to trade policy lottery

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Trump’s China deal leaves world exposed to trade policy lottery

This article is an on-site version of our Trade Secrets newsletter. Premium subscribers can sign up here to get the newsletter delivered every Monday. Standard subscribers can upgrade to Premium here, or explore all FT newsletters

Well, that didn’t take long. And there was me thinking that China’s resistance to being bounced into a deal — including the insistence that it was the US that had asked for talks — meant it had settled in for a long haul of negotiations. To be clear: the pact, agreed in suitably neutral Switzerland over the weekend, leaves US tariffs on China ludicrously high and asymmetrically so. But that the US was prepared to make a deal so quickly and reduce duties so much suggests more is to come.

Today’s main piece looks at the deals Trump has agreed so far with China and the UK. I also look at the sorry state of overseas aid and development following the news that Bill Gates will wind down his foundation. And now the first reader question for a while: quite simply, were China and the UK right to accept the deals? Answers please to alan.beattie@ft.com.

Get in touch. Email me at alan.beattie@ft.com

Taking the offer or paying the Dane

Trump’s deals with China and the UK have one thing in common, which is — and please sit down if you’re prone to fainting — they’re not binding and they leave a huge amount of negotiation down the line. I know, right? In fact, it’s not 100 per cent clear what they mean now, especially the China deal. As of this newsletter’s “hit send” time, the world’s trade nerds were still pondering over the announcement, trying to work out exactly what had been agreed. The first stab at overall tariffs, including an average for non-China emerging markets and advanced economies, is here, from the consultancy Oxford Economics.

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And, of course, they’re subject to crossfire from Trump’s other loose cannons. The other news yesterday was Trump declaring that the US pharmaceutical industry could charge no more in the US than in any other country. Is that on top of the sectoral pharma tariffs he wants? What does it mean for the extensive pharmaceutical trade between the US and both the UK and China? Nobody knows.

Even before that, literally the day after the UK deal was announced, the Trump administration launched yet another so-called Section 232 national security investigation, this time on aircraft, which could end in tariffs. Is the UK pre-exempted from those duties because of the deal? Nobody knows.

In theory the US has left itself quite a lot of leverage. The question is, especially with the threat of financial market turmoil an ever-present, whether it is willing to use it. The UK deal, which explicitly states it is not legally binding, leaves Britain vulnerable to being blackmailed into joint action against China if Washington decrees it. Simon Lester of the International Economic Law and Policy Blog has a great rundown here of the many uncertainties around the pact.

General terms for the US-UK trade deal
“Both the United States and the United Kingdom recognise that this document does not constitute a legally binding agreement”, the deal reads

With China, the US’s non-reciprocal “fentanyl tariffs” are still high and asymmetrically so. Beijing has an incentive to come back to the negotiating table and agree a further package of liberalisation — or indeed, as Treasury secretary Scott Bessent said on Sunday, agree to purchase more US exports.

This puts us straight back into the territory of the “phase 1” deal of Trump’s first presidency, in which China supposedly agreed a bunch of liberalising measures. The then US trade representative Robert Lighthizer made a big deal out of these, but they haven’t exactly stopped the US moaning about Chinese state capitalism. Beijing also agreed to buy a load of US soyabeans and other products, which it did not.

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Still, if there’s one thing we apparently know, it’s that the US is heading towards negotiating the tariffs down (though it seems to regard the 10 per cent baseline as inviolable). This will set it up for a nice old confrontation with perhaps Trump’s foremost target of ire, the EU, which has continued to insist the 10 per cent minimum is unacceptable.

Partly what happens now will depend on which of Trump’s team has the president’s ear on any given day, given their wildly contrasting views. In the endless game of Trade Official Tombola, you never know who’s going to be rattling round the Oval Office leading policy when decisions come to be made.

If it’s China warrior supreme Peter Navarro, the UK might find itself being led into a trade war and Beijing being denied more tariff cuts. If it’s commerce secretary Howard Lutnick, whose job seems to be to find out what Trump wants that day and cheerlead it, probably less so. Navarro clearly didn’t have much to do with the UK deal, since he was subsequently talking about the UK accepting beef and chicken produced to US hygiene standards, something Sir Keir Starmer’s government wisely refused to accept.

Remember the rules?

Finally, what does this mean for the rules-based world trading system? It’s not great that the US is agreeing bilateral deals all over the place. As I wrote last week, the UK pact is more directly damaging, since it involves violating the “most-favoured nation” principle by granting market access to the US it will not give to other countries.

The metaphor that immediately came to mind was Dane-geld, the protection money that Anglo-Saxon kings paid to Vikings in return for easing off the pillaging for a while.

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Rudyard Kipling famously had a downer on this tactic, contending that “we’ve proved it again and again, that if once you have paid him the Dane-geld, you never get rid of the Dane”. (My favourite feedback to my piece on this came from an actual mediaevalist historian, who argues that paying Dane-geld was an entirely sensible thing to do.)

The UK will need to keep scanning the horizon for signs of the striped Viking sails appearing again. It might turn out to be worth the gamble and the violation of MFN, or it might not. China might have hit on a better strategy (admittedly in a very different position), or might have not. Nobody knows anything.

Musk’s barbarians at the Gates

Bill Gates has revealed that he’s going to be accelerating spending and then closing the Gates Foundation, albeit not for 20 years. It’s a poignant moment. Trump’s (and specifically Elon Musk’s) savaging of US development assistance, including the US Agency for International Development (USAID) and the US programme for HIV-Aids relief, has left the sector gasping for air. Gates (correctly) last week said that Musk was killing children. By running down his fund, Gates hopes to ameliorate the impact of official aid cuts.

The traditional aid donors are turning away. The UK, which has already made a mockery of its aid budget by spending a chunk of the money on housing asylum seekers in Britain, has announced it will cut its spending yet further from 0.5 per cent to 0.3 per cent of gross national income. Former Labour prime ministers Tony Blair and Gordon Brown, who used to fall over each other competing to announce more aid, seem to have been silent on seeing their work undone, even though Brown had picked a public fight with Musk over the US’s aid cuts just weeks earlier. Not for the first time, Brown’s commitment to courage is stronger in theory than practice.

There’s no doubt the Gates Foundation did a tonne of good. (Disclosure: the FT has received money from Gates in the past.) In particular, being able to work with a longer time horizon than donor governments — which were under pressure to show results within a few years — enabled it to fund programmes such as the elimination of polio, which is slow and unspectacular work.

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But it took strong policy and ideological stances, a tactic that sat oddly with its philanthropic mission. The foundation publicly opposed the granting of a waiver on Covid-19 vaccines during the pandemic before reversing course, a highly contentious public policy issue to weigh in on.

More generally, the idea of private giving saving the world — remember the “philanthrocapitalism” of two decades ago? — now looks seriously naive. The new generation of tech crypto billionaires were seduced by the quasi-scientific approach of effective altruism, which has come under heavy and deserved criticism. The development sector is full of fear. There are stories of NGOs and think-tanks pulling controversial-sounding research papers or cutting the word “equity” from the title. It turns out it is a lot less independent of the state and governments than it thought.

Charted waters

Customs revenue is rising at US ports, but by nowhere near enough to replace a significant portion of receipts from the federal income tax as Trump wishes.

Line chart of Revenue collected at US customs ($bn) showing Lots of chips and dolls

Trade links

  • Chinese companies are purging their supply chains of foreign components, in case Trump’s trade war turns into a full-scale decoupling of its economy from the US’s.

  • Chinese exports jumped in April as its shipping companies pushed goods through ahead of trade talks and tariffs being imposed.

  • Speaking of which, Wired magazine looks at whether consumers should buy now to beat the tariffs or wait.

  • Treasury secretary Scott Bessent has been sent out to try to calm nervy investors. However, they are unlikely to have been reassured that the administration is on top of things by Stephen Miran, the chair of Trump’s Council of Economic Advisers, echoing Trump (before the deal with China) that the US doesn’t need a trade deal with China.

  • My FT colleague Martin Sandbu reminds us that a tax on imports is a tax on exports and will hit US companies selling abroad.


Trade Secrets is edited by Harvey Nriapia

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Trump to sign order to cut some U.S. drug prices to match those abroad

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Trump to sign order to cut some U.S. drug prices to match those abroad

US President Donald Trump participates in a celebration of military mothers in the East Room of the White House in Washington, DC, on May 8, 2025.

Jim Watson | AFP | Getty Images

President Donald Trump on Monday will revive a controversial policy that aims to slash drug costs by tying the amount the government pays for some medicines to lower prices abroad, White House officials said.

Trump will sign an executive order including several different actions to renew that effort, known as the “most favored nation” policy.

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“For too long, foreign nations have been able to free ride off of the American people, and American patients forced to pay for too much for prescription drugs,” one official told reporters on Monday.

“The president is dead serious about lowering drug prices,” they said.

Shares of U.S. drugmakers dropped in premarket trading Monday ahead of the official announcement. Eli Lilly fell more than 5%, while Pfizer, Merck and Johnson & Johnson dropped more than 2%.

But White House officials did not disclose which medications the order will apply to. They said Monday’s announcement will be broader than a similar policy that Trump tried to push during his first term, which only applied to Medicare Part B drugs.

It’s unclear how effective the policy will be at lowering costs for patients. In a social media post on Monday, Trump claimed drug prices will be cut by “59%, PLUS!”

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The order directs the Office of the U.S. Trade Representative and the Department of Commerce to crack down on “unreasonable and discriminatory policies” in foreign countries that “suppress” drug prices abroad, the officials said. It also directs the Secretary of the Department of Health and Human Services to encourage “most favored nation prices.”

Within 30 days, the secretary will also have to set clear targets for price reductions across all markets in the U.S., according to the officials. That will open up a round of negotiations between HHS and the pharmaceutical industry, officials said, not providing exact details on the nature of those talks.

If “adequate progress” is not made towards those price targets, HHS Secretary Robert F. Kennedy Jr. will impose the most favored nation pricing on drugs through rulemaking.

The order also directs the Food and Drug Administration to consider expanding imports from other developed nations beyond Canada. Trump signed a separate executive order in April directing the Food and Drug Administration to improve the process by which states can apply to import lower-cost drugs from Canada, among other actions intended to lower drug prices.

It also directs the Department of Justice and Federal Trade Commission to aggressively enforce “anti-competitive actions” that keep prices high in the U.S.

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The Department of Commerce will also consider export restrictions that “fuel and enable that low pricing abroad.” 

It is Trump’s latest effort to try to rein in U.S. prescription drug prices, which are two to three times higher on average than those in other developed nations – and up to 10 times more than in certain countries, according to the Rand Corporation, a public policy think tank.

The order is a blow to the pharmaceutical industry, which is already bracing for Trump’s planned tariffs on prescription drugs. Drugmakers have argued that the “most favored nation” policy would hurt their profits and ultimately, their ability to research and develop new medicines.

But the policy could help patients by lowering prescription medication costs, which is an issue top of mind for many Americans. More than three in four adults in the U.S. say the cost of medications is unaffordable, according to a KFF poll from 2022.

The industry also lobbied against similar Trump plans during his first term. He tried to push the policy through in the final months of that term, but a federal judge halted the effort following a lawsuit from the pharmaceutical industry. The Biden administration then rescinded that policy.

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White House officials initially pressed congressional Republicans to include a “most favored nation” provision in the major reconciliation bill they plan to pass in the coming months, but the policy would have specifically targeted Medicaid drug costs, Politico reported earlier this month. Several GOP members opposed that measure.

How Trump’s order could affect patients, companies

The industry’s largest trade group, PhRMA, estimated that Trump’s Medicaid proposal could cost drugmakers as much as $1 trillion over a decade. 

Some health policy experts have said a “most favored nation” drug policy may not be effective at lowering medication costs.

For example, USC experts said the policy “can’t undo the basic economics of the global drug marketplace,” where 70% of pharmaceutical profits worldwide come from the U.S.

“Facing a choice between deep cuts in their U.S. pricing or the loss of weakly profitable overseas markets, we can expect many firms to pull out from overseas markets at their earliest opportunity,” experts said in a report in April. 

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That will leave Americans paying the same amount for medications, drugmakers with lower profits and future generations of patients with less innovation, they said.

“In sum, everyone loses,” the experts said.

Other experts have said another legal fight with the pharmaceutical industry could prevent the policy from taking effect.

But even if the drug industry pushes back on Trump’s executive order, his administration still has another tool to push down drug prices: Medicare drug price negotiations.

It’s a key provision of the Inflation Reduction Act that gives Medicare the power to negotiate certain prescription drug prices with manufacturers for the first time in history.

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Trump last month proposed a change to that policy that drugmakers have long sought. Lawmakers on both sides of the aisle could be receptive to the idea, which proposes changing rules that differentiate between small-molecule drugs and biologic medicines.

Trump last week said he plans to announce tariffs on medicines imported into the U.S. within the next two weeks. Those planned levies aim to boost domestic drug manufacturing. 

Drugmakers, including Eli Lilly and Pfizer, are pushing back on those potential duties. Some companies have questioned whether the tariffs are necessary, given that several of them have already announced new U.S. manufacturing and research and development investments since Trump took office. 

Still, Trump last week doubled down on efforts to reshore drug manufacturing. He signed an executive order that streamlines the path for drugmakers to build new production sites.

Caplan noted that even if the drug industry pushes back on the executive order, the administration still has another tool at its disposal: Medicare drug pricing negotiations.

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‘Viva Papa Leo!’ At U.S. Masses, Dawn of Homegrown Pope Brings an Air of Electricity.

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‘Viva Papa Leo!’ At U.S. Masses, Dawn of Homegrown Pope Brings an Air of Electricity.

The Rev. Gosbert Rwezahura opened Mass on Sunday morning by saying what everyone in the pews was thinking. “Habemus papam!” he exclaimed at Christ Our Savior Parish in South Holland, Ill. Beaming, he added, “He is one of our own!”

It was the first Sunday in American history with an American pope seated on the throne of St. Peter in Rome. At parishes across the country, Catholics filed into the pews with a sense of wonder, hope and pride over Pope Leo XIV.

At Christ Our Savior, the pride was personal: Today’s parish was formed from others in the area around the South Side of Chicago that includes a now-closed church where the pope attended as a child.

Father Rwezahura put it simply: “We are the home parish of the pope!”

“I’m so full and so proud, I don’t know what to do,” said Janice I. Sims, 75. “I’m definitely blessed because I lived long enough to see it happen.”

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Others there traded anecdotes about brushes with the future pope, back when he was known as Robert Prevost: the music director who played at a wedding he officiated, the deacon who went to high school where his mother was the school librarian.

At the standing-room-only 10:30 a.m. Mass at Holy Name Cathedral in Chicago, the Rev. Ton Nguyen began his homily by exclaiming “Viva Papa Leo the 14th!” The congregation applauded. Outside the church, yellow and white bunting hung in celebration.

“My heart is overwhelmed with joy that we have an American Pope, and he is from Chicago,” Father Nguyen said.

Catholics at other services around the country were no less ebullient and were starting to think ahead to their hopes for the new papacy. Perhaps Leo could attract more young people to church, inspire more men to become priests or help unify an often fractious Catholic population in his home country. At 69, he could lead the church for decades.

“He already won over the hearts of the whole world,” said Amelia Coto, 70, who was attending a Spanish-language Mass at Gesù Catholic Church in downtown Miami. “We were without a father, but now God gave us this father we desired so much.”

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Ms. Coto is from Honduras, and she teared up when talking about Leo. Like others at Spanish-language Masses in Miami on Sunday, she expressed optimism that a Spanish-speaking pope who lived for decades in South America might be able to sway American immigration policy.

“I hope his arrival will help this new president change, stop all those deportations that Trump is doing to Latinos,” she said.

In New Orleans, the pope’s mother’s family had roots in the Black Creole community, where African, Caribbean and French influences blend. In the city this week, social media feeds were overloaded with images of the pope’s face superimposed in everyday New Orleans scenes. Eating a bowl of gumbo. Showing off his footwork in a second-line parade. Popping his head out of a front door to ask, “How’s your mama and dem?”

Angela Rattler, 69, was attending Mass on Sunday at Corpus Christi-Epiphany Catholic Church in the Seventh Ward. When she first heard the pope speak, tears flowed down her face, she said. “He appears to be such a humble man.”

It was Mother’s Day, which is not a Christian holiday but one where church attendance is usually high anyway. Still, the pews seemed especially full at some parishes.

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At St. Ann Parish in Coppell, Texas, all 1,300 seats inside were filled, along with a few hundred people seated in a courtyard at Sunday’s 10 a.m. Mass. The Rev. Edwin Leonard planned a homily that emphasized the vocation of motherhood. But then “the Holy Spirit did a beautiful thing,” he told his congregation, and another topic felt more fitting.

“So it is on Mother’s Day that I’m going to speak about the Holy Father,” Father Leonard said.

Among traditionalists, who had a rocky relationship with the open and informal Pope Francis, some wondered whether Pope Leo might reopen broader access to the traditional Latin Mass. Pope Francis cracked down on the traditional Mass, celebrated by Catholics around the world until the reforms of the Second Vatican Council in the 1960s.

At a Latin Mass at St. Damien Catholic Church in Edmond, Okla., worshipers expressed cautious optimism about the prospect. “There is no way to be sure what he’ll do,” the Rev. Joseph Portzer said in his homily. “But we do see that some of the first words that he said were to talk about unity in the church.”

Father Portzer was among those who found the pope’s American identity intriguing. “We will have an unusual experience being governed by someone who thinks like an American, a Midwestern American,” he said. “It’s going to mean a lot to us to have an American mind-set governing the church.”

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For him, that meant a practicality in governing and the possibility that “we will be able, as well, to understand the way he thinks.”

When Father Leonard in Texas heard the new pope’s name on Thursday, the first thing he did was to look up whether he had political or ideological leanings, he told his congregation.

“Mea culpa,” he said in the only Latin words heard during the Mass. “We should not try to fit our pope into our American liberal or conservative camps. If you did that, shame on us.”

Back at Christ Our Savior in the south suburbs of Chicago, a large population of immigrants from Nigeria worshiped along with white and Black families who have lived on the South Side for decades. The pope’s home parish is now a place that in many ways reflects the global church that its favorite son is now charged with leading. Father Rwezahura is from Tanzania, and the deacon serving with him on the altar on Sunday, Mel Stasinski, has lived in Chicago his whole life.

United by a faith shared by 1.4 billion Catholics around the world, they were also connected by their sheer joy on Sunday. As Diane Sheeran, 70, described how she felt when she got the news about Leo: “I had a grin for two days.”

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Reporting was contributed by Robert Chiarito in Chicago; Mary Beth Gahan in Coppell, Texas; Breena Kerr in Edmond, Okla.; Katy Reckdahl in New Orleans; and Verónica Zaragovia in Miami.

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